2.2: Making marketing decisions Flashcards
What are the three aspects of the design mix
- Function: how well does it do its job?
- Cost: balance price and profit
- Appearance: style, elegance
What are the four stages of the product life cycle
- Introduction: product launched, sales low
- Growth: sales increase sharply, profit made
- Maturity: sales growth slow down, repeat purchases, competition arises
- Decline: product outdated, sharp drop in sales, product withdrawn
What are extension strategies
A slight change in a product for fresh appeal for the target/a different market
What are some methods of product differentiation
- Unique/catchy name
- Quality
- Design/components/function
- Packaging
- Customer service
- Differentiation at all stages
What is competitor pricing
Setting prices based on the average price in the market
When would a low price be used
Generic/non-branded products or for a product trial
What are some methods of promotion
- Advertising (TV, radio, posters)
- Sponsorship (like sports)
- Product trials
- Special offers (discounts, BOGOF)
- Public relations (recognisable logo)
Benefits and drawbacks of advertising
+ Can have a big impact if done well
- Can be expensive
- Hard to check if it is working
Benefits and drawbacks of sponsorship
+ Provides exposure
+ Associates with a good cause
- Doesn’t say much about the business or its products
Benefits and drawbacks of product trials
+ Encourages new customers
- Expensive to give away free products
Benefits and drawbacks of special offers
+ Boosts short-term sales
+ Clears stock levels
- Unsustainable in long term (will reduce profits)
Benefits and drawbacks of public relations
+ Encourages customers to connect with brand
+ Promotes customer loyalty
- Takes a while to develop
- Can quickly be destroyed by bad publicity
What are the advantages of a strong brand
- Customers may instantly recognise the brand, what it does and its positive characteristics
- Well-known brands are more likely to be first choice
- Customer-business trust
- Strong brands can charge premiums
What are the benefits of retailing (selling in person)
- Customers can browse/try products
- Point-of-sale promotion (displays)
- Can provide help and advice
- Customers enjoy the experience
What are the benefits of e-tailing (selling online)
- No renting or space needed
- Customers can buy anytime, anywhere
- Small businesses can compete with larger ones without retail space
