price elasticity of demand
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
some key words
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 ..
new product development process
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
product portfolio analysis: boston matrix
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