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Business > Unit 3 > Flashcards

Unit 3 Flashcards

1
Q

what is marketing?

A

the process responsible for identifying, anticipating and satisfying customer requirements profitability

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2
Q

what are marketing objectives?

A

targets set to the marketing function to achieve the overall business objective

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3
Q

what is sales vloume?

A

the number of units sold

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4
Q

what is sales value?

A

how much the sales are worth

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5
Q

what is market share?

A

the proportion of a particular market that is controlled by an individual business.

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6
Q

how do you calculate market share?

A

( sales of the business / total market sales) x 100

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7
Q

what is market growth?

A

measures the change in size in a market as a %.

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8
Q

how do you calculate market growth?

A

(difference in size / earlier year) x 100

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9
Q

what types of markets are there?

A
  • physical
  • C2C
  • local
  • national
    -B2B
  • e-commerce
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10
Q

what is the marketing team responsible for?

A

identifying consumer wants and satisfying these now and in the future through an integrated marketing mix

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11
Q

what is the first step of the marketing process?

A

to set marketing objectives. these are targets set to achieve by the department in a specific period of time. following SMART

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12
Q

what are the steps of the marketing process?

A
  • define a main goal
  • outline objectives
  • break out objectives into tasks
  • tie tasks to dates
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13
Q

what are marketing objectives likely informed by?

A

research and constrained by budgets. they will be used to select the marketing strategy and develop a marketing plan

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14
Q

how do you calculate percentage change?

A

((old-new) / old) x 100

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15
Q

what are the main marketing objectives?

A
  • sales volume
  • sales value
  • sales growth
  • market share
  • market size
  • brand loyalty
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16
Q

what are the reasons for setting marketing objectives?

A
  • enable to achieve overall objective
  • staff motivation
  • evaluation of performance
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17
Q

how do you calculate sales growth?

A

(difference in sales / earliest year) x 100

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18
Q

how do you calculate market size?

A

(sales / market share) x 100

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19
Q

what are the external influences on marketing objectives?

A
  • market and competition
  • economy
  • social factors
  • ethics
  • technology
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20
Q

what are the external influences on marketing objectives?

A

-finance available
- production capacity
- HR
- nature of the product

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21
Q

what is market research?

A

the process of gathering data on potential customers

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22
Q

what is the role of market research?

A
  • competitor analysis
  • customer feedback
  • ideas for product development
  • identify trends in market
  • pricing strategies
  • consumer needs
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23
Q

what is primary research?

A

the collection of information for the first time for specific purposes

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24
Q

what forms of primary research are there?

A
  • surveys and polls
  • interviews
  • focus groups
  • observations
  • test marketing
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25
Q

what are the advantages of primary research?

A
  • specific to business / product
  • up to date
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26
Q

what are the disadvantages of primary research?

A

-cost
- time consuming
- poor validity

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27
Q

what is secondary research?

A

the collection of data that already exists and has been used for other purposes

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28
Q

what forms of secondary research are there?

A
  • online research
  • literature research
  • case study research
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29
Q

what are the advantages of secondary research?

A
  • low cost
  • immediately available
  • looks at market as a whole
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30
Q

what are the disadvantages of secondary research?

A
  • not specific
  • out of date
  • accessible to competitors
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31
Q

what is qualitative market research?

A

research into attitudes and opinions of consumers that influence their purchasing behavior

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32
Q

what is quantitative market research?

A

collection of information on consumers views and behavior that can be analysed statistically

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33
Q

what is market mapping?

A

using a diagram to identify all the products in the market using two key features- e.g. price and quality

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34
Q

what does market mapping show to a business?

A

enables business to see where the market is concentrated and may show gaps in the market

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35
Q

what is sampling?

A

the selection of a representative group of consumers from a larger target population

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36
Q

what are the methods of sampling?

A
  • random
  • stratified random sampling
  • quota sampling
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37
Q

what is random sampling?

A

selected by chance with no bias

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38
Q

what is stratified random sampling?

A

population is segmented into subgroups before randomly selected within subgroup

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39
Q

what is quota sampling?

A

segmented into subgroups before judgment is made in selecting respondents that represent subgroup

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40
Q

what is confidence interval?

A

the plus or minus figure used to show the accuracy of results arising from sampling

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41
Q

what is confidence level?

A

the probability that research findings are correct

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42
Q

what is the correlation between confidence interval and confidence level?

A

the high the confidence level, the wider the confidence interval

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43
Q

what is the value in using technology in gather and analysing data for marketing decision making?

A

means vast amounts of data can be collected, stored and analysed. gaining a greater understanding about the person buying a product.

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44
Q

what does correlation mean?

A

the statistical technique used to establish the extent of a relationship between two variables as the level of sales and advertising expenditure

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45
Q

what is a positive correlation?

A

when two factors move in the same direction

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46
Q

what is a negative correlation?

A

when two factors move in opposite directions

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47
Q

what is a strong correlation?

A

when it is easy to draw a line of best fit

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48
Q

what is a weak correlation?

A

when its hard to draw line of best fit. the weaker the correlation, the least accurate the data will be

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49
Q

what is extrapolation?

A

uses past data to extend an identified trend into the future. it is a useful technique when trends can clearly be identified and the market is relatively stable

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50
Q

when is extrapolation not suitable?

A

for industries subject to rapid change such as fashion and technology

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51
Q

what does elasticity mean?

A

a measure of the responsiveness of demand to a change in a variable

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52
Q

what is Price elasticity of demand (PED)?

A

a measure of how responsive demand is to a change in price

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53
Q

what is the calculation for PED?

A

%change in quantity demanded / %change in price

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54
Q

when is a product seen as elastic?

A

when the figure is -1 or below
-the % change in demand will be greater than % change in price

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55
Q

what are the implications of a price increase for an elastic product?

A

lead to a bigger % decrease in demand so the revenue will fall

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56
Q

what are the implication of a price decrease for an elastic product?

A

lead to a bigger % increase in demand so revenue will rise

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57
Q

what are the benefits of an elastic demand on a product ?

A
  • can use price reduction for life extension
  • can use sales to clear stock
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58
Q

when is product seen to be inelastic?

A

when the figure is between 0 and -1
- the %change in demand is less that the % change in price

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59
Q

what are the implications of a price increase for an inelastic product?

A

lead to a smaller % decrease in demand so revenue will increase

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60
Q

what are the implication of a price decrease for an inelastic product?

A

lead to a smaller % increase in demand so revenue will fall

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61
Q

what are the benefits of an inelastic demand on a product?

A
  • charge higher prices
  • do not use price reductions to promote
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62
Q

what are the factors influencing elasticity of demand?

A
  • strength of brand
  • necessity or luxury
  • substitutes in market
  • competition
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63
Q

what is Income elasticity of demand (YED)?

A

a measure of how responsive demand is to a change in income

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64
Q

what is the calculation for YED?

A

% change in quantity demanded / % change in income

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65
Q

what is it when YED is below -1?

A

elastic= means the %change in demand will be greater than %change in income. but a change in income would lead to an opposite change in demand

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66
Q

what is it when YED is between -1 and +1 ?

A

inelastic = means %change in demand is less than %change in income

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67
Q

what is it when YED is above +1?

A

elastic = means %change in demand is greater than %change in income

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68
Q

what is a luxury good?

A

a product or service that isn’t necessary
- elastic = above +1

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69
Q

what is a normal good?

A

a product or service that is a necessity
- inelastic = between -1 and +1

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70
Q

what is an inferior good?

A

a product or service that has a low perceived value
- elastic = below -1

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71
Q

why does income elasticity matter?

A
  • if economy is doing well and incomes rise = faster growth in demand in products with positive and high YED
  • during a boom, demand for inferior is likely to fall
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72
Q

what is market segmentation?

A

dividing the market into identifiable sub markets with their own customer characteristics

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73
Q

what is market targeting?

A

deciding which segment a business wants to operate in

74
Q

what is market positioning?

A

where a particular brand stands in relation to other brands in the market

75
Q

what is niche marketing?

A

when businesses identify and satisfy the demands of small segments of a larger market

76
Q

what is mass marketing?

A

when businesses aim their products at most of the available market

77
Q

what is the STP process?

A
  • segmentation
  • targeting
  • positioning
78
Q

what types of segmentation are there?

A
  • demographic
  • geographical
  • behavioral
    -income
79
Q

what are the benefits of market segmentation?

A
  • identifying the group most valuable to the business
    = brand loyalty
    = repeat customers
    = profits
    = price sensitivity
80
Q

what are the drawbacks of market segmentation?

A
  • cost of research
  • cost to develop product range
  • production costs
81
Q

what are the benefits of niche marketing?

A
  • meet customer needs
    = brand loyalty means they can rise prices
  • small production volume
82
Q

what are the drawbacks of niche marketing?

A
  • limited opportunity for market growth
  • specific niche = risk
  • inability to gain economies of scale
83
Q

what are the benefits of mass marketing?

A
  • less research
  • indicates business is high focus on volume of sales = econ of scales
  • smaller product range = low cost per unit = profit margin increase
84
Q

what are the drawbacks of mass marketing?

A
  • avoided segments
  • larger market = reducing price = more comp
  • digital marketing
  • mass production cost
85
Q

what does positioning help with?

A

decides on product specification, price, where to sell and how to promote.
= marketing mix

86
Q

what is the marketing mix?

A

putting the right product in the right place, at the right time, and at the right price

87
Q

what are the 7 P’s in the marketing mix?

A
  • Product
  • Price
  • Place
  • Promotion
  • People
  • Process
  • Physical environment
88
Q

what is industrial products?

A

bought for further processing or for use in conducting a business

89
Q

what is a unique selling point?

A

Refers to differentiating factors that allows a business to differentiate its product or service from others in the market

90
Q

what is a consumer product?

A

product brought by the final customers for personal use or consumption

91
Q

what is a convenience product?

A
  • widely available
  • bought on impulse
  • no planning
  • low customer involvement
91
Q

what types of consumer products are there?

A
  • convenience products
  • shopping product
  • specialty product
92
Q

what is an industrial product?

A

product brought by other businesses for further processing or to be used in the business activity ( transformation process)

93
Q

what is an industrial product?

A

product bought by other businesses for further processing or to be used in transformational process

94
Q

what are internal influences on consumer products?

A
  • efficient operations = lower prices
  • targets set by managers
  • people = staff to develop market share
  • finance
95
Q

what are the external influences on consumer products?

A
  • PESTLE +C
96
Q

what is a specialty product?

A
  • take longer to process a decision
  • willing to travel to buy
  • high involvement
  • staff involved in purchase is important
97
Q

what is product development ?

A

the process of developing new products or improving existing ones and then bringing them to the market.
= Research and development

98
Q

what are the phases in research and development?

A

1) idea generation
2) develop
3) testing
4) modify
5) launch

99
Q

what is product development?

A

selling the different products to the same market segments

100
Q

what are internal factors influencing new product development ?

A
  • research facilities
  • finance
  • time
  • staff expertise
  • strategy
101
Q

what are external factors influencing new product development?

A
  • market research
  • competitors
  • shareholders attitudes to risk taking
102
Q

what examples of product development are there?

A
  • repackaging
  • performance improvement
  • quality improvement
103
Q

what are the pros of market development?

A
  • increase sales and revenues
  • opportunity to price skimming
  • long term strategy
  • sell to different market segments
104
Q

what are the cons of market development?

A
  • cost and risk of failure
  • low volume of output and no economies of scale
105
Q

what is the importance of a USP?

A

add value by creating a USP for their products and allows businesses to differentiate from other competitors
- encourage brand loyalty
- able to charge higher price

106
Q

what is the product life cycle?

A

a graph that tracks sales of each individual product over time

107
Q

what are product life extension strategies?

A

marketing actions taken to prolong the life of a product

108
Q

what does a product life cycle help monitor?

A

track sales ($) and volume of units of an individual product over time

109
Q

what are the stages in the product life cycle?

A
  • research and development
  • introduction
  • growth
  • maturity
  • decline
110
Q

what are characteristics in the research and development stage in the product life cycle?

A
  • no sales and no revenue
  • high cost
    = negative cash flow
111
Q

what are characteristics in the introduction stage in the product life cycle?

A
  • low sales
  • marketing costs
    = negative cash flow
112
Q

what are characteristics in the growth stage in the product life cycle?

A
  • improved sales
  • marketing cost
    = positive cash flow
113
Q

what are characteristics in the maturity stage in the product life cycle?

A
  • peak sales
    = positive cash flow
114
Q

what are characteristics in the decline stage in the product life cycle?

A
  • declining sales
    = declining revenue
115
Q

what are the pros of using the product life cycle to make marketing decisions?

A
  • tracking
  • prompts extension
  • helps managers plan
  • suggests adaptations of marketing mix
116
Q

what are the cons of using the product life cycle to make marketing decisions?

A
  • each product has diff cycle
  • not clear where it is
  • doesn’t explain changes in sales
  • short term = unhelpful
  • doesn’t forecast
117
Q

what strategies of extension are there for products?

A
  • advertising
  • reducing price
  • adding value
  • entering new markets
  • changing packaging
118
Q

what is a product portfolio?

A

the range of products that a business sellsw

119
Q

what is an ideal product portfolio?

A
  • have products in each major stage of life cycle
    = constant flow of income to fund new products to support growth
120
Q

what does the Boston matrix represent?

A

allows businesses to plot their products on a grid or matrix according to each products market share and its market growth

121
Q

what are the four categories of products on the Boston matrix?

A
  • Dog
  • Question marks or problem child
  • stars
  • cash cows
122
Q

where is the Dog on the boston matrix?

A
  • Low market share and low market growth
123
Q

what strategy should a business do with a ‘dog’ product?

A

remove this product from the market depending whether it is making a loss and how important it is to the brand

124
Q

where is the question mark or problem child on the boston matrix?

A

low market share and high market growth

125
Q

what strategy should a business do with a question mark or problem child product?

A

monitor this product as it has potential to become a star, if product doesn’t achieve its potential market share it will become a dog

126
Q

where is the star on the boston matrix?

A

high market share and high market growth

127
Q

what strategy should a business do with a ‘star’ product?

A

invest in this product as it has potential for further growth. keeping its high market share is key to ensure it becomes cash cow in future

128
Q

where is the cash cow on the boston matrix?

A

high market share and low market growth

129
Q

what strategy should a business do with a ‘cash cow’ product?

A

maintain this profitable products market share but not spending too much on it as sales are unlikely to grow significantly

130
Q

what are the benefits of using the boston matrix?

A
  • suggests a strategy for each type of product
  • shows if portfolio is balanced or not
  • sustainability of the business
131
Q

what are the weaknesses of the boston matrix?

A
  • some products could be borderline
  • doesnt always lead to right decision
132
Q

what is price?

A

money charged for a product or service

133
Q

what are pricing strategies?

A

pricing decisions adopted over the medium to long term to achieve marketing objectives

134
Q

what are pricing tactics?

A

pricing decisions adopted in the short term to suit particular situations

135
Q

what is dynamic pricing?

A

where firms set flexible prices for products or services based on current market demands. increasingly sophisticates e-commerce systems make much wider use of dynamic pricing.

136
Q

what is price skimming?

A

involves setting an initially high price to maximise profit then lowering the price in the future

137
Q

what is penetration pricing?

A

the opposite to price skimming, setting initially lower prices then increasing it

138
Q

what is cost-plus pricing?

A

determined by adding a % markup to the cost of producing a product

139
Q

what is pricing methods?

A

the methods used to calculate the actual price set

140
Q

what are the influences on pricing decisions?

A
  • marketing mix
  • demand
  • state of economy
  • power of customers
  • costs
  • supply
  • quality
  • competitors
141
Q

what is loss leader prices?

A

a product sold at a loss to attract customers

142
Q

what is psychological pricing?

A

based on theory = making it seem better value

143
Q

what is competitor pricing?

A

business sets price on prices of direct competitors

144
Q

what is distribution?

A

the component within the marketing mix that defines both physical location and distribution channel its travelled through, from manufacturer to consumer

145
Q

what is distribution channel?

A

the route to market that a product takes from producers to the final customer. it will affect the number of intermediaries and hence the price for consumers

146
Q

what are intermediaries?

A

the middle people within distribution channels such as wholesalers and retailers

147
Q

what are wholesalers?

A

an intermediary that buys in bulk and se;;s to resellers rather than consumers

148
Q

what is multi-channel distribution?

A

where businesses use more than one type of distribution channel

149
Q

what is traditional distribution?

A

producer–wholesaler–retailer–consumer

150
Q

what are the pros of traditional distribution?

A
  • wholesale buys in bulk = high sales
  • low risk
  • includes retailer = low marketing cost
151
Q

what are the cons of traditional distribution?

A
  • wholesaler and retailer seek margins
  • less able to provide effective customer service to consumer
152
Q

what is modern distribution?

A

producer–retailer–consumer

153
Q

what are the pros of modern distribution?

A
  • ways to overcome high marketing costs
154
Q

what are the cons of modern distribution?

A
  • high distribution costs
  • wont receive full price
155
Q

what is direct distribution?

A

supplier–consumer

156
Q

what are the pros of direct distribution?

A
  • no wholesaler to take profit
157
Q

what are the cons of direct distribution?

A
  • high distribution costs
  • high marketing costs
  • sales in lower volume
158
Q

what are the factors deciding the type of distribution?

A
  • type of product
  • control over promotion
  • cost of distribution
  • customer expectations
  • geog location
159
Q

what is e-commerce?

A

buying and selling of goods and services online

160
Q

what are the pros of e-commerce?

A
  • open 24/7
  • larger market
  • low cost = no physical stores
  • cheaper marketing
161
Q

what are the cons of e-commerce?

A
  • cost of customer service and returns
  • cannot try and test
  • risk of excluding customers
  • easy comparing competitors
  • ICT upkeep and marketing cost
162
Q

what is m-commerce?

A

buying and selling goods and services using a mobile phone

163
Q

what are the pros of m-commerce?

A
  • allows tp make purchase anywhere
  • doesnt require PC
164
Q

what is promotion?

A

the component of the marketing mic=x that attracts, informs and persuades customers about the product in order to sell that product

164
Q

what are the cons of m-commerce?

A

-customers missed out
- requires app set up
- hacking?

164
Q

what is the promotional mix?

A

the combination of promotional activities that a firm uses in order to create consumer awareness and generate sales

165
Q

what is advertising?

A

a paid form of non-personal communication using mass media to change the attitudes and buying behavior of consumers

166
Q

what is sales promotions?

A

special offers reducing the price of a product or service

167
Q

what is merchandising?

A

in- store promotional activities at the point of sale

168
Q

what is personal selling?

A

a visit from a business’ sales representative to a potential customer

169
Q

what is public relations (PR)?

A

the media attention generated through a third part such as a magazine or review from a blogger

170
Q

what are the influencing factors on promotional mix?

A

-target audience
- type of product
- position on product life cycle
- finance
- competitors
- technology

171
Q

what is a brand?

A

a unique and recognized feature of a business or product. allows to gain competitive advantage through differentiation

172
Q

what is digital marketing?

A

refers to any online marketing methods

173
Q

what is the ‘people’ part of the marketing mix?

A

the people who make contact with customers in delivering the product

174
Q

what is the ‘process’ part of the marketing mix?

A

the systems and processes that deliver a product to a customer

175
Q

what is the ‘physical’ part of the marketing mix?

A

the elements of the physical environment the customer experiences

176
Q

what is an integrated marketing mix?

A

the individual elements complement each other to communicate a coherent message to customers

177
Q

what are the key influences on the marketing mix?

A
  • product life cycle
  • boston matrix
  • types of product
  • marketing objectives
  • target market
  • competition
  • positioning

Business (11 decks)

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