1.3 - marketing mix and strategies Flashcards
define and state what the design mix is
function, aesthetic and cost
= meeting identified market needs
how might design impact cost
better deign = creates usp
- sets business apart from competition
- creates competitive advantage
- brand loyalty
- economies of sales
- minimum cost and retain quality
how do changes in the design mix reflect social trends
- concern over resource depletion
- relating to any finite sources
- need to ensure sustainability and ethical sourcing
if sources deplete prices will rise
what is ethical sourcing - explain any positives/negatives
= ensuring that the products being sourced are created in safe facilities by workers who are treated well and work in safe conditions, fair wage…
+ builds brand credibility
+loyalty from customers
- results in higher costs
what are advantages of branding
- enables business to reduce amount spent on promotion
- increased chance of repeat purchases
- easier to persuade retailers to stock product
what is individual branding
- powerful and distinctive
- brands aren’t associated together
- publicity disasters don’t impact other brands
e. g. coca-cola, sprite, malteasers
what is corporate branding
- adds credibility to individual brand names
- promotes an entity compared to specific products
what are benefits to strong branding
- added value - provides reassurance
- charge premium prices - increased profit margin, perceived better quality
- reduced price elasticity - brand loyal customers
what are ways to build a brand
- unique selling points - temporary benefit
- advertising - increased superiority of product
- sponsorship
- digital media - social platforms
what is viral marketing and explain any advantages of it
= business strategy that uses existing social networks to promote a product
+targeted at precise markets and taste of consumers
+provides interactivity
+success of crowdfunding sites gains interest
what is emotional branding
creating a bond between the consumer and product by providing an emotional response to the advertising - often creates brand loyalty
what is cost plus pricing
setting the price of a product or service by calculating the cost, then adding a % to it
you can either:
- add a profit margin
- add a % mark up on top of cost of making product
how is price important in the context of customer sensitivity
= usually balance out factors with price to take into consideration if they should buy the product:
- quality of the product
- how much they want the product
- consumer income
what is competitive pricing
- priced in line with competitors
- customers have to judge product or service on non pricing methods
explain PRICE SKIMMING
advantages and disadvantages
= product is priced high to begin with (due to novelty and desirability) = can be lowered later on ADV \+establish product as a 'must have' item \+want exclusivity = will pay high prices DIS - may put off consumers with high prices - may impact business image - early purchasers may become frustrated with price drop
explain PRICE PENETRATION
advantages and disadvantages
= setting prices lower in order to gain market share
= encourages sales and persuades them to try new product
= aimed at mass market
= will recover development costs, lowering average costs
ADV
+attract high sales volume
+buying in bulk lowers purchasing price
DIS
- may affect brand image
- gain distribution in retail outlets
- price sensitive customers
explain PREDATORY pricing
= setting prices low enough to drive competitors out of business
- sets barriers to entry
- if low price elasticity, lower price will have less of an effect
APPROACH ONLY WORKS IF
- predator is strong financially
- competition are weak financially
