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EDEXCEL A Level Business > 1.3 > Flashcards

1.3 Flashcards

1
Q

What are the 3 components of the Desgin Mix?

A
  • Aesthetics
  • Function
  • Economic manufacture
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2
Q

What does aesthetics include?

A

How the senses respond to the product. e.g. look,feel,smell,taste

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3
Q

What does function include?

A

Is the product fit for purpose?
function, job, purpose, tasks, reliability, features

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4
Q

What does economic manufacture (cost) include?

A

can it be made efficiently?
can it be produced at a lower cost than the competitors?
what is the minimum cost the product can be made for whilst retaining quality?

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5
Q

Define Branding

A

Involves giving a product a name, a sign, a symbol or logo design or any feature that allows customers to instantly recognise the product and differentiate from competitors

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6
Q

Benefits to branding?

A
  • added value
  • ability to charge premium prices
  • reduced PED
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7
Q

Disadvantages to branding?

A
  • takes a long time (to build trust + loyal consumers)
  • very expensive
  • limited flexibility (can be difficult to rebrand)
  • makes it difficult to change the perception of a business if a scandal were to occur
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8
Q

Types of brands?

A
  • manufacturer brands e.g. Coca-Cola
  • own label brands e.g. Tesco value baked beans
  • generic brands e.g. paracetamol
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9
Q

Ways to build a brand?

A
  • unique selling points
  • sponsorship
  • social media (by interacting with customers)
  • customer service
  • advertising (builds brand awareness)
  • colour scheme
  • packaging
  • slogan
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10
Q

Define Promotion

A

The process by which people are encouraged to buy an organisation’s product or service

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11
Q

What is the role of promotion?

A
  • allows customers to know what the business is
  • encourages the customer to buy from the business
  • offers an “incentive” to the customer to buy the product
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12
Q

What is above-the-line promotion?

A

Placing adverts using the media

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13
Q

Examples of above-the-line promotion?

A
  • TV
  • newspapers
  • cinema
  • radio
  • posters and billboards
  • internet
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14
Q

Benefits and drawbacks of above-the-line promotion?

A

+ easy to build brand awareness
+ tailored to reach mass audiences
+ very expensive

  • difficult to measure clear results from a campaign
  • very expensive
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15
Q

Examples of below-the-line promotion?

A
  • sales promotions
  • PR
  • merchandising/packaging
  • direct mailing
  • direct/personal selling
  • exhibitions/trade fairs
  • sponsorship
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16
Q

What is below-the-line promotion?

A

Any promotion that does not involve the media

17
Q

Benefits and drawbacks of below-the-line promotion?

A

+ easy to measure if campaign has reached audience
+ easy and inexpensive
+ more targeted to specific niche segments

  • extensive training on working IT may be needed for marketing staff
  • deeper understanding of buyer behaviour required
  • targeting diverse cultures with the same theme is difficult
18
Q

Factors to consider before promotion?

A
  • cost
  • market type
  • legal factors
  • product type
  • competitors promotions
  • stage in the product lifecycle
19
Q

What are the 5 pricing strategies?

A

-cost-plus pricing
-skimming pricing
-competitive pricing
-penetration pricing
-psychological pricing

20
Q

What is the cost-plus pricing equation?

A

total costs / quantity + (%mark up)

21
Q

Define Distribution

A

Is about availability. It includes physical or online distribution availability and visibility.
OR
The ways in which a product/service reaches a consumer

22
Q

Define Pricing Strategy

A

The plan for setting a product’s price for the medium-to-long term.

23
Q

Define Price

A

The amount paid by consumers for a good or service.

24
Q

Define Product Life Cycle

A

Theoretical Model that describes the stages a product goes through over it’s life.

25
Q

What are the 5 stages of the product life cycle?

A
  • Development
  • Introduction
  • Growth
  • Maturity
  • Decline
26
Q

What is an extension strategy?

A

Used to extend the lifecycle of a product in the maturity phase.(possibly decline)

27
Q

What is a Product Portfolio?

A

A collection of all the products and services offered by a company.

28
Q

Define Boston Matrix

A

A planning tool for marketing which helps managers to plan for a balanced product portfolio.

29
Q

What are the 4 stages of the Boston Matrix?

A
  • Question mark products
  • Star products
  • Cash Cow products
  • Dog products
30
Q

Limitations of the Boston Matrix?

A
  • too simple and may not be able to be applied to all businesses
  • some businesses don’t fit into one section
  • high market shares do not always lead to high profits - not accurate
  • does not provide qualitative information
  • too simple
  • external factors may mean the BM changes regularly
  • does not provide information about competitors
31
Q

Drawbacks to branding?

A
  • expensive
  • takes time to establish strong brand
  • external factors
  • branding of competitors may be stronger
32
Q

benefits + drawbacks of cost-plus pricing

A

benefits:
- protects profit for business
- easy to estimate profit levels
- easiest method to apply and calculate
drawbacks:
- doesn’t take into account prices of competition

33
Q

benefits + drawbacks of skimming pricing

A

benefits:
- high starting price = upmarket image
- for innovative products - can harvest high profits from early buyers who want latest gadgets
drawbacks:
- cheaper imitations may appear on the market
- risky as consumers may be put off by high price

34
Q

benefits + drawbacks of competitive pricing

A

benefits:
- useful in market where one brand dominates as low prices can encourage consumers to buy
drawbacks:
- competitive pricing may not cover costs of small business who cannot get the same economies of scale as larger ones

35
Q

benefits + drawbacks of penetration pricing

A

benefits:
- encourages consumers to buy
- helps launch of new product
drawbacks:
- consumers may have bought the product at full price anyway
- expensive method as it can reduce sales revenue

36
Q

benefits + drawbacks of psychological pricing

A

benefits:
- encourages many sales form price elastic consumers
drawbacks:
- can be risky if comparable products are available for lower prices - consumers may be tempted away

EDEXCEL A Level Business (19 decks)

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