1.3- marketing mix Flashcards by sophie andelin

What is function?

What a product does and how well

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What are aesthetics?

How it appears to senses

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What are costs in the design mix?

Are my costs low enough for my prices?

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What are things to consider when thinking about function?

-High quality
-Easy to use
-Long lasting
-Size/convenience
-Durability
-Efficiency
-Responsiveness
-User friendly

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What are things to consider when thinking about aesthetics?

-The way it feels
-The way it tastes
-The way it looks
-The way it smells
-Textures
-The way it sounds
-On trend/fashionable
-Material
-Colours
-Quality

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What are things to consider when thinking about costs?

-Price
-Cost of materials
-Delivery costs
-Manufacturing costs
-Staff wages
-Paying suppliers
-Advertising costs
-Technology
-Raw materials
-Niche or mass
-Economies of scale
-Laws and legislation
-Production techniques

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What is branding?

Something identifiable in a business

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What are examples of branding?

-Logos
-Jingle
-Ambassadors
-Colours
-Advertising
-Design
-Products
-Packaging
-Slogans

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What is promotion?

How we make customers aware of our business

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What are ways to promote?

-Social media
-Advertising
-Samples
-Deals
-Sponsorships
-Bundles
-Giveaways
-Print media
-Celebrity endorsement

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What is a manufacturer brand?

A brand that focuses on producing physical products

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What is an own-label brand?

A product that is manufactured by a third-party manufacturer but sold under a retailer’s brand name

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What are the differences between a manufacturer brand and an own-label brand?

-In a manufacturing brand, products are produced by them
-In a manufacturing brand, the brand is usually well known
-In an own-label brand, the products are sold under the retailer’s brand name

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What are the advantages of having a strong brand?

-Customer loyalty
-Premium pricing
-Competitive advantage
-Brand recognition
-Brand extensions
-Employee pride

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What is price?

The amount a customer pays

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What should we consider when setting prices?

-Competitor’s prices
-Cost of materials
-Customer income
-Economical factors
-Brand reputation
-Trends
-Selling location
-Legislations
-External factors

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What are the 6 approaches to pricing?

-Cost plus
-Competitive
-Predatory
-Psychological
-Penetration
-Skimming

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What is cost plus?

My cost + profit

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What is competitive pricing?

Copy competition, customers choose based on other wants and needs

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What is predatory pricing?

Cost low, price low
Kill small competitors and requires economies of scale

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What is psychological pricing?

Trick customers into thinking they’re getting deals

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What is penetration pricing?

Start low to attract, then increase prices

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What is skimming pricing?

Start high to exploit loyalty and then got low as product ages

Give benefits and drawbacks of cost plus pricing

A: -simple
-stability
-cost recovery

D: -lack of flexibility
-profit margin limitation
-undercutting competitors

Give benefits and drawbacks of competitive pricing

A: market positioning increased sales market share D: profit margins customer disloyalty no differentiation

Give advantages and disadvantages of predatory pricing

A: market domination strategic positioning increased monopoly power D: legal issues loss of trust reputation damage

What are benefits and drawbacks of psychological pricing

A: perceived value increased sales brand image D: perception of deception loss of credibility focus on price over value

What are benefits and drawbacks of penetration pricing

A: competitive advantage rapid growth brand awareness D: profit margins perceived value loss of customers

What are benefits and drawbacks of skimming pricing

A: maximising profits brand image revenue stability D: limited market reach competitive response demand fluctuations

What is distribution?

The process of making a product or service available for the consumer of business user who wants or needs it

What is a distribution channel?

A chain of businesses or intermediaries through which a good or service passes until it reaches the final buyer

Give an example of a channel

Produced in factory -> wholesaler -> warehouse -> shop -> customer

What is a long channel?

Goes through more stages so therefore less profit retained in exchange for more exposure. Set higher prices to offset revenue loss

What is a short channel?

Goes through less stages so therefore more profit retained but less exposure to customers. Control over distribution can be costly

What are advantages and disadvantages of long distribution?

A: wider market coverage increased sales better customer service D: increased complexity higher distribution costs longer lead times

What are advantages and disadvantages of short distribution?

A: direct control lower costs quicker response times D: limited market reach higher pressure reduced flexibility

What can determine how we distribute?

-Size of business -Shipping costs -Distance from customer -The product -Technology

What is marketing?

The process of identifying customer wants and needs for profit

What is marketing based on?

Product life cycle and Boston matrix

What are the four stages of the product life cycle?

Introduction Growth Maturity Decline

What happens in the introduction stage?

-New product launched -Sales are low -Business should advertise more -Costs are high

What happens in the growth stage?

-Increase in sales -Sales rapidly increase -Continue to advertise -Costs are low

What happens in the maturity stage?

-Product reaches peak of market saturation -Sales slow down -Dont have to advertise as much -Costs are lowest

What happens in the decline stage?

-Decline in sales -Can choose whether to advertise more or less -Costs are low

What are the four stages of the Boston matrix?

STAR, cash cow, problem child, DOG

What happens in the STAR stage?

High market growth, high market share Links to growth stage and has consistent production

What happens in the cash cow stage?

Low market growth, high market share Product has reached its peak in demand. Links to maturity stage Lowest costs and highest profit

What happens in the problem child stage?

High market growth, low market share We don't know success Links to introduction stage Requires extra promotion

What happens in the DOG stage?

Low market growth, low market share Product becoming obsolete Links to decline stage

What is emotional branding?

Making customers feel something so they buy from you with feeling

What is rational branding?

The facts of the product

What is B2C?

Business to customer

What is B2B?

Business to business

What are advantages and disadvantages of B2C?

A: wider market reach shorter sales cycles brand loyalty D: market fluctuations complex negotiations dependence on key clients

What are advantages and disadvantages of B2B?

A: long time relations stable revenue streams less price sensitivity D: complex negotiations market fluctuations long sale cycles