4.3 The Marketing Mix Flashcards
What are the 4 ps?
- Product
- Price
- Place
- Promotion
What are the costs and benefits to producing a new product?
Costs:
- Market research needed
- capital expenditure
- no guarantee of sales
- if financing is borrowed, fanger
Benefits:
- Survival
- Bring competitive advantages
- New markets, potential of increased sales
- Help growth and economies of scale
What are the different pricing teckniques?
- Competitive Pricing
- Penetration Pricing
- Skimming
- Cost plus
- Promotional
What is market skimming, and its traits?
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.
- Profit is High
- Dangers of not being bought
What is Penetration Pricing and its traits?
Setting a price that’s extremely low to introduce product to market.
What is competitive pricing?
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:
- Product to be compared
- if better than it will be successful
- not higher, so it will be considered
What is cost-plus pricing?
It is pricing by adding an amount to the cost of production. There are two kinds:
- Mark-up
- Full-cost
What is promotional pricing?
There are two kinds:
- Loss-leader pricing
- Offer prices at a loss/ Bogof/Discounting (just to attract more customers)
- cost-plus pricing
What are distribution channels?
They are the route in which products get to the consumers
What are the kinds of channels of distribution?
- Producer → Consumer
- Producer → Retailer → Consumer
- Producer → Retailer → Wholesaler → Consumer
- Producer → Retailer → Agent → Wholesaler → Consumer
Who are the middlemen?
Retailers and Wholesalers
What is direct selling?
Produce → Consumer
What needs to be considered when choosing a channel of distribution?
- Cost
- Transportation costs must be taken into account
- Nature of The Product
- How quick it perishes
- The Market
- Wide Geographic areas should use wholesalers
What are the + & - of direct selling?
Advantages:
- All profit to producer
- controls all parts
- quickest
- direct contact with consumer
Disadvantages:
- Cannot see/try product
- Transportation costs
- Storage Costs
- Promotions must be done by producers
What are the + & - of having a retailer?
Advantages:
- Consumers can evaluate
- inventory prices shared
- retailers promote
- More convenient locations
Disadvantages:
- Retailer takes profit
- Loss of control
- Transportation
- Retailers also sell competitor’s products
What are the + & - of retailers + wholesalers?
Advantages:
- Wholesaler buys bulk; promotes; pays for transport and inventory
- Distribution is wider
Disadvantages:
- Loss of control
- another middlemen = more loss
What are the + & - of retailers + wholesalers + agent?
Advantages:
- Agent has specialist knowledge
Disadvantages:
- Middlemen
What are some promotional strategies?
Above-The-Line:
- Advertising
- Sponsorship
Below-The-Line:
- Direct Mail
- Mainstream radio/television
- Targeted Ads
- Personal Selling
- Sales Promotion
What is advertising?
It includes communicating with consumers through media - it is basically paid-for communication with consumers
What are the kinds of advertising?
- Informative
- Provides information to consumers including: price;place;about
- Promotional
- This simply convinces customers
What is sales promotion?
This is basically adding things on to the product:
- Sales
- Extras
- Prizes
- Loyalty Reward Schemes
Benefits:
- Its specific to the business
- Consumer Must by product
What is personal selling?
Its having a salesperson with direct contact, this enables a good relationship to be established to convince the consumers to buy the product.
Costs:
- expensive
- needs commisions
What is Direct Mail:
- This is posting leaflets/ other printed materials directly to the consumers.
- This reaches a wide geographic area
- though consumers may throw away the mail
- consumers identified with research
What is sponsorhip?
This is where businesses pay to have their name linked to an event
How is the internet used to promote?
- Targeted Ads
- e newsletters
- viral advertising
What is the product life cycle?
Introduction→ Growth → Maturity → Decline
What are some extension strategies?
- Changing Packaging
- Finding new markets and uses
- Increasing Advertising
What is the Boston Matrix?
The boston matrix categorises products by using product differentiation. There are four types:
- Star
- high market share in fast growing market
- Cash Cow
- high market share for slow growing market
- Dogs
- Low market share in slow markets
- Problem Children
- Low market share in fast markets
