Unit 3: Marketing

Question 1

What is Marketing?

Answer 1

Marketing involves a mutually beneficial exchange process. The business provides a product or
service in exchange for something else – usually money.

Question 2

What is the Marketing Function?

Answer 2

The marketing function of a business provides the link between the customer and the business. This
means that marketing managers need to understand the nature of the market they are operating in
and feed back this information to the other functions of the business such as operations.

Question 3

What does Marketing aim to do?

Answer 3

Marketing aims to satisfy or ideally delight customers so they want to come back for more. Marketing is not about one off transactions but about building a relationship with customers so they are loyal to the organisation, they will return for more and will be more willing to try other products the business offers.

Question 4

What is Market?

Answer 4

Marketing occurs when there are buyers and sellers. An example of a market is that there are people who want sell their house and people who want to buy them – this creates the housing market. There is a market for currency, shares, clothes, holidays, so there is basically a market for anything.

Question 5

Illustrate the Marketing Decision Process.

Answer 5

Set marketing objectives –> Analyse marketing data –> Make marketing decisions –> Implement decisions –> Review –>

(continuous process)

Question 6

What is ethics in marketing outline one example?

Answer 6

Its whether a business acts in a socially acceptable manner when marketing.

Example -

• Should a business that produces a new drug for a serious illness charge high prices because it can, or should it make it more widely available at a low price? - ethically speaking a business would make prices more affordable

Question 7

What are 3 key marketing objectives?

Answer 7

Sales Volume and Sales values targets

Market share

Brand loyalty

Question 8

What is a sales value target?

Answer 8

Sales value – the value of sales is measured in terms of how much is spent on a product, e.g.
sales of £30,000

Question 9

What is a sales volume target?

Answer 9

Sales volume – the volume of sales is measured in terms of the number of units sold, e.g.
sales of 200,000kg or 5 millions cans

Question 10

Why do managers set sales growth targets?

Answer 10

Managers will not just set targets for sales volume or value, they will also want to measure how
much they are increasing. Growth rate depends on the actual levels of sales.

Question 11

What is the equation for percentage growth in sales?

Answer 11

Change in sales over a given period / Existing sales

x100

Question 12

If percentage growth in sales is negative what does that mean?

Answer 12

It means that sales are falling.

Question 13

What is market share?

Answer 13

The market share of a product measures the amount it sells as a percentage of the total sales of the market.

Question 14

What is the equation for market share?

Answer 14

Sales of this product / Total market sales

x100

Question 15

Why is market share given as a target?

Answer 15

Market share is often given as a target rather than the absolute level off sales because it reflects
what is happening in the market overall.

Question 16

State 3 reasons why a manager would want a high market share?

Answer 16

• Relatively high sales and therefore possibly profit (depending on costs)
• Relatively high outputs; this may give the business power over suppliers and other partners

– this may enable it to negotiate better deals in terms of lower prices or better quality

• Relatively high prominence in the market; this may raise the profile of the business,

strengthen the brand make launching new products easier

Question 17

What is brand loyalty?

Answer 17

When a business retains customers, its measured by how many customers return to the business.

Question 18

What is the benefit of brand loyalty?

Answer 18

Keeping
customers is easier and cheaper than having to attract new ones and so brand loyalty is an
important measure for managers especially if they are trying to build a relationship with customers.
Brands are also valuable and may be sold later – the stronger the loyalty, the more it may be
possible to gain from the sale.

Question 19

What is the difference between internal and external influences on marketing objectives?

Answer 19

Internal influences on marketing objectives and decisions refer to factors within the business such as
employees and operational resources.
External influences on marketing objectives and decisions refer to factors outside of the business
such as the state of the economy

Question 20

State 6 internal influences on marketing objectives

Answer 20

The overall strategy of the business

The ambitions of managers

The existing position of the business

The amount the business can produce

Finance

The employees of the business

Question 21

State 6 external influences on marketing objectives

Answer 21

PESTLE

Political, Economic, Social, Technology, Legislation, and environment

• Competition

Question 22

Explain how Economic change can influence marketing objectives

Answer 22

Globalisation and the growth of emerging economies such as Indonesia,
Nigeria, Turkey and Vietnam create new growth markets to target. Again this will influence
marketing objectives such as the expected sales in different markets.

The cost of borrowing money for a mortgage; this will affect the number of people
able to buy a house
­ Incomes in the economy and the number of people in work; this will affect demand.

Question 23

Explain how social change can influence marketing objectives.

Answer 23

Social change is affecting customers views of what is acceptable and what they expect from product and a producer. This affects the likely targets set by marketing managers for different products in different markets.

Social patterns. These changes affect the typical size of house required (for example a family house or a retirement home) and the number of people looking for houses. Urbanisation occurs when people move to the cities from countryside, which affects the demand for housing in different areas.

Question 24

Explain how technology can influence marketing objectives.

Answer 24

Technological change is affecting how businesses communicate with customers and track their behaviour, what they are offering them, how customers order products, how products are reviewed and even where ideas for new products come from as customers are invited to submit their own designs and ideas.

Question 25

What does marketing research involve?

Answer 25

Market research involves gathering and analysing data relevant to the marketing process. Market
research involves primary and secondary data.

Question 26

What is the difference between primary and secondary market research?

Answer 26

Primary market research collects and analyses data for the first time to use for marketing purposes.
Secondary market research collects and analyses data that already exists for marketing purposes.

Question 27

What are the steps of the marketing research process?

Answer 27

• Identify and define what it is the business wants to find out
• Decide on how to gather the data (this might depend on factors such as the amount of money the business is willing to spend on gathering data, how long it has to gather the information and how accurate the findings have to be
• Gather the data
• Analyse the data
• Interpret the findings and present them to inform of decision making

Question 28

What should market research provide information on?

Answer 28

Who buys?, What they are buying?, When they are buying?, Why are they buying?, Who do they ask for information before buying?, Where are they buying?, What factors influence the decision to buy?, Personal factors - Is it a brand that someone wants to be associated with?, Economical factors - What will it cost to buy and run? What can it be sold for later?

Question 29

What is residential value?

Answer 29

what a product can be sold for in the future

Question 30

Why might a manager undertake primary research?

Answer 30

Primary: If secondary research is not fully appropriate then a manager may choose to undertake
primary market research. Primary research is first hand (collected for first time).

Question 31

Outline secondary research

Answer 31

Secondary: This research method uses existing data. Secondary research is usually cheap to access. It
may not be in the correct form the user requires it to be in (out of date or different layout you
want).

Question 32

What is a sample?

Answer 32

A sample is a group of people or items selected to represent a target population.

Question 33

What is a target population?

Answer 33

Target population is all the items or people that are relevant to the market research being undertaken. E.g. a business might be interested in all 16-18 year olds in the UK.

Question 34

Why is the entire target population not interviewed?

Answer 34

All of the people that a manager might want to interview are known collectively as the target population. However, in most cases it will not be possible to interview or survey all of the target population. This is because it is likely to take too long and be too expensive. As a result managers may choose a sample; this involves selecting a representative group of people or items from the target population.

Question 35

What determines the effectiveness of a sample?

Answer 35

How people or items are selected. The sample must be chosen carefully to be representative.

How the sampling is conducted. Some questions can be misleading affecting the results.

The sample size. The bigger the sample the more reliable the findings.

Question 36

What is quantitive data?, How is it gathered? and whats its value?

Answer 36

Quantitative data provides data in a numerical form. It is often gathered through surveys and its value is that it can show what is happening in a market in a measurable format.

Question 37

What is the problem with quantitative data?

Answer 37

This type of data may not represent how something happened.

Question 38

What is Qualitative Data? What is it used for? How is it gathered?