Marketing flashcards

Topic 5: Marketing

Market segmentation, and the types in the specification

Dividing customers into groups with shared characteristics, so product, price and message fit each group. Types: gender, age, location and income.

Purposes of market research

To identify market opportunities, gain insight into customers and competitors, and reduce the risk of launching the wrong product.

Primary and secondary research; quantitative and qualitative data

Primary: first-hand and new. Secondary: existing information collected by others. Quantitative: numbers and counts. Qualitative: opinions and reasons.

Why can market research be inaccurate?

A sample too small or unrepresentative, leading or unclear questions, dishonest or biased answers, out-of-date data, and misreading the results.

Pricing methods in the notes

Cost-plus (unit cost plus a mark-up), skimming (start high, cut later), penetration (start low to gain share), competitive (near rivals) and loss-leader (below cost to bring in shoppers).

A product costs 30 and sells for 39. Find the mark-up and the margin.

Profit = 9. Mark-up = 9 ÷ 30 × 100 = 30% of cost. Margin = 9 ÷ 39 × 100 ≈ 23.1% of selling price.

Unique selling point (USP)

A feature or benefit that rivals lack, giving customers a reason to choose the product and sometimes allowing a higher price.

Product life cycle stages and extension strategies

Introduction (low sales), growth (rising quickly), maturity (peak, flat), decline (falling). Extension strategies, used at maturity or early decline: new packaging, uses, markets, price, design or promotion.

Factors in selecting a promotion method

The target market, the marketing budget, competitors’ activities and the type of product.

Distribution channels

Direct: producer to customer. Retailer: producer, retailer, customer. Wholesaler: producer, wholesaler, retailer, customer.

Integrated marketing mix

Product, price, promotion and place set to fit each other and the target segment. Mismatched elements, such as a luxury image with a bargain price, confuse buyers.