Unit 3 marketing Flashcards
Market penetration
When a firm increases the sales of its current products to existing customers or new customers from competitors
Product development
Offering new and improved products to existing markets
Market development
Finding new markets for existing products
Diversification
Offering a new product in the market
Reasons to enter international markets
- If the UK market is saturated/competitive
- Opportunities to achieve economies of scale
- The firm has excess capacity
- Additional costs involved are relatively small
Ansoffs matrix
A way of classifying marketing strategies in terms of existing and new products in existing and new markets
Possible marketing objectives
Distribute products to different locations
Increase presence on social media
Maintain/increase market share
Internal factors influencing market objectives
Corporate objectives - needs to fit with overall objectives of firm
Operational issues - quality & capacity. Are new products possible?
Finance - expected ROCE, overall financial position
HR - available skills of workforce
External factors influencing market objectives
Competitors actions - assess all elements of marketing mix
Technological change - CAM improves quality, opens new markets?
Market factors - economic climate, social change, legislation, consumers
Market analysis
Detailed examination of market features such as market size and sales used to predict future trends
Reasons for market analysis
- gathering evidence for devising new strategies
- existing market has changes
- changes in competitor behaviour, technology, or market conditions
Moving averages
A technique for identifying an underlying trend by smoothing out fluctuations in data
Benefits of market analysis
- To find new market opportunities
- To predict what’s likely to happen in the market in the future
- See what the most significant influences on demand are in the market
Difficulty of market analysis
Data can give general analysis about a market but not about specific companies
Corporate objectives
A quantifiable statement of a business’s goals which includes measurable targets
Functional objectives
A quantifiable statement of a departments goals which enables it to contribute to the achievement of the business objective
Functional strategy
The plan by which the department intends to achieve its functional objectives on a day to day basis
SMART targets
Specific Measurable Agreed Realistic Time-based
Internal influences of financial objectives
Characteristics of the firm - size, status, age
Owners - no. of owners, motives, relationship with directors
Sector - private/public
Extrapolation
A prediction of a future trend based upon an identified current trend
Drawbacks of extrapolation
Relies on what’s happened the past continuing into the future. May well be the case in stable, slow moving markets but in dynamic markets e.g. Technological markets, extrapolation can be misleading
Advantages of IT in analysing markets
- Information can be processed quickly for sales forecasting techniques such as extrapolation, correlation, moving averages
- Build up an electronic database of consumer buying behaviour
Disadvantages of using IT in analysing markets
- Possibility of information overload, slows down decision making process
- Data is available very quickly so decision makers may overreact/misinterpret trends
SWOT analysis
Method of analysing the current situation by examining internal strengths and weaknesses of a business & opportunities/threats to external environment
