1.3 marketing mix and stategy Flashcards
what is sustainability?
- making something using materials which will still be around for future generations
what are the 5 stages in the product lifecycle?
- development
- introduction
- growth
- maturity
- decline
what is sales and cash flow like in the development stage?
- high costs
- no sales
- no revenue
- no profit
- negative cash flow
what is sales and cash flow like in the introduction stage?
- negative cash flow
- high costs
- low revenue
- no profit
- low unit sales
what is sales and cash flow like in the growth stage?
- increase in sales
- decrease in costs
- little profit
- improving cash flow
what is sales and cash flow like in the maturity stage?
- high cash flow
- high sales
- high revenue
- low costs
- high profit
- little competition
what is sales and cash flow like in the decline stage?
- decrease in sales
- decrease in revenue
- lower cash flow but still positive
- decreased profit
what is a pricing strategy?
- adopted over the medium to long term to achieve marketing objectives
- have a significant impact on marketing strategy
what is cost plus pricing?
- cost of unit + mark up
what is an advantage of cost plus pricing?
- easy and straight forward
what are disadvantages of cost plus pricing?
- there will be companies selling the product cheaper
what is penetration pricing?
- setting a relatively low initial entry price to gain market share
what are advantages of penetration pricing?
- increase market share
what is a disadvantage of penetration pricing?
- it attracts people looking for low prices not customer loyalty
what is hook and bait pricing?
- when the product is cheap but the compliments to use it are expensive
what is skimming?
- involves setting a high price before other competitors come into the market
what is a disadvantage of skimming?
- people may not want to buy it
what is discriminatory pricing?
-when a firm charges a different price to different groups of customers for an identical good or service, for reasons other than cost of supply
what are advantages of discriminatory pricing?
- allows an unprofitable business to avoid going bankrupt
- some groups benefit from cheaper prices
- spreads out demand and avoids congestion
what are disadvantages of discriminatory pricing?
- unfair
- decline in consumer surplus
what is dynamic pricing?
- businesses set flexible prices for products or service based on current market demands
what are advantages if dynamic pricing?
- can be used to boost sales
- can help increase demand
what are disadvantages of dynamic pricing?
- reduces customer loyalty
what is competitive pricing ?
- where competitor prices are the main influence on the price set
what are advantages to competitor pricing?
- may be adjusted if necessary
- prices set on the basis of correct data
what are disadvantages of competitor pricing?
- you need resources to implement it
- difficult to implement for companies with smaller revenues
what is psychological pricing?
- using price as a way of influencing consumers behaviour or perceptions
what is a brand?
- a product that is easily distinguishable from other products so that it can be easily communicated and effectively marketed
what is branding?
- the marketing practice of creating a name symbol or design that identifies and differentiates a product from other products
what is product branding?
- gives an item an identity within the marketplace
what can good branding allow for?
- products to stand out
- engender brand loyalty
what is a service brand?
- about people who represent the organisation making a customer orientated experience
what is an umbrella brand?
- a marketing practice involving the use of a single brand name for the sale of two or more related goods
what is an own label brand?
- an item packaged and marketed under the brand name of a particular retailer, usually a large supermarket, rather than the manufacturer
what is a global brand?
- brands that are recognised throughout much of the world
what are brand extensions?
- when a business uses a brand name on a new product that has some of the brands characteristics
- e.g mars bar and mars bar ice cream
what is brand stretching?
- where a brand is used for a diverse range of products, not necessarily connected
what is advertising?
- presents or promotes the product to the target audience through media such as TV, radio, cinema etc
what are pros of advertising?
- wide coverage
- control of message
- can be used to build brand loyalty
what are cons of advertising?
- often expensive
- impersonal
- one way communication
- lacks flexibility
what is sales promotion?
- the process of persuading a potential customer to buy the product
- designed to be used as a short term tactic to boost sales
- e/g coupons, free gifts
what are pros of sales promotion?
- effective at achieving a quick boost to sales
- encourage customers to trial products
what are cons of sales promotion?
- sales effect may only be short term
- may damage brand image
what is personal selling?
- businesses use people to sell the product after meeting face to face to face with the customers
what are pros of personal selling
- high customer attention
- message is customizable
- persuasive impact
what are cons of personal selling?
- high costs
- labour intensive
- can only reach a limited amount of customers
what is public relations/publicity/sponsorship?
- where a business managers its relationships with different parts of the public
what are pros of public relations/sponsorship?
- reach a large audience
what are cons of personal relations/sponsorship?
- can damage brand image
what is direct marketing?
- a rang of promotional activities that are aimed directly at the customer, straight to target audience
what are pros of direct marketing?
- focus limited resources on targeted promotion
- can personalise message
- easy to measure response
- cost effective
what are cons of direct marketing?
- response rates vary
- ineffective campaigns can be costly
- negative image of junk mail
what is social media?
- websites and applications that enable users to centre and share content
what are pros of using social media?
- cheap
- large audience
why promote?
- increase sales
- attract new customers
- encourage customer loyalty
- encourage trials
- remind potential customers
- create an image
what are the influences on promotional strategies?
- stage in production
- nature of the product
- competition
- marketing objectives and budget
- target market
what is distribution?
- place of the 4 ps
what must we take into account when choosing delivery?
- perishable goods
- costs
- lead time
- exchange rates (tariffs)
- close to supplier or customers
what are key changes in distribution?
- digital distribution e.g streaming services
- online e.g amazon
what is a retailer?
- the final stage in the chain, deals directly with the customer
what are the kinds of retailers?
- multiples
- specialist chains
- department stores
- convenience stores
- independents
- distributer
- agents
- franchises
what are multiples?
- chains of shops owned by a single company
- e.g. Sainsburys
what are independents?
- shop run by an owner
what is a distributer?
- sell on products and serve as a local sales point
- offer products from many producers
what are agents?
- specialist type of distributer
- does not hold stock
- e.g. travel, insurance
what is a distribution channel?
- moves a product through the stages from production to final consumption
what is a wholesaler?
- used by smaller retailers ]
- store mass products to be sold In bulk
