4.5 The 4P's Flashcards
Marketing Mix
The key decisions that a firm takes in order to persuade consumers to buy their good or service
The product life cycle AO4
Intro:
- High cost
- Low Sales
Growth:
- Increasing revenue
- Profits can start to be made
Maturity
- High but flat sales and market share. More EOS.
- Most consumers already own the product
Decline
- Sales and profits fall
Extension strategies (AO3)
Marketing strategies that prolong the maturity stage of the PLC before a new product is needed.
- New Product
- Redesign
- Add features
- New Packaging
Pros and Cons of Extension Strategies
The relationship between the product life cycle, investment, profit and cash flow AO2
BCG matrix on an organization’s products AO3, AO4
- Analyzes a firm’s product portfolio in terms of market share and market growth
- Helps firm manage Product Portfolio
Question Marks:
- High market growth, Low market share
- PLC = Introduction
Building
Stars:
- High market growth, high market share
- PLC = Growth
Holding
Cash Cows:
- Low market growth, high market share
- Milk the product
- PLC = Maturity
Milking
Dog:
- Low market growth, Low market share
- PLC = decline
Divesting
Importance of packaging AO3
- Protection
- Attraction to customers
- Differentiation (and branding) (Stand out)
- Information (Health, warnings, info)
- Help distribution and shelf placement (Boxes to pack easily, no wasted space)
Cons of Packagine
- Cost
- Environmental concern
- Must be consistent with the 4Ps (Quality)
Aspects of branding
Brand Awareness
- Extent to which a product is recognized by potential customers
Brand Development
- How infiltrated the brand is in the market, usually per 1000 people
Brand Loyalty
- Faithfullness of customers to the brand
Brand value/equity
- When customers are a premium for the brand
- Amount the price is above the price for a non-branded product
Advantages and Disagvantages of branding
Product Portfolio
BCG Matrix
Pricing strategies
Market skimming
* Setting a high price for a new product when a firm has a unique or highly differentiated product
Penetration pricing
* Setting a relatively low price often supported by strong promotion in order to achieve a high volume of sales
Promotional pricing
* Special low prices to gain market share or sell off excess stock
Predatory pricing
* Deliberately undercutting competitors’ prices in order to try to force them out of the market (illegal most the time)
Cost-plus pricing
* Adding a fixed mark-up for profit to the unit cost of a product
Loss leader
* Product sold at a very low price to encourage consumers to buy other products
Psychological pricing
* Setting prices that take account of customers’ perception of value of the product
- $0.99 instead of $1
Price discrimination
* When a business sells the same product to different consumers at different prices
Price leadership
* When one business sets a price for its products and other firms in the market set the same or similar prices
Aspects of promotion AO2
- Use of advertising, sales promotion etc.
- To inform, persuade and remind consumers
Above the line promotion
- Promotion directly paid for by the company to communicate with consumers through media (Costly)
Below the line promotion
- Promotion that is not directly paid for by the company
- Short term incentives to purchase
- E.g. Price promotion, loyalty cards, Buy 1 Get 1 Free, coupons, prizes, free samples
The impact of changing technology on promotional strategies (A03)
Types of Marketing
Internet Marketing:
- Google Ads
Viral marketing:
- Facilitates and encourages people to pass on marketing messages
Social media marketing:
- Marketing on Facebook
Guerrilla Marketing:
- Unconventional marketing
- Usually High impact
- Cheap
- May backfire, especially if not be well-received by conventional customers
The importance of place in the marketing mix AO2
Place:
* How products should pass from manufacturers to the final customers
Customers:
* Customers can see, try and buy
Manufacturers:
* Need places to sell their products
Retailers:
* Need to make a profit
Pros and Cons of Methods of Distribution
