Unit 3 Flashcards
1
Q
What is the purpose of marketing?
A
The purpose of marketing is to meet the needs of customers and the organisation
2
Q
What is the key term of marketing?
A
satisfying customers’ wants in a way that delights the consumers and also meets the needs of the organisation
3
Q
What is the first stage of marketing
A
The first stage of marketing is to conduct market research in order to discover the wants of customers and the factors that influence those wants
4
Q
What is the marketing mix?
A
An organisation will decide on suitable marketing techniques to ensure that customers are delighted
5
Q
What are the “7 ps” in marketing mix?
A
-product
-price
-promotion
-place (distribution)
-people
-process
-physical environment (physical evidence)
6
Q
Why do organisations use the marketing mix?
A
Organisations use the marketing mix in order to achieve their marketing objectives
7
Q
What is the definition of marketing objectives?
A
The goals of the marketing function in an organisation
8
Q
What is the definition of sales volume?
A
Measures the number of items sold or produced (such as the number of televisions sold)
9
Q
What if the definition of sales value?
A
Measures the financial worth of the items sold (e.g. £30 million of televisions)
10
Q
What is the equation for sales value?
A
Sales value = sales volume x average price
For example :
If a ‘99p store’ sells 100,000 items at 99p each, then its sales volume is 100,000 items and its sales value is £99,000
11
Q
What is the definition of market size?
A
The volume of sales of a product (e.g. the number of computers sold) or the value of sales of a product (e.g. the total revenue from computer sales)
12
Q
What is the definition of market growth?
A
The % change in sales (volume or value) of a generic product or service, over a period of time.
13
Q
What is the equation of market growth
A
market size in year - market size in previous year
Market growth (%) = ———————————————————————- x 100
Market size in previous year
14
Q
What factors influence market growth?
A
- economic growth : if countries wealth grows 3 % per annum (year), sales likely to rise in any given market
- the nature of the product : markets dealing with luxury products, tend to grow rapidly when economic growth is high
- changes in taste : as lifestyles change, new products, more popular while other decline
- social changes : way people live influence product sales
- fashion
15
Q
What is the definition of sales growth?
A
The % change in sales (volume or value) for a specific business or product over a period of time
16
Q
What is the equation of sales growth?
A
sales in that year - sales in previous year
Sales growth (%) = ———————————————————— x 100
Sales in previous year
17
Q
What is the definition of market share?
A
The % or proportion of the total sales of a product or service achieved by a firm
18
Q
What is the equation for market share?
A
Market share = Sales of one product or brand or company
————————————————————— x 100
Total sales in the market
19
Q
What is the definition of brand loyalty?
A
A measure of the degree of attachment that a consumer has for a particular brand or product. High brand loyalty for one product will reduce the likelihood of a consumer switching to another brand
20
Q
What is an example of marketing objectives?
A
- market positioning:
- try attract new market segments
21
Q
What are the values of setting marketing objectives?
A
- to act as a focus for decision making and effort
- to improve coordination, giving teams and departments common purpose
- to motivate staff, improve performance by setting challenging, realistic, targets
- to establish priorities, so staff understand relative importance of different objectives
22
Q
What are some benefits of setting marketing objectives?
A
-SMART (specific, measurable, achievable/attainable, realistic, time) set clear objectives, helps ensure staff meet same goal
-enable staff see if they succeeded or failed to meet expectations
-if members of department or team have common purpose, enabling managers to provide more united & coordinated approach to problem solving
-measurable and timed objectives allow managers and individuals to improve efficiency, practices worked effectively & staff able to learn from previous mistakes
23
Q
What are some problems of setting marketing objectives?
A
- external changes not always easy to predict, marketing objectives may be based off of incorrect assumptions
- internal changes should be foreseeable, so less likely cause problems
- many potential marketing objectives, some cases some objectives may conflict
- may be unclear priorities, employees taking decisions to meet own needs rather meet objectives of business
- business may not have sufficient resources/marketing budget that’s little, enabling marketing departments to meet objectives
- if objectives imposed, not agreed, employees may not feel ‘ownership’ of objectives of department
- may be reluctant to set realistic objectives in times of difficulty
- people like to set ambitious targets, often means marketing objectives loss value because they’re too ambitious
24
Q
What is external influences?
A
External factors are those outside the business, such as the state of the economy and the actions of competitors
25
What are some examples of external influences on marketing objectives and decisions?
- market factors :
- growth (focus on ambitious targets) or decline (focus on survival targets) of market have major impact on business’s marketing obj.
- competitors action and performance:
- if market is highly competitive, difficult to achieve high market share
- technological change :
- businesses that use technology efficiently in marketing (Amazon, eBay, etc) benefit from increased growth, an ability to set/reach ambitious marketing obj.
- economic factors
- growth or recession in the economy :
- if economy growing rapidly, customers purchasing more products, ∴ higher targets for sales & prices included in marketing obj.
- interest rates :
- interest rates high, more expensive for customers to borrow money to buy goods/services
- suppliers :
- marketing objectives take in consideration capability of suppliers provide whatever business believes can be sold.
- ethical and environmental factors :
- environmental considerations r of growing importance, most businesses adapted marketing obj. to demonstrate env. friendly products
26
What is internal influences?
Internal influences are those factors within a business, such as its workforce, resources and financial position
27
What are some examples of internalP influences on marketing objectives and decisions?
- business/corporate objectives :
- overall aims of organisation, key influence on functional obj. Marketing department ∴ ensure objectives consistent with
corporate obj.
- finance :
- business with healthy financial situation can afford more resources into marketing, ∴ can set more challenging objectives.
- Human Resources (HR) :
- marketing objectives take in account size/capabilities of workforce; motivated, efficient & productive workforce affect
marketing
28
What is the definition of market research?
The systematic and objective collection, analysis and evaluation of information that is intended to assist the marketing process
29
What important pieces of info do collection and analysis of data show organisation?
- achieving objectives :
- has the firm achieved its target sales figure or its desired percentage market share?
- identifying trends :
- are sales rising or falling? Is the trend stable or unpredictable?
- comparisons :
- how are the firms sales performing relative to competitors?
30
What is the definition of primary market research?
Collection or commissioning of information, gathering first-hand, for the specific purpose of the initial user.
31
What is the definition of secondary market research?
the process of gathering and analyzing data that has already been collected by others
32
What are the examples of primary market research?
- experiment
- observation
- surveys :
- personal interviews
- postal surveys
- telephone surveys
- internet surveys
- focus groups
- test marketing
33
What are the benefits of focus groups?
- they enable a firm to gather detailed info on why consumers react in the way that they do, and can help a business to modify products according to these findings or to identify gaps in the marketplace
- they can help to uncover new ideas on how to market products
34
What are the drawbacks of focus groups?
- there is sometimes an element of bias in focus groups, as the groups consist of people who have a particular interest in the product and may also want to please the company
- they are expensive to operate, a single focus group can often cost between £500-£4,000
35
What are the benefits of internet surveys?
- relatively inexpensive to place a questionnaire on a website
- responders are most likely to be interested in buying the product, as they have made a conscious decision to visit the website
- the surveys can be updated frequently, generating excellent topical data for the firm
- it may be possible to use a detailed questionnaire, particularly if the respondent has an incentive to complete it
36
What are the drawbacks of internet surveys?
- the sample will tend to biased towards people with a particular interest in the product or service
- they will be less relevant for organisations whose target market does not use the internet
37
What are some key sources of secondary market research?
- Government publications:
-Office for National Statistics (ONS) provides info on economic and social trends, firms investigate the implications for business
- Newspapers:
-broadsheet newspapers contain articles on specific industries & more general features.
- Magazines:
-publications provide helpful data in form of articles & surveys.
- Company records:
-company's own records are cheap, accessible source (secondary sources, they’re used for original purpose)
- Competitors:
-brochures, promotional materials, company reports & investor information help firm to study its rivals' actions.
- Market research organisations:
-in addition to conducting primary research, organisations produce detailed secondary surveys, purchased by firms.
- Loyalty cards:
-allow businesses to identify spending patterns of consumers & target them with relevant promotions.
- Internet:
-major source of secondary data, should be treated with caution may lack reliability of other sources listed.
38
What are the Benefits of secondary market research?
- information already available, quick decisions can be taken based upon it.
- cheaper than primary research, some government research & business's own info, will be free. Market research organisations charge for general research, but expenses shared between different organisations, making cost cheaper.
- secondary surveys often conducted regularly, so info obtained particularly helpful in identifying trends over time.
39
What are the drawbacks of secondary market research?
- the information may be dated and therefore could be misleading
- since info is available to other organisations, unlikely to give business any advantages over its competitors.
- may be no relevant secondary data to meet specific needs business.
-As data collected by other organisations for own use, secondary user not know level of accuracy & reliability of data.
40
What is the definition of qualitative market research?
Collection of info about the market based on subjective factors such as opinions and reasons
41
What are the benefits of qualitative market research?
- examining why consumers behave in certain way, business gain greater insight into what needs to do to appeal consumers
- qualitative research highlight issues business was not aware of, enabling action to overcome problems or seize opportunities
- qualitative research give detailed insights into customers’ thinking processes when they buy products
42
What are the drawbacks of qualitative market research?
- expensive to gather qualitative info, as usually requires skilled personnel interpret it. Can lead to bias
- difficult to tabulate data & compare with other data, opinions often unstructured
43
What is the definition of quantitative market research?
Collection of information about the market based on numbers.
44
What are the benefits of quantitative market research?
- Numerical data makes easier compare results with other organisations, such as competitors, or other divisions of same organisation
- Numerical data used to identify trends & project future trends.
45
What are the drawbacks of quantitative market research?
- only shows ‘what', rather than explaining ‘why’ ∴ data produced less useful than the qualitative data in helping organisation to understand reasons behind trends.
- can lack reliability & validity if sample biased or too small.
46
What is the definition of market mapping?
technique that analyses markets by looking at the features that distinguish different products or firms.
47
What are the benefits of market mapping?
- Helps identify firm's closest rivals, in order to plan suitable competitive strategies.
- Helps identify gaps or niches in market that a firm could fill by introducing a new
product or image.
- If carried out through market research, can help firm understand public's
perception of organisation as business or brand.
- may help a firm that needs to reposition itself in a market.
- Shows the overall level of competition in a market.
- Can be used to assess the relative popularity of the features being considered.
48
What are the drawbacks of market mapping?
- Can oversimplification of product or business's position.
- very subjective thus potentially inaccurate or biased, being based on the opinions
of the person who drew up the market map.
- Apparent gaps in market may exist because consumers are not interested in
certain combination of features.
49
What is the definition of confidence interval (margin of error)?
The plus or minus figure used to show accuracy of statistical results arising from sampling
50
What are the Factors influencing the confidence interval?
- Sample size:
-larger sample size, more sure business can be answered provided by sample
is true reflection of opinion of total population.
- Population size:
-represents target population the product/service being surveyed.
- Percentage of sample choosing a particular answer:
-very high or very low % of sample express particular opinion, there is less
margin of error & so confidence interval will be low.
51
What is the definition of extrapolation?
Using previous patterns of numerical data in order to predict values in the future
52
What are the Strengths of extrapolation?
- Easy to use:
Extrapolation is a straightforward method that can be applied with basic calculations or visual analysis of trends, making it accessible to a wide range of users
- Low data requirement:
Unlike some advanced predictive models, extrapolation can function with relatively small datasets, making it suitable for situations where extensive data collection is not feasible
53
What are the drawbacks of extrapolation?
- less reliable if there are fluctuations. Seasonal & cyclical changes are rarely repeated exactly. Many seasonal factors relate to weather, notoriously unpredictable.
- ignores qualitative factors, such as changes in tastes and fashion.
- ignores product life cycle, suggests most products, experience growth, ultimately decline in sales.
54
What is the definition of price elasticity of demand?
The degrees for which the quantity demanded of a good or service is affected by a change in price
55
What is the definition of income elasticity of demand?
The degree to which the quantity demanded of a good or service is affected by a change in consumer income
56
What is the calculation for price elasticity of demand?
Price elasticity of demand = % change in quantity demanded / % change in price
57
What is the calculation of income elasticity of demand?
% change in quantity demanded
Income elasticity of demand = ————————————————-
% change in income
58
What are the 3 price elasticity of demand?
- elastic demand :
-if change in price lead to greater % change in quantity demanded than % change in price, calculation yield answer>1
- inelastic demand :
-if change in price leads to smaller % change in quantity demanded than % change in price, Calu yield answer<1
- unit (or unitary) elasticity :
-name is given to situation where both % changes are same, given answer of (-)1
59
What is the definition of market segmentation?
The classification of customers or potential customers into groups or sub-groups [market segmentation], each of which responds differently to differently to different products or marketing approaches
60
What are the 4 classifies market segments?
- demographic segments :
- examples such as classifying consumers according to age, gender, marital status, family size & family life cycle
- geographic segments :
- examples such as classifying consumers according to region, country, urban/rural & ACORN (A Classification Of Residential
Neighbourhoods)
- income segments :
- examples such as classifying consumers according to family income, occupation, & social class
- behavioural segments :
- based on consumers’ attitudes to particular product
- types of segmentation in this category are often classified as examples of demographic segmentation
61
What are the benefits of market segmentation?
- increase market share :
- organisation can identify market segments, have not been reached & adapt its products & marketing to reach those segments
- assist new product development :
- gaps in market segments can be used to indicate the scope for introducing new products
- extend products into new markets
- identify ways of marketing a product :
- company recognises its customers’ characteristics can target its advertising to media used by that market segment
62
What are drawbacks of market segmentation?
- difficulty in identifying the most important segments for a product :
-successful segmentation requires market segments to be identifiable, reachable and distinct
- reaching the chosen segment with marketing :
- lifestyle categories in particular are difficult to identify or locate
- meeting the needs of customers not included in the chosen segment :
- emphasis on market segmentation may lead to a business ignoring other potential customers
63
What is the definition of market targeting?
Deciding on the consumers/market segment(s) to whom you tend to sell your products or brand
64
What is the definition of niche marketing?
Targeting a product or service at a small segment of a larger market
65
What are some advantages of niche marketing?
- less competition
- costs
- small-scale production
- tailor-made products
- targeting customers
66
What are the disadvantages of niche marketing?
- lower profits
- changes in demand
- market entry
67
What is the definition of mass marketing?
Aiming a product at all (or most) of the market
68
What are the advantages of mass marketing?
- large-scale production
- high revenue
- barriers to entry
- research and development
- brand awareness
69
What are disadvantages of mass marketing?
- fixed capital
- changes in demand
- effects of standardisation
- competition
- adding value
70
What is the definition of market positioning?
Where your product or brand stands in relation to the products or brands of other businesses
71
What factors decide marketing positioning?
- attributes and benefits of the product
- competition
- product user
- pricing
- product use or application
72
What are the Influences of elements of the marketing mix?
- finance
- cash flow
- discounts
- marketing budget and cost of promotions
- technology :
- technologically advanced products
- sophistication of the organisation’s database
- lower costs
- online selling
- social media
73
74
What effects of changes in the elements of the marketing mix?
- product
- price
- promotion
- place
- people
- process
- physical environment
75
What is the definition of industrial market?
Where a firm sells its products to another business
76
What are the main features of industrial marketing?
- larger transactions
- specialist buyers and sellers
- quality
- informative advertising
- pricing
- buyers-sellers relationship
77
What is the definition of Boston matrix?
A tool of product portfolio analysis that classifies products according to the market share of the product and the rate of growth of the market in which the product is sold
78
What is the definition of product life cycle?
The stages that a product passes through during its lifetime- development, introduction, growth, maturity and decline
79
What are the 5 stages of the product life cycle?
1) development
2) introduction
3) growth
4) maturity
5) decline
80
What is the definition of extension strategies?
Methods used to lengthen the life cycle of a product by preventing or delaying it from reaching the decline stage of the product life cycle
81
What are the main types of extension strategies?
- attracting new market segments
- increasing usage among existing customers
- modifying the product
- changing the imagine
- targeting new geographical markets
- promotions, advertising and price offers
82
What are the 3 types of distribution channel?
- traditional :
- producer → Wholesaler → Retailer → Consumer
- modern :
- producer → Retailer → Consumer
- direct :
- producer → Consumer
83
What is the definition of distribution channels?
Channels or routes through which a product passes in moving from the manufacturer (product) to the consumer
84
What is the definition of multi- channel distribution?
This exists when firms use more than one type of distribution channel
85
What are the factors influencing the method of distribution?
- size of the retailer
- type of product
- technology
- geography of the market
- complexity of the product
- degree of control desired by the manufacturer (producer)
88
What is the definition of E-commerce?
The buying and selling of goods and services through the use of electronic media
