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Principles of marketing 8
Terms in this set (30)
What is market share?
Usually the percentage of the total sales of a product accounted for by one company, this is sometimes calculated by number of outlets
What are the benefits of a high market share?
More sales, increased profit
Brand recognition increases- higher sales
Powerful companies can obtain supplies at a lower cost, usually in bulk
If the market is static, increasing market share will increase sales revenue
What is a fast growing marker?
One that offers higher sales, greater sales revenue, more profit, attract powerful suppliers/producers, can afford greater investment in turn making it harder for similar companies to compete
What are the benefits of low market share?
Focus on specialist products which may be sold at a premium price
Business not seen a s threat by larger suppliers who may otherwise try to undercut its prices
The business can be selective with advertising/marketing to its target market
More expenses can be avoided such as larger building, more staff, more equipment if no need for expansion
What do most large firms aim for what market share?
What is Pestle analysis used for ?
To research data relating to the wider environment on issues that might effect the buisness
There are 6 Key words associated with Pestle - what is the first one?
P for Political issues - ie change of government or new polices that could affect the business
What is the 2 word?
E for Economic Issues - such as inflation or tax changes that could affect customer spend
S for Social factors such as changing lifestyles issues that concern the public ie child poverty or care of the elderly
T for Technological developments - such as Wi-fi, tablet computers and smart phones
L - Legal factors such as employment law, health and safety or food handling/labelling legislation
The 2nd E for Environmental issues such as global warming and sustainable issues
What is mean t by product differentiation?
A product that has some thing 'extra' that stands out from the crowd making it even more desirable from its rivals
To be a successful business what must a business do to stay successful?
Continually change or reinvent themselves, add new products or services like click click and collect
What is meant by core product?
The basic product designed to meet customer user needs
What is meant by Augmented product?
The core product plus ad ons - additional benefits or service
What is meant by USP?
Unique selling point - a special feature of a product or service that makes it easy to promote and sell
What are the 4 P's?
Product - what shall we sell,
Price - what should we charge
Place -where shall we sell it
Promotion-how will our customers know about it
What is meant by product life cycle?
The lengh at whcih a product will begin and then come to an end
Can you name a few products that have gone on for years and years?
Bread, milk and eggs
Would should companies consider with their product and its legivity?
Locating its life style position of each of its products or services, especially at the point of saturation or decline stage, when not so popular anymore,
Can you think of a product that had a massive growth stage with then saturation and decline?
What happens at development stage of a product?
Enter market - Few buyers, profits low, few competitors
At Growth stage?
Fight for market share and differentiate product -Increased sales, products accepted, profit rising, more competion
Build on strengths, reduce prices, sales at a maximum buyers can pick and choose, profits have leveled, maximum competition
Sales falling, buyers satisfied, reduced profits,difficult to maintain market share - minimize costs, increase efficiency, improve or adapt product, launch into new markets
Sales fall, fewer buyers or interest, profits very low, some competitors leave market - Relaunch product, end production or leave market
What is product portfolio?
A range of products offered and all the different varieties produced by a business ie Heinz soup, salad cream, and pickles
What is Extension strategy mean?
A plan to revive sales by adapting a product or launching into new markets
Why do many companies extend the product portfolio?
To add value, some products are more successful than others, increase revenue, to broaden their target market to appeal to more customers, extend the brand so like Tesco for example - now includes banking, insurance, mobile phone and petrol
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