Section 2.2 Marketing Flashcards
The four peas
Price - strategies / factors impacting choice of strategy
Product - product life cycle + design mix - branding
Place - distribution channels
Promotion - methods and sales promotions
Two different types of market research
Secondary research
Primary research
Secondary research meaning
Secondary research is research that is market research that is already organised and is put together for you . This means that the research may be outdated or not trust worthy .
Primary research
Primary research is market research that you put together by yourself . This can be conveyed via surveys and questionnaires
What is price skimming ?
Price skimming is where a business initially sets a product at a reasonably high price and over time they bring the price down . This is good for future customers but is bad for the people who buy the product when it first comes out .
What is psychological pricing ?
Psychological pricing is when a business prices a product a little lower than a big whole number . For example a drink may be sold at 99p instead of £1 as it looks a lot cheaper to a customer .
What is price penetration
Price penetration is when a business sets a product at a low price but as it it gets recognition the price goes up.
What is a loss leader?
A loss leader is a pricing strategy where a product is sold at a price below its market cost to stimulate other sales of more profitable good or services
Advantages of a loss leader
It is easy to attract customers to a new store
Sales usually increase if consumers also buy more profitable peoducts
Disadvantages of a loss leader
Risk of loss - customers may only buy the cheap product instead of giving their attention to the more valuable items.
Stockpiling - if the product is decent quality and cheap consumers can buy in bulk and sell it for themselves , however this can be prevented by business restricting how many you can buy
What is freemium ?
Freemium is where a business lets you have something for free but add ons cost money .
Advantages of a freemium
Low market costs - it attracts customers by being free
Potential of high paying customer base , customers may be hooked so they buy stuff .
Disadvantages of freemium
There’s no guarantee people will buy the add ons
Consumer protection
A consumer protection law is a law put in place by the government to protect customers against , dangerous products , faulty , damaged and against unfair treatment.
What are the six stages of a product
1- r&d ( research and development) 2- introduction 3- growth 4. Maturity 5- saturation 6- decline
