Unit 3-decision making to improve marketing performance Flashcards
in terms of marketing, what do the managers need to understand about the market?
the nature of the market they are operating in to be able to feed it back to the other functions, such as operations.
what does the marketing function of a business provide?
a link between the business and the customers
what does marketing involve?
a mutually beneficial exchange process where they provide a good or service in exchange for something else, usually money.
what does marketing aim to do?
satisfy or delight customers so they’ll come back for more and it allows space for a better relationship with customers to increase customer loyalty.
what does relationship marketing aim to do?
-build long-term partnerships with customers
-retain customers
-build connections between the business and the customers
how are sales values measured?
in terms of how much is spent on a product (eg. sales of 30,000)
what are some marketing objectives?
-sales volume
-sales value
-sales growth
-market share
-brand loyalty
what are sales growth targets?
targets set to see how much the volume and the value have increased by
how are sales volumes measured?
in terms of the units sold (eg. sales of 200,000kg or 5m cans)
what is the formula of the % of growth in sales?
change in sales over a given period/ existing sales x100 (eg: 50,000-40,000/40,000 x100=25%)
what does market share measure?
it measures the amount it sells as a percentage of the total sales of the market
what are some external factors that affect marketing decisions?
-market and competition
-economic factors
-ethics
-technology
what is the formula for market share?
sales of this product/ total market shares x100 (eg: 400,000/ 4,000,000 x100= 10%
what are some internal factors that affect marketing decisions?
-finance
-production capacity
-human resources
-nature of product
what is the formula for market growth?
difference in total market sales/ earliest year x100
what is the formula for market size?
sales/ market share x100
what is primary market research?
the collection of info for the first time directly by or for a business to answer specific issues or questions
examples of primary research market
-surveys
-observations
-focus groups
-test marketing
what is secondary research market?
second-hand research involving the collection of data that already exists
what are examples of secondary market research?
-published reports
-government and other agencies
-internet
what is the aim of qualitative market research?
to find about the attitudes and the opinions of consumers
what might qualitative data help a business find?
it might reveal customer reactions to:
-products
-pricing
-packaging
-branding
what is quantitative data?
the collection of information on consumer charts that can be analysed statistically
what might quantitative data show?
-sales and potential sales
-the size of the market
-the prices consumers are prepared to pay
what does market mapping do?
it can enable a business to identify the position of its product in the market relative to others
what does market mapping measure?
different business’s
-high and low prices
-high and low quality
what is random sampling?
it is when each member of the population has an equal chance of being included
when is random sampling used?
when researching a product aimed at a a larger group
what is stratified random sampling?
it separates the population into segments or strata
what does stratified random sampling do?
it avoids bias by ensuring that the composition of the sample accurately reflects that of the entire population
what is quota sampling?
it is when the population is split into a number of groups, each sharing common characteristics
how is quota sampling used?
things such as surveys might take place allowing for a limit of respondents which leads to a save in money
what marketing decisions might a business need to make using sampling?
-pricing policies
-product design
-types of promotions
-target customers
when does a correlation occur?
it occurs when the is a direct relationship between one factor and another (could be positive or negative)
what is a confident interval?
it is the margin of error that a researcher would experience if they asked a particular question of a sample group and they expected to get the same answer back beyond that
what is a confidence level?
it is an expression of how confident the researcher is in the data collected (confidence level is expressed as a percentage- most commonly used is 95%)
what does extrapolation do?
it collects data to predict future data
why should extrapolation be treated carefully?
because it assumes that the future will be similar to the past so it may not be suitable for industries subject to rapid change
what is the importance of technology in gathering data for marketing decision making?
-enables targeted sales messages
-makes forecasting easier
-provides faster communication
-however, it relies on a business having the right data in the first place
formula for price elasticity of demand
% change in demand/ % change in price
formula for income elasticity of demand
% change in demand/ % change in income
what makes a product elastic and what effect does a rise and fall in prices have on it?
if the answer is greater than 1
-rise: total rev falls
-fall: total rev rises
eg: luxuries such as handbags
what makes a product inelastic and what effect does a rise and fall in prices have on it?
if the answer is less than 1
-rise: total rev rises
-fall: total rev falls
eg: necessities such as toilet paper
what other factors should be considered when making marketing decisions?
-brand loyalty
-competitor actions
-consumer tastes and fashion
-availability of substitutes
what is market segmentation
the process of dividing a market into distinct groups. Customers within the same segment will share common characteristics and this might help a business market them effectively
what is market targeting?
when a business targets its marketing to a specific market segment. Allows for a marketing plan to be created.
what is market positioning?
this refers to how a customer views an individual brand relative to competing brands
what is the process of segmentation, targeting and positioning?
-segmentation breaks the market up into definable groups (gender, age…)
-then, you’re able to know which groups you want to target.
-the biz will determine how it wants to position its product or service within the market
adv of the process of segmentation, targeting and positioning
-marketing will be more effective as it will be directed specifically to a targeted group
-resources will be used n¡more effectively
-sales and market share may increase as a result of the clear focus of marketing
dis of he process of segmentation, targeting and positioning
-they might overlook a potentially profitable segment
-changes in taste and fashion could be overlooked
what are some influences on the target market and positioning?
-the nature of the product
-competition
-the consumer
what is niche marketing?
when a business identifies and satisfies the demands of small segments of a large market.
adv of operating in a niche market
-may benefit from price skimming
-can be highly profitable
-customer loyalty
what is mass marketing?
when a business aim their products at most of the available market
dis of operating in a niche market
-if profitable, could attract competition
-may be difficult to generate acceptable profit
what are the 7 P’s of the marketing mix?
-Product, price, place, promotion, people, physical environment and process
what are some influences on the value of a new product development?
-technology
-competitor’s actions
-the entrepreneurial skills of managers and owners
what factors should businesses take into account when designing the marketing mix for a product?
-tech: the product itself and methods of distribution
-market research: key influence on al parts of the marketing mix
-finance: profit levels and cash flow
-nature of the product: determines that certain elements of the marketing mix may be more critical
what is the importance of a business having a USP?
it allows the business to differentiate its products from others in the market
what are the 5 stages of the product life cycle?
-development
-introduction
-growth
-maturity
-decline
what are some extension strategies? (extending the product life cycle)
-finding new markets for existing products
-changing the appearance or packaging
what does the Boston matrix measure?
undertakes product portfolio analysis based on the product’s market growth and its market share.
what are the 4 sections of the Boston matrix?
-star products: dominant share and good prospects for growth
-cash cows: dominant share, low prospects for growth
-dogs: low share and no prospects
-problem children or ?: small share of a growing market
what are some pricing strategies that a business might use?
-price skimming: original high price to regain losses, decreased when competitors enter
-penetration pricing: once a product is established, price inc to boost profit margins
-price leadership: used for established products
-price taking: no influence over the market price
what are the elements of the promotional mix?
-advertising
-sales promotion
-personal selling
-merchandising
-public relations
-branding
-packaging
-exhibitions and trade fairs
what are some of the influences the promotional mix?
-the position of the product on the product life cycle
-the type of product
-the finance available
-where customers make purchasing decisions
-competitors actions
factors that a business might take into account when choosing outlets and distributors
-location
-credit terms
-willingness to display products in prominent positions
what are the 3 main types of distribution?
-traditional: buy stock from wholesalers-provide advice, credit and delivery but can be expensive
-modern: purchase directly from manufacturers and arrange their own distribution
-direct: lowers prices at which they can sell their products, e-commerce
what are the influences on an integrated marketing mix?
-place in the product life cycle
-Boston matrix
-type of product
-marketing objectives
-target market
-competition
-positioning
