1.3 Flashcards
What is product or service design?
-The combination of factors needed in designing a product.
-Aesthetics,function, cost
What is aesthetics?
-Marketing research checks consumers feelings towards products.
-How senses respond to the product
-emotional attachment that the customer has with the product
What is function?
-How the design works
-The functions of the product/ service
What is cost (economic manufacture)?
-The min cost we can make the product whilst retaining quality
-Can it be made efficiently
-Produced for. Lower cost than the competitors
How does competitive advantage help towards cost in product/ service design?
-A lower cost of production will mean competitive advantage for the business they can pass on lower prices to customers, making the product more appealing.
What does changes in the elements of the design mix do to reflect on social trends?
-Concern over resource depletion; designing for waste minimisation, re-use, recycling
What is a bespoke design?
-Means custom made, custom built, tailor made to the consumer.
-This could be product such as a customised car
-This could be a service such as a customised wedding.
What is standard design?
Products or services that are sold as standard, the customer cannot add any extra features or benefits.
What is efficiencies?
Can be achieved by changing the types of materials used or by updating the technology used in production.
What is concern over resource depletion?
The consumption of. Resource faster than it can be replenished.
What is design for waste minimisation?
-Waste is actually created by contractors on site, the decisions made by designers have a major influence on the type and amount of waste.
-Deciding what to build and how to plan it
How to re-use?
-Some products are made to be re-used, this gives consumers good valence for money as they can use the product more than once.
How to recycle?
-Some products are made using recycled materials, this appeals to the green consumer and is good for the environment.
What is ethical sourcing?
-Ensuring products being sourced are created in safe facilities by workers who are treated well and paid for wages to work legal hours.
What are different types of ways to segment customers?
-Demographic, age, gender
-lifestyle
-income
-geographical location
What is promotion?
Marketing tools to bring a product/service to the attention of potential buyers
What are different types of promotion?
1) Personal selling
2)Direct marketing
3)Above the line- marketing
4)Below the line marketing
5)Public relations
6)Sponsorship
What is personal selling?
-An effective way to manage customer relationships.
-Sales person acts on behalf of the organisation and as a technical advisor
-Sales people are well trained in approaches and techniques of personal selling
-However, sales people are very expensive in terms of salary, training and commission.
what is direct marketing?
-Highly focused targeted mail based on wat customers have bought before.
-Sent via email or post
-may be special offers to re-engage customers who have stopped buying
What is above the line marketing?
-Involves mass media methods for targeting larger and more general customers.
-radio
-TV
What are advantages of above the line advertising?
-Tailored to reach a mass audience
-Communication is repeated so message is clear
-Building brand awareness
What are DVS of above the line advertising?
-Difficult to measure clear results
-Very expensive
What is below the line advertising?
-Direct marketing for reaching smaller but more targeted audiences
-Public relations
-Events
-Social media marketing
ADS of below the line marketing?
-Easy to measure
-Easy and inexpensive to use
-Targeted to specific niche segments
What are DVS of below the line advertising?
-Training my be needed
-deeper understanding of customer behaviour is needed.
-Difficult to targeting diverse with the same thing.
What are public relations?
-Aims to build a relationship with the public
-Unpaid communication which appears in mass media
-can include publicity stunts
What are long term public relations?
-Long term strategy
-Very low expenditure
-Less control over what is said but consumers find it more believable.
What is sponsorship?
-Positive association of the product with a celebrity/sport
-Difficulty to assess impact brand loyalty/ sales
What are types of sales promotion?
1) Buy one get one free- BOGOF
2)Price discounts
3)Money off coupons
4)samples/ giveaways
5)Special events
6)Point off sale
What is BOGOF?
Used to encourage customers to make a purchase
What are ADS of BOGOF?
-Very popular with shoppers
-Encourages trail and use of the product
-Boosts sales
What are DVS of BOGOF?
-Loss of profit
-Only useful in the short term
What are price discounts?
-Normal RRP (Recommended retail price) of the product or service has been reduced.
What are ADS of price discounts?
-Great way to clear old/ out-of date stock
What are DVS of price discounts?
-The business may be seen as the cheap option
-Too many discounts and customers become suspicious.
What are money off coupons?
-captures new customers : adds incentive
-used with existing customers to encourage an impulse to spend
-Some companies give out coupons in return for reviews
What are ads of money off coupons?
-Encourage repeat purchase
-Customers feel they are getting better vale for money
What re DVs of money off coupons?
-Reduced profit
-Customers may wait for coupons
-Customers may have been wanting to make purchases
What are samples/ giveaways?
-Send out/give customers free samples
-Giveaways may occur on the font of a magazine
What are ads of samples/giveaways?
-Ideal of new product launches
-Works especially well with some products
-Encourages word of mouth promotion
What are some DVS of samples/giveaways?
-Can be complicated to send in the post
-Can be expensive
What are special events?
-Activities to encourage e.g. shows
Ads of special events?
-Encourages customers to attend
-Rewards loyal customers with a special event
-ideal for small businesses
What are DVS of special events?
-Can be expensive
-Hard to measure the impact
What is a point of sale?
-Usually a cardboard display stand located close to the till I thin a shop which may trigger an “Impulse purchase”.
What are ads of point of sale?
-Ideal way to promote new products
-works best with products that have an event or holiday tie in
-manufacturers can add extra punch to the promotion by giving a discount
What are DVs of point of sale?
-Only successful if the product meet the needs of the consumer
-Needs to be designed and out to stores in time for the event
-Displays may be badly placed, poor location
What are different types of digital communications?
1) Online adverts
2)Mobile communications
3)Advergaming
4)Social media
5)Consumer generated content
6)Viral strategies
What are the ads and DVs of online adverts
+Powerful ad management tools can deliver accurate data and statistics about effectiveness of the adverts.
-Customers may ignore
-Click through may be expensive
What are the the ads and DVs of mobile communications?
+Extend the online reach so customers can interact whilst on the move.
-Small screen the message may be lost or distorted.
-Security issues of conducting transactions online
Ads of advergaming?
+Concentrating on the game so could be more than likely to listen to brand message
Ads and DVs of social media?
+Customers keep informed of new products
+Increases customer engagement with the brand
+Can show customer service with a quick response
-Blogs etc. all need to be updated on a regular basis, hiring committed staff. Additional costs.
What are ads and DVs of customer generated content?
+Chance for consumers to read reviews before they make a purchase on a product
-Online rep could be expensive to manage
-lots of ways to publicly complain
What are ads and DVs of viral strategies?
+consumers spread the message amongst themselves which reduces cost
-can be so complex that the original message is lost.
What is branding?
A Characteristic name or symbol that distinguishes the product from another supplier.
What are some was in which you can build a brand?
-Exploiting a USP
-Advertising
-Sponsorship
-Using social media
What is the importance of building a strong brand?
-Adds value to the product
-Brands can’t be traded
-Makes a product recognisable
-helps a business to position itself in the market
-product might become the natural choice for the novice customer
-builds trust
Allows a premium price to be charged
What types of brand are there?
Manufactures brand-Kelloggs
Own label brands- Sainsbury’s
Generic brands- do not have a particular brand association but use the name of the product
What social trends are used by businesses?
-Social media: attracting followers to social media sites is a key focus of market spending
-Viral marketing: The growth of social media and the sharing of videos and images
-Emotional branding: Businesses often associate their brands with things that consumers have strong emotional connections too.
What is rebranding?
When an established brand intends on developing a new differentiated identity in the minds of the consumers, investors and/ or competitors
What is price?
A key factor in any product decision. Price will not only determine the demand for a product but also the contribution of a product and the overall profit margin for the business
What influences price?
-Costs
-PED
-Competition
-Product life cycle
-Branding
What are types of pricing?
1)Cost plus
2) Price skimming
3) Penetration
4) Predatory
5) Competitive
6) Psychological
What is cost plus pricing?
-Price covers the costs and provides a good profit margin
-logical- maximises profit
What are the ads and DVs of cost plus pricing?
+Protects profit margins
+Easiest method of pricing to apply
+Easy to estimate profit levels
-Does not consider competitors pricing
What is skimming pricing?
-used when launching a new product
-price set high initially
-May be used to pay back high R&D costs
What are the ads and DVs of price skimming?
+High starting price can establish an up market image
+Great way to harvest high profits from early buyers who want the latest producers and are prepared to pay a premium.
-Cheaper imitations may appear on the market too soon and takes sales away
-Risky
What is competitive pricing?
-Prices are in line with competitors
-Used when very similar products are in the market
What are the ads and DVs of competitive pricing?
+Useful where one brand is dominant, other brands need to offer lower prices to encourage customers to buy
-May hint cover all costs of smaller businesses
