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Business > Topic 3 - Marketing > Flashcards

Topic 3 - Marketing Flashcards

1
Q

Corporate Objectives

A
  • those that relate to the business as a whole
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2
Q

Internal Influences on Marketing Objectives

A
  • corporate objectives
  • finance
  • HR
  • operational issues
  • business culture
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3
Q

External Influences on Marketing Objectives

A
  • economic environment
  • competitor actions
  • markets dynamics
  • technological change
  • social and political change
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4
Q

Market Size

A

indicates the potential sales for a firm

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5
Q

Market Growth

A

indicator for existing and potential market entrants

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6
Q

Market Share

A

how the overall market is split between existing competitors

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7
Q

Market Segmentation

A

involves dividing a market into parts that reflect different customers needs and wants:
- demographic, age, job, gender
- behavioural, usage, loyalty, attitudes
- income
- geography

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8
Q

Benefits of Market Segmentation

A
  • focus on resources of a market where the business can succeed
  • helps with new product development
  • better targeting at promotion
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9
Q

Drawbacks of Market Segmentation

A
  • markets are increasingly dynamic fast changing
  • data not always available, up to date or reliable
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10
Q

Niche Marketing

A

where a business targets a smaller segment of a larger market

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11
Q

Mass Marketing

A

a business sells into the largest part of the market

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12
Q

Marketing Mix (7Ps)

A

the combination of elements used by a business to enable it to meet the needs and expectations of customers
- product
- people
- price
- place
- promotion
- process
- physical environment

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13
Q

Consumer Products

A

bought by final customers for personal consumption

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14
Q

Industrial Products

A

bought for further processing or for use in conducting a business
bought by other businesses, not consumers

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14
Q

Types of Consumer Products

A

Convenience
- bought frequently
- price tends to be low
- widespread distribution
- mass promotion
Shopping
- customers careful on quality, price, brand, style etc
- price tends to be higher
- advertising by producer and resellers
Speciality
- unique characteristics or brand
- high price
- targeted promotion

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15
Q

Types of Industrial Products

A

Materials and Parts
- raw materials, components
-mostly sold to other industrial users
Capital Items
- industrial products used in production or operation
- e.g. IT systems, buildings infrastructure
Supplies and Services
- operating supplies (e.g. energy)
- business services (e.g. security)

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16
Q

Product Life Cycle Stages

A

Development
Introduction
Growth
Maturity
Decline

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17
Q

Development

A
  • absorbs lots of resources
  • may not be successful
  • long lead time before sales are achieved
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18
Q

Introduction

A
  • new product launched on the market
  • low level of sales
  • high unit costs
  • low capacity utilisation
  • heavy promotion
  • usually negative cash flow
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19
Q

Growth

A
  • expanding market but arrival of competitors
  • fast growing sales
  • rise in capacity utilisation
  • unit costs fall with economies of scale
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20
Q

Growth Strategies

A
  • advertising to promote brand awareness
  • improve product
  • go for market penetration
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21
Q

Maturity

A
  • slower sales growth as rivals enter the market
  • high level of capacity utilisation
  • weaker competitors start to leave the market
  • prices and profits fall
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22
Q

Maturity Strategies

A
  • attract new users
  • persuasive advertising
  • manage capacity and promotion
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23
Q

Decline

A
  • falling sales
  • decline in profits and weaker cash flows
  • more competitors leave the market
  • decline in capacity utilisation
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24
Product Portfolio Analysis (Boston Matrix)
assesses the position of each product or brand in a firms portfolio to help determine the right marketing strategy for each
25
Question Marks
- low share of a rapidly growing market - cash flow is negative - future is uncertain - could become either a star or a dog
26
Question Market Strategies
- invest to increase market share - invest in promotion
27
Star Products
- high share of a rapidly growing market - require high marketing spending - product is relatively strong
28
Star Product Strategies
- invest to sustain growth - build sales
29
Cash Cow Products
- high share of a slowly growing market - mature stage - dominant share
30
Cash Cow Strategies
- defend market share - little need for investment - little potential for growth
31
Dog Products
- product that have failed - decline phase
32
Dog Product Strategies
- sell off - not worth investing
33
Advertising
- paid-for communication - TV, radio, social media, billboards - mass market advertising is very expensive
34
Advertising Advantages
- wide coverage - control of message - communicated effectively
35
Advertising Disadvantages
- expensive - impersonal - lacks flexibility
36
Personal Selling
- person to person bias - two way communication - by telephone, meetings, knocking on doors - technical products, high priced low volume
37
Personal Selling Advantages
- interactivity - potential for development of a relationship - adaptable - opportunity to close sale
38
Personal Selling Disadvantages
- high cost - labour intensive - only reach limited customers
39
Sales Promotion
- short term incentives to increase sales - designed to stimulate purchases - coupons, loyalty points, BOGOF
40
Sales Promotion Advantages
- quick boost to sales - encourages customer to trial a product or switch brands
41
Sales Promotion Disadvantages
- may damage brand image - customers may expect further promotions
42
Public Relations (PR)
- public relation activities are those that will create goodwill toward an individual, business, cause or product - achieve favourable publicity about the business - build the image and reputation of the business and its products - communicate effectively with customers or stakeholders
43
Examples of Public Relations
- promoting new products - enhancing public awareness - promote social responsibility
44
Price Skimming
- set a high price to maximise profits - product is sold to different market segments at different times - best used in introduction or early growth stage - electronic items
45
Penetration Pricing
- opposite price skimming - offer a product at a low introductory price - gain market share quickly - build customer usage and loyalty - price can be increased once target market share is reached
46
Dynamic Pricing
- businesses set flexible prices for products or services based on current market demands
47
Distribution
main objective of distribution is to make products available in the right place at the right time in the right quantities
48
What is a distribution channel?
moves a product through the stages from production to final consumption
49
Retailers
- the final step in the chain, deals directly with the customer - focused on consumer markets - retailer chooses final price - convenience for customers - retailer holds stock
50
Wholesalers
- buy in large quantities from producers - break into smaller quantities to sell to retailers - wholesaler makes money by buying at a lower price from the producer and adding a profit margin onto the price paid by the retailer
51
Distributors
- distribute (sell on) products and serve as a local sales point - usually specialise in a particular industry e.g. building supplies, electrical components - different from agents in that a distributor holds stock
52
Agents
- specialist type of distributor - doesn't hold stock - earns commission
53
Two types of channels
Direct Indirect
54
Reasons to use indirect
- customers may live too far away to be reached directly or widely spread - consolidation of small orders into big ones - lack of retailing expertise
55
Multi channel distribution
involves a business using more than one type of distribution channel
56
Elasticity
measure the responsiveness of demand to a change in the relevant variable such as price or income
57
PED Formula
% change in quantity demanded/ % change in price
58
Price Elastic
change in demand is more than the change in price (>1)
59
Price Inelastic
change in demand is less than the change in price (<1)
60
Factors Influencing PED
- brand strength - necessity - habit - availability of substitutes - time
61
Income Elasticity of Demand Formula
% change in quantity demanded/ % change in income

Business (8 decks)

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