Marketing Mix Flashcards
What is de-marketing?
Reduces demand but drives frugal consumption
If more customers believe consumption should be reduced, then you are satisfying customer needs
What do you do once you have completed STP?
Convince the customer that you will satisfy their needs through marketing mix - 4Ps
What coordinated set of activities will convince your target customer?
4Ps
What does a lack of coordination do?
Confused the target customer
What is an example from class of the integrated marketing mix?
Baby carrots being put in vending machines to entice younger people, promoted through packaging, design, free mobile games, etc
What is the total product concept?
everything a customer receives, including all tangible and intangible attributes
Describe circular/closed loop product design vs linear product design
Companies are looking at how to close the loop in their design, don’t want to throw things into landfills and just forget about that end
Linear approach = take, make, dispose
Circular = Instead of throwing away at the end of life, replace, return and renew
What are the 8 tangible/intangible features of a product
Image of retail store Warranty Colour Packaging Instructions Image of brand Attachments Service after sale
What product was designed with the closed loop product design?
Earthkeepers by Timberlands are designed for disassembly and made with recycled materials
What is a brand
The name, term, symbol, or design that identifies a company’s products
What is a brand in the symbolic sense?
What the name or symbol means in consumer’s mind… a collection of perceptions about their total experience
What are the 5 steps of brand insistence, in order?
- Awareness
- Relevant Differentiation
- Value
- Accessibility
- Emotional Connection
What does the marketing mix reinforce?
Brand promise
How do you build brand insistence?
When you deliver on what you promise
What are the 3 subcategories of convenience products?
Emergency, impulse, staples
What marketing mix tactics are used for emergency convenience items?
Distribute intensively
Place at PoP
Ensure visibility
What marketing mix tactics are used for impulse convenience items?
Distribute intensively
Gain good shelf position
Place at PoP
What marketing mix tactics are used for staples convenience items?
Build brand trust
Distribute intensively
Gain good shelf position
What is the difference between emergency and staple items?
Emergency items are reactive - you only grab when you run out. Staples goods you don’t think about buying, you buy them frequently without thought
What is a shopping item? How is it different from a convenience item?
Products that last and therefore purchased less frequently… buyers spend considerable effort on purchasing. Convenience items are less expensive and usually not much effort in purchasing
What marketing mix tactics are used with homogenous products?
Distribute strategically and near competitors, highlight price
What marketing mix tactics are used used for heterogeneous products?
Distribute strategically and near competitors, use personal selling to emphasize benefits
What is consumer behaviour with homogeneous products, and what is an example of one?
Buyer perceives products as very similar and determines final purchase by lowest price
Ex. Microwave
What is consumer behaviour with heterogeneous products, and what is an example of one?
Buyer perceives products as having significantly different attributes and uses different criteria to purchase
Cars
What is consumer behaviour with specialty products, and what is an example of one?
Buyer is willing to spend high levels of effort - plan purchase and often does not compare alternatives
Luxury cars
What marketing mix tactics are used for specialty items?
Distribute exclusively using special channels matching special image, use personal selling
What is consumer behaviour with unsought products, and what is an example of one?
Buyers do not seek the product until a significant event happens, but then put effort into purchasing
Life insurance
What marketing mix tactics are used for unsought items?
Build brand value, use personal selling
What growth phase are most new ventures in?
Often growth or maturity phase
Give two examples of companies who used the product lifecycle to find new customers
Oreos changed their products when they extended to Algeria to appeal to tastes and preferences to extend or slow down product lifecycle
Canadian Tire changed their demographic from old white guys to much more diverse
Baking soda changed demographic from old people and bakers to sports and parents for deodorizing and cleaning
What is the product life cycle?
Series of stages where a product’s sales revenue and profits peak, then decline
True or false: the PLC refers to an entire product category, not an individual product
True
Why do marketers use the PLC?
Forecast future sales and plan new marketing strategies
What are the four stages of the PLC?
Introduction stage, growth stage, maturity stage, and decline stage
What is the introduction stage of the PLC and what is the main marketing strategy?
New product category with few competitors and low sales/profits
Marketing strategy is heavy promotion to build awareness and generate interest
What is the growth stage and what is it’s main marketing strategy?
Customers have adapted to product, sales are increasing, competitors are trying to enter category
Marketing strategy is building brand awareness through advertising, increasing distribution, and lowering prices
What is the maturity stage and what is it’s main marketing strategy?
Sales peak, profit is declining as market saturates
Marketing strategy is adding new features and styles, targeting competitors with advertising, and cutting prices
What is the decline stage and what is the main marketing strategy?
Declining sales and profits and consumer needs change, ability to produce at low cost determines which competitors remain
Marketing strategy is reducing marketing and production costs, possibly eliminating the product
What are the key factors on pricing considerations?
Company costs, customer capacity and willingness to pay, competitors price, and coordination with marketing mix
How do company costs get influenced and impact price, and how do you determine them?
Choice of business model and economic conditions influence company costs
Impact price floor (cannot go below a certain price or you are losing money)
Determine with calculating break-even point
How do customer’s capacity and willingness to pay get influenced and impact price, and how do you determine them?
Influenced by economic conditions, stage of life cycle, and perception of value
Impact price ceiling (can they afford it)
Determine by gaining customer feedback
How does competitors’ pricing get influenced and impact price, and how do you determine them?
Influenced by economic conditions and stage of lifecycle
Impact price floor and price ceiling (not trying to match, differentiating)
Determine by conducting competitive research
How does coordination with the marketing mix get influenced and impact price, and how do you determine them?
Influenced by marketing decisions
Impact price floor and price ceiling
Determine by communicating with colleagues
What are the four categories of pricing strategies?
New product pricing, psychological pricing, product-line pricing, and promotional pricing
What are the two primary types of new product pricing?
Price skimming and penetration pricing
What is price skimming?
Charging highest possible price during introduction phase (skims the cream off the market to recover R&D costs)
What is penetration pricing?
Selling new products at low prices in hope of achieving large sales volume and market share
What is psychological pricing?
Encourage purchases based on emotional responses rather than economically rational responses
What are the 6 types of psychological pricing?
Odd-number, multiple-unit, reference, bundle, everyday low prices (EDLPs), and customary
What is odd-number and multi-unit pricing?
Odd-number = setting prices using odd numbers slightly below whole-dollar Multiple-unit = setting single price for two or more units
What is reference and bundle pricing?
Reference pricing = pricing at a moderate level and positioning next to more expensive model
Bundle pricing = packaging together two or more products of complementary nature sold for one price
What is EDLP and customary pricing?
EDLP = set low price for products on consistent basis rather than frequently discounting
Customary pricing = setting prices of goods on basis of tradition
What is product line pricing?
Establishing and adjusting prices of multiple products in a product line
What are the three types of product-line pricing?
Captive, premium, and pricing lining
What are captive, premium, and price lining strategies?
Captive = basic product in product line is low, while price on items required to operate or enhance it are higher
Premium = highest-quality product or most versatile version of similar product in product line is highest price
Price lining = selling goods at certain predetermined prices reflecting definite price breaks
What are the 3 types of promotional pricing?
Price leading, special-event pricing, and comparison discounting
What are the price leading, special-event, and comparison discounting strategies?
Price leading = price below usual markup, near cost, or below cost
Special event = advertised sales or price cutting linked to holiday or season
Comparison discounting = setting price at a specific level and comparing it to higher price
What factors impact place/distribution options and why are they important?
Accessibility and availability: customers need to access product to buy it
Contracts: time consuming and costly to negotiate, must be careful
Intermediaries and channels: selling directly or through someone else?
Industry: Certain industries use extra levels such as wholesalers
Purpose: Need to match channels to reflecting purpose, customers expect this
What is an example of a company matching purpose to distribution?
IKEA investing money into e-commerce delivery startup Bolt which uses 0 emission trucks, to match IKEA’s goal of 100% zero-emission home deliveries
What are the benefits of using intermediaries in distribution?
Efficiency and assortment for customers: cumbersome to go to manufacturer to buy, easier to go to retailer
Break bulk shipments into smaller quantities: simpler to send a big shipment to Walmart as apposed to sending many small shipments to customers
Valuable market information: intermediaries know your customers and what is most popular/least popular
Instant sales infrastructure: Spaghetti sauce company isn’t going to buy a building just to sell spaghetti sauce, better to send to walmart where they can sell it with their building and employees already implemented
What is the cost of using intermediaries?
Intermediaries take a cut of profits and manufacturer loses control over final price
What is a solution to the cost of using intermediaries?
Demand Backward Pricing = work backward when pricing to ensure price is valuable to customer to create demand and factor in the cut that retailers will take
Why is it not a bad thing for retailers to take a cut of profits and having to lower your price margin?
You are selling a higher volume of products, selling on your own is a lot more expensive, in the end cost is lower for you therefore profits are higher
What is a solution for losing control over marketing due to using intermediaries?
Providing incentives to push your product by using:
Volume discounts - buy 10 cases it’s lower than buying 9
Co-op advertising - offer to pay for advertising in grocery flyers, etc
Detailing - going to store and make the display unique
Training - train sales people to know more about the product
Selective/exclusive arrangements - specialty goods choose only certain retailers, exclusivity
What is the promotional mix? (Integrated Marketing Communication/IMC)
Advertising, personal selling, sales promotion, and publicity
What is the advertising part of promotion?
Any paid form of non-personal presentation by an identified sponsor which communicates unique benefit
Flexible and reaches large or small audiences
What are the three steps to advertising purpose without creating purpose gap?
Be self-honest about the whole by acknowledging lifecycle and environmental impacts of product
Make, claim, and ask customers to support progress but don’t overstate
Ask customers to join you on journey
What is the personal selling portion of promotion? What are the benefits and drawbacks?
Face-to-face sales to customers
Benefits: individual attention, immediate feedback, adaptable messaging, more persuasive than advertising
Drawbacks: most expensive, lose control (requires significant training)
What are the factors to budgeting personal selling?
Nature of the product (if it is expensive and perceived as a risk for consumer)
Nature of the industry (impact of info to convey, degree of customizing)
What is the sales promotion portion of promotion? What is the benefit and drawback?
Marketing events or efforts that stimulate buying such as samples, frequent-user incentives, point-of-purchase displays, and contests
Benefit: cost effective way to stimulate sales
Drawback: customers may start expecting discounts
What sales promotion would be used for encourage trial of products?
Samples
What sales promotion would be used for boosting customer loyalty?
Frequent user incentives
What sales promotion would be used for gaining attention in retail environment?
Point of purchase displays
What sales promotion would be used for identifying prospects or building relationships?
Contests
What sales promotion would be used for attracting new customers or cross-selling other company products?
All options (samples, user incentives, contests, and point of purchase displays)
What is publicity?
Any communication or activity initiated by a company designed to win goodwill or prestige
Includes news releases, events, and other activities
What external factors affect the promotional mix?
Government - regulations and guidelines
Competition - monitored to know what they are doing
Social - what design to use
Technology - changing and expanding limits
What part of the promotion mix has the least control?
Personal selling
What do integrated marketing communications refer to?
Promotional mix must be coordinated to send clear message
How does the promotional mix work together?
Key tools are advertising and personal selling, supported by promotion and public relations to develop positive image
