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Business > Unit 3 (marketing mix and onwards) > Flashcards

Unit 3 (marketing mix and onwards) Flashcards

1
Q

What do channels of distribution show?

A

How a product gets from the producer to the final consumer.

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2
Q

What factors affect which method of distribution you use?

A
  • Cost
  • Nature of the product
  • The market
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3
Q

What is a retailer?

A

Shops and other outlets that sell goods and services to the final consumer.

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4
Q

What is a wholesaler?

A

A business that buys products in bulk from producers and then sells them to retailers.

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5
Q

What are middlemen?

A

These are the intermediaries in the channels of distribution, for example wholesalers and retailers.

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6
Q

What is direct selling?

A

Producer —–> Consumer

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7
Q

What are the advantages of direct selling?

A
  • All profit is gained by the producers.
  • Producer controls all of the marketing mix.
  • Quickest method of getting the product to the consumer.
  • Producer has direct contact with the consumer (Market research).
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8
Q

What are the disadvantages of direct selling?

A
  • Consumers aren’t able to try the product pre-purchase (If online).
  • Delivery costs may be higher (Over a wide area).
  • Storage costs must be payed by producer
  • Promotion and other finances have to be covered by the producer.
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9
Q

What are the advantages of Producer —–> Retailer —–> Consumer?

A
  • Consumers can try products pre - purchase.
  • Retailer pays a bit for inventory.
  • Retailer will pay for advertising and promotion.
  • Retailers are more convenient for consumers (location wise).
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10
Q

What are the disadvantages of Producer —–> Retailer
—–> Consumer?

A
  • Producer doesn’t gain 100% profit.
  • Producer loses some control of the marketing mix.
    -Producer pays delivery costs to the retailer.
    -Retailers usually sell competitors’ products as well.
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11
Q

What are the advantages of Producer —–> Wholesaler
——> Retailer —–> Consumer?

A
  • Wholesaler buys large quantities from producers; smaller quantities for retailers.
  • Wholesalers advertise and promote to retailers.
  • Transport costs to retailer is paid for by the wholesaler.
  • Wholesalers pay for storage costs (When purchased from the producer).
  • Wholesalers help the producer to sell its goods to a large market.
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12
Q

What are the disadvantages of Producer —–> Wholesaler ——> Retailer —–> Consumer?

A
  • Another middleman takes part of the profit from the producer.
    Producer loses even more control over the marketing mix.
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13
Q

What are the advantages of Producer —–> Agent —–> Wholesaler —–> Retailer —–> Consumer

A

The agent has specialist knowledge of the market. They find wholesalers and retailers who are prepared to buy and sell the product from the producer

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14
Q

What are the disadvantages of Producer —–> Agent
—–> Wholesaler —–> Retailer —–> Consumer

A

Another middleman is added to the channel of distribution which reduces the profit to the producer

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15
Q

What is promotion?

A

Marketing activities used to communicate with customers and potential customers to inform and persuade them to but a business’s products.

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16
Q

What is the main aim of promotion?

A

To increase sales.

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17
Q

What are some above - the - line promotional strategies?

A
  • Advertising
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18
Q

What is advertising?

A

Paid-for communication with consumers which uses printed and visual media. The aim is to inform and persuade consumers into buying a product.

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19
Q

What are the two types of advertising?

A
  • Informative advertising
  • Persuasive advertising
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20
Q

What is informative advertising?

A

Information about the product communicated to consumers to create product awareness and attract their interest

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21
Q

What is persuasive advertising?

A

Communication with consumers aimed at getting them to buy a firm’s product rather than a competitors product.

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22
Q

What are the advantages of advertising?

A
  • Quickly convince consumers
  • Reach a wide audience
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23
Q

What are the disadvantages of advertising?

A
  • Expensive
  • One way communication
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24
Q

What is below-the-line promotion?

A

Promotion that is not paid-for communication but uses incentives to encourage consumers to buy.

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25
Q

What are some below - the - line promotional strategies?

A
  • Direct mail
  • Personal selling
  • Sponsorship
  • Sales promotion
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26
Q

What is direct mail?

A

Also known as ‘mailshots’, printed materials which are sent directly to the adress of consumers.

27
Q

What are the advantages of direct mail?

A
  • Cover large market and specific target groups.
  • Cheap if emailed.
28
Q

What are the disadvantages of direct mail?

A
  • Can be seen as ‘junk mail’
  • Expensive to send by post
29
Q

What is personal selling?

A

Sales staff communicate directly with the consumer to achieve a sale and form a long-term relationship between firm and consumer.

30
Q

What are the advantages of personal selling?

A
  • Two - way communication
  • Useful for complicated products
  • Provides more information about the product
31
Q

What is a sponsorship?

A

Payment by a business to have its name or products associated with a particular event.

32
Q

What are the advantages of sponsorships?

A
  • Enhances brand image
  • Attracts specific audiences
33
Q

What are the disadvantages of sponsorships?

A
  • Expensive
  • If something goes wrong at the event the brand image could be damaged
34
Q

What are sales promotions?

A

Incentives used to encourage short-term increases in sales or repeat purchases.

35
Q

What are the advantages of sales promotions?

A
  • Increases consumer loyalty
  • Very specific to the product
36
Q

What are the disadvantages of sales promotions?

A
  • We lose a part of the profit
  • Possible only a short-term effect
37
Q

What is the marketing budget?

A

The amount of money made available by a business for its marketing activities during a particular period of time.

38
Q

What is e-commerce?

A

Use of the internet and other technologies by businesses to market and sell goods and services to customers.

39
Q

What are some opportunities of e-commerce for business?

A
  • Increased market.
  • Reduced costs.
  • Better information.
40
Q

What are some threats of e-commerce for business?

A
  • increased competition.
  • Unfamiliarity.
41
Q

What are some opportunities of e-commerce for consumers?

A
  • Convenience.
  • Wider choice.
  • Lower prices.
  • Better information.
42
Q

What are some threats of e-commerce for consumers?

A
  • Fraud.
  • Hacking.
  • No personal service.
  • Returning items.
43
Q

What is a marketing strategy?

A

A plan to achieve the marketing objectives using a given level of resources.

44
Q

When do businesses produce a marketing strategy?

A

After careful market research.

45
Q

What do you need in order to create a good marketing strategy?

A
  • The need for clear marketing objectives.
  • The need to consider for each element of the marketing mix.
  • The constraint placed on a strategy by the marketing budget.
  • The importance of monitoring strategy to make sure it is working and will lead to the achievement of marketing objectives.
46
Q

What are legal controls?

A

Laws that control the activity of business.

47
Q

What are the common legal controls on businesses which affect the marketing functions?

A

The ones that:
- Protect consumers from faulty and dangerous goods.
- Prevent businesses from using advertising to mislead consumers.
- Protect consumers from being exploited in industries where there is little or no competition.

48
Q

What are some impacts of legal controls on marketing strategies?

A
  • They will increase their costs - products may be changed to meet minimum quality standards.
  • A large company that dominated a market - anti-trust or competition laws, if it considered to be exploiting consumers by charging high prices or providing poor-quality goods and services.
  • Advertisements may have to be withdrawn and redesigned if they are found to contain misleading or inaccurate information.
49
Q

Why may businesses move to another country?

A
  • The market in their own country had reached maturity, or might even be in decline. Other countries can offer huge marketing opportunities for increased sales, revenue and profits.
50
Q

What are barriers to trade?

A

Usually taxes, quotas or bans that one country places on the goods of other countries to prevent or increase the cost of them entering that country.

51
Q

What are the problems of entering foreign markets?

A
  • Differences in language and culture.
  • Lack of market knowledge.
  • Economic differences.
  • Social differences.
  • Differences in legal controls to protect consumers.
52
Q

What is a domestic market?

A

The market for goods and services in the business’ own country.

53
Q

What are the two problems presented for businesses when entering new markets?

A
  • The business does not know the market.
  • The market (consumers) don’t know the business.
54
Q

What are methods to overcome problems of entering foreign markets?

A
  • Franchising.
  • Licensing.
  • Joint ventures.
55
Q

What is international franchising?

A

A business system where entrepreneurs buy the right to the name, logo and product of an already existing business.

56
Q

What are some advantages of international franchising?

A
  • Less chance of business failure because the product and brand are already well established.
  • The franchisor often provides advice and training to the franchisee as part of the franchise agreement.
  • The franchisor will finance the promotion of the brand through national advertising.
57
Q

What are some disadvantages of international franchising?

A
  • The initial cost of buying into a franchise can be very expensive.
  • The franchisee will still have to pay for any local promotions that they decide to do.
58
Q

What is licensing?

A

When a business in one country permits a firm in a foreign country to produce its branded product under license.

59
Q

What is a benefit of licensing?

A
  • The goods are produced by a firm which understands the local market so most problems of entering foreign markets are removed.
60
Q

What is a limitation of licensing?

A
  • Risk of poor quality or other problems that can damage the reputation of the businesses whose product it is.
  • Almost every product is removed apart from the lack of consumer knowledge about the product.
61
Q

What is a joint venture?

A

An agreement between two or more businesses to work together on a project.

62
Q

What are some benefits of a joint venture?

A
  • it reduces risk and cuts cost.
  • Each business brings different expertise to the joint venture.
63
Q

What are some limitations of a joint venture?

A
  • Any mistakes made will reflect on all parties to the joint venture. This may damage the reputation of all firms in the joint venture.
  • The decision-making process may be ineffective due to different business culture or different styles of leadership within each of the joint-venture partners.

Business (7 decks)

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