3.5.1 The Marketing Mix Flashcards
What is marketing mix made up of? [4]
Product in terms of
1. Design
2. Performance
3. Price
4. Promotion
including advertising and place in terms of where and how the product will be sold to customers.
What is the marketing mix commonly referred?
The marketing mix is commonly referred to
as the 4Ps and are key decisions that must be made to ensure successful marketing of a product.
What is market success of the marketing mix?
Although not all the 4Ps have the same degree of significance for each market situation, it
is important to have an optimum combination of the 4Ps fitting together into a coherent and integrated plan to ensure marketing success.
What is important to note about 4Ps?
It is important to note that the 4Ps must
be carefully coordinated to ensure that customers are not confused by conflicting messages
provided about the good or service sold.
What is a product? [2]
- A product is anything that can be offered to a market to satisfy a need or a want.
- Products that are marketed include physical goods, services, events, persons, ideas, or a mix of these entities.
How are marketers traditionally classified products?
Marketers have traditionally classified products on the basis of tangibility and use
(consumer or industrial).
What are tangible products classified as?
Goods
What are intangible products classified as?
Services
How are goods further sub-divided?
Goods are further sub-divided according to their durability.
What are non-durable goods?
Non-durable goods are tangible goods normally consumed in one or a few uses, such as soft
drinks and shower foam.
Why will business provide durable goods?
Businesses providing durable goods typically use more personal selling, charge a higher margin and provide seller guarantees such as warranty period or a refund policy.
How do businesses make non-durable goods?
As these goods are consumed quickly and purchased frequently,
businesses tend to make them available in many locations, make a small profit margin, and
advertise heavily to influence purchasing decision.
What are durable goods?
Durable goods are tangible goods that usually last many uses.
What are examples of durable goods?
Examples include
refrigerators, machinery and clothing.
What are services? [2]
- Services are intangible, inseparable, variable and perishable products.
- As a result, they
normally require tighter quality control, supplier credibility and adaptability.
What are examples of services?
Examples of
services include haircuts, legal advice and maintainance of electrical appliances.
What are consumer products?
Consumer products are products and services purchased by end-consumers for personal
consumption.
How will marketers typically classify consumer products?
Marketers typically classify consumer products based on how customers go
about buying them.
What are the types of consumer products? [3]
- Convenience products
- Shopping products
- Specialty products
What are convenience products? [3]
- These are goods and services that customers purchase frequently, immediately and with minimal comparison and buying effort.
- Examples include soap, sweets, newspapers and fast food.
- Convenience products are usually low-priced, and businesses place them in many locations to make them readily available when customers want to purchase them.
What are shopping products? [4]
- These are less frequently purchased consumer goods and services that customers make comparisons on suitability, quality, price and style.
- When buying
shopping products, customers spend time and effort to gather information and make
comparisons. - Examples include furniture, mobile phones, cars, hotel and airline services.
- Businesses usually distribute shopping products through fewer outlets but provide better sales support to help customers in making comparisons.
What are specialty products? [3]
- These are consumer goods and services with unique characteristics
or branding for which customers are willing to make a special purchase effort. - Examples include antiques, designer bags, high-end super cars, and the services of medical or legal
specialists. - Customers usually do not compare specialty products, but invest only the time and effort to reach businesses selling them.
What are industrial products?
Industrial products are goods and services purchased for further processing or for use in
business operations.
What is the difference between a consumer product and an industrial product? [3]
- Hence, the difference between a consumer product and an industrial product is based on how the product is used.
- If a customer buys a digital camera for his
hobby, the digital camera is a consumer product. - If the same customer buys the same digital
camera for use in a photography business, it becomes an industrial product.
How can industrial products be grouped? [3]
- Materials and parts
- Capital items
- Supplies and services
What are materials and parts? [4]
- These include raw materials and manufactured materials and parts.
- Raw materials can consist of farm products (wheat, livestock, fruits) and natural products (fish, timber, crude oil).
- Manufactured materials and parts consist of component materials (cement, wires) and component parts (microprocessor, tyres).
- Most materials and parts are sold directly to the business market.
What are capital items? [4]
- These are industrial products that aid in the customers’ production or operations, including installations and accessory equipment.
- Installations consist of
major purchases such as buildings (factories, offices) and fixed equipment (generators,
elevators). - Accessory equipment includes portable factory equipment and tools (hand tools, forklifts) and office equipment (computers, printers).
- Accessory equipment
typically have a shorter lifespan than installations and simply aid in business operations.
What are supplies and services? [4]
- These include operating supplies (lubricants, paper, stationery) and repair and maintenance items (paint, nails, brooms).
- Supplies are convenience
products of the business market because they are usually purchased with minimal effort
or comparison. - Business services include maintainance and repair services (window cleaning, aircon maintainance) and business advisory services (legal, consultancy).
- Such services are usually supplied under contract.
What does developing a product involves?
Developing a product involves defining the benefits that it will offer.
What are the benefits of developing a product? [4]
These benefits are communicated and delivered by product attributes
1. Quality
2. Durability
3. Features
4. Appearance
What is product quality?
Product quality refers to the characteristics of a good or service that is able to satisfy the
needs of customers.
What is effect on product performance due to quality?
Quality has a direct impact on product performance; hence it is closely related to value creation and customer satisfaction.
What are the two aspects of quality?
- Performance quality
- Conformance quality
What is performance quality? [4]
- This refers to the ability of a product to perform its functions.
- For example, a Rolls-Royce as compared to a Nissan, offers a smoother and more
comfortable ride. - Businesses seldom try to offer the highest possible performance
quality, as few customers want or can afford the high levels of quality offered in
products such as a Rolls-Royce or a Rolex watch. - Instead, businesses choose a quality
level that matches the target market needs and quality levels of competitors.
What is conformance quality? [3]
- This means that the product is consistently able to deliver a target
level of performance and is free from defects. - All businesses should aim for high levels
of conformance quality. - For example, although a Nissan may not perform as well as a
Rolls-Royce, it can have just as much quality by consistently delivering what customers
expect and pay for.
What are the types of ways appearance be classified? [3]
- Form
- Style
- Packaging
What is durability? [4]
- Durability is a measure of the product’s expected operating life under natural or stressful
conditions. - It is a valued attribute for products such as vehicles or kitchen appliances.
- Consumers are not expected to pay excessively more for durability.
- In addition, the product must not be subjected to rapid technological obsolescence, such as in the case of personal
computers or mobile phones.
How will business offer various features? [4]
- A business usually starts off with a basic
model and creates higher-end models by adding more features. - Features are competitive tool for differentiating the product of the business from competitors’ products.
- A business
should periodically conduct market research on customers to find out about features important to them, and new features they would prefer. - The business should then assess if the new features important to customers is worth the additional costs of adding these
features.
What is form? [2]
- Many products can be differentiated in form, such as size, shape or physical structure of a product.
- For example, aspirin which is a common medication used to treat pain, fever or inflammation, can be differentiated by dosage, size, shape, colour, coating
or action time.
What is style? [3]
- Style describes a product’s look and feel to customers.
- Increasingly, customers
are interested in and willing to pay more for aesthetic products; those with an attractive
look, touch, feel and attention to detail. - Aesthetics play a key role in brands such as
Apple computers, Montblanc pens, and Harley Davidson motorcycles.
What is packaging? [3]
- Packaging involves designing and producing the container or wrapper for a
product. - Traditionally, the main function of the package is to hold and protect the product.
- However, with increased competition and the lack of space in retail store shelves, packaging must now perform multiple roles, from attracting attention, to describing the product, to making the sale.
What is product life cycle? [3]
- After launching a new product, the business would want sales of the product to last as long
as possible. - Although the product is not expected to sell forever, the business would want to earn a decent profit to cover the risk and effort that went into launching the product.
- Businesses should be aware that each product has a life cycle, although the exact shape and length is not known in advance.
What are the four key stages of a product life cycle? [4]
- Introduction
- Growth
- Maturity
- Decline
What is an example of introduction stage?
For example, when Toshiba first launched
its non-glasses 3D television, it came only in two versions, 12 and 20 inch, and prices are
high at $1,400 and $2,800 respectively.
What is growth stage? [7]
- If the new product satisfies the market, it will enter a growth stage, in which sales will start to increase quickly.
- The early customers (innovators) will continue to buy, and later customers (early adopters) will follow their lead, especially if they come across good reviews or favourable word of mouth.
- Attracted by the opportunities
for profits, new competitors will enter the market. - They will introduce new product
features, and the market will expand. - The increase in competition will lead to an increase in the number of distribution outlets, and sales will increase as distributors
build on their inventories. - Businesses will continue to spend the same amount of money on promotion, or even increase their promotion spending. 7. While creating awareness
remains a goal, the business must now also meet the competition.
What is introduction stage? [5]
- The introduction stage starts when the product is first launched.
- In this stage, profits are negative or low because of the low sales and high distribution and
promotion expenses. - Businesses would spend a lot of money to attract distributors and
build on their inventories. - Promotion spending is high to inform customers of the new
product and to get them to try it. - As the market is generally not ready for product refinements, businesses typically produce basic versions of the product, and focus on selling to those who are most ready to buy.
What is maturity stage? [7]
- At some point, a product’s sales growth will slow down, and the product will enter a maturity stage.
- The maturity stage usually lasts longer than the earlier
stages, and it poses strong challenges to marketers. - The slowdown in sales growth
results in greater competition. - Competitors would thus start to mark down prices, increase their advertising and sales promotions, and spend more on research and
development to build better versions of the product. - These measures would lead to a
drop in profits. - Some of the weaker competitors would start to drop out, and the market
would only contain well-established competitors. - Although many products in the
maturity stage appears to remain unchanged for long periods of time, the more successful ones typically evolve to meet changing consumer needs.
What is decline stage? [4]
- The sales of most products will eventually dip, and the decline may be slow or rapid.
- Sales decline for many reasons, including technological advancements,
change in consumer tastes and preferences and increased competitive offerings - As sales and profits decline, some businesses would withdraw from the market.
- The remaining ones may reduce their product offerings, drop smaller market segments, reduce availability, cut promotion budgets or reduce prices further.
What are the uses of product life cycle? [3]
- Identifies how cash flow might depend on the product life cycle.
- Recognizes the need for a balanced product portfolio.
- Assists with the planning of marketing mix decisions.
