unit 3. Marketing Flashcards
what is a market?
market is when there are buyers and sellers
how sales are mesaured
measured in terms of slaes volume (number of units sold) and
sales value (how much would be made to the product)
formula of market share
sales of the product➗market size x 100
pros of having high market share
1:relatively high sales therefor possibly increase proft-depends on costof production,
2:relatively high output: may be able to have a good deal with suppliers. may have low cost per unit-bulk
values of setting marketing objectives
1:helps cooridnate within the business: may motivate employees due to clear goal. leading to increase in labour productivity.-increasing more unit- labor cost per unit may decrease-may be able to decrease price-
Depends on PED, and if they have applied lean production.
2:helps other functional objectives as they determine otheer decision such as staffing level, production capacity.
-creating a overall efficiency in the business-reputation, profit.
dependson if marekting objectives are SMART
common market objectives
-sales growth
-market share
-brand loyalty
-sales value
-sales volume
what are the internal influmces on marketing objectives
1:overall aim(corporate objectives) of the biz. if firm wants to increase the profit in the short term, marketing department focusing on new product that is still 2 years away from being launched.
2:finance: depends on how much biz could produce.
3:HR: if there is less staff, business needs to adjust what firm could do with amount of staff with marketing.
what are the external influences on marketing objectives?
1:technology :ex) market where tech changes rapidly-may focus on sales and price since tech causes price to rise or fall very fast
2:social :ex)if customers are conceerned about environment-could damage the brand image-NIKE-
3:economy: ex) In 2008 uk faced recession biz like tesco lidl changd price level low.
4: competitions-if they are selling low prices they may need to sell lower-price competitive
what is market research
gathering and analysing data relvant to marketing process
what does market research provide
provides insights of
1:who buys the product
2:what they are buying
3:when they are buying
4: why are they buying
5:where are they buying
6: what influenced to buy.
What do market research brings in terms of competitiveness
market research provides managers to make good marketing decision-biz provides higher value-competitive advantage
what is secondary research
-research using existing data-
➕cheap and quick
➕often free and eazy to obtain
➖not tailored to biz needs
➖could be out of date
what is primary research
orginial research firm did by their selves
➕kept private
➕more detaileed insights
➖risk of survey bias
➖time consuming and expensive
what is sample
selecting a representative group or people from target pop.
pros of sample
1:saves money because they dont have to survey a whole target pop.
2:quicker and easy
cons of sample
1: could be unrepresentable if undertaken badly
this depends on:
how people/items are selected
how the sampling is conducted
-if the question isnt clear may be unreliable
the size of the sample
Quantitative/Qualitative data
numbers/opininos
what is market mapping
is when customers are asked to rate a group of products into several charcteristics.
used when biz think whether if they want to fit in the market relative to existing products,
what number indicates strong negatie correlation
-1
what is extrapolation
is when using past trends to forecasty the future.
what is confidence level and
what does confidence level depend on
is how confidence they are at the results:
depends on :
size of the sample- the bigger the sample the better
how sample was constructed- were they picked randomly?
what is confidence interval
an range of the out come given from the confience level
95% confidence the range is between 1000-4000
Factors effect PED
Subsititue(#)
Percentage of income spent on
Luxury/necesity
Addictive/habit forming
Time bound
pros and cons of big data by increse tech
and what is depends on
➕able to gather more data on customer and analyse more effectively and quickly
-helps what influences to buy, and what type of people buys
➕help biz forecast sales more effectively by being able to anticipate what customers want
➖doesnt gurantee success
➖the date may not be trusted
depends on whther managers have the right data and and make a right decision.
what is the relationship between sales forecast and market research
marketing research provides info which enebales managers to forecast sale, which is essential in biz.
factors affecting market research negatively
-change in market
data collected in particular situation may be irrelevant data to have in a fast changing market.
-the way info is gathered
research may not be collected accurately
-lack of info
market research and ethics
managers may need to consider to what extent should they ask for permission befoere collecting into their purchase habits.
may consider if its acceptable to track their online purchase inorder to recommend other products.
what is segmentation and market segment
segmentation:the process of identifying different groups of similar needs
market segment: group of differenct groups of similar needs in the market
four ways of segmentation
demographic: segmenting demographically such as gender.
Geographic: when segmentation groups need and wants are based on geographic.
Income: segmentation groups need and wants based on income
Behavioural: segmented on the way customers act.
ex) when they buy- how much they buy
pros and cons of segmenting
➕more efficient and focused marketing
do not waste money on products/features not needed.
➖the more segment biz make- more complex-expennsive
➕customer feel more satisfied
➖the more market is segmented, the smalleer the potential market gets, which could be unprofitable.
what is targeting
targeting occurs when biz decides which segments it wants to operate in.
what needs to be considered before choosing the target market
biz choose where
1:there is sufficient demand and potential profit to justify the investment. some segment may be too small to be profitable
2:it has an abillity to stay competitive and gain sales
what is niche marketing
when a business focus on a specific segment of market
pros and cons of niche markting
➕able to compete wihtin a bigger market without directly challenging bigger biz-will not be seen as threat-minimize the risk of taken over-able to compete in segment of potentially larger market-potential profit↑
➕able to meet better customer needs-↑customer satisfaction-creates brand loyalty-inelastic-↑price-↑profit margin
➖may attract big customers if they are succsessful
➖nich market may not be particulary big therefore they may be vurneable from losing few customers (this depends on niche to niche)
what is mass marketing
when they aim to provide products that will meet some of the needs to most of the people
pros and cons of mass marketing
➕more customers-potentially more revenue-profit
➖larger volume (and therefore the investment and capacity) to fullfill order
➖promortional tech to reach more customers
➖biz will want to consider where they position themselves within the mass market to compete with competitors.
what is positioning
Positioning Identifies the benefits and price combination of a product relative to competitors
what are the factors influences the positioning of a product relative to competitors
1: price
2: benefit it offers
3:its brand image
4:lvl of service it provides
-(as compared to competitors)-
factors that influences firms to have a positioning of a product
-strength of a biz
if they have huge bargainning power
lower cost to produce-low price
-compeitotrs
if competitors are providing the benefit already-low positioning
-innovation
May have highly skilled employees and resources encourage the development of ideas-positioinh
what is Marketing mix
combination of marketing choices used by biz to influence consumers to buy product
7Ps
1:Price
2:Product
3.Place
(how products are distributed)
4.Promotion
(refers to how biz communicates about the product)(advert)(sponsorship)
5.people
6.process
7.physical environment(design)(car dealership)(showroom)
what are the internal influences on marketing mix
-change to financial position
Might affect investment in new product development or promotion
-change to staff
May bring new marketing opportunities
-changes to operation
Greater efficiencies may lower the prices, more innovation might improve the team and lead to greater promotion
-changes to obj
If obj has faster growth may need to change marketing mix to include higher sales
Whhat are the external factors influencing marketing mix
-Political/legal
New European legislation might affect how products have to be labeled
-Economic
If the economy is growing higher prices might be possible
-Soical
Greater environmental concern might affect how the product is produced
-Technological
More people using the interest might have online promotion effective
-Competition
Greer competition may mean the benefit of the product have to be enhanced to match what they are offering.
Consumer Products, Industrial products
B2C,B2B
what are the stages of the Product Life cycle
1:Development
-Stage when product is being developed.
-Investment into R&D, products are tested and assessed to see if they are viable.
-Negative cash flow, no sales no nothing.
2:Introduction
-when product is launched on to the market
-sales may be relatively slow as awareness can take time to build.
High investment may be needed to promote. Cashflow may still be negative.
3:Growth
-when the sales begun to rise faster ,still need to be investing, but cashflow may be positive.
4:Maturity
-when rate of growth of sales begun to slow
-may be due to competitors taking the sales
-sales may still be high, just not increasing rapidly.
5:Decline
-when sales are falling (growth rate is negative)
-due to new and better products may be in the market
-extension strategies may be used.
value of PLC
lead marketing managers to know what to expect at some point in the progress of a product over time
Which Coolidge allow managers to make extension strategies, as an example.
what is extention strategies
occurs when biz tries to prevent sales of a product from falling and delay the decline PLC. In order to prevent falling,
biz might
:increase promotion expenditure
:find new target market segment for product
:revamp改造the product
:find new usage occasion for the product
what is product portfolio analysys
examines the market position of all products of a business
Boston Matrix
one of the mthod of product portfolio analsys
shows each products of market share and relative growth of market
4 segments of Bostoon Matrix
1: Dog bottom right
low share and slow growth of a market
managers must either reinvest them to revitalize, or let them declinee and remove them.
2: Cash cosw bottom left
high share and slow growth of market
Managers could reinvest its profit into other products
3: Children/Question mark top right
Low share and High growth of market
Managers. may want to invest and protect and grow these products
4: Stars top left
High share and High growth of market
Managers need to keep investing: promotino
Pros of Boston Matrix
helps managers categorise their products and take a view on what they should do next
new product development is required when:
existing products are comping to an end
new opportuniteies are opening up to a markt
desire to increase brand image
new product development involves risk becasue
:the idea may not be viable andmaking profit becasue of technival problem
:market may not be understood well, promotion problmes
penetrating pricing
when biz harges low price to gain market share
used when price elastic
price skimming
when firm charge high price when product is launched
used when price inelastic
dynamic pricing
when price change rapidly in response to changing demand
factors to analye the promtional decision(7Ps decisions)
-target audience
viatal to understand type target group they are trying to reach to.
-promotional budget
how much money there is to spend
-the message
-technology
online promotional may be very affective to the biz
value of strong brand
inelastic demand-↑profit margin
-may prevent new competitors to enter market
analysing distribution decision
managers examine factors like:
- degree of coverage
the broader the spread of customers the more biz may have to use intermidates
-nature of the product
if high value low quantity may be ideal to distribute directly
-the cost of other ditribution strategies
online-cheap
stroe-expensive
integrating marketing mix
marketing mix must taken care of:
importance of it:
1:the position of the PLC:if on decline stage, price may be lowered
2:comptition: devlopmnt in the product may need more investment to be unique
3:the marketing obj: the desir to incrase sale may requir more investmnt in promotion
marketing mix should be intgrated inordeer to have an eeffective markting mix.
what is E-commerce
buying and selling off product throught an electronic mdeian such as internet
pros and cons of digital marketing
(E-Commerce)
-gather more info about customers and process more quickly and effectively
-build relationships with customers more effecitvely b y being able to track thier buying habits
-involves cutomers more into marketing process
customers can provide reviews of products to help other potential buyers
if biz were unable to adopt
they may lose some shares
examples of integrate marketing mix
IKEA
positioning: wants to provide well deisgned furniture at low prices
products: must be produced and desgined in a cheap way
physcial environment: stores are located outside of the town in low cost occasions.
what if the income elasticizes are:
-less than 1
-more than 1
-positive number
-negative number
Less than 1:
Inelastic demand. If positive, then less, necessity goods.
More than 1:
Elastic demand. If positive, luxury goods.
Positive #:
Normal products
Negative#:
Inferior products
Formula for market capitalization
Number of issued shares X current share price
4 MARKER ESSENTIALS.
You MUST state the definition (applies in economics as well)
And if there’s any specific knowledges involved like condition to price discrimination or like 4 types of mkt segmentation such income demographic behavior and geographic.
