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Business > Unit 3 - Marketing Management > Flashcards

Unit 3 - Marketing Management Flashcards

1
Q

What is a market?

A

anywhere where buyers and sellers meet

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2
Q

What is marketing?

A

the process of identifying, anticipating and meeting customer needs profitably

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3
Q

What is the purpose of marketing?

A
  • anticipating demand (e.g. seasonality?)
  • recognising demand
  • stimulating demand
  • satisfying demand
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4
Q

What is the market size?

A

measures the total sales generated by selling a product on a market

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5
Q

What is the formula for market size?

A

market size = (sales / market share) x 100

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6
Q

What is market share?

A

refers to the percentage of sales in a market, by one particular firm

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7
Q

What is the formula for market share?

A

market share = (total sales of business / total sales in whole market) x 100

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8
Q

What is the market share of a business with £488 million sales, with a market size of £1836 million?

A

market share = (488 million / 1836 million) x 100 = 27%

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9
Q

What is market growth?

A

the percentage change in volume or value of sales of a generic product over time

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10
Q

What is the formula for market growth?

A

market growth = (change in market size / original market size) x 100

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11
Q

What is a market leader?

A
  • has the highest market share
  • usually a high gap between market share of the leader compared to the market share of nearest competitor
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12
Q

What are marketing objectives?

A
  • increase sales volume
  • increase sales value
  • growing market size
  • market share growth
  • brand loyalty
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13
Q

What is the value of setting marketing objectives?

A
  • target setting helps focus the business
  • objectives can help to motivate
  • objectives can be used as an evaluation of performance
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14
Q

What is sales volume?

A

measures the number of items sold

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15
Q

What is sales value?

A

measures the financial worth of sales

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16
Q

What is sales growth?

A

the percentage change in volume or value of sales for a specific business

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17
Q

What is a brand?

A

a name, sign, symbol, design or slogan linked to a product in order to differentiate it from competitors

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18
Q

What is brand loyalty?

A

measures the degree of attachment a consumer has for a product/service/brand. Brand loyalty for one product will reduce the likelihood of the consumer switching to another brand

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19
Q

What is market research?

A

research carried out to identify the needs and wants of customers

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20
Q

What are the two types of market research?

A
  • primary
  • secondary
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21
Q

What is primary market research?

A

data collected for a specific purpose by a business

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22
Q

What are examples of primary market research?

A
  • questionnaire
  • interview
  • focus group
  • observation
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23
Q

What are the advantages of primary market research?

A
  • directly focused on research objectives, making it fit for purpose
  • generally more up to date than secondary
  • provides more detailed insights
  • competitors do not have access to it
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24
Q

What are the disadvantages of primary market research?

A
  • time consuming
  • often expensive
  • risk of survey bias (research samples may not be representative of whole population)
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25
Q

What is secondary market research?

A

data that already exists and which has been collected for a different purpose

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26
Q

What are examples of secondary market research?

A
  • census data
  • books
  • newspapers
  • internet
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27
Q

What are the advantages of secondary market research?

A
  • no extra cost
  • access to multiple sources
  • lower risk, as not collecting data, less likely to encounter errors that may impact business
  • faster
  • more in depth results
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28
Q

What are the disadvantages of secondary market research?

A
  • decreased access to data, may not provide what is required, or the data needed may not exist
  • not necessarily always up to date or relevant
  • competitors have access to the same data
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29
Q

What are the two types of research?

A
  • quantitative
  • qulitative
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30
Q

What is quantitative research?

A
  • relies on numerical/measurable data
  • used to see a trend or connection
  • produce objective data
  • done through questionnaires and surveys
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31
Q

What is qualitative research?

A
  • relies on non-numerical data
  • varied interpretations
  • subjective results are produced
  • possible personal bias
  • done through interviews and focus groups
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32
Q

What is sampling?

A

selecting a representative group of people from the target market

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33
Q

What are the advantages of sampling?

A
  • quicker and easier than trying to collect data from every single person
  • the larger the sample, the more representative the results will be
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34
Q

What are the 3 sampling techniques?

A
  • stratified
  • random
  • quota
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35
Q

What is stratified sampling?

A

where different groups are equally represented

e.g. if half the population were female, then half of the sample is female

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36
Q

What is random sampling?

A

where it is completely random

e.g. every tenth person is picked

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37
Q

What is quota sampling?

A

splitting population into groups and sampling a given number of people from each group

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38
Q

What is correlation?

A
  • occurs when there is a direct relationship between one factor and another
  • can be positive or negative
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39
Q

What are confidence intervals?

A
  • the margin of error for the research
  • indicates how accurate the findings are
  • if a confidence interval of 5 is used, and 70% of respondents gave a particular answer, then the researcher could be sure that between 65% and 75% of the population would give the same answer
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40
Q

What is the confidence interval affected by?

A

sample size
- smaller sample = greater margin for error and greater the confidence interval

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41
Q

What are confidence levels?

A
  • an expression of how confident the researcher is in the data collected
  • expressed as a percentage
  • most commonly used confidence level is 95%
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42
Q

What is extrapolation?

A
  • uses known data to predict future data
  • the further into the future it goes, the more difficult and less confidence in the certainty of results
  • extending the line
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43
Q

What is market mapping?

A

using a diagram to identify the position of all of the products in the market using two key features, such as price and quality

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44
Q

What does market mapping enable a business to do?

A
  • identify the position of its product in the market relative to others
  • to see where competition is most concentrated and whether there are any gaps in the market
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45
Q

What is market positioning?

A

shows the views of the consumer in terms of quality and image compared to rivals

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46
Q

What is product differentiation?

A

distinguishing a product/service from rival firms (USP, innovation, quality, service)

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47
Q

What are the advantages of market mapping?

A
  • helps spot gaps in a market
  • useful for analysing competitors
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48
Q

What are the disadvantages of market mapping?

A
  • there is not always demand for the gap in the market
  • depends on reliability of the market research
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49
Q

What influences the development of new products?

A
  • technology
  • competitors actions
  • market research
  • product differentiation
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50
Q

What is the value of technology in gathering and analysing data for marketing decision making?

A
  • faster communication
  • makes forecasting easier
  • enables targeted sales messages
  • but relies on business having correct data to start with
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51
Q

What factors affect demand?

A
  • supply
  • price
  • competition
  • seasonality
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52
Q

What is price elasticity of demand?

A

measures the extent to which the quantity demanded of a good changes in response to a change in price

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53
Q

What is the formula for price elasticity of demand?

A

PED = percentage change in quantity demanded / percentage change in price

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54
Q

What is the formula for percentage change?

A

percentage change = (difference / original) x 100

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55
Q

What are the two types of elasticity?

A
  • inelastic
  • elastic
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56
Q

What is price inelastic?

A

if demand for a product doesn’t change much with a change in price

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57
Q

What are examples of inelastic products?

A
  • petrol
  • diamonds
  • cigarettes
  • Apple iPhone (due to brand loyalty)
  • water
  • raw materials
  • healthcare
  • electricity
  • gas
  • milk
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58
Q

What are the characteristics of inelastic products?

A
  • have few or no close substitutes
  • necessities
  • addictive
  • usually bought infrequently
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59
Q

What does the graph for inelasticity look like?

A

vertical gradient, tilting towards the Y axis
(price on Y, demand on X)

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60
Q

What is price elastic?

A

if the demand for a product changes a lot with a change in price

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61
Q

What are examples of price elastic products?

A
  • chocolate
  • crisps
  • brands of water
  • jewellery
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62
Q

What are the characteristics of elastic products?

A
  • many substitutes
  • competitive markets
  • luxury goods (high % of income)
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63
Q

What does the graph for elasticity look like?

A

horizontal gradient, towards Y axis
(price on Y, demand on X)

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64
Q

If PED is between 0 and 1, what is demand?

A

inelastic

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65
Q

If PED is more than 1, what is demand?

A

elastic

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66
Q

A 20% decrease in price of Mars leads to a 30% increase in demand. Work out the PED and state whether it is elastic or inelastic.

A

PED = % change in quantity demanded / % change in price

PED = 30 / 20 = 1.5 = elastic

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67
Q

A 10% increase in the price of Mars leads to a 30% decrease in demand. Work out the PED and state whether it is elastic or inelastic.

A

PED = % change in quantity demanded / % change in price

PED = 30 / 10 = 3 = elastic

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68
Q

A shoe company reduces the price of their shoes by 10%, leading to demand increasing by 5%. Work out the PED and state whether it is elastic or inelastic.

A

PED = % change in quantity demanded / % change in price

PED = 5 / 10 = 0.5 = inelastic

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69
Q

What happens if PED is 1?

A

where the percentage change in demand is equal to the percentage change in price

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70
Q

What factors affect PED?

A
  • substitutes
  • percentage of income
  • luxury/necessity
  • addictive
  • time period
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71
Q

How do substitutes affect PED?

A

more substitutes, PED is more elastic

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72
Q

How does the percentage of income affect PED?

A

if the good takes a lot of a person’s income, then PED will be more elastic

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73
Q

How does luxury/necessity affect PED?

A
  • luxury are more elastic
  • necessities are more inelastic
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74
Q

How does addictiveness affect PED?

A

more addictive = more inelastic

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75
Q

How does the time period affect PED?

A

short term PED might be more elastic as there are fewer substitutes, but in the long term, more subs may be available, making PED more inelastic

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76
Q

What other factors affect PED?

A
  • degree of product differentiation
  • availability of substitutes
  • branding and brand loyalty
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77
Q

Why is PED negative?

A

a fall in price usually leads to an increase in demand

an increase in price usually leads to a fall in demand

as a plus and a minus equals a minus, PED is usually negative

therefore we ignore the minus

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78
Q

What is income elasticity of demand?

A

measures the responsiveness of quantity demanded given a change in income

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79
Q

What is the formula for YED?

A

YED = percentage change in quantity demanded / percentage change in income

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80
Q

If YED is between 0 and 1, what is the demand?

A

inelastic

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81
Q

If YED is more than 1, what is demand?

A

elastic

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82
Q

What happens to inferior goods as income increases?

A

demand decreases, and YED is less than 0

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83
Q

What happens to normal necessity goods as income increases?

A

demand increases, and YED is between 0 and 1

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84
Q

What happens to normal luxury goods as income increases?

A

even bigger increase in demand, and YED is more than 1

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85
Q

What happens is YED is 0

A

a unitary elastic good has a change in demand which is equal to the change in income

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86
Q

What type of good is it if the YED is a positive (+)?

A

normal good

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87
Q

What type of good is it if the YED is a negative (-)?

A

inferior good

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88
Q

A 20% increase in income leads to a 45% decrease in demand. Calculate the YED and state what type of good it is.

A

YED = % change in quantity demanded / % change in income

YED = 45 / 20 = -2.25 = inferior

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89
Q

A 10% increase in income leads to a 15% increase in demand. Calculate the YED and state what type of good it is.

A

YED = % change in quantity demanded / % change in income

YED = 15 / 10 = 1.5 = normal luxury

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90
Q

A 4% increase in demand is a result of a 15% increase in income. Calculate the YED and state what type of good it is.

A

YED = % change in quantity demanded / % change in income

YED = 4 / 15 = 0.26 = normal necessity

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91
Q

A 5% increase in income results in demand increasing from 25,000 to 450,000. Calculate the YED and state what type of good it is.

A

% change = (difference / original) x 100

difference = 450,000 - 25,000 = 425,000

% change = ( 425,000 / 25,000) x 100 = 17

YED = % change in quantity demanded / % change in income

YED = 17 / 5 = 3.4 = normal luxury

92
Q

Income increases from £20,000 to £30,000, resulting in a decrease in demand from 100 to 60. Calculate the YED and state what type of good it is.

A

% change = (difference / original) x 100

difference = new - original

% change income = (10,000 / 20,000) x 100 = 50%

% change in demand = (-40 / 100) x 100 = 40%

YED = % change in quantity demanded / % change in income

YED = -40 / 50 = -0.8 = inferior (and inelastic)

93
Q

Income increases from £20,000 to £25,000. Quantity demanded increases from 12 to 21. Calculate YED and state what type of good it is.

A

% change = (difference / original) x 100

difference = new - original

% change income = (5,000 / 20,000) x 100 = 25%

% change demand = (9 / 12) x 100 = 75%

YED = % change in quantity demanded / % change in income

YED = 75 / 25 = 3 = normal luxury

(as income increases demand increases)

94
Q

What factors affect YED?

A
  • necessities
    • demand will be income inelastic
  • luxuries
    • demand will be income elastic
95
Q

These are figures for Product X:
PED = 4.0
YED = +0.6

Is PED/YED elastic or inelastic and necessity or not/luxury?
What does this tell you about the product?
What type of product could it be?
What marketing strategies could be used for this product?

A

PED = very elastic, not a necessity
YED = inelastic, necessity

  • competitive market
  • lots of substitutes
  • people buy regardless of their income
    e.g. cereal

marketing strategies:
- short term
- reduce price to increase sales (depends on profit margins)
- change product image or re-brand
- long term
- reposition product to appeal to high income sectors

96
Q

These are figures for Product Y:
PED = 0.3
YED = +2.5

Is PED/YED elastic or inelastic and necessity or not/luxury?
What does this tell you about the product?
What type of product could it be?
What marketing strategies could be used for this product?

A

PED = inelastic, necessity or few close substitutes
YED = elastic (high), luxury

  • few substitutes
  • consumers who can afford high prices
    e.g. iPhone

marketing strategies:
- short term
- increase price, as will only be a small fall in demand
- long term
- maintain high prices, as will generate high profits
- protect product from competitors

97
Q

What are the difficulties in using PED and YED?

A
  • consumer tastes change quickly, so may not be accurate for the future
  • new competitors enter the market
  • technological advancements have an influence on the market
98
Q

What is a consumer?

A

end user of the product

99
Q

What is a customer?

A

the person buying the product

100
Q

What is market segmentation?

A

the process of splitting buyers into groups who have similar buying habits

101
Q

What are the 4 groupings of market segments?

A
  • geographic
  • behavioural
  • demographic
  • income
102
Q

What is behavioral segmentation?

A

considers factors such as when people buy and why people buy
e.g. Christmas, or birthdays

103
Q

What is geographic segmentation?

A

considers factors such as location (continent > post code), language, climate and season
e.g. hot climate

104
Q

What is demographic segmentation?

A

considers factors such as age, gender, marital status, religion, nationality
e.g. young adults

105
Q

What is income segmentation?

A

considers the amount of income of a person
e.g. purchase of a sports car

106
Q

What are other segments?

A
  • gym goers
  • car enthusiasts
  • smokers
  • football fans
  • university students
107
Q

What is ACORN?

A

a system that categorises UK post codes by examining the income and lifestyle of consumers

108
Q

What is the process of STP?

A
  • segment
  • target
  • position
109
Q

What is segmentation?

A

divide the market into groups with similar needs

110
Q

What is targeting?

A

decide which segment to focus on and appeal to the group

111
Q

What is positioning?

A

position the product in customers’ minds as better than the competition

112
Q

What are the benefits of market segmentation?

A
  • customers’ needs are matched and met
    • therefore likely to purchase the product, thereby increasing sales and so profits
  • increased customer retention
  • targeted marketing
    • promoting products using methods appropriate to the target market
  • increased market share
    • so will have more customers and sales and so profits
113
Q

What are the limitations of market segmentation?

A
  • businesses need to ensure they do not exclude customers by taking segmentation too far
  • it is becoming increasingly difficult to categorise customers and their behaviour
    • due to variety of options available in each market, and trends changing quickly
  • too much segmentation could mean sales are lost
114
Q

What are the two types of market?

A
  • mass
  • niche
115
Q

What is a mass market?

A

where products are aimed at the largest part of the market

116
Q

What is a niche market?

A

specifically targets a small group of customers within a larger market, who share the same characteristics

117
Q

What are examples of products in a mass market?

A
  • electricity
  • soap
118
Q

What are examples of products in a niche market?

A
  • vegan face wash
  • eco-friendly products
119
Q

What are the advantages of being in a mass market?

A
  • lots of customers to sell to
  • benefit from economies of scale
120
Q

What are the disadvantages of being in a mass market?

A
  • lots of competition, so cannot easily increase prices
  • advertising to a large, diverse group isn’t easy
121
Q

What are the advantages of being in a niche market?

A
  • low levels of competition, so could increase price
  • business has a clear focus
122
Q

What are the disadvantages of being in a niche market?

A
  • dependent on a small group of customers = risk
  • lack economies of scale, potential increased costs
  • likely to attract competition
123
Q

What is a marketing strategy?

A

a set of plans to achieve a marketing objective

124
Q

What is the marketing mix / 7Ps?

A

a combination of factors that can be controlled by a company to influence consumers to purchase its products

125
Q

What are the factors in the marketing mix / 7Ps?

A
  • product
  • price
  • promotion
  • place
  • people
  • process
  • physical evidence
126
Q

What is the product factor?

A
  • product life cycle
  • Boston Matrix
127
Q

What is the product life cycle?

A

describes the stages of the product’s life

128
Q

Draw the product life cycle, with labels.

A

See flashcards with pic on.

129
Q

What are the stages of the product life cycle?

A
  • introduction
  • growth
  • maturity
  • decline
  • extension strategy
130
Q

What is the introduction stage?

A

when a product is being introduced into the market

131
Q

What are sales like in the introduction stage?

A

low but fast because demand is low but growing as the product is new

132
Q

What are costs like in the introduction stage?

A

marketing and research and development costs are high, so usually no profit

133
Q

What is the growth stage?

A

when the popularity of a product increases

134
Q

What are sales like in the growth stage?

A

start to rise

135
Q

What are costs like in the growth stage?

A

costs start decreasing due to use of economies of scale

136
Q

What is the maturity stage?

A

when a product is firmly positioned in the market and continues to be popular

137
Q

What are sales like in the maturity stage?

A

still increasing but at a slower rate

138
Q

What are costs like in the maturity stage?

A

low due to economies of scale

139
Q

What are profits like in the maturity stage?

A

at their highest

140
Q

What is the decline stage?

A
  • when a product becomes less popular and fewer people buy it
  • the product can start to lose money and eventually be withdrawn
141
Q

What are sales like in the decline stage?

A

sales decrease as demand decreases/shrinks

142
Q

What are costs like in the decline stage?

A

only production costs exist, as no new marketing etc

143
Q

What is the extension strategy stage?

A

when a business tries to lengthen the life of a product either through promotion or improving the product

144
Q

What is different about each product’s life cycle?

A
  • products pass through the stages at different speeds
  • some products will sell for much longer than others e.g. milk, bread compared to loom bands
145
Q

What are the different sorts of goods?

A
  • convenience goods
  • shopping goods
  • specialty goods
146
Q

What are convenience goods?

A
  • impulse purchases
  • no loyalty
  • price elastic
147
Q

What is an example of a convenience good?

A

chewing gum

148
Q

What are shopping goods?

A
  • consumers will shop around
  • comparisons of different brands etc
  • brand and price are somewhat important to the decision
  • susceptible to promotion techniques
149
Q

What is an example of a shopping good?

A

trainers

150
Q

What are specialty goods?

A
  • long time to make a decision to buy
  • the people involved in the transaction are important
  • consumers willing to travel far
  • physical environment is important (7Ps)
151
Q

What is an example of a specialty good?

A

a car

152
Q

What are the advantages of a product life cycle?

A
  • useful if business has wide product range
  • helpful when making decisions about where funds should be allocated
153
Q

What are the disadvantages of a product life cycle?

A
  • doesn’t provide any clear solutions for business
  • is a tracker of progress, not a forecast
154
Q

What is the Boston Matrix?

A

a grid which categorises a business’ products according to their market share and market growth

155
Q

What does the Boston Matrix allow businesses to do?

A

undertake product portfolio analysis based on the product’s market growth rate and market share

156
Q

What are the sections of the Boston Matrix?

A
  • star
  • problem child
  • cash cow
  • dog
157
Q

Draw the Boston Matrix.

A

See flashcard with pic on.

158
Q

What is a star product?

A
  • fairly new and successful products
  • sales are from product trials
  • often in growth stage so need investment
  • market leaders
  • fast growth
  • high market share
  • high market growth
159
Q

What is an example of a star product?

A

Nescafé

160
Q

What is a problem child product?

A
  • low percentage market share in a fast growing market = has potential for the future, if can increase market share
  • pose problems for the business
    • poor profit margins
  • high demand for cash
  • low market share
  • high market growth
161
Q

What is an example of a problem child product?

A

Kit Kat

162
Q

What is a cash cow product?

A
  • established products = no need for heavy promotion
  • high customer loyalty
  • repeat purchases
  • in maturity stage
  • use profits from cash cow to support other products
  • generate more cash than needed to maintain market share
  • low market growth
  • high market share
163
Q

What is an example of a cash cow product?

A

Coca Cola

164
Q

What are dog products?

A
  • unsuccessful products
  • in decline
  • should be withdrawn or extension strategy implemented
  • low market growth
  • low market share
165
Q

What is an example of a dog product?

A

Milo

166
Q

How does the Boston Matrix benefit a business?

A
  • able to identify opportunities within the market
    • which products offer the most potential
    • which products could be dropped
  • allocating resources
    • how best to spend money
      • which products will do well
      • which products could benefit from investment
167
Q

What are the disadvantages of the Boston Matrix?

A
  • doesn’t offer accurate insights into markets
  • ignoring other factors that may influence the success of products
  • doesn’t take into account changes in demand
168
Q

What are the influences on and value of new product development?

A

design mix

169
Q

What is the design mix?

A

a combination of function, cost and aesthetics considered when developing a new product

170
Q

How does the design mix change for different products?

A

different products will focus on different parts of the design mix depending on the target market

e.g. cars
- function = car designed for families
- aesthetic = sports car
- cost = small car

171
Q

What is the definition of pricing strategy?

A

an approach businesses use to determine what prices they should charge for their products/services

172
Q

What are the two types of pricing strategy?

(for new products)

A
  • penetration
  • skimming
173
Q

What is price penetration?

A

when you set a low price to begin with and then increase the price once you have loyal customers and high market share

174
Q

When is price penetration used?

A
  • used on products that face lots of competition
  • mass market products
  • e.g. chocolate bar
175
Q

What is the goal of price penetration?

A

attract a large number of customers with limited budgets

176
Q

What is the target audience of price penetration?

A

price sensitive customers

177
Q

What are the advantages of using price penetration?

A
  • could raise brand awareness due to low prices
  • quick way to gain market share
  • benefit form economies of scale
  • over time the prices increase, making the product more profitable
178
Q

What are the disadvantages of using price penetration?

A
  • selling at a loss at the beginning
  • risky as customers may already be loyal to another brand, so may not switch
  • might start a price war with competitors
  • may be seen as lower quality, unless it is a well known brand
179
Q

What is price skimming?

A

when you set a high price to begin with and then lower the price over time

180
Q

When is price skimming used?

A
  • used on products such as electronics
  • innovative products
  • e.g. Apple iPhone
181
Q

What is the goal of price skimming?

A

maximise revenue from customers with high budgets

182
Q

What is the target audience for price skimming?

A

early adopters (people who buy products as soon as they come out)

183
Q

What are the advantages of price skimming?

A
  • increased profit, can enable more research and development
  • consumers who wait will benefit from lower prices
  • high price can help recoup investment costs
  • those that are loyal to the brand and want the new product immediately will pay the higher price > increased profit
184
Q

What are the disadvantages of price skimming?

A
  • consumers who pay a high price may feel ripped off
  • could lose market share if the price is too high
  • requires a degree of monopoly power
  • if the business is known for price skimming, customers may just wait for the price to decrease, so business may not benefit
185
Q

What is dynamic pricing?

A

applied to products where the price can fluctuate depending on demand

186
Q

What are examples of products with dynamic pricing?

A
  • hotel rooms
  • plane tickets
187
Q

What influences pricing strategy?

A
  • costs
  • USP that makes the product inelastic
  • the stage in the product life cycle
  • number of competitors
  • brand image
  • target market
188
Q

What is branding?

A

creating an identity for your product which customers see as different from other products

189
Q

How can a business create a powerful brand?

A
  • colour
  • product shape/size
  • celebrity endorsement
  • tagline/slogan
  • theme tune
  • packaging
  • sponsorship
190
Q

How does colour affect branding?

A
  • increases brand recognition
  • colour ads read up to 42% more than similar black and white ads
  • can be up to 85% of the reason why people buy
191
Q

What are the advantages of having a strong brand?

A
  • can charge premium prices
  • increase customer loyalty
  • USP
  • makes business stand out
  • reduced price elasticity of products
192
Q

What is promotion?

A

refers to raising awareness and desire for a product

193
Q

What methods of promotion are there?

A
  • advertising
  • public relations
  • sponsorship
  • social media
  • celebrity endorsement
  • guerrilla marketing
  • personal selling
  • digital marketing
194
Q

How can social media be used for advertising?

A
  • free advertising
  • paid advertising
  • targeted advertising (cookies)
195
Q

What is above the line promotion?

A
  • using media to promote products
  • TV
  • radio
  • posters
  • internet
  • direct marketing
  • newspapers
  • cinema
196
Q

What is below the line promotion?

A
  • using small scale promotion
  • targeted at individuals
  • free gifts
  • coupons
  • loyalty cards
  • exhibitions
  • sponsorship (except TV sport event, then it is above the line)
197
Q

What is celebrity endorsement?

A

a marketing strategy that uses a celebrity’s fame and image to promote a brand or product

198
Q

What are the benefits of celebrity endorsement?

A
  • consumers are more likely to trust a product, builds credibility
  • makes brand/product stand out
  • opens up to new markets
199
Q

What are the drawbacks of celebrity endorsement?

A
  • celebrity images change
    • if becomes negative, then reflects badly on brand/product
  • may overshadow the brand
  • expensive
200
Q

What is public relations (PR)?

A

refers to development and maintenance of positive relationships between a business and the public

201
Q

What is an example of PR?

A
  • open days for schools
  • awards celebrations
202
Q

What are the benefits of PR?

A
  • able to reach a large audience
  • maintaining brand image
203
Q

What are the drawbacks of PR?

A
  • no direct control
  • lack of guaranteed results
  • difficult to evaluate effectiveness
204
Q

What is sponsorship?

A

businesses can gain publicity by financially supporting an event or person

205
Q

What is guerrilla marketing?

A
  • a business’ use of images and artwork to incorporate their brand or product into every day life
  • low cost
  • creative
  • unconventional method of promotion
  • more appealing than TV advert
206
Q

What is personal selling?

A
  • involves interpersonal contact between the buyers and seller
  • aim of encouraging the buyers to purchase the product
207
Q

What is distribution (place)?

A

refers to making products/services available to customers where and when they need it

208
Q

How are products/services distributed?

A
  • through retailing (selling in person)
  • through e-tailing (online)
209
Q

What are wholesalers?

A
  • buy in large quantities from producers
  • break products into smaller quantities to sell to retailers
  • reduce producer’s transport costs
210
Q

What is a channel of distribution?

A

the path a product takes from producer to the consumer

211
Q

What are the 4 channels of distribution?

A
  1. manufacturer > consumer
  2. manufacturer > retailer > consumer
  3. manufacturer > wholesaler > retailer > consumer
  4. manufacturer > agent > wholesaler > retailer > consumer
212
Q

What factors influence distribution?

A
  • type of product
    • services are directly to consumers
    • exclusive businesses choose outlets carefully
  • speed
    • whether the products are perishable, and so would need to get to the consumer quickly
  • distance
  • cost
213
Q

What are the 3 types of distribution?

A
  • direct
  • modern
  • traditional
214
Q

What is direct distribution?

A

manufacture > consumer

215
Q

What are the advantages of direct distribution?

A
  • manufacturer can control distribution of their products
  • manufacturer in control of the price charged
216
Q

What are the disadvantages of direct distribution?

A
  • can become increasingly difficult to sell to a large number of customers
217
Q

What is modern distribution?

A

manufacturer > retailer > consumer

218
Q

What are the advantages of modern distribution?

A
  • intermediaries (retailer) makes it easier for producers to distribute their products more widely
  • more convenient for customers to buy the product
219
Q

What are the disadvantages of modern distribution?

A
  • poor customer service of retailers could limit sales
  • cause higher prices for the customer as the intermediaries must also make a profit
220
Q

What is traditional distribution?

A

manufacturer > wholesaler > retailer > consumer

221
Q

What are the advantages of traditional distribution?

A
  • customers can try on products
  • can have displays to attract customers
  • retailers can benefit from economies of scale by buying from wholesalers
  • help and advice on the spot
  • enjoy experience of shopping
222
Q

What are the disadvantages of traditional distribution?

A
  • costs of running premises
  • increased competition due to online at cheaper price
  • cost and time to train staff
223
Q

What are the benefits of online distribution?

A
  • lower cost due to not needing shopfront
    • do need a large space but can be anywhere
  • always open
  • access to wider markets around the world
  • convenient
224
Q

What are the drawbacks of online distribution?

A
  • cost of warehouse
  • cost of website
  • website can crash
  • not everyone has access to website
  • concerns about fraud
  • shipping/delivery times vs. instant
  • consumers cannot see the product, resulting in more returns
225
Q

What is the people aspect of the marketing mix (7Ps)?

A
  • refers to employees
  • may require people that know the product/service well as they can convey the benefits to the customer
  • attitude, skills and appearance of sales personnel can influence customer satisfaction
226
Q

What is the process aspect of the marketing mix?

A
  • businesses need to take into consideration new technology and stay up to date with current trends
  • technology enabled buying experience o become easier and quicker for customers

e.g. ordering online, flexible delivery

227
Q

What is the physical environment aspect of the marketing mix?

A
  • factors that help shape customers’ perception and image of service provided

e.g. colour of store, lighting used, music used, tone of voice/language of staff

Business (16 decks)

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