Marketing Mix and Strategy Flashcards
What is a good?
Goods of tangible nature e.g iphone
What is a service?
Goods of intangible nature e.g haircuts
What are 3 reasons people buy products?
-Benefits and satisfaction
-Symbols and ideas
-Positive expectations
What is the core part of a product?
It is what the customer wants to get the most from the product
What is the actual part of a product?
The tangible and intangible qualities of a product
What is the augmented product?
The extras that go with a product
What are the 4 main things when making an actual/augmented product?
-Reliability
-Quality
-Design
-Image
What is the design mix?
The 3 elements of a product that can help to differentiate from competitors
What are the 3 elements of the design mix?
-Aesthetics
-Function
-Cost/economic function
How to businesses change the design mix due to social trends?
-Waste management/resource depletion
-Design products for reuse
-Design products for recycling
What are the pros of resource depletion strategies?
-Save money by being more effective with packaging and raw materials
-Cuts down waste disposal costs
-Cheaper and more straightforward with environmental laws
What are the cons of resource depletion strategies?
-Will need to redesign production methods and products
-Difficult to source recycled products
What is ethical sourcing?
When businesses only use materials and services from suppliers who respect the environment and treat their workforce well while trading honestly
What are the pros of ethical sourcing?
-Can be used as marketing
-Attracts investors
-Motivates staff and promotes loyalty
-Prevents issues e.g negative press
What are the cons of ethical sourcing?
-Time consuming and difficult to find ethical suppliers
-Increased production costs
What is a brand?
A distinguishing symbol, logo or name that companies use to distinguish their products from others on the market
What is brand experience?
A brands actions perceived by a person
What is brand equity?
The value of a brand
What is brand extension?
Using an existing brand name on a new product
What is a manufacturers brand?
-Created by manufacturers
-Use advertising and promotion to encourage brand loyalty
-Higher prices
-More repeat purchases
What is an own label brand?
-Created by retailers
-Consumers get good value for money
-Higher profits to the retailer
-Creates ties between the customers and retailers
How can you create a brand?
-USP
-Advertising
-Sponsorship
-Use of social media
What is promotion?
The attempt throughout forms of media to draw attention to a product and thereby gain and retain customers
What is above the line promotion?
Mass media promotional methods
What are the advantages of above the line promotion?
-Higher customer attention
-Wide coverage
-Promotes the image of the company
What are the disadvantages of above the line promotion?
-Impersonal
-Lacks flexibility
-Only one way communication
What is below the line promotion?
Promotional methods which are more personal, traditional and allow the company to control the message that consumers receive
What are the advantages of below the line promotion?
-Adaptable
-Interactive
-Two way communication
What are the disadvantages of below the line promotion?
-Expensive
-Can only reach a limited number of customers
-Narrow coverage
What is emotional marketing?
Seeking to create a bond between a customer and the product by provoking an emotional response to the advertising
What is social media promotion?
-Communicating
-Providing value through daily content
-Having accountability
What is viral marketing?
Brand awareness which is created through word of mouth
What is premium pricing?
Pricing at or near the high end of the price range to attract status conscious customers
What is cost plus pricing?
Adding a markup to the cost which can be used for unique and differentiated products
What is skimming pricing?
Charging the highest initial price that customers will pay and then lowering the price at a later date
What is penetration pricing?
Setting prices at a lower price initially to encourage customers to try the product and is used to encourage switching from competitors
What is predatory pricing?
Large scale undercutting competitors to try and eliminate competitors but may result in selling lower than production costs
What is competitive pricing?
Setting prices based on the prices of direct customers or price matching them
What is psychological pricing?
Making prices seem more attractive to consumers
What is distribution?
The process of getting the right product or service to the consumers in the right place
What are channels of distribution?
The paths and businesses used to get the goods from the manufacturer to the consumer
What is a multichannel?
Producer, wholesaler, retailer, consumer
What are wholesalers?
Take bulk quantities from manufacturers and distribute them to smaller stores in the local area
What are the advantages of wholesalers?
-Wholesaler deals with storage of the product
-Sells products to smaller companies
-Employs a sales team to increase sales
What are the negatives of wholesalers?
-Wholesalers will need to make a profit so the final price is higher
-Business has less direct contact with the customer
-Hard to rely on promotion from the wholesaler
What is a single channel?
Producer, retailer, consumer
What are retailers?
A business or company that sells to the consumer directly, they buy the goods from a manufacturer and sell them to consumers at a marked up price
What are the benefits of retailers?
-Retailers are spread all over the country which increases sales
-Retailer creates an appropriate image when displaying a product
-More profitable for retailers as it removes the middle man
What are the negatives of retailers?
-Retailers build a relationship with the customer not the manufacturer
-Must rely on the retailer to display and sell the product
What is direct distribution?
Direct selling which means that products are sold directly from the manufacturer to the consumer
What are the benefits of direct distribution?
-Full control of the sales process
-Get a direct line of feedback from customers
What are the negatives of direct distribution?
-High costs to develop and manage a sales team
-Higher distribution costs
What is an agent?
Selling the products or service in return for commission
What are the aims of distribution?
-Get products to as many customers as possible
-Find the most cost effective way to get products to customers
-Make sure the product is easily available to customers
What is online distribution?
Processing orders for their consumers through the company’s website
Ways that distribution has changed to reflect social trends?
-Online distribution
-Home delivery
-Changing from a product to a service
What is E-commerce?
The buying and selling of goods and services online
What is M-commerce?
The buying and selling of goods and services through a mobile device
What has been the impact of E-commerce?
-Reduction in high street sales
-Many retailers have been replaced
-Supermarkets now offer online shopping and home delivery
What is multi-channel distribution?
The use of several methods of distribution in order to maximise sales, profit and loyalty by giving customers choice and convenience
What are the benefits of E-commerce?
-Reach a larger audience
-More convenient for customers
-Lower fixed costs
-Customers leave important date about themselves
What are the negatives of E-commerce?
-Not everyone has access to internet
-Customers may not be willing to purchase as they cannot touch the product before buying
-Possible expensive postal services
-Worries around internet security
What is a product portfolio?
The range of products made by a business
What are the advantages of a wide product portfolio?
-Target new customers
-Spread risks
-Increase in sales/profits
What are the disadvantages of a wide product portfolio?
-Increased advertising
-Danger of cannibalisation (everything is the same)
-Lacks economies of scale
What is marketing strategy?
A plan by a business to achieve its marketing objectives
-involves targeting a specific market in order to increase sales, gain market share and increase profitability
What should a business consider to develop a successful marketing strategy?
-Product portfolio
-Product life cycle
-Mass or niche market
What are the stages of the product life cycle?
-Introduction = sales are low as the new idea is introduced to the market
-Growth = rapid growth in sales and profits
-Maturity = tough competition means sales begin to level off
-Decline = shrinking market and sales decline
What are extension strategies?
Used to boost sales of a mature product
e.g changing packaging, relaunching the product
What are the advantages of the product life cycle?
-Forecast sales trends over time
-Helps adapt strategies dependant on the stage
-Simple to use
What are the disadvantages of the product life cycle?
-Not all products follow the product life cycle
-Hard to predict how long a product will be in each stage
-Only a theory
What factors can influence price?
-Target market
-Customer expectations
-Competition
-Production costs
-Business objectives
What are the types of promotion?
-Direct marketing = communicating directly with the customers through advertising
-Display = draw attention to a product
-Sales promotion = e.g contests, special offers
-Public relations = using the media to create positive stories about the business
-Personal selling = communication with potential buyers about a product to make a sale
-Adverts
-Sponsorship = used to increase brand recognition
-Word of mouth
-Trade fair = an exhibition to demonstrate a product
-Product placement = a form of advertisement where products are placed in a context e.g tv shows
What is the boston matrix?
A development from the product life cycle and is used when a business has a number of products to manage
What does cash cow mean?
-Dominant products in a low growth market
-Customers know and understand the product
-Limited/stable marketing strategies
-Limited growth with high profits
What is a star?
-Dominant products in a growth market
-High competition
-Growth stage with lots of advertising and promotion
What is a question mark?
-Poor competitive position in a growing market
-Don’t make much profits but have potential
-May invest in more money into the product or withdraw it
What is a dog?
-Weak position in a low growth market
-Don’t show much profit or potential for future profits
-Should cut back investment or close operation
What are the marketing strategies of mass markets?
Uses mass media e.g tv, radio, newspapers
What are the marketing strategies of niche markets?
Uses smaller media e.g specialist magazines, word of mouth, websites, direct mail
What does B2C mean?
Business to consumer
What does B2B mean?
Business to business
What is business to business marketing?
Informative advertising rather than persuasive e.g trade fairs
