MARKETING: Strategies Flashcards
Identify the 7P’s of the extended marketing mix
Keep in mind that extra 3P’s were introduced as a result of the expansion of service based industries
Product
Price
Promotion
Place (distribution)
People
Processes
Physical evidence
What falls under the marketing strategies?
The best way to remember it:
- Market segmentation
- Product/service differentiation and positioning
- 7P’s (list all of them)
- E-marking
- Global marketing
Define market segmentation and its ultimate aim
Market segmentation involves dividing the total market into segments. The business then selects the target market at which majority of marking resources will be directed at. The aim is to increase sales, market share and profits by better understanding and responding to the desires of the particular group of customers.
How is Don’t Be Gay Please related to market segmentation?
Refers to the characteristics of customers that are used to divide the total market into segments:
Demographic
Behavioural
Geographic
Psychographic
List examples of demographic, behavioural, geographic, and psychographic characteristics
Demographic:
Age, Sex, Income, Family size, Occupation, Education, Ethnicity.
Behavoural:
Loyalty, Usage Rate, Price Sensitivity, Benefits Sought,
Geographic:
Region, Urban, Suburban, Rural, City size, Climate,
Psychographic:
Lifestyle, Personality, Motives, Customer Opinions & Interests
What does product/service differentiation involve?
Differentiation is the process of distinguishing the products/services of the business from the competitors. It aims to persuade consumers to perceive the product or service as being superior to all similar products, therefore, influencing them to buy it.
Identify the 4 points of differentiation
Customer Service, Environment Concerns, Convenience, Social/Ethical
Outline each of the 4 points of differentiation
Customer Service - Service given to customers that caters their specific need that treat customers with high quality and value. This helps serve as the foundation of a final impression on the business
Environment Concerns - Concerns about “quality of life” amongst customer, increasing awareness about environmental issues. Consumers would therefore choose businesses that act sustainable
Convenience - Choosing of products that maximises customers comfort, making their life easier (e.g precut veggies, and already marinated chicken)
Social/Ethical - Concerns about the way the goods are made, including conditions in factories. Businesses that act ethically by creating the products that do not harm the environment, animals and society, have a competitive advantage over the businesses that don’t (i.e., H&M study of 1000 clothing factories found fashion firms engaging in unfair practices, making consumers less likely to purchase their products
What is referred to by product/service positioning?
Product positioning refers to the technique in which marketers try to create an image or identity for a product/service compared with the image of competing products/services.
Provide relevant example of product/service positioning
Dominos launched a new menu that reduced their sizes of pizzas as well as increasing their prices to appear that they have a higher quality brand, in an attempt to change their given reputation of their low quality pizza
What are products?
Products are goods/services offered for satisfying needs/wants
What are the three subtopics of products (strategy)
- Branding
- Packaging
- Labelling
What does the total product concept encompass?
The total product concept includes both tangible and intangible components of a product.
Describe a manufacturer’s brand.
Owned by the manufacturer and highly recognised by customers due to established reputation and quality.
Describe a house brand.
Owned by a retailer or wholesaler. Priced lower than manufacturer’s brands, found only in the stores of the retailer that owns them.
Describe a generic brand.
No owner: no brand name, and is typically marketed under the store’s name. Usually priced lower than both manufacturer’s and house brands, and focus on providing basic quality and affordability.
What is branding? What are the benefits of it for both business and its customers?
Branding is the process of customers recognising the business based on the particular features such as logo, colours, slogans, symbols, designs that set them apart form the competitors.
For the business:
+ Branding results in business recognition which leads to the repeated sales
+ Encourages customer loyalty
+ New products are easily introduced into the market and can be linked to the existent brand image
+ Promotion of one products indirectly promotes another
For customers:
+ Less perceived risk due to brand recognition
+ Less anxiety associated with choosing between random products and rather going for the brand that you are certain about in terms of quality
+ Psychological reward from purchasing the brand that you like
Describe the importance of packaging for a product.
Packaging is crucial as it develops a container and graphic design for a product, preserving and protecting it, capturing consumer attention, providing convenient units, assisting with display, and facilitating transportation and storage.
Explain how well-designed packaging can influence consumer perception.
Well-designed packaging can give a positive impression of the product, making it more appealing and increasing brand awareness. It can also become an integral part of the product’s identity, like the Coca-Cola bottle, which is recognisable by its shape.
What information is typically presented on a product’s label.
Ingredients, package size, and country of origin are typically presented on a product’s label.
Describe the purpose of labelling on a product package.
Labelling provides essential information about the product, including its ingredients, size, and country of origin, which helps consumers make informed purchasing decisions.
Explain why accurate labelling is important for consumer trust.
Accurate labelling is important for consumer trust because it ensures that consumers have the necessary information about what they are purchasing, which helps them make informed decisions and fosters confidence in the brand.
Recall the relevant case study for PRODUCT BRANDING AND PACKAGING
Coca Cola case study. The design and labelling of the Coca-Cola bottle, including its distinctive shape and embossing, help in brand recognition and consumer loyalty. The bottle’s silhouette is so iconic that it can be identified even without seeing the logo, enhancing brand awareness.
Describe cost-based pricing METHOD. Identify its advantages and disadvantages
The price is formualted based on the total costs associated with making a product + a markup (which is the perecentage of the total production costs which ensures that all extra costs are covered and profitability is guaranteed).
Adv:
+ Very simple method to establish the price
+ Mark-up allows for the increased revenue
Disadv:
- Difficult to estimate the approapriate mark up that will not be too low or too high
- The price is determined after the production and disregards the external factors in the market
Describe market-based pricing METHOD. Identify its advantages and disadvantages
The price is determined according to the interaction of the level of supply and demand.
Adv:
+ Accounts for the changing marketing conditions in supply and demand which ensures profitability
Disadv:
- The prices need to be adjusted frequently so it is difficult to implement
Describe competition-based pricing METHOD. Identify its advantages and disadvantages
Competition-based pricing is when the products that is above, equal to or below that of competitors based on the cost of production. If the prices are below that of competitiors the business aims to undercut the market and increase their market share. If they are the same, the business avoids competition and saves R&D costs. IF they are higher, the business aims to establish the “superior” quality impression.
Adv:
+ Distinguishes from competitors which increases profit margins, brand recognition and attracts more customers
Disadv:
- Relying on the performance of competitors can lead to loss of profit
Describe skimming pricing STRATEGY. Identify its advantages and disadvantages
Skimming: Involves setting price of product high while demand is high to quickly generate profit. This strategy is usually applicable for new technologies (such as a release of a new model of iphone).
Adv:
+ Recovers R&D costs
+ Generates profit very quickly in a short period of time
Disadv:
- Could lead to customer dissatisfaction, especially for customers that purchased something at X price which has been reduced by a certain amount after some time
Describe penetration pricing STRATEGY. Identify its advantages and disadvantages
Penetration: setting price of product on release to lowest possible to promote product selling, stimulating demand.
Adv:
+ Aims to sell as many products as possible to prevent competitors from entering the market
Disadv:
- The business will struglle to raise the price for the product after some time unless there are substantial improvements or modifications to the product made
Describe loss leaders pricing STRATEGY. Identify its advantages and disadvantages
Loss-leaders: The products are sold at or BELOW THE COST PRICE. The business is making loss on those products, in a hope that the customers will be attracted and purchase other products from that business. This strategy is usually used when the demand for the product is low or when the business wants to have a reputation of low prices.
Adv:
+ High customer attraction due to low prices
Disadv:
- Could result in loss of profit
Describe price points pricing STRATEGY. Identify its advantages and disadvantages
Price points: selling products at predetermined prices. For example, a jeweller may offer a line of watches
priced at $55, $75 and $95 regardless of how much they cost at wholesale.
Adv:
+ Simplifies the decision making for the customers
Disadv:
- Ignores mark up costs and could lead to loss of sales and profits if incorrectly priced
Define “Price and quality interaction”
A way to help determine the image customers have of a business, particularly products. For instance, highly priced goods are assumed to have superior quality, along with high manufacturing costs, achieving quality and status. Contrastingly, low-priced goods are perceived as low quality, requiring reduced manufacturing costs, therefore perceived as cheap
Recall case study of “Price and quality interaction”
IKEA hires fewer people, furniture bought must be taken by customers, products are packed in flat boxes to save storage in warehousing costs. IKEA is therefore able to save more money aside for other expenses.
Identify the elements of the promotion mix
Advertising
Personal selling
Relationship marketing
Sales promotion
Publicity
Public relations
Describe advertising in the promotion mix
Paid messages about the product across mass media. Advertising media refers to forms of electronic and print communication used to reach business’s audiences. These include: social media ads, billboards, catalogues, e-marketing, telemarketing.
Describe personal selling in the promotion mix
A sales representative attempting to directly reach a customer to make a sale. The message of the sales representative can be altered in such a way that can suit the customer’s needs.
Describe relationship marketing in the promotion mix
Development of strong relationships with customers in the hope to create customer loyalty. This is achieved through loyalty programs that provide rewards offered to frequent customers such as Flybuys, Rewards card etc.
Describe sales promotion in the promotion mix
Business’s attempting to sell its products by creating enticement to customers, used to gather attention of new customers and increase sales of existing customers. Includes the following:
- Coupons: discounts offered on particular items
- Premiums: gifts offered to customers in return for purchasing a product
- Refunds: return of product for money back
- Samples: free item of a product
- Point-of purchase displays: special signs and displays to gain customer attention
Describe publicity in the promotion mix
Free news story that discusses of the business’s products. Differs from advertising, as publicises are done without business’s input of costs, and the message displayed cannot be controlled. The business aims, if publicity is present, to enhance product image, raise awareness, and reduce any potential negative image.
Describe public relations in the promotion mix
Activities aimed at formulating favourable relations between business’s and its consumers, such as working with the media, participating in donations, or give-away sales.
What is meant by “The communication process”
Methods used to communicate messages of a product. Customers would be more willing to make a purchase if the message is communicated through a channel.
Define opinion leaders
Famous people that influence others. Business’s can refer to famous actors, athletes, musicians, and models to assist with celebrity endorsement.
Define word of mouth
People influence each other over conversations. Consumers are found to trust their friends more and believe that the feedback is genuine.
Define place as a part of exteneded promotional mix
How business’s make their products available to consumers for purchase through distribution channels
Identify the types of distribution channels
- Producer to Consumer
- Producer to Retailer to Consumer
- Producer to Wholesaler to Retailer to Consumer
- Producer to Agent to Wholesaler to Retailer to Consumer
What are the advantages of the distribution channels:
Producer to Consumer:
+ The producer has significant control over the product’s quality.
+ Direct customer contact helps the producer better understand their needs and wants.
Producer to Retailer to Consumer:
+ The producer can concentrate on the product’s manufacturing.
+ Greater distribution and access to the product are encouraged.
Producer to Wholesaler to Retailer to Consumer:
+ The producer can maintain less idle stock.
+ Marketing and sales are managed by the retailer, reducing costs for the producer.
What is channel choice
How the busines chooses its distribution type to distribute their product depending on the market coverage.
*market coverage - number of outlets (places) the business chooses to sell its products from
Define, and provide and example of the types of channel choice
Intensive: product is available in many local outlets
E.g convenience goods
adrian thinks I am trash at widowmaker( which is true but he couldn’t even carry me yesterday
Selective: moderate visibility of products. The products are available in certain locations and the customer is prepared to travel to shop for them.
E.g Zara, H&M
Exclusive: one store that the product can be made visible across a large geographical area
E.g Gucci, Tesla
Describe the issues that occur in physical distribution (there are 3)
Transport: how products will be transported by road, water, rail, and air. The mean of transportation depends on the product.
Warehousing: receiving, storing, and dispatching goods in warehouses that are central points of effective delivery for goods
Inventory: stock stored in warehouses. Business must implement inventory control to monitor the amount of goods available and undertake resupplying when appropriate. If a business lacks stock, it will lead to loss of sales. If a business is holding too much stock, high storage costs will incur.
With relevant example, explain what is meant by “People”
People refers to the quality of interaction between the customer and employees of business that deliver service. To achieve customer satisfaction, processes must be efficient, with the perception of customers is based on how they are being treated. I.e., interaction between Milena and Adrian as Coles workers between employees include: providing exception customer service, and assistance
With relevant example, explain what is meant by “Processes”
Processes refers to how activities flow in order to deliver the service. Processes must be highly efficient in services to achieve customer satisfaction. For instance, Adrian working in Sharetea and making Milena’s boba tea. Processes were highly inefficient, as the time to making the drink was significantly long, and the response of Milena’s request was heavily mistaken; she asked for no sugar and no ice, but HE ENDED UP GIVING HER SUGAR AND ICE. Hence, Sharetea lost a valuable customer.
With relevant example, explain what is meant by “Physical evidence”
Physical evidence refers to where the service will be delivered, along with the materials required to execute the service. Customers make judgements about the business based on these features. For instance, in a fancy hotel, visual material clues are present, evident in the furniture, beddings, and atmosphere of the hotel room. This is physical evidence that creates an impression to customers to make it look more luxurious.
What is e-marketing
The practice of using the internet to perform marketing activities.
Pros:
+ Provides instant feedback, beneficial for market research
+ Communicates with customers which builds strong relationships
Cons:
- Ethical concerns in regrards to collection of personal info
Negative comments and reviews cannot be removed
Briefly state and describe different means of e-marketing
- Webpages: displaying info in a form of text, images, videos, graphics with which customers can intereact to learn about the business’s products
- Podcasts: marketing messages are communicated via audio and can be targeting the specific audience
- SMS: texting customers directly
- Blogs: online forums where questions are raised and answered
- Web2.0: internet is used for sharing info rather than just retrieving it
- SMA: promotion across social media platforms. The most common type which provides great stastistics about cutstomers, inexpensive, gives great exposure.
What are the subtopics of global marketing?
- Global branding
- Standardisation
- Customisation
- Global pricing
- Competitive positioning
With a relevant case study, explain global branding
Global branding is the use of an identifier, such as name, term, symbol, or logo, that is used globally to assist customers in identifying products of a business. For instance, instead of Coca-Cola focusing on the product in their advertising, they focus on how the product is being used in everyday life. The campaign “Taste the feeling” focuses on emotions and lifestyle conveyed instead of the product. Although this is cost-effective, because ads do not have to be created from scratch across different markets, it is hard to reach global consumers, and does not focus on social trends such as increasing customer awareness about health.
With a relevant case study, explain standardisation
Standardisation assumes that all customers have similar needs and wants and therefore the product is mass produced and distributed in the uniform format. This approach is beneficial as it allows to reduce the costs of promotion as it is the same across different markets.
E.g Promotion for Coca-Cola is the same globally, with minor changes of language and ethnic details that are relevant to the region. Coca-Cola applies the same theme and colours, hence creating a standardised advertisement. Thus, the business achieved global standardisation by taking low-cost actions of altering advertisements to suit different regions, keeping the product same as well as their universal brand message)
Describe customisation
Customisation assumes how the product is used and the needs it satisfies, which differs between countries. For instance, although McDonald’s has standardised its name, logo, and production methods as well as its menu, there are local variation. For instance, in Japan, there is matcha ice cream unlike Australia.
List the types of global pricing
Customised pricing
Market-customised pricing
Standardised worldwise pricing
Identify what is meant by Global pricing?
Global pricing is how business’s adopt pricing policies across countries. Crucial for businesses to determine correct price, as it is the only factor that generates revenue, whilst others only incur costs.
Outline the global pricing methods
Customised pricing: Consumers in different countries are charged different prices for the same product. This is due to the cost of transportation of the product and taxes associated with it, therefore cost plus method is used to cover those additional expenses. E.g Coca-Cola uses this approach to account for tax, transportation and manufacturing costs, therefore the prices across different marets vary. However, this leads to increased competition between the local businesses that do not have to include associated transportation costs.
Market-Customised pricing sets price according to local marketing conditions.
Standardised worldwide pricing refers to the practice of charging the same price for the product everywhere else in the world. The major concern is that it doesn’t account for exchange rates, and transportation costs.
With reference to a case study, describe Competitive Positioning.
Competitive positioning refers to how businesses differentiate their products. Global businesses must show how their products are better than competitors.
For instance, Coca-Cola has a successful competitive position due to:
* having great product mix
* using celebrity endorsements such as Selena Gomez, allowing the business to grasp wider audience and develop associate the brand with success
* the slogan “taste the feeling” focuses on the feeling of joy rather than the product itself which reinforces the lovemark and develops a positive image based on the brand
* Global strategies are so broad and focus on themes/experiences/ emotions rather than product, this allows Coca Cola to have to differentiate their marketing campaigns in different countries as much.
