Unit 3

Question 1

Product orientation vs Market orientation vs Sales orientation

Answer 1

Product-business makes products they’re good at making
Market-business makes products according to customer wants/needs
Sales-when demand falls, adopting hardsell and aggressive promotion

Question 2

Pros cons of primary research 3,3 (important as most case study’s use a form of market research)

Answer 2

+specific to purpose
+confidential
+quick e.g questionnaires, calls

• can be difficult/long
• expensive
• may be unrepresentative if too small or chosen incorrectly

Question 3

Pros cons secondary research 3,2

Answer 3

+readily available
+saves time
+cheaper

• may be outdated
• may be irrelevant/not find what’s needed

Question 4

Extrapolation and when its useful

Answer 4

A moving average that takes a series of data and smoothes the fluctuations to show an average (removes extremes).

Used in stable environments, where market is unlikely to change

Question 5

Extrapolation pros cons (3,2)

Answer 5

+simple
+little data needed
+cheap/quick

• unreliable if significant fluctuations distort
• assumes past trends continue in future e.g pestle, unexpected events, disruptive change in tech etc

Question 6

Confidence intervals

Answer 6

Reflects the degree of certainty with which an outcome will happen. Uses a %, the higher, the more confident e.g 95% confidence level means you are 95% certain

Question 7

Market segmentation STP

Answer 7

Segment-divide population into segments
Target-decide which to target and adapt MM to appeal
Position-position in target customer’s minds to perceive better than competition

Question 8

4 types of segmentation

Answer 8

Demographic
Geographic
Income
Behaviour/lifestyle

Question 9

Benefits drawbacks of market segmentation 3,4

Answer 9

Focuses resources on parts where a business can succeed
Identifies new customers, markets and products
Helps create a more effective marketing mix

Ignore needs of potential customers
Difficult to break up into segments
Difficult to target/reach
Dynamic market-fast changing segments e.g demographic changing

Question 10

3 types of targeting

Answer 10

Niche (concentrated)
Segmented (differentiated)
Mass (undifferentiated)

Question 11

Niche marketing, when it’s good, and what it needs

Answer 11

Targeting 1/2 segments. Good for small business that lack resources. Segment must have growth potential, and an unfulfilled need that business can meet. (Gap in the market=niche)

Question 12

Segmented/differentiated market

Answer 12

Several segments targeted, with marketing mix altered to each one. Works for large firms with resources

Question 13

Mass marketing/undifferentiated

Answer 13

Business reaches entire market with a single product/marketing mix. Used for widely used products e.g toothpaste

Question 14

Niche marketing pros cons (4,3)

Answer 14

+Don’t have to compete with larger firms (as don’t usually target niche)
+Can be easier to market and reach audience e.g fishing bait in a fishing magazine
+Premium price
+Build specialist skills

• lose sales volume
• lack of E.O.S
• risk of overdependence i.e eggs all in one basket

Question 15

Market mapping pros cons (3,2)

Answer 15

Identify gaps in market eval:gaps may be there for a reason
Identify competitors-helps to steal customers
Help reposition if failing-recognise successes and what consumers prioritise most

• can be oversimplified, doesn’t explain why e.g a supermarket may get away with higher prices due to location
• subjective

Question 16

3 types of sample

Answer 16

Random
Stratified
Quota

Question 17

Stratified sampling

Answer 17

Stratified-population divided into groups and people selected randomly from each group

Question 18

Quota sampling

Answer 18

People are picked who fit into a category, to get opinions from people who the product is target at

Question 19

Interviewer effects

Answer 19

When response isn’t what really what interviewer thinks e.g can lie

Question 20

Internal/external influences on marketing objectives

Answer 20

Internal:
Corp objectives
Finance
Resources
HR-if less staff, maybe less capacity so sales volume is limited

External:
PESTLE
Economic-boom=increase sales since incomes rise
recession-maintain market share
Competition

Question 21

Quantitative data vs Qualitative data

Answer 21

Based on opinions, attitudes etc

Question 22

Quantitative research pros cons (3,2)

Answer 22

Easy to analyse
Provides insight to trends
Easily comparable with competition and previous figures

Doesn’t show reason behind trends/why
May lack validity if sample wrong

Question 23

Qualitative data pros cons

Answer 23

Essential for new products
Focus on customer
Highlight issues e.g why customer’s dont buy.

Expensive to collect/analyse
Opinions are subjective so sample may not be representative

Question 24

Benefits of mass marketing (3)

Answer 24

E.O.S-unit costs low
Widest potential customer base
Marketing costs low as only one mix

Question 25

How does PED and YED help businesses?

Answer 25

PED helps decide whether to raise or lower prices, by seeing what will happen to demand and total revenue

YED helps see what happens when the economy grows or shinks

Question 26

What can be done for a luxury good (positive XED>1) in a recession?

Answer 26

Discounts or interest free repayments etc to encourage sales

Question 27

What can be done for inferior goods in a boom?

Answer 27

Change brand image to appeal to better off customers as demand will fall.

Question 28

Value of marketing objectives

Answer 28

Measurable target

Sense of focus and allocate resources

Question 29

Multi channel distribution

Answer 29

Wider audience
More sales-e.g if not in stock in one place, can buy online

Less profit margin-intermediaries
Channel conflict-compete with retailers