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T1.3 Marketing Mix & Strategy Flashcards

1
Q

What is the marketing mix?

A

The marketing mix provides a framework for businesses to create and implement successful marketing strategies which are product, price, place and promotion

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2
Q

What is promotion and what does it involve?

A

Promotion is an important element of the marketing mix as it plays a crucial role in generating customer awareness, interest and desire for a product/service

  • Sales promotion
  • Advertising
  • Public relations
  • Direct marketing
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3
Q

What does Place involve?

A
  • Channels
  • Market coverage
  • Location
  • Inventory
  • Transport
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4
Q

What does Price involve (marketing mix)?

A
  • Price strategy
  • Pricing
  • Allowances
  • Discounts
  • Payment terms
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5
Q

What does Product involve (marketing mix)?

A
  • Features
  • Quality
  • Branding
  • Packaging
  • Services
  • Warranties

IMPORTANT - Each business combines the different elements of the marketing mix in unique ways to maximise their profitability

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6
Q

What is the design mix?

A

The product design mix refers to the combination of elements that make up a product’s design. These elements include function, aesthetics, and cost.

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7
Q

Define function (design mix)

A

The function of a product refers to its intended purpose and the specific tasks it is designed to perform

Note: A product’s function is the most important aspect of its design because it determines how well the product will meet the needs of its intended users

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8
Q

Define Aesthetics (design mix)

A

Aesthetics refers to the product’s visual and sensory appeal, including its form, shape, colour, and texture

Note: Aesthetics play an important role in attracting customers, creating brand loyalty, and generating word of mouth recommendations

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9
Q

Define Cost (design mix)

A

The cost of production must be considered when designing a product, as it directly affects the price point at which it can be sold

A well-designed product should balance cost and value, ensuring that customers perceive the product as valuable enough to justify its cost while still maintaining profitability for the manufacturer

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10
Q

Define Social trends

A

Social trends refer to changes in attitudes, behaviours and lifestyles of people

Note: Social trends can significantly impact the product design mix, especially about concerns over resource depletion and ethical sourcing

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11
Q

Define ethical sourcing

A

Ethical sourcing means that products are produced without exploitation of workers or environmental damage

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12
Q

What is advertising?

A

Promotion through paid channels such as television, radio, print media (magazines), and online advertising

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13
Q

What are advantages of advertising?

A
  • It can reach large audiences and increase brand awareness
  • Can also be used to create a specific brand image or message, e.g. the advertising campaign run by Compare the Market (Meerkat)
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14
Q

What are Disadvantages of advertising?

A
  • Can be expensive
  • The effectiveness of advertising can be difficult to measure
  • Many customers tune out or ignore ads
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15
Q

What is direct marketing?

A

Communicating directly with customers through email, text message, social media or post

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16
Q

What are advantaged of direct marketing?

A
  • Businesses can target specific audiences and personalise their message to individual customers
  • Direct marketing is also measurable, which enables businesses to track their results and adjust their strategy accordingly
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17
Q

What are disadvantages of direct marketing?

A

Can be intrusive as customers may perceive it as spam

Can also be costly, especially if businesses do not have an established customer database or need to purchase leads

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18
Q

What are sales promotion?

A

Techniques that encourage the purchase of a product by offering temporary incentives or discounts such as free samples, buy one get one free (bogof), discount coupons, loyalty cards, and rebates (customers have to mail in to receive money back)

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19
Q

What are advantages of sales promotion

A
  • Can quickly boost sales or customer engagement
  • Can help to clear out stock or promote a new product
  • Can encourage impulse purchases
  • Can be targeted to specific segments of customers
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20
Q

What are some disadvantages of sales promotion?

A

Can be expensive especially if the promotion requires a heavy discounting

Can attract deal-seeking customers who may not be loyal to the brand

May reduce the sales of full-priced products

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21
Q

Define branding

A

Branding is the process of creating a unique and identifiable name, design, symbol, or other feature that differentiates a product or company from its competitors

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22
Q

Types of branding

A
  • Product branding
  • Own brand product
  • Manufacturer/ corporate branding
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23
Q

Define Manufacturer/Corporate branding

A

This refers to the use of a company name or logo to promote all the products or services offered by the company

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24
Q

Adv. of Manufacturer/Corporate branding

A
  • Creates strong brand recognition and reputation for the company, which can increase customer loyalty and trust
  • Allows the company to leverage its existing reputation and customer base to introduce new products more easily
  • It helps build economies of scale by promoting multiple products under one brand, which can reduce marketing costs and increase profitability
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Disadv. of Corporate Branding
- If a company's reputation is damaged by a product, it can have a negative impact on all the products offered under that brand - If the company faces intense competition in one market (e.g. smartphones), it may affect the sales of all the products offered across other markets (e.g .laptops and desktops)
26
Define Product branding
This refers to the use of a unique name, design, or symbol to promote a specific product
27
Adv. of Product Branding
- Creates a distinct identity for the product, which can help to differentiate it from competitors and increase brand loyalty - Allows the company to market different products to different segments of the market, e.g. Coco Cola and Coke Zero - Can help to build customer loyalty and trust by associating the product with a specific quality and benefits, e.g. Dyson Vacuum Cleaners
28
Disadv. of Product branding
- The cost of creating and promoting a new brand for each product can be expensive - Introducing new products under different brands is difficult as the business must build a new brand for each product from scratch - Different products within the brand may have different levels of quality, which can affect customer satisfaction
29
Define Own brand product
Own brand or private label branding refers to the use of a retailer's name to promote a specific product or service
30
Adv. of Own Brand products
- It can help retailers differentiate themselves from their competitors by offering unique products - It allows retailers to offer products at a lower cost than branded products, which can help to increase sales and profitability - It can help to build customer loyalty by offering exclusive products that are not available elsewhere
31
Disadv. of Own Brand products
Own brand products may have a lower perceived quality than branded products which can affect customer loyalty and trust
32
Benefits of branding
1. Added Value Strong branding can add value to a product by creating a perception of quality, reliability, and trust 2. Ability to Charge Premium Prices Customers may be willing to pay more for a product that is associated with a well-established brand They perceive products with strong branding to be of higher quality and therefore worth the extra cost 3. Reduced Price Elasticity of Demand Strong branding can also reduce the price elasticity of demand for a product (customers are less sensitive to price changes) This is because customers who are loyal to a brand are more likely to continue purchasing the product even if the price increases
33
Ways to Build a Brand
Unique selling points Advertising Sponsorship Social media
34
What is viral marketing?
Viral marketing is a strategy where businesses use online platforms to promote their products by creating content at specific times, which can easily be shared and commented on
35
What is emotional branding?
Emotional branding is a strategy where companies build strong emotional connections with their customers by appealing to their values, beliefs, and emotions
36
Pricing strategies
1. Cost-plus 2. Penetration 3. Competitive 4. Predatory 5. Psychological 6. Price skimming
37
Define cost plus pricing
The business calculates the cost of production and then adds a markup to determine the final price
38
Define Price skimming
The business sets a high price for a new product/service when it is first introduced to the market
39
Define Penetration pricing
The business sets a low price for a new product/service when it is first introduced
40
Formula for cost plus
Unit cost / (mark up % x unit cost)
41
Define competitive pricing
The business sets prices so low that it drives its competitors out of the market
42
Define Competitive pricing
The business sets its prices based on its competitors' prices
43
Define Psychological pricing
This pricing strategy takes into account the customer's emotions, beliefs, and attitudes towards the product/service
44
Changes in Pricing to Account for Social Trends
Online Sales Online sales offer customers convenience and 24/7 accessibility Retailers have shifted their focus to online sales and adjusted their pricing strategies One way that pricing has changed to reflect this trend is through the use of dynamic pricing Retailers can adjust prices in real-time based on factors such as demand and competition Prices are higher when supply is lower and vice versa Retailers may also offer different prices for online purchases compared to in-store purchases to incentivise customers to shop online, which may mean the retailer requires fewer physical stores This will reduce the retailer's costs Price Comparison Sites Retailers have had to adjust their pricing strategies to remain competitive in an online marketplace where customers can easily compare prices, e.g. www.comparethemarket.com Pricing has changed to reflect the rise in price comparison through the use of price-matching policies Retailers now offer to match the prices of their competitors to prevent customers from switching to a competitor with a lower price Retailers may also use pricing algorithms to monitor the prices of their competitors and adjust their prices automatically
45
Define Distribution channels
Distribution channels refer to the various intermediaries through which goods/services move from the manufacturer to the end customer
46
Types of distribution channels
4 Stage 3 Stage 2 Stage
47
4 Stage Distribution Channel
1. Producer 2. Wholesaler 3. Retailer 4. Consumer
48
3 Stage Distribution Channel
1.Producer 2. Retailer 3. Consumer This channel is often used for products with high demand or where the cost of distribution is high This channel is often used for products with high profit margins, where the manufacturer can afford to sell directly to the retailer and still make a profit
49
2 Stage Distribution channel
1. Producer 2. Consumer This channel is commonly used for products that are sold online or through direct sales channels
50
Define The Product Life Cycle
The product life cycle describes the different stages a product goes through from its conception to its eventual decline in sales
51
5 stages in the product life cycle
1. Development 2. Introduction 3. Growth 4. Maturity 5. Decline
52
Product-related extension strategies
nvolves changing or modifying the product to make it more appealing to customers and extend its life cycle and can be achieved in one of three ways: Product improvements e.g. Samsung releases new versions of its Galaxy Smartphone every year with upgraded features and improvements to the previous model Line extensions e.g. Coca-Cola introduced Diet Coke and Coke Zero as line extensions of its original Coca-Cola Repositioning e.g. when IBM's personal computer division started losing market share to other brands, it repositioned its products as high-end business machines and focused on the enterprise market
53
Promotion-related extension strategies
Involves changing the marketing and promotion of the product to extend its life cycle and could include one or more of the following changes: Changes to advertising e.g Kellogg's continues to recreate adverts for its Corn Flakes cereal which has been around since 1906 Price promotions e.g. Cyber Monday occurs on the first Monday after Thanksgiving in the USA and electronic firms discount prices significantly to boost sales of their products Sales promotions e.g. many coffee shops offer a loyalty program where customers can earn a free drink for every six consumed
54
Define The Boston Matrix
The Boston Matrix is a tool used by businesses to analyse their product portfolio and make strategic decisions about each product
55
What are Cash cows?
Cash cows are products with a high market share in a mature market (the entire market is no longer growing)
56
What are Question Marks?
Question mark products have a low market share in a high-growth market These products have the potential to become stars if the company invests in their development
57
What are stars?
Star products have a high market share in a high-growth market
58
What are Dogs?
Dog products have a low market share in a low-growth market
59
What are Mass Markets?
Mass markets are characterised by large numbers of customers who have similar needs and wants
60
What are niche markets?
Niche markets are characterised by smaller groups of customers with specific needs and want
61
Define Business to Business (B2B)
B2B marketing focuses on selling products to other businesses
62
Business to Conusmer (B2C)
B2C marketing focuses on selling products/services directly to consumers
63

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