Topic 5- Marketing

Question 1

What is marketing?

Answer 1

Marketing is a scientific process that focuses on meeting the needs and wants of the customer profitbilty.
1. Identify who the customer is (segmentation)
2. Research what the customer wants
3. Design/update the product, price, place and promotion (marketing mix) to meet needs
4. Launch the product/relaunch the product

Question 2

What is the importance of understanding customers?

Answer 2

1. Provide a good service that customers will buy
2. Increase sales
3. Avoid costly mistakes
4. Be competitive

Question 3

What is segmentation?

Answer 3

Groups customers into subsections of the market with similar characteristics.
This enables businesses to target that subsection with tailored goods or services.
Customers can differ- what they want, willing to pay, where they buy
Methods of segmentation:
Age, gender, location, income
Importance of segmentation:
- Advertising can be targeted and more effective
- Most/ least important customers can be identified
- Easier to identify new customers

Question 4

What is market research?

Answer 4

The process gathering, analysing and processing data to find out the needs and wants of potential customers.
Competition- look online, try products, research in person
Target market- how much they earn, ages, gender, who would want to buy the product

Question 5

What is the importance of market research?

Answer 5

• enable the business to understand the market and know who to target
• identify opportunities
• reduce risk of failures

Question 6

What is primary research field and secondary research?

Answer 6

When the business collects original first hand information. It involves creating new information.

Secondary research- this is when you use existing information E.g internet, magazines, newspapers, past data

Question 7

What is the Marketing Mix?

Answer 7

The marketing mix refers to all the activities that influences whether or not a customer buys a product or not.
Price, place, product, promotion

Question 8

What is price is the marketing mix?

Answer 8

Price- the amount charged to a consumer for a good or service
Affects whether people can afford the product, how competitively it is priced compared to rival products.
Price skimming- high to low
Price penetration- low to high
Competitive pricing- base from competitors
Loss leader- product sold below its market cost
Cost plus- a pricing strategy by which the selling price of a product is determined by adding a specific fixed percentage
Demand- how many people want their product

Question 9

What is the calculation for revenue?

Answer 9

Selling price x output

Question 10

What is product in the Marketing mix?

Answer 10

Design- function and features
Image- attractive to customer
Product differentiation- methods that a business used to make their product distinct from rivals.
USP- a unique aspect of a product that makes it different.
Methods used:
- Quality
- design
- promotion
- branding

Question 11

What is the benefits and risks of product differentiation?

Answer 11

Benefits:
New products invented
Increase in sales
Competitive advantage
Increase market share and profit
Risks:
Expensive and may take time
May affect length of time existing products are popular for damage brand image

Question 12

What is the product life cycle?

Answer 12

A model showing the lifespan of a product sales from launch to being taken off the market.
1. Introduction
2. Maturity
3. Introduction
4. Penetration
5. Unique selling point- how businesses makes it product stand out from competitors.

Question 13

What is extension strategy and examples?

Answer 13

Ways in which a business modifies a product to appeal to more customers and maintain sales in maturity.
Make the product different not new
- change image
- change name
- packaging
- new segment
- improve product

Question 14

What is promotion in the marketing mix?

Answer 14

Promotion- the different ways in which a business tries to communicate with its customers.
Product portfolio- in a range of products that a business sells.
Sales promotion- are short terms incentives used by businesses to encourage customers to make a purchase
Forms of promotion:
- Billboards
- TV
- social media

Question 15

What is public relations and sponsorship?

Answer 15

Public Relations- communicating with the media and other interested parties to enhance the image of the business and its products and therefore increase sales.
-costs no money unless a professional company is hired out
Sponsorship- a common form of public relations, a business will sponsor an individual or event to raise its profit.

Question 16

What are factors that may affect promotion and pros and cons?

Answer 16

Affects:
- Who is selling to the target market
- competition and their actions
- nature of product
- nature of market
Pros:
- reach wider target audience
- increase sales from more customers
- improve public relations
Cons:
- expensive
- can be poorly received
- reputation damaged

Question 17

What is place in marketing mix?

Answer 17

Place- is where the product is sold, it involves the method of distribution used to get the product to the consumer.
- wants to be close to customers - want to be near popular places but not too near
Channel of distribution- is how the ownership of a product passes from the producer to the final customer
Factors influencing this:
- Target market - types of product - cost of transport

Question 18

What is a wholesaler?

Answer 18

Buy large quantities of supplies and sell them on in smaller quantities. They act intermediary between manufacturers, retailers and consumers.

Question 19

What is E-commerce and M-commerce?

Answer 19

E- commerce- is the buying and selling of goods and services online.
M- commerce- is the buying and selling of goods and services online through a mobile device, often through a mobile app or website on a mobile phone.