3.3 Marketing models

Cards (28)

  • The product life cycle - if a product is in the decline stage, we can employ extension strategies such as changing packaging
  • The Boston matrix
  • Market shares?
    total sales of a firm/total sales in the market x 100
  • Sales growth?
    difference in sales (between years)/earliest year x 100 (a percentage change)
  • market growth?
    difference in total market sales/earliest year x 100
  • market size?
    sales/market share x 100
  • price elasticity of demand?

    %change in demand/%change in price
  • income elasticity of demand?
    %change in demand/%change in income
  • Marketing objectives
    Market share
    Brand loyalty
    Market and sales growth
    Market size
  • External factors on marketing decisions
    Ethics
    Social factors (trends)
    Competition
    Economic factors (interest rates)
    Technology
  • Internal factors on marketing decisions
    Finance available
    Production capacity
    Human resources, skills of the workforce
    Nature of the product
  • Primary research
    Research done by an organisation itself, specific to the business
  • Secondary research
    Research already available on public domains, not specific to that business. Still useful e.g data from government about demographics.
  • Market mapping
    A map where companies are placed on according to price and quality (e.g), allows businesses to spot gaps in the market and exploit this.
  • Sampling
    The selection of a representative group. Can help make decisions such as types of promotion, target market and product design.
    Random - each member of the population has an equal chance of taking part
    Stratified - separates population into stratas reflecting the % of groups in the entire population.
    Quota - separating people due to sharing common characteristics
  • 3 types of marketing data
    Correlations
    Confidence intervals
    Extrapolation
  • Correlations
    Statistical technique to show the relationship between two co-variables, helps in forecasting sales etc.
  • Confidence intervals / margin of error
    The plus or minus figure used to show the accuracy of results collected from sampling. Most common confidence interval = 95%. Likely to be affected by sample size, the smaller it is, the larger the margin of error will be. E.g using a confidence interval of 5 and 70% of the population said they liked eggs, it would range from 65% to 75%
  • Extrapolation
    Analyses past performance of a variable such as sales and extends the trend into the future, not suitable in industries which are subject to rapid change e.g technology.
  • Using technology to gather and analyse data
    Provides faster communication
    Forecasting easier
    Relies on the accuracy of the data
  • Market segmentation
    dividing the market into sub-sections each with its own characteristics
  • Market targeting
    Deciding which market segment a business wants to operate in
    Depends on…
    Nature of the product, competition and the consumer
  • Marketing mix (7 PS)

    Promotion, place, people, process, physical environment, product, price
  • Integrated marketing mix
    A marketing mix that utilises all 7 ps.
  • USP
    Unique selling point, gives the business and product competitive advantage, differentiates from other products, important for homogeneous markets e.g chocolate bars
  • Pricing strategies
    Skimming - setting price high, then lowering it. Good for new and innovative products.
    Penetration - setting a low price to build market share, price gradually rises.
    Price leadership - used for established products and firms which dominate the market
    Price taking - setting price to the same as other products, common for small and medium sized businesses.
  • Promotion
    Packaging, branding, personal selling, public relations (PR), ATL / BTL advertising.
    Affected by ;
    Stage in the product life cycle, finance available
  • Distributions
    Location, credit terms, multi-channel distributions,
    • Traditional
    • Modern
    • Direct