chapter 18, 19- marketing mix Flashcards
define marketing mix
the four key decisions that must be taken in the effective marketing of a product
define customer relationship management
using marketing activities to establish successful consumer relationships so that existing consumer loyalty can be maintained
define brand
an identifying symbol, name, image or trademark that distinguishes a product from its competitors
define intangible attributes of a product
subjective opinion of customers about a product that cannot be measured or compared easily
define tangible attributes of a product
measurable features of a product that can be easily compared with other products
define product
the end result of the production process sold on the market to satisfy a consumer need
define price elasticity of demand
measures the responsiveness of demand following a change in price
define dynamic pricing
offering goods at a price that changes according to the level of demand and the customers ability to pay
define penetration pricing
setting a relatively low price often supported by a strong promotion in order to achieve a high volume of sales
define market skimming
setting a high price for a new product when a firm has a unique or highly differentiated product with low price elasticity of demand
define promotion
the use of advertising, sales promotion, personal selling, direct mail, trade fairs, sponsorship and public relations to inform consumers and persuade them to buy
define promotion mix
the combination of promotional techniques that a firm uses to sell a product
define above the line promotion
a form of promotion that is undertaken by a business by paying for communication with consumers
define advertising and give an example
paid for communication with consumers to inform and persuade eg TV and cinema advertising
define below the line promotion
promotion that is not a directly paid for means of communication but based on the short term incentives to purchase
define sales promotion
incentives such as special offers or special deals directed at consumers or retailers to achieve short term sales increases and repeat purchases by consumers
define personal selling
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 the consumer
define sponsorship
payment by a company to the organizers if an event or team or individuals so that the company name becomes associated with the event or team or individual
define public relations
the deliberate use of free publicity provided by newspapers, TV and other media to communicate with and achieve understanding by the public
define branding
the strategy of differentiating products from those of competitors by creating an identifiable image and clear expectations about a product
define marketing/ promotion budget
the financial amount made available by a business for spending on marketing or promotion during a certain period of time
define channel of distribution
this refers to the chain of intermediaries a product passes through from producer to final consumer
define internet (online) marketing
refers to advertising and marketing activities that use the internet, email and mobile communications to encourage direct sales via electronic commerce
define e-commerce
the buying and selling of goods and services by a business and consumers through an electronic medium
define viral marketing
the use of social media sites or text messages to increase brand awareness or sell products
define integrated marketing mix
the key marketing decisions complement each other and work together to give customers a consistent message about the product
what are the 4 p’s
price, product, place, promotion
what are the 4 c’s
customer solution, cost to customer, communication with customer, convenience to customer
what 4 things should a product have/be within the marketing mix
quality, durability, performance, appearance
give 2 benefits of a business having an effective USP
differentiation, charge higher prices, higher sales, brand identification
define product positioning
the consumer perception of a product or service as compared to its competitors
define product portfolio analysis
analyzing the range of existing products of a business to help allocate resources effectively between them
define product life cycle
the pattern of sales recorded by a product from launch to withdrawal from the market and one if the main forms of product portfolio analysis
what are the stages of a product life cycle
introduction, growth, maturity or saturation, decline
define consumer durable and give and example
manufactured product that can be reused and is expected to have a responsibly long life such as a car or washing machine
define extension strategies
these are marketing plans to extend the maturing stage of the product before a brand new one is needed
give 2 uses of a product life cycle
assist planning marketing mix decisions such as new product launches, identifying how cash flow might depend on the cycle, recognizing the need for a balance product portfolio
how do you calculate price elasticity
percentage change in quantity demanded/ percentage change in price
name 2 factors that determine price elasticity
how necessary the product is, how many similar competing products or brands there are, the level of consumer loyalty, price of the product as a promotion to consumer incomes
name 2 uses of price elasticity
making more accurate sales forecasts, assisting in pricing decisions
name 3 ways managers can determine an appropriate price
cost of proaction, competitive conditions in the market, competitors prices, business and marketing objectives, price elasticity of demand, new or existing product
define mark up pricing
adding a fixed mark up for profit to the unit price of a product
define target pricing
setting a price that will give a required rate of return at a certain level of output/ sales
define full cost pricing
setting a price by calculating a unit cost for the product and then adding a fixed profit margin
define contribution cost pricing
setting prices based on the variable costs of making a product I order to make a contribution towards fixed costs and profit
define competition based pricing
a firm will base its price upon the price set by its competitors
give an advantage and disadvantage to full cost pricing
advantage- price set will cover all costs of production, easy to calculate for single product firms where there is no doubt about fixed cost allocation,
disadvantage- inaccurate for businesses with several products where there is doubt over the allocation of fixed costs, doesn’t take market/ completive actions into account, inflexible, if sales fall then average costs rise so price could be raised
give an advantage and disadvantage of contribution pricing
advantage- all variable costs will be covered, suitable for firms producing several products, flexible as price can be adapted to suit market conditions
disadvantage- fixed costs may not be covered, if prices vary too much then consumers can be annoyed
give an advantage and disadvantage to competitor pricing
advantage- almost essential for firms with little market power, flexible to market and competitive conditions
disadvantage- price set may not cover all the costs of production, nay have to vary price frequently due to changing conditions
give an advantage and disadvantage of price discrimination
advantage- uses price elasticity knowledge to charge different prices in order to increase total revenue
disadvantage- administrative costs of having different pricing levels, customers may switch to lower priced market, consumer paying higher prices may object and look for alternatives
what are the two types of advertisements
informative advertising, persuasive advertising
give 3 factors business would consider when deciding a form of media to use
- cost (TV, radio and cinema advertising are very expensive)
- size of audience
- profile of the target audience in terms of age, income
- message to be communicated (detailed info would be written in an email or letter)
- other aspects of the marketing mix
- legal and other constraints
give 3 examples of how a business could use sales promotion
price deals (10% reduction on all items), loyalty reward programs, money off coupons, point of sale displays in shops, buy one get one free, games and competition
give 2 aims branding products would have
aiding consumer recognition, making the product distinctive from competitors, giving the product an identity or personality that consumers can relate to
give 2 functions of packaging
protect and contain the product, give information depending on the product, support the image of the precut, aid the products recognition
give 2 example of what businesses should consider when deciding on an appropriate channel strategy
if the product will be sold directly to the consumer or through retailers, how many intermediaries, where should the product be available, should the internet be the main channel
give an example of a product or service that uses direct selling (no intermediaries)
airline tickets, hotel accommodation, farmers markets, mail orders
give an example of a product or service that uses a one intermediaries channel (consumer goods)
holiday companies via travel agents, large supermarkets that hold their own stocks rather than wholesalers
give an example of a product or service that uses two intermediaries channel
a large country with great distances to each retailer
give 2 factors influencing choice of distribution channels
industrial products tend to be sold more directly, geographical dispersion of the target market, level of service expected by consumers, technical complexity of product, unit value of the product, number of potential consumers
give 3 benefits of a business using e-commerce and internet marketing
relatively inexpensive, companies can reach a worldwide audience, consumers interact with websites and leave important data about themselves, internet is convenient for consumers, accurate records can be kept about consumer interest and success of certain prompts, computer ownership is increasing so most people can access selling products gives lower fixed costs, dynamic pricing
give 3 limitations to e-commerce/ internet marketing
some countries have Lowe speed internet connections and in poorer countries computer ownership is lower, consumers cannot touch or try on the products so can limit the willingness to purchase, product returns can increase, cost and unreliability of postal services, website needs to keep up to date, worries about internet security
