1.3 Marketing Mix & Strategy Flashcards
What are some aims of promotion??
- Generate brand awareness
- Generate awareness of positioning
- Create an image
- Change attitudes
- Increase market share
What are the 7 types of Promotion??
- Personal selling
- Digital Communications
- Sponsorship
- Public Relations
- Advertising
- Direct Marketing
- Sales Promotions
What are 3 negatives of Advertising??
- Expensive
- Hard to measure effectiveness
- Easy to ignore
What are 3 positives of Direct Marketing??
- Target specific audience
- Measurable (helps adjust strategy)
- Personalise marketing message
What are 3 negatives of Direct Marketing??
- Intrusive
- Waste of money if sent to spam/junk
- Databases expensive to maintain
What are Sales Promotions??
Special offers:
e.g free samples, BOGOF
What are 4 positives of Sales Promotions??
- Quickly boost sales/engagement
- Clear out stock
- Promote new product
- Encourage impulse purchases
What are the 2 positives of Personal Selling??
- Build relationships with customers
- Personalised advice/guidance
What are the 2 negatives of Personal Selling??
- Expensive (to hire & train staff & for travel if it’s required)
- Limited reach
What are 3 positives of Sponsorships??
- Build awareness
- Create emotional connections
- Reach new customers
What are 2 negatives of Sponsorships??
- Expensive
- Subject to negative publicity
What are Public Relations??
Connecting with media through TV interviews, product launches, etc.
Creates Goodwill
What are 4 positives of Public Relations??
- Raise reputation
- Increase customer loyalty
- Cost-effective
- Obtain favourable reviews
What’s the main negative of Public Relations??
Difficult to control; what media reports about business and the public relations.
What are the 3 negatives of Digital Communications??
- May be subject to data privacy regulations
- less effective for older people
- May be ignored
What are Product Brands??
Specific individual products that a corporate brand makes
What are Own Brands??
In-house to supermarket or retailer (e.g Asda Essentials)
Why do businesses have/want Strong Branding??
- To add value
- Make product less price elastic
- Create barrier so it’s harder for newcomers to enter the market
What is Emotional Branding??
Matching branding to lifestyle values or aspirations to trigger an emotional response
What is Viral Marketing??
A low cost way of spreading brand awareness through online platforms
What are the factors that impact promotional strategy decisions??
- Product life cycle
- Nature of product
- Competition
- Budget
- Target Market
What are the factors that affect Pricing Decisions??
- Marketing Mix
- Costs
- Price sensitivity
- Price elasticity of demand
- Stage of product life cycle
- Competition
- USP (strong = high price)
Brand strength
What are the 6 Pricing Strategies??
- Price Skimming
- Psychological
- Predatory
- Competitive
- Penetration
- Cost Plus
What is Price Skimming??
Setting high price and gradually lowering it (usually after initial sales)
What are 2 positives of Price Skimming??
- Recover from development & marketing costs quicker
- Increases image & appeal
What are the 3 positives of using Penetration Pricing??
- Quickly capture market share
- Attract price-sensitive customers
- Can be used as an extension strategy
What are the negatives of Penetration Pricing??
- Lose customers when raising
- Damage brand image
What is Cost Plus Pricing??
Calculating cost of production & then adding a markup to determine price
What is the equation for cost plus pricing??
Unit cost + ((unit cost/100) x mark-up)
What are the 2 drawbacks and 1 benefit of predatory pricing??
- Anti-competitive
- Harms customers by lowering choice
+ Lowers competition
What is the benefit and the drawback of competitive pricing??
+ Helps maintain market share
- Constantly have to monitor & adjust prices
What is psychological pricing??
Taking into account customers’ emotions, beliefs & attitudes towards the product/business
Give an example of psychological pricing!
- Putting prices high to convince customers of good quality
- Setting price to £9.99 instead of £10 because it looks cheaper
How do online sales impact pricing??
- Dynamic pricing (adjust prices in real time)
- Different prices online to convince customers to shop online
- More price competitive
What’s the design mix??
Aesthetics, function & cost
What are the 2 main social trends that influence the design mix the most??
Resource depletion and Ethical Sourcing
How does resource depletion impact the design mix??
Customers increasingly more aware of the need to conserve natural resources & reduce waste
How does ethical sourcing impact the design mix??
Products should be produced without exploitation of workers or environmental damage.
Companies may change to more sustainable materials & production processes.
need t decide if increasing prices is worth cost/ethics
What are distribution channels??
The various intermediaries through which goods/services move from the producer to the end consumer
What are the benefits of traditional distribution (4 stage)??
- Customers can try on products
- Displays to attract customers
- Help & advice on the spot
- Enjoy shopping experience
What are the 2 changes to distribution to reflect social trends??
Online distribution and drop-shipping
What does shifting from product-based to service-based business usually mean??
Online distribution, which:
- More ethical
- Cost savings
- Less pollution
- Easier
- Requires further training
What are the advantages of retail distribution??
- Convenient for customers
- Often UK-wide reach to customers
- Retailer chooses final price
- Retailer handles financial transaction
- Retailer holds stock
- After-sales support
What are the 3 benefits of online distribution??
- Lower cost
- Open 24/7
- Customers from around the world
What are the 4 factors influencing distribution??
- Type of product (services directly to customers)
- Speed (perishables need to be delivered fast)
- Cost
- Distance
What are the 5 stages of the product life cycle??
- Development
- Introduction
- Growth
- Maturity
- Decline
What are the 3 factors of the development stage of the product life cycle??
- Focus on design and research
- High failure rate
- Time-consuming
What are the 3 factors of the introduction stage of the product life cycle??
- Negative cash flow
- Heavy promotion
- Either skimming or penetration pricing
What are the 3 factors of the growth stage of the product life cycle??
- Positive cash flow usually
- Competitors may be attracted to market
- Promote to differentiate from competiton
What are the 3 factors of the maturity stage of the product life cycle??
- Increased profitability
- Intense competition
- High level of capacity utilisation
What are the 3 factors of the decline stage of the product life cycle??
- Product becomes obsolete or replaced by newer products
- Rapid fall of sales
- Decline in capacity utilisation
What are 5 of the extension strategies??
- Product improvements
- Line extensions
- Repositioning
- Changes to promotion
- Sales promotion
What are the 4 parts of the Boston Matrix??
- Cash Cow
- Question Mark
- Star
- Dog
What are the 3 factors of cash cows??
- High market share in mature market
- Positive cash flow
- Use profit to invest in other products
What are the 3 factors of question marks??
- Low market share in high growth market
- Invest to increase market share & brand recognition
- Negative cash flow
What are the 3 factors of stars??
- High market share in high growth market
- Positive cash flow
- Invest significant amount in promotion
What are the 3 factors of dogs??
- Low market share in low growth market
- Phase out or sell off (divest)
- Could harvest any profit possible in short term
