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Higher Business Management > Unit 2 - The Management Of Marketing > Flashcards

Unit 2 - The Management Of Marketing Flashcards

1
Q

What is market led marketing?

A

Products are produced based on what the customer wants

Customers needs and wants are identified by doing market research

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2
Q

What is a downside to market led marketing?

A

There may be significant competition

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3
Q

What is product led marketing?

A

Product is produced as the organisation thinks they are good at providing it

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4
Q

What is a downside to product led marketing?

A

The market doesn’t necessarily have w need for it

Little or no market research as the needs and wants of the customer are not important

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5
Q

What does consumer behaviour aim to do?

A

Answer why what who and where,

Decide on how the product is marketed and future trends

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6
Q

Why do consumers buy? - consumer behaviour

A

Status, need, want, trend

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7
Q

What motivates people to buy? - consumer behaviour

A

POS, layout, promotions

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8
Q

Where do people choose to buy from? - consumer behaviour

A

Online, store, or for convenience

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9
Q

Who buys the product? - consumer behaviour

A

What target does it appeal to?

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10
Q

What are the three types of consumer behaviour?

A

Impulse
Routine/habit
Informed

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11
Q

Define impulse - consumer behaviour

A

Buying something without thinking, usually small value items.

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12
Q

Definite routine/habit - consumer behaviour

A

Buying something out of habit and without much thought

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13
Q

Define informed - consumer behaviour

A

Buying something after careful consideration of options, brands, prices etc
May be due to past experiences/reviews
Usually more high value items

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14
Q

What are benefits of market research?

A

Helps businesses to make informed decisions
Reduces the risk of an unsuccessful product launch
Customers feel valued as their opinions are used
Enhances the companies reputation

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15
Q

What is desk research?

A

Information that already exists and can be researched at a ‘desk’

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16
Q

What are the five types of desk research?

A 
Written
Oral
Pictorial
Graphical
Numerical
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17
Q

What is an advantage of desk research?

A

It is cost effective as can be researched at a desk.

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18
Q

What is a disadvantage of desk research?

A

The information is secondary so can be old or out of date
May not be specific
Can be biased

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19
Q

What is the difference between quantitative and qualitative?

A

Quantitative is factual and can be measured or counted

Qualitative is based on someone’s opinion

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20
Q

What is field research?

A

Where someone physically goes out and collects information

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21
Q

What are advantages of field research?

A

The information is new and up to date

Gives businesses a competitive advantage as competitors don’t have access to this information

Information is specific and reliable

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22
Q

What is a disadvantage of field research?

A

Can be expensive and time consuming

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23
Q

What are the four methods of field research?

A

Questionnaire/survey
Personal interview
Hall tests
Focus groups

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24
Q

Describe questionnaire/survey as a method of field research - advantages and disadvantages etc

A

Involves asking people for their opinion through a series of questions
Usually done online but can be done by post, telephone or in person

Advantages-
Inexpensive
People in large geographical areas can be targeted

Disadvantages-
Not always a high response level
Clarification can’t always be gained so questions may be skipped

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25
Q

Describe personal interview as a method of field research - advantages and disadvantages etc

A

When people meet and a number of questions are asked - usually used for a job

Advantages-
Clarification can happen if questions are not understood
Information is obtained instantly

Disadvantages-
Time consuming method
Expensive as interviewers need to be paid
Analysis can take a long time

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26
Q

Describe hall tests as a method of field research - advantages and disadvantages etc

A

Involves a product being given to customer to test out

Advantages-
Diverse group can be asked
First hand information

Disadvantages-
People may feel they need to give positive feedback
Can be expensive to make changes to the product

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27
Q

Describe focus groups as a method of field research - advantages and disadvantages etc

A

When a group of people are asked for their views on a product

Advantages-
First hand information is gathered
Lots of opinions will be gathered

Disadvantages-
People may feel they can’t disagree so false information can be gathered

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28
Q

What is random sampling?

A

Involves randomly selecting people from a list (telephone directory etc)
These people are then asked to take part in a method of field research

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29
Q

What are advantages of random sampling?

A

No chance of bias as it’s a random group

Many opinions and views can be gathered

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30
Q

What are disadvantages of random sampling?

A

Group is made up of all different target markets - unfocused.
Doesn’t take into consideration the personal differences, age etc.

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31
Q

What is quota sampling?

A

People are selected based on certain characteristics - age gender occupation etc.

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32
Q

What are advantages of quota sampling?

A

Less expensive to carry out than random sampling

Results will be focused as the group is specific to the need

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33
Q

What are disadvantages of quota sampling?

A

May have bias results as group have been selected

As all members of group have the same characteristics, they may all have the same views

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34
Q

What does an extension strategy do?

A

Adapts a product to prolong its lifespan

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35
Q

What are examples of extension strategies?

A 
Change in price
Add new features
New advertisements and marketing campaigns
Change the packaging
Improve the product
Target new markets
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36
Q

What is a product portfolio?

A

Refers to the different products an organisation may choose to sell

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37
Q

What are the two types of product portfolios?

A

Product line and diversified product portfolio

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38
Q

What is a product line portfolio?

A

A group of products that are closely related

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39
Q

What is a diversified product portfolio?

A

Where a business sells a mix of unrelated products

40
Q

What are the benefits of having a product portfolio?

A

Spreads the risk of failure - if one product fails they have others to fall back on

The chances of success of a new product are high as loyal customers will be happy to try it

Appealing to more than one customer segment will increase sales

Can cope with products which have seasonal demands

41
Q

What are the disadvantages of having a product portfolio?

A

Cost of promotions and advertising lots of different products can be expensive

If one product receives a bad reputation this can impact the rest

Research and development costs can be high

Staff may require training on the different products which is time consuming and expensive

42
Q

What are the five stages of the product life cycle?

A 
Development
Introduction
Growth
Maturity
Decline
43
Q

What happens in the development stage of the product life cycle?

A

A number of market research activities are carried out to check if the product has demand

44
Q

What happens in the introduction stage of the product life cycle?

A

The product is launched into the market but normally sales are low due to competition and lack of awareness from the public

45
Q

What happens in the growth stage of the product life cycle?

A

Sales rise sharply as awareness increases

This is the first stage where the company starts making a profit

46
Q

What happens in the maturity stage of the product life cycle?

A

Sales reach their peak then begin to slow

Competition increases so prices drop

Product is at its most profitable

47
Q

How do you keep a product in the maturity stage of the product life cycle?

A

Use extension strategies

48
Q

What happens in the saturation stage of the product life cycle?

A

The end of the maturity stage

Too many competitors

People are no longer demanding the product

High profits but sales are decreasing

49
Q

What happens in the decline stage of the product life cycle?

A

Sales begin to fall

Profit begins to fall

Eventually the product is withdrawn from the market

50
Q

What is a Boston matrix?

A

It is used to plot the range of products a business has, and identifies what products need changed or introduced

51
Q

What does the Boston matrix categorise products into areas based on?

A

Market share and market growth

52
Q

What is the Boston matrix used to analyse?

A

A company’s product portfolio

53
Q

What are the four sections of a Boston matrix?

A

Stars
Cash cows
Question marks
Dogs

54
Q

What are the advantages of the Boston matrix?

A

It is simple and easy to understand

It helps to identify which products should be retained and withdrawn

55
Q

What are the disadvantages of the Boston matrix?

A

It only provides a snapshot of the current position

It does not take into account external factors

High market share does not always mean high profits are being made

56
Q

What is the pricing strategy of cost plus?

A

A percentage of the cost is added to give a profit

57
Q

What is the pricing strategy of competitive?

A

Price of product set similar to competitors

Long-term strategy

58
Q

What is the pricing strategy of skimming?

A

The price is set high to begin with and lowers over time (phones, iPads etc)

Short-term strategy

59
Q

What is the pricing strategy of penetration?

A

Price set low to begin with and increases over time

Short-term strategy

60
Q

What is the pricing strategy of price discrimination?

A

Some businesses will charge different prices for a product at different times of the day or year, depending on the level of demand

Short-term strategy

61
Q

What is the pricing strategy of destroyer?

A

The price is deli are you set extremely low for a period of time to force competition out
This is illegal

Short-term strategy

62
Q

What is the pricing strategy of promotional pricing?

A

Used when organisations are trying to boost sales, prices are lowered for a short space of time

Short-term strategy

63
Q

What is the pricing strategy of premium pricing?

A

The price is set permanently higher than that of its competition due to its premium imagine

Long-term strategy

64
Q

What is the pricing strategy of loss leaders?

A

When a business puts the price so low it makes a loss, this is to entice customers into the store

Short-term strategy

65
Q

What is the pricing strategy of low price?

A

The price is set permanently lower than that of competitors (aldi, lidl etc)

Long-term strategy

66
Q

What is the pricing strategy of psychological pricing?

A

Organisations set the price at 99p or £99.99 to psychologically influence customers looking for value of money
Also fits in when filtering searches based on price

Short-term strategy

67
Q

What are the four channels of distribution?

A

DIRECT SELLING - Manufacturer -> customer

RETAILERS - Manufacturer -> retailer -> customer

WHOLESALERS -
Manufacturer -> wholesaler -> retailer -> customer

Manufacturer -> wholesaler -> customer

68
Q

What factors are considered when choosing a channel of distribution?

A

The product being sold - whether it is perishable (frozen, flowers etc) must be stored correctly during transportation

Reliability of companies (wholesalers/retailers)

Legal requirements/licensing restrictions (alcohol must be sold in a licensed outlet)

The imagine of the product - where it is sold

69
Q

What are methods of direct selling?

A

E-commerce
Mail order
Personal selling (door to door)
Online shopping channels

70
Q

What are the advantages of direct selling?

A 
Exclusive products
Prices can be cheaper
Available 24/7 to customers
Wider area can be targeted
Money saved on staffing costs
71
Q

What are the disadvantages of direct selling?

A 
Lack of personal service
High advertising/website costs
Delay between purchasing and receiving
Unable to ‘try on’
Delivery costs may put customers off
72
Q

What are the advantages of retailers?

A

Retailers are usually located closer to customers than the manufacturer
Retailers take care of promoting the product
Large retailers buy in bulk from the manufacturer

73
Q

What are the disadvantages of retailersV

A

Retailers take a cut of the profit
Retailers may alter the products price
Product will face competition from similar products in the store

74
Q

What are the advantages of wholesalers to manufacturers?

A

Packaging and displaying of goods is taken care of by the wholesaler
Wholesalers buy in bulk
Wholesalers take care of promoting to retailers

75
Q

What are the disadvantages of wholesalers to manufacturers?

A

Manufacturers make less profit as wholesalers take a cut
Manufacturer can’t control how product is marketed
Manufacturer can’t control how retailers sells the product

76
Q

Advantages of wholesalers to retailers?

A

Retailers can buy small quantities to save on storage and also if not a lot gets sold
Retailers can benefit from promotions offered by wholesalers that manufacturers may not offer

77
Q

Disadvantages of wholesalers to retailers?

A

It is more expensive than going directly to a manufacturer
Competitors also have access to wholesalers
Retailer does not have access to exclusive deals offered by manufacturer

78
Q

What might a business consider when deciding where to locate their store?

A

Competition - far away from competitors

Availability of resources - suitable premises car park etc or close to suppliers if products have a short shelf life

Costs - may be cheaper to locate in certain places

Transport links - for staff and customers

79
Q

What factors affect promotion methods?

A

The target market - ensure the product is seen by the right people

Finance available

Competitors advertising

The law

80
Q

What are some promotional strategies?

A

Coupons

Loyalty cards

Competitions

Special offers

Free samples

Celebrity endorsement

81
Q

What are some methods of advertising?

A

Broadcast media - TV, radio

Print media - billboards, posters, newspapers

Apps - advertising within apps (banners, pop ups etc)

SMS - sending texts to customers to promote a product

82
Q

What is public relations?

A

The activities of a business that help to control the image of the business

83
Q

What are some public relations activities?

A 
Press conferences 
Press releases
Donations to charities
Sponsorships
Promotional merchandise
Social media
84
Q

What are examples of above the pipeline promotion?

A 
Television
Radio
Cinema
Billboards
Internet
85
Q

Describe above the pipeline promotion

A

High quality adverts

Can reach wide audiences

The business doesn’t have direct control over which consumer their products are advertised to

Expensive due to advert production

86
Q

What are examples of below the line promotions?

A

Social media
Apps
Product endorsement
Product placement

87
Q

Describe below the line promotion

A

Business has control over the customers the advert is aimed at

BTL is more affordable than ATL

Impact can only last for a limited period of time e.g. social media posts

Some customers do not like BTL as they feel it is intrusive

88
Q

What is into the pipeline and out of the pipeline promotions?

A

Into the pipeline - manufacturers use this to encourage distributors to purchase more stock (wholesaler and retailer)

Out of the pipeline - used to encourage the customer to purchase the product

89
Q

Examples of into the pipeline promotion?

A

Trade credit - buy now, pay later

Bulk-buying discounts

90
Q

Examples of out of the pipeline promotion?

A

Special offers - BOGOF

Free gifts

Vouchers/coupons

Loyalty schemes

91
Q

What is unethical advertising?

A

Using fear tactics - buy now before it’s too late

Distortion of facts - ingredients

Obtaining research information illegally or without consent

Marketing a product falsely

Using women and men as sex symbols for advertising

Concealing dark sides or side effects of products or services

92
Q

What are the two agencies that enforce ethics?

A

ASA (Advertising Standards Authority)
-monitors all the advertising in the UK and can request adverts to be removed

OFCOM (Office of Communications)
-government agency which ensures all programs follow the rules of the broadcasting code

93
Q

What is the people factor?

A

Business must update staff, ensure they are trained, monitor them and ensure selection methods are rigorous

They should also always provide effective after sales service

94
Q

What is the process factor?

A

Involves the processes and systems used to deliver the service - websites, stores, call centres etc

  • well staffed
  • user friendly
  • latest technology (tracking, Apple Pay etc)
95
Q

What is the physical evidence factor?

A

The image of the business

  • bright and modern premises
  • easy to navigate stores
  • attractive layout of stores and websites
  • available parking
  • clean
  • good reviews

Higher Business Management (6 decks)

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