Marketing mix and strategy

Question 1

What is the design mix?

Answer 1

• Function (purpose)
• Aesthetics (sensory stimulation)
• Cost (produce and make a profit)

Question 2

What are the benefits of adapting the design mix to social trends?

Answer 2

• Reduce waste = lower costs and higher profits
• Popular + sell in large quantities = raise revenue and improved profits
• USP
• Avoid negative publicity

Question 3

What types of promotion is there?

Answer 3

• Above-the-line (advertising in the media)

- Below-the-line (promotion not using media)

Question 4

What types of above-the-line promotion is there?

Answer 4

• informative (increase awareness)
• persuasive (convince)
• reassuring (comfort existing customers)

Question 5

What types of below-the-line promotion is there?

Answer 5

• Sales promotions
• Public relations
• Packaging and merchandising

Question 6

What types of brands are there?

Answer 6

• Manufacturer brands (created by producers of goods)
• Own-label brands (manufactured for wholesales or retailers by other businesses)
• Generic brands (only contain the name of the actual product rather than a company name)

Question 7

What are the benefits of strong branding?

Answer 7

• Added value
• Ability to charge premium prices
• Reduce price elasticity of demand

Question 8

How might a business build a brand?

Answer 8

• Exploiting USP’s
• Advertising
• Sponsorships
• Using social media

Question 9

How might a business change branding and promotion to reflect social trends?

Answer 9

• Viral marketing (encourages people to pass on message to others about a product)
• Emotional branding (using emotions of consumers to build a brand)

Question 10

What types of pricing strategies are there?

Answer 10

• Cost plus (adding a percentage mark up to the costs )
• Competitive (based on rival prices)
• Penetration (setting low prices when launching)
• Predatory (low price forcing rivals out)
• Psychological (slightly below a rounded figure)
• Skimming (high price initially, then lowering it)

Question 11

What is a distribution channel?

Answer 11

A route taken by a product from the producer to the customer

Question 12

What is direct selling?

Answer 12

producers selling their products directly to customers

Question 13

What are the advantages of direct selling?

Answer 13

Intermediaries aren’t required, producers able to make more profit.

Question 14

What is retailing?

Answer 14

A business that buys goods from manufacturers and wholesalers, and sells them in small quantities to consumers.

Question 15

What is wholesaling?

Answer 15

A business that buys goods from manufacturers and sell them in smaller quantities to retailers

Question 16

What are agents?

Answer 16

An intermediary that brings together buyers and sellers

Question 17

How have distribution channels changed to reflect social trends?

Answer 17

• online distribution

- changing from product to service

Question 18

What are the stages of the product life cycle?

Answer 18

• Product development
• Introduction
• Growth
• Maturity
• Decline

Question 19

What are the extension strategies?

Answer 19

• Product adjustment (improvements, updates, extending range)
• Promotion (campaigns)

Question 20

What is a product portfolio?

Answer 20

The collection of products a business is currently marketing

Question 21

What is the boston matrix?

Answer 21

a 2x2 matrix model that analyses a product portfolio according to the growth rate of the market and the relative market share of products within the market.

Question 22

What criteria categorise products in the boston matrix?

Answer 22

two criteria:

• market growth (how fast the market for the product is growing)
• relative market share (how strong is the product)

Question 23

What are the four categories in the boston matrix?

Answer 23

• Stars (high market growth, high market share)
• Cash cows (relatively high market share, weak market growth)
• Question marks (low market share, fast growing market)
• Dogs (low market share, low growth)

Question 24

What do stars bring to a business (boston matrix)?

Answer 24

• Invest in product to cope with growing market and sales

- Net cash flow may be nearly zero due to outflow for promotion and high levels of profit.

Question 25

What do cash cows bring to a business (boston matrix)?

Answer 25

• High levels of profits
• little need for investment
• positive net cash flow

Question 26

What do question marks bring to a business (boston matrix)?

Answer 26

• likely unprofitable
• potential to become a star due to growing market
• net cash flow zero or negatives
• high levels of investment

Question 27

What do dogs bring to a business (boston matrix)?

Answer 27

• Poor sales and profits

- Net cash flow may be zero or negative

Question 28

What is a market strategy for mass markets?

Answer 28

• Product (many products, differentiated, USP)
• Price (become price leaders)
• Promotion (heavy investment)
• Place (multiple channels to distribute goods)

Question 29

What is a market strategy for niche markets?

Answer 29

• Product (highly differentiated, high quality)
• Price (high prices)
• Promotion (targeted promotions in specialised publications)
• Place (exclusive distributers or private)

Question 30

What are outbound marketing strategies?

Answer 30

To direct marketing material at potential customers whether they are expecting it or not.

Question 31

What are inbound marketing strategies?

Answer 31

Attracting potential customers to websites when they are looking for suppliers or solutions to problems (blogging for example)

Question 32

What are hybrid marketing strategies?

Answer 32

A combination of both outbound and inbound methods. Outbound strategies may be implemented in the short term as inbound strategies take around 6 months to generate results.

Question 33

How might a business develop customer loyalty?

Answer 33

• Communication (informed)
• Customer service
• Customer incentives (Rewards)
• Personalisation
• Preferential treatment