2.4 Marketing Mix Flashcards
The 4 ps of the marketing mix are…
Price
Product
Place
Promotion
What does tangeble mean?
Can be touched . Eg, products
What does intangible mean?
Can’t be touched. Eg. Services
The 5 different pricing strategies are …
Cost-plus pricing
Competitor pricing
Price Skimming
Promotional pricing
Penetration pricing
What’s cost- plus pricing ?
Adds a % onto the cost of producing a product, resulting in a sale price
Cost-plus pricing advantages
Prices are easier to calculate
Ensures each product will make a profit
Cost plus pricing disadvantages…
Doesn’t take into account competitor prices
Doesn’t encourage a business to lower prices
What is promotional pricing ?
Reduction in price to attract customers to products. Eg. BOGOF.
Promotional pricing advantages
Attracts customers into stores
Breaks loyalties with other brands
Encourages customers to buy more
Promotional pricing disadvantages
Customers may get used to promotional prices and not want to pay normal ones
Stock may be unavailable for customers who usually pay full price
Price skimming is….
When a product is more advanced than that of competitors, a business may set a high price because people will pay it. After time,demand decreases along with the price
What is competitor pricing ?
Competitor pricing is setting a price based on prices charged by another business or competitor on a similar product.
Penetration pricing is…
When a new business sets lower prices than competitors to attract customers and break customer loyalties with other brands
Promotion is ….
How a business informs its customers about a new product or service and persuades them to buy.
Promotional methods include ….
Tv advertising
Radio advertising
Social media
Billboards
Tv advertising advantages…
Helps reach a larger audience
Target market reached based on programmes watched
Engaging visual elements
Tv advertising disadvantages
Costly
Mainly suitable for larger businesses
Advantages of social media advertising
Social media pages are quick to update
Cheaper then other promotional methods such as tv advertising
Disadvantages of social media advertising
Time consuming to monitor and update
Negative feedback can be reviewed by other customers
Radio advertising advantages…
Portable so can reach customers anywhere
Cheaper then tv advertising
Radio advertising disadvantages…
No engaging visual elements
People can skip adverts
Advantages of business doing website advertisements
Videos on the website can show a product in more detail
Most business will have their own website
Used to send a message to buyers and persuade them
What’s invention…
Introduction of a total new idea
Whats Innovation…
Improvement of an original idea
What’s design…
Related to the style of the product
What are the point of sale promotions?( promotions that happen when the customer is buy in the product)
Price reduction
Loss leaders
Competitions
Free samples
What factors do customers condiser before buying a product ?
Design
Functionality
Convenience
Branding
What’s an invention
What’s an innovation
What’s the design
Invention- introduction of a totally new idea
Innovation- the improvement of an original idea
Design- related to the style of a product
What does the product life cycle do?
Describe the stages a product goes through from when it was first thought of to when it’s finally removed from the market.
4 stages of the product life cycle?
Introduction
Growth
Maturity
Decline
What does the introductionstage involve ?
Researching , developing and launching a product.
What does the growth stage involve ?
When sales are increasing at their fastest rate
What is the maturity stage in the product life cycle?
Sales are near their highest, but the rate of growth is slowing down.
This could be because of new competitors.
What is the decline stage in the product life cycle?
Final stage where sales begin to fall.
Advantages of the product life cycle?
Helps you identify when an extension strategy is needed.
Disadvantage of the product life cycle …
Doesn’t take external factors until consideration.eg competitor lowering prices
What does place mean in the 4ps of marketing?
Where products and services are sold
How the business gets products to the consumer
What’s a distribution channel?
The organisations a product passes through to get from a producer to a consumer
How products and services get to a customer.
What’s a shopping mall?
Public transport links, choice of stores and is under cover.
What’s a retail park?
Less traffic, free/ available parking, click and collect services and easier buying large items such as furniture
What were the 3 main distribution channels ?
Producer—Wholesaler—retailer —customer
Producer-retailer-customer
Producer-customer
What does the term break bulking mean?
Buying in bulk and then breaking that up and selling it in smaller quantities
What does a wholesaler do?
They buy in bulk from the producer then break bulk to the retailer
How do wholesalers help small shops?
It means small shops don’t have to pay to store large goods that could also go off
What’s a regional distribution centre? (RDC)
Owned by a retailer and store products that they will later sell in stores
The 2 ways a business can get its goods/ services to a consumer…
Physical distribution-movement of goods we can see and touch
Digital distribution- distribution of goods by downloading from a website or app. Eg Apple Music
Examples of digital distribution include..
Music
Apps
Films
Games
Advantages of digital distribution..
Goods are available instantly
Cost savings as no packaging or postage costs
Businesses don’t have to store goods
Digital distribution disadvantages include….
Not everyone has acess to the internet
Not all goods can be downloaded
What’s market data?
Market data is information that will help a business make marketing decisions
What data might business consider ?
Change in demand
Market share
Effect of promotion
Target market
