Unit 3 Flashcards
Decision making to improve marketing performance
Examples of marketing objectives
-sales volume and sales value
-market size
-market and sales growth
-market share
-brand loyalty
The value of setting marketing objectives
-target setting
-motivation
-evaluation of performance
market share calculation
sales of firm/total market sales x 100
what is market share?
The percentage of a market’s total sales that is earned by a particular company over a specified time period
sales growth calculation
difference in sales/earliest year x 100
market growth calculation
difference in total market sales/earliest year x 100
market size
sales / market share x 100
external factors influencing marketing objectives and decisions
-market and competition
-economic factors
-social factors
-ethics
-technology
internal factors influencing marketing objectives and decisions
-finance
-production capacity
-human resources
-nature of product
what does market research involve?
-study of market trends and characteristics
-analysis of market shares and potential of existing products
-sales forecasting for products
-analysis and forecasting of sales of new products
examples of primary research
-surveys
-observation
-focus groups
-test marketing
examples of secondary research
-published reports
-government and other agencies
-internet
features of quantitative market research
-its a collection of information and data on consumer views
-can be analysed statistically and represents in charts and graphs
-can be used to demonstrate sales potential, market size etc
features of qualitative market research
-research into attitudes and opinions of customers
-collected in small groups such as focus groups
-can show consumer reaction to changes in price, product, packaging etc
what is market mapping
Using a diagram to identify the position of all the products in the market using two key features e.g price and quality
random sampling
Each member of the public has an equal chance of being included. This is appropriate when a firm is researching a product aimed at a large target group
stratified sampling
This separates the population into segments of strata. This can avoid bias by ensuring that the composition of the sample accurately reflects that of the entire population.
quota sampling
This splits the population into a number of groups, each sharing common characteristics.
correlation
Occurs when there is a direct relationship between one factor and another
confidence interval
The plus or minus figure used to show accuracy of results arising from sampling.
confidence level
The probability that research findings are correct
extrapolation
analyses past performances of a variable, such as sales, and extends the trend into the future
elasticity
a measure of the responsiveness of demand to a change in a variable e.g price or income
price elasticity of demand equation
percentage change in demand / percentage change in price
income elasticity of demand equation
percentage change in demand / percentage change in income
market segmentation
dividing the market into identifiable submarkets each with its own customer characteristics
market targeting
deciding which market segment a business wants to operate in
market positioning
where a particular brands stands in relation to other brands in the market
niche marketing
A business identifies and satisfies the demands of small segments of a larger market.
Advantages of niche marketing
-may benefit from price skimming
-can be highly profitable
-customer loyalty
influences on choosing a target market and positioning
-the nature of the product
-competition
-the consumer
disadvantages of niche marketing
-if profitable could attract competition
-may be difficult to generate acceptable profit
mass marketing
Businesses aim their products at most of the available market
what is the marketing mix?
The combination of marketing activities that an organisation engages in so as to best meet the needs of its targeted market.
influences on designing marketing mix
-technology- the product itself and methods of distribution
-finance- profit levels and cash flow
-market research- a key influence on all elements of the marketing mix
7Ps of the marketing mix
-promotion
-people
-process
-physical environment
-product
-place
-price
influences and the value of new product development
-technology- developments in technology
-competitors actions- competitor producing a new product
-the entrepreneurial skills of manager’s and owners- skill of creativity and thinking of new ideas
Use of a USP
- business can base its advertising campaign around the difference between products and those of its rivals
- having a USP assists in encouraging brand loyalty as it gives customers a reason to continue to buy that particular businesses product
- A USP commonly allows the firm to charge a premium price for that product
what is each section of the boston matrix
-star - high market growth, high market share
-cash cow - low market share, high market growth
-dog - low market share, low market growth
-problem child - high market growth, low market share
stages of the product lifecycle
-development
-introduction
-growth
-maturity
-decline
extension strategies to prolong life of product
-finding new markets for existing products
-changing the appearance or packaging
price skimming
Setting a high price and lowering when competitors join the market
penetration pricing
Setting a low price to gain a foothold in the market and have high sales before increasing the price
price leadership
Used for established products with strong brand images. The firm adopting this strategy will probably dominate the market and other businesses will follow their lead.
price taking
Price takers set their prices equal to the going rate or the established market price.
loss leaders
Setting prices very low (often below cost of production) to attract customers. Businesses using this tactic hope that customers will purchase other full price products while purchasing the loss leader.
Special-offer pricing
This involves reduced prices for a limited period of time or offers such as “three for the price of two”
how to make demand demand for products more price inelastic
-differentiating products from those of competitors
-reducing competition through takeovers and mergers
what is promotion
Bringing a consumers’ attention to a product or business
elements of the promotional mix
-advertising
-exhibitions and trade fairs
-packaging
-public relations
-merchandising
-personal selling
-sales promotion
what is advertising?
A paid form of non-personal communication using mass media to change the attitudes and buying behavior of consumers
what is merchandising?
Merchandising is in-store promotional activity by manufacturers or retailers at the point of the sale
what is packaging?
Emphasises the attractiveness of the product and informs the consumer of its features
what are exhibitions and trade fairs?
Events staged to attract all those people involved in a particular market, both sellers and buyers.
what is branding?
This establishes an identity for a product that distinguishes it from the competition.
what is personal selling?
Visits by a firm’s sales representatives to prospective customers.
what are public relations?
Promoting the company’s image to establish a favourable public attitude towards the company
Influences on the choice of promotional mix
-the product’s position in its life cycle
-the type of product
-the finance available to the business
-where the consumers make purchasing decisions
-competitors’ actions
