1.3 - the marketing mix and strategy Flashcards
1
Q
design mix
A
- function
- cost
- aesthetics
2
Q
function
A
- focuses on what the product does, regardless of looks and price
- examples = parachute, phone charger, vaccine
3
Q
cost
A
- focuses on being as cheap as possible
- lower cost = competitive advantage
4
Q
aesthetics
A
focuses on looking good, function and cost come after
5
Q
changes in the elements of the design mix to reflect social trends
A
- resource depletion
- designing for waste minimisation
- re-use and recycling
- ethical sourcing
6
Q
benefits of adapting product designs to changes in social trends
A
- reduced waste = using less resources
- products are likely to be more popular and sell larger quantities
- can be used as a USP
- viewed as good corporate citizens
7
Q
marketing
A
a means of promoting a business and what it offers
8
Q
principles of marketing
A
- identifying needs
- promoting products or services/ contributing to brand development/ promoting the brand
- pricing of the brand
- promoting the brand by various means
9
Q
branding
A
identification of a product or service which is instantly recognisable with no explanation
10
Q
advantages of branding
A
- adds value to the product
- business can charge premium prices
- reduces elasticity of demand
- enables the business to reduce the amount of time spent on promotion
- customers are more likely to repurchase
- easier to persuade retailers to put products in their stores
- other products can also be promoted
11
Q
rebranding
A
occurs when a business decides to change a significant element of its identity
12
Q
promotion
A
process of communicating with customers
13
Q
main objectives of promotion
A
- inform
- benefit
- persuade
14
Q
types of promotion
A
- sales promotion
- public relations
- merchandising and packaging
- direct marketing
- exhibition and trade fairs
- digital marketing
15
Q
factors to consider when selecting promotion
A
- type of product
- size of the market
- cost
- competition
- marketing constraints
16
Q
distribution
A
the process of getting the right product or service to the consumer in the right place
- one of the four p’s of marketing (place)
17
Q
stage four distribution
A
manufacturer - wholesaler - retailer - consumer
18
Q
stage three distribution
A
manufacturer - retailer - consumer
19
Q
stage two distribution
A
manufacturer - consumer
20
Q
choice of the channel depends on
A
- nature of the product
- market
- nature of the business
- size of the business
21
Q
factors that affect distribution
A
- online shopping
- shopping malls
- call centers
22
Q
online distribution
A
- niche products reach a wider audience
- cater to any place
- transactions happen solely online
23
Q
advantages to consumers of online distribution
A
- cheaper, lower costs
- consumers can shop 24/7
- more choice
- can shop from anywhere if the internet is accessible
24
Q
disadvantages to consumers of online distribution
A
- not able to physically look at goods before purchase
- potential for poor after-sales service
- exclusion of customers without internet or cards
- difficulty in taking delivery of the goods
25
advantages to businesses of online distribution
- avoid costs of physical stores
- lower start-up costs
- lower costs when processing transactions
- less paper needed for documents
- payments made and received online
- can offer goods to a wider market
- can serve customers 24/7
- more choices regarding location
26
disadvantages to businesses of online distribution
- increased competition domestically & internationally
- lack of human contact
- heavy reliance on delivery services
- technical problems can occur
- security concerns surrounding sensitive information
27
marketing tools
- boston matrix
- product life style
28
product life cycle
describes the stages a product goes through from when it was first thought of until it finally is removed from the market
29
stages of the product life cycle
- research & development
- introduction
- growth
- maturity
- decline
30
extension strategies
- ways to prolong the life of a product before it starts to decline
- usually employed in the maturity stage
- can generate more profit and revenue
31
types of extension strategy
- advertising
- price reduction
- adding value
- explore new markets
- new packaging
32
boston matrix
a model that helps businesses analyse their portfolio of businesses and brands
- used in marketing and strategy
33
boston matrix categories
- stars = high growth, high market share
- cash cows = low growth, high market share
- question marks = high growth, low market share
- dogs = low growth, low market share
34
product portfolio
shows how a business decides to allocate investment across the portfolio
35
outbound strategies
- traditional method of marketing
- attracts potential business customers
-costly with low return on sales
- examples = direct mail, e-mail, cold calling
36
inbound strategies
- attracting potential business customers to websites
- requires considerable effort and resources
- examples = blogging, social media marketing, search engine optimisation
37
ways businesses can develop customer loyalty
- communication
- customer service
- customer incentive
- personalisation
- preferential treatment
38
cost plus pricing
- price where a mark-up has been added to the unit cost of producing the good/service
- mark-up is a % added to the unit cost
- makes sure all costs are covered
- very common strategy
39
drawbacks of cost plus pricing
- ignores market decisions
- difficult to identify all costs associated with production
40
price skimming
- price is set high in the first instance and then lowered later
- aim is to generate high levels of revenue and cover expensive development costs
41
advantages of price skimming
- can be used when PED is inelastic
- maximises revenue
- recover development costs
- lower price draws consumers in
42
disadvantages of price skimming
- only used with inelastic demand
- attracts other businesses to the market
43
penetration pricing
- setting a low price when launching the product to become established
- aim is to get a foothold in the market
- can be done by offering the product at a cheap rate for a time period or provide and introductory offer
44
advantages of penetration pricing
- useful when products targeted at middle-low income consumer groups
- grows sales of a new product quickly
- can create economies of scale
- puts pressure on rivals
45
disadvantages of penetration pricing
- can't let the offer last too long
46
predatory pricing
- setting a low price that forces rivals out of business
- some forms are illegal in the UK & EU
47
competitive pricing
- setting a price based on what rival businesses are charging
- a business looks at what rivals are charging before setting its own price
- market leader may set the price and others follow
48
psychological pricing
-setting a price that is slightly below a round figure
- consumers think the product is cheaper
- targets consumers looking for bargains
49
factors that determine the most appropriate pricing strategy
- costs and the need to make a profit
- stage in product life cycle
- strength of brand
- level of competition in the business environment
- price elasticity of demand
