Unit 3 Flashcards
What will marketing objectives focus on?
- Sales volume and value
- Market size
- Market and sales growth
- Market share
- Brand loyalty
What is sales volume?
amount of sales expressed as a number of units sold
(20 tonnes of wool)
What is sales value?
Amount of sales expressed as total sum of money spent by consumers
(£3 million expenditure on clothing)
What’s the Equation for market size?
units sold X price
What is market size?
Total sales value or sales volume in a given market
How to calculate Market growth?
(Change in size of market/original size) X 100
How to calculate market share?
(Business’ personal sales/Market sales) X 100
What’s brand loyalty
When customers keep returning to buy a recognised brand.
What’s Branding?
Creating and identity for a business distinguishing it from competitiors
What are the internal influences on marketing objectives?
- Finance (budgets, cash flow targets, ROI targets)
- HR (staff trained enough?, staff being informed)
- Operations (meet demand, Implementing marketing decisions, logistics of new market)
- Corporate objectives
What are external influences on marketing objectives?
- Competitors actions (pricing, promotional activities, marketing budget)
- Market factors (social factos, legislation, demographics)
- Technology change (E-commerce, social media, production capabilities)
- Ethics and environment (consumer expectation, pressure groups)
What’s market research?
The collection and analysis of data and information to inform a business about its market.
Two types of market research and what they are?
Primary-research gathered by the business itself
Secondary-research that’s already been done
Examples of Primary research
-Surveys
-Interviews
-Focus Groups
-Observations
What are the pros and cons of primary research?
Pro-meet exact requirements of the business
Cons-relatively expensive and takes time to obtains
Examples of secondary research
-Internet
-Books
-News articles
What are the pros and cons of secondary research?
Pro-quick, cheap
Cons-may be out of date, may not be specific to the business
What’s qualitative and quantitative research?
Qualitative–non statistical information (mainly opinion based)
Quantitative-statistical data (numbers and percentages)
What’s market mapping?
diagrammatic technique enabling the business to display perception of customers.
Types of sampling techniques
Random-each person has an equal chance of being selected
Quota-population is segmented into subgroups before a judgement is made selecting the most representative individuals
Stratified-population is segmented into subgroups before respondents are randomly selected from that subgroup.
What’s a correlation?
-Identifying a relationship between 2 variables
What are the types of correlation?
Positive-2 variables move in same direction
Negative-2 variables move in opposite direction
Zero-there is no relationship between factors
What’s a confidence level?
The degree of certainty with which a business believes an outcome will occur
What’s a confidence interval?
Parameters within which a confidence level applies
What does extrapolation mens?
Using past data to predict future outcomes
How does technology bring value to interpreting market data?
-Gather and analyse large amounts of data quickly and accurately
-Track and interpret spending habits
-Collect consumer opinions from around the world
-Encourage consumer feedback
-Enable two way communication
What does Price elasticity of demand mean (PED)?
A measure of how responsiveness demand is to a change in price
What does it mean if a product is price elastic?
A change in price will lead to a more than proportional change in demand
What does it mean if a product is price inelastic?
A change in price will lead to a less than proportional change in demand
What’s the formula for PED?
(% change in quantity demanded)/(% change in price)
What are factors influencing PED?
-Availability of substitutes
-Price of competitor goods
-Time
-Branding
-Income
-Nature of the good
Problems of forecasting PED
-PED is constantly changing in a dynamic world
-Difficult finding accurate information
-Price elasticity changes over different price ranges
-Tastes and fashions change constantly
-Competitors are improving their products
What is income elasticity of demand (YED)?
A measure of the responsiveness of the demand to a change in income
What’s the formula for income elasticity of demand (YED)?
(%change in quantity demanded)/(%change in income)
What is YED determined by?
-whether good is a luxury or a necessity
-level of income of a consumer
What is market segmentation?
when a market is split into subgroups of consumers with similar characteristics
How might a market be segmented?
-Demographic
-Geographic
-Income
-Behavioural
How can demographic be divided?
-Age
-Gender
-Education
-Race
-Religion
-Family size
-Stage in life
Benefits of market segmentation
-Most profitable and least profitable consumers can be identified
-Least profitable markets can be avoided
-Easier to identify new products
-Helps improve existing products
-Advertising can be more specific
What does targeting mean and what is it influenced by?
Deciding which market segment to target
influenced by
-Mission and objectives
-Perceived level of demand
-Degree of competition
-Nature of the product
-Understanding needs and wants
What does positioning refer to?
Where a product is placed in the market relative to its competitors
Influences on positioning
-Internal constraints
-Internal strengths
-Market conditions
-External environment
What’s the 7Ps of the marketing mix?
1) Product
2)Price
3)Promotion
4)Physical Environment
5)Place
6)People
7)Process
Influences on the marketing mix
The market
Market research
Positioning relative to competitors
Internal constraints
Actions of competitors
The economy
What does Product refer to?
(marketing mix)
The good/service provided by a firm
Whats the Boston Matrix?
A method used to analyse a businesses product portfolio
-Rising star (high share, high growth)
-Cash cow (high share, low growth)
-Problem child/question mark (low share, high growth)
-Dog (low share, low growth)
What’s the product life cycle?
Used to track stages that a product goes through during its life
What are the stages of the product life cycle?
- Development
- Introduction
- Growth
- Maturity
- Decline
- Extension strategies
What’s new product development (NPD)?
bringing new products or service tor market
Influences on New Product Development (NPD)
- Technology
- Competitors actions
- Entrepreneurial skills of managers/owners
What does Price refer to?
(marketing mix)
Amount of money the customers has to pay to receive the good or service
What are the 3 Pricing decisions?
-Penetration pricing
-Price skimming
-Dynamic pricing
What does penetration pricing mean?
Setting a low initial price for a new product to gain share then raising the price in the future
What does price skimming mean?
Setting a high initial price for a new product then lowering them later (mostly after costs are covered)
What does dynamic pricing mean?
Price changes frequently and quickly in response to changes in demand
What does promotion refer to?
(marketing mix)
Activities designed to communicate with the market to increase the visibility of a businesses product
What are promotional decisions influenced by?
- Segmentation,targeting and positioning process
- Internal constraints
- External influences (technology, competitors actions, environmental issues)
What does branding refer to?
A method involving creation of an identity for the business distinguishing it from other firms
What is relationship marketing?
focuses on building a longer term relationship with valued customers rather than focusing on short term sales
Methods of promotion through technology
- Social media
- Search engine optimisation
- Content marketing
- Viral marketing
What does place refer to?
(marketing mix)
The physical location as well as the distribution channel it travels through to get to the manufacturer
What is a distribution channel?
Routes that a product takes to get from producer to consumer
