1.3 - Marketing Mix and strategy Flashcards
What are the 3 elements of the design mix of a product?
1) Aesthetics
2) Function
3) Cost
3 ways design mix may change to reflect social trends.
1) Waste management
2) Design for re-use
3) Design for recycling
What is ethical sourcing?
- Businesses only use suppliers that respect the environment
- Treat their workforce well
- Pay workers fairly
- Provide good working environments
What is promotion?
Various forms of media to draw attention to a product and thereby gain and retain customers.
2 types of promotion.
1) Above the line
2) Below the line
What is a brand?
A distinguishing symbol, mark, logo, name that companies use to distinguish their products from others in the market.
What is a brand experience?
A brand’s action perceived by a person.
What is brand equity?
The value of a brand.
What is brand extension?
Using an existing brand name on a new product.
Benefits of strong branding?
- Added value
- Can charge premium prices
- Reduced price elasticty of demand
Ways to build a brand.
- USP’s
- Advertising
- Sponsorship
- Social media
Changes in brand and promotion to reflect social trends.
- Viral marketing
- Social media
- Emotional branding
What are the 2 types of branding?
1) Manufacturers brands
2) Own-label brands
What is manufacturers brands?
- Created by manufacturers
- Use advertising/promotion to build brand loyalty
- Charge higher prices
- Loyal customers
- Repeat purchases
What is own-label brands?
- Created by retailers
- Good value for money
- High profits for retailers
- Ties consumers to retailers
- Gives retailers bargaining power
What is above-the-line promotion?
Generally called advertising.
Reaches mass audience.
What is below-the-line promotion?
Targets consumers directly.
Supports above the line.
Emotional marketing?
Trys to create a bond between and product through emotional response to advertising.
Viral marketing?
Refers to brand awareness through word of mouth.
Original message posted on social media.
Consumers then share and businesses don’t have to pay for message distribution.
What is a core product?
The benefit of the product that makes it valuable to you.
What is the actual product?
The tangible, physical product.
What is the augmented product?
The non-physical part of the product, added value.
What features of a product do businesses focus on?
- Reliability
- Quality
- Design
- Image
Changes in price that reflect social trends.
- Online sales
- Price comparison sites
Factors that influence price.
- Target market
- Customer expectations
- Competition
- Business objectives
- Production costs
What is distribution?
The process in getting the right product or service to the consumer in the right place.
3 channels of distribution
1) producer>wholesaler>retailer>consumer
2) producer>retailer>consumer
3) producer>consumer
Pros and cons of manufacturer>wholesaler>retailer>consumer
+/ - wholesaler deals with storage of product
- sells product on to smaller companies
- employ sales team to increase sales
-/ -wholesaler will need to make profit so final price is higher
- business has less direct contact with the customer
- need to rely on promotion by the wholesaler
Pros and cons of manufacturer>retailer>consumer
+/ -retailer are spread all over the country so sales can be increased
-retailer will display the product, creating an appropriate image and offering customer care
-/ -retailers will build relationship with customer
-competition between retailers may lead to lower prices for the product
-rely on retailer to display and sell the product
Pros and cons of manufacturer>consumer
+/ -full control of the sales process
-direct line of feedback about what they like or don’t like in your product or service
-/ -high cost-developing and managing a sales team is expensive
-higher cost of distribution
-difficult to grow the business quickly
Agents
Sell the products/services of producers in return for a commission
(often in service sectore, travel agents, insurance agents etc)
Aims of distribution
- Many customers as possible
- Most cost-effective way
- Make product easily available
-Highlight exclusivity of product by controlling distribution
Changes in distribution to reflect social trends
- Online distribution
- Home delivery
- Changing from a product to a service
E-commerce vs M-commerce
- E-commerce refers to buying and selling of goods/services online
- M-commerce refers to buying and selling of goods/services online via mobile device
Stages of product lifecycle
1) Introduction stage - sales are low as the new idea is first introduced to the market
2) Growth stage - rapid growth in sales & profits
3) Maturity stage - tough competition means sales begin to level off
4) Extension - used by business to boost sales of a mature product
5) Decline stage - sales falling, may be some special offers but customer switching to new replacements or competitors
Extension strategies
- Repositioning the product in the market place
- Relaunching the product
- Aiming at a different segment
- Making some cosmetic changes to the look and design of the product such as limited edition versions
Boston matrix
A development from the product life cycle and is used when businesses have a number of products to manage. Cash cows, stars, problem children, dogs
Business to business marketing (B2B)
- Many businesses just deal with other businesses rather than consumers
- Typically involves larger transactions
- Suppliers need to build up closer relationships with customers
- Focus on offering a quality product/service
- Advertising needs to be informative rather than persuasive
