unit 3 marketing - all key terms

price elasticity of demand

a measure of how much the quantity demanded of a good responds to a change in the price of that good, computed as the percentage change in quantity demanded divided by the percentage change in price

Correlation

A measure of the extent to which two factors vary together, and thus of how well either factor predicts the other.

elastic demand

demand in which changes in price have large effects on the amount demanded

inelastic demand

A situation in which an increase or a decrease in price will not significantly affect demand for the product

unitary elasticity

a situation in which total revenue remains the same when prices change

factors affecting price elasticity of demand

degree of necessity, availability of substitutes, proportion of income, time

extrapolation

the act of estimation by projecting known information

confidence level

The level of certainty that a population parameter exists in the calculated confidence interval.

confidence interval

the range of values within which a population parameter is estimated to lie

Market mapping

Analyses market conditions to identify the position of one product or brand relative to others in the market in terms of given criteria

Primary Research

research done firsthand for the first time

secondary research

past research which has already been performed and often already published

Focus Groups Advantages

- high quality data

- realistic, in depth answers which can aid the deisgn or improvement of products

Questionnaire Advantages

highly structured, not time consuming, can obtain a lot of information, easy to analyse

secondary research disadvantages

May not be precisely relevant to information needs

Information may not be timely

Sources may not be original, and therefore usefulness is an issue

Methodologies for collecting data may not be appropriate

Data sources may be biased

sampling

process by which participants are selected

Reliability and Validity

consistency andn accuracy of research results to give a genuine summary of views of target population

random sample

a sample that fairly represents a population because each member has an equal chance of inclusion

quota sample

A sample deliberately constructed to reflect several of the major characteristics of a given population

stratified sample

a sample drawn in such a way that known subgroups within a population are represented in proportion to their numbers in the general population

quantitative data

data collected that has a focus on number eg what people choices are - eg how many?

qualitative data

non-number data - eg explores reasons for choices; more difficult to analyse

positive correlation

A correlation where as one variable increases, the other also increases, or as one decreases so does the other. Both variables move in the same direction.

negative correlation

as one variable increases, the other decreases

income elasticity of demand

a measure of how much the quantity demanded of a good responds to a change in consumers' income

Formula for PED (price elasticity of demand)

% change in quantity demanded / % change in price

Formula for YED

% change in quantity demanded / % change in income

normal good

a good that consumers demand more of when their incomes increase

inferior good

a good that consumers demand less of when their incomes increase

luxury goods

goods that have income elasticities greater than 1. when consumer income grows, quantity demanded of these goods rises more than the rise in income

Marketing Objectives

the goals set for the marketing department to help the business achieve its overall objectives eg increase sales

market share

a company's product sales as a percentage of total sales for that industry

market growth

The percentage change in the total size of a market (volume or value) over a period of time.

Market size

the total level of sales of all producers within a market

Segmentation

the process of dividing a larger market into smaller pieces based on one or more meaningfully shared characteristics

demographic segmentation

segmenting markets by age, gender, income, ethnic background, and family life cycle

Behavioural segmentation

dividing a market into segments based on consumer knowledge, attitudes, uses, or responses to a product

Market Targeting

is the process of evaluating each market segment's attractiveness and selecting one or more segments to enter

mass marketing

an attempt to appeal to an entire market with one basic marketing strategy

Niche Marketing

the process of finding small but profitable market segments and designing or finding products for them

advantages of mass marketing

large number of sales, benefit from economies of scale, risks can be spread between the different products it sells in the market, opportunities for growth of the business due to the large potential sales

Advantages of niche marketing

prices are usually higher

demand is more price inelastic

product is distributed through specialist retailers or directly to the consumer

upholds the premium brand image

exclusivity

brand positioning

A branding strategy in which marketers create a certain image or impression of a brand as compared to those of competitors' brands.

disadvantage of mass marketing

high competition; more expensive

disadvantages of niche marketing

products sell in relatively low volumes so profits need to be high enough to make it worthwhile

market must be large enough to support the business and specialist distribution

small size may prevent economies of scale

marketing mix

Product, Place, Price, Promotion, People, Process, Physical Env

viral marketing

the digital version of word-of-mouth marketing: videos, ads, and other marketing content that is so infectious that customers will seek it out or pass it along to friends

Social Media Marketing

utilization of social media or social networks to market a product, company, or brand

Positioning

Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers

Boston Matrix

A 2x2 matrix model that analyses a product portfolio according to growth rate of the market and the relative market share of products within the market

product life cycle

describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline

multi-channel distribution

when a producer uses several competing channels to reach the same target market--perhaps using several intermediaries in addition to selling directly.

price skimming

a pricing policy whereby a firm charges a high introductory price, often coupled with heavy promotion

price penetration

It sets a low initial price for a product in order to gain quick acceptance a segment of the market

integrated marketing mix

A marketing mix that has a theme with the elements all supporting each other

process in the marketing mix

Design of activity flows, steps and choices for customers, nature of customer involvement, role of technology/degree of automation

physical environment in marketing mix

The nature and appeal of the physical evidence a customer will observe during a transaction.

Can give an impression of the nature of the business.

Includes:

The company stationary and brochures.

Decor and cleanliness.

Delivery lorries.

Staff uniforms and appearance.

The website appearance.

The layout.

Practicality and safety.

people in the marketing mix

The behaviour and attitude of staff who determine the level of customer satisfaction in business transactions.

product development

a marketing strategy that entails the creation of new products for present markets

digital marketing

Uses all digital media, including the Internet and mobile and interactive channels, to develop communication and exchanges with customers

cost-plus pricing

a basis for pricing decision where the desire markup percentage is added to the costs.

advertising

A written or spoken media message designed to interest consumers in purchasing a product or service

sponsorship

a method of promotion where a business pays to have their brand in high visibility position