Unit 2 - Management of Marketing Flashcards
What is Field research and how is it collected ?
field research is a primary source of information collected for a specific purpose
Examples:
- Interview (face to face)
- Survey, Postal, telephone, online
- Test marketing
- Focus groups
- Observations
What is Desk research and how is it collected ?
Desk research is a secondary source of information that already exists, the information was collected for one purpose and then reused for another.
Examples:
- Websites
- Newspaper articles
- Competitors website
- Government statistics e.g. unemployment figures
Field Research, Advantages and Disadvantages (Face to Face interview)
Advantages:
- Body language and facial expressions can be observed
- The researcher can encourage an answer
- Any mistakes or understandings can be cleared up right away
Disadvantages
- Personal interviews can be expensive to carry out
- Researchers have to be selected and trained
Field Research, Advantages and Disadvantages (Postal survey)
Advantages:
- Cheap to send a large quantity of surveys over a large geographical area
- People can complete the survey in their own time
Disadvantages
- Questions must be simple and easy to carry out
- Response rate very low, incentives may be needed
Field Research, Advantages and Disadvantages (Focus Group)
Advantages:
- Qualitive information provided in the form of opinions, feelings and attitude.
- Points not understood can be clarified
Disadvantages:
- Time consuming and expensive to carry out
- The sample of people may not reflect the views of the consumer population
Desk Research Advantages and Disadvantages
Advantages:
- Easier to obtain information that has already been
collected, by looking in a newspaper, book or a website
- Usually cheaper and less time consuming, saving
money
- Decisions can be made quickly as the information
already exists
Disadvantages
- Information was collected for a different purpose,
meaning it could be unreliable
- Out of date/ not relevant as it was carried out a long time ago
- Information can be biased, leading to wrong decisions being made.
Types of Product Portfolio
- Varied product portfolio
- Product line portfolio
Varied Product Portfolio, Costs and benefits
Benefits:
- Increased profits from selling a variety of different products
- Can cope with seasonal fluctuations easier
- The needs of different markets can be met
- Newer products can replace those products at the end of their product life cycle.
Costs:
- The cost of advertising all the products could be very expensive
- If one product receives bad publicity it could negatively affect the other products
- Research and development costs will be high to maintain a variety of new products
Pricing Strategies
Psychological pricing Cost-plus pricing Penetration pricing Promotional pricing Price discrimination Destroyer pricing' Market skimming pricing Loss leader
Pricing strategy’s (explain)
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channels of distribution
- Manufacturer
- Wholesaler
- Retailer
- Direct Selling
Reasons for choosing different channels
- Legal Restrictions: Certain pharmaceutical products can only be sold via prescription in a pharmacy for customer safety
- Type of Product: Suitable transportation/ storage for type of product; product durability e.g. frozen foods, etc
- Finance available: If its to expensive to have retail outlets, manufacturers are likely to use wholesalers who can save them money from packaging & labelling
- Image of Product: Channel should reflect the quality of the product e.g. high quality products should be sold through exclusive, up-scale retailers
- Reliability of the wholesalers or retailers: If past experience shows these channels to be unreliable, manufacturers will just sell to the customer directly
Channels of Distribution ADV’s and DSV’s (retailer)
Advantage:
- Have responsibility for deciding on final price, advertising methods, etc.
- Located close to and have the ability to reach a large number of customers
- Retailers will deal with any direct customer problems
- May offer credit facilities, delivery, aftersales, and guarantees
Disadvantages
- Retailers may not price or advertise goods as the manufacturer would like
- Retailers require a share of the profit, hence the price may be high
- Incur costs of holding stock, storing stock, retail premises and employing sales staff
Different types of retailers
- Independent Retailers–most common type and can be best illustrated as your local corner shop
- Chain Stores–a number of outlets across the country with a well-known name. E.g. Marks and Spencer’s
- Supermarkets –offer a wide range of groceries, clothing and electrical goods. E.g. Tesco, Sainsbury’s
- Department Stores–offer a range of goods within different departments. Normally specialise in premium brands. E.g.
House of Fraser, Debenhams - Franchises–offer a new business a chance to trade using a successful formula, e.g. McDonald’s
How is promotion described ?
- Into-the-Pipeline
- Out-of-the-pipeline
What is Into-the-Pipeline promotion ?
- Into-the-pipeline sales promotions are offered by the manufacturer to encourage retailers to purchase products from them
- This is a promotion designed to enhance sales of a product to trade outlets and to help them sell the product to their
customers
What is Out-of-the-Pipeline promotion ?
- Out-of-the-pipeline sales promotions are offered by the retailer to encourage customers to purchase products from them
Into-the-Pipeline Promotion method (POS)
Point of Sale Material (POS):
- Free posters and display materials given to retailers to display product to customers
Advantages:
- This can enhance the look of the retail store
- It can draw customers eyes to the product display
Disadvantage:
- Retailers may need to dispose of bulky display materials at the end of the promotion
Into-the-Pipeline Promotion method (Sale of Return)
Sale of Return:
- Manufacturers give retailers the option to return goods that do not sell
Advantages:
- It allows retailers to try new products without the risk of being stuck with unsold inventory
- It improves cash flow
Disadvantages
- Products may be returned in a poor condition, creating waste
Into-the-Pipeline Promotion method (Dealer Loaders)
- Discounts used to encourage retailers to stock up on a product, (e.g. buy 10 get 1 free)
Advantages: - Retailers can save on the unit cost of products, allowing for greater profits
- Saving can be passed to customers to increase sales revenue
Disadvantages: - Retailers may overstock and find they are unable to sell
- Products might go out of date or out of fashion
Into-the-Pipeline Promotion method (Staff training)
Manufacturers can offer retail staff free training to give them the skills and knowledge to sell the products
Advantages:
- Staff become experts in the product, which can impress customers
- The quality and motivation of staff are improved
Disadvantages:
- Training has to be done during normal hours, reducing productivity, or after hours increasing overtime pay
Out-of-the-Pipeline promotion method (Special Offers)
This can include Buy One Get One Free (BOGOF) and other short-term promotion
Advantages:
- Encourages customers to try new products, which they may buy at full price
Disadvantage:
- Customers might feel pressured into buying more than they need resulting in a waste
Out-of-the-Pipeline promotion method (Free Gifts)
Used to tempt customers to buy a product again or for the first time, e.g. free toy
Advantages:
- Gifts that require multiple tokens ensure repeated purchases
Disadvantages:
- It can be difficult to find a gift that appeals to all target markets (e.g. free toy that suits boys and girls)
Out-of-the-Pipeline promotion method (Vouchers and Coupons)
Usually given in newspapers/ magazines to give customers money off future purchases
Advantages:
- Customers feel they are getting better value for their money, attracting new customers
- It can encourage repeat purchases
Disadvantages:
- Discounts offered by money-off vouchers can reduce profits
- Some customers will only spend up to the value of their money-off coupon limiting profits
Out-of-the-Pipeline promotion method (competitions)
Businesses can use competitions to encourage customers to buy in order to take part, for example the popular McDonalds Monopoly
Advantages:
- Can encourage repeat custom as more customers are trying to win or collect more tokens
- Can create hype and excitement around a product, which can lead to a new custom
Disadvantages:
- Prizes can cost substantial amounts of money
- The associated marketing costs of the competitions can be high and often packaging has to be redesigned.
Technology used in the marketing Department (Social Media)
- Twitter, Facebook, Instagram and Snapchat can all be used to interact with customers.
- Products can be advertised at any time and they allow access to a wide range of customers.
- Social media allows customers to:
Advantages
- Directly ask the business any questions they have
- A quick response time from the social media manager of the account
Disadvantages:
- There can be many spam comments making it hard to respond to actual customer questions
- The risk of being hacked
Technology used in the marketing Department (EPOS)
- Used as a key method of field research, especially in the retail sector
- A business is able to match-up the items being purchased with the type customer who is buying them
- This allows the marketing department to use more effective promotional strategies in the future and also helps to identify products which are in high demand and those which aren’t.
Advantages:
- Allow large amounts of field and internet market research to be collected organically
- allows marketing managers and senior managers to make more informed and better quality decisions.
Disadvantages:
- Expensive to purchase, install and maintain the EPOS equipment.
