Theme 1 - Marketing mix and strategy Flashcards
What is the marketing stratergy?
Marketing stratergy is the plan a business uses to reach is marketing objectives
What are the marketing mix 4 ps?
Product
Promotion
Pricing
Place
What is design mix?
The design mix includes function, aesthetics and cost
A business needs to make sure that the product is functinal, has good llooks and isnt too costly to produce
The product needs to meet the needs of the customer and be able to fulfil its function
The design must be aesthetically pleasing but the design cant be too costly to produce
How do changing social trends influence the design mix?
Businesses may need to alter the aesthetics or function of their products in response to changing social trends, many consumers are concerned about the overuse of resources and businesses want to minimise the amount of waste they produce
e.g. starbucks in 2013 started selling reusale coffe cups and PG tea bags used ro contain plastic in 2018 but in 2020 they whole range was biodegrable
Consumers are also increasingly demanding that raw materials should be ethically sourced
What is promotion?
Promotion is deisgned to inform consumers about a product and persudae them to buy it, its the use of marketing tools to bring a product to attention of potential buyers.
Promotional objectives include increasing sales and profits and increasing awareness of the product
What is media advertising?
Adverts can be used to promote goods and services and also ro promote a firms public image
Advertising uses various media including tv, radio, billboards etc and the choice of media depnds on who the target customers are amd how many see/hear the ad
What is digital communication?
Online adverts targeted at customers who hace shown interest
Advertising on mobile phones
Viral marketing businesses get users to pass on adverts to other people
This is a cheaper form of advertising, however many digital ads are just ignored
What is sales promotion?
Includes things like competitions, free gifts and special offers
What is BOGOF?
BOGOF ( buy one get one free)
A business offers one item for free when another is bpught and this is used to encourage customers to go into the shop and buy the item
Pros:
- Very popular with shoppers
-Encourages trial and use of the product
- Good to encourage buyers to switch brand and boosts sales
Cons:
- Loss of profit because if there is an increase in costs this will not be balanced by the increase in sales
What are price discounts?
That the RRP (retail reccomended price) of the product has been reduced
Pros
- Great way to clear out of date stocl
Cons:
- Customers may regard business as a cheap option and too many discounts businesses become suprlus
What are money off coupons?
Coupons can be used to capture new customers as it adds on incentive to buy ( time limit)
Coupons can be used with existing customers to encourage repeat purchases
Pros:
- Coupons can help the customer feel they are
getting better value for money
-Coupons are available from websites, loyalty
cards, store magazines and on the back of some
packs to encourage repeat purchase
Cons:
-Reduced profits from the cost of running the
promotion
-Some customers may be waiting for the coupons
before they purchase
-Customers may have been wanting to make a
purchase anyway
What are samples/giveaways?
Businesses may send out or give away free samples to customers in order to persuade them to try the product for the first time give aways may occur in the front of a magazine
Pros:
- Ideal for new product launches
-Works especially well with some products e.g.
shampoo, food etc.
-Encourages word-of-mouth promotion
Cons:
- Can be complicated to send in the post – needs a
database of customers
-Can be expensive as giving away some of the product
for free
What are special events?
Activities that the business does to encourage customers to try the product
Events can be shows, fetes, fairs etc
Pros:
- Encourages customers to
attend
-Rewards loyal customers with a special event
-Ideal for small businesses
Cons:
-Can be expensive
-Hard to measure how valuable this marketing is
What is point of sale?
Point of sale display is usually a cardboard display
stand located close to the till within a shop
This is to draw customer attention and trigger an
“impulse” purchase
Pros:
-Ideal way to promote new products
Works best with products that have an event or
holiday tie in e.g. crème eggs for Easter
Manufacturers can add extra punch to the
promotion by giving a discount
Cons:
-Only successful if the product meets the needs of
the customer
Needs to be designed and out to stores in time for
the event / holiday
Displays may be put in poor locations by shops e.g.
next to a broken till or one that is rarely opened
What is personal selling?
Personal selling is an effective way
to manage business to customer
relationships
The sales person acts on behalf of
the organisation and is useful to
customers as a technical advisor
Sales people are well trained in the approaches and techniques of personal selling
However, sales people are very expensive in terms of salary, training,
commission
-For example salesmen and saleswomen are often used to sell cars or home improvements where the profit margin is high
-Salespeople are useful where the product comes with a range
of features which need to be
explained or “upsold” e.g. a cold
climate convenience pack on a
new car
What is direct marketing?
Highly focussed targeted mail
based on what customers have
bought before
Can be e-mail or by post
May be special offers to re-engage
customers who have stopped
buying
Carefully tailored to items that
customers have bought before e.g.
holidays, hotels, travel deals etc.
What is public relations?
Public relations is also known as PR
-PR aims to build a relationship between the business and the public, to create a favourable corporate image
-PR is unpaid communication about an organisation which appears in mass media
-PR can include publicity stunts
-PR is a long-term not a
short-term strategy
-PR is very low expenditure –e.g. a business could send its products to the local paper for a “review”
-PR gives the business less
control over what is said BUT consumers find it more believable / authentic
What is sponsorship?
-Positive association of the product
with a celebrity or a sport
-Can be very expensive e.g. £125m
-Difficult to tell what impact this has on brand loyalty or sales
What is branding?
Branding creates a clear and obvious logo, name and statement.
This means that customers will instantly recognise the brand.
What is corporate branding?
Corporate branding is how a business presents itself
Within the corporate brand there may be seperate product brands aimed at different groups of consumers
What is product branding?
Product branding relates to specific individual products that a corporate brand makes
The individual product will have its own logo and slogan but it will also have the corporate brand in its packaging to show that it is associated with that trusted brand
What is own branding?
Own branding refers largely to brands that are in house to a supermarket or retailor
Its unlikley that large budgets have been spent on the branding of these products
Usually they dont have a distinctive logo or slogan they are cheaper to produce and consume.
What is rebranding?
Rebranding is is a marketing stratergy that can involve a change to the design, promotion, pricing, distribution of an existing product
A business might want to reposition a product and aim it at a different target or try to overcome competition from another business
What are the benefits of strong branding?
Strong branding adds value to the product
Makes the price elasticy of demand for a product less price elastic
the consumer percieves the product as better quality
can create a barrier so its harder for newcomers to enter the market
What are the ways to build a brand?
-Advertising :is used to promote and maintain custimer awareness of a brand. Businesses use it to persuade that their brand is unique. Lots of money is spent on advertising in a competitive market
-Sponsorship: Widely used in certain competitive markets. Corporate brands might sponsor large outdoor events such as music festivals or football/sport events. E.g. emirates began sponsoring fa cup in 2015
How can businesses use social media to build their brand?
Businesses can use social media to communicate with customers. Many businesses have changed their methods of promotion to include social media
Viral marketing includes platforms such as YouTube Instagram and Facebook and these can be used by businesses to share news and updates that consumers can then share which helps to spread awareness of a brand and advertise it. Messages spread at a rapid rate
What is emotional branding?
Emotional branding is when the branding of a product is matched to the lifestyle,values, aspirations of consumers to trigger an emotional response so that they buy the product
E.g malteasers and sharing
What factors affect pricing decisions?
-Affected by all other PS in marketing mix
-Price set to cover cost of making the product and to make profit
- Has to be acceptable to customers
- How price sensitive customers are
- PED influences the pricing of the product as it depends on the avalibility of substitutes
- The stage of lifecycle in production
- Competition
What is price skimming?
Price skimming is used when a new and innovative product is sold at a high price when they first reach the market
Consumers will have to pay more because the product has scarcity value and high prices which boosts the products images and increases its appeal (technological products )
Prices usually dropped considerably when the product has been on the market for a year- and everyone prepared to pay extra has already paid and competitors may have entered the market with inntiative lower prices. some businesses use this as a long term stratergy ie. apple.
What are the advantages and disadvantages of price skimming ?
Ads:
- Consumers will pay more because product has scarcity value
-high price boosts products image
- increases its appeal
Dis:
- Price drops considerably when product has been on market for a year or so
-competitors hace entered the marjet with innitiate products at lower prices
- customers can be put off with initial high prices
What is penetration pricing?
Penetration pricing is the opposite of skimming and lauches a priduct at a low prices in order to attract custimers and gain market share
Especially effective in areas that are price sensitive
This works best for businesses that can benefit from lower prices when manufactoring large quanitities
What are advantages and disadvantages of penetration pricing?
Ads:
- Effective in markets which are price sensitive
-Can be used to prolong products life
-Used to target a more budget conscious market segment
Dis:
- Customers may expect the low price to continue so difficult to raise it without losing customers
- Damages how the brand image may be received
What is cost plus pricing?
Cost plus pricing is when a firm adds up a percentage narj yo ti the costs of making or buying the product (unit cost)
What is the cost plus calculation?
price= cost
What are the advantages and disadvantages of cost plus?
What is predatory pricing?
What are the advantages and disadvantages of predatory pricng?
What is competitive pricing
What are the advantages and disadvantages?
What is physcologial pricing?
Basing the price on the customers expectations
What are the advantages and disadvantages of physcological pricing?
How do social trends affect pricing stratergys?
