Marketing Mix And Strategy Flashcards
What is product or service design?
The combination of factors needed in designing a product
What is standard design?
products or services that are sold as standard, the customer cannot add any extra features or benefits
What does the function mean?
What the item is used for
What does aesthetic mean?
What the item looks like
What is promotion?
The use of marketing tools to bring a product or service to the attention of potential buyers
What is personal selling?
When a salesperson meets a potential buyer face to face with the aim of selling their product/service
What is direct marketing?
Highly focussed targeted mail based on what customers have bought before
What is Above the line advertising (ATL)?
Involves mass media methods for targeting larger and more general customers
Eg. Advert on the tv
What are the advantages to ATL
Reaches mass audience
Advert communication is repeated so the message is clear
Great for building brand awareness
What are the disadvantages of ATL
Very expensive
Hard to measure clear results
What is below the line adversing (BTL)?
The same as direct marketing for reaching smaller but more targeted audiences
What are the advantages of BTL?
Easy to measure if the campaign reached an audience
Easy and inexpensive
What are the disadvantages of BTL?
Training may be needed on marketing
Need a good understanding of customer or buyer behaviour is required
What is public relations?
Aims to build a relationship between the business and the public to create a favourable copywriter image- long term strategy
What is sponsorship?
The financial or in kind support of an event with the objective of attaining certain business objectives
What is pricing?
The process of pricing is the choice of pricing strategy that a business makes when setting prices for their products or services
What is cost plus pricing?
A cost-plus pricing strategy seeks to set a price for a product or service which covers the costs and provides a good profit margin for the business
What are the benefits to cost plus pricing?
Protects the profit margins of the business
Easiest method of pricing to apply
Easy to estimate profit levels
What are the drawbacks of cost plus pricing?
This method of pricing does not take into account the prices of the competition
What is skimming pricing?
The price is set high to start and as more people join the market the price is decreased
What are the benefits of skimming?
A high starting price can establish an upmarket image
For innovative products it can be a great way to harvest high profits from early buyers who want the latest product and are prepared to pay a premium
What are the drawbacks of skimming?
Cheaper imitations of the product may appear on the market too soon and take sales away from the product
Risky strategy as customers may be put off from buying due to the high price
What is competitive pricing?
Having your prices the same as your competition so the customer has to make a decision on other factors such as service speed
What are the benefits of competitive pricing?
Makes consumers focus on non-price incentives
What are the drawbacks of competitive pricing?
Pricing at the competitive rate may not cover all the costs of some smaller businesses which can’t get the same economies of scale as the larger ones
What is penetration pricing?
This means setting prices really low on a new product to encourage sales and to persuade customers to try the product. Then when they like the product and have to keep buying it the business raises the price
What are the benefits of penetration pricing?
Works best with new products being launched to encourage consumers to try the product
What are the drawbacks of penetration pricing?
Consumers may have bought anyway, even without the low start price
Expensive as it eats into profits by reducing sales revenue
What is predatory pricing?
In oligopolies existing businesses may hold off the threat of a new entrant to the market by lowering their prices so that any competitor cannot make a profit.
What are the benefits of predatory pricing?
The intention with predatory pricing is to drive competitors out of the market place or set a barrier to entry to discourage new entrants to the market
What are the drawbacks of predatory prices?
Depends on the price elasticity of the product, if it is low then a lower price won’t make much difference to customer demand
What is psychological pricing?
This means pricing a product at £1.99 rather than £2.00 to appear cheaper
What are the benefits to psychological pricing?
- Seems cheaper than it is
- easy to implement
- generates more sales
What are the drawbacks to psychological pricing?
Psychological pricing strategy can be high risk, if comparable products are available for a lower price consumers could be tempted away
What is distribution?
The process of getting the right product or service to the consumer in the right place
What are the 4 stages of distribution?
Manufacturer
Wholesaler
Retailer
Consumer
What Is marketing?
The management process of identifying, anticipating and satisfying consumer demands for profit
What is a marketing strategy?
The methods used by a business to achieve their marketing objectives
What is product development phase?
first stage of the product lifecycle where a product is designed and market research is analysed to produce a product which will satisfy customer needs
What is the introduction phase?
When the product in finally launched and released to the public. May be costly as advertising and marketing could be needed
What is the growth phase?
products are enjoying rapid growth in sales and profits
What is the maturity phase?
face intense competition now all the producers have joined the market
What is the decline phase?
profits and sales have fallen and the product may be withdrawn from sale
