Unit 3 Flashcards
Product orientation vs Market orientation vs Sales orientation
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
Pros cons of primary research 3,3 (important as most case study’s use a form of market research)
+specific to purpose
+confidential
+quick e.g questionnaires, calls
- can be difficult/long
- expensive
- may be unrepresentative if too small or chosen incorrectly
Pros cons secondary research 3,2
+readily available
+saves time
+cheaper
- may be outdated
- may be irrelevant/not find what’s needed
Extrapolation and when its useful
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
Extrapolation pros cons (3,2)
+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
Confidence intervals
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
Market segmentation STP
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
4 types of segmentation
Demographic
Geographic
Income
Behaviour/lifestyle
Benefits drawbacks of market segmentation 3,4
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
3 types of targeting
Niche (concentrated)
Segmented (differentiated)
Mass (undifferentiated)
Niche marketing, when it’s good, and what it needs
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)
Segmented/differentiated market
Several segments targeted, with marketing mix altered to each one. Works for large firms with resources
Mass marketing/undifferentiated
Business reaches entire market with a single product/marketing mix. Used for widely used products e.g toothpaste
Niche marketing pros cons (4,3)
+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
Market mapping pros cons (3,2)
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
3 types of sample
Random
Stratified
Quota
Stratified sampling
Stratified-population divided into groups and people selected randomly from each group
Quota sampling
People are picked who fit into a category, to get opinions from people who the product is target at
Interviewer effects
When response isn’t what really what interviewer thinks e.g can lie
Internal/external influences on marketing objectives
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
Quantitative data vs Qualitative data
Based on opinions, attitudes etc
Quantitative research pros cons (3,2)
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
Qualitative data pros cons
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
Benefits of mass marketing (3)
E.O.S-unit costs low
Widest potential customer base
Marketing costs low as only one mix
How does PED and YED help businesses?
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
What can be done for a luxury good (positive XED>1) in a recession?
Discounts or interest free repayments etc to encourage sales
What can be done for inferior goods in a boom?
Change brand image to appeal to better off customers as demand will fall.
Value of marketing objectives
Measurable target
Sense of focus and allocate resources
Multi channel distribution
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
