4.1 to 4.5 Review Questions
What is a marketing plan?
-A detailed document about the marketing strategies in order to achieve marketing objectives -Usually includes -Marketing objectives -Strategic plans -Marketing actions -Marketing budget
Outline the main methods of conducting secondary market research
-Academic journals (publications written by experts with a first hand experience -Media Articles (Newspapers, magazines, internet, television) -Government Publications (Articles produced by the government on a wide variety of topics -Market Analysis (Publications or market intelligence reports that gather data about particular markets
What is a product?
-Any good or service that serves to satisfy the needs or wants of customers -Can be tangible (physical products such as computers) -Can be intangible (services such as education)
Outline the benefits of sales forecasting
-Better cash flow management -Helps production department know stock requirements -Better workforce planning -Improved marketing planning
What is branding and why is it important for business?
-Branding is the name, symbol, sign or design that differentiates a firms product from its competitors -Important for -Start ups: need to give customers clear image -Well known business: can charge higher prices if brand has a good image -Customers judge brands based on image -Can be a USP -Customers become connected -Product perception map
What is meant by consumer profiles?
-Consist of information provided about all the characteristics of consumers -Age, social status, income, spending patters -Important for firms to have good knowledge of who their consumers are
Why and how do marketing strategies evolve in response to changes in customer preferences?
-Customers preferences change constantly -Businesses need to meet these new demands to maintain market share -Internet marketing, text messages, emails, social platforms -Added bonuses (U2 releasing album on Itunes)
What are ethical issues that market researchers should take into considerations?
-Damage (ensure information collected is never used to harm the people in the samples) -Deceitful (Trust needs to be established when they gain the data) -Deceptive (Practices must not be misleading in order to access the data) -Disclosure (Invasion of privacy by not telling the participant prior) -Detachment (Need to be attached from personal biases & be objective
Why might it be important for some businesses to have a Unique Selling Point (USP)
-Differentiates the business from competition -Gives the firm and advantage - more customers -Wesley with Clunes, boarding, IB
How can organizations differentiate themselves and their products from competitors?
-Distinctive features on products -better quality materials -Different pricing strategies -Cars having different models to suit each target market -Different promotional strategies -Nike swooosh logo -Differentiated place -Offering online purchasing -Quality of customer service -The way the business is operated -Physical environment of the business -Packaging of the product
What are the various roles of marketing?
-Ensure the right products are supplied to fulfill the needs/wants of customers -Set the correct price so that the firm is competitive -Distribute the products conveniently for customers to buy the product -Ensure that there is adequate and effective promotion to convince customers to purchase the product
Use examples to explain the meaning of extension strategies
-Extension strategies aim to extend the life of a product at the maturity/saturation stage Companies such as Nike and Adidas are bringing back existing products into their new markets such as shoes and clothing from the 1980s and 90s with new technology and slighty different colour schemes to extend the products life Car brands bring out yearly upgrades as well as different versions with slightly different features such as 'sports models' to target different niche markets
What is market share and how is it calculated
-Market share % is the amount of share in the market a particular firm has -Can be measured by value or volume -Easier to gain market share in a growing market =(firms sales/total sales in market) x 100
What might the characteristics of the market include?
-Market size (total sales of all businesses in the market -Customer base (amount of potential customers) -Barriers to entry (laws) -Competition (how many firms) -Georgraphic characteristics (A surf shop in London would not work) -Demographic Characteristics (hipster cafes in Brunswick) -Market Growth rate (percentage change in market size over a period of time) -Market share ((firms sales/totals sales in market)x100) -Seasonal and cyclical characteristics (ski resorts in summer)
What does the typical marketing planning process involve?
-Marketing audit (examines current climate the business operates in; market research) -Marketing objectives (the goals/objectives of the marketing) -Marketing strategies (how they will use the marketing mix to achieve the objectives) -Monitoring and review (continual process of checking the targets are being met -Evaluation (how did the firm go with the marketing)
Distinguish between quota, random, stratified, snowballing, convenience and cluster sampling methods.
-Quota: Involves segmenting a given population into a number of groups that share certain characteristics (age, gender) -Random: Every member of the population has an equal chance of being selected -Stratified: The population is divided into groups with similar characteristics & then chosen from each group (stratum). These samples are then taken from each subgroup based on the ratio of the subgroup to total population -Cluster: Select a group from each region (cluster) & then do a random sample from the cluster. Good for geographically dispersed populations -Snowballing: Sample the first individual or group who then suggests other groups or individuals to sample -Convenience: Groups are selected based on their easy access & proximity to the researcher
What is sampling and why do market researchers use it?
-Sampling is the practice of selecting a small group (sample) of the population for a particular market for primary research purposes -It is done as markets can be made up millions of potential customers and businesses lack the time and resources to conduct market research on every person in the population. It would also be unnecessary.
Distinguish between the four quadrants of the Boston consulting group matrix
-Stars: High market growth/share, income levels, become cash cows -Cash cows: Low market growth/high market share, well established products, high sales -Dogs: Low market share/growth, generate little income for business, low future prospects -Question marks/Problem children: High market growth/low market share, large investment needed to increase their share, will they develop into stars? --> if not they need to be eliminated
Distinguish between the main methods of primary market research
-Surveys (done online, in person, phone, mail, email) -Interview (interviewer asks interviewee questions to gain information) -Focus groups (A small number of people representative of consumer groups discuss a product or idea) -Observation (watching and trying to understand certain things or peoples behaviour)
Outline the limitations of sales forecasting
-Time consuming -Ignores qualitative factors (political, social, economic)
What are the stages in a typical product life cycle?
1. Development 2. Introduction 3. Growth 4. Maturity 5. Saturation 6. Decline
What are moving averages?
A 'moving average' of sales from a certain period of times and is being used to establish underlying trends by smoothing out variations in the data set that are caused by seasonal, cyclical and random variations
Outline the relationship between the marketing mix and marketing objectives
A business needs to "produce the right product charged at the right price, available at the right place & communicated through the right marketing channels"
What is a position perception map?
A visual tool that reveals the customer perceptions of a product or brand in relation to others in the market -Premium products are of high quality & price -Economy products are low quality but appropriate price -Bargain products are high quality but low price -Cowboy products are poor quality yet high price
Distinguish between above and below the line promotion
Above the Line -Paid form of communication that uses independent mass media to promote a firms products -TV, radio, newspaper, magazines, posters, billboards -Wide audience -Difficult to target your specific customers Below the Line -Business has more control over its promotional activities -Not dependent on independent media -Direct marketing (mail,online direct to consumer) -Personal selling (sales representatives) -Public relations (enhancing imagine of the business/sponsorship) -Sales promotions (BOGOF, coupons, free advertising/offers/gifts) -Word of mouth promotion -Branding/logos/signs
Outline the advantages and disadvantages of using surveys for market research
Advantages -Large amount of data can be collected in a short period of time Disadvantages -Answers may not be an accurate reflection on consumers feelings
How can market research assist sales forecasting?
As, the more information a company has on their customers, the more accurate they can make their sales predictions
What are the benefits and limitations of marketing planning?
Benefits -Sharing it with other departments help the whole organization see the big picture & may motivate employees -Ensures the team sticks to the marketing budget & plan Limitations -Plans can become outdated if the market changes -It's expensive/time consuming
What is the difference between 'brand loyalty' and 'brand awareness'
Brand loyalty is when consumers become committed to a firms brand & are willing to make repeat purchases Brand awareness is when the consumers are able to recognize the existence and availability of a firms good/service but does not guarantee sales
Explain how brand value depends on brand awareness, brand development and brand loyalty
Brand value is how much a brand is worth in terms of its reputation, potential income & market value. By having a brand awareness, sales have the potential to grow (potential income), brand development (increase market value) and brand loyalty (brand reputation).
What are the differences between commercial marketing and social marketing?
Commercial Marketing - Marketing activities that determine consumer needs/wants before using strategies to market the product Social Marketing - Tries to influence individual behaviour and improvements in social well-being (Clean up Aus Day)
How do consumer markets differ from industrial (producer) markets?
Consumer Markets cater for private individuals (general public) Industrial markets cater for businesses and the government
Distinguish between consumer durable products, consumer perishable products and fast-moving consumer goods
Consumer durable products -Products that last for a relatively long time -Take up a large portion of consumers income -Cars, furniture, electronic equipment Consumer perishable products -Products that do not last long -Fresh flowers or seafood Fast-moving consumer goods -Everyday convenience products sold in retail outlets such as supermarkets -Personal healthcare products, groceries, newspapers and confectionary
Differentiate between producer and consumer products?
Consumer good is used by consumers (toaster, socks) Producer good is used by producers (capital: machinery)
What are the factors that influence the pricing decisions?
Demand (higher demand=high price) Rivalry (higher competition=lower price) Aims (NPO's vs Profit organisations & their prices) Supply (Lower supply=higher price) Time (Price depends on shelf life: technology advances) Image (prestige brand image = higher price) Costs of production (high COP=higher price)
Differentiate between segmentation by demographics, geographic and psychographic factors
Demographic - characteristics of human population -Age, gender, religion, ethnic group Geographic - geographic location -Regions, climatic conditions Psychographic - emotions and lifestyles of consumers -Income, values
What are correlation and extrapolation?
Extrapolation -The use of past data to identify trends and extend them to predict future sales Correlation -The relationship between two variables -Marketing expenditure and sales growth
Distinguish between field research and desk research
Field research -Also known as primary research -Data is taken first-hand for a specific purpose Desk research -Secondary research -Collection of second-hand data and information that already exists
How does marketing relate to the other functions of a business: Finance, human resources and operating management?
Finance & marketing need to work together to set appropriate budgets (can cause conflicts) Marketing & HR as marketing info can help plan the workforce (m-Daking sure you hire the correct salesperson) Operations & Marketing as products need to meet the needs of customers (market research)
What is market leadership?
Firms with high market share are known as market leaders Can lead to -More sales/profits -Economies of scale -More popular brands use it as promotion for new products
Outline the marketing objectives of for profit and not for profit organizations
For profit -Increased sales & revenue -Higher market share -Improved brand awareness/perception Not for Profit -Market for social reasons -Build membership/support -Generate awareness of NPO's cause & brand awareness -Create positive attention around NPO's operations -Demonstrate the value of the NPO
Why is it important for a business to have a balanced product portfolio?
It is important to have a balanced portfolio of goods in different quadrants as the product could change dramatically and businesses must always be thinking ahead not resting on what they have already achieved. The money made from cash cows and stars can be used to develop cash cows into these stars and then develop new products
What is the difference between target markets and market segments?
Market segments are segments of the market that are separated into smaller groups of consumers that may or may not have similar consumption preferences but they can whereas a target market is consumers with common needs/wants that a business decides to sell to
Distinguish between consumer needs and wants
Needs are what the consumer needs to survive such as food and shelter Wants are what the consumer desires: A fancy car or round the world holiday
Distinguish between niche markets and mass markets
Niche Marketing -A narrow, smaller or more specific market segment -Couples planning for a wedding, new homeowners Mass Marketing -A large, broad market that ignores specific market segments -Coca cola, Samsung
What is the marketing mix?
Product -Should satisfy the needs/wants of the consumer Price -The amount consumers are charged for the product Promotion -The ways in which consumers are informed about & persuaded to purchase the product Place -The products location (shop, internet, delivery)
What are the differences between market orientation and product orientation?
Product orientation - a business makes a product first and then tries to sell it Market orientation - Establish consumer demand and then produce/sell the product
Distinguish between quantitative and qualitative market research
Quantitative Research -Numerical data, objective, not open to interpretation -"How many?" questions & narrow focus Qualitative Research -Opinions, attitudes, beliefs, subjective, open to interpretation -"Why?" questions, broad focus, focus groups and interviews
Distinguish between sampling and non-sampling errors in market reasearch
Sampling Errors -Mistakes made in the sample design -Sample size wrong, not representative, wrong sample method Non-sampling Errors -Human error, data entry, biased questions, mistakes in processing or analysis data -Respondents didn't give truthful/honest answers
Distinguish between seasonal, cyclical and random variations?
Seasonal -Changes in demand because of the varying seasons Cyclical Variations tied to the business cycle in an economy Random -Changes or fluctuations that stand out from a given trend
How does the marketing of goods differ from the marketing of services?
Selling goods focuses on the characteristics (phone) Selling services focuses on the quality of the service
What is meant by a four-part moving average?
The addition of four consecutive time periods of sales that are then divided by four. Once this is done move along one time period and repeat, with the two figures, add these together and then divide by two, giving you are four-part, moving average.
Why is distribution (place) important in the marketing mix?
The intermediary channels, the higher the price of the product and the less likely it is that the product will be sold due to the customer having been given the right information
What does marketing mean?
The management process of getting the right product to the right customer at the right price to the right place and time
What is market research?
The process of collecting, analysing & reporting data related to a particular market
What is meant by sales forecasting?
The process of predicting what a firms future sales will be
Explain how the life cycle of a product has varying effects on a firm's level of investment, profits and cash flow.
Throughout the life cycle of a product, all three experience varying results due to the stages. Investment begins high in the research and development stage to get the product ready for consumption and then slowly decreases as time goes on whereas profits begin at zero and then steadily climb until the decline stage where they begin to fall and cash flow begins highly negative and still negative at the launch due to investment in marketing whilst it then becomes positive as the product experiences growth and continues to be positive until the profits are less than the costs of production
