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Latest Marketing KEY TERMS
Terms in this set (38)
The 4 purposes of research and analysis
1. To identify target markets 2. To identify competitors' activity 3. To understand consumer behaviour and motivations 4. To identify market trends
It's important to understand consumer behaviour and motivations because customers are motivated to make a purchase to fulfil a ?
Understanding the factors that influence a customer's behaviour and trigger a decision to buy helps a business to find the best ways to ? to its customers
7 methods companies can use to find out information about customer behaviour
1. Focus groups 2. Customer panels 3. Mystery shoppers 4. Observations 5. Foot counting (means the number of people that enter a store/location etc not literal 'foot counting'...) 6. Analysing customer data 7. Surveys
(To do with identifying market trends) ? research can be used to identify the key components of a market and to assess whether there are opportunities, or whether it is a saturated market or declining and not worth entering
(To do with identifying market trends) A ? market is a market which is full of similar products which now have little value to consumers; this might be due to increased competition, decreased need, or products becoming obsolete (no longer needed/out of date)
A saturated market
3 ways in which key research findings could be interpreted include looking at the following things (clue: they all start with the word 'market')
1. Market size, 2. Market growth, 3. Market share
4 key components of a market that a business can assess when looking at market trends are
1. Value 2. Market growth rate 3. The level of competition 4. The number of products in the market
Markets size can be calculated in two ways
by value and by customer
? is defined as the increase or decrease in the size of a market for a product or service over time and is typically measured as the percentage change in total sales in an industry or product category
The percentage of the total sales of a product account for by one company or sometimes calculated as the number of outlets (stores) a brand has
Are these benefits of having a LOW market share or a HIGH market share? 'The focus can be on specialised products which may be sold at a premium price' and 'The business can selectively advertise and promote its products to its target market'
Benefits of having a LOW market share
Are these benefits of having a LOW market share or a HIGH market share? 'Powerful companies can obtain supplies at lower cost because they buy in bulk' and 'If the market is static (stays the same) having this level of market share enables businesses to increase sales revenue'
Benefits of having a HIGH market share
Businesses need research data relating to the wider environment to find out about issues that might affect them. This is normally obtained for six key areas and is known as a ? Analysis
If you want to understand the "big picture" of the environment in which a company is operating (external environment) so you can take advantage of the opportunities and minimise the threats, you would carry out this type of analysis
To provides the context within which more detailed planning can take place to take full advantage of the opportunities that present themselves within the external environment of a business, you would carry out this type of analysis
'Product, Price, Place and Promotion' are known as
The Marketing Mix (or the 4 P's but try and remember it as the Marketing Mix mainly)
(To do with the marketing mix) ? refers to the price that has been selected as being most appropriate for this product/service in relation to the target customers
(To do with the marketing mix) ? refers to the most appropriate place or places that have been selected for the sale of the product/service whether this is a store (and considering location etc) or online. It also relates to the way in which the product will be distributed
(To do with the marketing mix) ? refers to the product or service being offered, its features, the packaging and considerations about the brand; these are all things related to the product aspect of the marketing mix that must be carefully planned to appeal to its target customers
(To do with the marketing mix) ? refers to all the ways in which the product is advertised and communicated to potential customers, so they know it exists
These 4 things come under which element of the marketing mix?
1. Core and augmented product 2. Unique Selling Point (USP) 3. Stages of the product life cycle - development, introduction, growth, maturity, decline 4. Product portfolios
The range of products offered by a business (such as all the Heinz varieties of food products) is called a
2 types of pricing strategies with a focus on costs, used when pricing up a product/service that takes into account things like skills, expertise and materials used in producing the product or providing the service (both end with the word 'pricing') both generally mean the same thing -
Cost-plus pricing and mark-up pricing
The 5 pricing strategies with a focus on the market
1. Competitive pricing 2. Price taking 3. Skimming 4. Penetration pricing 5. Premium pricing
Which of the 5 pricing strategies, is when you check the price that competitors charge and ask about the same? (could be more or less) It is used by supermarkets and mass market clothes shops
Which of the 5 pricing strategies, is when you check the going price and ask the same? Used for identical products that customers can compare such as eggs or tomatoes on market stalls etc
Which of the 5 pricing strategies, is when you ask a high price at the start to take advantage of the 'novelty' value? Often used for high tech products, such as Blu~ray and 3D televisions -
Which of the 5 pricing strategies, is when you ask a low price at the start to interest people? Often used for new food brands, sweets or chocolate
Which of the 5 pricing strategies, is when you ask a high price for a luxury item that consumers will get prestige from owning? Used by brands such as Gucci and Porsche
The law of demand says that sales increase as prices fall (and vice versa). This is why discount prices tempt you to buy more and why you buy less (or something else) when prices increase. This affects some products more than others and is known as the ?
Elasticity of demand (or price elasticity of demand)
? items such as food and fuel are needed no matter what they cost - although we might buy less or switch brand to save money and motorists may switch to train or bus and reduce leisure trips. Food and fuel are relatively inelastic (meaning not so elastic) because demand does not change much when prices change
? items such as cars, chocolate and televisions are more elastic because demand falls more quickly if prices increase. This is because you can do without or buy an alternative
Calculating ? Shows the responsiveness of an item to changes in price and is calculated using the following formula Price elasticity of demand (PD) = % change in quantity demanded (sales) divided by % change in price
A PED of more than 1 is shown as >1 shows that demand for an item is ?
A PED of less than 1 is shown as <1 means that demand for an item in ?
If the percentage quantity sold fell by MORE than the price increases, demand is ? The price increased and the sales fell a lot; they didn't want to buy the product at a higher price
If the percentage quantity sold fell by LESS than the price increased, demand is ? The price increased and the sales fell, but not by a lot - people still wanted to buy the product at the higher price
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