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business > 1.3 > Flashcards

1.3 Flashcards

1
Q

Define Design Mix

A

Three aspects of a design that companies consider when developing a product. All three functions,cost, function and aestetics

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2
Q

3 factors that make up design mix

A

Aestetics= look, taste, texture or feel of an item
Function= Is the item does what it’s expected to do and the extent to which it supasses expectations of quality of performance
Economic manufacture= considers the ease and economy with which the item can actually be made on the scale required

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3
Q

Define sustainability

A

Making something using materials that will be available in the future, perhaps as one tree is planted for every one thats cut down

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4
Q

Define ethical supply chains

A

A supply chain that operates in a way that delivers the highest levels of ethical + sustainable operations

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5
Q

Define wase minimisation

A

A waste management approach that focuses on reducing the amount + toxicity of hazadous waste generated

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6
Q

Define branding

A

The process of giving a meaning to a specific organisation, company, products or services by creating and shaping a brand in consumers minds

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7
Q

Define promotional mix
+4 examples

A

A combination of marketing methords including: advertising, sales, public relations and direct marketing to achieve a specific marketing goal

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8
Q

3 benefits of a strong brand

A

Reduced price elasticity of demand, added value, ability to charge premium prices

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9
Q

3 ways to build a brand

A

unique selling points (USPs)/differentiation
o advertising
o sponsorship
o the use of social media

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10
Q

4 examples of promotion

A

Advertising , sales promotion, public relations and direct marketing

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11
Q

Define advertising

A

A way of marketing your business in order to increase sales or make your audience aware of your products or services

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12
Q

Define personal selling

A

Face-to face selling technique y which a salesperson uses his or her interpersonal skills to persuade a customer in buying a product/ service

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13
Q

Define and explain social media marketing

A

A form of internet marketing that uses social media apps as a marketing tool. These social media platfors enable brands to connect with their audience to; Build a brand; increase sales; drive traffic to a website and build a community of followers to share and engage with content

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14
Q

Explain advantages and drawbacks of using social media marketing

A

Low cost, big audience, fast and interaction

Time consuming, risk of negative publicity, loss of control and dilutes brand voice

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15
Q

Define sales promotion

A

A marketing strategy in which a business uses a temporary campaign or offer to increase intrest or demmand in its product/service

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16
Q

Explain difference between direct and indirect marketing

A

Direct marketing is when you are asking potential customers to buy from you or use your services. Indirect marketing resources more around your brand that will lead to more business over time

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17
Q

Define the marketing mix What are the 4ps

A

A combination of factors that can be controlled by a company to influence to purchase its products
4ps- Promotion Product Price Place

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18
Q

Define
Price skimming
Price penetration
Predatory

A

Price skimming- Launching a product with a high price while product is unique
Price Penetration - Innvolves launching a product at a very low price to entice customers
Predatory - sets low prices to force a competitior out of business

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19
Q

3 examples of financial objectives

A

Profitability, effficiency, Stability

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20
Q

3 examples of marketing objectives

A

Increase sales, Build brand awareness, grow market share

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21
Q

Define pricing method

A

Ways in which the price of goods and services can be calculated by considering all the factors such as the product/service, competition, target audience, products life cycle

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22
Q

5 factors that influence pricing decisions

A

Cost of making product/service, competition, target audience, products life cycle, price elasticity of demand

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23
Q

3 pros of cost based pricing

A

Provides full cost coverage + consistent rate of return
Doesnt require a lot of market research
Helpful when businesses doesnt know customers willingness to pay

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24
Q

3 cons of cost based pricing

A

Creates little incentive for cutting costs or increasing productivity
Doesnt take consumers into consideration
Ignores competition

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25
Q

Whats a loss leader

A

When a product is sold at a price below its market value to stimulate purchases of more profitable goods/services

26
Q

Define distribution

A

The activity of both selling+delivering products and services from manufacturer to customer

27
Q

Define a retailer

A

A person or business that you purchase goods from. They dont typically manufacture their own items, they purchase from a manufacturer or wholesaler + sell goods to consumer in small quantities

28
Q

Define a wholesaler

A

A person or company that sells goods in large quatities at low prices, typically to retailers

29
Q

Define a product life cycle

A

A pattern of sales over time that most products tend to follow. The life cycle has 4 phases following the launch of a product: Introduction, growth, maturity, decline

30
Q

Define a product portfolio

A

The collection of all products or services offered by a company

31
Q

Define a Boston matrix

A

A model which helps businesses analyse their portfolio of businesses + brands by valuating the products market growth % and market share %

32
Q

Define an extension stategy

A

A medium to lobg-term plan for extending the life cycle of a product

33
Q

3 examples of extension strategies

A

Product differentiation
Reducing price of the product
Rebranding the product

34
Q

4 uses for the product life cycle

A

To determine:
Advertising schedules
Price points
Expansion to new products
Packaging redesigns

35
Q

3 uses of Boston matrix

A

Determine what products to:
Build- Try to boost sales of a product with a bright future (usually rising stars)
Milk- Typically assosiated with cash cows, involves taking profits generated by product without spending heavily on that product
Divest- Process of getting rid of products within the portfolio. Often happen to dogs but may occur to problem childs for whom there seem to be too much to do to boost market share profitability

36
Q

3 critisisms of the product life cycle

A

Varying market conditions- Market conditions vary from place to place
Inapplicable to every product
Analysis affected by various elements of the marketing mix (4ps)

37
Q

3 critisms of the boston matrix

A

High market share doesnt always equal high profits.
Growth rate + relative market share are not the only indicators of profitability
This model ignores + overlooks other indicators of profitability

38
Q

Whats the difference between B2B and B2C

A

B2B sells to businesses that resell products while B2C sells directly to the end consumer

39
Q

What are the different loyalty methords used by business?

A

Successful marketing
Point-based loyalty program
Offering discounts

40
Q

Define psychological pricing +adv and dis

A

The business practices of setting prices lower than a whole number. The idea behind psychological pricing is that customers will read the slightly lowered price and treat it lower than the price actually is. eg.£5.99
Adv- Can help nudge customers into making a purchase by helping them believe they are not paying the whole number
Dis- May have little effect on many planned purchases and may in fact mildly annoy customers
Appropriate when selling impulse purchases of “little treats”

41
Q

What are the four categories in the boston matrix?

A

STAR
High market share, High market growth, Cash neutral, Hold
CASH COW
High market share, Low market growth, Cash generating, Harvest/milk
PROBLEM CHILD/ QUESTION MARK
Low market share, high market growth, cash absorbing, build
DOG
Low market share, low market growth, Cash neutral, divest

42
Q

3 ways of building customer loyalty from B2B and B2C

A

B2B
Tailoring to customer, personal service, reliablility
B2C
Establishing strong brand image, branding, mass distribution

43
Q

Why is it important that some products emphasise function in the design mix (5 reasons

A

More predictable and stable
Longer product life cycles
Lower promotional costs
Build reputation for quality based on reliability
Economic manufacture through economies of scale

44
Q

Consuquences of a business when products emphasise Aesthetics in the design mix (5 reasons

A

High added value
Demand fuelled by customer aspiration
Potentially shorter product life cycle
Attracts imitation = need for design protection
Need for greater promotional support

45
Q

4 promotional objectives

A

Increase sales
Improve/raise awareness of brand image
Persuade customers to buy your product not the competition
Let customers know about a new product

46
Q

Above the line advertising (ATL) and 1adv+1dis

A

Advertising to a mass audience;
TV adverts, online adverts,cinema adverts, daily newspaper adverts
Adv - Reaches a large audience
Dis - Very expensive to make an advert and air it- for example Channel 5 is £17,000 every time its on.

47
Q

Define Below the line advertising

A

Below the line is more personal advertising to niche markets;
It is uses to-
Develop attitudes
Create awareness
Communicate information in order to gain a response from the target market.

48
Q

What are two long and short term methords of promotion

A

Long
Persuasive advertising
Public relations (creating publicity thats reported by news)
Short
Buy one get one free
Seasonal price cutting promotions

49
Q

3 changes in branding and promotion to reflect social trends

A

Viral marketing- Internet+ social media means word of mouth accelerated
Social media- Gives businesses a way to spread messages
Emotional branding- Branding attempting to create some kind of emotional response to the brand from consumers. Some overtly emotional than others such as Ben and Jerry’s sense of fun created through their promotion.

50
Q

Define predatory pricing + adv, dis and when appropriate

A

A strategy that sets low enough prices to force a competitor out of business
Adv- Once a rivals been forced to close, prices can be pushed higher, increasing margins
Dis- If it can be proven to be specifically designed to push rivals out of business, predatory pricing is illegal
Appropriate when a firm is clearly more financially powerful than smaller rivals

51
Q

Define competeitive pricing + adv, dis and when appropriate

A

Charging a price at the market average or at a discount to the average price in the market
Adv- Should ensure that price will not put customers off buying the product
Helps maintain market share in highly competitive market
Dis- Firms that use competitive pricing stategy have little control over the price they charge and thus the revenue they generate
Appropriate when a company is trying to take on more powerful rivals.

52
Q

Factors that determine the most appropriate pricing
strategy for a particular situation

A

number of USPs/amount of differentiation
price elasticity of demand
level of competition in the business environment
strength of brand
stage in the product life cycle
costs and the need to make a profit

53
Q

2 Social trend factors that cause changes in pricing

A

Online sales- Pricing online may be more sensitive as easier to compare prices with substitutes. Pricing levels may be lower as less costs online than physical stores. - + dynamic sales
Price comparison sites- Encourages firms to price competitively so their products and services show up best on these sites.

54
Q

What is a channel of distribution

A

The route taken by a product as it passes from producer to the consumer

55
Q

What is an agent in relation to distribution

A

facilitates sale between a business and a wholesaler, foreign markets,
commission based upon successful sales,
specialist market knowledge

56
Q

4 considerations business must make when deciding on place/distribution

A

Cost
Convenience
Coverage (number of places product is available)
Control (over marketing process - decreases as coverage increases)

57
Q

direct distribution
3positives and 2negatives

A

manufacturer > consumer (straight to)

-direct marketing
e.g. amazon/solicitor

positives:
1-quicker, 2max rev, 3cheaper for customer

negatives:
1-reduces distribution channel options so becomes less convienient for consumers,
2-internal workload increased

58
Q

modern distribution
2 positive 2 negative

A

manufacturer > retailer > consumer
-electronic goods & mass market
all round country = sales vol = higher

positives:
-makes it easier for producers to distribute their products
makes it more convenient for consumers to buy those products
negatives:
poor customer service could limit sales
cause higher prices for the end consumer, as the intermediary must make a profit

59
Q

traditional distribution
2 positives 1 negative

A

manufacturer>wholesaler>retailer>consumer

-manufacturers = few wholesalers & sell larger quantities or wholesaler and many retailers
-wholesaler = offer trade credit terms

positives:
-focus on production & save costs (storage)

negatives:
-wholesaler = marketing different & % profits

60
Q

agent distribution
1 positive 1 negative

A

manufacturer>agent>wholesaler>retailer>consumer
sell in another country
language/ regulations/ importing and tax

positives:
-selling in another country simple mkt knowledge

negatives:
-supply chain longer = increase final price

business (19 decks)

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