business-marketing Flashcards
four P’s of marketing
product- what the customer wants or needs
Price- the customer thinks is good value for money. isnt the same as being cheap
Promotion- promoted so that potential customers want to buy it
Place- used to get the product from customer to consumer
Factors that affect the marketing mix
- Changes in technology- improvements in e-commerce means that more companies are selling their products online rather than in stores
- customers needs and wants usually change over time- a business should adapt its marketing mix to meet these changing needs
- How competitive the market is and what business’s competitors are doing will also affect how a firm balances the elements of its marketing mix
market size-
market share-
-number of individuals within the market which are potential buyers or sellers of the product
-is the proportion of total sales within the market that is controlled by the business
ways a market can be segmented-
- age-
- income
- gender
- location
- lifestyle
Market research helps businesses to
- make informed decisons-used to support and inform decisions
-increased sales- the demand for a product or service is how much of it people will be willing to buy at a given price
-stay competitive- gathering-information on the products and prices of competitors can help to show how they are different
-reduce risks- -if a business sells a product that customers dont want or tries to sell products at a price too high it could lose a lot of money
-about-Primary research
-involves getting info from potential customers
-useful to find new info and getting opinions
-finding just a sample
-larger samples are more expensive but more accurate
types Primary research
-questionnaires
-surveys
-interviews
-focus groups-small group of people discuss their attitudes
-observation
trialling
-about-secondary research
-wide range of date
-market reseach reports or census
-look at their own internal data
-used by smaller businesses as its cheaper
-easily found
not always relevant
Product life cycles
1 research and development-
-scientific research vital
-find the most cost effective materials
2 introduction-launched for the first time
- lots of advertising and sales promotion
-place is very important
3 growth deman increases
4 maturity-product reaches its peak
-promotion becomes alot less important
-business continue to advertise the productbut less than its launch
5 decline
- demand falls a rival takes over
what do extension strategies do
- can extend life cycle of product
- product will make profit for longer
- however it means spending more money on the product
types extension strategies
- adding more or different features-
- using new packages
- targeting new markets
- changing advertisemnets
- lowering price
product portfolio
range of different products that a business sells
Boston matrix
- Question marks- low market share high market growth- newer product arent profitable yet need heavy marketing
- stars high market growth high market share future cash cows
- cash cows-high market share low market growth-in the maturity phase costs are low produced at high volumes
- dogs- low market share low market growth- lost cause
boston matrix + product portfolio
-boston matrix helps a business see wether it has a balanced product portfolio
- a balanced product portfolio means a business ccan use money from cash cows into question marks so they can become stars
differentiation
- can attract customers
-USP special feature
-promotion make it seem different
-change the price higher makes it luxorous lower makes it more appealing
-
Design mix
-function-design must be fit for its purpose
-cost-lead to low manufacturing costs
-aesthetics- look attractive and distinctive
developing new product- benefits
-new products=increase overall sales
-appeal to a new market segment
-businesses can initially charge higher prices for new products before their competitors bring similar products
-it can be good for the businesses reputation
developing new product-risks
-can be very costly and time consuming process- businesses risk running out of money if they invest too much into research and development and dont get the products to market quickly enough
-businesses can end up wasting resouces
-might not be abke to prodcuce the product on large scale
-risk ruining reputation
businesses need to think about demand when setting prices
- aim to make businesses money from selling needs to be more than costs
- easiest way to do this is by makinh the price higher than the total cost
- firms need to think about how the price will affect demand -if prices rise demand falls
- sometimes a firm may ned to set the price of a product lower than the total cost
Internal factors that affect price
-technology-the technology used by the business in every step of its process of making and marketing the product will affect pricing
-method of production-flow production may require expensive machinerybut it will also be more likely to benefit economies of scale compared to job production so products may be cheaper
-product life cycle- where a product is in the product life cycle
external factors that affect price
- competition-firm needs to look at what competitors are charging for similar products
-market segments-the nature of the market segment that a product is being targeted at will affect its price
-cost of raw materials
Pricing strategies
price penetration
loss leade
promotional
price skimming
competitive
cost plus
price penetration
- charges a low price for a new product to get people to try it
- establish market share-copetitive market
- product will make very little profit once established the firm increases price
loss leader
price of product is below cost-doesnt make a profit
promotional pricing
-put an offer for a limited period of time
- help increase demand in the short term
price skimming
-firms charge a higher price to begin with when they know there is a high demand
-often works for established firms
-increase revenue
-high price makes it look more desirable
-once established lower price
competitve
-charge similar prices to other firms
-lots of choices
-make very little profit
cost plus
- add a certain amount of profit onto the total costs makes sure they have a reasonable demand
why do we need promotion
-to inform customers about the product
-to persuade customers to buy the product
-to create or change the image of a product
-to create or increase sales
how to promote
- newspapers
-magazines
-posters or billboards
-leaflets flyers and business cards
-television
-internet adverts
-radio
technolofy promotion
-social media quick easy cheap
-targeted advertising
-e-newsletters
sales promotion short term
-comperttioms
-free samples
-specila offers
-coupons]
-point of sale displays
-free gifts
