Skip to content
Marlbridge
Free trial

Flashcards · 9609 · AS Topic 3

Marketing (AS Level) flashcards

22 cards on AS Topic 3, subtopics 3.1 to 3.3. Pick a subtopic or study them all.

Study mode needs JavaScript. Every card is listed below, so you can still cover the answers and test yourself.

All 22 cards

For a quick read-through or printing. Cover the right-hand side to test yourself.

3.1 The nature of marketing

Marketing objectives vs corporate objectives
Marketing objectives are targets for the marketing function (market share, brand awareness, a new segment). Corporate objectives are targets for the whole business (profit, growth, survival). Marketing objectives should help achieve the corporate ones.
Effect on equilibrium price and quantity of: demand rising; supply rising
Demand up: price rises and quantity rises. Supply up: price falls and quantity rises. (Demand down: both fall. Supply down: price rises, quantity falls.)
Product orientation vs customer (market) orientation
Product orientation: starts with what the firm can make. Customer (market) orientation: starts with what customers want, so it relies on market research.
A firm sells $12.8m in an $80.0m market; next year $14.4m in an $86.4m market. Find market growth, the firm’s growth and its market share each year.
Market growth = 6.4 ÷ 80.0 × 100 = 8.0%. Firm’s growth = 1.6 ÷ 12.8 × 100 = 12.5%. Share: 12.8 ÷ 80.0 = 16.0%, then 14.4 ÷ 86.4 = 16.7%. It grew faster than the market, so it gained share.
Mass marketing vs niche marketing
Mass: a large, broad market; volume and economies of scale, but strong rivals and thin margins. Niche: a small, specialised market; less competition, loyalty and premium prices possible, but limited size and the risk that large firms enter.
The three methods of market segmentation in the syllabus
Geographic (location, climate, urban or rural), demographic (age, gender, income, occupation, family size) and psychographic (lifestyle, values, attitudes, personality). Psychographic data is usually hardest to collect.
Customer relationship marketing (CRM): aims
Keep customers, increase repeat purchases, learn about their wants and encourage recommendations. Keeping customers is usually cheaper than winning new ones, but systems, training, rewards and data protection all cost money.

3.2 Market research

Purposes of market research
To find out about the market (size, growth, competitors) and customers (characteristics, wants and needs), so as to lower the risk of launching or changing a product.
Primary vs secondary research
Primary: new data collected first-hand (surveys, interviews, focus groups, observation, trials); specific and current but slow and costly. Secondary: data that already exists (government statistics, trade reports, internal sales records); fast and cheap but may be dated or not fit the question.
Is a firm’s own sales database primary or secondary research?
Secondary: the data already exists, collected for another purpose.
Why sample, and the limitations of sampling
Questioning the whole population is too costly or slow (and testing may destroy products). Limitations: an unrepresentative sample gives bias, a small sample is less reliable, non-response, and a better sample costs more.
Quantitative vs qualitative data
Quantitative: numbers, easy to compare. Qualitative: opinions and reasons, which explain why. Primary/secondary describes where data comes from, not which kind it is; one survey can give both.
What makes market research data reliable?
A large enough and representative sample, neutral questions, a credible source and recent data. Reliability asks whether findings can be trusted; usefulness asks whether they help this decision.

3.3 The marketing mix

Unique selling point (USP)
A feature of a product that rivals do not offer and that customers value, for example a two-year no-quibble guarantee.
Product life cycle stages, and extension strategies
Development, introduction, growth, maturity, decline. Extension strategies: new packaging, product modification, new uses, new markets, extra promotion, price changes, new channels.
Boston Matrix: the four categories
Star: high share, high growth (invest to keep the lead). Cash cow: high share, low growth (milk it to fund others). Question mark: low share, high growth (invest or stop). Dog: low share, low growth (drop, harvest, or keep to support the range).
Relative market share: formula and example (own share 8%, largest rival 16%)
Relative market share = own share ÷ share of the largest rival. 8 ÷ 16 = 0.5. Above 1 means market leader.
Boston Matrix vs product life cycle
The Boston Matrix compares market share and market growth across a whole portfolio at one time. The life cycle follows one product’s sales over time. A cash cow is often mature, but not always.
Penetration pricing vs price skimming
Penetration: a low starting price to win market share; suits a new entrant with elastic demand; low early profit. Skimming: a high starting price that falls later; suits a novel product with few rivals; recovers development costs quickly.
Cost-plus pricing: formula, and mark-up vs margin (unit cost £62, 30% mark-up)
Price = unit cost × (1 + mark-up) = £62 × 1.30 = £80.60. Mark-up is on cost; margin is on price: 18.60 ÷ 80.60 = 23.1% margin.
Price discrimination and dynamic pricing
Price discrimination: different prices to different groups for the same product (needs segments that can be kept apart). Dynamic pricing: price moves with demand or stock levels (common online; may be seen as unfair).
Distribution channels: direct, via retailer, via wholesaler
Direct: keeps the whole price, brand control and data, but the producer bears selling and delivery. Retailer: reach and display, but a retailer margin and less control. Wholesaler then retailer: bulk-breaking and many outlets, but an extra margin.

Revise Marketing further