MARKETING

• what are the 4 P's in marketing mix?

  product, price, promotion and place.
• what is segmentation?

  when people within a market are divided into different groups
• examples of segmentation?

  age

  income

  location

  gender
• why is market research important?

  understand customers + competitors.

  be able to identify customer needs and therefore create products that satisfy those needs.
• how will market research benefit the business?

  1. INCREASE SALES: knowing demand can help adjust pricing. can also help them avoid costly mistakes, like making too much of a product.
  2. STAY COMPETITIVE: gathering info on products/prices of competitors can help them to show how they are different (create a USP).
  3. CREATE TARGETED MARKETING: better able to produce promotional marketing that will be effective
• primary research:

  • asking customers for opinions
  • finding out new info + customer views on your product
  • ask a sample of people to keep costs down
  • large samples are more accurate but expensive
  • provides data that is up-do-date, relevant and specific.
  • but it can be time consuming
• questionnaires?

  cheap + can sample a large geographic area BUT most people wont respond.
• phone surveys and interviews?

  much higher rate of response BUT more expensive
• focus groups?

  faster than interviewing individually BUT may mean that some dont get heard
• secondary research:

  • looking at other people's work
  • access to wider range of data
  • useful to look at whole market
  • analyse past trends to predict the future
  • cheaper, easily found, and always available
  • not always relevant and often out-of-date
• what is quantitative data?

  measureable or can be reduced to a number
• what is qualitative data?

  asks about peoples feelings and opinions
• product life cycle!

  A) development

  B) introduction

  C) growth

  D) maturity

  E) decline

  
• extension strategies?

  adding more features

  • may increase demand by making it more appealing/useful

  new packaging

  • more eye-catching

  targeting new markets

  • e.g. a different age group or country. they can then target their promotional material at the new markets

  changing advertisments

  • more product awareness

  lowering price

  • or using special offers and competitions
• what is a product portfolio?

  the range of different products that a business sells.
• the boston matrix...

  A) market

  B) star

  C) question marks

  D) cash cows

  E) dogs

  
• question mark

  NEW PRODUCTS

  have small market share but high market growth.

  • need heavy marketing
• dogs

  low market growth and low market share.

  • a lost cause!
  • business could discontinue them/sell them
• cash cows

  BRING IN LOTS OF MONEY

  • high market share but low growth
  • in matureity phase
• stars

  future cash cows

  high market share and high market growth
• how to broaden product portfolio?

  • add products to an existing range by developing new products based on current ones.
  • increase range of products by developing different products.
• benefits of developing new products?

  • increase overall sales
  • extend life-cycle of existing products
  • appeal to new market segment -> new opportunities
  • can charge higher prices for new products before competitors copy
  • good for reputation
• risks of developing new products?

  • costly + time consuming
  • end up wasting resources if customers dont want it
  • may risk reputation if new product is of poor quality
• what is market driven?

  using market research to find out what the target market wants.

  • useful products
• what is product driven?

  invent a product and then try to sell it.

  • nobody wants it
• what is product differentiation?

  making your product distinctive in the market

  • using a USP
• 3 parts of the design mix?

  function - must be fit for its purpose

  cost - low manufacturing costs=higher profits

  appearance - attractive and distinctive: packaging
• internal factors affecting price?

  1. a business's aims and objectives.
  2. internal costs may change
  3. a product's life cycle
  4. elements of marketing mix
• external factors affecting price?

  1. nature of market
  2. competitiveness of market
  3. costs of raw materials
• what is price penetration?

  when a firm charges a very low price when a product is new to get lots of people to try it.

  • establishes market share
  • will make very little profit at the beginning
  • once established, firm will increase price - loyal customers will continue to buy.
• what is loss leader pricing?

  when the price of a product is below cost
• what is price skimming?

  when a firm charges a high price to begin with (because ofa high demand)

  • works for established firms who have loyal customers
• advantages of price skimming?

  increase revenue and to cover any research/development costs

  makes product more desirable to people with high incomes

  firms image and status
• what is competitive pricing?

  when the firm has to charge similar prices to other firms.
• what is cost plus pricing?

  selling price is determined by adding a markup to the cost of production.
• why do business promote?

  • to inform customers about product
  • to persuade customers to buy the product
  • to create/change the image of a product
  • to create/increase sales
• posters/billboards

  placed near the target audience

  stay in place for a long time

  seen daily by lots of people

  message needs to be short
• leaflets/flyers/business cards

  cheap to produce + distribute

  can be targeted at certain areas

  people can keep them

  many people see them as junk + throw them away quickly
• tv adverts

  seen by a wide audience

  include sound and moving images

  can deliver long messages

  help emphasise firms image

  very expensive
• magazines

  good for targeting specialist markets over a wide area

  can be pricier than newspaper adverts

  better for quality

  people tend to hang on to magazines for linger