Business Management - Topic 4

studied byStudied by 15 people
0.0(0)
get a hint
hint

What is a market?

1 / 145

146 Terms

1

What is a market?

A place where buyers and sellers come together or interact, a location, or a type of product

New cards
2

What is marketing?

The processes involved in identifying and satisfying customer needs

New cards
3

What is a product oriented business?

Business that prioritizes R&D of high quality and specialized products over market research, inward facing

New cards
4

What are advantages of being product orientated?

  • Can focus on creating a different product to competitors that is higher quality and has a USP

  • Can get patents for new products

  • Lack of competition

New cards
5

What are the disadvantages of being product orientated?

  • High risk, unsure if customers will be interested

  • High costs of investment

New cards
6

What is a market orientated business?

Business that puts the wants and needs of the customers above everything else, only develops products after understanding the market

New cards
7

What are the advantages of being market orientated?

  • Lower risk

  • Increased number of repeat customers due to better product-market fit

New cards
8

What are the disadvantages of being market orientated?

  • No USP

  • Market research must be right

  • Slow to adopt to changing market conditions

New cards
9

What is market share?

The value of a single company’s sales or revenues compared with the sales of all businesses in a market in a specified time

New cards
10

What is the equation for market share?

Market share = product sales ÷ total market sales x 100%

Market share = number of units sold by the company ÷ total number of units sold in the market x 100%

New cards
11

What is market growth?

The increase in sales revenue or sales volume in an individual market over time

New cards
12

What is the equation for market growth?

Market growth = (total market sales at the end of time period - total market sales at the start of time period) ÷ total market sales at the start of time period x 100%

New cards
13

What is a market leader?

The product or brand with the highest market share

New cards
14

What are advantages of being a market leader?

  • Easier to access different distribution channels

  • Brand recognition

  • EoS

  • Leaders have control over the “right” price for a product

New cards
15

How does a market leader benefit the customers?

  • Products become more valuable the more people use it

  • Market leaders can set lower prices if they have EoS

  • Businesses can use revenue to further develop products

New cards
16

What are disadvantages of being the market leader?

  • Lack of innovation may attract new competition

  • May face DoS

New cards
17

How does a market leader negatively affect customers?

  • Large businesses can abuse their power

  • No guarantee for lower prices

  • No competition will lower the motivation to innovate

New cards
18

How does a market leader negatively affect the economy, society, and the environment?

  • Market leaders have power to sway politics

  • Can easily gain support for mergers and acquisition to remove competition

  • Can resist trade unions

  • Can find tax loopholes

New cards
19

What is the BCG Matrix?

A tool to help businesses that have multiple products to decide on their marketing strategies by comparing market share of the product and the potential market growth

<p>A tool to help businesses that have multiple products to decide on their marketing strategies by comparing market share of the product and the potential market growth</p>
New cards
20

What are cash cows (BCG Matrix)?

  • High market share, low market growth

  • Likely to be in the mature stage of a product life cycle with an established customer base

  • Will need less money for marketing

  • Will have high sales revenue

  • Focus promotion on maintaining loyalty

New cards
21

What are dogs (BCG Matrix)?

  • Low market share, low market growth

  • Likely at the end of its product life cycle or is a niche product competing in mature low-growth markets

New cards
22

What are stars (BCG Matrix)?

  • High market share, high market growth

  • Revenue is likely to grow strongly

  • Requires significant investment to sustain growth

  • Focus marketing around attracting new customers and establishing a brand image

New cards
23

What is a problem child (BCG Matrix)?

  • Low market share, high market growth

  • Often launched in response to competitor’s growth

  • To gain market share investment is required

New cards
24

What is a marketing plan?

A document that outlines the entire marketing process of a business

New cards
25

What are elements of a marketing plan?

  • Marketing objectives

  • Marketing budget

  • Segmentation and target market

  • Market research

  • Marketing strategies (marketing mix)

  • Control tools (tools used to assess success)

New cards
26

What is segmentation?

Splitting a population into groups with similar needs or characteristics

New cards
27

What is the target market?

The consumer segment at which a business aims its marketing messages

New cards
28

What is geographic segmentation?

Dividing by geographic location (country-based, regional by continents, regional by state and country, urban vs. rural)

New cards
29

What is demographic segmentation?

Dividing by age, gender, occupation, socio-economic group, etc.

New cards
30

What is psychographic segmentation?

Dividing by lifestyle and personal interests (sports, music, food, movies, books, etc.)

New cards
31

What are advantages of segmentation?

  • Identify gaps and opportunities in the market

  • Design more suitable products

  • Reduce waste of resources

  • Diversify and spread risks by targeting different segments

New cards
32

What is targeting?

Selecting the most appropriate segment for a marketing campagin

New cards
33

What is a product positioning map?

A visual representation of how various competitors might attempt to position their brands in the eyes of consumers by displaying 2 attributes on a cartesian plane (usually price and quality or price and age)

<p>A visual representation of how various competitors might attempt to position their brands in the eyes of consumers by displaying 2 attributes on a cartesian plane (usually price and quality or price and age)</p>
New cards
34

What are the uses of product positioning maps?

  • Identify market segments whose wants and needs aren’t fulfilled

  • Establish gaps and opportunities in a market

  • Help identify closest competitors and threats of a business

  • Use info to target appropriately

New cards
35

What are niche markets?

Small part of a larger market that have very specialized wants or needs or those that are different from the larger market (eg. clothes for very tall people, gluten-free bread)

New cards
36

What type of promotion is normally used in a niche market?

Below the line

New cards
37

What is the advantage of being in a niche market?

Less competition can increase customer loyalty and allow for higher prices

New cards
38

What are the disadvantages of being in a niche market?

  • Tends to have low quantity of sales

  • Less reach

  • Little growth potential

New cards
39

What is a mass market?

A market for goods that are produced in very large quantities

New cards
40

What type of promotion is normally used in a mass market?

Above the line

New cards
41

What are the advantages of being in a mass market?

  • EoS

  • High quantity of sales

New cards
42

What is the disadvantages of being in a mass market?

More competition = lower prices = lower profit margin

New cards
43

What is USP?

A feature that distinguishes a product or brand from its competitors

New cards
44

What is differentiation?

Differences between a business’s product or service from its rivals

New cards
45

What are product USPs?

Unique product design, first of its kind, patents

New cards
46

What are price USPs?

Offer the lowest (only for those who have significant EoS) and highest prices (can indicate exclusivity)

New cards
47

What is promotion USP?

Promoting effectively to lead to customer loyalty and a positive brand image

New cards
48

What is place USP?

Being in a convenient location, a global business, or in the right distribution channel

New cards
49

What is a process USP?

Positive interactions with employees, good customer service

New cards
50

What is a physical evidence USP?

Experience is different to other businesses (layout, interior design, temperature, presentation)

New cards
51

What is a process USP?

High efficiency to increase speed and improve customer service

New cards
52

What is Porter’s Generic Strategies?

4 strategies to help businesses consider how to respond to the external environment by considering 2 brad strategies against the target market

<p>4 strategies to help businesses consider how to respond to the external environment by considering 2 brad strategies against the target market</p>
New cards
53

What is cost leadership (PGS)?

  • Lower cost, broad market

  • Business becomes the low-cost producer by reducing unit costs with EoS or increased efficiency

  • Suitable for markets with standardized products and hard to differentiate

New cards
54

What is differentiation (PGS)?

  • Differentiation, broad market

  • Business makes a product better or different with a USP

  • Can charge premium is successful

  • Profits will increase if costs stay in control

New cards
55

What is cost focus (PGS)?

  • Lower cost, narrow market

  • Business becomes the low-cost producer in a niche market

  • Usually for basic products

New cards
56

What differentiation focus (PGS)?

  • Differentiation, narrow market

  • Business produces specialized or differentiated products for a niche market

  • Product must be very high quality, very exclusive, or provides a special charactristic that the niche market wants

  • Can charge a premium to compensate for a small market

New cards
57

What is stuck in the middle (PGS)?

Business isn’t differentiated enough and costs are too high relative to competitors so the business has low profits or losses. Must change strategies by cutting costs or differentiating and focus on a broad or narrow market

New cards
58

What is the purpose of market research?

  • Gain info on customers and competitors

  • Identify wants and needs

  • Understand consumer purchasing behavior

  • Identify potential market change

  • Establish customer likes and dislikes

  • Test products

  • Evaluate existing markets

  • Investigate new possibilities in existing or new markets

  • Identify human needs (social ent.)

New cards
59

What are methods of primary research?

  • Surveys (large # of respondents in a short time, can gather quantitative data)

  • Interviews (longer, qualitative, allows for follow up questions)

  • Focus group (interview conducted with a small group of individuals, usually with similar characteristics, participants may get financial rewards)

  • Observations (natural reactions of customers are studied, individual consumers can be followed, record route in a store, which promotions they notice, or clicks they make on a website)

New cards
60

What are methods of secondary research?

  • Market analysis (pay agencies to do new research or buying pre-existing market analysis reports)

  • Academic journals (publications from educational or research institutions, Harvard Business Review, Jstor, Google Scholar)

  • Government publications (population stats, social trends, economic conditions, usually free and reliable)

  • Media articles for current local or national info

  • Online content (social media and social media analytics, e-commerce sales data, press release, company reports)

New cards
61

What are the benefits of primary research?

  • Direct info about taste and preferences

  • Provide info about resources for purchase

  • Provides unique info that gives a competitive advantage

New cards
62

What are limitations of primary research?

  • Expensive and time-consuming

  • May need to train employees to carry out research

  • Can be difficult to construct

New cards
63

What are benefits of secondary research?

  • Low cost

  • Provides broader contextual info

  • Pre-published info is available

New cards
64

What are limitations of secondary research?

  • Must rely on others’ research

  • Info wanted may not exist

  • Existing info may not fit the business

New cards
65

What is quantitative research?

Numerical data

New cards
66

What is qualitative research?

Non-numerical data (opinions)

New cards
67

What is a sample?

A subset of individuals from a given population that is used to make some estimation or prediction of the whole population

New cards
68

What are the 2 categories of sampling methods?

  • Probability sampling (each subject has the same chance of being selected)

  • Non-probability sampling (not all subjects have an equal chance of being selected)

New cards
69

What is random sampling?

Everyone in the population has the same chance of being selected to take part in the research, most representative of the population, probability sampling

New cards
70

What is quota sampling?

Divides the population into strata (subgroups based on a characteristic) and a small sample is taken from each stratum based on convenience, non-probability, faster and easier, less expensive than random, takes into account population proportions

New cards
71

What is convenience sampling?

Sample is made up of whoever is willing to take part, least representative, non-probability, simple, limited uses

New cards
72

What are descriptive statistics?

Tools used to present and interpret data collected (mean, mode, medium, standard deviation, charts, infographics, quartiles)

New cards
73

What is product (marketing mix)?

The result of a production process where resources are used to create a good or service to satisfy a want or need

New cards
74

What is the product life cycle?

A model to help businesses make decisions about a product’s marketing mix

<p>A model to help businesses make decisions about a product’s marketing mix</p>
New cards
75

What is R&D?

  • Everything before the product is released

  • No sales

  • Market research

  • Product development and testing

  • Preparing production (finding suppliers, facilities, initial stock produced, promotion can be done to create a “buzz”)

New cards
76

What is introduction (product life cycle)?

  • Product is released

  • Likely for sales to be low

  • Focus on promotion USP

  • Pricing and distribution is important to consider

New cards
77

What is growth (product life cycle)?

  • Sales accelerate

  • Pricing strategies might change and distribution may need to expand

  • Promotion focuses on raising awareness in new target markets

New cards
78

What is maturity (product life cycle)?

  • High and steady sales revenue

  • Slower growth rate

  • Saturated market

  • Focus on building customer loyalty

  • Can decrease marketing budget

New cards
79

What is decline (product life cycle)?

  • Falling sales or loss of market share

  • Loss of USP due to high competition

  • Product may no longer satisfy needs

  • Can still be profitable

  • Price may reduce

  • Distribution channels may shift to discount retailers

New cards
80

What are extension strategies (product life cycle)?

  • Methods to extend the maturity stage

  • Easier and cheaper than starting new

  • Find new target market (market research can be costly)

  • Redesign packaging (customers may feel tricked or disappointed)

  • Add new or different features to the product (can be developed quickly and at a low cost but loyal customers may not like the change)

  • Reduce prices (can damage image or be perceived as lower quality)

  • New promotional strategies to change mental model of how the product is used

New cards
81

What is a brand?

A name, symbol, or design used to identify a product or company

New cards
82

What is brand awareness?

The degree to which consumers recognize a product by its name or special characteristics (Nike ‘swoosh’)

New cards
83

What is brand development?

The process of creating and making a new strong brand which allows the company to launch secondary products with ease (Cadbury’s 20+ variations)

New cards
84

What is brand loyalty?

Customers continue to buy from a brand, even with alternative options, essential during hard times

New cards
85

What is brand value?

How much a brand is worth as an intangible asset, how much someone would pay for the brand

New cards
86

Why is packaging important?

  • Helps the product stand out from competitors

  • Represents the brand

  • Protects the product

  • Communicates info to customers

  • Promotes the product

  • Can be a USP

  • Ease of use

New cards
87

What is cost-plus pricing?

All costs + a fixed or percent mark up

Easy to use, all costs are covered, doesn’t take into account market pricing

New cards
88

What is penetration pricing?

Setting prices low to attract new customers to a new product or service

Short-term strategy to improve brand loyalty, good for repeat purchase products, helps secure large market share early on, low profit margin

New cards
89

What is loss leader pricing?

Larger businesses with a large product portfolio prices lower than their production costs to attract customers to buy another, more expensive product

Very risky

New cards
90

What is predatory pricing?

Prices are so low that competitors are forced ut of the market

May be illegal in some countries and is impossible to maintain

New cards
91

What is premium pricing?

High prices to create a positive perception, makes value seem higher

People may not be willing to pay, will have a small target market

New cards
92

What is dynamic pricing?

Selling the same product to different customers at different prices (change according to customer, change based on time, change based on competitors, change based on demand)

New cards
93

What is competitive pricing?

Pricing the same as competition, no USP

New cards
94

What is contribution pricing?

Variable costs + mark up

Each product will contribute a portion to the payment of fixed costs

May be difficult to identify direct and indirect costs

New cards
95

What is price elasticity of demand (PED)?

Analyzes how the demand is affected by changes in price

PED = % change in demand ÷ % change in price

New cards
96

What does it mean if PED>1?

Price elastic demand

A change in price will have a proportionally greater change in demand

New cards
97

What does it mean if 0<PED<1?

Price inelastic demand

A change in price will have a proportionally smaller change in demand

New cards
98

What does it mean if PED = 1?

Unitary elastic demand

A change in price will have an equal change in demand

New cards
99

What are factors that can determine PED?

  • Number and closeness of similar goods, the more similar goods the more elastic because if prices increase by a lot demand will drop by even more as they will buy from another product

  • Time period, customers may not have time to react to changes in price so it is inelastic

New cards
100

What is promotion?

The use of advertising, sponsorships, sales promotion, and personal selling to inform and persuade customers

New cards

Explore top notes

note Note
studied byStudied by 20 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 18 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 35269 people
Updated ... ago
4.9 Stars(185)
note Note
studied byStudied by 26 people
Updated ... ago
4.7 Stars(3)
note Note
studied byStudied by 3 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 24 people
Updated ... ago
4.0 Stars(1)
note Note
studied byStudied by 8 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 3 people
Updated ... ago
5.0 Stars(1)

Explore top flashcards

flashcards Flashcard30 terms
studied byStudied by 15 people
Updated ... ago
5.0 Stars(2)
flashcards Flashcard24 terms
studied byStudied by 2 people
Updated ... ago
5.0 Stars(1)
flashcards Flashcard450 terms
studied byStudied by 17 people
Updated ... ago
5.0 Stars(1)
flashcards Flashcard34 terms
studied byStudied by 179 people
Updated ... ago
5.0 Stars(9)
flashcards Flashcard22 terms
studied byStudied by 1 person
Updated ... ago
5.0 Stars(1)
flashcards Flashcard24 terms
studied byStudied by 8 people
Updated ... ago
5.0 Stars(1)
flashcards Flashcard178 terms
studied byStudied by 8 people
Updated ... ago
5.0 Stars(1)
flashcards Flashcard28 terms
studied byStudied by 2 people
Updated ... ago
5.0 Stars(1)