Unit 5- Marketing Flashcards
What are the two stages of customer needs?
- Identify them: Through market research
- Satisfy them: Adapting the marketing mix (product, price, promotion)
Why is it important to identify and satisfy customer needs?
- Be competitive compared to rivals
- Avoid costly research and development mistakes
- Increase sales
What is segmentation?
- Process of dividing the market into smaller groups of consumers w/ similar needs and wants
Main types of segmentation?
- Location
- Income
- Demographics (age and gender)
What is the point of market research?
- Workout the likely demand
- See if there’s competion
- See what target market looks like ( supports particular type of segmentation )
Types of market research?
- 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
Def Market size?
- Potential number of customers you could sell you product to
Def Market share?
- % of the market that a business already has
Marketing mix, Price, Law of demand?
If prices go up, demand goes down
e.g: Prices go up by 10%, demand falls by only 1% = more revenue ☺️
Def of Price skimming
Price skimming: Start w/ high price and reduce over time, prob bc you have brand awareness
+ve & -ve of price skimming?
+ve: Recoup R & D costs
- ve: Alienates customers, not willing to pay high costs therefore they may wait until you’ve skimmed price
Def of price penetration
Start w/ low price and increase it over time
+ve & -ve of price penetration
+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
Def of competitive pricing
When you set prices around same level as rivals
+ve & -ve of competing pricing
+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
Def Loss leader pricing
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
+ve & -ve of Loss leader pricing
+ve:
• Gets web traffic or foot full
-ve;
• If customer only buys one loss leader good then it’s useless to you
Def of Cost plus pricing
When add a market up based on cost to achieve the price
+ve & -ve of cost plus pricing
+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
What do pricing strategies depend?
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
+ve of product development?
• Increased customer satisfaction
• Increased sales
• Increased market share
•Improved brand image
-ve of product development?
• Costs, high R&D costs
• Some customers may not like the new development
+ve of product differentiation?
• Improves brand image:awareness
• Improved costumer loyalty
• Increased sales
• Reduced marketing costs, improved net profits
Stages of product life cycle?
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
What are some extension strategies?
• 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
Stages of Boston matrix?
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
Why is promotion important?
•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
Types of promotion?
•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
What does promotion depend on?
•How much finance you have
•What are your rivals doing
•What is the nature of ur product
•What makes sense for ur target market
What are the 4p’s that make up marketing mix?
•Price
•Product
•Place
•Promotion
