Marketing : Unit 36 - 39 Flashcards
- What is marketing mix?
- Elements of a firm’s marketing that are designed to meet customers’ needs.
- What are the 4 marketing mix?
- Product
- Price
- Promotion
- Place
- What is the process of product development? (5) define each.
- Generating ideas (ideas of new products coming from business owners)
- Analysis
- Development ( this stage involves carrying out experiments, using simulations, building models, producing samples and initial testing)
- Test marketing ( testing the product in a small section of the total market)
- Commercialization and launch ( a business puts the “final touches” to the product)
- Define the development process.
- This stage involves carrying out experiments, using simulations, building models, producing samples, and initial testing.
- What is a product?
- The goods and services produced by businesses are called products.
- Why is packaging important to a product? (6)
- Consumers judge the quality of the product by its packaging.
- Is used to attract the eye of customers.
- To protect the product.
- Make it easy to transport.
- Make it easy to use product.
- carries information about the product and promotes brand image.
- What is the product life cycle?
- Level of sales at the different stages through which a product passes over time.
- What are the 5 stages of a product life cycle?
- Development.
- Introduction.
- Growth.
- Maturity and saturation.
- What are extension strategies?
- Extension strategies are which lengthen the life of a product before it starts to decline.
- What are the benefits of using extension strategies to lengthen the life cycle of products?
- Competitors will find it more difficult to enter the market.
- What are the 6 ways of extension strategies?
- Finding new markets/users.
- Finding new uses for a product.
- Modifying the product.
- Develop the product range.
- Change the appearance or packaging.
- Encourage more frequent use of the product.
- What is a product portfolio?
- Is the range of products a business is currently marketing.
- What is the Boston matrix?
- 2x2 matrix that describes products according to the market share they enjoy and whether the market has any potential for growth.
- What are the 4 categories in the Boston matrix
- Stars.
- Cash cows.
- Question marks.
- Dogs.
- What does the star represent?
- Stars are valuable products for a business, they have a higher market share.
- What does the cash cow represent?
- Cash cows are mature products, they have a high market share but the market is not likely to grow very much.
- What does a question mark represent?
- Are products with a low market share but the market is growing.
- What does a dog represent?
- Dogs are at the end of their life cycle.
- What is early adopters?
- consumers who are keen to buy new products as soon as they are launched.
- What are the 7 methods of pricing?
- Cost plus pricing.
- Competitive Pricing.
- Psychological pricing.
- Penetration pricing.
- Price skimming.
- Promotional pricing.
- Dynamic pricing.
What is cost-plus/cost-based pricing? give advantages and disadvantages.
Pricing by adding a percentage (markup) to the costs that make a profit for a business when setting the price.
Ad: Easy to apply.
DisAd: Could lose sales if the price is higher than competitors.
What is penetration pricing? give advantages and disadvantages.
Setting a low price to start with in order to get established in the market: price may be raised once established.
Ad: Sales are high.
DisAd: profit per unit is less.
What is competition-based pricing? give advantages and disadvantages.
Pricing strategies are based on the prices charged by rivals.
Ad: Sales are likely to be high.
DisAd: Market research can be time-consuming and costly.
What is skimming/ creaming pricing? give advantages and disadvantages.
setting a high price initially and then lowering it later.
Ad: good quality product.
DisAd: May cut off potential customers.
What is promotional pricing? give advantages and disadvantages.
Promotional pricing usually involves lowering the price of a product for a short period of time to draw in customers.
Ad: Gets rid of any unwanted stock.
- Renews interest in the business.
DisAd: Sales revenue will be low.
What are the reasons for promotional pricing? (4)
- to get rid of old stock.
- to generate some cash quickly to help solve a cash flow problem.
- to generate renewed interest in an existing product.
- To attempt to win a larger share of the market by encouraging brand switching.
What are the 3 examples of promotional pricing?
- Discounts and sales.
- Psychological pricing.
- Loss leaders.
What is dynamic pricing? give advantages and disadvantages.
Pricing for basically the same product because they have different demand levels.
Ad: Increases sales revenue.
- Increases profits.
- Ensure all seats are filled.
DisAd: - High cost of constantly changing prices in the business.
- High cost of consumers in choosing the best price.
What is loss leaders?
- product sold below cost to draw in customers.
What is psychological pricing?
- Is to set the price slightly below a round figure. Consumers are tricked into thinking that 99.9 is cheaper than 100.
Ad: - High price for high-quality product.
- Charging process just below the whole number.
DisAd: Low price for regular customers.
What is place?
- It refers to the location where people can buy products.
What are distribution channels?
- Route taken by a product from the producer to the customer.
What are the 5 distribution channels?
producer - retailer - customer
producer-wholesaler -retailer -customer
producer -wholesaler - consumer
producer- agent - retailer- consumers
producer- agent - consumers
What are the 4 advantages of direct selling (one-level channeling)?
4 diasdvantages?
Ad : - All profits go to the manufacturer.
- This is the fastest and shortest channel.
- Manufacturer has full control.
- Direct contact with customers.
- Manufacture will respond quickly to customers.
Disad:- manufacturers bears stock holding costs
- maintaining retail outlets are costly.
- the manufacturer cannot focus on production.
What are the are 4 advantages of retailing /two-level channeling?
What are 3 disadvantages of retailing/ two-level channeling?
- Ad- Retailers are specialists.
- manufactures stock holding costs will fall as a retailer is bearing them.
- Easier for manufacturers to focus on production.
- Disad - Retailers take a big share of profit margin.
- Manufacturers have less control over distribution.
- No direct contact with customers therefore producers cannot respond quickly
- Retailers sell competitors products as well.
What is an intermediary?
What are the two intermediaries?
- a person or organization that helps to arrange agreements or business deals between other people or organizations.
- Retailers.
- Wholesalers
Who are wholesalers?
- persons or businesses that buy goods from manufacturers and sell them in smaller quantities to retailers.
Who are retailers?
- Businesses that buy goods from manufacturers and wholesalers and sell them in smaller quantities to consumers.
What is bulk breaking?
- Dividing a large quantity of goods received from a supplier before selling them in smaller quantities to customers.
What might be some features of some common retailers?(8)
- independents.
- supermarkets.
- department stores.
- multiples or chain stores.
- superstores or hypermarkets.
- street vendors.
- market traders.
- online retailers.
What is e- commerce/ e- tailing?
use of electronic systems to sell goods and services.
What are the 4 benefits to consumers of online distribution?
- It is cheaper because online retailers often have lower costs.
- Consumers can shop 24/7.
- there is generally a huge amount of choice.
- People can shop from anywhere if they have access to the Internet.
What are the 7 benefits to businesses of online distribution?one disadvantage of online distribution?
- Retailers may not have meet costs of operating costs.
- Lower start-up costs.
- lower costs when processing transactions.
- Less paper is needed for business documents.
- payments can be made and received online.
-B2C businesses can offer goods to a much wider market. - Businesses can serve customers 24/7.
- Businesses have more choices when locating their operations.
- Product isn’t tangible (customer)
What are the 3 other distribution methods?
- direct selling.
- wholesaling.
- Agent / brokers.
what is direct selling?
What is wholesaling?
- where businesses sell their products directly to consumers.
- it is when wholesalers buy from manufacturers and sell to retailers.
What is agent/ broker?
intermediary that brings together buyers and sellers.
What are 4 factors that are appropriate for choosing a distribution channel?
- nature of the product.
- the market.
- cost.
- control.
What are the two types of promotion?
- above-the-line promotion.
- below-the-line promotion.
What is above-the-line promotion?
-Placing adverts using the media, outside the business.
What is below-the-line promotion?
- Any promotion that does not involve using media.
What is merchandising?
- the way in which goods are arranged and place in a store.
What is coupons?
- printed piece of paper given to customer by the seller, allowing the customer to pay less than usual for the product when they next but it, or get a free gift.
What is direct mail?
- advertisements that are sent to people in the post, often people who have been chosen because they might be interested in product.
What is advertising?
communication between a business and its customers where messages are placed in the media to encourage the purchase of products.
What are the 5 different types below-the-line promotion?
- Sales promotions.
- Merchandising and packaging.
- Direct mailing.
- Direct selling or personal selling.
- Exhibitions and trade fairs.
What are the 6 above-the-line promotion?
- Television.
- Newspaper and magazines.
- Cinema.
- Radio.
- Posters and billboards.
- Internet.
What are sales promotion? (6)
- Free gifts.
- Coupons.
- Loyalty cards.
- Competitions.
- BOGOF offers.
- Money off deals.
What are 3 examples of merchandising?
- Product layout
- Display material (posters, leaflets used to display certain products with the aim of persuading customers to buy)
- Stock
What are the 4 advantages of using exhibitions and trade fairs?
- products might be tested out in consumers before full launch
- Some exhibitions are overseas and can be used to break into foreign markets.
- Products can be physically demonstrated and questions can be answered
What are the public relations?
Attempt by a business to communicate with interested parties.
What are 4 number of approaches that might be used by businesses to attract publicity?
- Press release. (some information about the business may be presented to the media).
- Press conference. ( Where representatives face the media and present information verbally).
- Sponsorship. (making a financial contribution to an event in return for publicity).
- Donations.
What is press conference?
Where representatives face the media and present information verbally.
What is sponsorship?
making a financial contribution to an event in return for publicity.
What is donations?
Donations to charities and local community might be used by business.
What is press release?
-information about the business may be presented to the media.
- What is main advantage of PR to a business?
- it is cheap method of promotion.
What are 4 ways to of promotion using technology?
- Online targeted advertising
- Viral advertising
- Social media
- E- newsletters
What is e-newsletters?
- These are documents sent electronically to interested parties.
What is viral advertising?
- direct marketing technique in which a company persuades Internet users to forward its publicity material in emails or via social media
What is exposure?
- advertising and publicity that is used to sell a product or service.
What are 6 advantages of using social media in advertising?
- It is relatively cheap.
- Businesses can respond immediately to developments in the industry.
- The quality of customer service can be improved as communication with customers is easier.
- The method has a huge reach
- Adverts can be accurately targeted.
- Links can be used to draw traffic into the company websites.
What is branding?
Branding involves giving a product a name, term, sign, symbol, design, or feature that allows consumers to instantly recognize the product.
What are 5 benefits of branding?
- differentiate the product.
- create customer loyalty.
- help recognition.
- develop an image.
- raise prices when the brand and images become strong.
What is product positioning?
way that people think about a product in relation to the company’s( other products and to competing products, or the way that the company would like them to think about it.)
What is subscription pricing?
- amount of money you pay regularly to receive a newspaper, magazine, broadcasting or telephone service.
What are the 5 main different promotion methods(strategies) used in different segments?
- Advertising.
- Sponsorship.
- Product trials.
- Special offers.
- Branding.
