Business - 3.3 Flashcards
1
Q
marketing mix - definition
A
to describe all the activities which go into marketing products
2
Q
4 parts of marketing mix
A
- product
- price
- price
- promotion
3
Q
product
A
- applies to good / service itself
- design
- features
- quality
4
Q
price
A
- price of product being sold to the customer
- should cover overall costs
5
Q
place
A
- the channels of distribution that are selected
6
Q
promotion
A
- how product is advertised & promoted `
7
Q
types of products
A
- consumer goods (for consumer)
- consumer services (for consumer)
- producer goods (for business)
- producer services (for business)
8
Q
important parts of product
A
- needs to satisfy customer
- right quality
- not difficult to produce
- design important for brand image
- different from competitors
9
Q
new products - advantages
A
- USP (first into the market)
- diversification for business (broader range of products to sell)
- allows business to expand into new / existing markets
- keep customers interested
10
Q
new products - disadvantages
A
- cost of carrying out market research
- costs of producing trial products (and wasted material)
- lack of sales if target market is wrong
- loss of company image if failed
11
Q
brand image - definition
A
the unique identity of a product that distinguishes it from other brands
12
Q
brand loyalty - definition
A
when consumer keep buying the same brand again and again instead of choosing a competitors brand
13
Q
importance of brand image
A
- creates brand loyalty
- helps differentiate company’s product
- products can be charger higher
- easier to launch new products
14
Q
role of packaging
A
- protect the product during shipment
- creates a long shelf life
- helps promote product
- carry vital info
15
Q
product life cycle - definition
A
- stages a product will pass through from its introduction, through its growth until it is mature, and finally its decline
16
Q
product life cycle - process
A
development => introduction => growth => maturity => saturation => decline
17
Q
how to extend product life cycle
A
- introducing new variations of the product
- selling in new market / outlets
- improve old product
- use a new advertising campaign
18
Q
role of price
A
- pricing a product that fits in business
19
Q
cost-plus pricing
A
- involves covering all costs and adding a percentage mark-up for profit
20
Q
cost-plus pricing - advantages
A
- easy to apply
- different mark-up for different company
21
Q
cost-plus pricing - disadvantages
A
- lose sales if priced higher than competitors
- total profit made if all units sold
22
Q
competitive pricing
A
- involves setting prices in line with competitors prices
23
Q
competitive pricing - benefits
A
- sales will be high (bec price is realistic)
- often used for consumers to tell the difference
24
Q
penetration pricing
A
- price is set lower than competitors prices
25
penetration pricing - advantages
- used for newly launched products to create an impact with customers
- ensures sales are made
26
penetration pricing - disadvantages
- profit per unit may be low
- customers get 'used' to low prices, when it is raised they may refuse to buy
- can affect reputation
27
price skimming
- firm charges the highest initial price that customers will pay, then lower it overtime
28
price skimming - advantages
- establish product as being good quality
- able to recover production costs
29
price skimming - disadvantages
- high price may discourage potential customers
- high profitability will encourage competitors to enter
30
promotional pricing
- product is set at a low price and will increase over a period of time
31
promotional pricing - advantages
- useful for getting rid of unwanted inventory
- can help renew interest in a product
32
promotional pricing - disadvantages
- revenue will be lower bec the price of each item is reduced
- can lead to price competition with competitors
33
price elasticity of demand - equation
% change in quantity demand / % change in price
34
types of PED
- relatively elastic demand
- relatively inelastic demand
- unitary elastic demand
35
relatively elastic demand
- small change in price = big change in quantity demanded
- price sensitive
* want
36
relatively inelastic demand
- big change in price = small change in quantity demanded
- price in sensitive
* need
37
unitary elastic demand
- increase x% in price = decrease x% in quantity demanded
- decrease x% in price = increase in x% quantity demanded
38
importance of price elasticity
- important to firms = allows business owners / managers to understand how a change in price will affect total revenue
39
distribution channel - definition
by which a product is passed from the place of production to the customer
40
3 types of distribution channels
1. direct to consumer
2. only retailer
3. wholesaler and retailer as intermediaries
41
direct channel - advantages
- simple
- can maintain their quality and reputation of the brand
- producers can build relationships
- do not share profits
- a way of market research
42
direct channel - disadvantages
- expensive to purchase capital for transport (trucks, drivers, storage space)
- difficult to sell to large no of customers
- not suitable for products that cant be sent by post
43
indirect channel, only retailer - advantagers
- producer sells large quantities
- reduced distribution costs (transport directly to one space)
44
indirect channel, only retailer - disadvantages
- no direct contact with customers
- price may be higher (producer needs to cover transport costs)
45
indirect channel, wholesaler and retailer - advantages
- wholesaler help storage
46
indirect channel, wholesaler and retailer - disadvantages
- wholesaler doesn't have full range of products
- wholesaler may be far from customers
47
importance of promotion
- create / improve brand image
- to inform people
- to introduce new products in market
- compete
- increase sales
48
advertising - definition
paid-for communication informing potential customers about a product to encourage them to buy it
49
2 types of advertising
1. informative
2. persuasive
50
informative advertisements
- emphasis on full info of the product
51
persuasive advertisement
- trying to persuade the consumer that they really need the product and should buy it
52
types of advertising media
- television
- posters
- billboards
53
sales promotion
incentives such as special offers or special deals aimed at consumers to achieve short-term increases in sales
