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Business
Marketing
| Question | Answer | |||
|---|---|---|---|---|
| marketing concept | a concept that ensures the business is always focused on the consumers needs before developing a good or service | |||
| marketing | process used to understand, anticipate and satisfy customer needs and wants both now and in the future | |||
| marketing strategy | strategy that examines the overall business objectives and develops marketing activities to help the business to achieve these goals. can involve identifying target market or formulating a market plan | |||
| marketing plan | this is used to implement the firms marketing strategy e.g launching a product into a new market. this could involve conducting a swot analysis, identifying the target market and their needs and wants then developing a marketing mix. | |||
| role of marketing plan in a business | - help business to focus on goals, (efficiency) -shows potential investors firm has conducted an in depth analysis, raises capitol opportunity -can be used to benchmark planned performance against actual results, allows firm to take corrective action | |||
| market segmentation | this is where the market is divided into different segments (geographic, demographic and psychographic. it enables the firm to target its product at relevant consumers raising efficiency. | |||
| geographic market segmentation | markets divided into geographic zones or areas e.g region, county or country | |||
| demographic market segmentation | market divided into segments based on common characteristics like age, gender, income or occupation. e.g Cadbury dairy milk buttons are aimed at children | |||
| psychographic market segmentation | market is divided based on beliefs, attitudes, social status and lifestyles e.g brands like louis Vuitton and Gucci are targeted at richer lifestyles | |||
| benefits of market segmentations | -increased sales, product meets consumer needs and wants creating loyalty -enables firms to focus on sections of the market giving competitive advantage (increased market shares) -business saves money and time by focusing on one specific market | |||
| benchmarking | setting a standard and comparing performance against this new set standard. this can help a firm focus on its goal and identify whether its achievable or not. | |||
| target market | the specific group of consumers who have common needs and wants. a firm aims its product specifically at this market to heighten profitability | |||
| niche market | a small group of consumers in a larger market who have different needs from the majority of the other consumers. these markets are ideal as these consumers are willing to pay more for a product which meets their needs. | |||
| advantages of a niche market | -less competition as other firms focus on larger markets . can help a firm to increase market share -increases consumer loyalty as they directly satisfy needs. increases business sales and profits -can launch new products easily due to consumer loyalty. | |||
| disadvantages of niche markets | - cant benefit from economies of scale as product is produced in smaller quantities -if larger competitors enter market firm may not be able to compete with their prices -can find it difficult to grow due to small market, and profit margins are lower | |||
| Product positioning | is creating a positive image of a product that stays in consumers minds. image can emphasise how the product saves money, makes their life easier or makes them more fashionable | |||
| Marketing mix | this is a strategy of mixing ideas of product, pricing, place and promotion used by firms to persuade consumers to buy their product. | |||
| product | a good or service | |||
| product portfolio | the range of products sold by a business | |||
| Marketing mix- product DEF | a good or service or good that a firm provides to satisfy consumer needs and wants . all products should have a unique selling point making the product stand out from others it involves: -product design -brand name -packaging -product life cycle | |||
| When designing a product a firm should consider.. | function: must do what consumers expect it to / must comply with law materials: what mats are needed/ensure they're ethically sourced cost: cover costs of manufacturing and distributing appearance: must attract consumers e.g shape, colour, image | |||
| impact of good product design | increased sales: product is visually appealing and easy to use giving product a competitive advantage over others lowers cost: less wastage of materials as products are well designed, saved money on product recall or repairs as less are faulty | |||
| patent | gives a firm legal ownership over a product or process preventing other firms can use the invention without inventor permission. patents can last up to 20 years | |||
| MARKETING MIX - brand name | a distinctive name given to a firm and the good/service it develops. usually registered and cannot be used by others e.g cadbury | |||
| solgan | a catchy memorable phrase used by firms to stay in consumer minds and boost advertisement. e.g finger licking good KFC | |||
| Trademark | a trademark legally protects a brands name, image and slogan from its competitors. other firms cannot legally use another firms name without their permission | |||
| advantage of a brand name for firm | -consumers can easily distinguish their product from competitors e.g lidl, aldi, tesco etc -can charge higher prices as consumers associate brands with higher quality -consumers develop loyalty to brands purchasing them even if their prices increase | |||
| advantages of brand names for consumer | -purchase a certain brand to improve their self-image as they believe some brands convey lavish life styles -reduces disappointment and consumers can stay with familiar brands -know that brand invests heavily on their products making them high quality | |||
| own brand products | products that are sold by retailers under the retailers own name and logo. they're often referred to as private labels e.g tescos finest | |||
| Advantages of own brand products for firm | -retailer can instruct manufacturer to make the product specific to colour etc allowing them to target consumers more directly -increases consumer loyalty become familiar with brands product brand lower prices over | -profits are made as consumers choose the own brand cheaper prices over the expensive branded ones | ||
| disadvantages of own brand products for firm | -cost, spend time and money on product which is expensive if product fails -business reputation, if product is low quality can damage rep -better universal economic conditions and better wages discourages customers from buying own brand | |||
| marketing mix- packaging must follow the functions of | -protection -image -information -convenience | |||
| MARKETING MIX -product life cycle | this describes the stages a product goes through from introduction to decline . it charts 5 stages of introduction, growth, maturity, saturation and decline | |||
| introduction stage of product life cycle | sales are low as product was just launched firm invests in promotion to increase awareness firm may have a negative cashflow and doesn't make a profit | |||
| growth stage of the product life cycle | sales increase as firm invests in production to keep up with demand production costs begin to fall and firm can benefit from economies of scale firm may not have enough cash to pay of all expenses | |||
| maturity stage of the product life cycle | -sale profits reach their peak -positive cashflow -business may need to increase ads/special offers | |||
| saturation stage of the product life cycle | -sales and cashflow slow down -costs / business expenses increase - product cost lowers | |||
| decline stage of the product life cycle | -sales and profits decline -decision to discontinue or change product -negative cashflow as expenditure is greater than sales | |||
| how to extend product life cycle | -product, new features, rebrand image -price, reducing prices -place, change location for larger target market -promotion, advertising campaign e.g insta | |||
| rebranding | marketing strategy to change the brands name, logo, image or product to target new markets and increase profits/sales | |||
| MARKETING MIX- price | relates to the amount of money consumers pay for a service or product offered by a firm. business set prices to ensure profit is made | |||
| lower pricing strategies | -penetration pricing, sets a lower price than others to gain better market share increases over time theyll increase product price | -predatory pricing, lower than competition push them out of market, pricing war | -loss leader, sells bellow cost to manufacture in hopes to attract more sales | |
| high price strategies | premium pricing, charges higher price than competitor gives an impression of luxury/ superior quality | price skimming, high price is charged when product is first launched to recover r&d costs fast before competitors enter market, attracts consumers who are willing to pay more | ||
| psychological pricing strategies | certain prices have a psychological impact on consumers gets consumers to buy based on emotions rather than common sense | Example | £4.99 associated with £4 rather than £5 | |
| mark-up pricing | adds a profit percentage to the cost price e.g 10% | |||
| tiered pricing | consumers choose price level that fits their budget allowing them to gain market share at different price points | |||
| price discrimination | different segments of the market are charged different prices for the same product | |||
| bundle pricing | firm sells multiple items at once for a lower price than they would sell for individually aka economy of scales | |||
| factors that influence price | cost, to manufacture the product, promote it and distribute it | competitor price, considering what the competition are selling for | products image, price reflects the products image e.g premium pricing gives a luxury impression | consumer demand, higher demand enables a firm to charge more e.g flights during summer |
| MARKETING MIX- place | refers to where a consumer can buy goods or services sold by a firm. they aim to reach the largest amount of consumers as possible for optimal profit and exposure | |||
| wholesaler | they buy in large quantities from producers and sell these products in smaller quantities to retailers e.g musgraves | |||
| agents | they sell producers goods and services in a particular area usually receiving a commission based on sales made | |||
| retailer | buys products from either wholesaler or producer and resell to consumers. they can operate online ASOS or in person Dunnes stores | |||
| channel of distribution | the way in which a product gets from the producer to the consumer. some channels have agents that act as a go between. e.g wholesaler | |||
| channel of distribution 1 | producer to wholesaler to retailer to consumer | |||
| channel of distribution 2 | producer to retailer to consumer | |||
| channel of distribution 3 | producer to agent to consumer | |||
| channel of distribution 4 | producer to consumer | |||
| advantages of channel of distribution 1 | target market, potential to reach a large target market as wholesaler can sell product to many retailers | consumer convenience, more convenient for customers as they can buy product from many retailers | simplified distribution, simplifies the process as the wholesaler stores all of the product whilst other retailers buy them in small quantities | |
| disadvantages of channel of distribution 1 | cost, the product is more expensive as a mark up is added at each stage as theres more people to pay. increasing consumer price | consumer feedback, slower to get to the producer slowing change which has to be made and delaying information on change in consumer demand. | profits, producer must give profits to all go betweens stretching the actual profit made | |
| advantages of channel of distribution 2 | larger target market can be reached as retailer can distribute this product to many consumers | lowers prices, due to fewer stages of distribution less mark-up is added to product allowing more of a profit for producer | promotion, larger retailer may have a promotional campaign which could increase consumer awareness of product and increase sales | |
| disadvantages of channel of distribution 2 | discounts, retailers may place pressure on producer to allow discounts reducing profit made | transport, producer must transport good to retailer increasing their own costs | copycat products, own-brand products may be made replicating the producers reducing producers sales. | |
| advantages of channel of distribution 3 | target market, agent is farmiliar with the target market and may have potential buyers increasing sales. allowing firm to establish market shares quickly | lower costs, no physical outlet is needed as agent does all the selling reducing costs | quicker reaction to change, as agents can directly pass on consumer feedback to producer. | |
| disadvantages of channel of distribution 3 | loss of control, loss of control over brand image and marketing as agent does this | loyalty, agents may work for a number of producers and loyalty is difficult to ensure or even bias. | costs increase, producer is responsible for marketing, transport and distribution costs which the agent demands | |
| advantages of channel of distribution 4 | profits increase, less stages drastically reduces mark up price added leaving more profit for producer | consumer feedback is direct allowing faster changes to be made by producer | awareness can be larger as websites can promote their product world wide | |
| disadvantages of channel of distribution 4 | costs as producer takes on all of the costs including marketing, distribution and manufacturing | producer may not have all expertise in marketing, finance or transport causing delay or increased expenses due to employment needed | time-consuming, typically selling at markets or events being time consuming due to travel and the profit may vary | |
| factors affecting the channel of distribution | cost, should choose cheapest most efficient channel to increase profits | target market, choose a channel that targets the largest amount of targeted consumers as possible | business image, must maintain image by choosing one channel and sticking to it | market size, depending on the demand for the product producer or wholesaler can store the good the distribute it. |
| MARKETING MIX - promotion | used to increase consumer awareness of a brand and the good or service it provides. it persuades customers to purchase the firms good over competitors | |||
| promotional mix | the range of methods used by a business to persuade consumers to buy their product | |||
| promotional mix methods | 1. advertising 2. sales promotion 3.public relations 4.personal selling | |||
| advertising | this refers to the communication of information about a firms good or service to consumers. it aims to remind, persuade and inform people | |||
| reminder advertising | advertising that reminds consumers about a product and its brand. often used in the decline stage of the product life cycle | |||
| persuasive advertising | this advertising persuades consumers that they need the product. usually used in the introduction stage of the product life cycle | |||
| generic advertising | advertises a specific good or service from an industry rather than from a brand or company. it is often financed by a state owned organisation | |||
| comparative advertising | advertisement that shows a product to be superior than another competitors product. its based on quality, price or choice. | |||
| advertising medium television advantages | -can reach a large market -details can be shown with images and sound being more interactive | |||
| advertising medium television disadvantages | -expensive medium -viewers can switch channels when ads appear | |||
| advertising medium radio advantages | -cheaper than a tv ad -more effective way to reach target market e.g local radios | |||
| advertising medium radio disadvantages | -easily forgotten as only sound is used -competition from similar product advertised at same time. | |||
| advertising medium newspaper advantages | -cheaper than tv -reaches local target market e.g local newspaper | |||
| advertising medium newspaper disadvantages | -fewer people read newspapers -they have a short shelf life and are generally not read on the day of publishment | |||
| advertising medium social media advantages | -possible to reach very large target market -can directly interact with consumers | |||
| advertising medium social media disadvantages | -trolls can damage firms reputation e.g bad comments -limited to the target market with the social media account e.g instagram | |||
| advertising medium business website advantages | -firm can control all information contained on the website -relatively cheap method of advertising | |||
| advertising medium business website disadvantages | -websites could be hacked firms reputation could be damaged -technology must be upgraded regularly to ensure user friendly website | |||
| factors to consider when choosing an advertising medium | cost, consider firm budget and ensure they're getting a value for money | type of product, ad should reflect the brand e.g Dior wouldn't advertise on a local radio but in fashion magazines | target market, want to reach the largest amount of people as possible in their area e.g social media for teenagers | stages of product life cycle, intense advertising will be in launch stage e.g billboard being more expensive but larger exposure |
| sales promotion | short-term gimmicks used by firms to attract consumers to buy their product or service | |||
| examples of sale promotion | loyalty cards, free samples, discounts, merchandising | |||
| public relations | a marketing technique to create a positive public image for a firm and their product. it aims to generate positive publicity with consumers | |||
| public relations methods | sponsorship, pays money to a group/person to display their brand name, can also be at places or events | endorsement, firm pays a recognisable person, influencer or athlete to promote their brand and products by taking part in advertising campaigns or displaying their support | charities, making direct donations and encouraging staff to donate boosting image of care | press communication, organise a conference to communicate information on their product or launches |
| personal selling | when a sales staff meet consumers face to face and persuade them to purchase an item. promoting the product through their appearance, knowledge and personality. they're typically paid commission | |||
| ASAI | advertising standards authority for Ireland | |||
| intermediary | a go between between the producer and consumer e.g agents | |||
| informative advertising | this advertisement gives consumers information about a product and shows what the product does. it gives factual information about the item |
Created by:
20sarah