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BUSINESS theme 1 > 1.3 > Flashcards

1.3 Flashcards

1
Q

4 parts of the design mix

A
  1. promotion - advertsing
  2. product - features,quaility,branding,packaging
  3. place - channels, location, transport
  4. price - discounts, price,priceing strategies
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2
Q

3 parts of the deign mix

A

function
aesthetic
costs

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3
Q

function - design mix

A
  • intended purpose
  • most important aspect of its design
  • meet the needs of intended users
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4
Q

aesthetics - design mix

A
  • visual and sensory appeal
  • shape, colour, texture
  • they create brand loyalty and recognition
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5
Q

2 social trends which change the design mix

A
  1. resource depletion - conserve natural resources and reduce waste.
    re use/ minimal waste/ recycle/ more durable products
  2. ethical sourcing concerns - products need to be produced WITHOUT exploitation of workers or environmental damage. companies should use sustainable materials and ensure there is no forced labour etc
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6
Q

types of promotion

A

advertising
direct marketing
sales promotions
personal selling
sponsorship
public relations
digital communications

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7
Q

do cards on each type of ptomotion

A
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8
Q

3 types of branding

A
  1. manufacture / corporate branding - this is the companies name or logo which promotes all services or products sold by that company eg Nike/ Apple
  2. product branding - unique name, design, or symbol to promote a specific product eg KitKat/ Coca-Cola
  3. own branding - private label branding refers to the use of a retailer’s name to promote a specific product or service. often used by supermarkets E.g. ASDA chocolate, Tesco’s Finest range, and Sainsbury’s Basics range
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9
Q

pros and cons of manufacture / corporate branding

A

PROS
- strong brand recognition and reputation - brand loyalty and trust
- can introduce new products more easily
- helps build economies of scale by promoting multiple products under one brand which can reduce marketing costs etc
CONS
- reputation can be damaged easily - effect the whole business
- if the business faces competition it can effect all the products

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10
Q

pros and cons of product branding

A

PROS
- distinct product identity which can differentiation from competitors
- the company can make different segments of the product - coke zero/ diet coke
CONS
- £££ creating a new brand for each product
- the different products within the brand may have different qualities which can affect customer satisfaction

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11
Q

pros and cons of own branding

A

PROS
- retailors can differentiate themselves from their competitors - unique products
- lower costs which increases sales
- builds customer loyalty
CONS
- stereotypically own branding products are seen to be low quality

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12
Q

benefits of branding

A
  • adds value - reliability, trust
  • charge higher prices - well established brand
  • reduced price elasticity of demand - because customers are loyal to the brand
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13
Q

steps to build a brand

A
  1. USP - eg apples premium quality
  2. advertising - create ads for emotional connection with audience. eg - cokes iconic ads ‘share the coke’ campaigns - share coke with your friends
  3. sponsorship - helps brands gain exposure. eg Nike sponsors high profile athletes in the Olympics and world cup
  4. social media - creates a community and awarness - glosier has lots of social media following - build a community
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14
Q

viral marketing, social media and emotional branding

A
  1. viral marketing - businesses use online platforms to promote their products
  2. social media - adapt their strategies to keep up with trends
  3. emotional branding - build strong emotional connections - values/beliefs and emotions eg Patagonia has built their brand around sustainability and ethical - built a community
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15
Q
A
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16
Q

price skimming

A
  • when new innovative products are sold at HIGH prices
  • consumers will pay more because the product has SCARCIRTY VALUE and the high price will BOOST ITS IMAGE for example computers and tech products
  • prices then get dropped after a year or so
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17
Q

penetration pricing

A
  • when new products enter the market at a LOW price to attract customers and gain market share
  • its effective in markets that are price sensitive eg new food/washing powder
  • works best for businesses that benefit from lower costs when manufacturing large quantities
  • cons - customers like the low price so when the price gets risen lots of customers are lost. this can also damage brand image
  • ## it can also be used as a pricing strategy to prolong a products lifecycle
18
Q

cost plus pricing

A
  • Calculating the total cost of producing a product and adding a fixed percentage (markup) to determine the selling price.
  • eg A bakery calculates the cost of ingredients and labor for a cake is £5. They add a 50% markup (£2.50) and sell the cake for £7.50.
  • simple easy, all costs are covered, doesnt consider demand or competitor pricing
19
Q

predatory pricing

A
  • Setting prices below cost to drive competitors out of the market, then raising prices once the competition is eliminated. It’s illegal in many countries.
  • eg A large supermarket chain drastically lowers the price of milk below cost in a specific region to force smaller local shops out of business. Once they’re gone, the supermarket raises milk prices again.
20
Q

competitive pricing

A
  • Setting prices based on what competitors are charging for similar products or services.
  • wo coffee shops located near each other both sell a regular latte for £3.
  • focuses on market share and requires monitoring of competitive prices
21
Q

psychological pricing

A
  • Setting prices to influence customer perception and make products seem more appealing.
  • A clothing store prices a shirt at £29.99 instead of £30, making it seem significantly cheaper.
  • creates the illusion of a bargain.
22
Q

factors that affect pricing decisions

A
  1. the marketing mix - during high promotion of a product its price may decrease
  2. price needs to cover the costs - in order to make profit
  3. price must be acceptable to customers - which depends how price sensitive the target market is
  4. the price elasticity of demand - depends on availability of substitutes, type of product and strength of brand
  5. stage in the product lifestyle its in
  6. price needs to be in line with the businesses objectives
  7. level of competition will affect the price
  8. strong USP - higher price because its highly differentiated
23
Q

4 stage distribution channel

A

producer –> wholesaler –> retailor —> consumer
- eg groceries, clothing, electronics

24
Q

3 stage distribiution channel

A

producer –> retailor —> consumer
- had no wholesaler bc the producer sells directly to retailor
- used for products with high demand where the cost of distribution is high
- used for products with high profit margins

25
Q

2 stage distribution channels

A

producer –> consumer
- gets rid of wholesaler and retailor
- only really used for products sold online or through direct sale channels like Ryanair selling a passenger ticket on their website

26
Q

the growth of e-commerce

A
  • online distribution has become increasingly popular - convenience and accessibility
  • drop shipping - businesses can sell products without holding stock so they are shipped directly from the producer to consumer - 2 stage distribution channel
27
Q

shift from product based to service based businesses

A
  • consumers are now increasingly valuing experience over material possessions
  • this uses different types of distribution
  • for example - uber delivers a taxi service through a mobile app. this reduces business costs because its a 2 stage distribution and no need for wholesaler or retailor.
28
Q

5 stages of the product life cycle

A

development
introduction
growth
maturity
decline

29
Q

development - product life cycle

A
  • designing and developing product
  • high initial costs for research and testing
  • cash flow negative - investments into the product with no revenue
  • time for creating awareness of product to begin to generate interest
30
Q

introduction- product life cycle

A
  • product starts to be launched
  • slow sales growth
  • negative cash flow
  • lots of marketing to create awareness
31
Q

growth - product life cycle

A
  • sales increase rapidly
  • production meets the growing demand
  • building market share
  • cash flow turns positive
  • marketing strategies to differentiate the product from its competitors and build brand loyalty
32
Q

maturity - product life cycle

A
  • slowing sales growth
  • product reaches its peak in terms of market penetration
  • positive cash flow
  • costs are reduced through economies of scale
  • marketing strategies - maintain market share and increase profitability and find new markets
33
Q

decline - product life cycle

A
  • sales start to decline
  • product is replaced by newer products
  • businesses focus shifts on reducing costs
  • cash flow negative as revenue declines and costs of marketing and advertising increase
  • marketing strategies may include price sales/ deals etc
34
Q

PRODUCT related extension strategies

A
  • product improvements - new version of the product eg apple new phones every year
  • line extensions - coke zero/ diet coke etc
  • repositioning in market
35
Q

PROMOTION related extension strategies

A
  • changes to advertising
  • price promotions
36
Q

cash cow - Boston matrix

A
  • high market share
  • high positive cash flow
  • marketing efforts to maintain market share
37
Q

question mark - Boston matrix

A
  • low market share in a high growth market
  • potential to be stars if they get investments
  • negative cash flow
  • if invested –> star
38
Q

star - Boston matrix

A
  • high market share in a high growth market
  • high positive cash flow and potential for more growth
  • marketing efforts - brand recognition
39
Q

dogs - Boston matrix

A
  • low market share in a low growth market
  • little revenue
  • no potential for growth
  • business will now move away from this product
40
Q

marketing strategies for MASS markets

A
  • building brand awareness - appeal to a broader audience
  • adverting needs to reach as many people as possible
  • simple message
41
Q

marketing strategies for NICHE markets

A
  • targets a specific segment of people
  • more targeted advertising campaigns
  • mor detailed messages often including technical info relevant to specific needs of the target market
42
Q

ways to develop customer loyalty

A
  1. customer service - more likely to return if they have a positive experience and recommend the business. eg Zappos is an online retailor known for exceptional customer service
  2. loyalty cards - for repeated customers, rewards and discounts if they return. eg Sephora has a programme called ‘beauty insider’ where you get points for free stuff
  3. saver schemes - discounts or special pricing which increase depending on how often you buy things

BUSINESS theme 1 (4 decks)

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