1.3 Flashcards
What are the examples of promotional methods
Advertising, sales promotion, social media, sponsorship, pubic relations product placements
What are promotional methods?
Promotional methods are the different methods that firms use to inform consumers about their product and to persuade consumers to buy it
Where can products or services be advertised?
Newspapers, the internet
What are public relations
Pr involves managing the spread of information about the business. Its aim is to make sure information is positive and reaches the largest possible audience
Define promotional mix
Promotional mix is the combination of different promotional methods that a business uses and is influenced by the finance available, competitors actions, the nature of the product, the nature of the market and the target market
What is the product lifecycle
The product lifecycle refers to the stages that a product goes through. It determines whether the business will charge a high or low price for the product.
What is price skimming?
It is a pricing method where a business sets a relatively high initial price and then gradually lowers it over time.
What is the purpose of price skimming?
Price skimming is used to try maximise revenue. It targets the early adopters who are willing to pay a higher price. The business can still attract other customers who pay a lower price later on in the products lifecycle.
This method can also help recover the costs of research and development. Although it can slow the growth of a product and give competitors time to launch a competitive product
What is price penetration?
This is where a business tries to increase market share by offering a low initial price.
In the short term, this will lead to lower average profits however market share may be more important for long term profitability of a business
What is competitive pricing?
This is where a business sets its prices based on what other businesses in the market are charging. Often used in mass markets where the products are similar.
What are the short term benefits of price penetration?
Can lead to lower average profits than what would be earned with a higher price.
However this market share may be more important for long term profitability
What is cost plus pricing?
Where a business charges the customer based on what is costs to produce the product or service. They work out exact what it costs and then add a ‘mark up’ extra amount on top to make sure the business makes a gross profit
What are distribution channels?
Different ways a business can distribute their product.
Methods include:
Manufacturer-wholesalers-retailers-customers
Manufacturer- retailer’s-customers
Direct to customer
What are some examples of extension strategies
-updating packing or rebranding
-changing target market
-advertising
-adding more or different features
What factors affect the marketing mix?
-target market
-presence and size of market
-type of product
