M1 topic 4 marketing strategies part 1 segmentation,differentiation,positioning, product, price Flashcards
What is differentiation
developing and promoting the differences between the business’s Goods and services from those of its competitors
How do businesses differentiate themselves (5)
Good Value for money Customer service Environmental concerns convenience Social ethical issues
What is the total product concept
the tangible and intangible benefits a product possess
what is a brand
the name, term, symbol or design that identifies and distinguishes a product from its competitors
what are the benefits of developing a brand for businesses (2)
Customer recognise product = repeat sales
Customer loyalty = ↑price
what is a trademark
the registered brand name/symbol business has exclusive right to use
what are types of branding strategies (3)
Manufacturer’s brand
House brand
Generic brands
what is packaging
the container and graphic design for the product
what are the advantages of good packaging (3)
Positive first impression = encourages purchase
Protect and preserves the product
Makes storage + distribution easier
what is labelling
the presentation of information on a package
what is price
the amount of money customers are prepared to offer in exchange for a product
why is having good pricing important
leads to Optimal sales
list types of pricing methods (3)
cost based pricing
market based pricing
competition based pricing
what is cost based pricing
when a mark up is added to the cost of production
what is mark up
a percentage of the cost amount that is added to production cost to gain profit
what is market based pricing
setting prices based on level of supply and demand
what is supply
quantity of product businesses willing to offer for sale at particular price
what is demand
the quantity of the product consumers are willing to purchase at particular price
what happens during a shortage of supply (2)
demand increases
profit increases
what happens if there is surplus of supply (2)
demand is less
prices decrease
what is competition based pricing
price that covers costs and is comparable to the competitor’s price
what happens if the products price is below the competitor’s
Allows Business to breaks into an established market
what happens if the products price is equal the competitor’s (2)
avoid market research
avoid risk of price war
what happens if the products price is above the competitor’s
product is viewed as more prestigious
list types of pricing strategies (5)
Price skimming price penetration loss leader price points prestige pricing
what is price skimming
charging the highest possible price for the product in the introductory stage
why is price skimming used (2)
In order to maximise profits due to hype
Recover research and development costs quicker
what is price penetration
charging the lowest price possible for a product to achieve a large market share whilst still making profit
what is loss leader pricing
pricing a product at or below cost price in order attract customers who may buy other products
what are price points
selling similar product models with different features at predetermined prices
why are price points used for
to encourage customers to trade up to a more expensive models
what is prestige pricing
charging a high price to give a product an aura of quality
