Unit 5- Marketing

Question 1

What are the two stages of customer needs?

Answer 1

• Identify them: Through market research
• Satisfy them: Adapting the marketing mix (product, price, promotion)

Question 2

Why is it important to identify and satisfy customer needs?

Answer 2

• Be competitive compared to rivals
• Avoid costly research and development mistakes
• Increase sales

Question 3

What is segmentation?

Answer 3

• Process of dividing the market into smaller groups of consumers w/ similar needs and wants

Question 4

Main types of segmentation?

Answer 4

• Location
• Income
• Demographics (age and gender)

Question 5

What is the point of market research?

Answer 5

• Workout the likely demand
• See if there’s competion
• See what target market looks like ( supports particular type of segmentation )

Question 6

Types of market research?

Answer 6

• Questionnaires
• Surveys: +ve: quantitive, easier to analyse
  -ve: doesn’t give you depth
• Interviews: +ve: Get more depth
  -ve: Take a long time to do
• Focus group: +ve: deeper opinions, qualitative info.
  -ve: Are ppl representative of your target market
• Internet Research, secondary
• Newspapers, secondary

Question 7

Def Market size?

Answer 7

• Potential number of customers you could sell you product to

Question 8

Def Market share?

Answer 8

• % of the market that a business already has

Question 9

Marketing mix, Price, Law of demand?

Answer 9

If prices go up, demand goes down

e.g: Prices go up by 10%, demand falls by only 1% = more revenue ☺️

Question 10

Def of Price skimming

Answer 10

Price skimming: Start w/ high price and reduce over time, prob bc you have brand awareness

Question 11

+ve & -ve of price skimming?

Answer 11

+ve: Recoup R & D costs

• ve: Alienates customers, not willing to pay high costs therefore they may wait until you’ve skimmed price

Question 12

Def of price penetration

Answer 12

Start w/ low price and increase it over time

Question 13

+ve & -ve of price penetration

Answer 13

+ve:
•Allows to grow awareness
• May get consumers to repeat buying from you and increase brand loyalty over time

-ve:
• If product quality isn’t good may struggle on maintaining demand level, when you then increase the price

Question 14

Def of competitive pricing

Answer 14

When you set prices around same level as rivals

Question 15

+ve & -ve of competing pricing

Answer 15

+ve:
• Allows you to maintain market share

-ve:
• Need to have a USP or differentiate your product, therefore meaning more R&D, meaning more cost

Question 16

Def Loss leader pricing

Answer 16

When you reduce prices to cost price of even below that

Encourage customers into your store w/ hope that they buy other products w/ higher margins on them

Question 17

+ve & -ve of Loss leader pricing

Answer 17

+ve:
• Gets web traffic or foot full

-ve;
• If customer only buys one loss leader good then it’s useless to you

Question 18

Def of Cost plus pricing

Answer 18

When add a market up based on cost to achieve the price

Question 19

+ve & -ve of cost plus pricing

Answer 19

+ve:
• If sale is made guaranteed profit

-ve:
•Could less to competitor price, may lead to a price that is v. high bc you had such a high markup and could ruin your demand

Question 20

What do pricing strategies depend?

Answer 20

Product life cycle - Where you are?
e.g:
•Introduction stage, no awareness, use price penetration
•Maturity stage, may use competitive pricing
•Decline stage, may use loss leader if you have a range of products

• Level of competition
  e.g:
  • Many rivals, use competitive pricing
  • No rivals, use price skimming
• R&D costs
  e.g:
  • If you have rlly high R&D costs, may use price skimming to recoup R&D costs otherwise may have a cash flow issue

Question 21

+ve of product development?

Answer 21

• Increased customer satisfaction
• Increased sales
• Increased market share
•Improved brand image

Question 22

-ve of product development?

Answer 22

• Costs, high R&D costs
• Some customers may not like the new development

Question 23

+ve of product differentiation?

Answer 23

• Improves brand image:awareness
• Improved costumer loyalty
• Increased sales
• Reduced marketing costs, improved net profits

Question 24

Stages of product life cycle?

Answer 24

R&D:
• High market research
• Product development costs
• No sales

Introduction:
• Low sales, depends on initial awareness

Growth:
• See sales growing
• More advertising needed

Maturity:
•Peak of sales

Decline:
• Avoid by having extension strategies
•When sales are reducing

Question 25

What are some extension strategies?

Answer 25

• Improve packaging

• Add new/more features, may lead to higher prices however this may be needed to recoup the R&D costs

• New target market

• Advertising

• Reduce prices, how sensitive is the demand, hope demand increases to lead to higher revenues

Question 26

Stages of Boston matrix?

Answer 26

Low market growth/ high market share= cash cow 👍
• as you earn profits allows you to reinvest into other products = long term sustainability

Low market growth/ Low market share= Dogs ☹️

High market growth/ High market share= Star ☺️
• more rivals
•higher marketing costs

High market growth/ Low market share= Question mark 😐
• Could invest in advertising so it becomes a success or give up

Question 27

Why is promotion important?

Answer 27

•Make customers aware of you product
•Remind customers of your product
•Therefore increase sales of product
•Change perception abt product
•Therefore persuade customers to buy it

Question 28

Types of promotion?

Answer 28

•Advertising. e.g: Billboards
•Sales promotion e.g: Free gifts

•Sponsorship. +ve: brand awareness
-ve: Cost, risk

•Social media. +ve: Easier to track results, quantitive data
-ve: Cost, time

•PR: +ve: brand awareness
-ve: Not much control, risk

Question 29

What does promotion depend on?

Answer 29

•How much finance you have
•What are your rivals doing
•What is the nature of ur product
•What makes sense for ur target market

Question 30

What are the 4p’s that make up marketing mix?

Answer 30

•Price
•Product
•Place
•Promotion