3.3.4 Using the marketing mix Flashcards
10 what is the marketing mix
a specific collection of actions and associated instruments employed by an organisation to stimulate acceptance of its ideas, products and services.
10 what is the 4 stages of a firm off to a customers
1 firm chooses product to meet identified need of target segment
2 distribution channel is selected to make product available
3 firm undertakes eye catching promo
4 price platform is accepted by all
10 what are the 7 Ps in the Marketing Mix
price
product
promotion
place
people
process
physical environment
10 what is product (learn)
a tangible object or service that is mass produced or manufactured on a large scale with a specific volume of units
10 what is examples of product features
variety
quality
design
features
brand name
packaging
services
10 what is place
the location a product can be purchased in
often distribution channel, include any physical store, as well as online
10 what is an example of place
channels
coverage
locations
inventory
transportation
logistics
10 what is a channel
the way you go to market, shops direct or online, as well as wholesalers, retail etc
10 what is price
amount the customer pays
determined by market share, competition, material costs, and customer value
business can increase or decrease price
10 what is examples of pricing
list price
discounts
allowances
payment periods
credit terms
10 what is promotion
all communications used
advertising, personal selling, public relations, word of mouth, point of sale
lots of crossovers
10 what is advertising
communication that is paid for, cinema, radio, tv adverts, print media etc
10 what is PR
unpaid communications
10 what are examples of promotion
branding
sponsorship
sale promotions
public relations
advertising
10 what is people
who is involved with the transaction
skills and attitudes will affect perception
10 what is an example of people
who enquires
who serves you
who serves customers
10 what is process
how you actually buy the product or service
influence satisfaction
pay for parking on phone, shopping on phone, waiting in a queue
10 what is physical environment
physical premises
car show room influences opinion of cars
design, décor, cleanliness, pictures, reception etc
12 three features of a product
the core benefit
tangible product
augmented product
12 what is the core benefit
what the product provides
washing machine to provide clean clothes for the customer
12 what is the tangible product
features such as specification, reliability and design
12 what is the augmented product
the extras such a brand name, delivery, guarantee and after sale services provided.
take your old washing machine and install the new one for you.
12 what is the product life cycle
different stages of product life
development
introduction
growth
maturity
decline
12 what is developement
stage when the product is being developed
investment in research costs
products tested and assessed to see if they are worth launching
no sales, so always negative cashflow
12 what is introduction
when the product is launched in the market
sales are slow, consumers not aware
high levels of investment still required to promote the product
cash flow remains negative
12 what is growth
sales begin to increase at a fast rate
consumers are more aware of the product
some investment still required
cash flow begins to become positive
12 what is maturity
rate of sales growth begins to slow
competitors may enter the market
sales may be high, but not increasing
cash flow is positive
12 what is decline
sales fall, growth is negative
new and better products are launched
cash flow turns negative again
12 what is the boston matrix
helps to categorise products and decide what to do next
identify poor performing products to help reinvest in
can leave business vulnerable to cash flow issues
can involve rebranding - an extension strategy
12 what are the two scales on a boston matrix
high to low market growth
high to low market share
12 what are the four categories of a boston matrix
cash cow - H share L growth
dogs - L share L growth
problem child - L share H growth
stars - H share H growth
12 what is a cash cow
high share of a slow growing market
mature market
do not need heavy promotion
well known and generate high sales
heinz baked beans
12 what is a dog
low share in a slow growth market
invest to revive the product or let it decline and eventually remove them
12 what is a problem child/question mark
low share in high growth markets
not yet established products
50/50 chance of succeeding
may need investing to do well
12 what is a star
high share in a high growth market
need to invest and promote the products
gain more distribution and ensure they remain stars
12 how does the product life cycle link to the marketing mix
mix is adapted at every stage of product life cycle
growth - price high
decline - reduce price
introduction - promote to create awareness
12 what is an extension stragety
prevent the sales of a product from falling and avoid or delay the decline of a product
medium to long term plan for lengthening a product life cycle, implemented in maturity or decline phase
12 what is an example of an extension strategy
increase promotional expenditure
revamp the product in some way
find a new target segment
new occasion of use for the product
12 why is the product life cycle valuable
the actual duration and precise nature will vary
managers need to know where a product is at any given time
managers must interpret data well
12 examples of different stages of product life cycle
new restaurant may take a while to establish itself, but a film is popular as soon as its release
medicine can be hot for 15 years but a song is only around for a few weeks
12 uses of the product life cycle
forecast future behaviour of sales
tool of analysis to assist in formulation of marketing strategies
aid the analysis of a product portfolio
12 limitation of the product life cycle
difficult to recognise where a product is in the life cycle
decline is not inevitable
not monitoring from a financial perspective can be bad
12 what is product development
modify an existing product or replace it with a new one
12 what are the stages in product development
generate ideas for new products
analyse ideas
select ideas to improve
develop prototypes
test products
launch
12 why would you develop a new product
end of life cycle for others
new opportunities in the market
build on strengths
achieve growth
match competitor actions
12 what are the risks of product development
not be viable, or technical problems along the way
not going to sell well, market is not understood, promotional problems or competitor actions
12 what do managers consider when investing
the time it will take to recover the initial spending and rate of investment
13 what factors affect price
cost
price elasticity of demand
13 what is price elasticity of demand
if demand is price inelastic, increasing price will increase revenue
if demand is price elastic, decreasing price will increase revenue
13 what is price inelasticity
price increase will lead to a smaller percentage fall in quantity demanded than percentage rise in price
13 what is price elasticity
price decrease will lead to greater percentage increase in quantity demanded than percentage cut in price
13 how do costs affect price
businesses must cover their unit costs
may use cost-plus pricing
higher sales levels leads to lower unit costs charging a lower price
13 why are high level sales important
higher level of sales enables fixed costs to spread over a larger output leading to lower unit costs and making it possible to charge a lower price
lower level of sales results in higher unit costs and requires a higher price to sell
13 what is penetration pricing
charges a low price to gain market share
when demand is sensitive to price/ elastic
low price gains high sales producing on a large scale
13 what is price skimming
much higher price is charged when the product is launched
demand is insensitive to price/ inelastic
heavy branding like an iPhone
13 what is dynamic pricing
changed rapidly in response to changing demand conditions
airlines,taxis,hotels track enquiries and raise prices accordingly
no one price for a ticket
14 What is target audience
understand the target group, how best to reach them
conduct research into how best to sell
14 what is the promotional budget
how much money the business has to spend on promotion
TV adverts are more expensive, so not possible on a small budget
14 what is the message received in the promotional mix
what does the business want to associate with itself
RedBull- high energy activities, extreme sports etc
14 how does technology affect the promotional mix
growth of online business creates new opportunities
target online advertising more effectively
define what regions adverts appear, use the algorithm to advantage
measure effectiveness of adverts
CTRS- click through rates
14 how can social media help promotional mix
create their own blogs, contribute to other blogs, promote their own products
viral marketing to create a buzz
14 what involves branding decisions
represents a promise made by a business to provide a specific set of benefits
recognise brands and values
features specific qualities
name, logo, slogan etc
14 how do brands hold reputational assets
reputation of the business is something of value to it
built up overtime
can be damaged
14 If a brand is strong….
demand is more price inelastic
customers = brand ambassadors
other products by brand
difficult for competition to gain market share
14 what is the AIDA model
Awareness
Interest
Desire
Action
14 why do you use the AIDA model
tv, radio, cinema bring attention, raising interests of people watching
detailed campaigns create desire
triggers action
15 what factors affect place
degree of coverage
costs of different strategies
nature of the product
degree of control over price and promotion
customer expectations and technological deliveries
15 how does degree of coverage affect place
how does the business want to reach customers, global, national,local
if spread is broad business may want intermediaries to reach all
is spread is narrow, business may want to distribute directly
15 how does tradition distribution go
producer, wholesaler, retailer, customer
15 how does modern distribution go
producer, retailer, customer
15 how does direct distribution go
producer, customer
15 how does cost of distribution strategies affect place
expensive for a business to set up own distribution channels
online sales opportunities allow business to become global at a lower cost
15 how does nature of the product affect place
high value products selling in low quantities are sold direct to customers
low value selling in high quantities require intermediaries, like a retailer
convenience items like gum are sold with wide distribution
15 how does degree of control affect place
the intermediary will gain some control over the promotion and price if used
otherwise the business controls everything
Aston Martin, Rolex, Gucci, etc, keep close control over their products
15 how does customer expectations of distributions affect place
customers expect multichannel distribution
access a product in many different ways
Tesco offers may shop sizes
technology revolutionised distribution in many industries, changing value and nature of physical stores
