Theme 1.3 Marketing Mix and Strategy Flashcards
What is Product Design?
Product design is the means by which customer demand for new and varied products can be met. A good design contributes to a product’s usefulness as well as its look(s).
What is the Marketing Mix?
- It is a combination of elements used by a business to enable it to meet the needs and expectations of customers.
- It is the collective term used for the 4 marketing decisions that a firm faces when trying to build a reasonable plan/ strategy for how its products will be marketed.
What are the 4 marketing decisions (4 Ps)?
Each P should work together to generate a logical, credible image.
- Product- the product or service that the customer buys
- Price- how much the customer pays for the product
- Place- how the product is distributed to the customer
- Promotion- how the customer is found and persuaded to buy
What is the design mix?
Function - the way a product works
- does it do what it needs to do?
- is the product reliable?
- e.g. washing machine, stapler
Aesthetics - how the product appeals to the customer in terms of how it looks, feels, etc.
- based on the subjective judgment of the customer
- a popular way to differentiate a product
- e.g. iPhone/ Apple products, designer handbags
Cost - does the design allow the product to be made and sold profitably?
- how much value is added during the production process?
How the Design Mix is changing to reflect social trends?
Ethical sourcing
- buying materials from suppliers that are behaving in a morally correct way
- HOW the products are made
- reducing the environmental impact of the creation of the product
- Fair Trade products e.g. coffee and bananas
Designing for waste minimisation
- reducing the amount of raw materials used
- successful minimisation is prevention = not producing the waste in the first place
waste at all
- Designing for waste minimisation ( REDUCE REUSE RECYCLE) e.g. changes to packaging, refillable pack
Concern over resource depletion
- when natural resources are used quicker than the rate of renewal
- RENEWABLE: ones that can be replenished
- NON RENEWABLE: ones that are in finite supply and therefore will run out
- sometimes you can redesign the product with a less rare material
- companies such as Birds Eye now use pollock instead of cod because cod is becoming short-supplied
What is a brand?
A product that is easily distinguished from other products so that it can be easily communicated and effectively marketed
What is branding?
The process involved in creating a unique name and image for a product in the customer’s mind, mainly through advertising campaigns with a consistent theme.
What is a brand name?
A name, term, sign, symbol, design, or any part other feature that allows consumers to identify the goods/ services of a business and to differentiate them from competitors
Benefits of effective Branding
- It adds significant value
- Able to charge higher prices and demand is more price INELASTIC
- Builds customer loyalty and desire
- Reduce elasticity of demand
What are the different types of branding?
- Product brand
- brands associated with certain products
- FMCG (FAST MOVING CONSUMER BRANDS)
- e.g. Persil, PotNoodle - Service brand
- either delivered online/ via app or face-to-face
- e.g. Netflix, Uber - Umbrella (FAMILY) brand
- brands that are assigned to more than one product
- makes different product lines identifiable by consumer grouping them under one brand name
- e.g. Dove, Cadbury - Corporate/ manufacturer and own-label brands
- e.g. Nestle, Unilever, BBC - Own-label brands
- where retail outlets assign their corporate branding to a range of goods and services
- e.g. Tesco Finest - Global brands
- easily recognised and operating worldwide
- based on familiarity, stability, and availability
- e.g. Ikea, McDonald’s
Ways to build a brand
- different methods of promotion/advertising
- create a USP
- sponsorship
- use of social media to build a relationship between the business and consumer
What is rebranding?
is a marketing strategy in which a new name, term, symbol, design, or combination is created for an established brand with the intention of developing a new, differentiated identity in the minds of consumers, investors, and/or competitors.
How does branding and promotion change to reflect social trends?
Viral marketing:
- uses social media and online platforms to try to produce increases in brand awareness or to achieve other marketing objectives.
- DEFINITION: any strategy that encourages people to pass on messages to others about a product or a business electronically
Social media:
- just like traditional media, are seen by many businesses as another place where they can display their promotional messages, through Instagram or other online pages.
Emotional branding:
- is the practice of building brands that appeal directly to a consumer’s emotional state, needs, and aspirations e.g. clothing, confectionary and toiletries
What is promotion?
Techniques used to make products known to consumers. Promotion in marketing has 2 key tasks: to inform and persuade.
The main aim of promotion is to ensure that customers are aware of the existence and positioning of products.
What is the promotional mix?
Describes the promotional methods that a business uses to pursue its marketing objectives.
What are the elements of the promotional mix?
- Advertising
- Sales promotion and merchandising
- Personal Selling
- Public Relations/ publicity/sponsorship
- Direct marketing
What are the key influences on what promotional elements are used and how?
Stage in the product’s life cycle
*position in the life cycle will require different promotional methods
Nature of the product
*what information do customers need before they buy?
Competition
*what are rivals doing?
*what promotional methods are traditionally effective in the market?
Marketing objectives and budget
*what does promotion need to achieve?
*how much will it cost?
Target market
*appropriate ways to reach the target market segmentation
Advertising pros and cons
+ wide coverage
+ control of message
+ repetition means that the message can be effective
+ effective for building brand awareness and loyalty
- often expensive
- can be impersonal
- one way communication
- lacks flexibility
- limited ability to close a sale
Personal Selling pros and cons
\+high customer attention \+message is customised \+persuasive impact \+potential for development of relationship \+adaptable \+opportunity to close the sale
- high cost
- labour intensive
- expensive
- can only reach a limited number of customers
Sales promotion pros and cons
+effective at achieving a quick boost sales
+encourages customers to trial a product or switch brands
- sales effect may only be short term
- customers may come to expect or anticipate further promotions
- may damage brand image
PR pros and cons
PR includes: press releases, sponsorships, donations to charities/local communities
+audiences are more likely to trust messages coming from an objective source rather than paid-for advertising messages
+can be an economical way to reach a large audience in comparison to paid for advertising media placement
+can help raise your company’s authority, build relationships with key audiences, and ultimately take your business to the next level
- no direct control you can’t exactly control how your business is portrayed by the media, when your message will appear, and where it will be placed
- never guarantee your story will be published
Sponsorship pros and cons
+Build relationships.
+ sponsoring events, charities or projects is that it builds awareness of your brand, exposing your business to a wider audience and giving them a positive association with your brand
- the actions of any person/brand/event you sponsor will immediately be linked to you
- there is no guaranteed return on investment
Direct marketing pros and cons
+focused limited resources on targeted promotion
+can personalise the message
+relatively easy to measure response and success
- response rates vary
- a negative image of junk mail and email spam
- databases expensive to maintain and keep accurate
Merchandising pros and cons
+encourages customer loyalty
+attracts customers
+increase brand recognition
- can be expensive
- once is not enough
What is price?
- the money charged for a product or service
- usually expressed in terms of £
- the only element of the marketing mix that impacts directly on the value of sales
What are the financial objectives?
- maximise profit
- achieve a target level of profit
- maximise sales revenue
- improve cash flow
What are the marketing objectives?
- maintain/improve market share
- beat/prevent competition
- increase sales
- build a brand
What are pricing methods?
the methods used to calculate the actual price set
What are pricing strategies?
- adopted over the medium to long-term to achieve marketing objectives
- have a significant impact on marketing strategy
What are the main influences on pricing?
- costs
- elasticity of demand
- product life cycle
- market share
- marketing objectives
- positioning
- competitors
What is cost plus pricing?
- basing your prices on costs
- popular method of cost-based pricing is mark up - widely used in retailing
the method ensures some profit is made : PRICE CHARGED=UNIT COST+ (% MARK-UP)
