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Business Theme 1 > Theme 1.3 > Flashcards

Theme 1.3 Flashcards

1
Q

What are three elements of the design mix?

A

Function
Aesthetics
cost

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2
Q

What are three key benefits of branding?

A

Adds value
Able to charge higher price
builds customer loyalty

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3
Q

What is brand extension?

A

When a business uses brand name on a new product that has some of that brands characteristics

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4
Q

What is brand stretching?

A

Where a brand is used for a diverse range of products, not necessarily connected

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5
Q

What are three key factors influencing Promotional decisions & strategy?

A
  1. Stage of product life cycle
  2. Competition
  3. Target market
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6
Q

What are three evaluation points on advertising?++-

A

+Wide coverage
+repetition means message can be communicated effectively
-Often expensive

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7
Q

What are three evaluation points on Personal selling?+- -

A

+High interactivity with customer
-High cost
-Limited amount of customers to promote to

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8
Q

What are three evaluation points on sales promotion?++-

A

+encourages customers to trial a product or switch brands
+Effective at achieving a quick boost in sales
-sales effect may only be short-term

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9
Q

What are three evaluation points of Direct marketing?++-

A

+Can personalise the marketing message
+relatively easy to measure response and success
-Databases expensive to maintain and keep accurate

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10
Q

What is viral marketing?

A

Uses social media and online platforms to try to produce increases in brand awareness or to achieve other marketing objectives

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11
Q

What are two evaluation points of cost influencing pricing? +-

A

+Easy to calculate
-Ignores PED

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12
Q

What is price skimming?

A

launching a brand new product at a high price while the product is still unique

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13
Q

What are three evaluation point on price skimming? ++-

A

+High prices can help create a desirable image for the product
+High prices generate rapid profits; helps recover costs spent on R+D
-Image may suffer when price begins to fall

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14
Q

What is penetration pricing?

A

Involves launching a new product at a very low price to encourage customers to buy it

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15
Q

What are three evaluation points on Price penetration?++-

A

+Low prices boost sales volumes - cutting production costs
+Encourages customers to develop a habit of buying the product
-Products image may instantly be seen as ‘cheap’

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16
Q

What is predatory pricing?

A

A strategy that sets low enough to force a competitor out of business

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17
Q

What are two evaluation points of Predatory pricing? +-

A

+once rival has been forced to close, the firm can raise the products price
-Illegal

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18
Q

What is competitive pricing?

A

Changing a price at the market average or at a discount to the average price in the market

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19
Q

What are two evaluation points of competitive pricing? +-

A

+Should ensure that price will not put customers off buying the product
-A firm will have little control over the price they charge and thus the revenue they generate

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20
Q

What is psychological pricing?

A

Having the price of a product look cheaper i.e. £3.99

21
Q

What are two evaluation points of psychological pricing? +-

A

+can help nudge the customer into buying the product
-May have little effect and may mildly annoy customers

22
Q

What is a loss leader?

A

A product which is sold at a low (even loss making) price in order to encourage customers to buy other full price products from the business along with the loss leader

23
Q

What is dynamic pricing?

A

Where a business sets flexible prices for products or services based on current market demands

24
Q

What is a distribution channel?

A

moves a product through the stages from production to finale consumption

25
Q

What is a retailer?

A

The final step in the chain; deals with customers directly

26
Q

What are two key advantages of retail distribution?

A
  1. Convenience for customers
  2. Retailer holds the stock
27
Q

What’s a wholesaler?

A

Buying in large quantities from producers and breaking into smaller quantities

28
Q

What are two advantages of Wholesalers?

A
  1. Reduces the producers transport costs (fewer journeys)
  2. Retailers can order in smaller amounts from wholesalers
29
Q

What is a distributor?

A

sell on products and serve as a local sales point (Usually specialise in a certain industry)

30
Q

What is an agent?

A

A specialist type of distributor that does not hold stock which usually specialises in services i.e. travel and they earn commission based on sales achievements.

31
Q

What is direct distribution?

A

A channel where a producer and consumer deal directly with each other without the involvement with an intermediary

32
Q

What is indirect distribution?

A

Involves the use of intermediaries between the producer and the consumer

33
Q

What is a multi-channel Distribution?

A

involves a business using more than one type of distribution channel

34
Q

What are three evaluation point of a Multi-channel Distribution?

A

+Allows more target segments to be reached
-Can be more complex to manage
-Potential for channel conflict - e.g. competing with retailers by also selling direct

35
Q

What are two uses of the product life cycle?

A
  1. Forecast future sale trends
  2. Help manage and analyse product portfolio
36
Q

What are the 5 stages of the product life cycle?

A
  1. Development
  2. Introduction
  3. Growth
  4. Maturity
  5. Decline
37
Q

What are two disadvantages of the product life cycle?

A

-Decline is not inevitable
-It is difficult to recognise exactly where a product is on the product life cycle

38
Q

What are three ways to extend the product life cycle?

A
  1. Lower price
  2. Change promotion
  3. Change product - improve and develop it
39
Q

What is the Boston Matrix?

A

Assesses each product within a firm’s product portfolio. The two key variables on the axis are Market growth and Market share.

40
Q

What are the four quadrants of the Boston Matrix?

A

Problem child
Rising star
Cash cow
Dog

41
Q

What is a problem child?

A

These products may be successful in the future but currently have low market share

42
Q

What is a rising star?

A

A product with high growth and high market share

43
Q

What is a cash cow?

A

A product with high market share with little growth

44
Q

What is a dog?

A

A product with low growth and low market share

45
Q

What is business to business marketing?

A

The sale of one businesses product to another business or organisation i.e. Rubber gloves to a local hospital

46
Q

What is business to customer marketing?

A

the sale of a business

47
Q

What is an example of a mass marketing strategy?

A

Expensive advertising campaigns

48
Q

What is an example of a niche marketing strategy?

A

Strong customer service (don’t have a big budget)

Business Theme 1 (4 decks)

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