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Business > Unit 3: Marketing > Flashcards

Unit 3: Marketing Flashcards

1
Q

What is marketing

A

process of identifying, anticipating & satisfying customer needs
profitably

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2
Q

What is the first stage of marketing

A

conducting market research to discover wants of customers & factors that influence those wants

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3
Q

What are the 7 p’s

A
  • price
  • promotion
  • place
  • people
  • product
  • physical environment/evidence
  • process
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4
Q

How do you calculate sales value

A

Volume x average price

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5
Q

When is sales value best used as a measurement

A

easier to use when comparing businesses whose products have diff price levels

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6
Q

When is sales value better to use as a measurement than sales volume

A

when comparing multi- product firms

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7
Q

What’s a problem with sales value

A

It’s difficult to visualise

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8
Q

What is market size usually measured in terms of

A

sales volume & sales value

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9
Q

Firms in larger markets will find it easier to compete

TRUE or FALSE

A

FALSE - they’ll find it more difficult to compete

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10
Q

Why is market size not usually a marketing objective for many businesses

A

They can’t influence/control it

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11
Q

What is market size usually and indicator of

A

maximum potential sales for a firm in a particular market

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12
Q

How do you calculate market size
(2 formulas)

A

number of units sold in market (per period) x average selling price

firm’s revenue (per period) ÷ market share

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13
Q

How do you calculate market growth

A

(market size in yr - market size in previous yr) ÷ market size in previous yr x 100

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14
Q

What is market growth usually a key indicator of

A

Existing and potential market entrants

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15
Q

What is a benefit of being active in a market that has fast growth potential

A

rapid increase in sales volume & sales value

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16
Q

Give 2 factors influencing market growth

A
  • economic growth
  • nature of the product
  • change in taste
  • social changes
  • fashion
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17
Q

What’s a positive of identifying market trends before other businesses

A

When the market continues to grow, the business will have more expertise and brand loyalty (more competitive than rivals)

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18
Q

How do you calculate sales growth

A

(Sales in that yr - sales in previous yr) ÷ sales in previous yr x 100

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19
Q

What is sales growth achievement influenced by

A

external factors & firms own efforts

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20
Q

Give 2 marketing objectives based on sales growth

A
  • a given increase in the level of sales volume
  • a given increase in sales value
  • a percentage rise sales volume
  • a percentage rise sales value
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21
Q

How do you calculate market share

A

(sale of one product/brand/company ÷ total sales in the market) x 100

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22
Q

What does market share explain

A

How the overall market is split between competitors

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23
Q

Market share is an excellent measure of a company’s success

TRUE or FALSE

A

TRUE

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24
Q

Market share can only increase in what circumstance

A

if the company is performing better than its rivals

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25
Q

What is a problem with market share

A

not always reliable indicator of success:

  • can be difficult to define a market
  • market declining = firm’s market share may grow bc competitors leaving the market
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26
Q

What does increasing brand loyalty enable a business to do (give 2 examples)

A
  • gain regular repeat purchases from loyal customers
  • spend less money on promotions & advertising
  • charge higher prices bc loyal customers = less concerned abour price
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27
Q

Marketing position, innovation and survival/security are marketing objectives

TRUE or FALSE

A

TRUE

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28
Q

Give 3 benefits of setting market objectives

A
  • Specific obj = clarity for employees & enables marceting department a
    staff to see if they’ve succeeded / failed to meet expectations
  • If members of department have common purpose = more likely to work as a team
  • measurable & timed obj = allows improvement of efficiency
  • marketing department gives clear indication of importance of each obj =
    enables employees to recognise own priorities = consistent w/ needs of business
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29
Q

Give a problem with setting market objectives

A
  • external changes = not easy to predict = marketing obj may be based on incorrect assumptions
  • potential conflict between marketing objectives
  • businesses may be too ambitious w/ marketing obj = marketing obj loses its value
  • business may not have sufficient resources to achieve obj
  • If obj imposed instead of agreed, employees may not put in effort to achieve the goals set
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30
Q

Give 4 external influences on marketing objectives

A
  • market factors/dynamics
  • competitors actions & performance
  • technological change
  • ethical & environmental factors
  • economic factors e.g. interest rates, recession, exchange rates
  • political factors
  • suppliers
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31
Q

Give 3 internal influences on marketing objectives

A
  • business objectives
  • finance
  • HR
  • operational issues
  • business culture
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32
Q

Name 3 different aspects of market research

A
  • research and development
  • cash flow forecasting
  • customer service
  • sales forecasting
  • budgeting
  • market segmentation
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33
Q

Market research is important because customers differ in terms of…

A
  • benefit mey want
  • amounts they’re able / willing to pay
  • media they see
  • time & place they buy
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34
Q

Give 2 insights provided by effective market research

A
  • dimensions of the market
  • competitor strategies
  • need, wants & expectations of customers
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35
Q

Market research is classified in 2 ways according to…

A
  • how the data is collected (primary/secondary market research)
  • content of the data (quantitative/qualitative)
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36
Q

Give 3 types of primary research

A
  • experiment
  • observation
  • surveys
  • focus groups
  • test marketing
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37
Q

Give an advantage and disadvantage of experiments

A

ADVANTAGES:
- relatively cheap way of finding out customer preferences
- considers actual customer behaviour

DISADVANTAGES:
- may delay introduction of potentially successful strategy
- customer behaviour may not be same throughout country

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38
Q

Give an advantage and disadvantage of observation

A

ADVANTAGES:
- layout of displays can be modified if observation reveal any problems

DISADVANTAGES:
- shows whats happening instead of why it taking place
- expensive to employ specialist psychologists to observe limited behaviour

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39
Q

Give an advantage and disadvantage of focus groups

A

ADVANTAGES:
- firm can gather detailed info & modify products or identify gaps in the marketplace
- can uncover new ideas on how to market products

DISADVANTAGES:
- sometimes bias group consists of ppl who have interest in product = less critical than average consumer
- expensive to operate

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40
Q

Name 2 different type of surveys

A
  • personal interviews
  • postal surveys
  • telephone interviews
  • internet surveys
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41
Q

Give an advantage and disadvantage of personal surveys

A

ADVANTAGES:
- wide range of info obtained - questions can be opener or closed
- interviewer can explain uncertainties = avoid misinterpretation

DISADVANTAGES:
- can be time - consuming
- interview may give false answers

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42
Q

Give an advantage and disadvantage of postal surveys

A

ADVANTAGES:
- cheap
- may avoid bias of personal interview

DISADVANTAGES:
- response rates usually low
- no guarantee the responses are representative

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43
Q

Give an advantage and disadvantage of telephone interviews

A

ADVANTAGES:
- cheap
- can be targeted directly at known customers

DISADVANTAGES:
- increased use of telesales = customer resentment
- interviewees dont want to spend so much time talking

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44
Q

Give an advantage and disadvantage of internet surveys

A

ADVANTAGES:
- relatively inexpensive
- can be updated frequently

DISADVANTAGES:
- less relevant for org whose target market doesn’t use internet
- biased towards ppl w/ interest towards product/service

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45
Q

Secondary market research is more expensive than primary research

TRUE or FALSE

A

FALSE - it’s more cost-effective in comparison to primary research

46
Q

Give 3 key sources of secondary market research

A
  • Gov publications
  • trade press & magazines
  • market research orgs/reports
  • google /internet
  • loyalty cards
  • competitors website/ marketing marenal
47
Q

Give 2 benefits of secondary market research

A
  • free / easy to obtain
  • helpful in identifying trends overtime
  • good source of market insight
  • quick to access & use
48
Q

Give 2 drawbacks of secondary market research

A
  • available to all orgs = doesn’t give advantage over competitors
  • not tailored to business needs
  • Specialist reports often quite expensive
  • Secondary user may not know level of accuracy & reliability
49
Q

What is qualitative research based on

A

documents, beliefs, opinions, personal accounts in detail

50
Q

What is the aim of qualitative research

A

to understand why customers behave in a certain way or respond to a new product

51
Q

Give 2 benefits of qualitative research

A
  • gain greater insight into what it needs to do to appeal to consumers
  • can highlight issues the business weren’t aware of
  • gives detailed insight to customers thinking progress process when they buy products
  • effective way of testing elements of marketing mix e.g.promotional campaigns
52
Q

Give 2 drawbacks of qualitative market research

A
  • expensive - requires skilled personnel to interpret it
  • conducted on small scale usually = not representative
  • difficult to organise the data & compare it w/ other data
53
Q

Give 2 benefits of quantitative data

A
  • summarises data in concise & meaningful way
  • relatively easy to analyse - easier to compare w/ other orgs e.g. competitors
  • can be used to identify trends & project future trends
54
Q

Give a drawback of quantitative research

A
  • focuses on what instead of why - doesn’t give detailed data
  • can lack validity & reliability if sample is biased or too small
  • doesn’t explain reasons behind numerical trends
55
Q

What are the 3 sampling methods

A
  • random
  • quota
  • stratified
56
Q

What is random sampling

A

When every member of the population has an equal chance at selection

57
Q

Give an advantage of random sampling

A
  • simple to derign & interpret
  • able to avoid bias
58
Q

Give a disadvantage of random sampling

A
  • anyone may be selected = may not be representative of market as a whole
  • need a complete & accurate population listing
59
Q

What is stratified sampling

A

When the population is divided into subgroups, then a simple random sample is selected within each group

60
Q

Give an advantage of stratified sampling

A
  • can reduce sampling error
  • can provide more accurate estimates for all subgroup related to the research
  • can save money by requiring a smaller sample size
61
Q

Give a disadvantage of stratified sampling

A
  • can be more complicated to analyse the data
  • can be difficult to classify every member of the population into a subgroup especially if the characteristics aren’t clear
62
Q

What is quota sampling

A

The population divided by the most important variables e.g. income, age,
location etc. and a predetermined number of subjects is selected from each group

63
Q

Give an advantage of quota sampling

A
  • quick & easy way of obtaining a sample - ensures representation of important groups within the population
64
Q

Give a disadvantage of a quota sampling

A
  • not random = risk of bias
  • need to understand the pop to be able to identify basis of stratification
65
Q

When conducting primary research what does a business need to balance

A

the need for accuracy against the cost of the survey

66
Q

The larger the sample, the more reliable the data

TRUE or FALSE

A

TRUE

67
Q

What % of confidence should the results of a sample size be for the results to be acceptable

A

95

68
Q

Give 2 benefits of sampling

A
  • can provide a good indication of the likely behaviour of whole market
  • using sampling before making marketing decisions can avoid errors
  • can be used flexibly & adapted to different needs
  • reliable info can be gathered from a fairy small cross- section of ppl
69
Q

Give 2 drawbacks of sampling

A
  • may be unrepresentative
  • may be bias in questions or in the answers they encourage
  • may be difficult to locate suitable respondents
  • in markets where tastes are constantly changing, the time taken to carry out & process the data may mean the opinions are out of date
70
Q

What are the 3 statistical techniques used in the interpretation of marketing data

A
  • confidence intervals
  • correlation
  • extrapolation
71
Q

What are confidence intervals used for

A

to assess the reliability of sampled data when trying to forcast figures

72
Q

the degree to which statistics are a reliable predictor of actual events is known as…

A

Confidence level

73
Q

What are confidence intervals written as

A

a plus or minus figure to show the accuracy of Statistical reruits

74
Q

Give 2 factors that influence the confidence interval

A
  • sample size
  • population size
  • percentage of sample choosing a particular answer
75
Q

What do correlations look at

A

The strength of a relationship between two variables

76
Q

The dependent variable is the factor causing the other factor to change (x-axis

TRUE or FALSE

A

FALSE - that is the independent variable

77
Q

define an independent variable and a dependent variable

A

independent variable - the factor causing the other factor to change (x-axis)
dependent variable - the factor being influenced (y-axis)

78
Q

What are the 3 types of correlations

A
  • positive
  • negative
  • no correlation
79
Q

What has to be discovered before any conclusions are drawn about there being a link between 2 sets of info

A

casual link

80
Q

What is extrapolation

A

The use of trends established from historical data to forecast the future

81
Q

What two ways can extrapolation be carried out and which one is recommended for greater accuracy

A

Visually or by calculation
(calculation is recommended for greater accuracy)

82
Q

What factors should be considered with extrapolation (name 2)

A
  • product life cycle
  • pace of technological innovation
  • growth of global economy
83
Q

Give 2 strengths of extrapolation

A
  • quick & cheap
  • simple method of forecasting
  • It’s common for past trends to continue into the future
  • helps ensure a steady growth bc targets will be based on past data
  • not much data required
84
Q

Give 2 weaknesses of extrapolation

A
  • less reliable if theres fluctuations in historical data
  • assumes past changes will continue & therefore doesn’t take into account changes in business environment
  • Ignores qualitative factors e.g. changes in taste & fashion
  • ignores product life cycle (products will ultimately decline in sales)
85
Q

What does elasticity of demand measure

A

the degree to which the demand for a good/service is affected by the value of another variable

86
Q

What are the 2 elasticity of demands

A
  • income elasticity of demand
  • price elasticity of demand
87
Q

What does price elasticity of demand measure

A

the extent to which the quantity of a product demanded is affected by a change in price

88
Q

What is the value of PED if a change in price leads to a greater percentage change in the quantity demanded than the percentage (elastic demand)

A

Greater than 1

89
Q

What is the value of PED if a change in price leads to a smaller percentage change in the quantity demanded than the percentage (inelastic demand)

A

Less than 1

90
Q

What is perfect inelastic demand

A

when the price elasticity demand is 0 which means there’s no change in quantity demand when price changes

91
Q

What is the value of PED where the percentage of change in quantity demanded is the same as the percentage change in price (unitary elasticity)

A

1

92
Q

Give 3 factors that influence PED

A
  • necessity
  • habit
  • availability of substitutes
  • brand loyalty
  • time
93
Q

What does income elasticity of demand indicate

A

how demand will be affected by changes in income

94
Q

Luxury products IED is less than 1

A

FALSE - it’s more than 1 (as income grows, proportionally more is spent on luxuries)

95
Q

Luxury products are income elastic

TRUE or FALSE

A

TRUE

96
Q

Typically, what is the IED of necessity products (income inelastic)

A

Less than 1 but more than 0

97
Q

What type of product have negative income elasticity

A

Inferior products

98
Q

When does demand fall for inferior goods

A

demand for a product falls as income increases bc ppl can afford better alternatives

99
Q

Name 2 limitations of price & income elasticity of demand

A
  • can be unreliable bc of the difficulties involved in calculating it
  • there are other factors that affect demand e.g. change in consumer tastes, new competitors etc.
  • many markets are subject to rapid technological change - makes previous data unreliable
  • competitors will react to match the change - pricing decisions can’t be taken in isolation
100
Q

Firms tend to like products with inelastic demand

TRUE or FALSE

A

TRUE

101
Q

What do businesses usually support their marketing data with

A

Qualitative judgments

102
Q

Give a situation where qualitative judgements are most likely to be included in marketing decisions

A
  • when the product/business is new = no previous info to base predictions off
  • theres no clear statistical indication of future sales
  • trends have changed = unwise to predict on basis of past statistics
  • when the factors influencing sales are not easy to quantity
103
Q

What is market segmentation

A

the classification of (potential) customers into groups, each of which responds differently to diff products/ marketing approach

104
Q

What are the 4 types of market segmentation

A
  • demographic
  • geographic
  • income (the types of segmentation in this category are often classifed as examples of demographic factors)
  • behavioural
105
Q

Give 2 of the main forms of demographic segmentation

A
  • age
  • gender
  • ethnicity
106
Q

Income isn’t an important influence on consumer spending

TRUE or FALSE

A

FALSE

107
Q

In the UK, what is the basis for market segmentation

A

Social class

108
Q

Give 2 examples of behavioural segmentation

A
  • loyalty
  • attitudes
  • knowledge
  • usage
  • lifestyle
109
Q

The extent to which a particular org might benefit from segmentation depends on the degree to which…

A
  • particular segment can be easily identified
  • the firm is able to generate profit from that market segment consumer behaviour varies
  • the firm is able to reach that segment directly in its marketing & market research
110
Q

Give a benefit of market segmentation

A
  • increase market share - an org can identify market segments that haven’t been reached & adapt its products & marketing to reach those segments
  • helps make marketing mix more effective
  • can extend products into new products
  • able to assist new products developments - gaps in market can be used to indicate scope for introducing new products
111
Q

Give a drawback of market segmentation

A
  • business needs to meet the needs of customers that aren’t included in the chosen segment
  • just bc you can identify a segment doesn’t mean you can reach the customers
  • successful segmentation requires market segment to be identifiable, reachable & distinct - data may not always be available or reliable

Business (9 decks)

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