Unit 2, Marketing,10 Flashcards
Marketing
Marketing - is concerned with finding the needs of customers and then meeting those needs.
Marketing research
Marketing research - marketing research is about how business collect information on whether or not their products or services will be bought.
Primary research ( field research )
Primary research - is any type of research that is new information being collected for the first time.
Example of primary research include:
- Questionnaires
- Interviews
- Focus group
- Trials
Advantages of conducting questionnaires
- can easily target particular customers
- can distribute to many respondents to get varied opinions.
- cheaper than other primary market research methods.
Disadvantages of conducting questionnaires
- not all customers will complete every question leading to gaps in results data.
- Customers may not understand all of the questions.
Interviews
Interviews - one to one / face to face meeting gain knowledge + information
Why interviews effective than questionnaires?
-accurate in depth question can be explained by the interviewer.
Focus group
Focus group - a group of customers who are selected to represent the target market bought together to discuss their felling on a product/market ( 6 people).
Advantages of Focus Group
Focus groups are chosen to represent the target market for a business, the data from then is usually very accurate.
Disadvantages of Focus Group
Focus Group - are usually small in size, which like the quality of responses.
The selection of people to take part is time consuming and so costly .
Trials
Trials - in a trial, a product or service is sold for a short amount of time as a time to see whether or not consumers like the product.
Advantages of trials
A business can establish whether the idea would have a positive impact an overall sales which reduces the risk of failure. A business may save money in the long term if they identify that customers are not demanding what the business is offering for sale.
Disadvantages of trials
Trials are costly to set up in the short term. The area may not fully reflect the target market which may lead to unreliable conclusions.
Secondary research
Secondary research , sometimes called desk research to data that already exists.
For example: websites internet data, consensus data, magazines.
Websites
Websites - most companies now put information about themselves and their products on the internet, all of which can be used by other competitor business as secondary data.
Census data
Census data - is data collected by the government energy ten years, questioning the entire population on their income, occupation and so forth.
Internal data
Internal data - this refers to past sales figures, profits and comments form costumers. This can be used for future decision making and is usually stored on computer
Advantages of primary research
- It designed exactly how the business wants.
- It could be expensive to complete.
- Generally, it could be the cheaper opinion.
- Interview questions can be explained to avoid confusion and incorrect data.
Advantages of secondary research
- a risk that it could be out of data - the census, for example is, only every 10 years.
- research collected may not be exactly in the form the business requires.
- a wide range of data is readily available.
- It may difficult getting customers to co-operate and provide answers to questions.
Quantitative, key points
- quantitative data can be used to create percentage and graphs. This makes it easier to analyse.
- typically quantitative data can incorporate responses from a larger number of people
Qualitative, key points
- qualitative data can offer more in depth information.
- the detail / opinion may be more useful in satisfying the market research brief.
( numbers )
Marketing mix, 4 P’s
Price, Product, Pace, Promotion
Market segmentation
Market segmentation - is splitting the market for a product into a different parts, or segments.
Common ways in which customers can be divided are as follows:
- Age
- Gender
- Income
- Occupation
- Location
- Lifestyle
Price for 4 P’s
- Cost-plus pricing
- Competitor pricing
- Penetration pricing
- Skimming
- Promotional pricing
Cost-plus pricing
Cost-plus pricing - this is a pricing method that adds a percentage to give the selling price.
Cost-plus pricing ,key points
- Price is easy to calculate using this strategy.
- This strategy ensures that produce are priced higher higher then business total costs. Therefore each product will be making profit.
- It may be better to use a different strategy which takes into account other factors such s the prices that competitors are charging.
Competitor pricing
This is when a prise is set based on prices charged by competitor business for a similar or identical product.
Examples: milk = £ 2.40 (any 2 for £3.50 with special card )
Promotion pricing
Promotion pricing - This is reproduction in price to attract customers to an existing product or to sell off old products promotion include Buy One Get One Free and 3 for price 2
Disadvantages of promotion pricing
- customers may get used to promotion and not buy at full price anymore.
- can lead to stock not being available for customers who usually pay for full price.
Advantages of promotion pricing
- attracts customers into stores.
- breaks loyalties with other brands.
- encourages customers to buy more.
Price skimming
Price skimming - this is where a product is more advanced then that of competitors and therefore a price is set high because customers are willing to pay. After a period of time, the price will be reduced.
Advantages Price skimming
- help to build a reputation for high quality products.
- potential for high sales revenue
Disadvantages of Price skimming
- in the long term, competitors ail enter the market and apply pricing penetration.
- may lead to low sales value.
Revenue
Revenue - money from sales; subtract costs = profits
Penetration pricing
Penetration pricing - when a business is new to the market, a price is set lower than competitor business. This is a short- term strategy to help break customers loyalties from trusted brands.
Advantages of penetration pricing
- can be a promotion tool when a business / product first launches.
- can help to break customer loyality with other brands.
Disadvantages of penetration pricing
- likely to result in retaliation from established competitors.
- creates expectation from customers.
Promotion
Promotion - is concerned with how a business informs its customers about a product or service and then persuades them to buy.
Promotion methods
- free samples
- social media posts
- TV adverts
- billboards
- radio adverts
TV advertising
- this is costly
- it is therefore suitable for larger business
- it helps to reach a large audience
advatages of Social media
1.Social media accounts are cheap to operate ( NOT
FREE as there will be some costs involved i.e. staff)
2.Customers are more likely to take notice of advertisements as they have demonstrated an interests.
- Large numbers of people use social media.
4.Social media pages are quicker to update than other methods.
Point of sale promotion
1.Price reduction
2. Loss leaders
3. Competitions
4. Free samples
Disadvantage of social media
- It can be consuming to manage.
- Negative feedback from customers may be viewed by other customers.
Advantages and disadvantages of Radio
- Radio advertising is cheaper than TV advertising
- Radio is portable and so can reach costumers anywhere. This also includes in the car and listeners may be able to visit the business before reaching the destination.
- One problem is that the product can not be seen.
- A further problem is that listeners may be skip adverts.
Advantages and disadvantages of websites
- Most businesses will have their own website.
- Websites can be used to send a particular message to buyers in an attempt to persuade customers to buy from that business.
- Videos can be used to show the product in more detail.
Marketing mix, product. Price
Price will have some importance to customers, however design, functionality, convenience and branding may also be factors that customers that into consideration. This means that a business may need to consider more than just price when developing a product.
Marketing mix , product . Invention
Invention - this is the introduction of totally new idea.
Marketing mix, product. Innovation
Innovation - this is the improvement of an original idea.
Product life cycles
Product life cycles - an important concept in marketing. It describes the stages a product goes through from when it was first through of until it finally removed from the market.
Stages of product life cycle
- Introduction - researching, developing and then launching the product.
- Growth - when sales are increasing at their faster rate.
- Maturity - sales are near their highest, but the rate of growth is slowing down e.g. because of new competitors in the market.
- Decline - final stage of the cycle, when sales begins to fall.
Marketing mix, Place
Place - place refers to where products and services are sold AND how the business gets products and services to the consumer. How products and services get to a consumer are known as distribution channels.
Advantages of distribution channel ?
- shopping malls = public transport links, choice of stores and is under cover.
- retail parks = less traffic, free/available parking, clicking and collect services and easy if buying large items such as furniture.
Distribution channel
Distribution channel = all the organisations through which a product must pass between its point of production and purchase by the consumer.
Distribution channels, examples
- Producer => wholesaler => retailer => consumer
- Producer => Retailer => Consumer
- Producer => Consumer
Wholesaler
Wholesaler = a large storage centre able to take in deliveries direct from producers. The role of a wholesaler is to “break bulk”. This mean buying in large quantities from a producer and then selling smaller amounts to a retailer.
Key point, wholesaler
Wholesaler help small shops, because it means that they do not need to store large quantities of goods.
Regional Distribution Centre (RDC)
Regional Distribution Centre = RDC are owned by the retailer and are used to store products they will later sell in their stores.
Why do you think that retailers invest in RDC’s?
(Regional Distribution Centre)
- it means that they can buy directly from producers, which will normally be cheaper than buying from wholesalers.
- RDC’s mean that ships do not have to increase storage space which would decrease selling space.
- RDC’s can be located near to motorways so that products can reach shops quickly.
Marketing mix, place, Via physical distribution
Via physical distribution = this refers to movement to goods that we can see and touch, i.e. a desk distributed by road transport.
Marketing mix, place, Via digital distribution
Via digital distribution = this refers to the distribution of goods digitally by download from Apple Music.
Examples: music, films, books, games
Advantages of digital distribution
- goods are downloaded, so available instantly.
- costs saving to either business or customer, as there is no postage and pocking cost involved.
- the business, does not have store goods in a warehouse, leading to decreased costs.
- it is better for environment.
- a business can sell through the world and so has more potential customers.
- a business may be able to improve its image with skilful use of websites.
Disadvantages of digital distribution
- not all products can be download.
- not everyone can have a connection for internet.
- digital distribution has also made it easier to illegally download for free.
- it is costly to set up a websites / app.
- all business can sell through t the world, so there is more competition.
Target market
Target market = this is who the business selling.
