Marketing management flashcards

Topic 3: Marketing management

Marketing objectives listed in the specification

Sales volume, sales value, market size, market growth, sales growth, market share and brand loyalty.

Market growth, market share and market size: formulas

Market growth = change in market size ÷ original size × 100. Market share = firm's sales ÷ market sales × 100. Market size = firm's sales ÷ market share (£21m ÷ 0.075 = £280m).

Correlation: what to remember

Positive: both variables rise together. Negative: one rises as the other falls. Points nearer a line mean a stronger correlation. Correlation is not causation: a third factor may explain both.

Confidence interval and extrapolation

Confidence interval: the range likely to contain the true population value; narrower means more reliable (a larger, representative sample narrows it). Extrapolation: extending a trend beyond the data; reliable only close to existing data.

Interpreting PED for pricing

PED above 1 (ignoring sign): elastic, so a price cut raises revenue. Below 1: inelastic, so a price rise raises revenue. The specification asks you to interpret elasticity, not calculate it.

Interpreting YED

Above 0: normal good. Above 1: demand rises faster than income (luxury-type). Below 0: inferior good, demand falls as income rises. Useful for choosing markets in a boom or recession.

The four segmentation methods in the specification

Demographic, geographic, income and behavioural.

Segmentation, targeting and positioning

Segment: split the market into groups. Target: choose segments, with a mass (one broad mix) or niche (small, specialised) approach. Position: decide how buyers should see the product against rivals.

The extra three Ps of the 7Ps

People (staff skills and attitude), process (how the service or order is delivered) and physical environment (setting, layout, website, packaging).

Boston Matrix: categories and actions

Axes: market growth and relative market share (own share ÷ largest rival's share). Star (high growth, high share): invest. Question mark (high growth, low share): build or drop. Cash cow (low growth, high share): harvest. Dog: consider withdrawal.

Penetration vs skimming pricing

Penetration: a low entry price to win share. Skimming: a high entry price to take margin from early adopters; suits a novel product with few rivals or the need to recover high development costs.

Digital marketing and e-commerce: value and drawbacks

Value: reach, targeting, measurability, lower costs; supports relationship marketing. Drawbacks: competition, delivery and returns, security, skills needed.