Marketing Mix and stratergy Flashcards
What is function?
- the way the product works
- does it do what it needs to do
- is the product reliable
What are the three elements of the deign mix?
function, economic manufacture, aesthetics
What is economic manufacture?
- does the design allow the product to be made and sold profitable>
- how much value is added during the production process
What are aesthetics?
- how the product appeals to the customer in terms of how it looks, feels?
- based on the subjective judgement of customer
- a popular way to differentiate a product
examples of features that succesfully emphasise function in the design mix?
- more predictable and stable demand
- longer product life cycles
- lower promotional costs
- build reputation for quality based on reliability
- economic manufacture through economies of scale
examples of features that succesfully emphasise aesthetics in the design mix?
- high added value
- demand fueled by customer aspiration
- potentially shorter product life cycle
What ways does design mix refelct society?
- sustainability
- ethical supply chains
- waste minimisation
What is a brand?
product that is easily distinguisghed from other products so that they can be easily communicated and effectively marketed
3 key benefits to effective branding?
- adds significant value
- business is able to charge higher prices + demand is more price inelastic
- branding builds customer loyalty and aspiration
What are the 6 types of brand?
- product brand (specific products )
- service brand (adds percieved value to produtcts)
- umbrella brand (assigned to more then one product)
- corporate or own label (promoting brand name )
- global brand (operating worldwide
What are the two tasks of promotion?
to inform and persuade
What is the main aim of promotion?
ensure customers are aware of the existence and positioning of products
What does the promotional mix do?
describes the promotional methods that a business uses to pursue its marketing objectives
What are the elements of the promotional mix?
- advertising
- sales promotion and merchandising
- personal selling
- public relations/ publicity / sponsorship
- direct marketing
What are the key influences on which positioning elements are chosen?
- stage in product life cycle
- nature of product
- marketing objectives and budget
- target market
Benefits of advertising?
- wide coverage
- control of message
- effective for brand awareness
Drawbacks of advertising?
- can be expensive
- impersonal
- one way communication
- lacks flexibility
- limited ability to close sale
benefits of personal selling ?
- high customer attention
- message is customised
- interactivity
- persuasive impact
- adaptable
- opportunity to close sale
drawbacks of personal selling?
- high cost
- labour intensive
- expensive
- can only reach limited amount of people
What are the benefits of sales promotion?
- effective at achieving a quick boost to sales
- encourages customers to try a product
drawbacks of sales promotion?
- sales effect may only be short term
- cutomers may expect further promotions
- may damage brand image
what are public relation activities?
thoose that create goodwill toward an individual, business, cause of a product
What are the main aims of PR?
- achieve favourable publicity about a business
- build the image and reputation
- communicate effectively with customers
Give examples of some PR activities?
- promoting new products
- enhancing public awareness
- projecting a business image
- promote corporate social responsibility
What is direct marketing?
sending of promotional material directed through mail, email, social mediaor phone to individuals or businesses
What does direct marketing do?
allows a business to generate specific response from targeted groups of customers
What is price?
money charged for a product or service
What are financial objectives?
- maximise profits
- achieve a target level of profits
- acheive a target rate of return
- maximise sales revenue
- improve cash flow
What are some marketing objectives?
- maintain/ imporve market share
- beat / prevent competition
- increase sales
- build a brand
What are the three main levels of pricing?
- pricing methods
- pricing tactics
- pricing strategies
What are pricing methods?
- methods used to calculate actual set price
what are pricing tactics?
- adoped in short run to suit particular situations
- limited impact beyond the product itself
What are pricing stratergies?
- adopted over the medium to long term to achive marketing objectives
What influenxes the price of a product?
- cost
- elasticity
- product life cycle
- market share
- marketing objectives
- postioning
- competitors
What does price taker mean?
busines has no option but to charge the ruling market price
What is a price maker?
business is able to set its own price without worrying about rivals
What is a price leader?
market leader whose price changes are followed by rivals
What is a price follower?
follow the price changing lead of the market leader
What are the main benefits of basing price on cost?
- easy to calculate
- price increases can be justified when costs rise
- managers can be confident each product is being sold at a profit
Drawbacks of basing price off cost?
- ignors PED
- may not take into account competition
- sales are lost if price is set lower then consumer is willing to pay
- less incentive to control costs
What is price skimming?
charging a premium price when a product is first launched in order to maximise revenue per unit
What is penetration pricing?
offering a significantly lower price than normal in an attempt to maximise volume sold and to build an installed base of product users
- price is often increased once market share is reached
What does penetration pricing aim to do?
- gain market share quickly
- build customer usage and loyalty
What are price wars?
- competitive price reductions by firms as part of day-to-day competitive rivalry in the market
- used to increase market share
- continues till weaker businesses go out of business
What is psychological pricing?
- using phycology to base prices (99p)
What is loss leading ?
- a loss leader is a product displayed and advertised at a price below normal
- encourages customers to buy full priced items
What is dynamic pricing?
setting flexible prices for products or services based on current market demands
What is cost plus pricing?
price is set by applying a percentage margin based on the unit costs of production or supply
Name some pricing methods?
- penetration pricing
- price skimming
- psychological pricing
What are the 6 parts of the marketing mix?
- product
- price
- promotion
- place
- people
- process
What is the product life cycle?
model that describes the stages a product foes through over its life
WHat can a product life cycle be used to do?
- forecast future sales
- help with market targeting and postioning
- help analyse and manage a product portfolio
What are the five stages of the product life cycle?
- development
- introduction growth maturity
- decline / end
Explain the devlopment stage of product life cycle?
- complex and time consuming
- needs significant resources
- high cost
- may not be succesful
- can be long time before sales are achieved
Explain introduction part of product life cycle?
- new product launched in market
- low level of sales
- low capacity
- negative cash flow
Explain growth stage of product life cycle?
- fast growing sales
- product gains market acceptance
- cash flow may become positive
Explain maturity stage of product life cycle?
- slower sales growth
- high level of capacity utilisation
- high profits for those with high market share
- cash flow coudl be extreamly positive
- prices and profits fall
Explain decline stage of product life cycle?
- falling sales
- market saturation and/ or competition
- decline in profits and weaker cash flows
- more competitors leave the market
What are some extension stratergies to prolong product life cycle?
- lowering price
- changing promotion
- changing product
- looking for alternative distribution channels
- developing new market segment
What are some criticism of the prooduct life cycle model?
- shape and duration of the cycle varies from product to product
- length cannot be reliably predicted
- decline is not inevitable
What is the boston matrix?
model for portfolio analysis
What are the two areas in the boston matrix?
- market share
- market growth
What are stars in the boston matrix?
high growth products competing in markets where they are strong compared to competition
What are cash cows in the boston matrix?
low growth products with a high market share. mature succesful rpdoucts tht need little investment
What are question marks in the boston matrix?
products with low market share and opering in high growth markets (have potential)
What are dogs in the boston matrix?
low market share in low growth markets
