4.5. 7 ps of marketing Flashcards
product life cycle
model that helps businesses make decisions about a product’s marketing mix- showing typical trend sales over time
5 stages of product life cycle
Research and development (R&D)
Introduction
Growth
Maturity
Decline
reaearch and development stage
activities that take place before product is released in the market- no sales simply testing
introduction stage
The first stage of the product life cycle, when the product is initially launched to the market.
focus on selling USP, must consider pricing strategies and distribution channel
what is focused on durinng research and development stage
- market research- primary and secondar
- product developing- desighning, testing, inovative, patent laws and copywrite
preparing production- making product getting stock
growth stage
The second stage of the product life cycle, which is characterised by an increase of sales over time.
how does a business continue in growth stage
t will need to find new target markets. This will lead to an adaptation of the marketing mix. Pricing strategies may need to be changed. Distribution channels may need to be expanded, perhaps to mass-market retailers.
maturity phase
high and steady sales revenue
sales will grow but slower and slower
market crowded with competition
what will be marketing objectives during maturity fase
Marketing objectives during the maturity phase will focus on building customer loyalty. During maturity, marketing budgets may be cut as businesses are no longer attempting to increase sales from new customers.
decline stage
period of falling sales and or market share
products lost unique selling point in highly competetive markets
prices reduced
extension strategies
A practice used to keep a product in the maturity stage of the product lifecycle, rather than letting it go into the decline stage.
extension strategies examples
finding new target market-> sales increase but can be costly needing market research
redesign packaging-> big impact on customer demand but some customers may be disapointed by new packaging with same product
product update->fast low cost, loyal customers may not like changes
price reduction-> increase sales reach more cutomers but could damage reputation
new promotional strategies
brand
symbol or design that is used to identify a product or company. A strong brand can give a product a character with which consumers can identify
brand awareness
The degree to which consumers recognise a product by its name and special characteristics.
brand development
Building brand awareness by cultivating the business’s values and consumer perceptions of the product
brand loyalty
When customers continue to buy a particular brand, even where alternatives exist.
brand value
- value of the intellectual property associated with brand
- can also mean the additional value that consumers assign to the product because of its strong brand- makes brand less sensitive to prices
packaging roles
- protect the product
- communicate information about product and brand
- promote the product and communicate USP
- make product easy to use
cost-plus (markup) pricing
method of pricing a product or service whereby all total direct costs and some allocation of indirect costs are added together, along with some markup- either fixed or percentage amount to determine sales price to reach customers
advantage and disadvantage of cost-plus (markup) pricing
pricing method is straightforward, if the customer accepts the price profit will be achieved
however its very inward facing, takes no account of competition of the customers ability to pay, meaning the potential customers may be put off by prices that are too high
predetory pricing
Predetory pricing: lower prices to push competitors out of business
Advantage: able to take up a dominant position in the market, also limits the possibility of new businesses entering the market
Disadvantage: impossible to maintain over a longer period, considered iliegal
dynamic pricing
sell the same product to different cutomers at different prices depending on circumstances
- based on group of customers, using algorithm and statistic to see who has ability to pay more
- based on time, This method might involve changing the price of goods and services for one or more days per month. Or it might involve changing the price throughout a single day
penetrating pricing
selling at lower price to gain more sales: good for prodicut that are purchased repeatedly
Advantage: business secure a large market share early on . Customer loyalty is established
Disadvantage: may have low profit and if prices are increased later customers will be unhappy
loss leader pricing
Loss leader pricing: sell at loss to get more sales, implemented by bigger businesses
Advantage: increase sales revenue
Disadvantage: very risky, only works when selling many products
