1.3 Marketing Mix and Strategy Flashcards
marketing mix ( the 4 Ps)
product
place
promotion
price
the design mix
aesthetics
function
costs
benefits of using the design mix to make a good design
add value
differentiation
reduce manufacturing costs = boots profit margins
improve brand image and loyalty
long and short term methods of promotion
long term = persuasive advertising
short term= buy one get one free , seasonal price cutting
ways to build a brand
advertising
USP
sponsorship
digital media
viral marketing
emotional branding
pricing strategies for new products
price skimming/creaming - new product so price is high whilst still unique in the market
penetration- new product at low price to attract customers
strengths and weaknesses of penetration pricing
+ lower sales = increases sales
+ high volumes sold = persuade retailers = boost distribution
+ encourages customer to buy again
- product shown as cheap
- likely to create price sensitivity
strengths and weaknesses of price skimming
+ high price = desirable image for product
+ generate rapid profit
- deter customer as being “rip off”
- early buyers frustrated at lower prices later on = less loyalty
- image suffers when price falls
pricing strategies for existing products
cost plus & predatory
cost plus - adding a desired percentage onto total costs per unit
+ guarantee profit each unit sold
- ignoring market = unrealistic price guaranteed
(only works with no competition)
prefatory - low prices to force customers out of a business
+ once forced completion out = prices rise
- illegal
pricing strategies for existing products
competitive & psychological
competitive- charging marking price average
+ customers are not put off
- have little control over price they charge & revenue generated
psychological- set just below the price wanted ($9.99 instead of $10)
+ encourage to buy it
- little effect
factors determine most appropriate price strategy
differentiation - use cost plus
competition - competitive pricing
strength of brand - cost plus
changes in price of social trends
online sales - easier to shop online = customer can compare online , prices also can be lower as less fixed cost
price comparison sites - competitive pricing
distribution
important so consumer can access the product
(intermediaries- business between producer and consumer)
- traditional physical channel:producers sell to wholesaler who supply to small retailers (help smaller firms to distribute)
-direct to retailer: large producers sell in bulk to retailer (hard negotiation prices)
Product life cycle
introduction - sales are low are rise quickly
growth - sales begin to rise quickly
maturity- sales slows and stabilises at highest level
decline - begin to fall
extension strategy - to extend the popularity of the product
- changes to product (adding extra functions, features)
- promotion changes (different market, sales)
product portfolio
large businesses selling various products
a catalogue
