Marketing Flashcards
What is a cash cow in product
Products which are doing very well in the market
They have a High share of the market
Business use the money made from cash cows to develop products for the future
What is a problem child in product ?
A product which has a small market share or a fast growing market.
Money needs to be spent on the problem child to make sure they are succesfull, so the revenue from cash cow can be used.
What is a star in product ?
A star has a big share of a fast growing market; e.g Apple iPhone
Needs to keep improving and promoting as the aim is turning the star into a cash cow in the future.
Name some extension strategies
To avoid the decline phase
Cutting the price to make the product better value for money
Spending more money on advertising
Trying to get people to buy more of the product
Trying to find new customers by selling abroad
What is price skimming?
A High price set for a product when it first enters the market
This helps firms obtain the money needed to repay development costs
What is a loss leader?
Selling the product at a loss to the customer, so the customer will buy more of something else so that the firm then makes a profit.
What is cost plus pricing ?
To ensure the business covers it’s costs and makes a profit for example the product costs £10 and adds 20% to sell it at £12
What are the factors which influence the price
Demand - what people are willing and a me to pay for the product.
Company’s objectives - gain large share of the market
Hugh quality and charger a much higher price
What is sales promotion?
Discounts such as buy one get one free, competitions and coupons
What is direct marketing
When a business contacts the potential customer directly without going through other media
For example- a voucher for use at the next time they go shopping
A business can measure it success
Name factors which influence promotional activities
Costs- much more expensive than on TV or in in the local newspaper.
Target audience - local- local radio and newspaper
Larger wider audience - national newspaper, TV, Internet
What is a distribution channel?
How products get from the manufacturers to consumers
What is a wholesaler
They buy in large quantities from a producer and sell to retailers
What is a retailer ?
Shops that sell directly to customers
What are levels of distribution
Zero level - no intermediaries between the producer and consumer
One level - one intermediaries between the producer and consumer e.g - retailer sells to customer.
Two level - 2 intermediaries - e.g- producer- wholesaler - retailer - customer
