Unit 3 Flashcards
What are the aims of marketing?
to satisfy customers so they want to come back and buy again
What is marketing about?
building a relationship with customers so they become loyal to the business and will return
What is relationship marketing?
attempts to build a long term partnership with customers, it aims to retain customers
What are the products which a bank wants you to purchase?
- savings account
- borrowing
- insuring your house and possessions
- changing currency
- buying shares
What did Philip Kotler define marketing as?
the art and science of choosing target markets and getting, keeping and growing customers through creating, delivering and communicating superior customer value
What is the marketing process?
set marketing objectives analyse marketing data make marketing decisions implement decisions review
How will marketing decisions improve performance?
ensure that the business continues to meet customers wants and needs
Why would a business want a high market share?
high sales and therefore more profit
high outputs - power over supplier
high prominence in the market - raise profile and strengthen
What are the internal influences on market objectives?
finance human resources operations existing position overall strategy and business objectives
what are the external influences on market objectives?
political economic social technological competitive
What is the marketing mix?
is the combination of marketing decisions that influences a customer’s decision to buy
What are the 7 P’s?
price product place people physical environment promotion process
What is the price of the product?
which includes the price charged for different versions of the product and payment terms
What is the product?
the physical features and specifications of the products e.g what it does, looks like, reliability
What is the place (distribution of the product) ?
the distribution channel, how the product gets to the consumer
What is the promotion of product?
how the business communicates about the product
What is the people?
people who are involved in the transaction e.g who serves you
What is the process?
how you actually buy the product
What is the physical environment?
the physical premises of the business
What are the internal influences of the marketing mix?
changes to the financial position
changes to staff
changes to operation
changes to objectives
What are the external influences of the marketing mix?
political and legal factors - new legislations
economic factors - growing economy
social factors - greater environmental concerns
technological factors - online promotion
competition
What are the 3 subcategories that consumer products can be split into?
convenience items
shopping goods
specialty products
What convenience items?
e.g milk and bread, widely distributed, customers will not usually travel very far to get these and will buy an alternative brand if their usual is unavailable.
What are shopping goods?
products where customers compare features and price between different options and may take time before deciding to buy
What are speciality products?
such as a sports car or Rolex, may have thought about purchasing for a period of time and would be willing to travel great lengths to buy
What does the product lifecycle show?
shows the different stages a product goes through
What is an extension strategy?
when a business attempts to prevent sales falling and avoid or delay the decline stage of a products lifecycle.
What are 2 examples of extension strategies?
revamp the product e.g packaging
find new target market
find new usage
What does the Boston Matrix do?
portfolio analysis - which plots the position of each product in terms of its market share and growth of market
Explain the dog section in the Boston Matrix
- low market share and slow growth of market
- managers must invest to revalitise product or let them decline and eventually remove it.
Explain the cash cows section in the Boston Matrix
- well established
- high market share but slow market (perhaps because the product is more mature, therefore not growing as fast)
- do not need promoting heavily because they are well known
Explain the question mark (problem children) section in the Boston Matrix
- in fast growth markets
- not established so small market share
- called problem children as they might do well or equally not
- managers want to invest and protect these products
Explain the stars in the Boston Matrix
- in fast growth markets and good market share
- managers will want to keep investing in, promoting and gaining more distribution for these products to keep it as a star
What are the 6 factors which affect pricing decisions?
stage of the product's life costs price elasticity of demand positioning other elements of the market mix competitiveness of the environment
What are promotional methods?
are the different ways an organisation promotes it products
Give 5 different types of promotional methods?
advertising displays loyalty cards merchandise sponsorship
What is meant by brand?
a promise to deliver certain benefits and services
What does a strong band mean?
- demand is more likely to price inelastic
- customers become brand ambassadors, telling others
- customers more open about new products
- difficulty for other brands to enter same market
What is e-commerce?
buying and selling products online
What is market research?
gathering and analysing data relevant to the marketing process
How can market research be used by managers?
- analyse the existing position of the business
- decide on possible objectives
- identify possible actions that could be taken
- decide what the best action will be and how to implement it
What does the market research process look like?
1 - define problem/ objectives
2 - develop research plan
3 - implement plan ; collect and analyse data
4 - interpret data and report findings
What’s the calculation for price elasticity ?
% change in QD / % change in P
What is the number correlation for elastic demand PED?
> 1
What is the number correlation for inelastic demand PED?
<1
What affects price elasticity of demand?
- time
- how expensive it currently is
- branding of product
- USP
- amount of available substitutes
What is the formula for income elasticity of demand?
% change in QD / % change in income
What influence does sales forecast have on other areas of the business?
HR - what are the staffing requirements
Finance - estimate future inflows and profits
Operations - expected levels of sales and produce to match
How can market research go wrong?
- there changes in the market
- the way information is gathered
- lack of information from not spending enough
What is segmentation?
the process of identifying different groups of similar needs
What are market segments?
different groups of needs and wants
What are some common ways of categorising by segmentations?
demographic segmentation geographic segmentation income segmentation socioeconomic segmentation behavioural segmentation
What is demographic segmentation?
characteristics of the people in the
What influence does sales forecast have on other areas of the business?
HR - what are the staffing requirements
Finance - estimate future inflows and profits
Operations - expected levels of sales and produce to match
How can market research go wrong?
- there changes in the market
- the way information is gathered
- lack of information from not spending enough
What is socioeconomic segmentation?
segmentation on income and professions and can be split into catergories
What are market segments?
different groups of needs and wants
What are some common ways of categorising by segmentations?
demographic segmentation geographic segmentation income segmentation socioeconomic segmentation behavioural segmentation
What is demographic segmentation?
characteristics of the people in the target population
What is geographic segmentation ?
areas where the customers are based, differing tastes and preferences
What is income segmentation ?
split into high and low income, high income may be more interested in saving and investing whereas low income borrowing
What is socioeconomic segmentation?
segmentation on income and professions and can be split into catergories
What are the categories for socioeconomic segmentation?
A: Higher managerial, administrative or professionals
B: Intermediate managerial administrative or professional
C1: Supervisors, clerical and junior managerial, administrative or professional
C2: Skilled manual workers
D: Semi and unskilled manual workers
E: Casual labour
What is behavioural segmentation?
focuses on what customers actual do e.g when the buy, how much they buy
Why is segmentation useful?
- understand what different groups want rather than treat them all the same
- more focused and efficient marketing
- adapting the process
What are the benefits of selecting target segments?
business can focus on the needs and wants of customers in these segments, which will mean they will meet needs and wants more effectively and precisely
What is a niche market?
is a smaller specific segment of the market with clearly identifiable needs and wants
What is a mass market?
- whole of a market, where a business doesn’t try and match the needs of a specific segment
- aims to provide products that will meet some of the needs and wants of most people
What is good about a niche market?
- can compete in a bigger market, without directly challenging bigger businesses
- not perceived as a threat by larger competitors
- gap in the market with limited competition
What is bad about a niche market?
- small market might be vulnerable to losing a few customers
- profits might be relatively low
- if the business grows it will attract the attention of larger businesses
What is good about mass markets?
- more customers and potential revenue and returns
What is bad about mass markets?
- large amount of investment needed
- competition
- can lose demand to niche markets
What is needed to be successful in a mass market?
- large volumes to fulfill order (therefore investment and capacity)
- promotional techniques to reach more customers
- positioning in market
What is positioning?
how their products are perceived relative to their competitors
How is the positioning of a business showed?
market map
What are the 4 axis of a market map?
expensive - value
modern - classic
What influences the positioning of a product?
- the strengths of the business ( a efficient business may aim to be a low price provider)
- innovative business (providing greater benefits than rivals)
- competitors (what are other firms offering)
- market conditions (PEST-C factors)
