2.2 - Making Marketing Decisions Flashcards
What are the 3 elements in the design mix
Function
Aesthetic
Cost
What are the 4 phases of the product life cycle
Introduction - product is launched
Growth - Sales increase rapidly as awareness increases
Maturity - Sales peak during this time
Decline - loses popularity and customers look for alternatives
What factors affect how long a product lasts (2)
How dynamic the market is - the rate that it is changing
How strong the brand image behind the product is
What are extension strategies
A way of extending the life cycle of a product
What are some extension strategies
- Product differentiation - Stands out from competitors and adds a USP
- Reducing the Price of the product
- Rebranding the product - to appeal to customers again
- Repositioning the product - eg trying a different sized version of the product/ Updating it
- Increasing market activity - eg running new ad campaigns and promotions
What do businesses need to think about when deciding on a price
- The cost of making the product
- The quality of the product
- The brand image of the product
- The supply and demand of the product
What are the 2 method of pricing a business must choose from
Pricing low - achieves a high volume of sales but a low profit margin typically used for generic products with no USP
Pricing high - Low volume of sales but high profit margin used for products with a strong USP
What are the 4 factors that may lead to a change in price
- Changes in technology
- Number of competitors
- Market segments
- Where the product is in its life cycle
What do businesses use promotion for (3)
- inform consumers of a new product or service
- persuade consumers to buy a product or service
- remind consumers about the benefits of a product or service
What is an advertisement
a paid-for message designed to influence consumer purchases
What is a Sponsorship
They provide financial support to an event, person or organisation, either through free products or services, or through a financial payment.
In return, the business, product or service is prominently displayed.
What are product trials
They designed to encourage consumers to try a product either for free or at a reduced cost.
What are special offers
A type of sales promotion. They offer incentives to persuade consumers to make a purchase.
What is Branding
A brand image can be used as promotion
When a new product is launched under an established brand name, consumers may be more likely to purchase it because of their knowledge of the existing brand.
define promotional strategy
Planned promotional activities designed to increase awareness of a product or service by appealing to a target audience.
define viral marketing
Promotional activity that encourages consumers to share content between themselves on the internet.
What is targeted online advertising
Website owners track the online activity of consumers using cookies. They use this to build a profile of consumer interests and target ads towards them based on this
define channels of distribution
the different ways of moving goods from producers to customers
What are 3 common channels of distribution
Producers
Retailers
e-tailers
What is a direct channel of distribution
Only involves the producer and the customer
What is an indirect channel of distribution
It introduces an intermediary ( a link) who makes it easier to distribute products and more convenient for customers to buy these products. however they take some profit
What is the advantages(2) and disadvantages(1) of a retailer
customers are able to see and feel the quality of the products that they are interested in
Retailers that sell a particular type of product may also be able to offer specialist advice
They require premises which can be expensive
What are the advantages(4) of being an e-tailer
they can offer a wide range of products as they are not limited by the size of a shop
they may allow small producers to sell through their website for a fee
their prices are often lower, as they do not have to pay for a physical shop
customers can shop whenever and wherever they want, as e-tailers are open 24 hours a day, 7 days a week
What are the disadvantages(4) of being an e-tailer
customers need to have internet access
customers cannot pay by cash
goods need to be delivered, so customers must be willing to wait
items cannot be seen in person before purchasing them
Why does each element of the marketing mix need to be balanced
as they all affect each other
