Unit 2 - Management of Marketing Flashcards

Question

what are the four different types of buying behaviour?

Answer 1

habitual/routine purchases, limited decision making purchases, extended decision making purchases and impulse purchases

Answer 2

these require little involvement by the buyer, are bought frequently and generally fulfil a basic want e.g. milk or bread.

Answer 3

these will require some consideration by the buyer. They are still relatively regular purchases but require greater participation in the buying process e.g. clothes.

Answer 4

usually expensive, one-off long term purchases, which will involve detailed consideration by the buyer e.g. a car, house or holiday.

Answer 5

items bought without prior thought e.g. magazines, chocolate or crisps. It should be noted that items bought on impulse may include more expensive items - the disposable income of the consumer will have an impact on the type of item likely to be bought on a whim.

Answer 6

Producing a random list of individuals to survey. Those picked for inclusion in the sample could be generated randomly, using a computer.

Answer 7

It is more representative of the whole population.

Answer 8

Using this method of sampling reduces the risk of bias as people are chosen totally at random and are not selected from one particular market segment

Answer 9

It may not be focused on any particular market segment and this assumes all members of the group are the same, which is not always the case. They chosen people must be interviewed which can be expensive and take time.

Answer 10

This make a random group more representative of the population as a whole. the sample is divided up into segment based on how the population is divided up.

Answer 11

a number of people who meet specific characteristics are chosen, for example, according to age, gender, income group. The researcher must find people to interview who fit these categories

Answer 12

Cheaper to operate than random sampling. Statistics showing the proportions of different groups within the population are readily available.

Answer 13

* Random sampling does not target any specific market segment. Quota sampling chooses a group of people with certain characteristics. * Random sampling is often more expensive than quota sampling as it requires a large group of people to be sampled. Quota sampling requires less respondents.

Answer 14

Meet the needs and wants of the consumer/target market.

Answer 15

adding additional features, improving after sales service, reducing delivery times or improving colour and packaging.

Answer 16

1. An idea is generated 2. Market research is undertaken 3. A prototype is developed 4. The prototype goes through market testing, where customers try out the products and give feedback 5. Adaptations are made on the basis of market testing 6. The product is launched

Answer 17

* Customers might not want the product – no demand * Money wasted on an undesirable product may lead to poor cash flow * Businesses reputation could be damaged if the new product is poor quality * External (PESTEC) factors might prevent the product being a success

Answer 18

Branding is a combination of a name, symbol and design given to a product, product range or company. For example, Nike or Adidas.

Answer 19

* Products in the market are instantly recognisable * Repeat purchases increase sales * Can save money on marketing * Can charge higher prices * Build loyalty with customers * Customers may see brand as a guarantee of quality * Easier to launch new products on to the market

Answer 20

* Imitators and fake products are common * One poor product/experience can affect the whole brand * Brand names can be expensive and time-consuming to build up

Answer 21

A product portfolio is the range of items sold by a business. A company like Sony has a product portfolio that includes computers, cameras, televisions, and games.

Answer 22

* increased research and development costs due to multiple products being produced * marketing and advertising costs may be high due to the promotion of a large range of products * bad publicity incurred by one product may affect sales of all products within the portfolio * resources may be spread too thin and this could affect the performance of existing cash cow products

Answer 23

* having different products can spread risk between markets. This mean there is less chance of a company making losses * having a range of products can lead to greater brand awareness * can encourage customer loyalty as customers are more likely to buy multiple products from the same brand * easier to launch new products due to greater brand awareness * can meet the needs to different market segments * can allow for seasonal fluctuations * allows for new products to replace products at the end of the product life cycle * can increase profits from selling a range of different products

Answer 24

a method of categorising products within the organisation's product portfolio

Answer 25

Market growth and market share

Answer 26

How fast is the market for the product growing? The market may be declining, or it may be expanding. Sales of a product in a fast expanding market have a better chance of growing than a product in a stagnant or declining market.

Answer 27

this is the portion of a market controlled by a particular company or product. How strong is the product within the market?

Answer 28

big market share and high market growth e.g. iPhone 11. These are the leaders in expanding industry and generate large profits. However, they require substantial investment to sustain growth.

Answer 29

small market share in a high growth market e.g. google pixel phone. These have low market share in an expanding industry and needs substantial investment to improve position.

Answer 30

big market share in a low growth market e.g. Weetabix. These are leaders in mature or declining industry and can generate funds. They also maintain market share which ensures quality and customer loyalty.

Answer 31

small market share in a market with low growth. A dog is usually about to go into decline. These will require heavy investment and effort to turn over profit.

Answer 32

A Boston Matrix is used to plot the range of products an organisation offers and also helps spot where products need to be introduced or changed.

Answer 33

``` Dogs - development In - introduction Greece - growth Make - maturity Sand - saturation Dirty - decline ```

Answer 34

This is where a product is researched, designed and a prototype will be made. A large percentage of products will never progress beyond this stage.

Answer 35

* Sales - Zero. Remember: consumers don't know about products that are at this stage - it's impossible to buy something you don't know exists! * Profit - Zero. There are very high costs associated with the development of any new product - some of which may never be recouped.

Answer 36

The launch stage of the new product into the market

Answer 37

* Sales - Initially low, as few consumers know about the product at this stage. However, some products will have little or no competition at this stage so high prices can be charged. * Profit - Zero. There will be high advertising costs associated with this stage, as well as the development costs which need to be recouped.

Answer 38

Where consumers are becoming more aware of the product and competitors may start to enter the market.

Answer 39

* Sales - Sales begin to increasing at their fastest rate due to consumer awareness * Profits - Low. The outstanding development costs will be reducing, however there will still be high advertising costs against still modest sales levels

Answer 40

The product has become commonplace on the market and competition will be increasing and established.

Answer 41

* Sales - Sales of the product will be high. * Profit - Good levels of profit can be made at this point in the life cycle, as there will be little advertising required.

Answer 42

There will be a large number of competitors and not all products will survive. Consumer tastes may change and demand falls.

Answer 43

* Sales - Sales will level out. Prices may need to be revised and lowered to ensure survival in a highly competitive marketplace. * Profits - Profits will remain high, however the company will need to invest in additional advertising to remind consumers that the product exists.

Answer 44

The product is no longer desirable and is likely to have been replaced by a newer version or technology.

Answer 45

* Sales - will fall until the product is withdrawn. | * Profits- Profits will decrease rapidly until the product is withdrawn.

Answer 46

* Change name – if a product has suffered from bad publicity and sales are falling, a tried and tested technique is to simply change the name of the product. * Advertising – try to gain a new audience or remind the current audience * Price reduction – more attractive to customers * Adding value – add new features to the current product * Explore new markets – diversifying, selling abroad/different target market * New packaging – brightening up old packaging, or subtle changes

Answer 47

the amount a customer is prepared to pay (and actually pays) for a product.

Answer 48

* The cost of production * How much profit the producer wishes to make * The quality of the product * The amount the consumer is willing to pay * The amount being charged by competitors * The target market for the product * How much of the product can be supplied * What stage is the product is at its life cycle * State of the economy

Answer 49

``` Market price Price discrimination Low prices High price Cost plus pricing ```

Answer 50

This long term pricing strategy relies on setting your price at the same level as competitors and rivals. The business will then compete on other factors such as convenience, customer services or after sales service.

Answer 51

used when demand for a product or service may change due to changes in consumer demand. This means that you may pay different prices for the same product or service at different times of day or at different times of the year, in different locations or when different prices are charged for different customers. For example: a hotel in Spain can charge more for a room in August when more people are looking for a summer holiday in warm weather than it can in February when fewer people take a holiday and the weather is less reliable.

Answer 52

This long term pricing strategy is set below the market price in order to attract customers. Customers will often look for the product that is cheapest as a way of saving money. They will only do this if they see the product as value for money. Low prices can be associated with poor quality, even if this is not always the case. This might put some customers off buying a product.

Answer 53

Businesses that use a high price strategy deliberately have their price higher than rivals. This is to signal luxury or quality.

Answer 54

This involves setting a price by calculating the average cost of producing goods and adding a mark-up for profit. This method of pricing is a quick and simple way of setting a selling price. It makes sure that the money generated from a sale will cover all costs and generate a profit; however, it does not take market needs into account.

Answer 55

``` Penetration pricing Destroyer pricing Promotional pricing Psychological pricing Skimming Loss leaders ```

Answer 56

used to enter a new market. The price will be set lower than competitors to gain market share. Once a product becomes established the price will increase to be more like the market price. This strategy can be used to encourage customers to switch brands, although it does mean the company will not be making much profit during the initial launch of the product.

Answer 57

used to eliminate competition. It involves a business setting a very low price in order to attract customers away from competitors, who will struggle to match the low price and may go bust. Usually only large businesses can use this strategy as they can withstand the losses for a longer period than small businesses can. This is illegal in the UK.

Answer 58

Prices are reduced for a period of time through discounts, special offers or the use of vouchers. This strategy is often used to attract a lot of media interest or to help clear old or obsolete stock, for example during January sales.

Answer 59

used to make customers perceive the price of a product is lower than it is. For example, charging £19.99 for a product instead of £20, the customer will perceive the product is less than £20 and that they are receiving a good deal

Answer 60

a new product is launched at a high price. At this early stage, those people who must have it will buy the product despite its price. Once the sales start to slow, the business will begin to lower the price so that more customers can afford their product. This short term pricing strategy can only work when there are little or no competitors in the market.

Answer 61

a method of selling certain products at a loss or below market value to encourage customers to come into a business. The hope is that they will buy other full price items. This method of pricing should increase sales of other full price products in the store. Loss leaders can be used to increase customer numbers and may create customer loyalty.

Answer 62

the process of getting a product from the manufacturer to the customer.

Answer 63

* Where the customer is * Availability of a suitable premises * Parking facilities * Suitable infrastructure * Government incentives and grants * Market segment * Employee availability * Competition * Environmental impact

Answer 64

the way in which the product gets from the manufacturer to the consumer. through any combination of manufacture > wholesaler > retailer > consumer

Answer 65

a business that buys products in bulk from the manufacturer who then sells on smaller quantities.

Answer 66

a business that sells smaller quantities of product directly to consumers. They can either but products from the manufacture or from a wholesaler.

Answer 67

``` Finance Image Legal Restrictions Product (perishable) Stage of product life cycle Size ```

Answer 68

* Reduces transport costs for manufacturer as wholesalers buy products in bulk * Wholesaler takes on the risk and cost of storing the stock * Wholesaler can repackage and label product in smaller quantities meaning less work/costs for the manufacturer

Answer 69

* Manufacturer will lose some profit to the wholesaler * Manufacturer loses control of how the product is sold and marketed * The wholesaler may damage the reputation of the manufacturer if the product is not sold correctly

Answer 70

* Convenience – retailers are located close to customers * The retailer displays and markets the goods for the manufacturer and offers after sales service * Retailers can provide customers with information about the product

Answer 71

* Manufacturer will lose some profit to the retailer * Products in retailers are often displayed next to the competition * Manufacturer loses control of how the product is sold and marketed

Answer 72

* Supermarkets * Discount retailers – non branded products at a cheap price. Other retailers have had to discount their own products to compete * E-tailer – low overhead costs. Need large warehouses. * Convenience retailer – ‘corner shop’ and usually an independent retailer. Prices higher than supermarkets. * Multiple chain stores * Department stores – offer a range of goods within different departments. Normally, specialise in premium brands e.g. Debenhams * Franchises * Door to door

Answer 73

where a product is sold directly by the manufacturer to the end consumer.

Answer 74

Mail order - Goods are sold via catalogues Personal selling - Products are sold door-to-door or by telephone TV shopping - This can take the form of detailed commercials known as 'infomercials' or through specialist channels

Answer 75

buying and selling over the internet or using mobile technology such as apps.

Answer 76

E-tailing and direct selling. Companies can use either or both of these methods to make their products available to consumers.

Answer 77

the term used to refer to online retailers such as Amazon, who sell goods from a wide range of suppliers.

Answer 78

* 24/7 availability * Worldwide audience reached, greater number of potential customers. * Information can be gathered about customers who leave details on website * relatively cheap and easy to set up * It is possible to allow customers to compare products and read customer reviews to encourage purchase. * Special online only offers can be created.

Answer 79

* Products cannot be touched or actually seen prior to purchase, can put customers off * Many customers dislike sharing personal information like credit/debit card details online. * It is vital to have strong security procedures can be expensive. * delivery times * Relies on technology, so should their be any problems the sale may not be completed.

Answer 80

the way in which the consumer is made aware of the product and is persuaded to buy it.

Answer 81

* The type of product * Type of market * Budget avaliable * Competitors mix * Stage in the product life cycle

Answer 82

* Increase sales * Encourage loyalty * Create awareness * Remind * Encourage customers to contact * Create an image * Improve position in the market

Answer 83

refers to mass media marketing. This is marketing which is designed to appeal to a very wide range of people and to be seen by a large number of people.

Answer 84

far more targeted and takes place through public relations, sales promotions and direct selling. This includes a wide variety of promotions through social media.

Answer 85

* Advertising - TV and newspaper marketing, as well as the use of billboards, * Celebrity/product endorsement - Where a celebrity agrees to promote an organisation or product. * Product placement - This is where an organisation pays to have a product featured within a film or TV programme.

Answer 86

Advantages of this include national coverage and reaches wide group, however it can be very expensive and may target the wrong market segment

Answer 87

``` advantages of this include: o Gain a good image o Consumers buy to be like celebrities o Increases sales o Consumers associate products with that person disadvantages include: o High costs involved o any scandal or negative publicity occurring, could have a negative impact on the product ```

Answer 88

Advantages: Reaches a wide range of audiences Disadvantages: Very expensive

Answer 89

Consumer offers - special offers available to their customers. Social media - Although some social media promotion is mass market, the majority is extremely focussed and targeted generated by Facebook, Twitter etc. Sponsorship - Used in connection with a certain event or sports team. A company will pay a substantial sum to 'brand' an event or club. Direct selling Public relations

Answer 90

a wide ranging set of activities with the aim of ensuring that relationships between a company and customers/the public remain positive and strong.

Answer 91

o use of press releases to share good news, or apologise for any problems o hold a press conference which offers the opportunity for two-way conversation and answering questions o give donations to charities or organise events to demonstrate CSR o sponsor events locally and nationally to raise awareness o give out company merchandise with branding to generate goodwill

Answer 92

When Manufacturers promote their products to retailers to encourage them to stock their products.

Answer 93

``` Point of sales displays Sale or return Dealer loader Promotional gifts Staff training ```

Answer 94

found at the checkout. The point of sale display is most commonly designed to attract the customer to products that are new, for example the latest DVDs, books or video games. These materials are often offered for free to the retailer if they agree to stock the business's products.

Answer 95

offered by manufacturer to retailers to reduce the risk for the retailer of stocking the manufacturer's product. This method of promotion gives the retailer the right to return any stock that they do not manage to sell. This will encourage retailers to stock products that are new as they are able to return them if they do not sell.

Answer 96

when the manufacturer will offer the retailer extra goods if they purchase a certain quantity of an item. For example, six boxes for the price of five. This will encourage retailers to purchase a higher quantity of stock from the manufacturer.

Answer 97

Manufacturers can provide retailers with promotional gifts for customers to encourage the sale of their product and attract customers into the retailer. For example, a food company could provide branded bowls with the purchase of selected cereals.

Answer 98

Some manufacturers provide retail staff with training. This will increase their knowledge of the product therefore increasing the chance of sales.

Answer 99

When Retailers promote the product to customers to encourage them to buy the product.

Answer 100

``` Special offers Discounts But one, get one free Vouchers/money-off coupons Loyalty cards Free samples Free gifts Competitions ```

Answer 101

refers to any member of staff who is in contact with the customers of a business.

Answer 102

Customer service

Answer 103

* they will be more likely to return (customer loyalty) which will lead to increased sales and profits * It would also mean that customers do not take their business to competitors.

Answer 104

Staff training After-sales service Customer complaints procedures Recruitment and selection

Answer 105

the experience the customer has when purchasing a product.

Answer 106

Efficient delivery service High quality information and communication throughout purchase Good ability to deal with customer complaints Able to access goods and services without you Up to date with new technology

Answer 107

the physical environment experienced by the customer. This could mean the design and layout of a shop or website.

Answer 108

* premises should be clean * layout of the store is easy to navigate * design of the premises should convey the image of the business * eye catching displays * appropriate parking and toilet facilities

Answer 109

* the site needs to be easy to navigate * products should be clearly displayed with key information * key information about the company and customer service should be clear and easy to find * customers should be able to contact the company * the design should use colours, text and images that reflect the business

Answer 110

* E-commerce * Internet advertising * E-mail - This can be used to send surveys or marketing materials to customers. This method of marketing is quick and cost effective. * Social media - can be used to interact with customers. * Apps - Apps can be used to give customers easier access to products and services. customers can buy directly from the app without having to browse a full internet site. They can also be used to advertise products, for example ‘in-app’ advertising when playing games. * Electronic point of sale -

Answer 111

EPoS is a huge database that can contain records about not only the products stocked by an organisation, but about their customers and suppliers, giving it a wide range of uses. Within the marketing department, the main function of EPoS is to provide highly detailed and quantitative market research and is designed to work alongside retailer loyalty cards.