Marketing Test

What is marketing

Marketing is the management process involved in identifying, anticipating and satisfying consumer needs profitability.

2 distinct approaches to market products are

market orientation and product orientation

What is product orientated approach:

-inward looking approach (product first and then try sell it)

-product led and assumes supply creates its own demand.

advantages of product orientated approach:

• Associated with production of high quality products

• Can succeed when speed of change is slow and firm already has good reputation.

• has control over activities

disadvantages of product orientated approach

• takes risks which may lead to business failure or closure

• Spend money on research and development without considering consumer needs.

Market orientated approach is

• outward looking: focused on carrying market research first and then product.

• Focuses on establishing consumer demand

disadvantages of market orientated approach

• Due to consumers change in tastes, hard to meet everyones needs

• The research is costly

advantages of market orientated approach

• market research increases, and risk of failure decreases

• can anticipate and respond quickly to change in market

• Strong position compared to competition because of regular feedback

market share is:

The % of total shares that a business has within the industry

market growth is:

the increase in number of consumers who buy the goods/services. It’s the % change in market size over a given period of time.

market size represents:

TOTAL sales made by all businesses in a given market.

market share provides insight into

firm’s revenue, growth and profit margins

when calculating and interpreting market share (remeber that):

• Can be measured by volume and value (dif results)

• dif products included can influence calculation of market share

You are a market leader when you have

firm with largest market share within an industry

benefits of being a market leader:

• increased sales rev (higher profit)

• able to gain EOS

role of marketing planning:

process involving organisation deciding on market strategies that would be most effective in attaining overall strategic objectives.

what is a marketing plan

a doc about marketing strategies that are developed to achieve marking objectives.

what is included in marketing plan (main bits)

• Marketing budget

• Key strategic plans

• Marketing objectives (SMART)

• detailed marketing actions

advantages of marketing planning

• identify specific problems and find solutions to them

• Marketing budget ensures resources are not wasted

• SMART objectives improves change of success for firm’s marketing strategy

disadvantages of marketing planning

• may become outdated if not changed quickly

• process may consume considerable resources (time, money for designing plan..)

marget segmentation is the ..

process of diving market into smaller or distinct groups of consumers to meet their desired wants and needs.

demographic segmentation

considers varying characteristics of human population in the market.

• age

• gender

• religion

• family characteristics

geographic segmentation

• climate conditions (cold so warm jackets)

• regions in countries where people live (eg agricultural)

Psychographic segmentation

based on lifestyle choices or personality:

• social and economical status

• values (moral beliefs eg animal testing)

advantages of segmentation

• helps identify existing gaps and new opportunities in market

• designing products for specific groups can boost sales (profit)

• minimise waste of resources since customers for products are idenitified

• (CAN BE EXPENSIVE)

Targeting is→

process of marketing to specific market segment

different targeting strategies

• undifferentiated market/mass marketing (entire market)

• Differentiated marketing/segmented marketing (targets several market segments like toyota with all prices)

• Concentrated marketing (smaller and more specific market segment)

product positioning:

involves analysing how consumers define/percieve a product compared to other products within a market. (position map)

Importance of position map

• helps establish close competitors

• quick and simple way of presenting research

Niche market vs Mass Market

Niche market → focuses on small groups of people/consumers who have interests with product/service of specific organisation.

Mass market → Aimed at large market segment (aim to find highest number of customers)

What is a USP:

feature differentiating product from other competing products. Why consumers choose one product over the other.

Importance of having USP

• helps firm establish competitive advantage

• customer loyalty (something special abt product)

• Leads to improved revenue

How firms differentiate them and their product (dif types)

• price

• service (delivery, installation etc)

• product (eg durability or resistance)

• relationship (product and customer, personnel choice, trust)

• distribution (channels of distribution) - eg middlemen

• Reputation (created through other forms of differentiation - like high quality)

sales forecasting is

process of predicting what a firm’s future sales will be

benefits of salesforecasting

• better cash flow management

• increased efficiency (stock how much to produce..)

• better workforce planning (how much staff needed - HR)

• Improved marketing planning (greater awareness of future trends)

limitations of salesforecasting

• time consuming

• ignores qualitative external factors (politics etc)

• entry of competitors may be unseen

purpose of market research

• wants and needs of customers are seen

• reduce risk of market failure

• helps business see what is likely to happen in future

methods of market research

primary and secondary research

primary research is

• ‘field research’, first hand info from market

• direct from customers

secondary research is

analysing data that already exists ‘desk research’

• quicker and cheaper

qualitative research

• data of opinions, attitudes or beliefs

• subjective

• multiple realities

• researcher part of process

  (collecting, analysing and interpreting)

quantitative research

• collection of numerical data

• less open to interpretation

• objective

• researcher is separate

• provides one reality

  Counts and measures

sampling methods means

the process of selecting appropriate sample (small group of people to represent population of target market)

qouta sampling is

segmenting a given population into number of groups that share similar characteristics (eg age)

advantages of qouta sampling

• quick and cost effective

• usually more reliable that random sampling

disadvantages of qouta sampling

• not always representation of population

• interviews may be biased in selecting interviewees

random sampling

each member of population has equal chance of being picked

advantages of random sampling

• reduces bias

• relatively easy way of obtaining sample

disadvantages of random sampling

• sample chosen may be too small

• may not consist of target population

convenience sampling

• research groups selected based on their easy access and proximity to researcher

advantages convenience sampling

• fast, easy and cheap

disadvantages convenience sampling

may be biased and not represent population well