Unit 3 Flashcards
Sales Value Formula
Sales Value = Sales Volume X Average Price
Market Growth
Often an important strategy to most multinational and global organisations as it means products can be sold into new or expanding markets.
Market Growth Formula
Market size in current year - Market size previous year x 100 = Market Growth %
Factors Influencing market growth
- Economic growth - appealing to a business looking to enter this market.
- Nature of the product - Economic growth is high in luxury product markets e.g. jewellery, oil.
- Changes in consumer taste - New products gaining popularity whilst others decline.
- Social change - The way in which people live and how it influences product sales.
- Fashion - Recent television events such as the Great British Bakeoff sets trends in homebaking.
Sales Growth
Percentage change in sales for a specific business or product over a period of time.
Sales growth formula
Sales in that year - Sales in previous year / Sales in previous year x 100 = Sales Growth %
Market Share
The percentage of total product sales achieved by a firm or specific brand of product.
Market Share Formula
Sales of one product in a market/ total sales in market x 100 = Market Share %
Brand
A name, sign, symbol or design linked to a particular product or service.
Brand Loyalty
Measures the degree of attachment a consumer has to a particular brand.
Value of Setting Marketing Objectives
- To provide a benchmark where success and failure can be measured.
- Gives the business a focus for decision making.
- Helps different teams and departments have a common purpose.
- Helps to improve efficiency by examining reasons for failure.
- Can be motivating for staff as they have targets to achieve.
Drawbacks of Setting Marketing Objectives
- External changes not always predictable therefore marketing objectives may be made on assumptions.
- Internal changes are usually predictable but not always e.g. high turnover of staff.
- May be unclear priorities set out by staff members themselves where they are trying to meet their own needs instead of the organisation’s.
- Business may run out of resources due to the lack of capital meaning objectives aren’t being achieved.
What is Marketing?
The management process responsible for identifying, anticipating and satisfying customer requirements.
Primary Market Research
New research that has never been done before. AKA Field Research because researchers must go into the field and ask questions from consumers. e.g. Experiments, Focus groups and surveys.
Secondary Market Research
Information gathered by researching and reading information that already exists. AKA Desk Research. Can be more cost effective and accurate. E.g. Newspapers, Company records, Internet
Qualitative Market Research
Consumers are asked open ended questions like why or how and encouraged to give their own opinion. Can give an understanding of reasoning behind purchasing. Can be expensive and requires skilled staff and can be difficult to compare.
Price Elasticity of Demand Formula
% Change in quantity demand / % Change in price
Income Elasticity of demand Formula
% Change in quantity demand / % Change in income
Elastic
Where a change in price leads to a greater percentage change in the quantity demanded than in the percentage change in price. Answer is generally bigger than 1.
Inelastic
Where a change in price leads to a smaller percentage in the quantity demanded. Answer is generally less than 1.
