4.3 The Marketing Mix

Question 1

What are the 4 ps?

Answer 1

1. Product
2. Price
3. Place
4. Promotion

Question 2

What are the costs and benefits to producing a new product?

Answer 2

Costs:

1. Market research needed
2. capital expenditure
3. no guarantee of sales
4. if financing is borrowed, fanger

Benefits:

1. Survival
2. Bring competitive advantages
3. New markets, potential of increased sales
4. Help growth and economies of scale

Question 3

What are the different pricing teckniques?

Answer 3

1. Competitive Pricing
2. Penetration Pricing
3. Skimming
4. Cost plus
5. Promotional

Question 4

What is market skimming, and its traits?

Answer 4

It is setting a price that’s expensive, a unique product has people more willing to pay a high price on it, also gives status to consumers.

1. Profit is High
2. Dangers of not being bought

Question 5

What is Penetration Pricing and its traits?

Answer 5

Setting a price that’s extremely low to introduce product to market.

Question 6

What is competitive pricing?

Answer 6

Setting price similarly to competitors prices. This should be used if the business has a good brand image and in a market filled with competitors, this should be favourable. This allows:

1. Product to be compared
2. if better than it will be successful
3. not higher, so it will be considered

Question 7

What is cost-plus pricing?

Answer 7

It is pricing by adding an amount to the cost of production. There are two kinds:

1. Mark-up
2. Full-cost

Question 8

What is promotional pricing?

Answer 8

There are two kinds:

1. Loss-leader pricing
   
   1. Offer prices at a loss/ Bogof/Discounting (just to attract more customers)
2. cost-plus pricing

Question 9

What are distribution channels?

Answer 9

They are the route in which products get to the consumers

Question 10

What are the kinds of channels of distribution?

Answer 10

1. Producer → Consumer
2. Producer → Retailer → Consumer
3. Producer → Retailer → Wholesaler → Consumer
4. Producer → Retailer → Agent → Wholesaler → Consumer

Question 11

Who are the middlemen?

Answer 11

Retailers and Wholesalers

Question 12

What is direct selling?

Answer 12

Produce → Consumer

Question 13

What needs to be considered when choosing a channel of distribution?

Answer 13

1. Cost
   
   1. Transportation costs must be taken into account
2. Nature of The Product
   
   1. How quick it perishes
3. The Market
   
   1. Wide Geographic areas should use wholesalers

Question 14

What are the + & - of direct selling?

Answer 14

Advantages:

1. All profit to producer
2. controls all parts
3. quickest
4. direct contact with consumer

Disadvantages:

1. Cannot see/try product
2. Transportation costs
3. Storage Costs
4. Promotions must be done by producers

Question 15

What are the + & - of having a retailer?

Answer 15

Advantages:

1. Consumers can evaluate
2. inventory prices shared
3. retailers promote
4. More convenient locations

Disadvantages:

1. Retailer takes profit
2. Loss of control
3. Transportation
4. Retailers also sell competitor’s products

Question 16

What are the + & - of retailers + wholesalers?

Answer 16

Advantages:

1. Wholesaler buys bulk; promotes; pays for transport and inventory
2. Distribution is wider

Disadvantages:

1. Loss of control
2. another middlemen = more loss

Question 17

What are the + & - of retailers + wholesalers + agent?

Answer 17

Advantages:

1. Agent has specialist knowledge

Disadvantages:

1. Middlemen

Question 18

What are some promotional strategies?

Answer 18

Above-The-Line:

1. Advertising
2. Sponsorship

Below-The-Line:

1. Direct Mail
2. Mainstream radio/television
3. Targeted Ads
4. Personal Selling
5. Sales Promotion

Question 19

What is advertising?

Answer 19

It includes communicating with consumers through media - it is basically paid-for communication with consumers

Question 20

What are the kinds of advertising?

Answer 20

1. Informative
   
   1. Provides information to consumers including: price;place;about
2. Promotional
   
   1. This simply convinces customers

Question 21

What is sales promotion?

Answer 21

This is basically adding things on to the product:

1. Sales
2. Extras
3. Prizes
4. Loyalty Reward Schemes

Benefits:

1. Its specific to the business
2. Consumer Must by product

Question 22

What is personal selling?

Answer 22

Its having a salesperson with direct contact, this enables a good relationship to be established to convince the consumers to buy the product.

Costs:

1. expensive
2. needs commisions

Question 23

What is Direct Mail:

Answer 23

1. This is posting leaflets/ other printed materials directly to the consumers.
2. This reaches a wide geographic area
3. though consumers may throw away the mail
4. consumers identified with research

Question 24

What is sponsorhip?

Answer 24

This is where businesses pay to have their name linked to an event

Question 25

How is the internet used to promote?

Answer 25

1. Targeted Ads
2. e newsletters
3. viral advertising

Question 26

What is the product life cycle?

Answer 26

Introduction→ Growth → Maturity → Decline

Question 27

What are some extension strategies?

Answer 27

1. Changing Packaging
2. Finding new markets and uses
3. Increasing Advertising

Question 28

What is the Boston Matrix?

Answer 28

The boston matrix categorises products by using product differentiation. There are four types:

1. Star
   
   1. high market share in fast growing market
2. Cash Cow
   
   1. high market share for slow growing market
3. Dogs
   
   1. Low market share in slow markets
4. Problem Children
   
   1. Low market share in fast markets