making marketing decisons Flashcards
what makes up the design mix
cost, appearance, function
importance of product differentiation
makes product stand out from competitors, encourages loyal customer base, charge higher prices, increases brand awareness
what are the stages of a product lifecycle
introduction- after research, tests, prepared, sales/distribution low, high costs; growth-sales/products/distribution increasing, costs/price still high; maturity-sales peaked, lower costs; decline-no longer popular, slowly decreasing
2 types of pricing strategies
pricing low for high volume but low profit margins, or pricing high for low volume but high profit margins
what is a mass market
aimed at wide range of customers due to high levels of competitors
what is a niche market
aimed at particular type of customer so less competition
how does technology affect pricing strategies
access to ecommerce gives more ability to shop around so more competition than just locally so need to be more price competitive (cheaper) or it has expanded the market so it is easier to attract customers so businesses can charge higher
what pricing strategy is best at the introduction of a product lifecycle
low price to encourage customers, or high price to create image of quality
what pricing strategy is best at the growth of a product lifecycle
keep low and increase with sales
what pricing strategy is best at the maturity of a product lifecycle
raise prices to try and improve profit margins
what pricing strategy is best at the decline of a product lifecycle
special offers in place to encourage last ditch sales before taken off market
what pricing strategy is best if an extension is being planned
premium- increase price to create new image of quality ands hope loyal customers stay
what is the pricing method skimming
high price at launch due to high demand due to USP, and slowly reduce overtime
what is the pricing method penetration
low initial price to gain market share and increasing later
what is the pricing method competition based
priced based on competitors, going rate, highly competitive markets, not high uses
