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SHHS - GCSE Business - J204 Paper 1 > 2.4 The Marketing Mix > Flashcards

2.4 The Marketing Mix Flashcards

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1
Q

What is the marketing mix?

A

Price
Product
Place
Promotion

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2
Q

Define competitor pricing.

A

When a price is set based on prices charged by competitor businesses for a similar product.

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3
Q

Define cost-plus pricing.

A

A pricing method that adds a percentage of profits to the total costs of making a product. This gives the selling price.

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4
Q

Define penetration pricing.

A

When a price is set lower than competitor business. Often used by new businesses to break into the market and establish a market share.
Should only be seen as a short-term strategy.

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5
Q

Define skimming.

A

Where a product is more advanced than that of competitors; price is set high as some customers are willing to pay higher prices to own the newest technology.

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6
Q

Define promotional pricing.

A

Where prices are reduced to give products a boost or to sell off old stock. Commonly seen as sales in shops.

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7
Q

What factors must a business consider when setting prices?

A 
Prices charged by competitors.
How familiar customers are with the business/product?
The costs of production.
The profits a business hopes to make.
Who is the target market?
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8
Q

Define innovation.

A

The improvement of an original idea, which will often involve using new processes. It is closely linked to design, where new ideas can be used in a product to change the design.

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9
Q

Define invention.

A

The introduction of a totally new product.

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10
Q

What is research and development (R&D)?

A

This is used to help both new and existing products. Research may involve testing products in a laboratory or conducting market research by interviewing customers.

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11
Q

What is the product life cycle?

A

The life of a product, shown on a graph, divided into four stages - introduction, growth, maturity and decline.

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12
Q

Why are image and design important?

A

How a customer feels about owning a product may be used in marketing. Customers may like to buy products with a good design and a good image.

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13
Q

Why do businesses need to innovate?

A

Businesses are all trying to develop an advantage over the competition in order to increase sales and demand. If you do not innovate you may be left behind by the competition and ultimately, could fail.

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14
Q

Why is branding important?

A

The brand a business develops represents a certain image. We know brands and have a clear idea of the quality and standard to expect from them.

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15
Q

Most products have a time span over which consumers will want them. What is this called?

A

The product life cycle.

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16
Q

What happens at the introduction stage of the product life cycle?

A

Product is launched.
Advertising is high.
Sales start to rise.
Penetration or skimming pricing may be used.

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17
Q

What happens in the growth stage of the product life cycle?

A

Sales grow rapidly.
Slightly less advertising as the product becomes more known.
No need for offers as the product is new and in high demand.

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18
Q

What happens in the maturity stage of the product life cycle?

A

Sales are towards their highest.
The rate of growth slows.
Advertising may be needed to maintain sales against the competition.

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19
Q

What happens in the decline stage of the product life cycle?

A

Sales are falling.
Promotions may be introduced to sell off old stock.
Customers see the product as old/dated and switch to those of competitors or a newer replacement.
The business may already have developed a new product to replace the one that is in decline.

20
Q

When are sales highest in the product life cycle?

A

The maturity stage.

21
Q

What are extension strategies?

A

Actions a business can take to maintain high sales.

22
Q

At what stage in the life cycle do businesses introduce extension strategies?

A

The maturity stage.

23
Q

Outline 3 extension strategies.

A

Advertise more widely.
Reduce the price.
Develop new markets (abroad, new targets)

24
Q

Is the life cycle the same length for every product?

A

No - some businesses have a very short life span, others can be around for many years.

25
Q

What is the first stage of the product life cycle?

A

Introduction

26
Q

What is the second stage of the product life cycle?

A

Growth

27
Q

What is the third stage of the product life cycle?

A

Maturity

28
Q

What is the final stage of the product life cycle?

A

Decline

29
Q

Define physical distribution.

A

The distribution of goods using a physical presence such as a shop.

30
Q

Define digital distribution.

A

The distribution of goods and services digitally by downloading from a website.

31
Q

List three products that can be downloaded digitally.

A

Computer games
Books
Music
Newspapers

32
Q

What is a distribution channel?

A

The way a business distributes its products or services.

33
Q

What is a wholesaler?

A

A large centre who take large deliveries of stock direct from manufacturers. Their role is to ‘break the bulk’.
They buy in large quantities from manufacturers and sell in smaller quantities to retailers. E.g. Costco sells to a local newsagent.

34
Q

What is a regional distribution centre (RDC)?

A

A large storage facility owned by a retailer.
Producers will deliver goods to the RDC which are then loaded onto delivery vehicles and delivered to stores across the region.
For example, large manufacturers deliver goods to Morrisons’ RDCS. Morrisons then look at the stock that is needed by each store, filling trucks with the range of goods needed and delivering them.

35
Q

How is digital distribution different to e-commerce?

A

With digital distribution the goods are downloaded but do not exist physically, whereas with e-commerce there is still physical movement of goods when the products are delivered.

36
Q

List three advantages of digital distribution.

A

Customers can access products 24/7.
Goods are downloaded, so are available quickly.
Costs savings for the business as there is no delivery.

37
Q

List three disadvantages of digital distribution.

A

Not all goods are suitable for digital distribution.
Businesses may be forced to distribute digitally to match competition.
Not all customers have access to the internet.
Digitally distributed goods are easier to copy, meaning businesses lose sales.

38
Q

What is promotion?

A

The methods used by a business to inform customers about products and services and to persuade them to buy.

39
Q

Do all businesses carry out promotion?

A

No - small, well-established businesses might rely on word or mouth.

40
Q

List three aims of promotion.

A

To inform customers about a product or service.
To keep a business ahead of the competition.
To create or change the image of a business.
To maintain/increase sales.

41
Q

What is point of sale promotion?

A

Promotions that take place at the place where customers buy the products.

42
Q

What are the four examples of point of sale promotion?

A

Price reductions
Loss leaders
Competitions
Free samples

43
Q

Describe loss leaders.

A

A business will lower the price of one or two products to such a point that there is little or no profit.
Customers will be attracted to the business by the low prices, but while they are there they will buy a number of other items that the business does make a good profit on.

44
Q

What considerations need to be made when choosing appropriate advertising media?

A

The cost of advertising and how much the business can afford to spend.
The target market and where they will be likely o see advertising.
Whether the advert is part of a campaign or a single advert.

45
Q

What are the five main methods of advertising?

A 
Social media.
Websites.
Printed media.
Television.
Radio.
46
Q

Market data is information that will help a business make marketing decisions.
What might this include?

A 
Changes in demand
Target market
Market share
Product change
Effect of promotion
47
Q

What is market share?

A

The percentage sales one business/product has as a proportion of the sales of the total market.

SHHS - GCSE Business - J204 Paper 1 (17 decks)

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