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66 Cards in this Set
- Front
- Back
Marketing |
The management process responsible for sales promotion and for identifying, anticipating and satisfying customer requirements profitability |
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Marketing Objectives |
Are the goals that a business is trying to achieve through its marketing |
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Examples Of Marketing Objectives |
- To increase sales - To raise brand awareness - To reduce prices - To target a new market - To reposition a product |
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Marketing Objectives are Established By |
Internal Factors: - Market research findings - Forecasted sales - Forecasted profits External Factors: - Customer behaviours - The economy - Changes in law |
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Mass Marketing Strategy |
Designed to appeal to the whole market |
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Niche Marketing Strategy |
Designed to appeal to a specialist, smaller segment of a market |
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Benefits of Mass Marketing1 |
- The number of consumers in these markets is huge - The business can produce large quantities at a lower cost by exploiting economies of scale |
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Drawbacks of Mass Marketing |
- There is often a lot of competition in these markets - Businesses can often spend lots of money marketing their products in these markets |
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Benefits of Niche Marketing |
- Businesses can often avoid competition in these markets - It can be a lot easier to focus on the needs of their customers in these markets |
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Drawbacks of Niche Marketing |
- The number of customers in these markets is small - Businesses can only produce in smaller quantities at a unit higher cost by not being able to exploit economies of scale |
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Marketing Mix |
Includes the important marketing decisions relating to product, price, promotion and place |
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Product |
The design, functions and intended benefits that come from consuming a good or service |
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Price |
The amount consumers must pay to purchase the product. |
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Promotion |
Creating a favourable image for the product, or it may simply inform potential customers of its existance |
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Place |
The way products are made available to potential customers |
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Product Life Cycle |
Refers to the phases that most products go through between their first introduction to the market and their eventual decline in sales, which may lead to production ceasing |
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4 Stages of Product Life Cycle |
- Introduction - Growth - Maturity - Decline |
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Introduction |
At this stage, spending on promotion will be high. the price charged by the business may vary. The number of outlets the product is sold at will be limited |
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Growth |
At this stage spending on promotion will be high. The price charged by the business will become more competitive now. The number of outlets to buy the product should be increasing |
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Maturity |
At this stage spending on promotion will be falling as the product is already established in the market. The price charged by the business will remain competitive. There will be a wide range of outlets to buy the product |
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Decline |
At this stage spending on promotion will be low or non existent. The price charged by the business will be falling. there will be a lower number of outlets left to buy the product and the types of outlets will be beginning to change. |
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Extension Strategy |
A way of increasing sales by relaunching the product with new image, or aiming at a different market segment and promoted in fresh ways. |
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Types of Extension Strategies |
- Produce a new and improved version - lower the price - Find new markets abroad - Develop the product range - Target new segments |
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Product Portfolio |
Is the full range of products sold by the business |
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Boston Matrix |
An attempt to analyse the product portfolio of a business |
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Stars |
Market leading products in growth markets |
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Cash Cows |
Products in low growth markets that have high market shares |
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Question Marks |
Products that have a low share of the market with high growth potential |
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Dogs |
Products that have low market share in a market thats not growing |
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Ethical Trading |
Doing the 'right' thing |
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Sourcing of Sustainable Materials |
Not buying more natural resources that can be regenerated |
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Price Elasticity of Demand |
Measures the change in quantity sold that results from a change in price. |
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PED is Calculated By |
% change in quantity demanded -------------------------------------------------------- % Change in price |
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Income Elasticity of Demand |
Measures the responsiveness of demand for a product after a change in consumer incomes |
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YED is Calculated By |
% change in quantity demanded ----------------------------------------------------- % change in income |
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Normal Goods |
When consumer incomes rise demand also increases for these goods, by a small proportion |
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Luxury Goods |
When consumer incomes rise demand for these goods will rise by an even greater proportion |
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Inferior Goods |
When consumers incomes rise, demand for these products falls |
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Productivity (Labour) |
Usually defined as output per person but a higher definition is output per hour worked |
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Labour Productivity is Calculated By |
Total output -------------------------------- Number of workers |
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Employing New Technology |
Lower cost of production |
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Process Innovation |
Involves the use of new technologies in the production process and may play a big part in cutting costs |
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Investing in More Capital Equipment |
- Man made goods - Machinery/equipment - Becoming more productive, lower costs |
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Training Employees |
- Experience - New skills - More knowledge - Fewer mistakes All of these increase productivity |
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Labour Intensive Production |
Uses relatively more labour, and works, and works well where wages are generally low |
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Capital Intensive Production |
Uses a high proportion of capital equipment and relatively low proportion of labour. It can cut costs where wage costs are high |
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Efficiency |
Using resources in the most economical way possible. This means keeping costs to a minimum; businesses strive to organise their activities so that there is no wasting time or capital equipment that they use. |
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Ways of Raising Efficiency |
- Location production - Quality and availability of labour - Labour turnover |
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Location of Production |
The least expensive place to go, cheapest location |
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Labour Turnover |
Refers to the number of employees leaving the business each year, as a percentage of the average labour turnover |
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Standard Products |
Designed to meet the needs of large numbers of customers, e.g toothpaste, shampoo |
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Bespoke products |
Designed specifically to meet the needs of a customer, e.g tailored clothing |
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The design mix |
integrates all aspects of development so that the product can satisfy all likely customers requirements. theses aspects are functional, aesthetic and economic manufacture |
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Functional |
Refers to a product being fit for purpose |
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Aesthetic |
Refers to perceived beauty, a sense that something is pleasing to the eye |
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Economic manufacture |
Often involves producing at a minimum cost whilst retaining the qualities that buyers are looking for |
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Capacity utilisation |
Measures actual output as a percentage of maximum potential output: per period of time |
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Capacity utilisation calculation |
Current output ----------------------------------------- X 100 Maximum possible output |
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Drawbacks to operating at full capacity |
- Since some downtime is required for maintenance - Staff moral will also suffer if they are constantly working flat out |
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Benefits of operating at full capacity |
- Unit costs are as low as possible |
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Implications of under-utilisation of capacity |
Average fixed costs will rise, this means higher costs and possibly higher prices leading to lower profits. so its in a businesses interest to increase capacity utilisation |
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Inventory |
Means the amounts of raw materials and components, work in progress and finished products that a business holds |
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Inventory control |
is the process by which the business ensures that stocks of input are adequate to meet production requirements, and that stocks of the finished product are readily available for customers |
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Buffer stock |
These are kept to ensure the the business never completely runs out of either inputs and finished products |
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Holding too much stock |
- Holding stock cost money, e.g storage costs - increased risk of inventory loosing value due to not being wanted or needed, and wastage |
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Holding too little stock |
- May lead to a loss of sales - Could damage reputation of the business - Longer lead times for consumers that remain |