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A LEVEL BUSINESS > Paper 1- Theme 1.3- Marketing mix and strategy > Flashcards

Paper 1- Theme 1.3- Marketing mix and strategy Flashcards

1
Q

Define marketing mix

A

combination of factors (4 p’s) to help the business take into account the customers needs when selling a product

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2
Q

Define design mix

what factors does it consider

A

way in which aspects of a products designed are considered

function, aesthetic, economic manufacture (capability to be manufactured at a cost below selling price)

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3
Q

How does the design mix change to reflect new social trends

A

-design should be sustainable so that the long term resource supplies are not affected

  • designed for waste minimisation
    • keeps costs down and can be used as marketing strategy
  • designed to be recycled as waste materials
  • ethically sourced - sustainably sourcing resources, the chain of supply needs to be considered and not damaging people’s livelihoods or condition of workers
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4
Q

Factors of the design mix

A

Function
Economic manufacture
Aesthetics

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5
Q

Define promotion

A

The use of methods to communicate with existing and potential customers to buy your product

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6
Q

Types of promotion

A
  • advertising- tv, radio
  • personal selling- sales people, telemarektong
  • publicity- speeches, PR stunts
  • sales promotion- vouchers, deals, BOGOF
  • sponsorship- business sponsor and Individual or event
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7
Q

Define distribution

A

Distribution is the process of getting products to the right place for consumers at the right time

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8
Q

Describe the direct distribution channel

Pros and cons

A

manufacturer —> consumer (e.g. online Amazon store)

PROS:

  • full control of supply and marketing
  • max revenue as no intermediaries

CONS
- may not be available in retail stores so lose potential sales

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9
Q

Describe the modern distribution channel

Pros and cons

A

manufacturer —> retailer —> consumer

PROS:

  • use established infrastructure to access all over the country
  • less cost and more control as no wholesaler

CONS

  • hard to maintain relationships with retailers
  • large retailers are tough with negotiations on price, credit and demanding that you pay for special offers
  • brand image may be damaged in retail stores
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10
Q

Describe the traditional distribution channel

Pros and cons

A

manufacturer —> wholesaler —> retailer —> consumer

PROS:

  • gain distribution to small independent shops to
  • producer can focus on production, not worry about retailers
  • helps small producers gain access to retail stores

CONS

  • wholesaler markets product
  • lose out on profit due to wholesalers benefitting from EoS and share of profit
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11
Q

Describe the use of an agent distribution channel

Pros and cons

A

manufacturer —> use of an agent —> wholesaler —> retailer —> consumer

PROS:
-makes selling in foreign country easier due to knowledge of the market (tax, regulations and language)

CONS:

  • supply chain longer (more separate parties slows down distribution)
  • takes commission
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12
Q

Define an agent

A
  • someone who facilitates the sale between a business and a wholesaler (usually in foreign markets)
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13
Q

How was distribution changed to reflect social trends

A

• increase online distribution

  • reach wider geographical market
  • can be accessed without need for physical copy

• changing from product to service
(e.g. music going from vinyls to streaming services)

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14
Q

Define the product life cycle and state it’s stages

A

-model showing the lifespan of a product’s sales from launch up until its removal from market

research and development 
introduction 
growth
maturity
decline
extension strategy
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15
Q

define an extension strategy

A

•ways that a business can modify its product or marketing strategy to prevent a decline in medium-long term sales

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16
Q

2 types of extension strategy

A

Product

  • name change
  • new flavour/differentiation

Promotion

  • new packaging
  • new use for product
  • new target market
17
Q

define Boston Matrix and then describe its set up

A

-tool used to analyse a product’s market share and market growth

cash cow (high share, low growth)
rising star (high share, high growth)
problem child (low share, high growth)
dog (low share, low growth)
18
Q

positives of Boston Matrix model

A
  • identify where each product in portfolio is positioned in the market
  • assess when is right time to launch and recall products to max. profit
19
Q

negatives of Boston Matrix

A

-only uses market share and growth to analyse the portfolio
—>costs are not considered (high share doesn’t mean high profits)
-current market share tells little about future share
-possible short term impacts on market having low growth not considered

20
Q

define marketing

A

management process of identifying, understanding and meeting customer needs and wants: providing products or services to meet those and creating profitability

  • through promotion and selling
21
Q

define marketing strategy

A

• a plan of medium - long term actions to achieve the company’s marketing goals

22
Q

describe the marketing strategy appropriate for mass markets

A
  • heavy promotion (mainstream media)
  • product should be differentiated but not niche
  • lower costs as mass produced (EoS)
23
Q

describe the marketing strategy appropriate for niche markets

A
  • direct advertisement at target market segment (e.g. Ferrari advertise in sports car mag)
  • develop relationship with consumer so they build brand loyalty
  • focus the marketing on reinforcing the distinctive characteristics of each product
24
Q

describe the marketing strategy appropriate for business to business markets

A

•when a businesses main customers is another business or org.

  • business don’t buy with emotion they just want most reliable service for lowest price
  • advertising must be informative and clear
  • focus on understanding and meeting the businesses needs (most reliable but cheapest service)
25
Q

describe the marketing strategy appropriate for business to consumer markets

A
  • emotional connection built with customer by advertising emotionally
  • must maintain good relations with customers (build brand loyalty)
  • high need to research customers and adjust every aspect of product or service to fit their needs (as their loyalty builds is essential)
26
Q

define customer loyalty

A

a preference for a product or brand based on previous purchases and emotional connection
(leads to repeat purchases)

27
Q

why is customer loyalty useful

A

•selling to existing customer is cheaper (less promotional spending and market research)
- costs 5x more to attract a new customer than keep an existing one

•increase market share as choosing you over competitors

28
Q

How business develops customers loyalty

A
  • emotional advertising
  • loyalty cards and saver schemes
  • positive previous experiences of product or brand (focuses on needs of customer)
29
Q

define pricing strategy

A

approach which a business decides on the price of its products or services

  • when entering a new, or in a existing market
30
Q

name the different pricing strategies

A

skimming - enter market with a high price, before competitors enter market or if product is superior

predatory - illegal tactic used by dominant firms where they deliberately sett prices very low to drive competiton out of market

penetration - relatively low price compared to competition to attract new customers
–> make them switch product, to achieve high market share

psychological - make consumers think price is more appealing than it truly is by rounding down

competitive - price the same or a little less than competing products
–> following with the demand and supply forces (price taker)

premium - higher than market average, due to added value

cost plus - adding a % on top of total costs

cost leadership - operate at a loss to maximise market share

31
Q

Factors that determine the best possible pricing strategy

ones I wouldn’t remember

A
  • strength of brand
  • price elasticity of demand
  • stage in product life cycle
  • is it selling online? easy comparison checks
32
Q

How has pricing changed to reflect social trends

A

•online sales - E, M, S commerce
-prices change frequently in response to change in demand, due to technology that tracks demand and levels of interest

•price comparison websites
-businesses have to be more competitive as customers can compare prices easily

33
Q

pros and cons of cost plus pricing

A

pros

  • easy to calculate and agile with changing costs
  • always lead to profit

cons

  • doesn’t consider demand change (external factors)
  • ignores effects of their price elasticity of demand
  • -> product orientated rather than market orientated
34
Q

pros and cons of price skimming

A

A LEVEL BUSINESS (20 decks)

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