3.3.4- Making marketing decisions: Using the marketing mix

Question 1

What are the 7Ps? Give examples.

Answer 1

• Price. e.g. discounts, positioning
• Product. e.g. quality, branding
• Place. e.g. geographic, channels
• Promotion. e.g. marketing, PR
• People. e.g. training, culture
• Physical environment. e.g. online experience, packaging
• Process .e.g. Delivery

Question 2

What factors influence the marketing mix?

Answer 2

• Market research
• Competitors
• Target market segment
• Location
• Type of product
• Brand image
• Knowledge and skills of employees

Question 3

What are the three types of consumer products?

Answer 3

• Convenience: Inexpensive but bought regularly. e.g. coffee
• Shopping: More expensive, less regular. e.g. computers
• Speciality: Unique. e.g. luxury car

Question 4

What is the boston matrix?

Answer 4

Compares the market growth and market share

Question 5

What are the main factors of the star in the boston matix?

Answer 5

• High market share and high growth
• They’re profitable and have the most potential

Question 6

What are the main factors of the question mark in the boston matirx?

Answer 6

• High market growth, low market share
• Mainly new products
• Arent profitable but can either succeed or fail
• Need heavy marketing

Question 7

What are the factors of the cash cow in the boston matrix?

Answer 7

• High market share but low market growth
• Are produced in high volumes, so costs are low

Question 8

What are the factors of a dog in the boston matrix?

Answer 8

• Low market share and growth
• If still profitable, business will harvest profit in short term
• Can be sold off

Question 9

What does the boston matrix help with?

Answer 9

Shows where businesses products are positioned

Question 10

What are the stages of the product life cycle? Give a brief explanation.

Answer 10

• Development: Research and development. Lots of market research
• Introduction: Product launched into market. Promotion is high
• Growth: Sales grow, repeat & new customers. Improved development
• Maturity: Sales reach peak. Competition is fierce
• Decline: Sales fall. Can withdraw of use extension strategies

Question 11

What can businesses do for their extesntion strategy?

Answer 11

• Product development: Improve, reformulate, redesign products
• Market development: Find new markets or uses for product
• Can change the way of distribution
• Change price
• Change way its promoted

Question 12

What are the factors affecting pricing decisions?

Answer 12

• Price sensitivity
• Price elasticity of demand
• Products life cycle
• Companies objectives
• By the other P’s
• Profit to be made

Question 13

What are the strengths of price skimming?

Answer 13

• Creates the perception of high quality/must have products
• Provides higher up-front sales
• Can segment customer base with different strategies at each price level

Question 14

What is price skimming?

Answer 14

Products sold at high and then reduces overtime

Question 15

What are the weaknesses of price skimming?

Answer 15

• Early adopters may be turned off by price decrease
• Wont work if the product is similar to competitors
• Quality/service must justify price

Question 16

What is price penetration?

Answer 16

Set prices low then increase them overtime

Question 17

What are the strengths of price penetration?

Answer 17

• Can get loyal customers
• Win customers from competitors

Question 18

What are the weaknesses of price penetration?

Answer 18

• Customers can return to competitors when price increases
• Lower profit margins

Question 19

What are some pricing strategies excluding price skimming and penetration?

Answer 19

• Predatory pricing: Businesses purposely lowers price to force other businesses out of the market. Once gone prices increase
• Competitive pricing: Companies set prices lower or equal to competitors
• Psychological pricing: .99 to make people think its cheaper than it really is
• Dynamic pricing: aims to increase rev by changing price based on competitors price and demand

Question 20

What is promotion?

Answer 20

Inform customers about a product/service and persuade them to buy it.

Question 21

Why do businesses choose to advertise through media?

Answer 21

• Digital advertisement is easier
• Can reach a lot of people
• Can target customers with similar interest to their product

Question 22

How does branding impact a products image?

Answer 22

• Can charge a premium price
• Customers often remain loyal
• Packaging is distinguishable
• Ethical/eco-friendly
• Eliminates competition

Question 23

What are some other promotions excluding advertising?

Answer 23

• Sales promotion: BOGOF, competitions, free gifts
• Merchandise: point of sales display
• Personal/direct selling
• Loyalty cards

Question 24

What are the different channels of distribution?

Answer 24

• Direct selling: Manufacturer to consumer
• Indirect selling: Manufacturer to retailer to consumer
• Direct thru agent: Manufacturer to agent to consumer
• Indirect selling: Manu to wholesaler to retailer to consumer

Question 25

Why do retailers use multi-channel distribution?

Answer 25

It gives flexibility for customers and cover a wide market

Question 26

How do people play a vital part at providing goods and services?

Answer 26

• Employees who are friendly, polite/ knowledgeable, people are more likely to buy from them
• Sales people with interpersonal skills can build relations with customers

Question 27

How does process provide goods and services to customers?

Answer 27

• Businesses have to decide how to balance max profit while keeping customers happy, like a long wait
• Technology can improve process

Question 28

How can physical environment affect customers surroundings?

Answer 28

Clean, stylish, modern environment is more motivating for customers