The Seven Ps of the Marketing Mix Details Flashcards

1
Q

Stages of the product life cycle

A

-Research and development(R&D)
-Introduction
-Growth
-Maturity
-Decline

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2
Q

The product life cycle is based on…

A

sales revenue(NOT TIME. there isn’t a fixed period of time for any of the stages. Whether you’re in one stage or the other depends on sales revenue)

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3
Q

Features of the Research and Development(R&D) stage

A

-Covers all activities that take place before a product is released into the market
-Length of stage depends on product and industry(e.g. clothing brands have shorter R&D stages, while pharmaceutical drugs have higher ones)
-Business focuses on market research, product development and preparation of production

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4
Q

Features of the introduction stage

A

-Initial sales are likely to be low but growing
-Business must focus on promotion(to make customers aware of the product), ideally using its unique selling point(USP)
-Business must carefully consider pricing strategies and the distribution channel

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5
Q

Features of the growth stage

A

Incrreasing rate of product sales growth
-Business may find new target markets(to continue growth)
-Business may adapt the marketing mix(e.g. expanding distribution channels) to meet demand

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6
Q

Features of the maturity stage

A

-Sales growing at a slower rate(since market may be crowded with competition)
-High profits(due to high sales revenues and lower promotional costs)
-Increased focus on building customer loyalty

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7
Q

Features of the decline stage

A

-Decreasing sales/Loss of market share
-Business may reduce prices(to target cost-conscious customers)

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8
Q

Reasons why products may enter the decline stage

A

-The product may have lost its unique selling point(USP) due to competition
-Technology may be outdated
-Product may no longer satisfy customers

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9
Q

Products may still be profitable during the decline stage(T/F)

A

True(although sales are falling, costs may also be low too)

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10
Q

When are products usually withdrawn from the market?

A

When they begin to make a loss(i.e. revenues lower than costs of production)

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11
Q

Examples of extension strategies

A

-Finding a target market
-Redesign of packaging
-Updating the products
-Price reduction
-New promotional strategies

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12
Q

Important aspects of branding

A

-Brand awareness
-Brand development
-Brand loyalty
-Brand value

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13
Q

Rules that packaging must follow to be effective

A

-Protect the product
-Communicate information(about the product)
-Promote the product and communicate its USP
-Make the product eady to use

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14
Q

Elements of the marketing mix that packaging connects to

A

Product and promotion

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15
Q

Types of pricing methods

A

-Cost-plus(markup) pricing
-Penetration pricing
-Loss leader pricing
-Predatory pricing
-Premium pricing
-Dynamic pricing
-Competitive pricing
-Contribution pricing

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16
Q

Penetration pricing works best for…

A

goods that will be purchased repeatedly(i.e. shampoos, magazines, cereals and other ‘fast moving consumer goods’)

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17
Q

Typical conditions for loss leader pricing

A

-The business must be able to afford to set prices on a product that will result in a loss
-The business must have a variety of products

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18
Q

Circumstances under which dynamic pricing can be applied:

A

-The groups of consumers(and their respective levles of wealth)
-Time(e.g. lunch time discounts, higher prices at night, etc.)
-Competitors’ prices(in different areas)
-Demand

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19
Q

Benefits of cost-plus(markup) pricing

A

Simple and easy to ensure all costs are covered

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20
Q

Limitations of cost-plus(markup) pricing

A

Inward facing(takes no account of the market)

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21
Q

Benefits of penetration pricing

A

Market share and customer loyalty may be established quickly

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22
Q

Limitations of penetration pricing

A

-Low profit margins are likely during the initial low price
-Customers may not accept the price rise

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23
Q

Benefits of loss leader pricing

A

Can lead to a large boost in sales revenue

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24
Q

Limitations of loss leader pricing

A

-Is only possible for multi-product retailers
-Business may just experience losses(if strategy doesn’t work)

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25
Q

Benefits of predatory pricing

A

-Competition is eliminated
-Higher prices and higher market share can lead to increased profits(once competition leaves the market)

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26
Q

Limitations of predatory pricing

A

-Only possible for very large businesses
-Impossible to maintain over a longer period of time
-Illegal in many countries

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27
Q

Benefits of premium pricing

A

-Potentially higher profit margins
-Can lead to improved public perceptions of a company

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28
Q

Limitations of premium pricing

A

Can only be applied to a target market

29
Q

Benefits of dynamic pricing

A

-Higher profit and sales
-Adjusts to the competition
-Flexibility
-Better inventory management

30
Q

Limitations of dynamic pricing

A

-Customer dissatisfaction(leading to a loss of sales, since customers paying more may feel cheated)
-Not applicable to all markets

31
Q

Benefits of competitive pricing

A

Price aligned with rivals

32
Q

Limitations of competitive pricing

A

Pricing alone is not low enough to attract customers(other methods of differentiation may be needed)

33
Q

Benefits of contribution pricing

A

-Allow flexibility in the pricing of individual products
-Demand factors can be taken into consideration

34
Q

Limitations of contribution pricing

A

-Difficult to classify costs as direct or indirect

35
Q

What value must the price elasticity of demand(PED) have for the situation to be considered as price elastic demand?

A

PED > 1

36
Q

What value must the price elasticity of demand(PED) have for the situation to be considered as price inelastic demand?

A

0 < PED < 1

37
Q

What value must the price elasticity of demand(PED) have for the situation to be considered as unitary elastic demand?

A

PED = 1

38
Q

PED Classifications

A

-Price elastic demand
-Price inelastic demand
-Unitary elastic demand

39
Q

Factors that determine the PED for a product

A

-Number and proximity of substitute goods available
-Time period

40
Q

Types of promotion

A

-Above the line promotion(ATL)
-Below the line promotion(BTL)
-Through the line promotion(TTL)

41
Q

Methods of above the line(ATL) promotion

A

-Television advertising
-Newspaper advertising
-Magazine advertising
-Radio advertising
-Outdoor advertising(e.g. billboards, bus sides)

42
Q

Methods of below the line(BTL) promotion

A

-Direct marketing
-Sales promotion
-Loyalty cards/Loyalty programs
-After-sales service
-Public relations(e.g. supporting charitable causes)
-Merchandising
-Exhibitions and trade fairs

43
Q

Examples of sales promotion

A

-“Buy one get one free”
-Free samples
-Point-of-sale display
-Half-price offers
-20% off

44
Q

Methods of through the line(TTL) promotion

A

-DIgital marketing
-360-degree marketing

45
Q

Benefits of through the line(TTL) promotion

A

-It allows businesses to reacch as broad or defined an audience as they want
-It allows businesses to customise the message according to the profile of their target market
-It makes it possible to incrrease brand exposure, and, at the same time, generate sales

46
Q

Ways that businesses use social media to promote their products

A

-Paid advertisements
-Content generated by users(e.g. comments)
-Direct messages
-Influencers

47
Q

Advantages of using social media for promotion

A

-Differentiation at low cost
-More knowledge about customers
-Improvement of customer service
-Easy way to measure the performance of businesses

48
Q

Disadvantages of using social media for promotion

A

-Social media must be part of a broad promotional strategy
-Social media production has marketing costs(e.g. hiring social media specialists)

49
Q

Types of intermediaries

A

-Wholesalers
-Retailers
-Agents/brokers

50
Q

Features of wholesalers

A

-Purchase large quantities of stock from producers and store it
-Sell stock to retailers(or sometimes, customers9 afterwards
-Act as a central delivery and collection point
-Reduces the amount of deliveries needed from producers to retailers
-Break-bulk

51
Q

Examples of retailers

A

-Convenience stores
-Supermarkets
-Online retailers
-Department stores
-Vending machines
-High street shops and chain stores

52
Q

Difference between an agent and a retailer

A

The agent does not own the product that it is selling. Instead, the agent promotes the product and charges a commission

53
Q

Examples of agents

A

-Price comparison websites
-Travel agents
-Estate agents
-eBay
-International distributors

54
Q

Factors that determine the exact combination of intermediariees used

A

-Product type
-The size of the distributor
-Cost
-Control
-Legal factors

55
Q

Types of distribution

A

-Direct distribution
-Indirect distribution

56
Q

Benefits of direct distribution

A

-Eliminates intermediary expenses
-Increases direct contact with customers(gives the producer a chance to carry out market research)
-Provides control(i.e. the producer can take decisions over the marketing mix of the product)

57
Q

Limitations of direct distribution

A

-Reduces distribution options
-Increases internal workload
-Raises costs

58
Q

Benefits of the producer → retailer → consumer distribution channel

A

Easy distribution of the product(i.e. the producer can deliver its products to more places)

59
Q

Limitations of the producer → retailer → consumer distribution channel

A

-Intermediary keeps some profit
-Loss of control over the products(i.e. producers lose control over the marketing mix of the products)

60
Q

Benefits of the producer → wholesaler → retailer → consumer distribution channel

A

-Reduces advertising and storage costs(due to the wholesaler)
-Gives producers the possibility of entering new markets(which would be harder to access otherwise)

61
Q

Limitations of the producer → wholesaler → retailer → consumer distribution channel

A

-Another intermediary keeps some profit
-Loss of control

62
Q

Benefits of using agents/brokers

A

-Opportunities for new markets(since agents have specific knowledge of the legal aspects of each country, which is needed to introduce the new products successfully)
-Potentially increased sales

63
Q

Limitations of using agents/brokers

A

-A commission must be paid(so reduced profits for the producer)
-Loss of control

64
Q

Elements of process(as a part of the marketing mix)

A

-Placing and paying for orders
-Delivery systems
-Customer feedback
-After-sales service

65
Q

Factors which affect the marketing mix of a particular product

A

-Whether or not a business is providig a good or a service
-The type of business organisation and the resources available for creating and implementing a specific marketing mix
-The characteristics of the market in which the business operates and the possibilities for it to grow and increase revenue
-The characteristics of the target market
-The legal and cultural aspects of the country in which the business is located

66
Q

How the product life cycle can be linked to the Boston Consulting Group(BCG) matrix

A

-Problem children(question marks) → introduction stage
-Stars → growth stage
-Cash cows → maturity stage
-Dogs → decline stage

67
Q

The links between the BCG matrix categories and the product life cycle are not absolute(T/F)

A

True

68
Q

In which stage of the product life cycle do businesses tend to put their highest investments into a product?

A

Research and Development(R&D) stage