L4 What Market Mix Flashcards
1
Q
What is a consumer?
A
- User of the article
- Opposite of ‘producer’
- ‘Consumer goods’ are used directly, domestically, but NOT in manufacturing
- Create ‘consumer markets’ for c=goods and services
2
Q
A
3
Q
What is a customer?
A
- ‘Purchaser’ of the article
- ‘Industrial goods’ are used by commerce, industrial goods are described as being sold to ‘customers’ not ‘consumers’
- Industrial customers create ‘industrial market’ for goods and services
- Customers who will never use the article can create ‘ consumer markets’
4
Q
What are the 5Ps of the Marketing Mix?
A
Product, Price, Packaging, Promotion, Place
5
Q
What is a Product in the Marketing Mix?
A
- Physical entity or** service**
- Typically purchase of service does not involve change of ownership
- Should provide some benefit to customer
- If competitors cannot match these benefits, product has a Unique Selling Point (USP)
- Judged on criteria like: Quality, Durability, Brand (e.g. brand loyalty from reputation)
6
Q
What is a Price in the Marketing Mix?
A
- Price is usually set by market
- typically at a low level slightly above cost (to sell lots and deter competitors) - exceptions exist.
- ‘Pricing gap’ (cost vs. customer valuation), discounts, offers, trade terms etc.
- Price sensitivity - What market is willing to accept may change
- Ability or willingness of consumer to pay affects price
- Affluent/ poor areas of sale
- Luxury branding
- Strategic costing
- Loss leaders - product sold at a loss to attract customers. E.g. free trial of subscription service
7
Q
What are the different pricing strategies from the Firm’s Viewpoint?
A
- Price Maker or Price Taker (Market Pricing)
- Cost Plus Pricing
- Target Pricing and Costing
- Discounts
8
Q
Describe the ‘Price Maker or Price Taker’ strategy
(Market Pricing)
A
- Price Maker - set by the market leader. E.g. Tesco determines petrol price for petrol stations geographically nearby.
- Price taker - others in the market not as dominant as the market leader. E.g. Shell etc. have to take the price Tesco sets
9
Q
Describe the ‘Cost Plus Pricing’ stategy
A
- Design product and then set price
- Product cost + Profit margin = selling price
10
Q
Describe the ‘Target Pricing and Costing’ strategy
A
- Target market price - profit margin = target cost
- Destermine the target cost and design the product accordingly
11
Q
Describe the ‘Discount’ strategy
A
- Pass on the cost savings
- Reward loyalty
12
Q
What is Packaging in the Marketing Mix?
A
- Catches the customers attention/ conveys an impression of the product.
- Ensures that the product is delivered in good condition
13
Q
What is promotion in the Marketing Mix?
A
- Any type of persuasive communication
- Aimed at increasing purchases
- Broader taget than the current customer base
- May be:
- Short term (e.g. linked to sales)
- Long term (e.g. public relations; press conference, press releases, publicity events)
- Internal promotion
- Advertisment
14
Q
What are some examples of promotion?
A
- Sales promotion - Discounts/offers to trade/consumers
- Advertising - Narrowcast (advertising to ‘product specialists); Broadcast (advertising to anyone and everyone)
- Publicity - Any media coverage that has not been bought (e.g. generated by press release for new products)
- Sales - Sales Systems (e.g. web pages for customer support); Personal selling (Account managers specific client groups).
- Public relations - Raising the public profile of the company.
15
Q
What is Place in the Marketing Mix?
A
- How the product reaches the customer. There are various ‘Distribution Channels’;
- “Selling” outlets - from traditional shops to catalogue showrooms, industrial disrtibutors.
- Home Sales (e.g. Tupperware) to “Direct from the Factory”
- Web-based
- Also important is the ‘customer experience’ - merchandise assortment (what products are sold together)
- Store location
- Store layout, ‘atmosphere’ and ‘ambiance’
