Unit 3 Flashcards
Whats a marketing plan
Detailed report on the marketing strategy, marketing objectives, and marketing budget
What does an effective markwtting plan depend on?
business mission/objectives (eg increasing loyalty etc)
Current state of the firm in the market (new entrant, bad reputation etc) (situational analysis)
Assets/strengths of the brand (eg wendys plays into its fresh quality stuff)
State of the market (PEST)
Whats marketing mix
Combination of the factors called the 4Ps that the business can control to influence consumers to buy their goods
Whats marketing budget
Money business allocates to its marketing dept from its finance sources (confirm this as notes says smth else)
Benefits of marketing plan
- employees confident that business has a planned future. Theyre secure (motivation)
- Banks mor secure in giving loans cuz
- shareholders more confident on buying shares
- gives business direction on where to use its resources
- lets them organise the 4 Ps (element of marketing) with proper diŕection
- can set marketing objectives to evaluate against
Income elasticity of demand
YED.
Responsiveness of demand in income changes
(%demand change)/(%income change)
Negative YED
Inferior good
Positive YED
Normal or luxury
Promotional elasticity of demand
Responsiveness to demand in change in promotional spending of product
(%demand change)/(%promotion spending change)
Cross elasticity of demand
Responsiveness of demand due to substitute price changes
(%good A QD change)/(%Good B price change)
Negative XED
Compliments
Negative XED
Complementary good
Positive XED
Substitute
Very positive XED
Strong substitute
Research and development
Research: Discovery of new ideas in order to solve problems
Development: changing ideas to commercial product
Benefits of R&D
New products (monopoly for a while, new mkt, brand image etc)
New materials (cost of production falls if new/better raw material created)
Employee motivation
New employee positions (new ideas)
Brand image boost
Better goods for consumer
Whats the structure of a marketting plan?
WHO WE ARE
-Situation analysis
1. SWOT analysis
2. PEST analysis
3. Competitor analysis
4. Customer analysis
WHAT WE WANT TO ACHIEVE
- Marketting objective
- Marketting budget
HOW WE WILL ACHIEVE IT
1- product
2- price
3- promotion
4- plave
SWOT analysis
Strength Weakness Oppurtunities Threats
Revenue and demand problem in elasticities
U can use either for elasticity formula (in numerator) as effectively will serve same purpose (so can replace d with revenue)
But prefer % qty demand change
PEST analysis
Political
Economic
Social
Technological
Competitor analysis
Obvious
Consumer analysis
Demographics
Budgeta
Tastes etc
Diff between marketing plan and strategy
Strategy is a part of plan
But in syllabus essentially same thing
GENERALY
Focus on situational analysis in plan question
Focus on marketting mix in strategy question
Marketting plan/strategy answering technique
Define technical analysis (with components), objectives, 4ps (seperately)
In main answer 1 paragraph for each P and technical + objectives 1 para each.
Sales forecasting
Predicting future sales (revenue)
2 methods
- extrapolation
- moving averages
Importance of correct sales forecasting
- Dividents given based on them (might overpay)
- wrong forecasting can make u lose investor trust
- wrong forecasting can make u go into loss and take lots of debt, especially when forecast during period of high spending
- helps identify stock requirement
- helps estimate workforce
- used to asses competitiveness
- used to attract investors
- improves coordination b/w depts (production is making that many units, research is studying how to mass produce higher quality at that qty etc)
- objectives
Etc
Sales forecasting issues
- consumer taste changes
- unforseen conditions (forest fires)
- macroeconomic conditions can hit (inflation)
- tech advancements can limit forecasts
- new unforseen competitors
- time and resources to analyze
- human error
- may not have enough data for accurate assesment
How to do moving averages
Practice questiosn
How to do extrapolation
Google (but plot on graph and see where it goes, not sure if thats exactly it yet)
Globalization
Increasing Freedom of goods, capital, services across globe
Individual economies integrating into 1 large global economy
International marketing
Promoting & selling products in markets outside of domestic market
Globalisation advantages
Lower cost (cheaper fsctor inputs abroad)
More customers
More technology spread
Increased SOL
Access to new talent
Talent also gets employment
International marketing importance
- increase revenue when domestic market saturated and growth left limited
- possibly sell for higher prices outside
- business risk spread as less dependant on 1 economy doing well
- rapid growth due to huge untapped market
Global localization
Adapting marketing mix policy to national mkt taste & cultures
(Eg netflix showing desi shows in india)
Pan global marketing
Adopting standard marketing mix policy for multiple countries
Eg pepsi selling similar brand/product worldwide (maybe some regional differences)
Advantages of global localization
- local tastes reflected (higher demand naturally)
- less marketing needed to “explain” the product (money saved)
- more likely to meet legal requirements (eg ham in muslim countries)
- less local opposition
Disadvantages of global localization
- EOS reduced (cuz mass supply, ads etc limited)
- Brand could lose core identity/consistent reputation
- additional costs to make products that specially fit locals
- if done distastefully, bad reputation
Advantages of pan global marketing
- EOS
- Standard identity (brand trust)
- can make sta dard product availible for consumers no matter where in the world they are
Disadvantages of pan global marketing
- legal limitations (eg ham bans)
- brand name translation issue
- extra spending on promotion to make ppl understanding the product
- resustance from locals becuz of cultural diff
Methods of entry into intl market
- Indirect Export
- Direct exports
- Franchising
- Licensing
- Joint venture
Direct exports
Directly exporting to the intl market without intermediary (eg pepsi)
Benefits of globalisation
Direct export adv disadv
ADV
- control over foreign markets
- more profit cuz intermediary payment cut out
- more control over distribution (eg product handling)
- better protection of trademarks/patents
DISADV
- higher cost to set up (transport etc)
- more information on mkt needed (time consuming)
-
Globalisation limitations
-Language barrier for customers AND labor
- equality policy for firms hurt cuz some employees are paid more relative to their economy
- geopolitical situtation can cause tariffs/barriers
- sometimes cou tries can take extreme measure against you (eg outright ban and seized factories in russia)
- cultural identity loss
- foreign worker exploitation (overowrk underpay)
- racism/mistreatment etc
- global competition can limit you (predatory pricing etc)
Indirect exports
Exporting through domestically based export mediaries who ship and distribute them abroad
Eg amazon
Indirect export adv disadv
ADV
- Less initial investmen
- fast to enact (as process already set up)
- can focus resources on production expansion/improvement rather than distribution (EOS)
- no direct handling managerial problems
DISADV
- the 3rd party can be unreliable
- COP rises due to distributer fee
- limited/no control over marketing
International Licensing agreement
Right to exclusively OR non exclusively have access to intellectual property (name, designs, patents) to manufacture and distribute in intl markets.
Licensing adv disadv
ADV
- Expand for low risk (most risk on licensee)
- extra income (theyre paid) with very little cost (just intellectual property which is nearly free)
DISADV
- Licensee can hurt brand image w low quality product
- associated to company that may have poor publicity, ruining trademark
Franchising
Right to sell a companies product to an another entity. It has support etc as well and guidelines
Joint venture
Collaboration between 2 companies while maintaining their identities.
New division between them likely created for working together
