1.3 Flashcards
what are the four Ps of the marketing mix?
Place
Product
Production
Price
what does product include?
features
quality
branding
packaging
services
warranties
what does promotion include?
sales promotion
advertising
pr
direct marketing
what does place include?
channels
market covarage
location
inventory
transport
what does price include?
pricing strategies
discounts
payment terms
what is the design mix?
the elements that make up a product’s design (function, aesthetics and cost)
what is function?
a products intended purpose and the tasks it was made to perform
it is the most important aspect of its design because it determined if it meets the customers needs
what is aesthetic?
a products visual and sensory appeal
they play an important part in attracting customers, creating brand loyalty, and generating word of mouth
what is the effect of cost?
A well-designed product should balance cost and value, ensuring that customers perceive the product as valuable enough to justify its cost while still maintaining profitability for the manufacturer
what is the reason for promotion?
to build brand awareness and loyalty (leads to repeat customers and referrals)
what is advertising?
Promotion occurs through paid channels such as television, radio, print media (magazines), and online advertising
advantages of advertising
It can reach large audiences and increase brand awareness
Can be used to create a specific brand image or message
disadvantages of advertising
Can be expensive
The effectiveness of advertising can be difficult to measure
Many customers tune out or ignore ads
what is direct marketing?
communicating directly with customers through email, text message, social media or post
what are the advantages of direct marketing?
Businesses can target specific audiences and personalise their message to individual customers
is measurable, which enables businesses to track their results and adjust their strategy accordingly
disadvantages of direct marketing
Can be intrusive as customers may perceive it as spam
Can be costly, especially if businesses do not have an established customer database or need to purchase leads
what are sales promotions?
Marketing techniques that encourage the purchase of a product or service by offering temporary incentives or discounts such as free samples, buy one get one free (bogof), discount coupons, loyalty cards, and rebates (customers have to mail in to receive money back)
what are the disadvantages of sales promotion?
Can quickly boost sales or customer engagement
Can help to clear out stock or promote a new product
Can encourage impulse purchases
Can be targeted to specific segments of customers
disadvantages of sales promotion
Can be expensive especially if the promotion requires a heavy discounting
Can attract deal-seeking customers who may not be loyal to the brand
May reduce the sales of full-priced products
what is personal selling
Occurs when a salesperson interacts with potential customers one-on-one, either in person or through digital communication channel
advantages of personal selling
Allows businesses to build relationships with their customers and understand their specific needs
Enables businesses to provide personalised advice and guidance to customers
disadvantages of personal selling
Can be expensive due to the cost of hiring and training sales staff
The impact of personal selling can be limited as it is difficult to scale to large audiences
what is sponsorship?
an agreement in which a company provides financial or other support to an event, team, or organization in exchange for marketing exposure
advantages of sponsorship
Can help to build brand awareness and credibility
Can create emotional connections with target audiences
Can support specific business objectives, such as entering new markets or reaching new customers
disadvantages of sponsorship
Can be expensive, especially for high-profile events or properties
May not directly drive sales
May be subject to negative publicity if the sponsored entity experiences a scandal or controversy
what is public relations?
The business seeks to build relationships with the public and manage their reputation
advantages of public relations
Can enhance a business’s reputation and credibility
This can lead to increased customer loyalty and sales
Can be cost-effective when compared to advertising or personal selling
disadvantages of public relations (pr)
PR can be time-consuming and is difficult to measure the direct impact of
what are digital communications?
Refer to any form of marketing or communication that is delivered electronically
advantages of digital communications
Can be highly targeted to specific customer segments
Can provide real-time engagement and feedback from customers
disadvantages of digital communications
Can be easily ignored or filtered out by customers
May require significant investment in technology or data infrastructure
May be subject to data privacy regulations or security breaches
May not be effective for reaching older or less digitally-savvy customer segments.
what is branding?
the process of creating a unique and identifiable name, design, symbol, or other feature that differentiates a product/service or company from its competitors
what is corporate branding?
This refers to the use of a company name or logo to promote all the products or services offered by the company (eg apple)
advantages of corporate branding
Creates a strong brand recognition and reputation for the company, which can increase customer loyalty and trust
Allows the company to leverage its existing reputation and customer base to introduce new products more easily
Helps to build economies of scale by promoting multiple products under one brand, which can reduce marketing costs and increase profitability
disadvantages of corporate branding
If a company’s reputation is damaged by a product it can have a negative impact on all the products offered under that brand
If the company faces intense competition in one market, it may affect the sales of all the products offered across other markets
what is product branding?
This refers to the use of a unique name, design, or symbol to promote a specific product
advantages of product branding
Creates a distinct identity for the product which can help to differentiate it from competitors and increase brand loyalty
Allows the company to market different products to different segments of the market
Can help to build customer loyalty and trust by associating the product with a specific quality and benefits
disadvantages of product branding
The cost of creating and promoting a new brand for each product can be expensive
Introducing new products under different brands is difficult as the business must build a new brand for each product from scratch
Different products within the brand may have different levels of quality which can affect customer satisfaction
what is own branding
refers to the use of a retailer’s name to promote a specific product or service and is often used by supermarkets
E.g. ASDA chocolate, Tesco’s Finest range, and Sainsbury’s Basics range
advantages of own branding
It can help retailers to differentiate themselves from their competitors by offering unique products
It allows retailers to offer products at a lower cost than branded products which can help to increase sales and profitability
It can help to build customer loyalty by offering exclusive products that are not available elsewhere
disadvantages of own brand
Own brand products may have a lower perceived quality than branded products which can affect customer loyalty and trust
benefits of branding
Added Value
Strong branding can add value to a product by creating a perception of quality, reliability, and trust
Ability to Charge Premium Prices
Customers may be willing to pay more for a product that is associated with a well-established brand as they perceive products with strong branding to be of higher quality and therefore worth the extra cost
Reduced Price Elasticity of Demand
Strong branding can also reduce the price elasticity of demand for a product (customers are less sensitive to price changes). This is because customers who are loyal to a brand are more likely to continue purchasing the product even if the price increases
what is viral marketing?
a strategy where businesses use online platforms to promote their products by creating content at specific times, which can easily be shared and commented on
E.g. During the COVID-19 pandemic, Coca-Cola and McDonald’s ran campaigns that emphasised community which aligned with the public’s need for social support
what is emotional branding?
a strategy where companies build strong emotional connections with their customers by appealing to their values, beliefs, and emotions
what is cost plus pricing?
The business calculates the cost of production and then adds a markup to determine the final price
The markup covers the cost of production plus the business’s desired profit margin
price skimming
The business sets a high price for a new product/service when it is first introduced to the market
This is effective when an established brand is introducing a new product and there is a high demand for it
The high price helps the business to recover its development and marketing costs quickly
The business will then gradually lower the price to ensure sales continue
what is penetration pricing
The business sets a low price for a new product/service when it is first introduced
effective when a business wants to quickly capture market share and attract price-sensitive customers
Once they have enough customers, the business will start to raise the price
what is psychological pricing
takes into account the customer’s emotions, beliefs, and attitudes towards the product/service E.g. a business may set its prices at £9.99 instead of £10 as customers perceive the former as a better value
how can businesses change their pricing to keep up with social trends?
use pricing algorithms to monitor prices of competitors
use dynamic pricing
what are distribution channels
the various intermediaries through which goods/services move from the manufacturer to the end customer
what are the stages of a four stage distribution channel?
producer, wholesaler, retailer, and consumer
what is a four stage distribution channel used for
commonly used for products such as groceries, clothing, and electronics
what are the stages in a three stage distribution channel?
producer, retailer, consumer
what is it commonly used for
products with high demand or where the cost of distribution is high
often used for products with high profit margins,
what are the stages in a 2 stage distribution channel?
producer and consumer
commonly used for products sold online
what is drop-shipping?
once the business has sold the product, they are shipped directly from producer to the consumer, which reduces cost and complexity
(eg like how amazon gives people a place to sell online)
what are the stages of the product lifecycle?
development
introduction
growth
maturity
decline
what happens in the development stage, and what is the implication?
explanation - The focus is on designing and developing the product
The business usually incurs high costs for research and development, market research, and product testing
implication - Cash flow is usually negative during this stage, as the company is investing heavily in the product without generating any revenue
The marketing strategy during this stage is focused on creating awareness and generating interest in the product
what happens in the growth stage, and what is the implication?
enters this stage when sales begin to rapidly increase
the business focus shifts to building market share and increasingg production to meet the growing demand
implication- Cash flow usually turns positive during this stage as sales revenue increases and costs are spread out over a larger volume of production
The marketing strategy is to differentiate the product from its competitors and build brand loyalty
what happens in the maturity stage, and what is the implication?
Characterised by slowing sales growth as the product reaches its peak in terms of market penetration
implication- Cash flow is usually positive during this stage as sales revenue continues to come in and costs are reduced through economies of scale
The marketing strategy aims to maintain market share and increase profitability by cutting costs and finding new markets
what happens in the decline stage, and what is the implication?
Starts when sales begin to decline as the product becomes obsolete or is replaced by newer products
The business focus shifts to managing the product’s decline and reducing costs
implication- Cash flow usually turns negative as sales revenue declines and costs associated with the product’s decline increase
The marketing strategy may involve discontinuing the product, reducing its price to clear inventory, or finding new uses for the product
what are extension strategies?
the techniques used by businesses to extend the life of a product beyond its natural life cycle
These strategies are designed to boost sales and maintain profitability for a product that has reached the decline stage of its life cycle
product related extension strategies
changing or modifying the product to make it more appealing to customers and extend its life cycle through things like product improvement, line extension (like coke adding diet coke) or repositioning
promotion related extension strategies
Involves changing the marketing and promotion of the product to extend its life cycle
eg:
changes to advertising
price promotion
sales promotions (loyalty program)
what is the boston matrix
a tool used by businesses to analyse their product portfolio and make strategic decisions about each product
what is a cash cow, and what are the implications?
products with a high market share in a mature market (the entire market is no longer growing)
implication:
They generate significant positive cash flow but have low growth potential
The business invests minimal resources in cash cows as they are seen as stable sources of income
Marketing efforts focus on maintaining their market share and profitability
what is a problem child/question mark and what are the implications
have a low market share in a high-growth market
have the potential to become stars if the company invests in their development
implication - often a negative cash flow as businesses have to invest in problem child products to increase market share and turn them into starts
Marketing efforts focus on increasing their market share and brand recognition
what are star products and what is the implication
Star products have a high market share in a high-growth market
The company typically invests in stars to maintain or increase their market share
implication -
generate significant positive cash flow and have the potential for continued growth
Marketing efforts focus on building brand recognition, increasing market share, and maintaining profitability
Stars are valuable assets and the business should focus on maximising their potential
what is a dog, and what is the implication?
Dog products have a low market share in a low-growth market
implication:
They generate little revenue for the company and have no growth potential
Businesses often move away (divest) from these to focus on more profitable products
Marketing efforts for dog products are minimal or zero
marketing strategies for mass markets
- focus on building brand awareness and appealing to a broad audience
- Advertising campaigns are usually designed to reach as many people as possible and use mass media
marketing strategies for niche markets
- focus on targeting a specific segment and building a relationship with them
- often include technical information
- ads are more targetted
what is B2B (business to business) marketing?
focuses on selling products to other businesses
pros and cons of b2b selling
pros
predictable and stable market, a high level of customer loyalty, and high order and sales.
cons
limited target market, longer purchase decision time, and bargaining power of clients.
why is customer loyalty good?
drives repeat purchases which helps the firm to reduce marketing costs when launching new products
what are some ways a business can develop customer loyalty?
providing excellent customer service
offering loyalty cards
offering saver schemes
