Unit 2 Managing a Marketing Campaign Flashcards
Name 6 aims a business might have when carrying out marketing.
- To understand its customers needs
- To develop new products
- To improve profitability
- To increase their market share
- To diversify into new areas
- To increase their brand awareness and brand loyalty
Explain how marketing improves profitability
Profitability is profit efficiency
So marketing needs to lead to reduced costs or increased price
Explain how marketing can lead to reduce costs
If you understand customer needs, lower product quality might be possible
Explain 3 ways marketing can lead to increase price
- If you build brand awareness, this adds value so you can charge a higher price.
- Or if you develop new products this can add value.
3.Or if you increase market share, fewer competitors means you can increase price
When might a business want to diversify?
Diversification is spreading risk.
So diversify if you see risk ahead.
Risk might be seen late in the product life cycle.
Describe the product life cycle?
What is brand loyalty?
A long term commitment by your customers to make repeat purchases of your brand
Give some evidence that brand loyalty is important.
According to the Harvard Business Review (HBR), businesses with high brand loyalty scores, grow revenue 2.5 times faster and deliver 2-5x the return to shareholders over the medium term.
Give 2 benefits of brand loyalty?
- Loyal customers purchase more often (90% according to the HBR) therefore sales revenue is higher.
- It costs much less in promotion to retain customers than to switch new customers to buy from you.
What is the most important feature to the loyal customer?
Quality. The product or service has to be of good quality and consistently delivered.
Which of the 7Ps delivers quality?
Product.
Product delivers quality.
Quality is important to loyal customers.
Loyal customers bring the highest revenue.
What is a diversification strategy?
A new product, to a new customer
What is a product development strategy?
A new product to the existing customer
What is a market development strategy?
The existing product launched to a new customer
Which marketing strategy requires the least resources?
Product development because it builds on brand loyalty
Which marketing strategy has higher risk?
Diversification and market development but they also carry higher possible returns
How can you define market share?
your sales divided by total market sales x 100
Define branding
Creating a unique identity
To distinguish you clearly from your competitors
Define a mass market?
A product that appeals to a wide range of customer types.
What is a niche market?
A product that has been adapted to fit the needs of a specific target market
Describe 2 benefits of a niche market?
- It closely meets the needs of the customers so customers are highly satisfied and loyal.
Loyal customers = low cost of marketing.
Loyal customers = higher revenues - The market is less competitive so lower costs of marketing.
Describe 2 benefits of a mass market
Larger overall market means higher potential sales if the brand is recognisable.
Cost effective for a large organisation due to economies of scale.
What is meant by USP?
Unique Selling Proposition
It is your competitive edge
It is the offer that your competitors can not replicate
Describe 4 steps to discovering your USP?
1.Understand what your customers want
2.Understand your own business values and strengths
3.Understand where your competitors sit in the market
4.Tailor your 7Ps to deliver the USP