10404859
Description
Flashcards by Olivia Gniadek, updated more than 1 year ago
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Created by Olivia Gniadek
over 7 years ago
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| Question | Answer |
| What is an Industrial Market? | When Industries and Businesses purchase products in the production of other products e.g. Sony buy metals and plastics to produce televisions Tip Top buys flour to make bread |
| What is a resource market? | Consists of individuals that are engaged in all forms of primary production such as mining, agriculture, fishing, forestry e.g. farmers buy machinery, seed, and fertilizer |
| What is a niche market | Divided into smaller market groups consisting of buyers who have specific needs or lifestyles e.g. male, female, lower income, higher income, young, old etc |
| What is a consumer market? | Consists of individuals who consume the products they buy e.g. food, housing, entertainment, clothing etc |
| What is a mass market? | When the seller mass produces and mass distributes and mass promotes one product. e.g. car manufacturers, electricity, water etc |
| What is an intermediate market? | When wholesalers and retailers buy finished goods and sell them again to make a profit e.g. Subway buys goods and makes them into sandwhiches |
| What is the ethics of Advertising? | Advertisers should start taking responsibility for self-regulating their ads by: - Designing self-regulatory codes in their companies e.g ethical norms, decency, legal points - keeping track of activities and remove ads which don't fulfill codes - inform customers about self-regulatory company codes - pay attention on the complaints coming from consumers about product ads - maintaining transparency throughout company and system |
| If advertising ethics are met, what will it result in? | - Making company answerable for all activities - reduce chances of being blamed by critics and regulatory bodies - gain confidence of customers, make them trust the company and products |
| What is market research? | Process of collecting, recording and analysing information concerning a specific marketing problem |
| Market research primary data | (facts and figures collected from original source) Surveys: - Personal interviews: 1 on 1 - Focus groups: group meets researcher - Electronic collection methods: email, phone, internet |
| Market research secondary data | (Info that has been collected by someone else) Internal data (inside business) - customer feedback, sales/management reports, research reports |
| What is the Experiment method? | Gathering data through altering factors under tight conditions to evaluate cause and effect. Market researchers do this to determine whether changing one factor (cause) will alter the behaviour of what is being studied (effect) Experiment methods carried out in the field are called test marketing |
| What is an observation method? | Recording the behavior of customers. No interview/ direct contact with respondents is avoided Types: Personal Observations: - Researcher disguises as customer in a store Electronic Observations: - Camera or counting machines e.g. scanner or cash register record data on sales and customer purchase patterns |
| What are the benefits of the observation method? | Highly accurate The main limitation - only explain what happens not why it happens |
| Benefits of Surveys | Gathers first-hand information that provides customer opinion details |
| SWOT Analysis | |
| Marketing Mix | Product: - What am I marketing? - What makes it unique? - What are some ways we can change product offering? Place: - What am I doing to drive distribution of my product? - How am I growing sales at the current point of purchase? - What new distribution channels can I explore? - What promotions can I put in place at the point of purchase to drive sales? |
| Marketing Mix continued | Price: - What pricing strategy am I using for my new product launch? - Is it competitive against market alternatives? - Am I taking a 'value', 'mid-range', or 'premium' position? - Have I reviewed pricing of my existing product range to see if I'm market competitive? - What effect on the brand image will I have if I change the pricing decision? Promotion: - often seen as the glitz and glam of marketing - The strategy used to protect and drive sales - occasionally may be used to protect existing market share - business must determine which above or below line tactics will be used e.g. above line = tv, radio, internet below line = mail, supermarket sampling |
| Criteria for success of a marketing strategy | Production modifications: businesses that upgrade products will maintain competitive advantage Price modifications: price needs to be revised in response to changes in the external business environment |
| Criteria for success of a marketing strategy continued | Promotion modifications: in the later stages of a products life cycle, promotion costs may decline, stabilize, or fall. Strategies need to change over time corresponding to life cycle of product Place modifications: as product success increase, distribution channels need to be expanded to cater for growing markets. electronic communications, new distribution channels e.g. the internet may be used |
| Strategies to improve sales performance | New product development: - products have a lifespan of 5-10 years - if a business wants to achieve long-term growth = continually introduce new products. Product deletion - to maintain an effective marketing mix, a business must delete the line of products - outdated products may create unfavourable images that negatively rub off on other products sold by the business - when the product is in decline, the business must decide to either delete it or redevelop it. |
| What is a marketing plan? | - the main document that is the cornerstone of any marketing function - outlines marketing strategy and direction of a product/service - annually prepared - may also be supplemented by smaller product launch plans Essential elements: Intro, SWOT analysis, Target Market, Marketing Mix, Budget, Activity Calendar, Conclusions |
| What is the ethics of marketing? | (conduct that goes beyond legal requirements) - market communications share a standard of truth - market professionals abide by a high standard of personal ethics - marketing is distinguished from news & entertainment content - Marketers need to be transparent - customers treated fairly (nature of product/consumer) - privacy of customer should not be compromised - Marketers must comply with government standards - ethics should be discussed at every marketing decision |
| Ethical behaviour | - leads to marketing and business opportunities e.g. publicity in media - positive business image - attracts customers and customer loyalty e.g. customers buy more products, therefore, increased sales - positive impact on employment e.g. productivity, staff absenteeism, staff retention rates improve - attract stakeholders and investors - Increase in business reputation - customers go towards ethical businesses |
| Government Regulation | - protects customers & businesses - increased customer trust and confidence in business = people buying more products = good for the economy - promotes competition & fair trade - benefits consumers, businesses, community - encourages businesses to do the right thing - promotes competition & creates a more equal playing field |
| Competition and Consumer Act 2010 | - most important pieces of legislation affecting marketing and business practices in Australia Have two major purposes 1: protect consumers against undesirable practices 2: the regulation of certain trade practices that restrict competition. Government wants more businesses operating in the same market to boost competition All businesses and commercial activities are undertaken by the government are virtually applying to this legislation |
| Breaches of Competition and Consumer Act 2010 | - Civil or criminal proceedings against individual or business - Penalties up to $1.1 million for companies, $220,000 for individuals - Sueing of the business - Damage to business reputation |
| Marketing fundamentals | - marketing is fundamental for a business, without marketing customers may not be aware of a product's existence - 70% of new products released fail due to poor marketing - Business make few sales if they do not market products successfully - Products become best-selling essential items due to well-managed marketing plans. |
| What is marketing? | Process of planning and executing the concept, prices, promotion and distribution of ideas, goods and services to individual and organizational objectives Marketing - involves a range of activities - directed at a wide range of goods and services - Stresses importance of satisfying exchanges e.g. something in return - not limited to activities of the business |
| Pricing Strategies | When a base price is chosen by a busienss, then they fine tune the price with its pricing strategy Businesses can use several pricing strategies at once - marketing objectives - the life cycle of the product - The market of the product - The degree of differentiation - The degree of economic activity |
| Pricing Methods | Cost based pricing - simplest of the three - The business decides on production cost - business adds amount covering additional costs (interest payments, transport etc) & providing profit margin (markup) - Markup is expressed through % - Total cost + markup = selling price - cost + (cost x mark up %) = price |
| Competition based pricing | Price covering costs of raw materials and cost of business operation and is comparable to competitors price - often used when high degree of competition from a business that produces similar products - once business establishes base price it can choose a price either - below that of competitors - equal that of competitors - higher that of competitors |
| Market based pricing | Business sets price according to level of supply and demand when demand overpowers supply = shortage in stocks and increase in price |
| Price points | Selling products only at certain premeditated prices - easier for The customer to find the type of product - easier for business to encourage the customer to 'trade up' to a more expensive model. |
| Loss leader | - product sold at or below cost price - attracts customers - business makes a loss but attracts customer attention to buy other products as well - Business recovers by making sales |
| Total sales and product line sales | To calculate the difference, use the formula Actual sales – sales quota to calculate the % change, use the formula Difference ÷ Sales quota x 100 |
| Market segmentation | - The ultimate aim is to generate sales, market share and profit by understanding desires of different target customers - customer market can be divided into four main variables |
| Market segmentation diagram | |
| Customer value | - customer gains from owning and using a product - cost of obtaining the product e.g. if a customer buys a new prestige Jeep, the customer is satisfied when owning a new car |
| Customer satisfaction | Depends on a product perceived performance in delivering value - if a customer bought a terrible pizza, there is no customer satisfaction |
| Quality | goes beyond being free from defects - relates to customer satisfaction 'if the customer doesn't like it, it's a defect' e.g. new packaged glad wrap was high-quality plastic, however, the appearance and new dispensing method were a turn-off point for customers. |
| Price skimming | - occurs when the business charges the highest price for the introductory product - The objective is to recover costs of production and research as quickly as possible before competition enters the market |
| Price penetration | Occurs when business charges lowest price possible for product - aims to quickly achieve the large market share - The objective is to sell the large number of products to discourage competitors from entering the market Disadvantage: More difficult to increase the price, therefore fewer sales revenue until the product is modified |
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