Studied by 47 peopleMarket Orientation
A marketing approach adopted by businesses that are outward looking by focusing on making products that they can sell, rather than selling products they can make. Focuses on the customer in order to identify, design, develop and supply products that meet needs and wants. Can be gathered through market research.
Product Orientation
A marketing approach used by businesses that are inward looking as they focus on selling products that they can make rather than making products they can sell.
Market Share and how is it calculated?
Market share measures an organization's portion of the total value of sales revenue in a specific industry.
Market share = (firms sales revenue/industrys sales revenue) x 100
Market growth and how is it calculated?
Refers to the rate at which the size of a market is increasing. This is usually expressed as a percentage change in the total sales of the market over a specific period usually per year.
Market Growth Rate = current market size – original market size ($) / original market size x 100
Market Leadership
The position of a business which has the largest market share in a given market for a particular good or services.
Benefits of being a market leader
Possess strong prestige and brand value. Market leaders gain recognition and respect from the general society
Challenges of being a market leaders
Some challenges faced by market leaders are resource constraints such as lack of HR, lack of internal resource support like developers, engineers, and data scientists, or budget for technology, media/advertising, and agencies.
Ethics influence on marketing practices and strategies
Ethical marketing brings long-term value and loyalty. Positive correlation is created between ethical marketing and the quality of consumer/brand relationships.
Marketing plan
A document outlining an organization's marketing objectives and the marketing strategies to be used to achieve these objectives.
Marketing Audit
A marketing audit is a review of the current position of an organization's marketing mix in terms of its strengths and weaknesses and considerations of opportunities and threats.
What does the typical marketing planning process involve?
Starts by defining the company's business environment and competitive positioning. From there, it moves on to identifying what is needed in terms of market research, target markets, and marketing objectives.
Benefits and limitations of marketing planning
Advantages: Promotes Your Business to a Target Audience. Helps You Understand Your Customers. Helps Brand Your Business.
Disadvantage: Costs of Marketing. Time and Effort May Not Yield a Return.
STP Model
model is useful because it helps you to identify your most valuable types of customer, and then develop products and marketing messages tailored to them. This allows you to engage with each target group more effectively, personalize your messaging, and – ultimately – increase your sales.
Segment your market.
Target your best customers.
Position your offering.
How do market segments differ from target markets?
Market segmentation is a process of dividing a population into groups that share common characteristics. A target market is a specific audience that a company wants to reach with its products or services.
Consumer profiles
the demographic and psychographic characteristics of consumers in different markets such as their gender, age, occupation, income level, religion, marital status, and purchasing habits
Differences between segmentation by demographics, geographic and psychographic factors
Demographic information tends to focus on external or physical factors such as age, ethnicity, gender, location, etc., while psychographic information focuses on psychological factors such as motivations, beliefs, priorities, etc.
Product position (perception) map
a visual tool that reveals customer perceptions of a product or brand in relation to others
Repositioning
the process of changing a target market's understanding or perception of a product or service
How do niche markets differ from mass markets?
Niche marketing focuses on an audience with easily identifiable preferences, wants and needs. On the contrary, mass marketing is a strategy to market across various demographics, which at times can seem aimless.
First mover advantage
Being the first business to provide a certain product.
Sales forecasting
A quantitative management technique used to predict a firm's level of sales over a given time. Helps a business to identify problems and opportunities in advance. forecasts may turn out to be inaccurate.
Benefits of Sales forecasting
Sales forecasting helps you attain this revenue efficiency by offering insight into the likely behavior of your most valuable customers. You can predict future sales, as well as improve pricing, advertising, and product development.
Why might sales forecasting techniques be inaccurate?
Sales forecasting techniques may be inaccurate because there are so many variables that are subject to change.
Limitations of sales forecasting
Limited information, meaning it is a prediction based on historical data and trends. Forecasting can be inaccurate and possess elements of bias. If the data and information used to predict sales forecasts are outdated, irrelevant or heavily biased.
If the data and information used to predict sales forecasts are outdated, irrelevant or heavily biased, then the forecasts are unrealistic and of little or no value to management. The external business environment causes change that may not be predictable such as natural disasters, fierce competition from abroad, etc.
How might changes in the external environment influence sales forecasting?
Global economy (recessions) called cyclical variations. Random variations like natural disasters. Season variations, such as trends in different periods of a year.
Market research
Refers to marketing activities designed to discover the opinions, beliefs and preferences of potential and existing customers.
Ad hoc market research
conducted as and when required in order to deal with a specific problem or issue.
Continuous market research
market research conducted on an ongoing basis rather than a one-off (ad hoc) basis.
Purposes of market research
Gives up to date information to businesses. Enables companies to improve their marketing strategies. It helps businesses predict what is likely to happen in the future.
Primary (field) market research
Involves gathering new and first hand data serving a specific purpose.
Secondary (desk) market research
Involves a collection of second hand data and information that already exists.
Advantages and disadvantages of primary market research
Advantage: It is up to data and specific research that allows a better approach to the market
Disadvantages: very time-consuming and too costly
How do surveys differ from interviews?
A survey is normally written and sent out to many different people. An interview is normally a one-on-one verbal conversation.
How do focus groups differ from observations as forms of primary market research?
Advantages and disadvantages of secondary market research
Advantages: method is far more cost-effective and less time-consuming (compared to conducting primary market research) and it is easier to collect as the data is already in multiple sources.
Disadvantages: Information gathered is more than likely not going to be specific to the business and its needs. The information on the internet could be out of date, either by months or years, so circumstances of where this information can be used will vary.
Market analysis
Reveals the characteristics, trends and outlook for a particular product or industry such as market size, market share and market growth rates.
Quantitative and qualitative market research
Quantitative market research refers to collecting large amounts of data through surveys, questionnaires, and polling methods. On the other hand, qualitative market research involves determining customer motivation through close observation.
Sampling in market research
Difference between quota, random and covenient sampling methods
In convenience sampling, you continue to sample units or cases until you reach the required sample size. In quota sampling, you first need to divide your population of interest into subgroups (strata) and estimate their proportions (quota) in the population.
A product
any good or service that serves to satisfy the needs or wants of customers.
Tangible and intangible products
Products can be tangible meaning physical product or intangible such as services.
Consumer and producer products
Consumer products are those purchased by private individuals for their own personal use. Producer products are those purchased for commercial use rather than for private consumption
Product life cycle
Shows the different stages that a product is likely to go through from its initial design and launch to its decline and eventual withdrawal from the market.
Main stages in a typical product life cycle
5 stages; research and development, launch, growth, maturity, and decline.
Product portfolio
refers to the collection of other products owned by a business at a point in time.
BCG Matrix
a tool that helps businesses that have multiple products to decide on their marketing strategies. Depending on two variables: market growth, and market share.
Dogs: These are products with low growth or market share
Question marks or Problem Child: Products in high growth markets with low market share
Stars: Products in high-growth markets with high market share
Cash cows: Products in low growth markets with high market share
Importance of a balanced product portfolio
To rely on a range of products for growth and steady revenue streams.
Extension strategies
any means of prolonging a product's life cycle and delaying a decline in its sales revenue. Examples are; price reductions, advertising, repackaging, redesigning, etc.
What is the relationship between the product lifecycle investment profit and cash flow?
Initially high development costs and high promotional costs will mean a negative cash flow, but as the products move through the growth phase and into maturity, the cash flow should start to become positive.
A brand
Refers to a name that is identifiable with a product of a particular business, although the term can also refer to a sign, symbol, color scheme, font or design that belongs to a business.
Brand awareness
measures the extent to which people recognize a particular brand. It is often expressed as a percentage of the sample surveyed. creating brand awareness is a key part of promoting a product or business.
Brand Value
refers to the premium that customers are willing to pay for a brand name over and above the value of the product itself. Meaning that customers are willing to pay more for a reputable brand, such as Starbucks coffee, than for a product itself such as coffee from a low-cost fast-food restaurant.
Importance of branding for a business
The branding of a business is a form of differentiating an organizations product from those of its competitors
Importance of price decision
Price is a key element since it is the only element of the seven Ps that brings money to the business. A good price means the business will be able to support the well-being of the stakeholders and pay taxes to support public services.
Cost-plus ‘mark up’ pricing
Involves adding a percentage or predetermined amount of contribution to the cost per unit of output to determine the selling price.
Penetration pricing
A pricing method that involves setting a low price in order to enter an industry. It allows the business to compete against existing firms in the industry and to gain market share.
Loss leader pricing
Involves selling a good or service below its cost value.
Predatory pricing and why is it illegal in some countries
It involves temporarily reducing the price in an attempt to force its competitors out of the industry as they cannot compete in a profitable way. Predatory pricing may be illegal in some countries because it is regarded as an anticompetitive trade practice.
Why might consumers not necessarily benefit from predatory pricing, such as price wars?
In a predatory pricing scheme, prices are set unrealistically low in order to eliminate competitors and create a monopoly. Consumers benefit from lower prices in the short term but suffer in the long term as the successful predator has eliminated choice and is free to raise prices.
Premium Pricing
When the price of a good or service is set significantly higher than similar competing products, usually because the product is of higher quality or is sufficiently unique enough to justify the premium price.
Dynamic pricing
Practice of varying the price of a good or service to reflect changing market demand, often with price changes throughout the day.
Competitive pricing
The practice of a business setting the price of its goods or services at the same or similar level to that of its competitors.
Contribution pricing
It involves setting a price based on the direct costs of producing a product. The aim is to ensure the selling price generates an acceptable contribution towards covering the fixed costs of the business.
How does knowledge of price elasticity of demand help managers and entrepreneurs?
This knowledge can provide managers with valuable information about how sales revenue is likely to change if prices are adjusted. Disinformation can be used by decision makers in various ways: it helps firms decide on their pricing policy, determine which products are most affected by a downturn in economy, etc.
Promotion
Part of the marketing mix related to advertising, sponsorship, sales promotion, or other tactics to inform and persuade customers. Refers to methods of communicating marketing messages to existing and potential customers, usually with the intention of selling a firm's product.
Advertising and how does this differ from promotion
A form of visual and/or audio marketing communication used to inform and persuade people to buy a certain good or service. Advertising is a process in promotion.
Above the line promotion
any form of paid for promotional method through independent mass media sources such as television magazines and the radio to promote a business, its products or its brands.
Below the line promotion
refers to the use of non mass media promotional activities, allowing the business to have direct control.
Examples of below the line promotion
Direct marketing, loyalty cards, sales promotion, after-sales service, public relations, merchandising, exhibitions and trade fairs
Through the line promotion
refers to promotional strategies that involve both above and below the line methods.
Social Media marketing
Refers to the promotional practice of gaining online traffic through social media platforms.
Place in the Marketing mix
Place refers to the distribution of its products.
Distribution channels
used to get a product to the customer
Intermediaries
agents or businesses that act as a middle person in the channel of distribution between the manufacturer and consumers of a product.
Different levels of Distribution Channels
There are three types of distribution channels: direct, indirect and hybrid.
Direct: With the direct channel, the company sells directly to the customer.
Indirect: Indirect channels use multiple distribution partners or intermediaries to distribute goods and services from the seller to customers.
Wholesalers and retailers
Wholesalers are businesses that purchase large quantities of products from a manufacturer and then separate or break the bulk purchases into smaller units for resale mainly to retailers. Retailers are the sellers of products to the final customer.
Agents (distributors/brokers)
Distributors are independent and specialist businesses that trade in the products of only a few manufacturers. Agents or brokers are representatives and negotiators who act on behalf of buyers and vendors of a product.
Specialty channels of distribution
any direct way to distribute products that does not involve retailers.
Multi-channel distribution strategy
Refers to the use of a range of channels to distribute a firm's products.
Factors that affect choice of distribution channel
Product, Company, Competition, Market and Environment Related Factors.
Service
an intangible product
People’s importance for the marketing mix of services
People are at the heart of every business. Without people, you have no one to market to; no one there to buy your product or make use of your services.
Process in the marketing mix
elated to the activities needed in the interaction between the customer and the business.
Physical Evidence
refers to the tangible aspects of a service.
Packaging is part of physical evidence, as it is the art of presenting products in an advantageous way to costumers in order to improve sales. It is also a form of product differentiation.
Importance of physical evidence for the marketing mix of services
Physical evidence provides tangible cues of the quality of experience that a company is offering. It can be particularly useful when a customer has not bought from the organization before and needs some reassurance, or is expected to pay for a service before it is delivered.
International marketing
the marketing of an organization's goods and services in overseas countries.
Advantages and Opportunities of international marketing
Increased customer base, economies of scale, increased brand recognition, spread risks, wider distribution channels, extend the product lifecycle, and to gain more profit.
Main threats posed by entry to international markets
Legal issues, political issues, social and demographic issues, infrastructure challenges, and economic issues.
Social and demographic issues affect international marketing
They help you identify the individual members of your audience by certain characteristics, wants and needs.
Business etiquette and influence on international marketing
Business etiquette refers to the requirements and expectations of social and business behavior and good business etiquette helps you make an excellent first impression. It displays professionalism and respect towards clients and their work culture.
Note 
Flashcard (44)