Theme 1 AO1 Flashcards
What are the three parts of the design mix ?
Function, aesthetics, cost.
What is cost plus pricing strategy?
Where a mark-up is added to the cost of production.
What is price skimming?
Charging the highest price upon release and then dropping the price as the product matures.
What is penetration pricing?
Charge a low price initially but increase the price as the product gains in demand.
What is predatory pricing.
Setting prices low to eliminate competition. This is illegal.
What is competitive pricing?
Matching competitor’s prices.
What is psychological pricing?
Using strategies such as making a product 99p rather than £1 to convince consumers that the product is cheaper than it is.
In regard to the design mix, what does function mean?
Ergonomics, usability, safety, reliability.
In regard to the design mix, what does aesthetics mean?
How it looks, tastes, feels and how the senses react to the good or service.
In regard to the design mix, what does economic manufacture/cost mean?
How much it costs to produce and can it be produced efficiently.
What are three characteristics of a mass market?
Very high amount of customers, all products sold in the same way, more EOS to be exploited.
What are three characteristics of a niche market?
Products are targeted towards a small customer group, small firms can survive easily in niche markets as there is less competition, products focus on the needs of the consumers.
How does the market size affect a business?
The greater potential for the business to grow but there is likely to be more competition.
How does market share affect a business?
It affects the strategies a business will use dependant on their share of the market.
What is market mapping?
A map of a specific market that groups brands dependent on different categories of their products e.g. price or quality.
