Marketing Mix Flashcards
what is the marketing mix?
- the combination of product, price, place and promotion for any business venture
what is a product portfolio?
- the mix of products the business produces and sells
what are 3 benefits of a product portfolio?
- spreads risk
- economies of scale
- targeting of wider markets
what is a USP?
- unique selling point
- differentiates the product from its rivals
what are 3 benefits of having a USP?
- competitive advantage
- helps justify premium pricing
- likely to attract more customers
what are the 6 purposes of packaging?
- design
- convenience
- protection
- information
- environmental factors
- cost
what is branding?
- a name, term, sign, symbol or design that identifies a sellers products and differentiates them from competitors products
what are 3 reasons brand awareness is important?
- brand loyalty
- differentiate product
- competitors may discount heavily
what are 3 cons of brand awareness?
- high advertising costs
- loss of brand value for 1 product can affect a whole range of similarly branded products
- brands invite competition
what are 5 methods of product differentiation?
- methods of promotion
- packaging
- form
- the provision of add ons
- quality and reliability
what are 2 arguments in favour of and against quality products?
+ brand image eg apple
+ customer retention
- price must be fair
- place is also important
what is a marketing plan?
- detailed statement of how the companys marketing strategy will be put into action
what are 2 pros and 2 cons of having a marketing plan?
+ helps in achieving business objectives
+ employees will be more informed
- costly
- bad plan can demotivate employees
what is the product lifecycle?
- the life of a product in the market with respect to sales
- products pay through these stages at different speeds, and some dont make it past certain stages and fail
identify and explain the stages of the product lifecycle
- development: negative cashflow caused by spending on R&D and market research
- introduction: product launched onto market, sales are slow, lots of promotion is needed to boost sales
- growth: sales increase, gaining enough money to pay back initial investments
- maturity and saturation: sales increasing, slower rate of growth, competition may be entering the market
- decline: sales fall, must decide whether to support or remove the product
what are 3 reasons for changes in product life cycle?
- recessions
- fall in demand
- products are already owned
what is meant by extension strategies?
- a medium/long term plan for lengthening the life cycle of a product or brand, or to generate for sales
- likely to be implemented during the maturity or decline stage
what are 3 examples of extension strategies?
- new features
- develop a wider product range
- change brand appearance
what is the boston matrix?
- shows the market share of each business’ products and the rate of growth of the markets in which they operate
explain the features of cash cows
- high market share in a relatively slow growing market
- money used to support new products
- less money is likely to be used on supporting them as theyre already established
explain the features of stars
- high market share in a high growth market
- may need protection from competitors
- money used to fund heavy promotion
explain the features of question marks
- low market share in a high growth market
- product abandonment may occur
- high levels of investment are needed to keep the products going with re-launches
explain the features of dogs
- low market share in a low growth market
- likely to be withdrawn from the market
what are 3 ways the boston matrix helps in managing a business’ expanding product portfolio?
- analyse products success in relation to market share and growth
- identify what products may need to be removed from the market
- identify well performing products and increase production of them
what is penetration pricing?
- pricing a product at a low level initially and then raising the price once a certain market share is gained
what is 1 pro and 1 con of penetration pricing?
+ brand loyalty
- customers may get the impression that he product is low quality
what is price skimming?
- charging a high price for a product with a USP for a limited period a\nd decreasing the price over time
what are 2 pros of price skimming?
- gain as much revenue as possible
- pay off R&D costs
what is going-rate pricing?
- selling goods/services at a price broadly in line with the price charged by competitors
what is destroyer pricing?
- setting the price low enough to drive competitors out of the market
- illegal as its anticompetitive
what is loss leader pricing?
- priced below the cost of production to attract customers
what is psychological pricing?
- prices are set at the level that matches what consumers may expect to pay
- they perceive that theyre receiving value for the price paid
what is contribution pricing?
- price is based on the vc+a contribution towards overheads and profits
what is cost-plus pricing?
- price covers the cost of producing the good plus a profit percentage
what are 2 pros and 1 con of cost-plus pricing?
+ costs are passed directly on to the buyer
+ every good is sold at a profit
- competitor actions are ignored
what are 2 advantages of using the righ pricing strategies?
- increase sales
- take into account competitor actions
what are 2 disadvantages of using the right pricing strategies?
- competitors may mirror pricing strategies
- expensive to promote
what is promotion?
- the attempt, through various forms of media, to draw attention to a product and thereby gain and retain customers
what are 3 objectives of promotion?
- increase sales
- raise awareness
- beat competitors
what 3 things does the method of promotion used depend on?
- target market
- cost
- the product itself
what is above-the-line promotion?
- indirect
- through independent mass media
- reach a wide, large audience
what are 5 types of above-the-line promotion?
- TV
- newspapers
- internet
- billboards
- magazines
what is below-the-line promotion?
- targets consumers directly
what are 3 types of below-the-line promotion?
- direct mailing
- PR
- exhibitions
what are 3 factors influencing the promotional method used?
- competitor actions
- budget
- target market
what are distribution channels?
- the path taken by a product as it passes from a producer to the final customer
what is place?
- the point where products are made available to customers
what are the 3 distribution channels?
- direct: manufacturers to customer
- modern: manufacturer to retailer to consumer
- traditional: manufacturer to wholesaler to retailer to consumer
what is multi-channel distribution?
- where a business uses several methods to sell their products to consumers
what are 2 pros and 2 cons of global marketing?
+ larger potential market
+ spreads risk
- economic factors like income levels
- degree of competition
what are 2 pros and 2 cons of internet marketing?
+ widens potential market
+ raised awareness
- expensive
- not everyone has the internet
