Marketing Flashcards

1
Q

Cameron House is a 5* Hotel Resort on the banks of Loch Lomond, the gateway to the Scottish Highlands. It has won many awards for the quality of service it provides to guests. This includes a hotel, luxury lodges, a golf course, spa and leisure centre, luxury rooms and
top quality restaurants serving local produce. It is also a favourite venue for weddings and the hotel is booked most weekends in the year for these events—a Wedding Co-ordinator is employed at the hotel. All wedding client detail records are stored on a database.
Suggest and justify a suitable market segment that Cameron House could target. (2 Marks)

A
  • Income – high earners would be attracted to a 5 star hotel
  • Families – as it is a resort with lots of facilities
  • Sports people – as it offers sporting facilities
  • Young couples – may be interested in the wedding service
  • Older people – who are retired and take more holidays
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2
Q

Define the term market share. (1 Mark)

A

The number of consumers the organisation attracts as a percentage of the whole market.

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3
Q

Suggest 3 ways an organisation could segment its market. (3 Marks)

A
  • By age.
  • By gender.
  • By level of income.
  • By social class.
  • By religion.
  • By occupation.
  • By geographical location.
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4
Q

Other than helping with choosing a location, describe 2 benefits of carrying out market research. (2 Marks)

A
Benefits of market research: 
• Helps to identify target market 
• Helps to identify competition 
• Helps to plan the marketing mix 
• Reduces risk of business failure 
• Identify pricing strategy 
• Identify customer needs/wants/trends
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5
Q

Suggest 3 field research techniques. (3 Marks)

A
  • Interviews
  • Postal surveys
  • Telephone surveys
  • Hall tests
  • Online surveys
  • Observation
  • Focus groups
  • Consumer audits
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6
Q

Describe the benefits of carrying out market research . (4 Marks)

A
  • Allows an organisation to anticipate changes in consumer taste
  • Can keep organisation ahead of competition
  • Can ensure product meets the needs of consumers
  • Can help identify a gap in the market
  • Can provide information about the best place to sell the product
  • Can give information about the price consumers are willing to pay
  • Can help identify the best way to promote a product
  • Can help organisations find out why certain products do/don’t sell
  • Reduces risk of failure when launching a new product
  • Products/Business promoted at the same time
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7
Q

Explain one advantage and one disadvantage of secondary information. (2 Marks)

A

Advantages
• Information is inexpensive to acquire therefore saving the organisation money
• Information is easy to access as it can be done from the office through a computer
• A wide variety of information can be available in a short period of time therefore saving the organisation many hours of primary research

Disadvantages
• Information may not be relevant as it has been gathered for another purpose
• It may be difficult to check for bias as you may not be able to go back to the original source
• Information may be out of date and things have changed since

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8
Q

Give two examples of secondary information. (2 Marks)

A
  • Newspaper articles
  • Magazine articles
  • Information from another company website/Internet
  • Government statistics
  • Textbooks
  • Trade journal articles
  • Previous business records
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9
Q

Suggest 3 ways in which young entrepreneurs can conduct Primary Market Research. (3 Marks)

A

• Surveys/questionnaires (Accept different methods – eg Telephone, Postal, and Online).
• Interviews (Accept different methods – eg face-to-face, telephone).
• Consumer Panels/Focus Groups.
• Observation.
• Hall Test.
3 x suggestions – 3 marks

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10
Q

Identify and describe 2 methods of field research.

A

Personal Interview
• Face to face interview in the street or home.
• Respondent encouraged to answer.
• Misunderstandings dealt with immediately.

Postal Survey
• Series of questions posted to consumers.
• Inexpensive method of field research.

Telephone survey
• Consumer telephoned at home and asked questions.
• Response is immediate.
• Large numbers surveyed quickly.

Hall Test
• Consumers look at/try product and give feedback.
• Used often in supermarket when trialling new products.

Focus Groups
• Selected groups of people gather to discuss a product.
• People’s actual opinions/feelings are gathered.

1 mark per method (max 2)
1 mark per description (max 2) (4) No mark for questionnaire or survey on its own
Can get description mark if not given already for another method

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11
Q

Greggs is the UK’s largest bakery chain with nearly 1400 outlets. As the business has grown it has benefited from economies of scale. However, inflation has affected supplies and this causes pressures on profit levels. Market research is conducted regularly to help
management plan new products. Pressure from rivals means that Greggs is constantly looking at how to achieve the best marketing mix for their products. Busy peak periods often mean large queues in Greggs—such are the demands of customers for favourites such as sausage rolls.

Suggest and justify an appropriate method of primary research and secondary research that Greggs could use to gather market research.

A

Primary research that can be used to gather research:
Questionnaire/survey – can ask standardised questions to all sample, quick to complete.
Interview – can gather more detailed information than questionnaire, clarification can be given.
Consumer Panel/Focus Group – can get direct reactions to products/services, can be more cost effective than questionnaires/interviews.
Observation – cost-effective to gather, see reactions to products/ services.
Hall test/Taste test – can find out reactions to products.

Secondary research that can be used to gather research:
Newspapers/Magazines – find out useful information on rivals‟ products, cost-effective.
Rival customer websites – contain details of products/services, up-to-date, cost effective.
Government Statistics – contain information on economy/trends etc helps Greggs plan decisions.
Internal information – sales/stock/financial records can help Greggs identify successful/unsuccessful decisions and make future plans.

1 × Primary Method
1 × Secondary Method
2 × justifications (must be different)

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12
Q

Sony
Sony are a multinational company. They manufacture a range of electronic products, including games consoles, laptop computers and TVs. Sony are also involved in the entertainment industry.
Competition is fierce in these markets and Sony are constantly producing new
products and services to attract customers. This means that they have products
at all stages of the Product Life Cycle.

Suggest and justify how altering the “Product” and “Price” elements of the Marketing Mix could extend the Product Life Cycle of a Sony Laptop. (4 Marks)

A

Extension strategies that could be employed:
• Product strategies – add more features, re-design, range of colours etc.
Justification – makes product more attractive, updates image, and stands out from rival products.
• Price strategies – lower price to widen range of market, increase price to make product more exclusive.
Justification – customers attracted to lower prices/value for money or customers attracted to image of a high price product.
Accept any 2 suitable strategies – 2 marks
Adequate and different justifications – 2 marks
Max 2 marks for product strategies and max 2 for price strategies.

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13
Q

Greggs is the UK’s largest bakery chain with nearly 1400 outlets. As the business has grown it has benefited from economies of scale. However, inflation has affected supplies and this causes pressures on profit levels. Market research is conducted regularly to help
management plan new products. Pressure from rivals means that Greggs is constantly looking at how to achieve the best marketing mix for their products. Busy peak periods often mean large queues in Greggs—such are the demands of customers for favourites such as sausage rolls.
Suggest how Greggs could adapt the 4 elements of the marketing mix to win customers from its rivals. (4 Marks)

A

Product – the business can change the recipe, the packaging, the design of the products.
Price – the business can change the price of its products.
Promotion – the business can choose different ways to promote its products.
Place – the business can choose better places to locate the shops.
Max 2 for more than one from each element

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14
Q

NAIRN’S LIMITED
Nairn’s Ltd is based in Edinburgh and has been making oatcakes since 1888.
The Nairn’s range of food is naturally wholesome and nutritious.
Nairn’s now sell their products all over the world becoming a global brand.
Rising food prices have increased the cost of the main raw materials by over 10%. Nairn’s have increased new product development and marketing to increase sales to cope with rising costs.
Explain what is meant by the term brand. Describe 2 benefits to a business of establishing a successful brand. (3 Marks)

A

A brand is a name, logo or symbol which identifies a business or product.
Advantages:
• Easily recognised
• Brand loyalty can be created
• Creates a brand image
• Reduces need for advertising, brand advertises itself
• Easier to launch a new product/line
• Higher prices
• Higher profit/sales/market share
• Higher prices may be charged for the product
• Increase profits/sales/market share
• Easier to obtain finance as established business

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15
Q

Identify 3 stages in new product development Nairn’s Ltd would follow before launching a new product onto the market. (3 Marks)

A
  • Market Research
  • Brainstorming / Developing ideas
  • Creating a prototype
  • Test Marketing
  • Modification
  • Advertising
  • Launch
  • Obtaining finance
  • Decisions made eg price/package design – accept as separate points
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16
Q

A G Barr plc spent a lot of time and money maintaining a good brand. Explain the benefits of having a brand to an organisation. (4 Marks)

A
  • Brand is easily recognised as the logo/ design used helps identify it
  • Brand loyalty can develop when customers feel that that brand is the best available for that particular good or service
  • Can charge higher prices for a branded good as customers are willing to pay more for that particular brand over what they see as inferior brands
  • Easier to launch new products because once a customer is loyal to a brand, new products under that brand will be looked at in the same way
  • Can save money on marketing/ advertising because each new product under the brand name will not need to be marketed separately – just a general marketing campaign for the brand
  • Customers may see a brand as a symbol of quality which leads to higher sales
  • May be a ‘snob value’ in using certain brands when people want to be seen with the “best” of goods/keeping up with others
  • Goods may be in fashion and everyone wants to be seen with it
17
Q

Identify and describe 4 stages in the product life cycle. (8 Marks )

A
  • Development – product is planned, developed and tested before being introduced onto the market
  • Introduction – product is launched onto the market
  • Growth – sales of the product are rising as consumers become more aware of it
  • Maturity – product is well known in the market and growth is slowing down competition increases and the price of the product falls
  • Saturation – competition is very fierce and prices fall significantly
  • Decline – sales and profits fall as new and more advanced products enter the market
18
Q

Sony

Sony are a multinational company. They manufacture a range of electronic products, including games consoles, laptop computers and TVs. Sony are also involved in the entertainment industry.
Competition is fierce in these markets and Sony are constantly producing new
products and services to attract customers. This means that they have products
at all stages of the Product Life Cycle.
Name and describe 2 stages of the Product Life Cycle. (4 Marks)

A

Stages of the Product Life Cycle:
• Development – product has not been launched yet, development of ideas etc.
• Introduction – product is launched onto the market, consumer awareness is low, sales are low, high marketing costs, possible losses made. 1st stage.
• Growth – sales rise due to product awareness/promotion/ demand. Business should be profitable at this stage as initial development costs are covered by high sales revenue. 2nd stage.
• Maturity – sales start to level off due to entrance of competition in the market. 3rd stage.
• Saturation – sales are level market becomes saturated as everyone who wants product has one, profits start to fall, extension strategies are required to keep sales level. 3rd/4th stage.
• Decline – sales start to fall as product starts to fall out of fashion. 4th/5th/final stage.
• Obsolescence – sales stop as product is removed from the market. final stage.

ID of stage – 1 mark
Adequate description of stage – 1 mark

19
Q

Describe factors that could be considered when setting the price of a good or service. (3 Marks)

A
  • Cost of production
  • Competitors’ prices
  • Level of profit organisation wishes to make
  • Level of promotion/advertising carried out
  • Market the product is aimed at
  • Place where the product is sold
  • Break-even point
20
Q

Bartosz and Dominika Kowalski opened a Polish Deli and cafe. They carried out
market research before deciding on a location in a shopping centre. The
business has been a great success, even though the UK economy has been
affected by a slow down in the Business Cycle.

Give 3 reasons why Bartosz and Dominika may have chosen the shopping centre as a location. (3 Marks)

A
  • Lots of passing trade/customers
  • Lots of parking/free parking
  • Longer opening hours than in high streets
  • May be no competition
  • May have low rent charges
  • Shop sizes/facilities may be suitable
  • Close to suppliers
  • Government incentives
  • Shared security
  • Near competition – positive or negative but not both
21
Q

NAIRN’S LIMITED
Nairn’s Ltd is based in Edinburgh and has been making oatcakes since 1888.
The Nairn’s range of food is naturally wholesome and nutritious.
Nairn’s now sell their products all over the world becoming a global brand.
Rising food prices have increased the cost of the main raw materials by over 10%. Nairn’s have increased new product development and marketing to increase sales to cope with rising costs.
Suggest 2 methods of advertising Nairn’s Ltd could use to attract customers to buy their products. Give 2 different justifications for your suggestions. (4 Marks)
(2013 1D)

A

Methods of advertising:
TV Advertising – justification – reaches a wide audience
Newspaper Advertising – justification – target economic groups
Radio Advertising – justification – captive audience ie in cars
Website – justification – global appeal
Email/Direct Marketing – justification – no wasted advertising costs
Outdoor media – accept as separate points
Must be advertising promotions, do not accept sales promotions, celebrity endorsements etc.

22
Q

Identify and describe 4 methods of sales promotion that an organisation may
use. (8 Marks)

A
  • BOGOFs – consumer buys one product and gets another free
  • Bonus Packs – eg 50% extra free
  • offer more of the product for the same price as the original
  • Competitions – consumer buys a product then gets the chance to win something by entering a competition eg on cereal boxes, magazines etc
  • Demonstrations – in supermarkets staff give out taster samples of new products
  • Coupons or vouchers – printed in newspapers or on the reverse of till receipts to give customers money off future purchases
  • Free Samples – given to consumers when buying another product eg free perfume samples when buying from a cosmetics counter; free toy in a box of cereal
  • Credit Facilities – given to customers to allow them to buy goods now but pay later
  • TV Advertising – showing an advert between breaks in TV programmes
  • Product Placement – can be awarded separately
  • Celebrity Endorsement – can be awarded separately
  • Sponsorship – can be awarded separately
  • Loyalty Cards
23
Q

Suggest and justify an appropriate promotion strategy for the following Sony
products. A different strategy and justification must be given for each product: (6 Marks)
• Sony PSP hand-held game console;
• Sony Camcorder;
• Sony-Ericsson mobile phone.

A

Candidates may choose from the following promotion strategies:
• TV advertising – wide audience reached, able to target specific market segments through TV channels, audio-visual images can give lots of information, and catchy theme tunes/music can be used.
• Radio advertising – research shows it is a highly effective form of advertising, cheaper than TV advertising, catchy tunes/music can be used, can target specific market segments through radio stations.
• Newspaper/magazine advertising – images can be used to show products, lots of information can be printed, specific markets can be targeted through choice of paper/magazine.
• Outdoor media/billboards/transport – large images can be shown, can be placed to attract target market segments eg sports stadiums.
• Sony’s website – using own website can give lots of information on products, global audience reached, customers can register and data can be saved, products can be sold online.
• Pop-ups/advertising on other websites – Sony can reach a global audience, target specific market segments through choice of websites.
• Sales promotions (BOGOF, free features, 25% discount, competitions etc) – can persuade customers to buy in order to get better value for money – accept different sales promotions.
• Celebrity/Product Endorsement – consumers want to be like the celebrity so will purchase products.
• Trade Events – reach specific target market/consumers can see and try out the products.

Max 1 form of ‘Advertising’ Promotion – only one ID mark but can gain different justification marks.

24
Q

Identify and describe 3 methods of promotion that can be used by an organisation in order to attract customers. (6 marks)

A

Newspaper Advertising − promoting a product or service ) Max 2 for any
through a printed image − colour, text enhancement used. ) type of advertising – 4
TV Advertising − promoting a product or service through the medium of TV − moving image, sound, colour etc.

[Advertising on own – 1 mark ID
Advertising done through the medium of TV – 2 marks
TV advertising – 1 mark ID
Newspaper/TV etc must have Advertising after for ID mark
Billboards on own – OK]

Product endorsement − using a famous personality to wear/use a particular product − fans follow their idols and buy the product.

Product placement − paying for products to appear in popular TV programmes or films − subtle way of advertising.

BOGOFs/2 for 1/3 for 2 − consumer buys one product and gets another free − feel they are getting more for their money.

Bonus Packs − eg 50% free whereby a consumer gets more of the product for the same money.

Competitions − consumer buys a product then gets the chance to win something by entering a competition eg on cereal boxes, magazines etc.

Free Samples − in supermarkets staff give out taster samples of new products or consumer gets free perfume samples when buying from a cosmetic counter.

Direct Mail − sending specific details of products or services directly to identified consumers ie target market.

Fundraising

Discounts

Promotional pricing/Sales

Introductory Offer