Strategies Flashcards
How are markets segmented?
Demographic
Geographic
Psychological
Behavourial
What is a Demographically Segmented Market?
A market segmented based on:
- Age
- Gender
- Occupation
- Income
- Ethinicity
What is a Geographically Segmented Market?
Market segmented based on
- Reigon
- Urban
- Rural
- City
- Climate
What is a Psychographically Segmented Market?
Market Segmented based on:
- Lifestyle
- Personality
- Socio-economic groups
What is a Behavourally Segmented Market
Market segmented based on:
- Loyalty
- Use rates (frequency)
- Price Sensitivity
Why is Differentiation important?
Differentiation is important because it allows the bus. to identify and promote key differences between their products and those of its competitors
- Stand out from the crowd
- Innovation within the market
How can business’s differentiate
- Price
- Quality
- Convenience
- Customer Service
- Social / Ethical
What is Positioning?
Involves the development of a product image (in the mind of the consumer) in relation to other similar product.
- Positioning Graph (High Price or Low Price, High Quality or Low Quality)
List the 7p’s
- Product
- Price
- Promotion
- Place / Distribution
- People
- Processes
- Physical Evidence
- e-marketing
- Global marketing
List the Product Strategies
- Branding
- Packaging
What is branding and give some benefits
A brand is a name, term, symbol, design that identifies a specific product and distinguishes it from its competitors
- Helps customers identify specific products that they like (develops customer loyality)
- Helps businesses introduce new products as customers already aware of the business brand (introduction of one product indirectly promotes all branded products.)
. e.g. apple introducing a new iphone.
Differentiate between Different branding strategies
Manufacter’s Brand (National brand)
- When a manufacturer owns a brand name
- Recognised across countries e.g Kraft
House Brand (Private brand)
- Brand owned by wholesaler or retailer
- Products often cheaper because wholesaler / retailer can buy a lower cost
e. g. Myers
Generic Brands:
- Products with no brand name at all
e. g. Homebrand
Why is packaging an important product strategy?
The Packaging is the first impression on a product. Packaging is a form of communication, customers see the colurs and draw conclusions before they see the label.
Certain packagaing can create images such as Luxury and Exclusiveness
Why is Labelling required? Give some requirements on labels.
Labelling put in place to protect customers from misleading or deceptive claims and the unsafe use of products.
Requirements:
- Name and Description of Food
- List of Ingrediants
- Name and Address of Supplier
List the Pricing METHODS
- Cost based pricing
- Market based pricing
- Competition based pricing
Describe Cost based pricing
Business determines total cost of producing on unit then adds a markup e.g. 15%. –> provdes a profit margin.
Describe Market Based Pricing
Prices set accordingly based on level of Supply and Demand
High Demand = Higher Prices
Low Demand = Lower Prices
Describe Competition-based pricing
Basing price based on competitor’s prices.
“We’ll beat competitors by 10%”
Below competitors = breaking into established market
Equal to competitors = No market research required
Above competitors = Status buyers / superior appeal
List the Pricing STRATEGIES
- Price Skimming
- Price penetration
- Loss leader
- Price Points
Describe Price Skimming
Product price set as high as possible during introduction phase “initial hype” then gradually skimed down.
e.g. Technology - Apple
Describe Price Penetration
Business charges lowest possible price for product without losing money to quickly achieve a large market share for product.
- -> Discourages competitors to enter market
- -> hard to signiciantly raise prices
Describe Loss Leader
Products sold at or below cost price for a Limited time offer / limited amount of goods.
–> Attracts customers to the shop and what they lose on the product they make back on other products bought by the customers.
Used when:
Bus. is overstocked on product / slow to sell
Increase traffic flow to gain new customers
To build repuation for low prices
Describe Price Points
Selling products are predetermined prices, used mainly by retailers
–> Makes it easier for customer to find a product they need. price often associated with the quality of the product. Also easier to encourage customers to trade up to a more expensive model
e.g. Jewler.
List promotion Stategies
- Adversting
- Personal Selling
- Relationship marketing
- Sales Promotions
- Publicity and public relations
- Opinion leaders
- Word of Mouth
Why is promotion important?
Promotion atempts to:
- Attract new customers by bringing awareness to products
- Increase brand awarness by reinforcing image of product
- Convince new and existing customers to buy.
Describe Advertising
Provides bus. with flexibility to reach and extemely large audience or to focus on a small, distinct target market.,
e. g.
- Mass Marketing - TV, Radio, Newspaper
- Direct Marketing - Catalogues mailed
- Social media advertising
- Billboards
Describe Personal selling
Sales consultant directed to a customer in an attempt to make a sale –> Human aspect of promotion (relationship marketing)
Pros:
- Message can be modifed to suit customer needs
- Customer feels valued - Long term relationship/ loyalty
- More likely to purchase if someone is there to convince them.
Describe relationship marketing
Creates customer loyalty by meeting needs of customer on an individual basis -> customer satisfaction
Establishing a regular client base which will most likely spread bus. name through word of mouth
e.g. Loyalty programs (flybuy) -> establishes loyalty / progression towards a reward -> customer more inclined to keep coming back.
Describe Sales Promotion
Business uses insentives to entice new customers.
Creates interest in and generates awareness of a particular product. Encourages trial purchases of new products.
e.g. Coupons, Samples, Discounts, Offers
Describe Publicity and Public Relations
Any free news story about a business / product -> out of control of the business.
Aims to: Raise awareness of a bus / product.
“All Publicity is good publicity”
Public relations:
Activities aimed at creating / maintaining favourable relations between bus. and customers
- promotes positive image and attracts interest in the business activities and its products.
e. g. Charity events / give aways.
Describe Opinion Leader
A person who influences others. Their opininons are respected and often sought out for advice
e.g. Celebrities are used in advertising because they are social influencers and people respect their opinion.
Describe Word of Mouth
Customers trust word of mouth more than advertising because they trust people they know. –> refers to relationship marketing. By creating long term relationships with customers, they will refer friends / family to the bus. via word of mouth.
List the Place/Distribution Strategies
- Distribution Channels
- Channel Choice - Intensive, Selective, Exclusive
- Physical distribution issues - Transport, warehousing, inventory
How do Traditional Distribution Channels work?
Manufacturer -> Wholesaler -> Trailer -> Consumer
What are Innovative Distrubution Channels?
Non-store retailing -> selling outside of a traditional store
e.g. Internet marketing / shopping
What is Intensive Distribution?
Product widely avaliable -> selling to as many outlets as possible
e.g. Milk, Newspaper, Lollies
What is Selective Distribution
Distributing to select few of avaliable outlets
-> customer prepared to seek specific outlets to find product e.g. Myers
e.g. Clothing, furniture, electrical appliances
What is Exclusive Distribution?
Selling product in only one retail store in a large geographic area
- > Used for exclusive / expensive products
e. g. Gucci, Lamborghini, Rolex, Supreme.
Describe the Physical Distribution Issues
Activities concerned with the efficiency movements of products from the producer to the customer.
Transport:
- Bus must consider length of time needed to transport goods e.g. fresh food must be transported quickly
Warehousing:
Storing / organising products efficiently to maximise space usage
Inventory:
Maintaining quantities and varieties of products appropriate for the target market
-> inventory control
Describe People Strategies
Important for people peforming services to be qualified + trained empliyees –> product knowledge / communication
Customers base judgements on level customer service provided, which leave impression of the bus –> customer satisfaction
Describe Processes Strategies
Refers to the flow of activies that a bus. will follow in delivering its service. Processes must be efficient if service is to be delivered on time and to customer expectations
Describe Physical Evidence Strategies
The environment in which the service is delivered. Environment should be comfortable + appealing for customers
e.g. Hotels + restaurants use decoration to appeal to customers and promote a positive image
Describe E-marketing strategies
Using the internet to perform markting activities -> convienience. Allows products to be marketed to customers world wide (global audience)
e.g. Webpages, social media
List the Global Marketing Strategies: GGCCS
- Global Branding
- Global Pricing
- Customisation
- Competitive positioning
- Standardisation
Describe Global branding
The world wide use of a name, slogan or logo to identify a product -> brand has same meaning in any language
-> easier for known brands to gain traction in new products as customer loyalty is established.
Describe Standardisation
Product is the same everywhere in the world -> satisfies the needs of everyone
- Marketing mix will be the same in every country -> Reach and development costs reduced
e. g. Coca Cola has same taste everywhere
Describe Customisation
Recognises differences between the needs of customers in different markets.
market plan is customised accordingly to economic, political and cultrural characteristics of the country.
Describe Global Pricing
Customised Pricing:
- Customers in different countries are charged different prices for the same product.
affected by:
- Exchange rates
- Transportation
- Government Taxes
Market customised pricing
- Price varies according to level of overseas demand + competition in the market
Standard world wide pricing
- Same price for product anywhere in the world
- Only possible if foreign market costs remain low enough not to affect overall costs.
Describe Competitive Positioning
Refers to how a bus will differentiate its products in the foreign market.
