Marketing Mix

Question 1

Define the marketing mix

Answer 1

The combination of marketing that influences a customers decision to buy

Question 2

What are the 7 Ps?

Answer 2

Product
Price
Place
Promotion
Physical environment
Process
People

Question 3

Describe product

Answer 3

The product itself including features design reliability guarantees after sale service (it can be a service too)

Question 4

Describe price

Answer 4

The prices of all versions of the products and payment terms

Question 5

Describe place

Answer 5

Distribution channel I.e how the product moves from the producer to the final customer eg can the customer buy direct from the producer

Question 6

Describe promotion

Answer 6

How the business communicated about its product

Question 7

Describe people

Answer 7

The people (employees ) involved in the transaction. The skills and attitude affect customers perceptions of the product.

Question 8

Describe physical environment

Answer 8

The physical premises -how this looks affect your perception of the product

Question 9

Describe process

Answer 9

How you buy the product eg internet , mobile phone payments , queueing at tills? How easy is it ? Customer experiences ?

Question 10

What are the internal reasons why the marketing mix may have to change?

Answer 10

Changes in available finance could affect price promotion or product

changes in staff could affect people and products (skills changing)

greater efficiencies meaning prices can be loaded

changing objectives for example improving product to try and get repeat customers

Question 11

What are the external reasons why the marketing mix may have to change ?

Answer 11

Political and legal – if the legislation changes products may have to be adapted for example product safety or labelling

Economic -if as a recession the prices may have to be lowered and vice versa

Social – trends towards social responsibility (to be environmentally friendly )

Technological -may make changes to product possible or allows alternative payment options (process)

Competition-if this increases then the features may need to change and be promoted more

Question 12

What is a consume product ?

Answer 12

Products bought for consumption by the general public e.g luxury goods, everyday goods, impulse purchases

Question 13

How does marketing mix affect luxury goods?

Answer 13

People and physical environment are very important
Promotion is targeted
Price is less important
Distribution channels may be limited

Question 14

How does the marketing mix affect everyday goods?

Answer 14

Distribution channels are very wide
Physical environments is less vital
People are less vital

Question 15

How does the marketing mix affect regular purchases?

Answer 15

Price product and promotion are very important

Question 16

What are industrial products

Answer 16

Products sold to businesses for use in their own processes

Question 17

If a business sells industrial products what are professional buyers like?

Answer 17

Less interested in packaging or branding and are more interested in the technical performance of the product

Will want to understand how the product gives value for money and helps to improve competitiveness (could affect the price and people elements)

Process of purchase would also be important for the business

Question 18

What does the product consist of ?

Answer 18

The core benefit eg drier dries clothes

The tangible product I.e its features , specification

The augmented product I.e the extras such as brand name ,guarantee , after sales service

Question 19

Why is product often viewed as the most important element?

Answer 19

If the product isn’t right customers aren’t going to buy again (lack of repeat custom )

Question 20

What is product differentiation.

Answer 20

Developing and marketing a product that is distinctly different to rival products . It’s the USP or point of difference

Question 21

How could a business achieve product differentiation?

Answer 21

Different features than rivals

Ethically sourced goods

Better quality than competitors

Offer a guarantee that rivals don’t

Question 22

Benefits of product differentiation

Answer 22

Can charge a higher price (premium pricing )
Could create price inelastic demand (becomes very niche )

Question 23

What is the product life cycle ?

Answer 23

Shows the sales of a product over time

Question 24

What are the five main stages of the product life cycle ?

Answer 24

Development
Introductions
Growth
Maturity
Decline

Question 25

Why’s it important to identify which stage of the life cycle the product is in?

Answer 25

It helps determine the correct marketing strategy (different strategy for different stages)

It helps the firm plan seafood (you know what stage is next )

Question 26

Describe development in the product life cycle

Answer 26

Negative cash flow

Product testing to see if it’s worth launching

Investment into research and development

Question 27

Describe introduction in the product life cycle

Answer 27

A lot of promotion-costly-build awareness
Low sales
Negative cash flow
High unit costs -no economies of scale
Limited distribution channels
Low price but can be high eg iPhone-can use price skimming/penetration

Question 28

Describe growth in the product life cycle

Answer 28

Cheaper to produce high volumes so unit costs begin to fall
Change in price (lower if started off high-price can be increased if they started low due to brand loyalty)
Cash flow becomes positive
Target new market segments
Product modifications and improvements
Sale growing rapidly-market is growing :attracts competition
Generate interests -promotion
Growing number of outlets-wider distribution
More competition is likely to be there

Question 29

Describe maturity in the product life cycle

Answer 29

New products released
Promotion stresses USP
Wide distribution channels
Low unit costs as you start to have higher volumes being sold
Sales at their highest
Rate of sales growth slows (intense competition)
High profits for those with high market share
Competitive pricing

Question 30

Describe decline in the product life cycle

Answer 30

Price decreasing
Decreasing promotion -introduce sales promotion
Falling sales
Market is saturated
Unit costs start to rise (lower volume)
Fall in profits and weak cash flow
Remove weaker products -focus on one product
Reduce unprofitable distribution channels

Question 31

Why do businesses use extension strategies

Answer 31

A business will want to do it can to extend the growth and maturity phases of the life cycle and to delay the decline phase

Question 32

Define extension strategies

Answer 32

Extend the life of a product before it goes into decline

Question 33

How can you extend the life of a product ?

Answer 33

Special offers , competitions etc increased promotional expenditure to renew interest
Price reduction
Target new segments for example, new country new age
new packaging
New flavours
new uses for product

Add value for example, add new features

Question 34

How have product life cycles changed?

Answer 34

Product life cycles are getting shorter. Consumers are less brand loyal than in the past and are constantly looking for new projects.

Question 35

What do businesses do in response to changing product life cycle trends?

Answer 35

This means businesses need to plan shorter more intensive promotional campaigns and spend more time developing new products to replace old ones

Higher prices may be needed to compensate for higher cost and lower overall sales

Question 36

What are examples of case studies with changing product life cycle trends?

Answer 36

Segway:end of the road for the much hyped two wheeler -2020: ended production of the two wheeler not very popular with public - turned out to have product life cycle of twenty years

Apple: discontinues ipod twenty years after released now made redundant as phones do the same job