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Business Studies Theme 1 - People > Marketing Mix And Strategy 1.3 > Flashcards

Marketing Mix And Strategy 1.3 Flashcards

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People You Should Know flashcards
1
Q

What are the three factors of the design mix?

A
  1. Aesthetics - the look - does it appeal to senses?
  2. Function - does it work?
  3. Economic manufacture
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2
Q

How do social trends affect design mix? (5)

A
  1. Concern over resource depletion - e.g. creating a sustainable product
  2. Designing for waste minimisation
  3. Recycling
  4. Reuse
  5. Ethical sourcing
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3
Q

what are the three ways a waste material can be disposed of?

A
  1. Burning them
  2. Burying them
  3. Reusing them
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4
Q

what are the two ways that ethical sourcing can be taken?

A
  1. sourcing based on the manufacturer or retailers ethical values, perhaps buying supplies and materials from known businesses or farms, where the customer knows the supplier treats animals and people well.
  2. Using it as a ‘buzz term’ to make the business sound better to a consumer
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5
Q

prototype definition:

A

a test model of a planned design, used to see if it functions properly, with durability, reliability and safety.

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6
Q

sustainability definition:

A

making something using materials that will be around for future generations, perhaps because you are planting a tree for every one you fell

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7
Q

Give 4 advantages of branding a product/ business:

A
  1. it enables the business to reduce the amount spent on promotion
  2. customers are more likely to purchase the product again (repeat purchase)
  3. it is easier to persuade retailers to put the products in their stores
  4. Other products can be promoted using the same brand name
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8
Q

What are the 6 types of branding?

A
  1. Individual branding
  2. Brand family
  3. Corporate brand
  4. personal branding
  5. Global branding
  6. Own label branding
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9
Q

Describe an individual brand: (Give an example)

A

marmite is owned by unilever, but only in the small print is this written on the packaging. this is because if something goes wrong then marmite wont be dragged down

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10
Q

Describe a brand family: (umbrella branding)

A

It adds value and acceptability and add a comforting familiarity. A good brand has emotional qualities. It also makes the product identifiable to the consumer

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11
Q

Describe a corporate brand:

A

There are three main ones: Nestle, Unilever and Mondelez. They may put their name on everything to reinforce creditability to the brand name.

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12
Q

Describe a personal brand:

A

Celebrities maximise their status/ name and ‘sell’ themselves as a brand. e.g. the beckhams

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13
Q

Describe an own label brand:

A

where retailers attach their corporate branding to a range of goods and services

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14
Q

Describe a global brand:

A

easily recognised and operating worldwide. they are “household” names. these brands are based on familiarity, availability and stability.

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15
Q

What are eight ways to build a strong brand:

A
  1. using promotional mediums - sponsorship
  2. Building and sustaining customer relationships
  3. innovation
  4. market research
  5. unique selling points
  6. advertising
  7. sponsorship
  8. use of digital media -social media
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16
Q

What are three benefits to firms of digital media:

A
  1. success of crowdfunding show people are interested in starting up businesses
  2. traditional advertising was a 1 way process from the company to customer which may create bonding between the company and the consumer
  3. the targeting can be specifically targeted at the tastes and habits of each consumer
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17
Q

Give 5 benefits of strong branding:

A
  1. added value
  2. charging premium prices
  3. builds customer loyalty
  4. other products launched in the same brand are likely to do well
  5. reduced price elasticity
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18
Q

What are the three types of promotion:

A
  1. Above the line promotion
  2. Below the line promotion
  3. Through the line promotion
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19
Q

What is the main aim of promotion:

A

to ensure that customers are aware of the existing and positioning of products.

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20
Q

Give four purposes of promotion:

A
  1. to introduce new products
  2. to attract new customers which would increase market share
  3. to achieve customer recognition
  4. to reduce price elasticity
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21
Q

Describe above the line promotion :

A

It is brand building, but there is less control over the promotion. For example tv, radio, press

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22
Q

Describe below the line promotion:

A

It is targeted/ direct promotion. for example emails to a person. a database is needed. you have more control over who sees it.

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23
Q

Describe trough the lien promotion:

A

Its a campaign which involves both above and below the line

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24
Q

What are the 6 pricing strategies:

A
  1. skimming prices
  2. penetration prices
  3. cost plus pricing
  4. competitive pricing
  5. predatory pricing
  6. psychological pricing
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25
Q

factors affecting pricing strategies (6)

A
  1. stage of business cycle
  2. Brand image - premium pricing
  3. competitors pricing
  4. location - adds value
  5. cost of product - profitability
  6. Quality of product
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26
Q

what are price takers?

A

They have no option but to charge the ruling market price

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27
Q

what are price makers?

A

they fix their own price

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28
Q

what are price leaders?

A

market leaders whose price changes are followed by rivals

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29
Q

what are price followers?

A

follow the price changing lead of market leader

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30
Q

what are two pricing strategies for new products entering the market?

A
  1. penetration pricing

2. price skimming

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31
Q

what is penetration pricing?

A

Its when the price is set low to gain market share. this is done in a very competitive market

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32
Q

what is price skimming?

A

Its when the price is set high to cover high research and development costs as quickly as possible. they reduce the price over time

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33
Q

give four strategies for existing products:

A
  1. completive pricing
  2. destroyer/ predatory pricing
  3. cost plus pricing
  4. psychological pricing
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34
Q

what is competitive pricing?

A

They consider their rivals when pricing, this is done in highly competitive markets

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35
Q

what is predatory pricing?

A

The price is set low on purpose to drive out other competitors. They have the intention of raising these prices after the competitors have been driven out. It is anti-competitive.

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36
Q

what is cost plus pricing?

A

Its where the unit cost and a % mark up create the price. this guarantees profit if sold.

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37
Q

what is the cost plus pricing calculation?

A

(unit cost) + (% mark up)

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38
Q

what is psychological pricing?

A

Where the price is set where consumers may perceive it to be lower than it actually is. its more efficient with more expensive products. Its is also useful if there are barriers, like stamp duty

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39
Q

Give 2 advantages and 2 disadvantages of price skimming:

A

advantages:
1. establish the item as a must have
2. can recover investment/ R&D costs
disadvantages:
1. some customer may be put off by the high prices
2. when they cut their costs the image may suffer, as original buyers may be annoyed the price has fallen

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40
Q

Give 2 advantages and 2 disadvantages of price penetration:

A

advantages:
1. low priced new products may attract a high sales volume, which makes it hard for a competitor to break into the market.
2. high sales volume means good distribution of products and good displays
disadvantages:
1. pricing low may affect the brand image making it look cheap
2. hard to gain distribution in more upmarket retailers

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41
Q

loss leader definition:

A

pricing a product below cost in order to attract further profitable business

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42
Q

price elasticity definition:

A

a measurement of the extent to which a products demand changes when its price is changed

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43
Q

price sensitive definition:

A

when customer demand for a product reacts sharply to a price change

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44
Q

pricing tactics definition:

A

short term pricing responses to opportunities or threats

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45
Q

What is distribution?

A

the process in getting the right product/ service to the consumer in the right place (and the right quantity)

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46
Q

what is a distribution channel?

A

moves a product through the stages from production to final consumption

47
Q

what are the 4 channels of distribution called?

A

0 stage
1 stage
2 stage
3 stage

48
Q

what is the process of a 0 stage distribution channel?

A

manufacturer > Intermediaries > consumer

49
Q

what is the process of a 1 stage distribution channel?

A

manufacturer > retailer > consumer

50
Q

what is the process of a 2 stage distribution channel?

A

manufacturer > wholesaler > retailer > consumer

51
Q

what is the process of a 3 stage distribution channel?

A

manufacturer > agent > wholesaler > retailer > consumer

52
Q

what are 4 main distributors?

A
  1. an agent
  2. wholesaler
  3. retailer
  4. distributor
53
Q

what is a wholesaler?

A

a business which buys i bulk - using economies of scale, which can then be sold on cheaper for the consumer

54
Q

describe a 0 stage distribution channel and what it includes:

A

from manufacturer to the consumer. It can have high profit margins and lower prices for selling are available. It could be by e-commerce, or they could own their own retailer outlets, a vending machine, an outlet shop, or by direct mail/ selling.

55
Q

what is a multi channel?

A

businesses which use more than 1 channel

56
Q

why is it good to be 1 stage? (2)

A

gives the manufacturer the distribution of products.

they will often arrange/ display the products for you

57
Q

what is it good to be 2 stage? (1)

A

they bulk buy so get it cheaper and can often pass this low price to the conusmer

58
Q

Give 4 factors which influence changes in the channels of distribution?

A
  1. size of business
  2. type of product/ service
  3. whether the business is established or not
  4. price of product/ service
59
Q

what 3 factors affect the importance of price of a product/service?

A
  1. the quality of the product
  2. how much consumers want the product
  3. consumers income
60
Q

give 4 factors which are key changes in distribution to reflect social trends?

A
  1. sale of services for example through mobile devices
  2. Widespread adoption of e-commerce by households reducing high street retail sales
  3. Ageing of population with significant disposable income
  4. mass customisation reducing the need for stockholding in distribution channels.
61
Q

Defining of barrier to entry:

A

Factors that makes it hard for new firms to break into existing markets

62
Q

definition of wholesaler:

A

the middleman between the producer and retailers, who breaks bulk down from container lorry loads into manageable parcels

63
Q

definition of opportunity cost:

A

the cost of missing out on the next best alternative when making a decision

64
Q

Definition of long tail:

A

the huge number of tiny businesses appealing to minority tastes that can find a profitable existence online because they can target the whole planet not just the local area.

65
Q

definition of impulse buying:

A

buying in an unplanned way

66
Q

what is the product lifecycle?

A

a theoretical model which describes the stages a product goes through over its life

67
Q

what are the 5 stages of a product lifecycle after R&D:

A
  1. introduction
  2. growth
  3. maturity
  4. decline
  5. extension strategy
68
Q

what is the value of the product life cycle: (2)

A
  1. helps managers to plan their marketing activities.
  2. helps decide prices - so at the beginning of a product lifecycle, a technologically advanced product may be launched with a high price
69
Q

What is the marketing strategy at the introduction part of a product lifecycle? (sales figures & revenue increase/ decrease, price, profit and their key strategy)

A

the sales figures are low, there is low revenue but potential to increase. the price is usually high but very dependant on the product. the key strategy is marketing the product

70
Q

What is the marketing strategy at the R&D part of a product lifecycle? (sales figures & revenue increase/ decrease, price, profit and their key strategy)

A

no income/ sales figures as its not on the market currently, the price is usually undecided. there is no profit as their are no sales, and the key strategy is to create the best possible product.

71
Q

What is the marketing strategy at the growth part of a product lifecycle? (sales figures & revenue increase/ decrease, price, profit and their key strategy)

A

The sales figures are increasing, the revenue increases too, the price of the product will be moderate, this is so the product sells and the profit is increasing. The key strategy is to continue marketing

72
Q

What is the marketing strategy at the maturity part of a product lifecycle? (sales figures & revenue increase/ decrease, price, profit and their key strategy)

A

The sales figures are high (max) and the revenue is at its max, the price is quite high as it will sell, the profit is at its max and the key strategy is to milk the profit

73
Q

What is the marketing strategy at the decline part of a product lifecycle? (sales figures & revenue increase/ decrease, price, profit and their key strategy)

A

The sales figures will be lower and there is decreasing revenue, the price of the product is likely to be lower and the profit is lower. the key strategy is to bring in as much money while its still around

74
Q

What is the marketing strategy at the extension strategy part of a product lifecycle? (sales figures & revenue increase/ decrease, price, profit and their key strategy)

A

The sales figures increase, the revenue increases, the price of the product is moderate so it sells and the profit is moderate too. the key strategy is to market the product.

75
Q

what is the aim of an extension strategy?

A

To prevent a decline in the products sales in the medium to long term.

76
Q

what are the two main variables for an extension strategy?

A
  1. the product itself

2. the promotion of the product

77
Q

Give three key influences on successful new product developments:

A
  1. understanding of the consumers within a certain market segment
  2. the creativity to be able to see how a problem or issue can be solved innovatively
  3. Enough resources to be able to develop an idea and market it
78
Q

Definition of the cash cow product:

A

a product that has a high share of s low growth market

79
Q

Definition of a ‘dog’ product:

A

a product that has a low share of a low growth market

80
Q

Definition of a extension strategy:

A

marketing activities used to prevent sales from declining

81
Q

Definition of portfolio analysis:

A

an analysis of the market position of the firms existing products, it is used as part of the marketing planning process

82
Q

Definition of a problem child product:

A

a product that has a small share of a fast growing market

83
Q

Definition of a rising star product:

A

a product that has a high share of a fast growing market

84
Q

What does a problem child usually need lots of to help it prosper:

A

lots of investment as it could turn out well or could fail

85
Q

what are 4 purposes of product portfolio analysis (and what part of the Boston matrix are they used for)

A
  1. building - this involves investment in promotion and distribution to boost sales and is often used with a problem child
  2. holding - this involves marketing spending to maintain sales and is used with rising star products
  3. milking - taking whatever profits you can without much more new investment and is often used with cash cow products
  4. divesting - this involves selling off the product and is common with dogs or problem children
86
Q

What is the purpose of the Boston matrix? (3)

A
  1. to give the business direction/ products
  2. allows companies to see where the product lies
  3. decide on a strategy for the business
  4. to minimise waste
87
Q

Definition of market positioning:

A

where the product is placed in the market relative to its competitors

88
Q

What is the definition of business strategy:

A

a long term decision for a company on what they’re going to do in terms of products. when markets change (they’re dynamic) the strategy has to change as well. When markets remain constant (they’re static) the strategy can stay the same

89
Q

Give 2 reasons why a business strategy is important:

A
  1. different countries will have different opinions on what they want
  2. So they can reach the right target audience
90
Q

what is a marketing strategy? (3)

A
  1. looks to the future
  2. is carefully thought out
  3. contributes to the achievement of company objectives
91
Q

What is niche marketing?

A

where a business targets a smaller segment of a larger market, where customers have specific needs and values

92
Q

what is mass marketing?

A

where a business sells into the largest part of the market, where there are many similar products offered to competitors

93
Q

what is business to consumer marketing?

A

consumers want to know the benefit of the product

94
Q

give some factors of mass marketing (3):

A
  1. penetration pricing
  2. large distribution area
  3. added value of products
  4. not very differentiated
95
Q

Give some factors of niche marketing: (3)

A
  1. less need for product differentiating (less competitors)
  2. premium pricing
  3. added value can be high
  4. direct distribution
96
Q

business to business marketing strategy: (3)

A
  1. informative advertising
  2. low pricing - affect the profit margins
  3. use agents to visit directly to business.
97
Q

Definition of homogenous goods:

A

these have no points of differentiation and therefore each one is the same as every other (making competitors focus on price)

98
Q

definition of product differentiation:

A

the extent to which consumers perceive your brand as being different from others

99
Q

What are 3 pros to advertising?

A
  1. Wide coverage (bigger audience)
  2. Can build brand loyalty
  3. Control of message out
100
Q

What are 3 cons to advertising?

A
  1. Often expensive
  2. Lacks flexibility
  3. One way communication
101
Q

What is the definition of merchandising?

A

The activity of promoting the sales of goods especially by their presentation in retail outlets.

102
Q

Give 2 positives to sales promotion:

A
  1. Effective at achieving a quick boost of sales

2. Encourages customers to trial a product or switch brands

103
Q

Give two negatives to sales promotion:

A
  1. Sales increase may only be short term

2. May damage the brand image

104
Q

What is direct marketing?

A

The marketing is aimed directly at the customer

105
Q

What are 2 advantages of direct marketing?

A
  1. Focus limited resources on targeted promotion

2. Easy to measure response and success

106
Q

Give two disadvantages of direct marketing:

A
  1. Need a database (up to date and accurate)

2. Ineffective campaign can be costly

107
Q

What is the definition of public relations?

A

Are activities that create good will towards an individual business or product

108
Q

What is 3 pros of public relations?

A
  1. Creates a positive brand image
  2. Increases demand
  3. Appeals to the consumer directly
109
Q

What are two cons of public relations?

A
  1. Costly/ planning

2. Always a risk in the public eye

110
Q

What is the definition for a sponsorship?

A

It is financial support received from a sponsor

111
Q

What is the definition of personal selling?

A

Is promotion on a person to person basis

112
Q

Give 2 advantages of personal selling:

A
  1. High customer attention
  2. Message is customised
  3. Interaction
113
Q

Give two disadvantages of personal selling:

A
  1. High costs
  2. Labour intensive
  3. Can only reach a limited number of customers

Business Studies Theme 1 - People (6 decks)

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