marketing mix-promotion and place chapter 20

Question 1

promotion

Answer 1

about communicating with actual or potential customers with the use of advertising , sales promotion, personal selling, direct mail, trade fairs, sponsorship and public relations to inform consumes and persuade to buy. effective promotion not only increases awareness of products, but also creates images and product personalities that consumers can identify with.

Question 2

advertising

Answer 2

paid for communication to inform and persuade consumers, using media such as TV, newspapers and cinema

Question 3

direct promotion

Answer 3

a range of promotional activities aimed directly at target customers. it is also know as direct marketing

Question 4

sales promotion

Answer 4

incentives such as special offers or special deals directed at consumers or retailers to achieve short term sales increases and repeat purchases by consumers

Question 5

promotion mix

Answer 5

the combination of promotional techniques that a firm uses to sell a product. There are several elements to the promotion mix, they include all of the marketing tools that can be used to communicate with the consumers.

Question 6

promotion budget

Answer 6

the amount a business spends on promotion used by a business for any product is a key decision. it is not only about the total spent but how the budget us allocated between competing forms of promotion available.

Question 7

promotion objectives

Answer 7

increasing sales by raising customers awareness of a product.
increasing consumer recall of an existing product and its distinctive qualities.
increasing purchases by existing consumers or attracting new consumer to the brand.
demonstrating the superior specification or qualities of a product compared with those of competitors, often used when the product has been updated or adapted in some way.
creating or reinforcing the brand image or personality of the product, increasingly important in consumer markets where it often claimed that all products look the same.
correcting misleading reports about the product or the business, rather than the product, through corporate advertising.
encouraging retailers to hold inventories of the product and actively promote products to the final consumer

Question 8

advertising promotion

Answer 8

advertising is communicating information about a product or business through the media, such as TV and newspapers. these advertisements should be directed towards the appropriate target market by selecting the right media. successful advertising campaigns have led to substantial increases in consumer awareness and sales. this effect can last for a considerable length of time if brand loyalty is established. advertisements are classified into two types which are informative advertising and persuasive advertising.

Question 9

informative advertising

Answer 9

adverts that give information about a product to potential purchases, rather than just trying to create a brand image. this information could include price, technical specifications, main features or places where the product can be purchased. this style of advertising is most effective when promoting a new product that consumers are unlikely to be aware of, or when communicating a substantial change in price, design, or specification

Question 10

persuasive advertising

Answer 10

adverts trying to create a distinct image or brand identity for the product. they may not contain any details at all about the materials, ingredients used, prices, or places to buy the product. this form of advertising is very common, especially in markets where there might be little differentiation between products. advertisements then try to create perceived difference in the minds of consumers

Question 11

targets of advertising

Answer 11

not all advertising is aimed at the final consumer. trade advertising is aimed at encouraging retailers to stock products and sell them to consumers and, if possible, to promote them in preference to rival products. this type of advertising is most likely to take place in trade journals and magazines which are not available to consumers

Question 12

advertising agencies

Answer 12

specialists that advise businesses on the most effective way to promote products. advertising agencies can offer a complete promotional strategy. this can be important to a business that does not have its own marketing experts or may be entering a new market. these agencies will devise a promotional plan for substantial fees.

Question 13

stages in devising a promotional plan

Answer 13

research the market, establish consumer tastes and preferences, and identify the typical the typical consumer profile the typical consumer profile.
advise on the most cost effective forms of advertising media to be used
use their own creative designers to design adverts appropriate for each medium
fil or print the adverts to be used in the campaign
monitor public reaction to the campaign and feed this data back to the client

Question 13

stages in devising a promotional plan

Answer 13

research the market, establish consumer tastes and preferences, and identify the typical the typical consumer profile the typical consumer profile.
advise on the most cost effective forms of advertising media to be used
use their own creative designers to design adverts appropriate for each medium
fil or print the adverts to be used in the campaign
monitor public reaction to the campaign and feed this data back to the client

Question 14

advertising methods

Answer 14

print advertising
broadcasting advertising
outdoor advertising
product placement advertising
guerilla advertising
sponsorship
digital advertising

Question 15

print advertising

Answer 15

this includes advertising in newspapers, magazines and specialist publications.

Question 16

benefits of print advertising

Answer 16

it can be directed at particular towns or regions, or consumers who read particular special interest magazines.
it provides hard copy, which can be cut out and kept by the consumer for future reference

Question 17

limitations of print advertising

Answer 17

it is expensive to gain national coverage
evidence suggest that it it how much less effective with younger consumers than digital communications

Question 18

broadcasting advertising

Answer 18

this is advertising on TV and radio, and in cinema

Question 19

benefits of broadcasting advertising

Answer 19

adverts have visual appeal and can create a brand image through the actors used
national or even international coverage is possible
it can linger in the memory of consumer for a long time if visually dramatic

Question 20

limitations of broadcasting advertising

Answer 20

it is expensive to buy media time
it is expensive to design and produce the adverts
there is no permanent hard copy

Question 21

outdoor advertising

Answer 21

this includes advertising on billboards and bus shelter posters

Question 22

benefits of outdoor advertising

Answer 22

it is low cost compared to other media
it can be located in prime positions with many potential consumers passing by
it can be read/seen more than once

Question 23

limitations of outdoor advertising

Answer 23

the best locations are the most expensive
it can be damaged or vandalized
many passers-by will not notice this type of advertising

Question 24

product placement advertising

Answer 24

products are featured in TV shows and films

Question 25

benefits of product placement advertising

Answer 25

the chosen shows or films will be targeted at a particular type of consumer
this creates a desirable image if the product is associated with famous actors or shows
it is not explicit advertising. some consumers assume the product is being used because it is desirable, not because a business has paid for the placement

Question 26

limitations of product placement advertising

Answer 26

the show, film or actors may become less popular
it is very expensive if the show or film is well known

Question 27

guerrilla advertising

Answer 27

products are advertised at surprising and unconventional events to make the public take notice

Question 28

benefits of guerilla advertising

Answer 28

it is low cost
it can be creative, inventive and can appeal to young consumers
it encourages word of mouth communication between potential consumers
a staged event can receive free publicity from the media

Question 29

limitations of guerrilla advertising

Answer 29

the message may be misunderstood
it may considered irresponsible and lead to negative backlash
it may be remembered for the wrong reasons

Question 30

sponsorships

Answer 30

this involve payment by a business to become associated with an event, an individual or a sports team. it could lead to the business logo appearing on a team’s shirt for example

Question 31

benefits of sponsorships

Answer 31

the good publicity of being associated with big sporting and other events
global press and TV coverage of the largest events
the success of the team or individual can lead to greatly increased interest in the brand

Question 32

limitations of sponsorships

Answer 32

it can be very expensive,
failure of the event, team or individual can reflect badly on the brand

Question 33

how to choose advertising methods

Answer 33

the forms of communication that cost the most are not always the most effective. advertising method chosen depends on cost, the consumer profile of the target audience, the message and image to be communicated, legal constraints and other aspects of the marketing mix

Question 34

choosing advertising methods: cost

Answer 34

marketing managers must compare the cost of each method, including the cost per target consumer. the use celebrities in adverts greatly increases the total cost. if a TV adverts cost $1m and 5 million people watch it then the cost per target consumer is $0.20.

Question 35

digital marketing

Answer 35

marketing that uses the Internet and online based digital technologies such as desktop computers, mobile phones and other digital media and platforms to promote products and services. viral marketing through social media can be virtually cost free

Question 36

choosing advertising methods: consumer profile of the target audience- age, income levels, interests

Answer 36

advertising decisions must consider the target market. there is little point in advertising a new children’s toy after 10:00pm. young consumers are likely to be most accessible via social media and digital marketing.

Question 37

choosing advertising methods: the message and image to be communicated

Answer 37

written forms of communication are likely to be most effective for giving detailed information about a product. this information can be referred to more than once by potential consumers.

Question 38

choosing advertising methods: legal constraints

Answer 38

a widespread ban on tobacco advertising in Formula One grand prix racing forced many sponsors to use other media for presenting their cigarette advertising. in some countries, there are restrictions on the use of TV advertising aimed at children, claiming that it exercises too much influence over young minds.

Question 39

choosing advertising methods: other aspects of the marketing mix

Answer 39

the links and integration between the other parts of the marketing mix and the advertising method chosen could be crucial to success. the use of exclusive and glossy women’s magazines to advertise a new budget range of ready coked meals could be counter productive.

Question 40

sales promotion methods

Answer 40

sales promotion generally aims to achieve short term increases in sales, where as advertising often aims to achieve returns in the long run through building customer awareness of and confidence in the product. a wide range of incentives and activities can be referred to as sales promotion like price offers, loyalty reward programmes, money-off coupons, pos displays in shops, Buy one get one free and games and competitions on packaging.

Question 41

targets for sales promotions

Answer 41

the final consumer, to encourage purchase
the distribution channel like retailer to encourage stocking and display of the product

Question 42

reasons for sales promotion

Answer 42

it is not just about informing consumers, in many cases, consumers already know about a product’s existence, so any sales promotion campaign aims to stimulate consumers to try the product or buy more of it.

Question 43

sales promotion: price offers

Answer 43

these are temporary reductions in price, also known as price discounting. the objective is to encourage existing customers to buy more and to attract new customers as the product now appears more competitive

Question 44

limitations of price offers

Answer 44

price reductions will reduce the gross profits on each item sold
there could be a negative impact on the brand’s reputation from the discounted price

Question 45

sales promotion: money off coupons

Answer 45

these are more versatile and better focused way of offering price discount. coupons can appear on the back of receipts, in newspaper adverts or on an existing pack of the product

Question 46

limitations of money off coupons

Answer 46

these could just encourage consumers to buy what they would have bought anyway
retailers may be surprised by the increase in demand and not hold enough inventory, leading to consumer disappointment
the number of consumers using coupons might be low if the price reduction is small

Question 47

sales promotion: customer loyalty schemes

Answer 47

the aim is to encourage repeat purchases and discourage consumers from buying from competitors. loyalty cards give the business much information about consumers’ buying preferences, which helps in customer relationship marketing

Question 48

limitations of customer loyalty schemes

Answer 48

the discount cuts the gross profits on each purchases
there are administration cost
most consumers now have many loyalty cards from different retailers, so their loyalty impact is reduced

Question 49

sales promotion: money refunds

Answer 49

these are offered when the receipt is returned to the manufacturer

Question 50

limitations of money refunds

Answer 50

these involve the consumer completing and posting a form, which might be a disincentive
the delay before a refund is received my act disincentive

Question 51

sales promotion: buy one, get one free (BOGOF)

Answer 51

this encourages multiple purchases, which reduces the demand for competitors’ products too

Question 52

limitations of BOGOF

Answer 52

there could be substantial reduction in the gross profit margin.
consumers may conclude that the normal price is too high.
consumers may think goods are being sold off because they cannot be sold at normal prices , which may impact on reputation.
current sales might increase, but future sales could fall as consumers have stocked up on the product.

Question 53

sales promotion: POS displays

Answer 53

maximum impact on consumer behavior is achieved by attractive, informative and well positioned displays in stores

Question 54

limitations of POS displays

Answer 54

the best display points are usually offered to the market leaders-products with high market share
new products may struggle for the best positions in stores unless big discounts are offered to retailers

Question 55

direct promotion methods

Answer 55

direct mail
telemarketing
personal selling

Question 56

direct promotion method: direct mail

Answer 56

direct mail is sent out by post

Question 57

benefits of direct mail

Answer 57

this is low cost and well defined areas/regions can be targeted
it is easy to evaluate the success of a campaign by checking response rates

Question 58

limitations of direct mail

Answer 58

many potential consumers now prefer digital communication
the mailing may be viewed as junk mail and quickly thrown away

Question 59

direct promotion methods: telemarketing

Answer 59

this includes all marketing activities conducted over the telephone, including selling, market researching and promoting products

Question 60

benefits of telemarketing

Answer 60

telemarketing can be outsourced to an agency. they may charge for the cost of the script to be used and then on an hourly basis, or might charge for each cold call that leads to an interested potential customer being contacted again
this is lower cost than personal selling
it is easy to monitor the response/rejection rate

Question 61

limitations of telemarketing

Answer 61

many consumers object to cold calling
it is very easy to reject a telemarketing message

Question 62

direct promotion methods: personal selling

Answer 62

with this method, a sales person is employed to sell each individual customer

Question 63

benefits of personal selling

Answer 63

sales success rates are often high with skilled direct sales employees
it is often used for expensive industrial products. this is often one of the key differences between consumer marketing and business marketing
it is effective with expensive and complex products that require specialist knowledge

Question 64

limitations of personal selling

Answer 64

customers may complain about being pressured into buying, especially if the sales employees are paid a high bonus for each sale made
sales employees need to be well trained . they should avoid selling to a reluctant consumer who later regret the decision
this is a high cost method of promotion and selling

Question 65

digital promotion

Answer 65

the promotion of products using digital technologies, mainly on the internet but also including mobile phones

Question 66

developments in digital promotion

Answer 66

it is the fastest growing form of promotion. new opportunities for using it are constantly being created. the promotion mix of most businesses is being directed increasingly to digital promotion and away from the traditional advertising.

Question 67

methods of digital promoting

Answer 67

social media marketing
email marketing
online advertising
smartphone marketing
search engine optimization
viral marketing

Question 68

digital promoting: social media marketing

Answer 68

not just a marketing channel but also a way for people to keep in touch for people to keep in touch with friends and family, read the latest news or follow topics they are interested in. there are many social media platforms to choose to use. most use more than one. promotion managers decide what platform is relevant to the target group of consumers and they are trying to communicate with. twitter and Facebook advertisements, hashtag campaigns and influencer marketing are among the most popular methods of scial media marketing

Question 69

digital promoting: email marketing

Answer 69

email marketing connects with customers within their own mailboxes. It is a well established method of increasing brand loyalty and selling more products to existing customers. businesses can reach out to customers through newsletter campaigns, purchase confirmation emails, thank you emails and email notifications about new products

Question 70

digital promoting: online advertising

Answer 70

displaying pop up banners or advertisements on other websites aiming at the same niche is the most common form of online advertising. businesses can use online platforms such as google AdSense that allows adverts to be automatically delivered to other content sites

Question 71

digital promoting: smartphone advertising

Answer 71

one of the most important methods of digital promotion , especially to younger consumers. as well as sending text messages to subscribers, businesses can further appeal to potential consumers by providing them with free apps for all phone types. Apps can send real time push messages to consumers’ phones when new products are available on the company website. messaging platforms also allow marketing teams to create marketing bot which are used to gain new customers

Question 72

digital promoting: search engine optimization (SEO)

Answer 72

businesses that use ecommerce locate their websites on search engines. they need SEO to make sure that their content appears among the first results of a search. Without SEO, it is very difficult indeed for a business trading online to remain competitive. Several SEO methods can be used to ensure high ranking on a search engine results page. search engine algorithms are constantly changing and businesses need to update their SEO methods accordingly

Question 73

e commerce

Answer 73

the buying and selling of goods and services by businesses and consumers through an electronic medium

Question 74

viral marketing

Answer 74

viral marketing makes use of all types of marketing. the essence of viral marketing us to create a post, video, meme or similar short form of content that spreads across the web like a virus. to make a successful viral marketing campaign, businesses promote the multiple channels over a short period of time. marketing managers try to identify individuals with high social networking potential, called influencers. the managers create a viral messages that appeal to the influencers. these have a high chance of being passed on to many people who may be impressed that the influencer has contacted them about the product

Question 75

benefits of digital promotion

Answer 75

worldwide coverage
relatively low cost
easy to track and measure results
personalization
social media communication builds
content marketing
website convenience increases slaes

Question 76

benefits of digital promotion

Answer 76

worldwide coverage
relatively low cost
easy to track and measure results
personalization
social media communication builds
content marketing
website convenience increases sales

Question 77

benefits of digital promotion: worldwide coverage

Answer 77

a website allows businesses to find new markets and trade globally, increasing potential market size

Question 78

benefits of digital promotion: relatively low cost

Answer 78

a well planned and well targeted digital marketing campaign can reach the right customers at a much lower cost than traditional forms of advertising

Question 79

benefits of digital promotion: easy to track and measure results

Answer 79

web analytics and other techniques of measuring response rates make it easy to establish how effective a promotion campaign has been. detailed information about how customers use a website or respond to advertising is available, which helps to improve the effectiveness of future campaigns

Question 80

benefits of digital promotion: personalization

Answer 80

this is a very important benefit of digital promotion. each customer can be made to feel that only they are being sent a special offer. the business’s customer database needs to be linked to the website, then whenever someone visits the site, the business can greet them with targeted offers

Question 81

benefits of digital promotion: social media communication builds customer loyalty

Answer 81

involvement with social media and quick responses to customers’ messages can build customer loyalty and create a reputation for being easy to converse with

Question 82

benefits of digital promotion: content marketing

Answer 82

digital marketing allows a business to create engaging campaigns using a content marketing. this means producing varied content such as images, videos and articles, which can help a business gain social currency, especially if it goes viral

Question 83

benefits of digital promotion: website convenience increases sales

Answer 83

the conversion rate of visits to website (when customers buy something) is higher than with other forms of selling. it is more convenient too, unlike other forms of media which require people to get up and make a phone call or got to a shop

Question 84

limitations of digital promotion

Answer 84

time consuming
skills and training
global competition
complaints and feedback

Question 85

limitations of digital promotion: time consuming

Answer 85

unless a digital promotion agency is used (which can be high cost), tasks such as optimizing online advertising campaigns and creating marketing content can be time consuming. the success of promotions needs to be judged against the cost of preparing them

Question 86

limitations of digital promotion: skills and training

Answer 86

employees must have up to date knowledge and expertise to carry out digital marketing with success. tools, platform and trends change rapidly. employees may need training to keep their skills at the right level

Question 87

limitations of digital promotion: global competition

Answer 87

reaching a worldwide audience is easy but this means competitors can do so too. standing out clearly against a large number of competitors can be difficult and costly. search engine optimization is one way of trying to do this

Question 88

limitations of digital promotion: complaints and feedback

Answer 88

unhappy customers can quickly send out negative messages about a business or its products. any negative feedback or criticism of a brand can be visible to the target audience through social media and review websites. it is essential for a business to respond quickly and effectively to such criticism

Question 89

extension: measuring success of promotions

Answer 89

it is vital that marketing managers gather as much evidence as possible about the success (or failure) of existing promotion campaigns to allow them to take better decisions in the future. the best ways of assessing the success of promotions are:
sales performance before and after the promotion campaign
consumer awareness data
consumer panels
response rates to advertisements
social media feedback

Question 90

measuring success of promotions: sales performance before and after the promotion campaign

Answer 90

by comparing the sales of product before the campaign was launched, with the daily and weekly sales during and after the campaign

Question 91

measuring success of promotions: consumer awareness data

Answer 91

each week, market research agencies publish results of consumer recall or awareness tests, based on answers to a series of questions concerning the advertisements they have seen and responded to. this gives businesses rapid feedback on the progress of a promotion campaign

Question 92

measuring success of promotions: consumer panels

Answer 92

these are useful for giving qualitive feedback on the impact of promotions and the effectiveness of advertisements

Question 93

measuring success of promotions: response rates to advertisements

Answer 93

newspaper and magazine adverts often have tear off slips for consumers to request more details. event TV adverts can ask for consumers to ring in, perhaps with the chance of winning a competition. websites can record the number of hits and video sharing sites can record the number of times an uploaded advert has been viewed

Question 94

measuring success of promotions: social media feedback

Answer 94

the rapid response rate of social media users to new products or new promotions is perhaps now the most widely used measure of marketing success or failure

Question 95

benefits of packaging promotion

Answer 95

the quality, design and color of materials used in packaging can have an important supportive role to play in the promotion of a product. cheap and unattractive packaging of goods such as clothes or chocolates will destroy any quality and status images that the firm is attempting to establish. distinctive packaging can help to form the basis of promotional theme, which will endure as long as the product. packaging can advances revolutionize the sale and promotion of products.

Question 96

limitations of packaging promotion

Answer 96

expensive and wasteful packaging may add unnecessarily to costs, which could reduce a product’s competitiveness. with increasing environmental pressures, packaging that is seen to be too ostentatious or cannot be recycled may result in a negative consumer reaction. for this reason, the use of recycled and recyclable materials in packaging is increasing and this helps to support the image of sustainable brands. as with all other aspects of marketing, packaging decisions need to be blended with the overall objectives of the the business of the product

Question 97

functions of packaging

Answer 97

protect and contain the product, both during transportation and in stores
give information-depending on the product- to consumers about the contents, ingredients, cooking instructions, assembly instructions and so on
support the brand image of the product created by promotional campaigns
make the product attractive and help the consumer to recognize it

Question 98

aims of branding products

Answer 98

aiding consumer recognition
making the product distinctive from competitors
giving the product an identity or personality that consumers can relate to

Question 99

the benefits of effective branding

Answer 99

it increases the chances of brand recall by consumers
it clearly differentiates the product from others including reinforcing the difference by promotion
it allows for establishment of a family of closely associated products with the same brand name
it reduces the responsiveness of consumer demand to a price increase. consumers often have preferences for well known brands and are prepared to pay a high price for them. this gives the business a high profit margin
it increases consumer loyalty to brands, which is a major marketing benefit

Question 99

importance of choosing brand name

Answer 99

an important part of the overall marketing strategy and there are specialist agencies that will advise firms on name suitability. these agencies check that the proposed name has not been registered by another company and that it does not have an unfortunate translation in other languages. they will survey consumers to gauge their reaction to the proposed brand name

Question 100

own label brands

Answer 100

these are product ranges launched by retailers under their own store name. it is rare for the retailers to actually produce their own goods. they purchase them from producers who add on the retailers’ labels and brand names. often, the goods are made by leading manufacturers that have their own well known brands that compete with the own label brands

Question 101

disadvantage of own label brands

Answer 101

creates a more competitive environment for the well known brands, but it can also make use of spare manufacturing capacity. for the retail stores, this strategy gives them a reasonable quality product, bought with bulk discounts, over which they have full marketing control

Question 102

channel of distribution

Answer 102

the chain of intermediaries a product passes through form producer to final consumer

Question 103

Place: marketing mix

Answer 103

place decisions are about how products should pass from manufacturer to the their final customer. any business, whether it produces goods or provides services, needs to establish a distribution strategy. this explains how a product will move from the point of creation to points of consumption in an efficient and low cost manner so that it is convenient for the consumer to buy

Question 104

distribution

Answer 104

getting the right product to the right consumer at the right time in a way that is most convenient to the consumer

Question 105

channels of distribution: direct selling

Answer 105

this is a direct routine from manufacturer to consumer. there are no intermediaries, so this is referred to as the zero intermediary channel. the growth of the internet has led to a rapid rise in use of this channel of distribution. when the manufacturer whishes to keep complete control over the marketing mix, then direct routes are more likely to be used when the goods are bought infrequently but in large quantity, or when they are bulky and expensive to transport, or when they have been purpose built for a particular customer.

Question 106

channels of distribution: single intermediary channel

Answer 106

it has one intermediary usually a retailer. with the increasing size of many modern retailers, the single intermediary channel is becoming more common. big retailers have great purchasing power. they are able to arrange their own systems for storage and distribution to individual stores. this channel of distribution is usually used for consumer goods and where goods can be easily be transported to the whole country but could also be used by an agent selling industrial products to businesses.

Question 107

channels of distribution: two intermediaries channel

Answer 107

This channel of distribution involves two intermediaries to transfer goods from the manufacturer to the customer. until recent developments in retailing and ecommerce, the traditional two intermediaries channel was the most common of all channels of distribution. it is still used when wholesalers buy from producers and sell to retailers

Question 108

advantages of direct selling

Answer 108

no mark up or profit margin is taken by intermediaries
the producer has complete control over the marketing mix
it is quicker than other channel so may lead to fresher food products
direct contact with consumers offers useful market research

Question 109

advantages of single intermediary channel

Answer 109

retailers display the products and offer after sales service
retailers incur the cost of holding inventories
retailers should be in locations that are convenient to consumers
producers focus on production, not on selling the products to consumers

Question 110

advantages of two intermediary

Answer 110

wholesalers hold the goods and buy i bulk from producers
it reduces producers’ inventory costs
wholesalers pay for the costs of transport to retailers
wholesalers buy in large quantities and sell in small quantities

Question 111

disadvantages of direct selling

Answer 111

all storage and inventory costs have to be paid by the producer
there are no retail outlets so consumers cannot see and try before they buy
it may not be convenient for consumers
no after sales service is offered by shops
it is expensive to deliver each item to consumers

Question 112

disadvantages of single intermediary channel

Answer 112

the intermediary takes a profit markup, making the product more expensive to consumers
producers lose control over the marketing mix
the outlet is not exclusive as retailers sell competitors’ products too
producers pass on delivery costs to retailers

Question 113

disadvantages of two intermediary channel

Answer 113

another intermediary takes a profit mark up, making the product more expensive consumers
producers lose further control over the marketing mix
it slows down the distribution chain

Question 114

benefits of e commerce

Answer 114

it is relatively inexpensive if the cost is compared to the consumers reached
companies can reach a worldwide audience for a small proportion of traditional promotion budgets.
Consumers interact with the websites and make purchases and leave important data about themselves.
The internet is convenient for consumers to use if they have access to a computer.
Businesses can keep accurate records on the number of clicks or visitors, and quickly measure the success rate of different web promotions.
Computer and smartphone ownership is increasing in all countries of the world.
Selling products on the internet involves lower fixed costs than traditional retail stores.
Dynamic pricing - charging different prices to different consumers is easier.

Question 115

limitations of e commerce

Answer 115

Some countries have low-speed internet connections and, in poorer countries, computer ownership is not widespread.
Consumers cannot touch, smell, feel or try on tangible goods before buying, which may limit their willingness to buy certain products online.
Product returns may increase if consumers are dissatisfied with their purchases once they have been received.
The cost and unreliability of postal services in some countries may reduce the cost advantage of internet selling.
Websites must be kept up-to-date and user-friendly, and good websites can be expensive to develop.
Worries about internet security (e.g. consumers may wonder who will use information about them or their credit card details) may reduce future growth potential.

Question 115

limitations of e commerce

Answer 115

Some countries have low-speed internet connections and, in poorer countries, computer ownership is not widespread.
Consumers cannot touch, smell, feel or try on tangible goods before buying, which may limit their willingness to buy certain products online.
Product returns may increase if consumers are dissatisfied with their purchases once they have been received.
The cost and unreliability of postal services in some countries may reduce the cost advantage of internet selling.
Websites must be kept up-to-date and user-friendly, and good websites can be expensive to develop.
Worries about internet security (e.g. consumers may wonder who will use information about them or their credit card details) may reduce future growth potential.

Question 116

questions that need to answer when deciding on an appropriate channel

Answer 116

Should the product be sold directly to customers or through retailers?
How long should the channel be (i.e. how many intermediaries should there be)?
In which locations should the product be made
available?
Should the internet (online selling) be the main
channel?
How much will it cost to keep the product inventory on store shelves and in warehouses?
How much control does the business want to have over the marketing mix?
How will the distribution channel integrate with other marketing-mix components?

Question 117

why is the choice of distribution channel important

Answer 117

the channel strategy must be integrated with the marketing objectives of the business
consumers can benefit from easy access to products. this allows them to see and try products before they buy, makes purchasing easy and allows, if necessary for the return of goods
manufacturers need outlets for their products that give a wide geographical market coverage. however they also want the desired image of the product to the promoted effectively
retailers, which sell goods to the final consumer, add on a mark up to cover their costs and make a profit. if the price is very important to consumers, using few or no intermediaries is an advantage as the manufacturer should be able to charge a lower price

Question 118

digital distribution

Answer 118

the delivery or distribution of digital media content such as video, TV programmes, films, software and video games

Question 119

physical distribution

Answer 119

the activities that combine to achieve the efficient movement of finished products from the end of the production operation to the consumer

Question 120

advantages of digital distribution

Answer 120

get their music distributed globally on platforms
avoid the high costs of traditional physical distribution
expand a global fan base
keep 100% if the revenue earned
achieve low carbon footprint method of distribution

Question 121

integrated marketing mix

Answer 121

the key marketing decisions complement each other and work together to give customers a consistent message about the product

Question 122

what will the most effective marketing mix decisions be like

Answer 122

based on marketing objectives and affordable withing the marketing budget
integrated and consistent with each other and targeted at the appropriate consumers

Question 123

why does integrated marketing mix matter

Answer 123

the impact a product has on consumers is explained by a range of different messages before we decide on taking an action. consumers will avoid buying products with a confusing and inconsistent marketing mix. this results in low long term sales. far better to have a clear and unambiguous message about the product, relayed through all elements of the marketing mix.
the best prepared marketing plans can be destroyed by just one part of the marketing mix not being consistent with the rest.

Question 124

cost per click

Answer 124

measurement of the amount of money you pay when a consumer clicks your ads