MOM&O The Marketing Mix N5 U3 P17 Flashcards
Four P’s
Product
Price
Promotion
Place
Product
Quality
Design
Size
Colour/shape
Packaging
Information
Material used
Image
Product development- GAPTAP
Generate the idea- come up with an idea
Analyse- decide whether or not they have the resources
Produce a prototype- create an example of product, checking if it works
Test the product- asking customers what they think, test in small part of market
Alter the product- make changes based on feedback
Produce the product- start production, advertise to inform consumers
Importance/advantage of branding
Recognition
Brand loyalty
Increase market share
Stable level of demand
Difficult for consumer to change brands
Higher prices can be charged
New products are easily launched
Trends
Advertise the brand, not individual product
Disadvantage of branding
Takes tie to establish brand
Promotion costs are high
Need to keep promoting
Single bad event can affect whole brand
Huge markets produce ‘fake products’
Imitators
Fashion change
Product life cycle- introduction stage
The product is launched to the market
Heavy advertising necessary to inform customers
Sales are slow
Product life cycle- growth stage
Consumers are aware of product
Sales rapidly grow
Product begins to become profitable
Product life cycle- maturity stage
Sales reach peak
Spending on advertising will be reduced
Profits can be used for new products
Product life cycle- decline stage
Sales and profit start to fall
Product unprofitable and is taken of the market
Importance of price
Must be in range of what target customers can afford
Must be a reasonable price
Higher prices demands better quality
Price must reflect image
Factors to consider when setting a price
Costs of producing the product
Amount of profit business needs
Price changed by competitors
How the business can use price to increase sales
Government legislation on minimum and max pricing
Long-term pricing strategies- low price
Business may decide to charge a price lower than competitors
Lower price leads to more sales
Best used where there is little brand loyalty and increased competition
Increase market share
Attract customers
Long-term pricing strategies- market price
Setting price in line with competitors
Little competition
Competition rise in other things
Long-term pricing strategies- premium pricing
High price is used offering high-quality products
Change higher prices for well known brands
Little competition charge more
Product may have established USP, more appealing
Supply of goods is restricted, charging higher price, reduce demand
Short-term pricing strategies- skimming
High prices set at first, when there is little competition
The price is lowered overtime
