The Marketing Mix(12,13,14,15) Flashcards
What is the marketing mix?
It is a term used to describe all the activities which work towards marketing a product/service.
What are the 4 Ps of the marketing mix?
- Price: High/Low? Competitors’ prices?
- Product: Who will buy it? Packaging & Design?
- Place: Which distribution channel? Where is it sold?
- Promotion: How will consumers know about the product?
What are 4 types of products?
- Consumer goods
- Consumer services
- Producer goods
- Producer services
What makes a product successful?
- Needs to satisfy consumer needs & wants
- Needs to be the right quality in relation to price
- Not too expensive to produce, reasonable profit made
- Design, product must look nice
- Needs a USP (Unique Selling Point)
Stages of product development?
Get ideas–>Further research–>Forecasted sales–>Make prototype–>Test market–>Full launch
Benefits/Costs of developing new products?
\+USP \+Diversification \+Expansion (into new & existing markets) -Costs of research, trials, waste, analysis -Lack of sales if target market is wrong -Loss of brand image if product fails
What is brand image?
The identity given to a product which distinguishes it from other products
What is brand name?
The unique name of a product which differentiates it from others
What is brand loyalty?
When consumers keep buying the same brand repeatedly, instead of buying other brands
What is packaging?
Packaging is the physical container or wrapping of a product. It is used for selling appeal and promotion
What functions does packaging perform?
- Provides info aboot product
- Protects the product, makes it easier to transport
- Easy to open/use product from packaging
- Looks nice, promotes brand image
What are the stages of the product life cycle?
- Development: Prototype made, tested. No sales
- Induction: Introduced into market, sales start to grow
- Growth: Sales grow faster, persuasive advertising used
- Maturity: Sales increase slowly, intense competition
- Saturation: Sales stabilize at highest point, profits fall
- Decline: No appeal any more, no one buys it anymore
How can a company extend the product life cycle?
- Introduce variations of product or change packaging
- More advertising
- Introduce product into new markets
- Introduce an improved version of the product
Why do businesses implement pricing strategies?
- To try to enter a new market
- To increase market share
- To increase profits
What are the main methods of pricing?
- Cost-plus pricing
- Competitive pricing
- Penetration pricing
- Price skimming
- Promotional Pricing
- Psychological pricing
- Dynamic pricing
What is cost-plus pricing?
Cost-plus pricing involves estimating sales, calculating cost of producing them all, then adding a %age mark-up for profit. It’s easy, but bad if competitors’ prices are less
What is competitive pricing?
It is when product is priced in line or just below competitors’ prices. Sales are likely to be high, but expensive market research is involved
What is penetration pricing?
It is when the price is set lower than competitors in order to enter a new market. It ensure sales are made when the product enters, but as price is low, profits are low
What is price skimming?
It is when price is set high for a new product on the market. It may improve brand image and establish the product as being of good quality, but consumers may not buy it because of the high prices
What is promotional pricing?
It is when the product is sold at a low price for a limited amount of time. It is useful for getting rid of unwanted stock and can help to boost sales, but revenue will be lower.
What is psychological pricing?
It is when attention is paid to the effect of the price upon the consumers’ perceptions of the product. May involve very high prices for high-quality products as status symbols or prices like $3.99
What is dynamic pricing?
It is when different market segments are charged different prices, like student discounts, etc. Leads to increased profit, revenue
What is price elasticity of demand?
It is a measure of the responsiveness of demand to a change in price
What are two types of promotion?
- Advertisements: “above the line” promotion.
- Sales promotion: “below the line” promotion, coupons, gifts, etc.
