unit 2 marketing & the environment

price elastic demand (>1). if demand decreases so does sales rev because customers are responsive to change in demand, substitutes.

the n.o. shows % change in price leads to greater % change in quantity demanded.

inelastic demand: n.o. (<1) e.g. -0.7 shows % change in price leads to smaller % change in quantity demanded.

random sample: group of respondents, each member of target populationequal chance chosen

quota sample: several diff. segs sharing common feature e.g. age. n.o. interviewees fixed to reflect % in total population

market research: systematic + objective collection, analysis, evaluation of info to help marketing

market segment: class of (potential) customers each with diff. response to diff. product + marketing

oligopoly -market dominated by small n.o. of large business known as oligopolists

penetration pricing -strategy, low price to break into mrkt + boost mrkt share

loss leader -tactic, set low price to encourage consumers buy other more profitable products

above the line promotion -advertising. through media e.g. t.v

below '' -other promo e.g. PR, sponsoring ..

market research - generation of product ideas - decision on viable product -prototype - test market - full-scale launch

product life cycle 1. research and develop, 2. intro 3. growth 4. maturity 5. decline

stars: high % mrkt share in high growth mrket, increasing sales rev, need lots of promo, short term cause cash out flow exceed inflow, but still generate profit can support other products

cash cow: often in established mrkets in maturity, low growth discourage competitors enter mrkt, less promo needed. 'milk' it to support other products

problem children: competing in competitive mrket, mrket grows, scope for futrue sales

dogs: likely withdrawal in recession. little scope for profits

determinants of competitiveness:

• improve operational procedures
• investment in new equipment/technology
• staff skills, education + training
• innovation through investment in research + development
• enterprise, risk taking
• quality procedures
• incentive schemes for staff