what is marketing

Question 1

Marketing

Answer 1

it is a management task that connects the business to customers by learning and identifying what customers want and need so that customers are satisfied and continue to purchase products and services even more

Question 2

what is a management task

Answer 2

it is bout communicating with customers to find out what they want and then producing it to meet their needs profitably.

Question 3

market

Answer 3

refers to the group of consumers that is interested in a product and have the resources to purchase the product and is permitted by law to purchase it

Question 4

marketing involves a number of related management functions.

These include

Answer 4

■ market research 
■ product design 
■ pricing 
■ advertising 
■ distribution 
■ customer service 
■ packaging.

Question 5

what is a marketing objective

Answer 5

the goals set for the marketing department to help the business achieve its overall objectives.

Question 6

Examples of marketing objectives

Answer 6

■ market share – perhaps to gain market leadership
■ number of new customers
■ customer satisfaction
■ brand identity.

Question 7

effective, marketing objectives should

Answer 7

■ fit in with the overall aims and mission of the business ■ be determined by senior management
■ be realistic, motivating, achievable, measurable and clearly communicated to all departments in the organisation

Question 8

Why are marketing objectives important?

Answer 8

■ They provide a sense of direction for the marketing department.
■ Progress can be monitored against these targets

Question 9

Market orientation:

Answer 9

an outward-looking approach basing product decisions on consumer demand, as established by market research.

Question 10

Product orientation

Answer 10

an inward-looking approach that focuses on making products that can be made – or have been made for a long time – and then trying to sell them. ignoring customer needs

Question 11

Asset-led marketing

Answer 11

an approach to marketing that bases strategy on the firm’s existing strengths and assets instead of purely on what the customer wants.

Question 12

The benefits of market orientation are:

Answer 12

■ The chances of newly developed products failing in the market are much reduced.
■ If consumer needs are being met with appropriate products, then they are likely to survive longer and make higher profits than those that are being sold following a product-led approach.
■ Constant feedback from consumers

Question 13

Societal marketing

Answer 13

this approach considers not only the demands of consumers but also the eff ects on all members of the public (society) involved in some way when firms meet these demands.

Question 14

demand

Answer 14

the quantity of a product that consumers are willing and able to buy at a given price in a time period.

Question 15

Supply:

Answer 15

the quantity of a product that firms are prepared to supply at a given price in a time period.

Question 16

factors influencing demand for a product

Answer 16

price: for all normal goods the quantity bought rises with a price fall and the quantity bought falls with a price increase

■ changes in consumers’ incomes
■ changes in the prices of substitute goods and complementary goods
■ changes in population size and structure

Question 17

factors influencing the level of supply of a product

Answer 17

price – firms will be more willing to supply a product if the price rises and will supply less as the price falls
■ costs of production
■ taxes imposed on the suppliers by government, which raise their costs
■ subsidies paid by government to suppliers, which reduce their costs

Question 18

market location

Answer 18

local market
regional market
international market
electronic market

Question 19

Market size:

Answer 19

the total level of sales of all producers within a market.

Question 20

size of a market is important for three reasons

Answer 20

1 A marketing manager can assess whether a market is worth entering or not.
2 Firms can calculate their own market share.
3 Growth or decline of the market can be identified

Question 21

how market size is measured

Answer 21

volume of sales

value of sales

Question 22

Market share

Answer 22

the percentage of sales in the total market sold by one business. This is calculated by the following formula:

firm’s sales in time period divided by total market sales in time period × 100

Question 23

benefits of a high market share

Answer 23

■ Sales are higher than those of any competing business in the same market and this could lead to higher profits too.
■ Retailers will be keen to stock and promote the best-selling brands. They may be given the most prominent position in shops.

Question 24

Market growth

Answer 24

the percentage of change in the total sales of a market (volume or value) over a period of time.

Question 25

how to calculate market growth

Answer 25

volume of sales from current year year minus volume of sales in previous year divided by volume of sales in previous year times 100

Question 26

why is market growth important

Answer 26

to ensure the business is always profiting

Question 27

market growth depends on

Answer 27

economic growth

changes in consumer incomes

changes in consumer tastes

technological changes

Question 28

competitors

Answer 28

indirect competitor- businesses that provide an alternative product or service for customers to purchase

direct competitors- business that provide the same or very similar products and services in the same industry

Question 29

examples of marketing strategies that are likely to add value:

Answer 29

■ Create an exclusive and luxurious retail environment
■ Use high-quality packaging to differentiate the product from other brands
■ Promote and brand the product so that it becomes a ‘must-have’ brand name
■ Create a ‘unique selling point’ (USP) that clearly differentiates a product from that of other manufacturers

Question 30

Niche marketing:

Answer 30

identifying and exploiting a small segment of a larger market by developing products to suit it

Question 31

Mass marketing:

Answer 31

selling the same products to the whole market with no attempt to target groups within it.

Question 32

Advantages of niche marketing

Answer 32

■ Small firms may be able to survive and thrive in markets that are dominated by larger firms.
■ If the market is currently unexploited by competitors, then filling a niche can offer the chance to sell at high prices and high profit margins
■ Niche market products can also be used by large firms to create status and image

Question 33

Advantages of mass marketing these qualities

Answer 33

■ Small market niches do not allow economies of scale to be achieved. Therefore, mass-market businesses are likely to enjoy substantially lower average costs of production.
■ Mass-market strategies run fewer risks than niche strategies. As niche markets contain relatively small numbers of consumers, any change in consumer buying habits could lead to a rapid decline in sales.

Question 34

Market segmentation:

Answer 34

identifying different segments within a market and targeting different products or services to them.

Question 35

Examples of market segmentation are:

Answer 35

■ Computer manufacturers, such as Hewlett-Packard, produce PCs for off ice and home use, including games, but also make laptop models for business people whotravel.
■ Coca-Cola not only makes the standard cola drink but also Diet Coke for weight-conscious consumers, and flavored drinks for consumers with particular tastes.

Question 36

important marketing concepts

Answer 36

1.creating/adding value
2 Mass marketing and niche marketing
3 Market segmentation

Question 37

three commonly used bases for segmentation are:

Answer 37

1 Geographic differences
2 Demographic differences
3 Psychographic factors

Question 38

Advantages of market segmentation

Answer 38

■ Small firms unable to compete in the whole market are able to specialise in one or two market segments
■ Businesses can define their target market precisely and design and produce goods that are specifically aimed at these groups, leading to increased sales.
■ It enables identification of gaps in the market – groups of consumers that are not currently being targeted

Question 39

disadvantages of market segmentation

Answer 39

■ Extensive market research is needed.
■ Production and stock-holding costs might be higher than for the option of just producing and stocking one undifferentiated product.