3.3.4 Marketing mix

Question 1

Tradition Four P’s

Answer 1

-Product
-Price
-Place (distribution channel)
-Promotion

Question 2

Extra 3

Answer 2

-People
-Process
-Physical environment

Question 3

Marketing mix

Answer 3

The combination of elements used by a business to enable it to meet the needs and expectations of customers

Question 4

Product

Answer 4

-Consumer products
-Convenience products
-Shopping products
-Speciality products

Question 5

Boston Matrix

Answer 5

-A model which helps businesses analyse their portfolio of businesses and brands. The Boston Matrix is a popular tool used in marketing and business strategy

Question 6

Price

Answer 6

What a customer has to give up in order to acquire a product or service

Question 7

Pricing methods

Answer 7

The method used to calculate the actual price set

Question 8

Pricing strategy

Answer 8

Adopted over the medium to long term to achieve marketing objectives

Question 9

Pricing tactics

Answer 9

Adopted in the short term to suit particular situations

Question 10

Financial objectives that affect pricing

Answer 10

-Increase cash flow
-Increase profit

Question 11

Marketing objectives that affect pricing

Answer 11

-Increase advertisement
-Increase brand awareness
-Sales volume+value

Question 12

Cost based pricing

Answer 12

Setting a price based on how much it cost to make

Question 13

Cost based pricing benefits

Answer 13

-Covers all costs
-Easy to calculate
-Price increase can be justified when costs rise

Question 14

Cost based pricing drawbacks

Answer 14

-Keep costs low=price low
-Costs too high=price high
(BOTH DEPEND ON P.E.D!!!)

Question 15

Price skimming

Answer 15

-A firm charges a high initial price and then gradually lowers the price
-Works well for products that create excitement amongst ‘early adopted’
-Best used in introduction or early growth stage of product life cycle
-Electronic items provide many great examples

Question 16

Price skimming will only work if…

Answer 16

…product is in demand
…luxury
…innovation
…high price = high quality
…strong brand image

Question 17

Penetration pricing

Answer 17

-Offer a product at a low introductory price
-Aim is to encourage and persuade customers to pay for the product
-Become willing to pay for it
-Prices can be increased once target market share is reached

Question 18

Dynamic pricing

Answer 18

-Pricing strategy in which businesses set flexible prices for products or services based on current marketing demands

Question 19

Promotion

Answer 19

-Advertising
-Ways to bring customers in
-Publicity
-Informing, influencing and persuading
-Communicating about a product or service

Question 20

Why use promotion?

Answer 20

-Brand image
-Increase awareness
-Customer loyalty

Question 21

Different ways of promotion

Answer 21

Advertising- paid for communication
Sales promotion- short term incentive to increase sales
Personal selling- promotion on a person to person basis
Public relations- help to achieve favourable pricing
Direct marketing- promotional material through text, mail, email or phone calls

Question 22

Value of brands

Answer 22

-Brand image
-Recognise the product from another
-Logo/slogan (if effectively marketed)

Question 23

Benefits of brands

Answer 23

-Increase customer loyalty
-Stand out
-Charge higher prices

Question 24

Place

Answer 24

To make products available in the right place at the right time in the right quantities

Question 25

Distribution channel

Answer 25

Moves a product through the stages from production to final consumption

Question 26

Retailers

Answer 26

-Focused on customer markets
-Final step in the chain
-Deals directly with the customer

Question 27

Advantages of retailers

Answer 27

-Quick service
-Offer choice
-Buy specific amount (not bulk buying)
-Easy to access
-Hold stock

Question 28

Wholesalers

Answer 28

-Buy in large quantities
-Break into smaller quantities to sell to retailers
-Make money by buying at a low price from producer and adding a profit margin

Question 29

Advantages of wholesales

Answer 29

-Retailers can order in small amounts
-Reduce the producers transport costs

Question 30

Economics of sale

Answer 30

-Output increases, cost per unit decreases

Question 31

Distributor

Answer 31

-Specialises in one particular industry (building supplies, electrical components, industrial clothing)

Question 32

Agent

Answer 32

-Specialist type of distributor
-Does not hold stock
-Tend to operate in tertiary sector (service)
-Earn commission based on sales achieved