Marketing mix Flashcards
Advantages of product let marketing
Can focus on quality product to sell
No market research
Focuses on developing new and innovative product
Little competition compared to market led organisations
Advantages of market led marketing?
Produces product consumers want
Market research is essential
Flexible and adaptable to market changes
Aim to increase market share in a highly competitive
More market aware so easier to deal with rival companies
What are examples of consumer behaviour ?
Impulse purchase
Routine purchase
Informed consumer
What are the advantages of research and development?
Ensures customers have the product they want
Competitive edge
Known as an innovator and improve existing products
Sells unique products and ensure products are safe
Describe the product life cycle
Development
-no sales and making a loss as product is not being sold
Introduction
-sales are slow and overall loss is made as there is high promotional costs
Growth
-sales rise as customer confidence rises and profits start rising
Maturity
-sales peak as product is at its most popular there are healthy profits but may start falling due to competition
Saturation
-sales and profits fall as consumers start going elsewhere
Decline
-sales fall rapidly and product may be withdrawn from the market as profits fall
What are extension strategies?
Change product design, packaging, recipe, price
Change method of promotion or place of sale
Introduce new variations of the product
What are the advantages of a large product portfolio?
Increased brand awareness Increased profit Easier to launch new products Business spreads risk New products can replace old products that are at the end of their life cycle Easily cope with seasonal fluctuations
What are disadvantages of product portfolio?
High advertising costs so customers know all products
Research and development costs are high to maintain a variety of new products
If one product has a problem it can damage the whole portfolio
What is the Boston matrix?
Market share on top Market growth at side Star Question mark Cash coz dog
Star of Boston matrix?
Need constant investment to keep ahead of competitors
Market leader
Stars deteriorate over time
Cash coz of Boston matrix?
Little marketing due to lack of competition
Funds generated can improve stars or question marks
Question marks of Boston matrix?
Invest in them due to promising market position
Strong development to turn into stars
Dog of Boston matrix
Adversely affect profits
Should be divested due to lack of market share and growth
Drop the dog
Cost plus pricing
Simple and quick and business covers cost and makes a profit
But..
Doesn’t consider markers needs of competitor prices
Skimming
Charge a high price for a high quality product
But..
Can be discouraging due to the high price
Penetration pricing
Low price attracts customers wk high sales and market share which leads to decreased production costs
But..
Might not achieve high profit
Consumers may think its low quality and its only suitable for very price sensitive goods
Destroyer pricing
Dominate the market and consumers benefit from low prices
But..
It’s illegal
Promotional pricing
Stock levels reduce quickly
But..
Only works on popular items
Price discrimination
Benefit both consumers and producers
But..
Need to be certain about characteristics of the market
Loss leaders
Encourages customers to buy more meaning more pfpit
Advertising campaigns customer loyalty and may buy in bulk
But..
Can be accused of unfair business competition
Psychological pricing
Illusion leads to more sales and can be applied to many segments
But..
Inconvenient
What does the channel of distribution depend on?
Product being sold Size of the market Finance available Legal restrictions Durability of the product Manufactures distribution capability
What are the retailing trends?
Increase in customers shopping at large retail parks
Increase in supermarkets which put smaller businesses out of business
Vast use of e-commerce
Increase in discount stores
Customers needs catered for under one roof with supermarkets
Why do manufacturers sell to retailers?
Often located close to customers
Retailers may offer credit facilities and after sales service
Established customer base
Retailer Indus cost of storage premises and sale staff
Why do manufactures sell to wholesalers?
Saves on number of small deliveries
Administration costs are reduced
Less money tied up in stock or stock going obsolete
Wholesalers may label the product
Disadvantages to manufactures selling their product?
Loss of control of how the product is presented
Less profit as wholesaler makes profit
Costs involved in producing point of sale merchandising for wholesalers
Mail order
Offers credit facilities Can be exclusive and only way to purchase product Saves on expensive high street location But.. Lack of personal service High advertising costs Bad debts can occur
Internet/etailers
Consumers can order anywhere 24/7 which saves time and hassle Goods delivered direct to consumer base Saves overhead costs Can reach a wide geographical area But.. Delay between purchasing and receiving goods Concern over use of credit cards Lack of personal contact
Personal selling
Direct contact to the customer Can be tailor made Demonstrations can be shown But.. Consumers not keen on being disturbs at home
Direct mail
Specific market segments can be targeted Can reach wide geographical area But.. consumers w Don’t like large volumes of junk mail
Socialist magazines
Customers who purchase are directly invested
Consumers can phone orders in or speak to specialists
Into the pipe line promotion
Point of sales materials Sale or return Staff training Dealer loaders Extended credit Dealer competitons
Out of the pipeline promotion
Free samples Loyalty schemes Vouchers and discount coupons Special offers Bonus packs Competitions
Public relations
Use of press release to counteract bad publicity Give donations to charities Sponsor events locally and nationally Product endorsement Publicity literature given out
People
Appropriately qualified, motivated, committed to training and developments and well suited staff
Processes include?
Sourcing of products
Transportation of products to retail outlet
Storage and cooking of products
Service in the restaurant
Benefits of efficient process?
Avoids confusion
Streamlined business practice
Increases chance of satisfied customers
Loyal customers and repeat custom
Drawbacks of an inefficient process?
Customers go elsewhere
Share negative experiences with others
Negative business image
Physical evidence
Location where the service is offered and whatit looks like
Eg
Store layout and design or website design
