2.2- Making marketing decisions Flashcards by Lottie Savina

Design mix
Def?
3 factors?

Combination of function, costs and aesthetics when developing a product
Function, cost, aesthetic

How well did you know this?

Not at all

Perfectly

Design mix
Function

What the product does and how well it does it

How well did you know this?

Not at all

Perfectly

Design mix
Cost

How cost-effective the product will be to manufacture

How well did you know this?

Not at all

Perfectly

Design mix
Aesthetics

How the product looks and appeals to customers

How well did you know this?

Not at all

Perfectly

Product life cycle

The phases a product will go through in its life

How well did you know this?

Not at all

Perfectly

4 stages of a products life cycle

Introduction, growth, maturity, decline

How well did you know this?

Not at all

Perfectly

Features of introduction in product life cycle

-High research and development costs
-Profits may be negative
-Sales are low

How well did you know this?

Not at all

Perfectly

Features of growth in product life cycle

-Rapid growth in sales and profits
-Customer is aware of product
-Demand is high

How well did you know this?

Not at all

Perfectly

Features of maturity in product life cycle

-Face competition as market grows
-Sales peak
-May use discounts to keep sales high

How well did you know this?

Not at all

Perfectly

Features of decline in product life cycle

-Profits and sales fall
-Could be withdrawn from sale if becomes unprofitable

How well did you know this?

Not at all

Perfectly

2 things that can change the length of a product life cycle

How dynamic the market is- tech becomes out of date quickly
How strong the brand image is- a well-known brand will have longer life

How well did you know this?

Not at all

Perfectly

3 Ways to extend a product’s life cycle
How it works and dis?

Product differentiation, create USP to stand out
Dis- must appeal to consumers
Reducing price, attracts customers from competitors
Dis- not sustainable, will affect business profits
Rebranding, can appeal to new customers
Dis- expensive

How well did you know this?

Not at all

Perfectly

4 Factors a business considers for the price of a product?

Cost of raw materials, quality of product, brand image and demand for product

How well did you know this?

Not at all

Perfectly

2 types of pricing strategies?

Pricing high- high prices and profit margins, low volume of sales (luxury products, have USP)
Pricing low- low prices and profit margins, high volume of sales (generic products, no USP)

How well did you know this?

Not at all

Perfectly

4 factors that influence pricing strategies

Technology, competition, market segments, product life cycle

How well did you know this?

Not at all

Perfectly

Pricing high strategy
Ads & dis

Ad- may have reputation for good quality
Dis- could slow down sales if too expensive

How well did you know this?

Not at all

Perfectly

Pricing low strategy
Ads & dis

Ad- builds customer usage and loyalty
Dis- may be hard to raise selling price

Cost plus pricing def?
Equation?

Adding a fixed amount / percentage, to the cost of making a product
Price= unit cost + (mark up % x unit cost)

Prices based on cost
Ads & dis

Ad- Guaranteed profit per unit
Dis- Price may be expensive compared to competitors

Competitive pricing

Setting a price based on competitor’s prices

Promotional pricing and example?

Reducing prices in the short term e.g selling old stock

Promotional pricing
Ads & dis

Ad- encourages customers to try a product
Dis- sales may only be high during promotion

Promotion

Raising awareness and desire for a product

3 key reasons why businesses promote

Inform consumers of new product/ service
Persuade consumers to buy product/ service
Remind consumers about benefits of product/ service

Branding

A product with unique character that is well recognised

Methods to create a strong brand? Ads & Dis?

Colour, packaging, slogan, celeb endorsement Ad- brand awareness, customer loyalty Dis- costly to maintain, need for good reputation

5 promotion strategies

Advertising, sponsorship, product trials, special offers, branding

Advertising Def? 2 Ads & dis?

Any method of promotion that is paid for Ads- Target many consumers, control message Dis- Expensive, not flexible

Sponsorship Def? 2 Ads & dis?

Financially supporting an event or person Ads- Build awareness, target market Dis- Expensive, could tarnish reputation w association

Product trials Def? 2 Ads & dis?

Free samples to encourage customers to try a product Ads- Competitive advantage, entices customers to visit store Dis- Labour intensive, costly

Special offers Def? 2 Ads & dis?

incentives to persuade customers to make purchases Ads- Entice customers, clear excess stock Dis- Can reduce profit margin, sales may only be high during the offers

Branding Def? 2 Ads & dis?

A product with unique character that is easily recognised Ads- Builds awareness, customer loyalty Dis- Expensive, negative attributes tarnish reputation

Promotional strategy

Combining promotion methods to reach the target audience

4 ways technology can be used in promotion

Marketing on social media, apps, newsletters, targeted online advertising

Marketing on social media Def? Ad & dis?

Producing content that can be easily be shared Ad- Cheap Dis- Needs to appeal to audience

Apps in promotion Ad & dis?

Ads in app, notifications Ad- Notifies customers of new products/deals Dis- Require expertise to create an effective app

E-newsletters to promote Def? Ad & dis?

Newsletters sent to customers who selected to receive them Ad- Maintain customers Dis- Don't attract new customers

Targeted online advertising Def? Ad & dis?

Websites tracking users activity through cookies Ad- Create products for customers' interests Dis- May be few trends

Retailing 2 Ads & Dis

Ads- Customers can try the product, no need to wait for delivery, can improve convenience Dis- Require premises that are expensive, and costs of employees

E-tailing 2 Ads & Dis

Ads- Lower costs due to no premises, open 24/7 Dis- Items can't be seen in person, can't pay in cash

3 Ways the marketing mix can cross over

Product with high cost of production requires a higher price Clothing products sell better when customers can try it on in a store Expensive products require high quality of promotion e.g celebs