Making marketing decisions Flashcards
The design mix
- function
- cost
- appearance
Product lifestyle
- introduction
- growth
- maturity
- decline
Extension strategies
increase the life of a product this could involve slightly changing the product so it has a fresh appeal
Some examples of extension strategies are:
- new marketing campaign
- a modified product
- changed packaging
Product differentiation
making a product stand out from its competitors
Product differentiation is important because it helps businesses:
- position their products
- target different market segments
- gain an advantage over rivals
- allows customers to see their needs are being met more effectively than by a competitor
What differentiates a product?
- unique and catchy name
- quality
- design, formulation or function
- packaging
- customer service
- differentiation across the value chain
Value chain
the full lifecycle of a product or process, including material sourcing, production, consumption and disposal/recycling processes.
The pricing strategy adopted by a business has a direct impact on
- customers perceptions on quality and value
- businesses profitability
- demand of products and services
What are some types of pricing?
- premium
- competitive
- low
When might a low price be used?
- generic/non branded product
- to encourage product trail
- first launch
What are the impacts of a business trying to improve its profits by increasing the price?
- succeed- customers must perceive the business to be of sufficiently high value in relation to competition
- fail- sales volume fall
What two pricing strategies might a business adopt?
- volume strategy
- margin strategy
What is a margin strategy?
involves setting a high price that achieves a high profit margin
What is a volume strategy?
setting a price with a low profit margin that requires high sales volumes to be profitable
What must a business with a high volume low margin strategy be able to do?
- keep costs low
- have the facilities to produce and distribute large quantities of
What must a business with a low volume high margin strategy be?
- high in quality
- good brand image
- premium market
What influences pricing strategies?
- competition
- market segment
- products life cycle
- costs
- branding
- technology
Why do businesses use promotional techniques?
- create customer awareness
- create interest
- create desire
- boost sales
- build a strong brand image
What methods are there of promotion?
- advertising
- sponsorship
- product trails
- special offers
- public relations
What are some examples of advertisement?
- radio
- magazine
- posters
- websites
- displays
- TV ads
What is the benefit of advertising?
grab customers attention if the location and medium is right for the business
What is the drawback to advertising?
- expensive
- difficult to work out the impact on sales
What are some examples of sponsorship?
- sporting events
- music festivals
- educational or environmental causes
What is the benefit to using sponsors?
- provide the business with exposure
- associates it with a good cause
What is the drawback to sponsorship?
communicates little information
What are some examples of product trials?
- free miniatures
- product testing
- samples
What is the benefit to using product trials ?
encourage customers to use a product / service they wouldn’t otherwise
What is the drawback to product trials?
expensive to give away free products
What are some examples of special offers?
- buy one get one free (GOGOF)
- free prize draws
- discount sales
What are the benefits to special offers?
- boost short term sales
- clear stock levels
What is the drawback to special offers?
not sustainable in the long term as it will reduce profits
What is an example of public relations?
using a recognisable logo
What is the benefit of public relations?
encourages customers to connect with the brand, trust it and become loyal to it
What are the drawbacks to public relations?
- takes a long time to develop
- brand images are fragile to bad publicity
How may a business benefit from having a strong brand?
- easy recognition and known representation
- may associate positive characteristics
- increase brand loyalty
- first choice
- increased trust
- charge premium
What are four examples of technology in promotion?
- social media
- apps
- targeted advertising
What are the two channels of distribution?
- retailing
- e tailing
Retailing looks like?
- manufacturer - retailer - customer
- retailer - customer
E-tailing looks like?
- manufacturer - customer
- manufacturer - third party - customer
What are the benefits of retailing?
- opportunity to browse and try products
- offers point of sale promotion
- provide customers with help and advice
- enjoy the experience
What are the benefits of e tailing?
- don’t have to own a retail space
- 24/7 purchases
- global access
- compete without needing a retail space
What must a business consider when choosing a location?
- cost
- proximity to competitors
- proximity to the labour market
- proximity to resources and transport links
What are the four elements of the marketing mix?
- product
- place
- price
- promotion
What would happen to a business’s marketing strategy if aspects of the marketing mix don’t link?
fail
Product- a product with unique features and a strong brand can be . . .
highly desirable
Place- a highly visible and convenient location can
attract customers other businesses can’t
