Making Marketing Decisions- Using The Marketing Mix

Question 1

The 7 p’s

Answer 1

• Price
• Product
• Place- the distribution of the product.
• Promotion
• People involved in the transaction
• Process- how to buy the product.
• Physical environment- refers to the physical premises.

Question 2

Internal influences on changes in the marketing mix

Answer 2

• Changes to the financial decisions.
• Changes to staff bringing about new marketing opportunities.
• Changes to operations.
• Changes to objectives.

Question 3

External factors on changes in the marketing mix

Answer 3

• Political and legal factors.
• Economic factors.
• Social factors.
• Technological factors.
• Competitors.

Question 4

Stages of the product life cycle

Answer 4

• Development- This is the stage when a product is being developed.
• Introduction- This is when a product is launched on to the market.
• Growth- This is when the sales begin to increase at a relatively fast rate.
• Maturity- This is when the rate of growth of sales begins slow.
• Decline- This is when the sales are falling.

Question 5

The value of the product life cycle

Answer 5

• Shows different stages a product may go through, from its conception to its withdrawal from the market.
• The duration and precise nature of each stage will vary from product to product.
• Can see how decisions may vary over time as the sales of a product move into different stages.

Question 6

Extension strategies

Answer 6

• Find new uses.
• Increase usage.
• Find new market segments.
• Promote more effectively.
• Modify the product.

Question 7

What does the Boston matrix do

Answer 7

It plots the position of each product in terms of its market share and the relative growth of the market.

Question 8

Boston matrix- Quadrants

Answer 8

• Dogs- These products have a relatively low share of a slow growth market.
• Cash cows- These products are well established and so have a relatively high market share; however the market they are in is growing slowly.
• Question marks- These are products that are in fast growth markets; however they are not yet established and only have a relatively small market share.
• Stars- These are products that are in fast growth markets and are doing well in terms of market share.

Question 9

The value of the Boston matrix

Answer 9

• Helps managers categorise their products and take as view on what they should do next.
• A manager will aim for some well established products (CC) to help fund the development and success of new products (QM+S).
• They will want a balanced portfolio in which the mature, established products help prepare the business for the future.

Question 10

Why is new product development required

Answer 10

• The existing products are coming to the end of their life cycle.
• New opportunities are opening up due to changes in the market.
• There is a desire to build on the strengths of the brand.
• It is a way of achieving growth.
• To match what competitors are doing.

Question 11

New product development risks

Answer 11

• Many product ideas do not make it to actual production due to the product not being viable to make profit.
• Many products don’t sell well and are withdrawn, which could be due to competitors.

Question 12

What can influence pricing decisions

Answer 12

• Stage of the product’s life.
• Costs.
• Price elasticity of demand.
• Positioning.
• Other elements of the marketing mix.
• Competitiveness of the environment.

Question 13

Penetration pricing

Answer 13

• This occurs when a business charges a low price to gain market share.
• This is most suitable when demand is sensitive to price.
• A low price can gain high sales and enable the business to benefit from producing on a large scale.

Question 14

Price skimming

Answer 14

• This occurs if a relatively high price is charged when a product is launched.
• Most appropriate when demand is price inelastic.

Question 15

Influences on the promotional mix

Answer 15

• Promotional budget.
• Target market.
• The message.
• Positioning.
• Competitive environment.

Question 16

Analysing branding decisions

Answer 16

• A brand represents a promise made by a business to provide a specific set of benefits.
• A brand conveys something to customers, like exclusivity.
• The reputation of the brand is something that has value to the business.

Question 17

What will a strong brand mean

Answer 17

• Demand is likely to be more price inelastic.
• Customers may become brand ambassador, telling others about the brand and convincing them to try it.
• Customers may become more open to other products launched under the same brand name.
• It may be difficult for other brands to enter the market or gain market share.

Question 18

Factors that effect distribution decisions

Answer 18

• The degree of coverage.
• The costs of different distribution strategies.
• The nature of the product.
• The degree of control a business wants over the way its products are priced and promoted.
• How customers expect to access the product and what technology allows a business to deliver.

Question 19

Marketing mix- People

Answer 19

• Thos providing the service, advising and carrying out the task.
• Managers will have to decide on staffing levels, investment in training and how to reward staff.
• These decisions will depend on factors such as how the business is positioned and the nature of the product.

Question 20

Marketing mix- Process

Answer 20

• Part of the customers experience in the whole process of buying.
• Stores may compete by making the process easier, like buying online.
• Technological changes in particular have enabled businesses to improve their process.

Question 21

Marketing mix- Physical environment

Answer 21

• Marketing managers will want to consider how their physical environment fits in with their brand.
• Managers will consider factors such as where to locate them, how to design them and how much to invest in them.
• This will depend on factor such as the brand, the nature of the product and positioning.

Question 22

Influences on the integrated marketing mix

Answer 22

• The position in the product life cycle.
• The Boston Matrix- there may need to be investment in more distribution for star products.
• The type of product- the price must be competitive with rivals for goods.
• The marketing objectives.
• The target market.
• Competition.
• Positioning.

Question 23

What has digital marketing enabled businesses to do

Answer 23

• Gather more information about customers and process it more quickly and more effectively.
• Build relationships with customers more effectively, by being able to track buying habits.
• Target very specific segments.
• Involve customers more in the marketing process.
• Target global markets 24 hours a day.