3.3.4 Flashcards
extended marketing mix
what are the 4p’s of marketing?
- product
- price
- place
- promotion
why does a business use the marketing mix?
to attract it’s target market
how can the marketing mix be effective?
should be influenced by market research
what is the difference between a product and a service?
- product = tangible
- services = intangible
what does product life style mean?
the lifespan of a product or service
what are the 4 stages of product lifestyle?
- introduction
- growth
- maturity
- decline
what does introduction mean in product lifestyle?
the product is launched to the market
what does growth mean in product lifestyle?
sales increase sharply and the product will begin to make profit
what does maturity mean in the product lifestyle?
sales growth slows down but repeat customers continue to buy and customers become loyal
- market can become saturated by rivals bringing out competing products
what does decline mean in the product lifestyle?
product becomes outdated and is unable to compete so sales begin to decrease leading to a withdrawal of the product
how can a business increase the life cycle of a product?
extension strategies
what does extension strategies mean?
slightly changing the product to give it a fresh appeal to current or new markets
what does extension strategies include?
- new marketing campaigns -> promotional activities or changing the price or changing the packaging
- modified product
- change suppliers to provide a different quality product
- enter a new market
- find an alternative use for the product/service
what does product differentiation mean?
making a product different from other products in some way
what does product differentiation help a business to do?
- position their products
- target different market segments
- gain an advantage over their rivals when faced with competition
what does product differentiation include?
- unique and catchy product name
- quality
- design, appearance or function
- packaging
- customer service
what has an impact on new product development?
- changes in social trends
- changes in legislation
- changes in the economy that impact disposable income
- changes in technology
- levels of competition
- position in the market
- size of the market
what does price mean?
the amount of money a customer will need to pay for a good/service
what influences how much customers are willing to pay?
quality of a good/service
- if price is too high there is a risk pricing yourself out of the market
- if price is too low a business could end up making a loss
how does a business price their product/service appropriately?
adapt one of the following:
- penetration pricing
- economy pricing
- price skimming
- psychological pricing
- premium pricing
- competitor pricing
- cost plus pricing
what are the links between price and profit?
- businesses can increase profit by increasing the price
- businesses can increase profits by reducing their outgoings such as costs leading to a greater profit margin
what is a margin strategy?
setting a price that achieves a high profit margin
what us a volume strategy?
setting a price with a low profit margin which requires high sales volume to be profitable
e.g. McDonalds or Lidl
what factors influence price?
- technology
- branding
- costs
- levels of demand
- market segment
- availability of substitutes
- product life cycle
- levels of competition
