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Business- Theme 2 > 2.2 Making Market Decisions > Flashcards

2.2 Making Market Decisions Flashcards

1
Q

What factors are in the design mix?

A
  • Function
  • Aesthetics
  • Cost
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2
Q

What element of the marketing mix does the design mix come under?

A

Product

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3
Q

What is function?

A

How well a product does it’s job + how easy a product is to use

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4
Q

What is aesthetics?

A

Look, feel and visual appeal of a product

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5
Q

What is the cost?

A

Producing the product for a cost that allows the business to make a profit

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6
Q

What are the 4 stages of the product life cycle?

A
  • Initial growth
  • Growth
  • Maturity
  • Decline and discontinuation or extension
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7
Q

What is ‘Introduction’ in the product life cycle?

A
  • Research, development and a launch of new products

- Sales are low coz product awareness is low + brand reputation is not well known

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8
Q

What is ‘Growth’ in the product life cycle?

A
  • Product becomes more and more popular
  • Sales increase rapidly
  • Customer reviews and word of mouth replaces some form of promotion
  • Business may raise price coz of it
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9
Q

What is ‘Maturity’ in the product life cycle?

A
  • Growth has slowed down
  • limit to the number of new customers
  • Business likely to experience economies of sale
  • Business should be able to maximise profitability
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10
Q

What is ‘Decline’ in the product life cycle?

A
  • Sales drop as product loses popularity
  • Product may go out of fashion etc.
  • Business will lower product price
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11
Q

What are the different types of extension strategies?

A
  • Lowering Prices
  • Increasing Advantage
  • Rebranding the product
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12
Q

What is an extension strategy?

A

Any action a business takes in order to lengthen the product life cycle

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13
Q

What is differentiation?

A

Process of developing a distinctive or unique product

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14
Q

How can a business differentiate it’s product?

A
  • Give product unique style or design
  • Create a distinct brand
  • Excellent customer service
  • Product= high quality
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15
Q

Why is differentiation important?

A
  • Increases competitiveness of that buisness

- Allows business to charge a higher price for a product

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16
Q

What are 2 factors businesses will consider when setting the price of a product?

A
  • The volume of the product

- The product’s profit margin + cost of producing the product

17
Q

What is a high volume pricing strategy?

A
  • Producing a lot of a product at a low cost
  • Buying raw materials in bulk for cheaper
  • Allows a business to reduce production costs and set a low price for the product
18
Q

What is a high margin pricing strategy?

A
  • Business attempts to maximise the difference between the production cost and retail price
  • Adding value to a product
  • High margin strategy often results in low volume( only small number of customers are willing to pay a high price)
19
Q

How does technology influence pricing strategy?

A
  • Allows flexible pricing strategy
  • Makes it easier for customers to compare prices charged by competing businesses
  • Makes market more competitive
20
Q

How does competition influence pricing strategies?

A
  • Linked to supply of a product
  • Business usually sell at lower prices coz of competition
  • The less competition the higher the price of products/services
21
Q

How does market segments influence pricing strategies?

A
  • Business target different customers with a product at a different price so they can meet needs and wants
  • Mass market products have lower prices coz product is generic
  • Niche market products = higher price
  • New products= high price
22
Q

How does the product life cycle influence pricing strategy?

A
  • Visibility, Popularity and demand will change

- Thus price will change, especially in decline phase

23
Q

What are the different types of promotion strategies?

A
  • Advertising
  • Sponsorships
  • Product trials
  • Special offers
  • Branding
24
Q

What is advertising?

A
  • When a business pays to put an advert in order to communicate a message to customers/potential customers
  • Uses a lot of media( TV, Radio etc)
25
Q

What are sponsorships?

A
  • When a business supports an event, activity or person

- Finacially or by providing product + services

26
Q

What is product trials?

A
  • The giveaway of a product
  • Can be expensive
  • Efficient method that encourages customers to buy the products
27
Q

What are special offers?

A
  • Often referred to as sales promotion
  • Helps boost sales over a short period of time
  • Take form in discounts
28
Q

What is publicity?

A
  • Any communication about a business that is created by the business, it’s customers and third party
  • Public relations are used
29
Q

What is branding?

A
  • Personailty/ image of product

- Generated through marketing activities

30
Q

How can social media and viral advertising be used as a form of promotion?

A
  • Viral advertising= a message/image distributed among a lot of people
  • Helps increase brand awareness
  • Can be used to support campaigns
31
Q

How does the use of apps help promote a business?

A
  • Helps creatively engage with customer

- Give customers access to catalogue of products

32
Q

How does emails and e-newsletters help promote a business?

A
  • Helps build long-lasting relationships
  • Can be used to communicate large amounts of info
  • Customers can buy products online

Business- Theme 2 (11 decks)

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