The marketing mix & strategy Flashcards
Topics 9-13
c3ce3Things that businesses may consider when designing a new product include s_____, a___________, its f_________, d____________, its i________, as well as it’s ease in being _____ effectively produced.
shape
appearance
function
dimensions
image
cost
Explain why the function of a potential product is important for businesses to consider.
A product must be fit for purpose and reliable, working every time a customer tries to use it. Products that do not do what they say will not suceed. Products should also be convenient, making it as easy as possible for the customer to enjoy the product.
Aesthetics - Products and services should provide __________ __________ and _________ __________. This can change over time due to changes in __________ _______.
sensory stimulation
aesthetic appeal
consumer tastes
Explain why the cost of a potential product in important for businesses to consider.
A well designed product is more likely to be bought if it is cheap. Businesses will want to try and produce at the lowest possible price to make more profit.
What are some examples of how businesses will try to reduce waste when producing new products?
1= Making products more durable so they can last a lifetime.
2= Designing products smaller and lighter.
3= Design for reuse or recycling
What are the benefits of a buisness designing a product to be recycled?
As well as reducing the costs of production, businesses can develop a positive brand image by presenting themself as being good to the environment by promoting recycling.
What is the definition of promotion?
Promotion is when buisnesses attract attention to their products.
What are some of the aims of promotion?
Tell consumers about a new product
Remind consumers about a product
Reassure consumers about a product
Reach a new target audience
To show customers that a rival is bad
What is the difference between above-the-line and below-the-line advertising?
Above-the-line advertising involves paying for promotion, wheras below-the-line advertising involves non-paid promotion.
What are the three types of above-the-line advertising?
1= Informative advertising
2= Persuasive advertising
3= Reassuring advertising
What are some benefits of advertising?
1= Reaches a huge amount of customers
2= They may be seen repeatedly
3= It can be targeted
What are some drawbacks of advertising?
1= Very expensive
2= May lack impact / be ignored
3= Can be controversial
What are some examples of sales promotions?
1= Free gifts
2= Coupons
3= Loyalty cards
4= B1G1F
How can public relations be used as a form of below-the-line advertising?
Communicating with customers, via press releases, social media or donations can be used to improve the image of a business.
What are some benefits of having strong branding?
1= Added value & loyalty
2= Ability to charge premium prices
3= Reduced price elasticity of demand
What are some ways to build a brand?
1= Unique selling point (USP)
2= Advertising
3= Sponsorship
4= Social media
5= Aligning with social trends
Explain cost plus pricing.
This is where businesses add the mark-up costs onto the unit cost to decide their prices. This can sometimes be bad as it ignores market conditions.
Explain price skimming / creaming.
Price skimming is where you launch a product into a new market charging a high price for a limited time. It takes advantage of a new market until competitors arrive.
Explain penetration pricing.
This is where a business enters a new market and charges a low price for a limited time, aimed at gaining a foothold in the market.
Explain predatory pricing.
Predatory Pricing aim is to eliminate competitors from the market, by charging a very low price for a period of time until one or more rivals leave the market.
Explain competitive pricing.
This is where businesses set their prices very similar to rivals. It is usually regarded as a way to avoid a price war with rivals.
Explain psychological pricing.
This strategy puts prices just below whole figures (e.g. £99.99 instead of £100, aiming to trick customers into believing prices are lower than they actually are.
Explain dynamic pricing.
This is a strategy commonly used in the travel and event industry. It is where revenue us maximised by adjusting prices due to the time of day, week, closeness to event, or availability of tickets.
What are some factors affecting which price strategy is most appropriate?
1= Whether they have a USP
2= PED of the product
3= Degree of competiton
4= Strength of the brand
5= Stage in the product life cycle
6= Unit costs and the need to make profit
Define distribution channels.
Distribution channels is the route taken by a product from the producer to consumer.
Define direct selling and give an example.
This is where you sell products directly to your customer. Examples include the internet, door-to-door selling or telephone selling.
Give one benefit and one drawback of direct selling.
Direct selling does not require the use of an intermediatary. However, it do
What are wholesalers?
Wholesalers buy products from manufactuers and sell them to retailers. They act as an intermediatary. A famous example of a wholesaler is Costco.
What are agents / brokers?
They link buyers to sellers.
What are some factors that influence which distribution channel a company decides to use?
1= Nature of the product
2= The market
3= Cost
4= Control
Why would the nature of a product influence which distirbution channel a company decides to use?
Most services are sold directly to consumers, for example, window cleaners use intermediataries. Fast moving consumer goods cannot be sold directly because such goods would not be sold effectively by manufacturers in single units.
What is the main recent trend in terms of the distribution of products?
The main change in social trends with distribution is the move to online selling, often known as e-commerse.
What are the benefits of online distribution to consumers?
1= Normally a lower price
2= Can shop 24/7
3= Can shop anywhere
4= Huge amount of choice
What are the benefits of online distribution to businesses?
1= Low startup costs
2= Payments can be made online
3= Less money spent on staff and premesis
What are some drawbacks of online distribution to businesses?
It is very easy for competition to form as it can be done from anywhere and cheap. Customers are also not able to touch / see the product before they buy it.
What is the product life cycle?
It shows the different stages that a product passes through over time and the sales that can be expected at each stage.
What are the six stages of the product life cycle?
1= Development
2= Introduction
3= Growth
4= Maturity
5= Saturation
6= Decline
What are extension strategies?
They are a way of prolonging the life of a product before it starts to decline. There is normally two methods, product adjustment and promotion.
What would it mean if I were to say a business was effectively managing the product portfolio?
Managing the product portfolio is phasing out old products and introducing new ones. By organising launch at regular intervals, there is never a gap in the market.
What are the two variables that the Boston Matrix assesses?
Market growth and relative market share.
Stars are valuable to businesses. They exist where a business has ____ growth and ____ share. They are already ___________, but need ___________ to be able to cope with a growing market. Net cash flow may be _____.
high
high
profitable
investment
zero
Cash Cows are likely to be profitable. They have ____ growth, ____ share. Due to this, little ____________ is needed and it will have a _________ net cash flow.
low
high
investment
positive
Question marks exist where a product has ____ growth, ____ share. These are a problem for businesses due to their _____________ on whether they will be profitable. It has the potential to be a _____. Net cash flow is likely to be ____.
high
low
uncertainty
star
low
Dogs exist where a product has ____ growth, ____ share. These have relatively _____ prospects for sales and profits. However it can have _________ cash flow due to little need for _____________. Businesses should try to get rid of these assets.
low
low
poor
positive
investment
Why would it be bad if a business had too many products in the same category of the Boston Matrix?
Having too many items at the top of the boston matrix can drain resources. Balancing these with cash cows will mean positive cash flow from the cash cows can be used to support products in a growing market.
Define marketing strategies.
Marketing strategies are a set of plans aimed at meeting a specific marketing objective.
Define marketing.
Marketing is the management process of identifying, anticipating and satisfying consumer demands for profit.
What are the 4 P’s of the marketing mix?
1= Product
2= Price
3= Promotion
4= Place
What marketing strategies are more aligned with competing in a mass market? - Link one point to each of the 4 P’s.
1= Developing a USP
2= Following the market price
3= Invest heavilly into promotion
4= Use multiple distribution channells
What marketing strategies are more aligned with competing in a niche market? - Link one point to each of the 4 P’s.
1= Design carefully to meet customer needs
2= Charge a premium price
3= Targeted advertising
4= Selective distribution channels
What is the difference between an inbound marketing strategy and an outbound marketing strategy?
Outbound marketing strategies direct marketing materials at potential customers, wheras inbound marketing strategies attract customers to websites when they are looking for solutions to problems.
What are some ways businesses can develop customer loyalty?
1= Communication
2= Customer service
3= Customer incentives
4= Personalisation
5= Preferential treatment
