4.5 Marketing - 4P's Flashcards
Types of extension strategies
- New markets (new regions; export)
- New markets (new segments)
- New uses
- New design or packaging
- New promotional strategies
Under consideration of which P may be best considered extension strategy to new regions?
Product (basic version/improved/substitute, other?) Promotion, Price, Place
Which extension strategy may be best considered under Promotion?
- New markets (new regions; export)
- New markets (new segments)
- New uses
- New design or packaging
- New promotional strategies
Under consideration of which P may be best considered extension strategy to new segments (in the same region)?
Product, promotion, price, place
What strategy may it be called, if a company finds new uses to a Product, and so is able to suggest is to new segments/with different Promotion/at different Price/at different Place to buy?
Extension strategy
May be redesigned and safer skateboard a subject of an extension strategy?
yes
What are the stages of product development (a stage of life-cycle)?
- Generating ideas
- Screening the ideas
- Creating of a prototype
- Test marketing
- Commercialization/launch/introduction
Product life cycle stages
- Development
- Introduction
- Growth
- Maturity
- Saturation
- Decline
What pricing strategy is most popular at the introduction stage with big or no competition?
- Penetration if there is big competition
- Price skimming if the product is unique/has no/less competition
What happens at the growth stage with pricing?
- Prices set to penetrate the market may now raise but
- Skimming prices lowered
What happens to Price skimming strategy at maturity stage?
Become competitive or promotional pricing, as many competitors attracted by your profits enter the market
Why market becomes saturated?
There are too few who want/need to buy or too many competitors have entered the market
Aggressive/comparative advertising is common for which stage of product life-cycle?
Saturation
Which type of advertising is used at each stage of life-cycle?
- Development-N/A (exceptions Apple and Tesla?)
- Introduction - Informative/awareness raising
- Growth- persuasive
- Maturity- reassuring/reminding/loyalty building
- Saturation - Aggressive, comparing and differentiating
- Decline - minimal
Limited/selected sales points is common for which stage of life-cycle?
Introduction and decline
Permanent price cuts are common at which stage of life-cycle?
Decline
What are the products of BCG?
- Cows
- Stars
- Question marks
- Dogs
Which products of the BCG matrix have probably high margins?
- Stars, if they are unique products and
- Cows, as the market is mature or saturated and companies no more try to grow the market share
Is it worth to increase marketing costs/aggressive ,marketing for Coca-cola? which type of product is this under BCG?
Cow, not worth investing more, as the sales will probably no more rise
What type of strategy is the introduction of Coca-cola with coffee?
- Redesign (one of the extension strategies)
or - Holding strategy, though for cows mostly is used the harvesting strategy
BCG strategies for its product portfolio
- Holding
- Building
- Harvesting
- Divesting
What strategy is used for Problem children/question markets?
Building (investing cash flows from cows in distribution/promotion to increase their market share
Limitations of BCG portfolio
- High market share of cows does not necessarily mean high profit
- Potential of Question marks may not be adequately assessed as many external factors may be involved
Pricing strategies
- Price cuts (permanent)
- Promotional Pricing/price promotion
- Skimming
- Penetration
- Cost-plus/mark-up
- Psychological/perceived value/99.9
- Loss leader
- Price discrimination (based on customers’ characteristics)
- Dynamic pricing (based on changing market conditions, like Bolt)
- Economy pricing
- Premium Pricing (based on quality)
- Bundle pricing (less cost in a bundle then separately)
- Complementary pricing (Paying small amount for main product and large amounts for details, like food in petting zoo
Components of branding/brand development in general
- Raising Brand awareness
- Strengthening of brand loyalty
- Maintenance of brand value
What is a brand?
a differentiating:
Name
Sign
Symbol
Design
What is brand awareness
Ability of customers to recognize the brand, and further to have some information on uses, sales points
What is brand development?
A Plan
to improve awareness and image of a product
What is brending?
Process or series of activities designed to differentiate
Brand value?
- If you were to sell the company and they want to use your name, logo, and brand identity to sell products or services, your brand value would be the amount they would pay you for that right.
- Extra money that customers are willing to pay for the this branded product
What are the benefits of packaging?
- Protection
- Convenience to carry, use
- Provision of information
- Reduced risks
- Promotional tool
Disadvantage of cost-plus pricing?
- No consideration of customer value
- No consideration of competitors
Disadvantage of penetration pricing?
- High market share does not necessarily mean profit
- Customer perception of low quality
- Used in price sensitive markets, so after rising the price (as initially planned) there may be no/less demand
Disadvantage of loss leader pricing
Accusations by competitors of unfair business practices, and possibly court/recovery of economic damages to competitors
Disadvantage of Price discrimination
dependent of demand elasticity
Disadvantage of Competitive pricing
Predatory/destroyer pricing is illegal in many states
Below-the-line promotion types
Less conventional but where company has more control:
Direct marketing (direct mails)
Trade shows
Search engines SMM
Personal selling In person or on the phone
Public relations
Sales promotions (coupons; BOGOF; competitions etc)
Place/distribution types
Zero intermediary
1 intermediary
2 Intermediary
What is Social media?
technology/medium that connects people to chat or share contents
What is Social network?
specific net of places in social media, like FB
What is viral marketing?
Marketing that aims to attract millions of views through voluntary sharing to raise awareness
Benefits of SMM
- Wide reach
- Engagement
- Measurable market information/research
- Low cost
- Speed
- No high/exceptional skills needed
Disadvantage of SMM
- Your target segment may not be present
- May be seen as disturbing by your segment
- Your segment is represented by Lurkers
Methods and examples of Guerrilla marketing
Intrigue
Creativity
Life commercials
Flash mobs
Disadvantage of guerrilla marketing
Ethical issues
Brand image may be damaged
may be illegal
Promotional mix?
A combination of ATL and BTL promotion aimed at specific target markets and may includes: advertizing, PR, personal selling, sales promotion (price discounts etc) , direct marketing etc.
Below the line (BTL) promotion vs Above-the-line?
BTL: Less conventional but where company has more control over tools, customer bases and processes
ATL: paid ads etc, ; third parties involved
