Decision making to improve marketing performance - 3.4

Question 1

What is the elements of the marketing mix?(7P’s)

Answer 1

Combination of marketing decisions that influence customers decisions to buy. The marketing mix consists of price, process, product, place, promotion, people and physical environment.

Question 2

What internal influences change the elements of the marketing mix?

Answer 2

• Changes to financial position
• Changes to operations. For example, greater efficiency might lead to lower prices.
• Changes to objectives. May be a target of faster growth

Question 3

What external influences change the elements of the marketing mix?

Answer 3

• Political and legal factors
• Economic factors. A growing economy may mean higher prices
• Tech factors. Online promotion may be more effective.

Question 4

What is the analysis of product decisions?

Answer 4

• The benefit the product provides
• Tangible product (its specifications, reliability and design)
• Augmented product. The extras such as brand name, delivery process and service provided.

Question 5

Why is product portfolio analysis useful?

Answer 5

Examines the market position of all the products of a business. This can be helpful to decide whether some need reinvestment or to remove some.

Question 6

What is the Boston matrix?

Answer 6

A method of portfolio analysis. Plots position of products in terms of market share and growth of each market.

Question 7

What are dogs in the Boston matrix?

Answer 7

Have a low share in a low- growth market. Must reinvest or let them decline.

Question 8

What are cash cows in the Boston matrix?

Answer 8

Have a high market share in a low- growth market. Products don’t need promoting as they are well known. An example could be Heinz baked beans.

Question 9

What are question marks in the Boston matrix?

Answer 9

Have a high- growing market but have a low market share. May or may not turn out to do well.

Question 10

What are Stars in the Boston matrix?

Answer 10

In a fast growing market and have a high market share. An example could be a leading brand in a new type of app.

Question 11

What is the value of the product life cycle model?

Answer 11

Shows the different stages a product may go through. We can see decisions may vary as sales of a product move into different stages.

Question 12

What is an extension strategy?

Answer 12

Used when a business attempts to prevent sales of a product from falling and to avoid the decline stage of the product life cycle.

Question 13

What is an example of extension strategy’s?

Answer 13

• Increase promotional expenditure to renew interest
• Revamp the product with new packaging?
• Find a new target market such as new countries to sell in

Question 14

What are the influences on new product developments?

Answer 14

• Existing products are coming to the end of their life cycle
• New opportunities due to changes in the market
• To match what competitors are doing

Question 15

Why does product development involve risk?

Answer 15

• Product ideas may not make it to production because may not be viable in terms of producing
• Products don’t sell well because market has not been researched properly in terms of promotion or competitors.

Question 16

What is price penetration?

Answer 16

Business charges low price to gain market share. Gain high sales and benefit from producing on a large scale.

Question 17

What is price skimming?

Answer 17

Setting high prices when launching a product. Appropriate when demand in price inelastic (product is heavily branded)

Question 18

What promotional decisions are considered?

Answer 18

-Target audience to understand how to reach them
- Budget, some promotional methods are expensive
- Technology, Google can ensure certain ads show for people who search specific things.

Question 19

Why is branding important?

Answer 19

A brand promises to deliver certain benefits. Distinguishes businesses from competitors through logos or slogans.

Question 20

What factors need to be considered when considering distribution decisions?

Answer 20

• Coverage, target globally or locally?
• Nature of product, high value products in low quantities may be sold directly to customers
• Degree of control, how product is displayed, promoted and priced

Question 21

What is multi-channel distribution?

Answer 21

Buying products in different ways such as in store, online or click and collect.

Question 22

What does people mean in terms of marketing activities?

Answer 22

Those providing the service, advising and carrying out the task. Such as skills of a hairdresser. Managers decide training levels through positioning. Restaurant staff will need more customer service training than McDonald’s staff.

Question 23

What does process mean in terms of marketing activities?

Answer 23

Process of buying, such as queuing, ordering easily or forms to fill in.

Question 24

What does physical environment mean in terms of marketing activities?

Answer 24

Have to consider where to locate, design and how much to invest which also depends on positioning of the product.

Question 25

Why is an integrated marketing mix important?

Answer 25

Different aspects of the marketing mix must work together. For example, people expect customer service at a 5 star hotel to be outstanding.

Question 26

What are the influences on the integrated marketing mix?

Answer 26

• Position in product life cycle, products in the decline stage may need lower prices
• Boston matrix, may need to be investment in more distribution of star products
• Target market, promotional mix may be digitally based for youth market

Question 27

Why has digital marketing helped businesses?

Answer 27

• Gather more information about customers and process this quickly and effectively
• Target specific segments and set up online cheaply to do this
• Involve customers in the marketing process, customers can give reviews and influence other buyers