Unit 3 Flashcards
Market size
The volume if sales of a produc6
Market size
The volume if sales of a produc6
Marketing
Anticipating and satisfying customers wants in a way that felights the consumer and also meets the need of the organisation
Market growth
Percentage change in sales
Factors including market growth
Economic growth
Nature of the product
Changes in taste
Social changes
Sales growth
Percentage change in sales
Market share
Percentage change in proportion of total sales of a product or service achieved by a firm or a specific brand of a product
Example of marketing objective
Marketing positioning reaching out to different targets like gendere
Ethical and environmental marketing objectives- making there products better for the environment
Value of setting marketing objectives
Act as a focus for decision making and effort
Provide a yardstick against which success or failure can be measured
Improve co-ordination by giving teams a common purpose
Benefits of setting marketing objectives
Marketing objective should be smart
SPECIFIC
MEASURABLE
AGREED
REALISTIC
TIME BASED
measure and timed objectives allow managers and individuals to improve efficiency
Problems with setting marketing objectives
External chanh3s are not easy to predict and marketing objectives may be based on incorrect assumptions
Internal changes should be foreseeable foreseeable they are likely to create problems
May be unclear priorities
External influences on marketing objectives
Market factors- growth or decline has big impact on objectives
Competitors action and performance- difficult for the owner to achieve a high market share if there is loads of competitors
Supplier- capability of its suppliers to provide whatever the business believe can be sold
Internal influence software marketing objectives
Finance- business with healthy financial situation can afford to put.more resources into it marketing and therefore can set more challenging objectives
Primary market research
Collection or commissioning of info, gathered first hand, for the specific purpose of the initial user
Secondary market research
Info that has already been collected for a different purpose
Example of primary research
Focus group
Survey
Telephone interviews
Advantages of focus group
Enable a firm to gather detailed info om why consumers react the way they do
Disadvantages of focus groups
Sometimes and element of bias in focus groups as ghe groups consists of people who have particular interest in the group
Focus group
Group of consumers encouraged to dicuss their feelings about a product or a market
Interview advantages
A wide range of info can be obtained
Questions can be closed or open
The interviewers can explain the wording of the question to the interviewer
Interview disadvantages
Personal interviews can be time consuming
Person responding can give false answers
Advantages of surveys
Cheap
Surveys can update quickly
May be possible to do a detailed questionnaire
Disadvantages of surveys
Sample will tend to be biased towards people with a particular interest
Will be less relevant for organisations whose target market use the internet
Examples of secondary market research
Government publications
Newspapers
Magazines
Competitors
Loyalty cards
Internet
Advantages od secondary market research
Info is already available
Cheaper than primary research
Secondary surveys are often conducted regularly
Disadvantages of secondary market research
Info may be dated and therefore misleading
Since info is available to other organisations unlikely to give the business any advantages over competitors
Qualitative market research
Collection of info about the market based on subjective factors such as opinions and reasons
Benefits of qualativae market research
By examiners why consumers in a certain way the business can gain a greater insight into what it needs to appeal to its consumers
Can highlight issues that the business was not aware of
Drawback of qualative Market research
Expensive to gather this info as usually requires skilled personel to interpret it
Difficult to tabulate the data and compare it with other data
Quantitive market research
Collection of info based on numbers
Benefits of quantities market research
Summarises data in a concise and meaningful way
Numerical data makes it easier to compare results eith other organisations
Disadvantages of quantative research
Only shows what rather than explaining why
Can lack reliability and validity
Market mapping
A technique that analyses markets by looking at the features that distinguish different products or firms
Benefits of market mapping
Helps to identify a firms closest rival
Helps to identify gaps in the market that a firm could fill by introducing a new product or image
Shows overall competition of market
Benefits of market mapping
Helps to identify a firms closest rival
Helps to identify gaps in the market that a firm could fill by introducing a new product or image
Shows overall competition of market
Disadvantages of market mapping
Can be an oversimplification of a product or a business position
Very subjective ajd potentially inaccurate or biased
Apparent gaps in a market
Benefits of sampling
Asking a small group of customers fsj provide food indication of the likely behaviour of the whole market
Can be used flexibly
Reliable info can be gathered from a fairly small cross section
Disadvantages of sampling
Samples may be unrepresentative
May be bias in questions or in the answers that they encourage
In markets tastes are constantly changing such as music industry
Confidence intervals
Plus or minus figure used to show accuracy or statistical results arising from sampling
Factors influencing confidence levels
Sample size
Population size
Percentage of sample choosing a particular answer
Extrapolation
Using previous patterns of numerical data in order to repdict values in the future
Strengths of extrapolation
Quite common for past trends to continue into the future
Some consumers adopt new idead more quickly than others and so products experiencing sales growth steadily build up
Disadvantages of extrapolation
Less reliable if there are fluctuations
Assumes thr past changes will continue into the future and so does not take into account changes
Ignores qualative factors
Value of technology in gathering marketing decisioj making
Info from business links
Internet
Loyalty cards
Social media
Value of info technology in analysing data for marketing decision making
Time saved by a business allows a business to comapres a number different strategies
Organisations are able to link their sale records to databases
Price elasticity of demand
The degree to which the quantity demanded of a good or service affected by a change in price
Income elasticity of demand
The degree to which the quantity demanded of a good or service is affected by a change in consumer income
Price elasticity can be
Elastic demand
Inelastic demand
Unit elasticity
Plastic demand
I’d the change in price leads to a greater percentage change in the quantity demanded than the percentage change in price
Calculation answer will be greater than 1
Inelastic demans
If the change in price elasticity to a small percentage change in the quantity demanded than the percentage change in price then the calculation number will be smaller than 1
Unit elasticity
The name is given to the both situation where both percentage changes are the same giving an answer of -1
If demand for a good iwinelastic whay does it mean if price rises
The quantity demanded falls by a small percentage
If demand for a good is elastic whay does it mean when price increases
Quantity demanded falls by a large percentage
If a demand for a good is unitary what happens to sales revenue
Will be the same
Factors influencing the price elasticity of demand
Necesity- if product is a necessity customers will buy similiar quantities even if price is high
Habit-cugarretes or chocolate
Market segmentation
Classification of customers or potential customer into group or sub group
Types of market segmentation
Demographic segments
Geographic
Income
Step 1 of market segmentation
Identify vaes for segmenting market
Gather profile of consumers in ech of those market segments
Step 2 of market segmentation
Assess nature of each market segment and identify those that provide the best match to the business’ existing capabilities
Select the market segment on which the business will focus its effort on
Step 3 of market segmeng
Decide on important characteristics of products that will be used to appeal t the targeted market segments
Develop a marketing mix for each market segment
Demographic segmentation
Age gender
Geographical segment
Influenced by places people live at
Income segmentation
Influence on customer spending
Products and marketing messages can be made to make them more likely to buy a product
Benefits of market segmentation
Increase market share
Assist new peoduct development
Extend products into new markets
Drawbacks of market segmentatin
Difficulty in identifying most important segments of a product
Reaching the chosen segment with marketing
Recognising changes in segments interested in theproduct
Niche marketiny
Targeting a product or service at a small segment of a larger market
Advantages of niche marketing
Less competition
Cost reduction
Small scale production
Tailor made products
Disadvantages of niche marketint
Lower profits
Changes in demand
Market entry
Mass marketing
Aiming a product at all of tha market
Advantages of mass marketing
Large scale production
High revenues
Barriers to entry
Disadvantages of mass marketing
Fixed capital
Changes in demand
Competition
Adding value
Market positioning
Where your product or brand stands in relation to the products or brands of other businesses
Market positioning factors
Attributes and benefits of product
Competition
Product user
Pricing
Value or marketing positioning
Allows a business to maximise sale revenue
Reduced cost
Give the business scope for high prices
Marketing mix
Elements of a business approach to marketing thag enables it to satisfy there customers
6 ps
Product
Price
Promotion
Place
People
Process
Physical environment
Influences in elements of marketing mix
Finance-cash flow, discounts, marketing budget and costs of promotion
Technology- lower costs, online selling ,social media
Features of industrial marketing
Larger transactions
Quality
Pricing
Informative advertising
Features of convenience products
Consumed and purchased regularly
Purchase them by habit
Purchased by large proportion of population
Features of shopping products
Consumed and purchased quire often
Because consumer plan their purchase they do not need to be displayed so prominently in stores
Features if speciality products
Products will often have unique characteristics
Consumers are much more slectivd and greater emphasis on image
Product features
Reliability
Size and weight
Fashion
Durability
Convenience of use
Boston matrix
A tool of product portfolio analysis that classifies products affording to th3 market share of the product and the rate of growth or the market in which the product is sold
Stars Boston matrix
These are products that have a high percentage market share in a high growth market
They enjoy increasing sale revenue but because the market is growing, competitors will be encouraged to focus on this market
Cash cows born matrix
These products have a high percentage in a low growth market, they often exit in established markets that have reached maturity
Problem child Boston matrix
Low percentage market share in a Hugh growth market
Problem child Boston matrix
Goods or services with a low percentage market share in a high growth market share
Poses a problem for the firm
Problem child Boston matrix
Goods or services with a low percentage market share in a high growth market
Dogs Boston matrix
Good with a low percentage market share in a low growth market
5 stages of product lifecycle
Development
Introduction
Growth
Maturity
Decline
Development
Prepare for launch of its product
For example
Generation of idead
Analysis of ideas
Product development
Test marketing
Launch
Introduction
Starts with the launch and continues during the period in which product is new to the market
Growth
Aa pr9duct becomes more popular it enters the growth
Profitability may be reached ss initial burst of marketing is no longer needed
Maturity
Firm will hope to make a profit and sales will tend to stabilise
However there may be an increase if the product is in an expanding market
Decline
Eventually sales of a product will fall
Problems of predicting life cycle
Is limited use in strategic planning because the exact life span of a product is never known
Stages of development os mrw goods and services
Generation of ideas
Analysis of ideas
Product development
Test marketing
Launch
Influences in new product development
Technology
Competitors actions
Entrepreneurial skills
Benefits of focus on core
Concentration on areas of expertise will lead to greater efficiency as the firm will benefit from specialisation
Each product is likely yo be produced on a much larger scale
Consumers will trust firms ability
Benefits of product profileration
Increasing number of products will spread risks and this may help to secure the firms future
Penetrative pricint
A strategy in which low prices are set to break into a market or to achieve a sudden increase in market share
Price skimming
A strategy in which a high price is set to yield a High profit margin
Dynamic pricing
Flexible system if pricing based on marketing factors
A products price may change at short notice according to changing in supplies or demand
Can also involve charging different prices to different customers
Influences of pricing decision
Cost of production
Price elasticity of demand
Benefits of branding
Increased demand
Increased price
Reduced competition
Protection against downturns
Examples of direct selling
Dorect mail
Telephone
Personal selling
Influence on the choice of promotional mix
Campaign objectives
Costs and budgets
Target market
Balance of promotions in a campaign
Importance of location
Convenient
Accessibility
Cost
Reputation
Examples of how people increase number of outlets
Promotional campaigns
Providing extra facilities
Offering hug profit margins to retailers
Paying generous commission to sales staff
Traditional distribution channel
Producer wholesaler
Retailer consumer
Modern distribution channek
Producer retailer consumer
Direct distribution channel
Producer consumer
Factors including method of distribution
Size of retailer
Type od product
Technology
Geography of the market
Importance of an integrated marketing mix
If the main selling point of a product is it excellence then the quality and design of the product
Supermarket will want its low price
Influences of integrated marketing mix
Position in product lifecycle
Baston matrix
Type of product
Marketing objectives
Benefits ot digital marketing to business
Reduces costs
More personalised and targeted marketing
Marketing can be relayed to consumers interests
More immediate impact
Benefits of commerce in the business
Saves costs
Saves time
Facilitates customisation of products
Inventory levels cab be reduced
Benefits of commerce in the business
Saves costs
Saves time
Facilitates customisation of products
Inventory levels cab be reduced
Issues involving digital technology and ecommerce
Security
Initial costs
User resistance
