Business Marketing

What are the 2 methods of market research and describe them

Field Research- involves gathering brand new information suitable for the businesses exact needs

Desk Research- involves researching and analysing information that has already been gathered

Give 4 advantages and 2 disadvantages of field research

• A

• information is accurate as it can be validated

• Information is fit for purpose it’s needed for

• Information is up to date

• It has complete information, meaning no parts are missing

D

• requires trained and paid interviews which make it expensive

• It’s time consuming as you have to find the correct people for the job

Give 6 methods of field research with description, 1 advantage and 1 disadvantage

Personal interview -involves a face to face interview. Personal interview Can be held in the street or home

A- allows 2 way communication D- can be expensive as researchers have to be selected and trained

Focus group - involves specially selected groups of people, usually led by an experienced chairperson who puts forward points to encourage open discussion

A- customers have agreed to participate therefore considered responses are more likely D- strong personalities within the group can sway discussion and opinions

Telephone survey - involves a market researcher telephoning people at home and asking them questions

A- a large number of people can be surveyed quickly D- many people don’t like strangers asking questions over the phone, met w hostility

Postal survey - involves a market researcher sending a questionnaire out through the post

A- inexpensive as it doesn’t require a trained interviewer D- questions must be simple and easy to answer

Hall test - involves inviting customers to look at/ try a product and then give their reaction to it

A- information gained is qualitative D- can be difficult to analyse qualitative information

Online survey - when a website or email is used to ask customers questions

A- customers can be surveyed across a very large geographical area. D- access to the internet must be available

Give 3 advantages and 3 disadvantages of desk research

A

• information is quick to gather

• Information doesn’t require trained and paid interviews, makes it cost effective

• Information already exists so it’s easy to look up

D

• information is collected and presented by someone else, so it could be biased

• Information is not fit for purpose

• Researcher may have to read through a lot of information to get what is needed

Identify 5 methods of desk research

• Competitors website

• Online news article

• Sales figure

• Review websites

• Social media posts

Name, describe and give the impact on sales and profits of all the stages of the product life cycle

Development- The product is being researched and developed. Prototypes will be made and tested. Changes may have to be made after research feedback.

There are no sales yet as the product is still being developed and the product will actually be making a loss due to the costs of development and zero income from sales

Introduction- The product is launched on the market. The costs of holding stock, advertising and promoting the product is high at this stage

Sales are slow to begin with as customers are unsure of the product and may have to persuaded to move on from competitors products. There are high promotional costs which still results in a loss being made

Growth- product has been on the market for some time and customers are fully aware of the product and are purchasing it

Sales start to rise rapidly, this is a result of slightly reduced prices, lack of competition. Profits are starting to be made and losses from development and promotions during the initial stages are recouped

Maturity- the product has been on the market for some time and customers are fully aware of the product and are purchasing it.

Sales growth peaks and levels out. Profits can still be healthy but start to fall as the competition will take sales away and thus profits will fall

Saturation- the product suffers from too many competitors being in the market and customers tastes may begin to change

Sales begin to fall as customers flock to competitors products. Profits fall rapidly, especially if prices are slashed to encourage sales

Decline- The products life is nearing the end and the product will stop being produced and customers tastes change

Sales fall rapidly and eventually the product will be withdrawn from the market. Profits continue to fall, eventually products may be sold at unit cost just to break even

Draw the product life cycle with separate lines for profits and sales

A normal product life cycle is the sales line

What are extension strategies

Give 6 examples and their impacts

Extension strategies - to stop a business from entering the decline stage

1) Changing the packaging - make the product appeal to a new market segment

2) Rebranding the product -. A new name can appeal to a different/ wider market segment

3) Changing the use of the product - make it appeal to new markets or suit seasonal tastes

4) Lowering the price of the product - make the product more affordable and therefore appeal to more market segments

5) Changing the place a product is sold e.g selling online - making the product available in more places will mean it is seen by more potential customers

6) Altering the methods of promotion - changing the way a product is promoted can increase sales simply by raising awareness of the product

What is a product portfolio

And what are the two types of product portfolio and describe them

Product portfolio - range of products on sale

2 types of product portfolio: -

Product Line Portfolio - having a variety of similar products on sale. Greater profits can be gained by having so many products on sale as different products in the line will appeal to different market segments with different tastes.

Diversified Product Portfolio - having products for sale across completely different markets business segments. The variety spreads the risk across different markets in case one fails

Give 5 advantages of a product portfolio

• businesses can spread risk over different markets

• business can meet the needs of different market segments and appeal to more customers

• Newer products can replace those at the ends of their life cycle

• A range of products increases the awareness of the brand as a whole

• A business will find it easier to launch new products with a large existing portfolio

Give 4 disadvantages of a product portfolio

• There are high costs involved in researching and developing a large volume of products

• High marketing costs are incurred to promote all of the products

• Bad publicity surrounding one product can affect the whole portfolio

• Resources assigned to new products may affect the performance of existing products

What is a Boston matrix

And Name and describe the 2 areas that enables a business to analyse its products

businesses can analyse their product portfolio using a Boston matrix

2 areas: -

Market share - the percentage of sales in the market a product makes

Market growth - the overall potential for sales that the market has as a whole

Draw and label the Boston matrix

State the 4 types of products in the Boston matrix with their descriptions and 2 impacts

Stars - products that have a high market share in a high growth market

Impacts - allow a business to be a market leader - need constant investment in marketing to keep ahead in a competitive market

Cash cows - products that have a high market share of a low growth market

Impacts - require little marketing expense due to lack of competition - funds generated can be used to further strengthen stars and improve riskier ventures

Question marks/ problem child - products that have a low market share in a market with high growth potential

Impacts - can be invested in due to their position in a promising market - need development of a strong marketing mix if they are to be turned into stars

Dogs - products that have a low market share of a market with low growth

Impacts - adversely affect profits. - should be divested due to lack of market share and the declining market for the product ( can’t be turned into stars)

Give 7 types of pricing strategies and their descriptions, 1 advantage and 1 disadvantage

Cost plus- the business calculates the unit cost of a product and then adds a percentage mark-up for profit.

A- quick and easy way of setting the selling price. D- doesn’t cover indirect costs

Competitive - the price of a product is set similar to the competitors

A- avoids a price war D- other elements of the marketing mix must be better than the competitors to ensure sales

Skimming- the price is set high to begin with and lowers over time

A- lack of competition also allows maximum prices to be charged D- high initial prices can put off some customers

Penetration - the price is set low to begin with and increases over time

A- encourages customers to try a new product D- very little profit can be generated during the initial low price period

Premium - the price is set permanently higher than the competition

A- creates an image of high quality and exclusivity D- customers looking for value for money will go elsewhere

Low - the price is set permanently lower than the competitors

A- high volumes of sales. D- some customers are put off by low prices as they believe it indicates low quality

Price discrimination - prices are altered depending on a discriminating factor e.g different prices charged on public transport depending on age

A- ensures products appeal to different market segments D- more difficult to budget for sales revenue in advance

What is into-the-pipeline and out-of-the-pipeline

Into-the-pipeline - sales promotions are offered by the manufacturer to encourage retailers to purchase products from them

Out-of- the-pipeline - sales promotions are offered by the retailer to encourage the customers to purchase products from them

Give 4 methods of into the pipeline and give a description, 1 advantage and 1 disadvantage

Trade credit - manufacturers offer retailers credit to pay for goods at a later date

A- retailers can purchase stock and then pay for it once it’s sold D- this could lead to bad debt if retailers are unable to sell stock

Merchandising materials - free posters and display materials are given to retailers to display products to customers

A- enhance the look of the retail store D- retailers may need to dispose of bulky display materials at the end of the promotion

Sale or return - manufacturers give retailers the option to return stock that does not sell

A- it allows retailers to try new products without the risk of being stuck with unsold stock D- products may be returned in a poor condition, creating waste

Bulk buying discounts - discounts used to encourage retailers to stock up on a product

A- retailers can save on the unit cost of products, allowing for greater profits to be made. D- retailers may overstock and find they are unable to sell

Give 4 methods of out of the pipeline and give a description, 1 advantage and 1 disadvantage

Special offers - include BOGOF and other short term promotions on selected items

A- encourage customers to try new products which they may then purchase again at normal price D- customers might feel pressured into buying more than they need which may result in waste

Free gifts - tempt customers to buy a product again or for the first time

A- gifts that require multiple stamps can encourage repeat purchases D- difficult to find a gift that appeals to all target markets

Vouchers and coupons - given in newspapers/ magazines to give customers money off future purchases

A- encourage repeat purchases D- discounts offered by money - off vouchers can reduce overall profits

Interest free credit - retailers offer customers credit to pay for goods at a later date

A- allows customers to purchase products and then pay for them when they can afford to. D- could led to bad debt if many customers are unable to pay by the agreed date

State the three types of extended marketing mix ( final 3 p’s) and describe them And give some examples )

People - refers to who is representing a business or brand. Those employed by the business are essential to the image and reputation of a business, especially those that are customer facing ( receptionists and sales staff)

Process - refers to how a customer receives a service. ( process of booking a holiday and obtaining a bank loan)

Physical evidence - refers to what customers see that gives them clues about a business from the image it portrays

Give 3 methods and justification each of the final 3 P’s

PEOPLE

• Train staff well to deal with customers effectively - enables staff to be informed of the expectations of the business when dealing with customers such as being polite and helpful

• Regularly update staff on product / service developments - ensures staff appear knowledgable and can assist customers

• Monitor staff ( e.g recording customer-service call or sending mystery shoppers) - ensures employees are representing the business appropriately and standards are maintained

PROCESS

• ensures staff appear that outlets and call centres are well staffed - avoids customers having to queue for too long, which can put them off returning

• Empower customer-facing staff to make decisions - avoids further waiting as problems/ queries do not need to be passed on to management

• Introduce the latest technologies to improve processes - technology is generally faster than humans and will speed up processes

PHYSICAL EVIDENCE

• the layout and design of websites should be carefully considered - the website should convey to the customer the type of business it is ( carefully considering colour schemes, fonts, design and image) if they reflect the business well the website will appeal to the target market

• Premises and vehicles should be modern and clean- ensures that customers opinion of the business isn’t ruined by old fashioned / dirty shops, reception areas or delivery vans

• Feedback and testimonials from previous customers should be promoted - provide reference materials for new customers which is especially important when purchasing a service as it can’t be tried beforehand

What is public relations (PR) and give examples with descriptions, 1 advantage and 1 disadvantage

PR - act of controlling the image of a business that is perceived by the public

Examples of PR: -

Press conferences - Media are invited to a business presentation, where they are given information or news

A- business can send an update out to a wide audience while keeping control of what is reported D- could have to face difficult questions and be put on the spot

Press releases - Media are provided with a written account of a businesses newsworthy activities

A- used to counteract bad publicity D- take a long time to ensure wording is perfect, especially if the business is already under pressure due to a mistake

Sponsorship - some businesses pay to sponsor an event, team or venue

A- businesses can benefit from the successes of those that they sponsor D- it can cost a lot to sponsor big events

Company visits - businesses may choose to open up their factories to the public for a limited period

A- customers are able to get a sense of what the business is like and how it’s run. D- a dedicated staff member will have to show visitors around, affecting their productivity elsewhere

State the two types of technology in marketing and describe it

Social media - used as a PR tool by responding to comments from customers

Apps - designed for tablet computers and smartphones to promote their business

Give 3 advantages and disadvantages of social media and apps each

SOCIAL MEDIA

A- social media is free to use

• consumers can leave comments which can be used to improve the product

• Information on new products/ promotional offers, price changes or new products can be uploaded immediately

D- negative feedback can be given instantly, to allowing the business time to release a statement in its defence

• negative feedback can be given, which can put other customers off using the business

• It can be difficult to engage with new customers as they have to voluntarily agree to see the business’s updates

APPS

A- can target ‘in app’ promotions and information on products that users will like, based on their browsing history

• e-commerce can be integrated, increasing sales potential to worldwide, 24/7

• Users of apps can share their experience on social media sites allowing the business free promotion and wider recognition

D- apps cost money to develop and are often given away for free

• apps require a mobile signal to be used, limiting the reach to customers in rural locations

• There is a limit to the amount of information that can be put on apps due to the screen size of mobile devices