1.3 Flashcards
what is a good & service
a physical product/ an active job that fulfils a customers want or need
what is the core product
the benefit of the product that makes it valuable to you
what is the actual product
the tangible/physical product
what is the augmented product
non-physical part of the products that adds value
what are the 4 most important features when creating a product
reliability
quality
design
image
what are the 3 design mix
aesthetics
function
cost
+ & - of resource depletion strategies
+/ save money, more efficient, cut waste, reputation
-/ redesign products, change production, sourcing recycled materials
define ethical sourcing
only using materials, components & services from suppliers that respect the environment, workers and trade honestly
+ & - of ethical sourcing
+/ USP, build trust in brand, attract ethical investors, motivates
-/ time consuming & costly, must balance profit margins
what is e-commerce
the buying and selling of goods and services online
what is m-commerce
the buying and selling of goods and services online through a mobile device
what is the impact of e-commerce
reduction in the sales for high street stores
access to larger markets
what is multichannel distribution
the use of several methods of distribution in order to maximise sales
what are the advantages of e-commerce
+/ easy to get data on consumers
access to larger target market
dynamic pricing is easy
can sell products internationally
what factors influence pricing
target market
customer expectations
competition
production costs
business objectives
what is prestige/premium pricing
pricing at or near high end prices which attracts status conscious customers, often in a niche market and price inelastic
what is price discrimination
charging different customers different prices for the same product or service, often used for unique and differentiated products
what is cost plus pricing
adding a mark up to the cost of goods and services, ignores price inelasticity
what is penetration pricing
sell products at a low price initially to attract customers then slowly increase the price as customers gain loyalty
what is price skimming
charge a high price initially to have a high profit margin and show high status and quality then slowly lower the price over time
what is promotional pricing
businesses temporarily reduce the price of a product or service to attract prospects and customers and increase demand
what is going rate pricing
setting prices that are exactly in line with competition prices
what is psychological pricing
business prices products so that customers believe they are paying less than they really are
what is distribution
the process of getting products and services to the consumers
what are channels of distribution
the paths and businesses used to get the goods from the manufacturer to the consumer
what are wholesalers
they take bulk quantities from manufacturers and distribute them to small stores in local areas
what are the advantages and disadvantages of wholesalers
+/ wholesalers deal with storage
sells on to smaller companies
-/ charge higher prices
wholesaler has less contact with customers
rely on promotion by the wholesaler
define retailers
business or company that sells to the consumer directly
what are the advantages and disadvantages of retailers
+/ can be global
better customer care
builds relationship with customers
-/ requires a lot of organization
high costs
what is direct distribution
products are sold directly from the manufacturer to the customer
what is a product portfolio
the range of products made by a business
what are the advantages and disadvantages of a wide product portfolio
+/ target new customers
spreads risk
increased sales
-/ increased advertising
danger of cannibalization
lack of economies of scale
what are the stages in the product life cycle
introduction
growth
maturity
decline
what is the Boston matrix
star
question mark
cash cow
dog
what is a cash cow
low market growth, high market share
profitable products with established brand image
what is a star
high market growth, high market share
lots of competition
high revenue and costs
what is a question mark
high market growth, low market share
could become a start or a dog
what is a dog
low market share, low market growth
not worth investing in
is possible to be profitable in some situations
what are the characteristics of mass marketing
caters to almost everyone
no specific customers
lower unit costs
market everyone in the same way
what are the characteristics of niche marketing
small subset of the market
products are designed for a specific purpose
inelastic demand
small turnover
less competition
what is business to business marketing
trade with other businesses not directly with customers
advertising focuses on information not persuasion
focus on quality
why are loyal customers a benefit to a business
recommend your business to others
easier to keep customers than acquire new ones
helps you understand the market in more depth
