mr sims - topic 3; the marekting mix

Question 1

what are the 7 Ps why are they important

Answer 1

1) product - this needs to be perfect as it will be advertised to its potential customers and the business needs to know if anything is wrong with the product before selling
2) price - the price of the product cant be too high (people wont buy the product if it is expensive think about price inelastic and price elasticity) or too low (people would think that the quality of the product isn’t good)
3) promotion - how is the product going to be advertised
4) place - where is the product going to be sold - businesses need to take into the account that the place where the product is going to be sold needs to available to its potential customers
5) people - most important part of a service business - customer is more likely to buy a product is the service is good
6) physical environment - the presentation of the environment where the service is delivered is important - links with the place
7) process- theses included things such as waiting time, ordering time and payment systems

Question 2

why is it important to have all of the 7 Ps

Answer 2

in an integrated marketing mix - 7ps needs to work together and complement each other if one factor is wrong it can decrease the revenue generated from the product

Question 3

what other factors affect the integrated marketing mix

Answer 3

1) competitors - can influence the mix - price can be influenced by the price of similar products - so promotion will need to be taken account to
2) target market segment - influences the marketing mix e.g. wealthy consumers will be price sensitive than low consumers - so price will be needed to be taken into account
3) where the company wants to position a product in the minds of customers will impact all areas of the marketing mix e.g. Pandora highlights about the quality of products and how well trained their staff is
4) location of the business - will determined what is realistic when putting together is marketing mix - so process will be taken into account
5) the type of product that the business is marketing will affect the importance of each of the 7 ps in the marketing mix
6) product life cycle and the business’s product mix influence the marketing mix

Question 4

What types of resources that will affect the business’s marketing mix

Answer 4

1) the marketing and the over all business objectives of a businesses will affect the marketing mix
2) businesses will need to compromise on certain aspects of the marketing mix due their finances e.g. their budget on advertising
3) some suppliers might not offer credit or discount (economy of scale) to small business leading them to only make a small proportion of goods- effects their price and process
4) the knowledge and skills of employees might mean businesses can justify increasing prices

Question 5

Changing the marketing mix can help to make a business more competitive

Answer 5

1) markets are dynamic - constantly changing, new competitors/ products are entering and leaving - interstate marking mix needs to adapt to these changes
2) for the business to say profitable - need to constantly need to review their marketing mix and altering their marketing decisions taking into account the actions of competitors and other changes in the market place
3) can improve competitiveness but chasing any one of the seven elements in the marketing mix- improve quality of the product or reassess their method of promotion
4) use new pricing strategies and reconsider channels of distribution
5) can increase the skills of the workers or make their physical environment more inviting

Question 6

What are the three types of consumer products

Answer 6

1) convenience products- inexpensive, these products are brought on a daily basis- everyone buys them, brought out of habit won’t bother to find other alternatives
2) shopping products - these are things like clothes, computers and washing machines that are brought less regularly than convenience products - more expensive sold in fewer places than convenience products - people might pay more for particular brand
3) specialty products these are things consumers believe are unique in come way and they’ll travel to some the exact brand can charge a higher price - can make higher profits

Question 7

How can new products be great for the businesses

Answer 7

1) new products can bring new customers
2) can give a competitive advantage
3) allow companies to main a balanced product portfolio

Question 8

How can competition and technology inspire new products

Answer 8

1) technological development mean that a company can now offer the customer something that it couldn’t offer before - in the long term the new product is likely to be a replacement for the old one
2) company will develop a new product in response to one which has been launched by a competitor
3) there is a gap in the market and a company placed an innovative product - but they will needs to spend lots of money on research and development - high risk but high rewards

Question 9

Why does new products need a USP

Answer 9

Having a usp = differentiates from competition

Question 10

What are the factors affect pricing decisions

Answer 10

Price of a product is affect by all of the other Ps in the marketing mix

1) price is often set to cover the cost of making the product and make a profit - called cost plus pricing - the percentage amount that added on to the cost is called the mark up
2) needs to be acceptable to customers - thinks about price sensitive the market is
3) price elasticity if demand influences the pricing of a product - depend on the available of substitute, the type of product and wherever it’s an expensive purchase and loyalty to the brand
4) the stage of the product’: life cycle will also affect pricing decisions
5) the price has to be in line with the company’s objectives e.g keep their brand image up market
6) the price of competitor products influences pricing decisions - price is set above that of competitor products without it being differentiate in some way ten no one will buy it and it may bring the company bad publicity

Question 11

What is price skimming

Answer 11

Is when new and innovative products are sold at high prices when they first each the market. Consumer will pay more because of its value
Prices are usually then dropped when the product has been on the market for a year - by then competitors will have entered the market will new products with lower prices
Someone companies use pride slimming as a long term strategy to Keep their brands more exclusive e.g. apple
BUT potential custom tees can be put off by the high price and customers who bought the product as its initial price may be annoyed when the price drops

Question 12

What is penetration pricing

Answer 12

Opposite of skimming - launching a product at a low price in older to attract customers and gain market share - good for markets which are price sensitive
Works best for companies that can benefit from lower costs when manufacturing large quantities of a product
BUT customers wil expect this low price can damage brand image if it can’t be continued
Can be used an extension strategy to prolong a products life

Question 13

How is promotion part of the marketing mix

Answer 13

Promotion is designed to inform customer about a product/ service or persuade them to buy it

Question 14

How do many companies choose to advertise

Answer 14

Many companies use social media to advertise their goods/ services
Adverts are used to promote good/service and all to promote a firms public’s image
The choice of media depends on the number of targets customers and how many of them see the ad

Question 15

How is digital advertising cheaper

Answer 15

Businesses can target online adverts to customers who’ve shown an interest in that type of product by browsing for it online
Advertising on mobile phones - e.g. banners in apps
Viral marketing is when companies get users to pass on adverts to their friends through social networking platforms or email the adverts have to be considered interring enough for people to pass long

Question 16

How does advertising changes during a product life cycle

Answer 16

Products are often heavily advertised at launch - if a product is completely new to the market - ads are more informative tell customers about the product
During growth - adverting differentiates between brand persuading consumers that the product

Question 17

how is branding a key aspect of a products image

Answer 17

1) if a business convinces customers that their brand is superior to others they can charge a premium price - charge more than their competitors
2) customers often remain loyal to a brand if they are confidence in its quality
3) packaging of the product is important to distinguish so that customers can identify the product e.g. coco cola
4) popular brands often eliminate competition and deter new competitors - if there is no alternative product then the price will become inelastic and can be increased without reducing demand much

Question 18

not all promotion involves advertising

Answer 18

1) companies often offer sales promotion - special offers like by one and get one free. sales promotion can aim to raise awareness or increase sales of a product
2) merchandising means ensuring that retailers are displaying a company’s product as effectivity as possible
3) direct mail means mailshots sent out to customers. the customers usually hasn’t asked to receive them - business that keep information about their customers - can target their direct mail to particular consumer groups but need to take into account that direct mail can be thrown in the junk main - which is a waste of time and money
4) personal selling - personal communication between sales person and customer . can involve sales assistants in shops as well as traveling salespeople and phone salespeople
5) relationship marketing involves forming long term relationship with customers - costs less in marketing than continually attracting new customers e.g. social media

Question 19

What does public relations mean

Answer 19

PR - public relations, this involves leasing with the media, writing press releases and answering press enquires

Having PR gets businesses or products good publicity in the media, which potential customers can view from the media and might be interested in buying the product

Question 20

How can businesses use a range of methods to promote their products?

Answer 20

1) businesses use a mixture of methods to promote products- called promotional mix
2) the promotional mix depends on; a) the product itself, the market, competitor activity, the product life cycle and the budget available

E.g. convenient products - purchased by the consumer are promoted by advertising. Expensive and complex products are more likely to be promoted by personal selling

3) manufacturers use different methods to sell their product to a retailer than to sell it to the final customer. Businesses often use salespeople Roget shops to stock their product and advertising to persuade customers to buy the product in the shops.
4) the promotional min reflects the economy. E.g. McDonald’s may promote their “saver menu”

Question 21

What is the channel of distribution

Answer 21

Is the route a product takes from the producer to the consumer.

Question 22

What are the different businesses that can get a product and pass it to customers

Answer 22

A product is usually passes through intermediaries on the way from producer to consumer

Different types of businesses that are involved are

1) retailers - which are shops who sell to consumers, they are usually the final stage in the distribution channel e.g. tesco
2) wholesalers - buy product cheaply in bulk and sell them on to retailers e.g. cosco

Question 23

How do wholesalers make life easier for realities and man manufacturers

Answer 23

1) wholesalers but goods from manufacturers in bulk and sell them in smaller quantities to retailers. - called “breaking bulk” - wholesalers takes the food off the manufacturers hand and pays for the whole lot. Manufacturers don’t have to wait for customers to buy the goods before they see any cash
2) they make distribution simpler. Without a wholesaler, the manufacturers would have to make separate deliveries to lots of retailers, and send each and every retailer an invoice. Selling to one wholesaler cuts down the paperwork and the number of journeys.
3) wholesalers can store more goods than a retailer can - they act as the retailers storage cupboards (expensive to keep stock)

Question 24

Explain direct selling (0 - level channel): manufacturer - consumer

Answer 24

By using the internet it has made it easier for producers of shopping and speciality goods to sell forever t to the consumer. Buying and selling on the internet called e-commerce, this allows access to a worldwide market.
advantage for small firms as they want to keep the low -cost option is to sell goods using electronic marketplace e.g. EBay.

Another way of using this channel is, direct selling, which is done through door-to-door sales, TV shopping channels, telephone sales and websites

Also accountants, electricians and hairdressers sell their services direct to the consumer

Question 25

Explain the indirect selling (1 - level Channel): manufacturer - retailer - consumer

Answer 25

Large supermarkets but convenience and shopping goods in bulk direct from the manufacturer and have these delivered straight from the manufacturer or via own warehouses. This is a faster method of perishables

Question 26

Explain direct selling through tan agent (1 - level channel): manufacturer- agent - consumer

Answer 26

An agent is like a sales representative expect they are not employed by the company whose goods they sell.
They get commission (a percentage of the value of the goods they sell) instead of being paid a salary e.g. Avon products are sold buy agents who sell Avon products in their own name rather an as an Avon employee

Question 27

Explain indirect selling (2 - level channel): manufacturer- wholesaler - retailer - consumer

Answer 27

This is the traditional distribution channel used for convenience goods e.g. fast foods chains

Question 28

What is multi - channel distribution

Answer 28

Is when businesses sell through more than one method e.g. online and in stairs

This is because it gives them flexibility for consumers and wide market coverage for manufacturers

An example of this is supermarket ls and fashion retailers which have high street stores as well as an internet store are using a multi - channel strategy- this may lead to added costs but allows them to target a wider market.