1.3 The Marketing Mix and Stratagies Flashcards
What makes up the 4P’s
Price, Product, Place, Promotion
What are Parts of the Traditonal Design Mix
Function- the way that something works
Economic Manufacture - does the design allow the product to be made + sold profitably, production costs
Aesthetics - how the product appeals to the customer in terms of the look and feel
What is Sustainability
making a product without affecting the long term supplies of the inputs into the product
Whats a brand
is a product that is easily distinguished from other products so that it can be easily communicated and effectivly marketed
What are the benifts of effective branding
adds significant value ( from customers point of view)
able to change higher prices + demand is more price inelastic
builds customer loyalty and aspiration
What are the types of branding
Service Brand
Product Brand
Corporate
Own Label Brands
Umbrella ( “Family Brands”)
What is Product Brands
associated with specific, products, fast moving consumer goods brands
What is service brands
added value to services, either delivered face to face or online eg. Vue, Banking
What is Umbrella ( “Family”) Brands
brands that are designed to more than one product eg. Cabury owns Dairy Milk, Creme Egg
What is Corporate Brands
refers to the practice of promoting the brand name under all products eg. their name
What is Own Label Brands
when businesses have their own take on a high brand product eg. Tescos Finest, Essential Waitrose.
What is Global Brands
easily recognised around the world and can be highly popular eg, Coca Cola, McDonald’s
What is Brand Extention
when a business uses a brand name on a new product that has some of brands characteristics eg. Lucozade + Lucozade Sport
What is Brand Streching
where a brand is used for a diverse range of products, not always connected
What are the uses of promotion
Encourage customers to buy from them and not competitors
encourage brand streching
create awareness
change attitudes
create image
What is the main aim of promotion
awareness of the existance and positioning of products within the market
Whats in the Promotional Mix
Public Relations, Direct Marketing, Personal Selling, Sales Promotion, Advertising
What are the key factors influencing promotional mix
stages of product life cycle
nature of the product
competiton
marketing objectives + budgets
Target Market
What is Advertising
helps you to reach out to potential customers and encourage them to buy your products or services
is paid for communication
mass market advertising is very expencive
What are the Advantages of Advertising
wide coverage
control of the message
repition means the message will be hurd effectivly
effective for building loyalty
What are the Disdvantages of Advertising
oftern expensive
impersonal
one way communication
lacks flexability
limited ability to close a sale
What is Personal Selling
promotion on a person to person basis
two way communications
highly priced, low volume and high technical products rely heabily on personal selling
What are the Advanatges of Personal Selling
high customer attention
adaptable
apportunity to close the sale
potential for development of relationship
potential for development of relationship
Interactivity
What are the Disdvanatges of Personal Selling
high costs
labour intensive
expensive
can only reach a limited number of customers
What is Sales Promotion
tactical, point of sale material or other incentives designed to stimulate purchases.
Short term incentives to increase sales
example are free samples, BOGOF, Coupons, Discounts, Loyalty Points
What are the Advantages of Sales Promotion
effective at achieveing a quick boost of sales
encourages customers to trial a product or switch brands
What is Public Relations
create good will towards an indevidual business, cause or product
having a good business relationship with public whilst impoving reputation
What is Public Relations aims
achieve favourable publicity
communicate effectivly with customers and other stakeholders
What is Direct Marketing
directed through mail, email, social media or phone to indeviduals or business
Direct Marketing uses
allows to generate a specific response from targeted groups of customers
-> allows to focus on several objectives
- increasing sales to existing customers
- build customer loyalty
- generating new businesses.
Direct Marketing Advanatges
focus limited resources on targeted promotion
can personalise the message
easily to test different marketing messages
Direct Marketing Disadvanatges
responses rates vary
negative image of junk email + spam
databases expensive to maintain and keep accurate
What are the stages of Price Setting
devlop pricing objectives
asses of target market’s ability to purchases
Determine demand for product
Analyse demand cost and profit relationship
Evaluate competitors prices
Select Pricing Strategy + tactics
Decide on price
Business Objectives that will influence Pricing
**Financial - **maximise profit, achieve a target level of profits, achieve a target rate of return, maximise sales revenue, imporve cash flow.
**Marketing - ** maintain/ improve market share, beat/ prevent competition, increase sales, build a brand
Factors affecting pricing decisions
Stage of Product Life Cycle
Market Share
Market Objectives
Market Positioning
Competitor Pricing
Costs
Price Elastciity of Demand
What are Price Takers
have no option but to charge same as market
What are Price Makers
able to fix their own price
What are Price Leaders
market leaders whose price chanages are followed by leaders
What are Price Followers
follow the price - changing lead of the market leader.
What is price skimming
set a high price to maximise profit and is sold to different market segments at different times. Then top segment is skimmed of high price.
What is Penetration Pricing
offer at a low introducing price and aims to gain market share quickly, build customer loyalty, price can be increased once target market share has been reached
What is Price Wars
each business aims to increase market share by price reduction but the result is destructive spiral of reductions
might be seen as good but in long term will be seen as less competitors
What is psychological pricing
are to do with how much customers brain work with pricing. For example things being 99p are seen as cheaper to customers
What is a loss leader
is a product that is priced below the normal price but make a gain as you go buy other things whilst you are there
what is dynamic pricing
is a strategy in which businesses set flexible prices for products or services based on current market demands
What is Distrubution
refers to the various methods in which goods/ services move from the manufacturer to the end customer
what is the four stage distribution channel
Manufacture -> Whole Sale -> Retailer -> Customer
what is the three stage distribution channel
Manufacture -> Retailer -> Customer
what is the 2 stage distribution channel
Manufacture -> Customer
What is the product life cycle
a theoretical model which describes the stages a product goes through over its life.
Development, Introduction, Growth, Maturity, Decline / Withdrawal
Describe the development stage
often complex
absorbs significant resources
may not be successful
may involve a long lead time before sales are achieved
market research is done
makes new product ideas do not reach the launch phase
Describe the introduction phase stage
new product launches into the market
low level of sales
high unit costs
usually negative cash flow
heavily promotion to make customers aware of the product
low capacity utilisation
What are the strategies are used in the intro stage
aim encourage customer adoption
high promotional spending to create awareness and inform people
either skimming or penetration pricing
limited, focused distribution
demand initially from “early adopters”
Describe the growth stage
expanding market but arrival of competitors
fast growing sales
rise in capacity utilisation
product gain market acceptance
cash flow can become positive
unit costs fall with economies of scale
the market grows profits rise and new entry of competitors
what are the strategies in the growth stage
advertising to promote brand awareness
intensive distribution
go for the market penetration + price leadership
improve the product
Describe the Maturity stage
slower sales growth as rivals enter the new market
high level of capacity utilisation
cash flow should be be strongly positive
prices and profits fall
weaker competitors starts to leave the market
strategies for mature products
manage capacity + productions
promotion focuses on differentiation
intensive distribution
enter new segments
attract new users
re positioning
develop new users
Describe the decline stage
falling sales
market saturation and / or competition
decline in profits + weaker cash flows
more competitors leave the market
decline in capacity utilisation
What are reasons products reach decline stage
technological advancements
change in customer tastes + behaviour
increased competition
failure to innovate + develop products
how can you extend the product life cycle
lower price
change promotion
change product - re styling for improvement
alternative distributing channels
develop new market segments
re positioning the products
what are the weaknesses of the product life cycle
the shape and duration of the cycle varies from product to product
its difficult to recognise exactly where a product is on its product life cycle
length cannot be reliably predicted
decline is not inevitable
