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Business Studies (A Levels) > Chapter 16 & 17 The Marketing Mix Product > Flashcards

Chapter 16 & 17 The Marketing Mix Product Flashcards

1
Q

What is marketing mix?

A

The marketing mix is the four key decisions that must be taken in the effective marketing of a product

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2
Q

What are the 4P’s?

A

1 Product design
2 Pricing
3 Promotion including advertising
4 Place (distribution)

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3
Q

what are the 4C’s?

A 
The 4Cs has been proposed as an alternative view of the key elements of successful marketing
. 
These are,
1 Customer solution
2 Cost to customer
3 Communication with customer 
4 Convenience to customer
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4
Q

What is Customer relationship marketing (CRM)?

A

Customer relationship marketing (CRM) is using marketing activities to establish successful customer relationships so that existing customer loyalty can be maintained

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5
Q

What is The difference between products and brands?

A

1 The product is the general term used to describe the nature of what is being sold
2 The brand is the distinguishing name or symbol that is used to differentiate one manufacturer’s products from another

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6
Q

what is Product positioning

A

Before deciding on which product to develop and launch, it is common for firms to analyse how the new brand will relate to the other brands in the market, in the minds of consumers.

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7
Q

What does the market map illustrate?

A

The market map illustrates the range of “positions” that a product can take in a market based on two dimensions that are important to customers

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8
Q

Examples of market map dimensions are?

A 
1 High price v low price 
3 Basic quality v High quality 
4 Low volume v high volume 
5 Necessity v luxury 
6 Light v heavy 
7 Simple v complex 
8 Lo-tech v high-tech 
9 Young v Old
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9
Q

What is the product life cycle?

A

The product life cycle is the pattern of sales recorded by a product from launch to withdrawal from the market

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10
Q

What are the different stages of the product life cycle?

A

Introduction
Maturity (or saturation)
Decline

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11
Q

Product life cycle: Introduction stage

A

Sales are often quite low to begin with and may increase only quite slowly

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12
Q

Product life cycle: Growth stage

A

If product is effectively promoted and well received by the market, then sales should grow significantly

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13
Q

Product life cycle: Maturity (or saturation) stage

A

At this stage, sales fail to grow, but they do not decline significantly furthe

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14
Q

Product life cycle: Decline

stage

A

During this stage, sales will decline steadily

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15
Q

Examples of extension strategies include?

A

1 Developing new markets for existing products, for example export markets
2 New uses for existing product
3 Product re-launches, involving new packaging, designs and advertising

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16
Q

What is price?

A

Price is the amount paid by customers for a product. Price can have a great impact on the consumer demand for the product

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17
Q

The pricing level for a product will determine?

A

1 Determine the degree of value added, by the business, to bought-in components
2 Influence the revenue and profit made by a business due to the impact on demand
3 It can help establish the psychological image and identity of a product

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18
Q

what is Price elasticity of demand (PED)?

A

The price elasticity of demand measures the responsiveness of demand following a change in price

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19
Q

What is The formula for price elasticity of demand?

A

Percentage change in quantity demanded /

Percentage change in price

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20
Q

what does PED show us?

A

1 The value of PED is normally negative because in fall in price (-ve) usually results in a rise in demand (+ve)
2 This is called an inverse relationship (when one variable falls, the other variable rises and vice versa)
3 If the value of PED is more than 1, the product is said to have elastic demand
4 If the value of PED is between 0 and 1, the product is said to have inelastic demand

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21
Q

What factors determine the price elasticity?

A

1 How necessary the product is
2 How many similar competing products or brands there are
3 The level of consumer loyalty
4 The price of the product as a proportion of consumers’ incomes

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22
Q

what are the Applications of price elasticity of demand?

A

Assisting in pricing decisions
1 If a product had an elastic demand, then a business would gain more sales revenue if they were to decrease the price
2 If a product had an inelastic demand, then a business would gain more sales revenue if they were to increase the price

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23
Q

What affects the pricing decision for any product?

A 
1 Costs of production
2 Competitive conditions in the market
3 Competitors’ prices
4 Business and marketing objectives
5 Price elasticity of demand
6 Whether it is a new or existing product
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24
Q

What are the different pricing methods for cost-based pricing?

A

1 Mark-up pricing
2 Full-cost pricing
3 Contribution-cost pricing

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25
Q

What is Mark-up pricing

A

Mark-up pricing is adding a fixed mark-up for profit to the unit price of a product

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26
Q

What is Full-cost pricing ?

A

Full-cost pricing is setting a price by calculating a unit cost for the product (allocated fixed and variable costs) and then adding a fixed profit margin

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27
Q

What is Contribution-cost pricing?

A

Contribution-cost pricing is setting prices based on the variable costs of making a product in order to make a contribution towards fixed costs and profits

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28
Q

What are the different pricing methods for competition-based pricing?

A

1 Competition-based pricing

2 Price discrimination

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29
Q

What is Competition-based pricing

A

Competition-based pricing occurs when a form will base its price upon the price set by its competitors

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30
Q

what is Price discrimination

A

Price discrimination takes place in markets where it is possible to charge different groups of consumer’s different prices for the same product

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31
Q

What are the different pricing methods for new product pricing strategies?

A

Penetration pricing Market skimming

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32
Q

What is Penetration pricing?

A

Penetration pricing is setting a relatively low price often supported by strong promotion in order to achieve a high volume of sales

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33
Q

What is Market skimming?

A

Market skimming is setting a high price for a new product when a firm has a unique or highly differentiated product with low price elasticity of demand

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34
Q

Full-cost pricing Advantages

A

Price set will cover all costs of production

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35
Q

Full-cost pricing Disadvantages

A

does not take market-competitive conditions into account

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36
Q

Contribution pricing Advantages

A

all variable costs will be covered by the price – and a contribution made to fixed costs

37
Q

Contribution pricing Disadvantages

A

fixed costs may not be covered

38
Q

Competitor pricing Advantages

A

flexible to market and competitive conditions

39
Q

Competitor pricing Disadvantages

A

price set may not cover all of the costs of production

40
Q

Price discrimination Advantages

A

uses price elasticity knowledge to charge different prices in order to increase total revenue

41
Q

Price discrimination Disadvantages

A

administrative costs of having different pricing levels

42
Q

What is promotion?

A

Promotion is about communicating with actual or potential customers

43
Q

what are Promotional objectives?

A

1 To increase sales by raising consumer awareness of a product
2 To remind consumers of an existing product and its distinctive qualities
3 To encourage increased purchases by existing consumers or to attract new consumers to the brand
4 To demonstrate the superior specification or qualities of a product compared to those of competitors
5 To create or reinforce the brand image of the product

44
Q

What is promotion mix??

A

The promotional mix is the combination of promotional techniques that a firm uses to sell a product

45
Q

What is Advertising?

A

Advertising is paid-for communication with consumers to inform and persuade, e.g. TV and cinema advertising

46
Q

what is Above-the-line promotion

A

Above-the-line promotion (advertising) is a form of promotion that is undertaken by a business by paying for communication with consumers

47
Q

Advertisements are often classified into two types, what are they?

A

1 Informative advertising

2 Persuasive advertising

48
Q

What is Informative advertising?

A

Informative advertising are adverts that give information to potential purchasers of a product, rather than just trying to create a brand image

49
Q

What is Persuasive advertising?

A

Persuasive advertising are adverts that are trying to create a distinct image or brand identity for a product and it may not contain any details at all about materials or ingredients used, prices or places to buy it

50
Q

Advertising decisions- factors for which media to use?

A 
1 Cost
2 Size of audience
3 The profile of the target audience in terms of age, income levels, interests and so on
4 The message to be communicated
5 The law and other constraints
51
Q

What is Sales promotion

A

Sales promotion is incentives such as special offers or special deals directed at consumers or retailers to achieve short-term sales increases and repeat purchases by consumers

52
Q

What is Below-the-line promotion?

A

Below-the-line promotion (sales promotion) is promotion that is not a directly paid-for means of communication, but based on short-term incentives to purchase

53
Q

What is Personal selling?

A

Personal selling is when a member of the sales staff communicates with one consumer with the aim of selling the product and establishing a long-term relationship between company and consumer

54
Q

What is Direct mail

A

This directs information to potential customers, identified by market research, who have a potential interest in this type of product

55
Q

what are Trade fairs and exhibitions

A

These are used to sell products to the ‘trade’, i.e. retailers and wholesalers
Companies seldom sell much directly at trader fairs, but contacts are made and awareness of products is increased

56
Q

What is Sponsorship

A

Sponsorship is payment by a company to the organizers of an event so that the company name becomes associated with the event

57
Q

What is Public relations (PR)

A

Public relations is the deliberate use of free publicity provided by newspapers, TV and other media to communicate with and achieve understanding by the public

58
Q

What is Branding?

A

Branding is the strategy of differentiating products from those of competitors by creating an identifiable image and clear expectations about a product

59
Q

Effective brand identity will do what?

A

Increase the chances of brand recall by consumers
Clearly differentiate the product from others
Reduce price elasticity of demand for the product
Increase customer loyalty to brands

60
Q

What is The marketing or promotion budget?

A

The marketing or promotion budget is the financial amount made available by a business for spending on marketing/ promotion during a certain time period

61
Q

New techniques and technology have enabled the effectiveness of all promotion campaigns to be assessed with some accuracy. How can this be done?

A

1 Sales performance before and after the promotion campaign
2 Consumer awareness data
3 Consumer panels/focus groups
4 Response rates to advertisements

62
Q

what are Industrial products

A

goods and services sold to industry, not to consumers – also need promoting

63
Q

What is trade?

A

Trade- or industry-focused promotional campaigns are unlikely to use commercial TV, radio or national-newspaper advertising

64
Q

what Promotion to use at this Stage of life cycle: Introduction

A

informative advertising to make consumers aware of the product’s existence, price and main features

65
Q

what Promotion to use at this Stage of life cycle: Growth

A

to continue with some informative advertising, but the focus may now move to brand building and persuasive advertising

66
Q

what Promotion to use at this Stage of life cycle: Maturity

A

advertising to emphasise the differences between this product and competitors – may be needed to remind consumers of the existence of the product

67
Q

what Promotion to use at this Stage of life cycle: Decline – assuming no extensive strat

A

minimal advertising, apart from informing consumers of special offers

68
Q

What is role does packaging play in the promotion of a product?

A

The quality, design and colour of materials used in the packaging of products can have a very supportive role to play in the promotion of a product

69
Q

What functions does Packaging perform?

A

1 Protect and contain the product
2 Give information to consumers about the product
3 Support the image of the product created by aspects of promotion
4 Aid the recognition of the product by the consumer

70
Q

What is meant by the term ‘place’?

A

‘Place’ decisions are concerned with how products should pass from manufacturer to the final consumer

71
Q

what are Channels of distribution

A

Channels of distribution refers to the chain of intermediaries a product passes through from producer to final consumer

72
Q

What questions must a business ask before deciding what channel of distribution to use?

A

1 Should the product be sold directly to consumers?
2 Should the product be sold through retailers?
3 How long should the channel be (how many intermediaries)?
4 Where should the product be made available?
5 Should the internet be the main channel?

73
Q

What are the different channels of distribution?

A

1 Two-intermediaries channel
2 Single-intermediary channel
3 Direct selling channel

74
Q

what is the Two-intermediaries channel

A

(producer/manufacturer – wholesaler – retailer – consumer)

75
Q

what is the Single-intermediary channel

A

(producer/manufacturer – retailer – consumer)

76
Q

what is the Direct selling channel

A

(producer/manufacturer – consumer)

77
Q

Direct selling: Examples of products or services

A

1 mail order from manufacturer

2 airline tickets and hotel accommodation sold over the internet by the service providers

78
Q

Direct selling: Possible benefits

A

1 no intermediaries, so no mark-up or profit margin taken by other businesses
2 quicker than other channels
3 direct contact with consumers offers useful market research

79
Q

Direct selling: Possible drawbacks

A

1 all storage and stock costs have to be paid by producer
2 may not be convenient for consumer
3 can be expensive to deliver each item sold to consumers

80
Q

Single-intermediary channel: Examples of products or services

A

1 holiday companies selling holidays via travel agents

2 large supermarkets that hold their own stocks rather than using wholesalers

81
Q

Single-intermediary channel: Possible benefits

A

1 retailer holds tocks and pays for cost of this
2 retailer has product displays and offers after-sales service
3 retailers are often in locations that are convenient to consumers

82
Q

Single-intermediary channel: Possible drawbacks

A

1 intermediary takes a profit mark-up and this could make the product more expensive to final consumers
2 producer has delivery costs to retailer

83
Q

Two intermediaries channel: Examples of products or services

A

1 in a large country with great distances to each retailer – many consumer goods are distributed this way, e.g. soft drinks, electrical goods and books

84
Q

Two intermediaries channel: Possible benefits

A

1 wholesaler holds goods and buys in bulk from producer

2 reduces stock-holding costs of producer

85
Q

Two intermediaries channel: Possible drawbacks

A

1 another intermediary takes a profit mark-up – may make final good more expensive to consumer
2 slows down the distribution cha

86
Q

What is Internet marketing?

A

Internet marketing is the marketing of products over the internet

87
Q

What are the marketing factions of internet marketing?

A

1 Direct selling of consumer and industrial products
2 Advertising by using the company’s own website or by placing a banner advert or ‘pop-up’ on another firm’s website
3 Sales leads are established by visitors to a site leaving their details
4 Collecting market research data

88
Q

Internet marketing Benefits

A

1 Companies can reach a worldwide audience for a small proportion of traditional promotion budgets
2 The internet is convenient for consumers to use – if they have access to a computer
3 Consumers interact with the websites and make purchases and leave important data about themselves

89
Q

Internet marketing Limitations

A

1 The website must be kept up-to-date and user-friendly – good websites can be expensive to develop
2 Worries about internet security e.g. consumers may wonder who will use their information about them or their credit cards details

Business Studies (A Levels) (38 decks)

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