2.2 - Making Marketing Decisions

Question 1

What is the design mix?

Answer 1

-function
-aesthetics
-cost

Question 2

The product life-cycle

Question 3

What are the two pricing strategies?

Answer 3

-price skimming=set high price when launched into market
-price penetration= sell product at low price

Question 4

What are the influences of pricing strategies?

Answer 4

-technology=new technology in production process can help to lower business costs.
-competition= as competition increases may mean competitive price has to be introduced
-market segments= business may have to adopt a different strategies depending on market segment targeted.
-product life cycle=the phase that product is in will determine whether lower or higher price can be charged.

Question 5

What are the 5 promotion strategies?

Answer 5

-advertising
-sponsorship
special offers
-product trials
-branding

Question 6

What is the benefit/drawback of advertising?

Answer 6

+Can reach a large potential audience. particularly effective for older generation
-can be expensive, especially if people ignore adverts, or watch TV on demand.

Question 7

What is the benefit/drawback of sponsorship?

Answer 7

+ can provide a lot of brand exposure. particularly effective when targeting events for different market segments.
-if event being sponsored gets bad publicity, the business’ image may suffer. can also be expensive

Question 8

What is the benefit/drawback of special offers?

Answer 8

+customers feel like they are getting a bargain
-profit margins will be reduced

Question 9

What is the benefit/drawback of product trials?

Answer 9

+encourages customers to try a new product
-can be costly to give way free samples.

Question 10

What is the benefit/drawback of branding?

Answer 10

+can add value to a product and will develop loyalty and repeat purchases.
-can take a long time to develop a strong brand

Question 11

What are the methods of distribution?

Answer 11

• retailers=buys products from producers in larger quantities and sells them for higher price to consumers.
  -e-tailers= buy and sell good on the internet
  -direct=employed by business who sell their product directly to the customer.

Question 12

How each element of the marketing mix can influence other elements?

Answer 12

if product was high quality, luxury and innovative product:
-price=likely to cost a lot to manufacture so price will need to be set high
-promotion=the promotion strategies must be appropriate given the product is high quality, likely to be targeted at premium market
-place= to uphold product’s superior image it must be sold in suitable establishments.

Question 13

What is competitive advantage?

Answer 13

-a gain that a business has over its rivals in the market

Question 14

NEED TO FINISH