Unit 3 marketing

Question 1

Market penetration

Answer 1

When a firm increases the sales of its current products to existing customers or new customers from competitors

Question 2

Product development

Answer 2

Offering new and improved products to existing markets

Question 3

Market development

Answer 3

Finding new markets for existing products

Question 4

Diversification

Answer 4

Offering a new product in the market

Question 5

Reasons to enter international markets

Answer 5

• If the UK market is saturated/competitive
• Opportunities to achieve economies of scale
• The firm has excess capacity
• Additional costs involved are relatively small

Question 6

Ansoffs matrix

Answer 6

A way of classifying marketing strategies in terms of existing and new products in existing and new markets

Question 7

Possible marketing objectives

Answer 7

Distribute products to different locations
Increase presence on social media
Maintain/increase market share

Question 8

Internal factors influencing market objectives

Answer 8

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

Question 9

External factors influencing market objectives

Answer 9

Competitors actions - assess all elements of marketing mix
Technological change - CAM improves quality, opens new markets?
Market factors - economic climate, social change, legislation, consumers

Question 10

Market analysis

Answer 10

Detailed examination of market features such as market size and sales used to predict future trends

Question 11

Reasons for market analysis

Answer 11

• gathering evidence for devising new strategies
• existing market has changes
• changes in competitor behaviour, technology, or market conditions

Question 12

Moving averages

Answer 12

A technique for identifying an underlying trend by smoothing out fluctuations in data

Question 13

Benefits of market analysis

Answer 13

• 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

Question 14

Difficulty of market analysis

Answer 14

Data can give general analysis about a market but not about specific companies

Question 15

Corporate objectives

Answer 15

A quantifiable statement of a business’s goals which includes measurable targets

Question 16

Functional objectives

Answer 16

A quantifiable statement of a departments goals which enables it to contribute to the achievement of the business objective

Question 17

Functional strategy

Answer 17

The plan by which the department intends to achieve its functional objectives on a day to day basis

Question 18

SMART targets

Answer 18

Specific
Measurable
Agreed
Realistic
Time-based

Question 19

Internal influences of financial objectives

Answer 19

Characteristics of the firm - size, status, age
Owners - no. of owners, motives, relationship with directors
Sector - private/public

Question 20

Extrapolation

Answer 20

A prediction of a future trend based upon an identified current trend

Question 21

Drawbacks of extrapolation

Answer 21

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

Question 22

Advantages of IT in analysing markets

Answer 22

• Information can be processed quickly for sales forecasting techniques such as extrapolation, correlation, moving averages
• Build up an electronic database of consumer buying behaviour

Question 23

Disadvantages of using IT in analysing markets

Answer 23

• Possibility of information overload, slows down decision making process
• Data is available very quickly so decision makers may overreact/misinterpret trends

Question 24

SWOT analysis

Answer 24

Method of analysing the current situation by examining internal strengths and weaknesses of a business & opportunities/threats to external environment