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business > unit 3 > Flashcards

unit 3 Flashcards

1
Q

marketing mix

A

all the activities that go into marketing a product or service

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2
Q

developing new products (benefits)

A

-will give business a USP
-allows business to expands into new markets

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3
Q

developing new products (drawbacks)

A

-market research= high costs
-brand image could be damaged if product doesn’t meet customer needs
-trial products are expensive

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4
Q

brand image

A

identity given to a business which give it a personality of its own and distinguishes it from competitors

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5
Q

benefits of brand image

A

-strong brand image=USP
-customer loyalty=increase sales
-may allow the business to charge premium price

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6
Q

role of packaging

A
  1. has to be suitable for the product to be stored
  2. used for promoting the product, provides information
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7
Q

extension strategies

A
  1. sell to new markets
  2. modify the packaging
  3. use a new advertising campaign
  4. introduce a new or improved version of old products
  5. sell through additional retail outlets
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8
Q

development

A

-market research
-prototype is tested
-0 sales

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9
Q

introduction

A

-sales are low
-capital spent on advertising
-no profit

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10
Q

growth

A

-sales grow rapidly
-prices are still high
-profits are made

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11
Q

maturity

A

-increase competition
-advertising to maintain sales

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12
Q

saturation

A

-sales reach their highest point
-prices have to be reduced because of competition

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13
Q

e-commerce

A

buying products and services online

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14
Q

benefits of e-commerce

A

-convenient for customer
- website to promote product is much cheaper than other forms of advertisement
-larger geographical target market
-can buy raw materials online

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15
Q

drawbacks of e-commerce

A

-many more competitors
-lack of customer service (no face -to face)
-website design and updates are expensive to maintain
-customers worried about online fraud
-increased variable costs (shipping)

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16
Q

internet promotion (benefits)

A

-target focus groups
-ads and information on social media can be updated regularly
-cheap to use as can advertise on their own page

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17
Q

internet promotion (drawbacks)

A

-customers may find ads annoying=impacting brand image
-potential customers may not use social media
-negative comments=negative brand image

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18
Q

place

A

businesses have to decide where to sell their products and have to decide on the best distribution channel

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19
Q

distribution channel

A

mean by which a product is passed from producer to consumer

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20
Q

distribution channel 1

A

-producer consumer
-lower price for customer
-suitable for fresh produce
-high delivery fees
- impractical for many products as consumers may live far away
-not suitable for products that cant be easily sent by post

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21
Q

distribution channel 2

A
  • producer retailer consumer
  • reduced delivery fees
  • producer has no direct contact with consumer ( lack of personal service)
  • costs higher than DC 1, need to cover costs of retailer
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22
Q

distribution channel 3

A

-producer wholesaler retailer consumer
-reduces storage costs+save storage space for small retailers
-wholesaler could give trade credit to retailer = increases retailer cash flow
-takes longer fro fresh produce to reach retail store=bad quality
-consumer price is higher (cover costs + make profit)

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23
Q

distribution channel 4

A

-producer agent wholesaler retailer consumer
-producer may not know the best way to sell in another country (cultural and language barrier)
-agents will be aware of local conditions and will be in best position to select best places to sell
-agent takes portion of revenue (less profit)
-producer has less control over how product is sold

24
Q

using an agent

A

if the product is exported to another country, the producer will sometimes use an agent to sell their products on behalf of them

25
Q

aims of promotion

A
  1. to increase brand awareness + increase sales
  2. to introduce new products to the market
  3. compete with competitors product
    4.improve company image (brand image)
26
Q

TV

A

-targets large audience, target specific segments
-increase fixed costs (expensive), customers may prefer to watch netflix as it is more convenient

27
Q

radio

A

-often uses memorable song/tunes = increases brand awareness
-cannot put across a visual image, spotify

28
Q

newspapers

A

-adverts are permanent, relatively cheap in local papers
- many young people do not purchase newspapers, not very attention grabbing

29
Q

magazines

A
  • niche business can advertise their business specifically to their target market
    -not often published, less opportunities to advertise, more expensive than newspapers
30
Q

posters/ billboards

A

-cheap, can be seen by everyone who passes by
-people may ignore (phones) not a lot of detail can be added-limited persuasion for customer

31
Q

ads in cinema

A

-effective to target specific target market
-expensive, people stream at home, seen by limited people

32
Q

leaflets

A

-cheap, can be delivered door-to-door
-may be ignored and dumped (junk mail)

33
Q

internet

A

-can be viewed by existing customers, direct link to buying product, emails can be sent to existing customers
-may ignore emails (junk mail), some may not use the internet

34
Q

below the line promotion

A

-free gifts
-BOGOF
-price reductions (sales)
-free samples
-point of sale display

35
Q

marketing budget

A

specifies how much money is available to promote or advertise a product
low marketing budget limits the ways of advertising for a business

36
Q

price elastic

A

consumers are sensitive to a change in price if prices increase sales will decrease significantly

37
Q

price inelastic

A

consumers are not sensitive to a change in price, if price increase demand may not decrease significantly

38
Q

competitive pricing

A

-setting prices in line with your competitors or just below them
-if product is not overpriced compared to competitors=sales are likely to be higher
-if costs of production of the business are higher than competitor=potential loss (profit)
-high quality product needs to be sold at a high price to give it. higher quality image

39
Q

penetration pricing

A

-when the price is set lower than the competitors (to be able to enter a new market)
-useful for new products
-will lead to an increase in sales and market share
-low price=lower profit per unit
-not ideal for branded product with good quality reputation
-customer dissatisfaction business wants to increase prices

40
Q

price skimming

A
  • a high price set for a new product on a market
  • help product to be perceived of high quality
  • research and development costs can be payed due tot he profit made from high prices
    -high price discourage people from buying the product
    -business high profit may encourage competitors to enter market= decrease sales
41
Q

cost plus promotion

A

-estimating how many products will be sold calculating total cost of making these products and then adding a percentage mark up profit
-each product earns a profit
-easy method to apply
-business could loose sales if price is too high compared to competitors
-costs are passed to customers= high selling prices

42
Q

promotional pricing

A

-product is sold at a low price for a short time
-rid of stock that will not sell
-help renew interest of the product
-revenue will be lower
-pice war with competitors, they might reduce too

43
Q

benefits of developing new products

A

-will give business a USP
-allows business to expand into new and existing markets

44
Q

drawbacks of developing new products

A

-the business will have to carry market research (expensive)
-the brand image could be damaged if the company fails to meet customer needs with new product
-cost of producing trial products is expensive

45
Q

role of packaging

A

-it has to be suitable for the product to be stored in
- packaging is also used to promote the productq

46
Q

why have some market become more competitive

A
  • globalisation of markets
  • transportation improvements
  • internet/e-commerce
47
Q

how can a business respond to changing spending patterns and increase competition

A
  • maintain good customer relationships
  • keep improving its existing products
  • bring out new products to keep customers interest
  • keep cost low to maintain competitiveness
48
Q

mass market advantages

A
  • total sale in these market can be very high
  • the business can benefit from economies of scale
  • risks can be spread, as often will sell several variations of the products to the mass market, if on fails others are likely to succeed
  • opportunities of growth for the business due to the high sales
49
Q

mass market disadvantages

A
  • high levels of competition
  • high costs of advertising and promotion
  • standardised products or services are produced so may not meet the specific needs of all customers potential customers, therefore leading to a cost of sales
50
Q

niche market advantages

A
  • small businesses may be able to sell successfully in niche markets as larger businesses may have not identified them
  • the needs of customers can be more focused and targeted
51
Q

niche markets disadvantages

A
  • small businesses which can have limited sales potential
52
Q

market segment

A

an identifiable sub-group of a whole market in which consumers have similar characteristics or preferences

53
Q

benefits of market segmentation

A
  • to identify suitable products to suit that market segmentation in the market
  • to ensure that pricing , packaging and place are ideal for the market segment chosen-effective customer reach
54
Q

market research

A

the process of gathering, analysing and interpreting information about a market

55
Q

why do businesses use market research

A
  • give the business a better understanding of its target market
  • develop products to meet the customers needs and wants
  • can increase sales and prevent any wasted time and resources
  • helps the business develop an appropriate marketing strategy
  • help it gain more market share
56
Q

primary research

A

the collection and collation of original data via direct contact with potential or existing customers

57
Q

methods of primary research

A
  • interviews
  • questionnaires
  • online surveys
  • focus groups

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