Marketing mix and strategy 1.3

Question 1

What are 3 main things a business may take into account when assessing the function of a product?

Answer 1

A business will want to assess its safety, if it is fit for purpose and convenient to the consumer.

Question 2

What are some of the things that should be included when assessing the aesthetics of a product?

Answer 2

Appearance, smell, taste, shape and size, compact…

Question 3

Why may aesthetics be the most important in the design mix for consumers?

Answer 3

The looks of the product is what catches consumers attention when purchasing a good therefore making it important for it to stand out from rivals.

Question 4

Why may costs be the most important in the design mix for producers?

Answer 4

The cost to produce the good is what determines if a business is able to afford to produce the good. If it is to expensive to manufacturer then it may be substituted for cheaper materials.

Question 5

Products for each element that is most important:

Answer 5

Function: tools, housing systems, hiking boots etc
Aesthetics: Fashion, Accessories and jewellery
Costs: Insurances, consumer durables, housing appliances

Question 6

What is meant by resource depletion?

Answer 6

This is when raw materials/resources are used beyond the rate of replacement.

Question 7

How can the design mix be implemented when producing a product to ensure waste minimisation?

Answer 7

• changing the function so that it can be used to last longer than it does.
• Can be designed to be more compact and lighter to reduce materials used per unit of output.
• Producing a good that can be used more than once implemented via the design

Question 8

How can the design mix be implemented when producing a product to ensure it can be re-used?

Answer 8

• Designing goods so that they can be re-used later for the same purpose
• Implementing schemes that are cost-effective such as refunding empty bottles

Question 9

How can the design mix be implemented when producing a product to ensure it can be recycled?

Answer 9

• Using waste materials to produce products so that your utilising waste to make new products which is cost-effective as well as sustainable
• using old materials which can be used for new materials

Question 10

What is ethical sourcing?

Answer 10

When a business uses eco-friendly resources, pay fair wages and provide a safe working environment.

Question 11

Advantages and disadvantages of ethical sourcing?

Answer 11

A = USP, attracts consumers and helps environment
D = can be costly, people may only want low priced goods

Question 12

What is promotion

Answer 12

When a business aims to inform customers about products that they are selling to increase sales.

Question 13

What are 3 main types of promotion?

Answer 13

Sales promotion, public relations and merchandising and packaging

Question 14

What is sales promotion?

Answer 14

When a business uses incentives to help increase the chances of consumers continuing to buy their products.
For example, Coupons, loyalty cards and free gifts

Question 15

What are examples of public relations?

Answer 15

Press releases, press conferences and sponsorships

Question 16

What are examples of merchandising and public relations?

Answer 16

Product layout, display materials and well-stocked shelves

Question 17

How might a business choose its method of promotion?

Answer 17

How small/big the business is?
The market the product is in?
The product type?

Question 18

What is branding?

Answer 18

Allowing a business to be recognisable to consumers through name, brand and logo

Question 19

What are 3 good things about having good branding?

Answer 19

• Adding value (through using celebs for TV adverts etc)
• premium prices (a good brand has the ability to charge a higher price because customers will remain loyal to them)
• Reduce PED (brand loyal means if price increased, consumers are less price sensitive)

Question 20

How can a business build a brand?

Answer 20

• Advertising
• Sponsorships
• Using social media

Question 21

What is cost-plus pricing?

Answer 21

This is when a business calculates the cost to produce a single unit and then add a % mark up to ensure they make profit per unit

Question 22

What is price skimming? One plus and one con

Answer 22

This is when a business sets the price really high and then eventually decreases the price of it overtime. This is good because it means business can gain maximum profit as their are no competitors in the market but may only work on inelastic demand

Question 23

What is the difference between penetration pricing and predator?

Answer 23

Predator rapidly decreases prices with an aim to force competitors out of the market whereas penetration allows businesses to gain loyal customers and offer free trails etc

Question 24

What is psychological pricing. One con and one pro

Answer 24

Psychological is when a business sets a certain prices to make it seem like they are getting a better deal. Adding 0.99 seems cheaper than adding the extra 0.01p
May not always work if customers are price aware

Question 25

Give 3 factors that determine the most appropriate price strategy for a business

Answer 25

• How competitive the market is
• The PED of the product
• Stage in the product life cycle (if its in its introduction phase, penetration pricing may be better)

Question 26

How are there changes in prices to reflect social trends?

Answer 26

• dynamic pricing (prices that rapidly change to alter for seasons etc)
• Personalised pricing (data bases are used to set unique prices)

Question 27

What are price wars?

Answer 27

This is when firms in the same market, compete with prices

Question 28

What are distribution channels?

Answer 28

Different ways in which a business can distribute their products

Question 29

What are 4 ways in which products can be distributed?

Answer 29

1) Manufacturer to consumer
2) manufacturer to retailer to consumer
3) Manufacturer to wholesaler to retailer to consumer
4) Manufacturer to agent to wholesaler to retailer to consumer

Question 30

What is one pro and one con of a wholesaler?

Answer 30

Pro - they have a large network of buyers which lets a business reach lots of customers quickly
Con - Poor customer service as wholesalers decreases the amount of personal interactions

Question 31

What is direct distribution?

Answer 31

When a producer and consumer deal directly with one another

Question 32

]What is indirect distribution?

Answer 32

Involves the use of intermediaries between consumer and producer

Question 33

4 factors to consider when a business finds a distribution channel?

Answer 33

• If it is perishable
• If it is technical and complex
• If it is geographically spread
• Its size