Unit 3 Flashcards
Types of marketing objectives
- Sales volume and sales value
- Market size
- Market and sales growth
- Brand loyalty
The value of setting a marketing objective
- Target setting that allows a sense of direction
- Employee engagement and motivation
- Evaluating the performance of a business
Internal influences of marketing objectives and decisions
-Finance: the budget given to use for marketing
-Production capacity: must be physically possible to achieve targets.
Human resources: market growth may depend on the skill of the workforce
-Nature of growth: innovative products are more incline to a scope of growth
external influences on marketing objectives
-Market and competition: Varies on the state of the market and competitors
- Economic factors: The economic cycle, interests rate which may affect consumer spending
-Social factors: Consumer taste change overtime
-Ethics: Consumers are more woke
- Technology: Affects the way a business both produces and sells.
The value of sampling
- Samples represent the whole target market due to the principle being the larger the sample the more accurate it will be.
Ways sampling can be collected
- Random sampling: where each member of the public has an equal chance of being selected
- Stratified random sampling: Separates the population into segments.
- Quota sampling: Splits the population into a number of groups that share characteristics. More efficient
Factors influencing choice of sampling
- Pricing policies
-Product design
-Types of promotion - Target customers
Extrapolation
Uses known data to predict the future.
By using past sales it may be possible to predict future sales by a trend line
Treat with caution with industires such as fashion and technology
The value of technology in marketing decision making
- Provides faster communication
- Makes forecasting easier
-Enables targeted sales messages - However, relies on having correct data in the first place
Market mapping
- Enables a business to identify the position of its product in the relevant market.
- Main features include price and quality
Market segmentation
Dividing the market in sub-markets with each of its own customer characteristics
Mass markets
- Business must produce on a large scale
- Need to be price competitive
- Have a strong USP
The marketing mix (7Ps)
The 4 ps included : Price, Product, Place, Promotion
The extended mix: People, process and the physical environment
Factors to consider when designing a marketing mix
- Technology
- Finance
- Market research
- Nature of the product
Influences on new product development
-Technology: Firms use technological advances for basis of development to meet the demands of a consumer fully.
-Competitors actions: A competitor product or service may be better which in turn will encourage the business to inspire to be better
- The entrepreneurial skills of managers and owners: The skill of being able to create new ideas that fit the customer needs.
Extension strategies used in the life cycle
- Finding new markets for existing products- Ansoff’s matrix
- changing the appearance or packaging of a product.
What does the Boston matrix include
- Star products- have a dominant share of the market and good growth prospects
- Cash cows- are products with a dominant market share but low growth
- Dogs- have a low market share and low prospects for growth
Problem children- Are products with a small share of a growing market
Conclusions you get from the matrix
- Firms should avoid having too many products in a single category
- Continuing production of a cash cow can allow cash to develop new products
- Firms need problem children products as they could grow to be a cash cow.
Characteristics of a star product
- Market leaders
- Fast growing
- Substantial products
- Requires substantial investment to finance growth
Characteristics of a problem child
- Rapid growth
- Poor profit margins
- Enormous demand for cash
Characteristics of a cash cow
- Profitable products
- Generate more cash than needed to maintain a market share
Characteristics of a Dog
- Greatest number of products in this category
- Markets are not growing
- operate at a cost of disadvantage
Price Skimming
Where products are in a new market and are listed at a high price with limited sales that allow high profit margins to trial where their price will fit in the market.
The competitive price will then be listed again
Penetration pricing
-The price will be set at a very low price at first to gain a foothold in the market. Once the product is recognised it will then be increased to then up their profit margins
Price leadership
This is where the product has been recognised and will set a high price for their products.
Therefore other competitors will vary their price around this.
Price taking
Price takers set the price to the ‘going rate’ which is often used for small competitors and medium competitors.
Loss leadership
Business set the product at a very low price in which intends to get the customer to purchase other products at full price
Advertising
Informative advertising: To increase consumer awareness.
Persuasive: Attempts to persuade the customer to buy the product
Influences on the choice of the promotional mix
- The products position the product lifecycle e.g. a newly launched product will require more advertising
- The type of product
- The finance that is available for the business
- The packaging needs to be attractive for the consumer
- The action of competitors
Factors a business will consider in terms of distribution
- Location: will seek areas where there’s fewer competitors and where their target customer live
- Credit terms: New business will want shorter credit terms to help ease their cash flow to survive
- Willingness to display products in beneficial positions: E.g. A good position in the retail outlet
Types of distribution channels
Traditional: Many small retailers buy from wholesalers as they provide the right quantity. Wholesalers provide advice, credit and delivery but can be expensive.
Modern: Purchase from manufacturers and have their distribution pathway. They can buy huge quantities which allow discounts to cover the cost of their own distribution. This allows them to provide products cheaper for consumers which gives a company a better market position.
Direct: Many businesses sell direct to the customer on the internet. This allows the business to allow attractive low prices.
Factors that influence the choice of distribution channels
- The type of product: Cheaper products that are in high in quantity will be used by wholesaler to save capacity and expensive will be used by direct.
-The nature of the market: Businesses that sell in dispersed markets
- The technical complexity of the product: Are better distributed from producer to customer so if any complex problems occur they can be resolved efficiently.
Multi-channel distribution
Consumers are offered many different varieties.
E.g. Shops, online and click and collect.
Pros of digital marketing and e-commerce
- Businesses can build a relationship with the customer by gaining more details about them.
- Reviews can be given after purchasing
- Social media allows a type of marketing to be used that is cost-efficient.
Cons of digital marketing and e-commerce
- Reputations can be destroyed through bad online reviews due to being able to write the review even if they didn’t buy the product
