THEME 1.3 : MARKETING MIX AND STRATEGY

Question 1

what is the design mix?

Answer 1

-the combination of three factors needed to create an effective design: function, aesthetics and costs.

Question 2

what is marketing?

Answer 2

-a management process involved in identifying, anticipating and satisfying consumer requirements profitably

Question 3

what is the marketing mix?

Answer 3

-the ‘4 P’s’. These are four elements of a business’ marketing that are designed to meet the needs of the customers.
-product, price, place, and promotion

Question 4

what is above-the-line promotion?

Answer 4

-advertising activities that are non-targeted and have a wide reach. —-usually used to build awareness of the brand. e.g. television, radio, newspapers, magazines and outdoor advertising such as billboards

Question 5

what is below-the-line promotion?

Answer 5

-a more targeted approach to promotion. This method avoids mass media like television or radio, and instead uses direct mail, face-to-face, etc. in order to sell specific products to specific consumers.

Question 6

what is advertising?

Answer 6

-communication between a business and its customers where images are placed in the media to encourage the purchase of products

Question 7

what is merchandising?

Answer 7

-the practice and process of displaying and selling products to customers (the marketing and selling of commodities)

Question 8

what are own-label brands?

Answer 8

-products that are manufactured for wholesalers or retailers by other businesses

Question 9

what is a producer?

Answer 9

-a business that makes, grows or supplies good or commodities for sale.

Question 10

what is a wholesaler?

Answer 10

-a business that acts as a link between the producer and retailer; it buys in bulk and sells to resellers rather than too customers.

Question 11

what are retailers?

Answer 11

-a business that sells goods or services directly to the customer.

Question 12

what is the Four Stage Distribution Channel?

Answer 12

-A traditional channel consists of four stages: producer, wholesaler, retailer, and consumer
-This channel is commonly used for products such as groceries, clothing, and electronics
-E.g. The Coca-Cola Company produces the soft drink and then sells it to a wholesaler, who in turn sells it to a retailer
The retailer then sells the soft drink to the customer

Question 13

what is the Three Stage Distribution Channel?

Answer 13

-The three stage distribution channel eliminates the wholesaler stage, with the producer selling directly to the retailer
-This channel is often used for products with high demand or where the cost of distribution is high
-It is also frequently used for products with high profit margins, where the manufacturer can afford to sell directly to the retailer and still make a profit
-E.g. Toshiba produces laptops and sells them directly to retailers like Curry’s, who then sell them to the end customer

Question 14

what is the Two Stage Distribution Channel?

Answer 14

-The two stage distribution channel eliminates both the wholesaler and retailer stages, with the manufacturer selling directly to the end consumer
-This channel is commonly used for products that are sold online or through direct sales channels
-E.g. Ryanair sells its service (passenger tickets) directly to the end customer on their website

Question 15

how have social trends impacted distribution channels?

Answer 15

-Changes in distribution have been impacted by social trends such as the growth of e-commerce and the shift from product-based businesses to service-based businesses

-By understanding these trends, businesses can adjust their distribution strategies to meet the needs of their customers better and stay competitive in the marketplace

Question 16

what are advantages & disadvantages of Four Stage distribution channel?

Answer 16

-adv: storage costs are absorbed by the wholesaler (breaking a large quantity of products into smaller batches for retailers to purchase)

-disadv: wholesaler and retailer each demand a mark-up, reducing profit for the producer or increasing prices for consumers

Question 17

what are advantages & disadvantages of Three Stage distribution channel?

Answer 17

-adv: customer service and some promotional activities are carried out by the retailer & storage and display costs are absorbed by them

-disadv: the retailer’s mark-up will reduce the profit of the producer or make the product more expensive for consumers & promotional activity by the retailer may not be communicated with the producer, potentially causing production shortfalls

Question 18

what are advantages & disadvantages of Two Stage distribution channel?

Answer 18

-adv: a low-cost and fast way to get products to consumers & producer has full control over promotional activity, merchandising and customer service

-disadv: all storage and distribution costs are the responsibility of the producer & resolving customer service issues can take a lot of time and take attention away from production

Question 19

what are advantages & disadvantages of Above the Line Promotion?

Answer 19

ADV: Businesses can reach a large and diverse audience because mass media channels provide a high level of visibility
-It is effective for creating a strong brand image, enhancing brand recognition and establishing a sense of credibility and trust among consumers

DISADV: can be expensive, especially for small businesses with limited budgets as it focuses on reaching a wide audience rather than specific target segments, advertising may not effectively reach the intended audience
- traditional media consumption has decreased and consumers can easily filter out or ignore advertisements.

Question 20

what are advantages & disadvantages of Below the line promotion?

Answer 20

ADV: direct marketing is measurable which enables businesses to track their results and adjust strategy accordingly & personal selling enables businesses to give personalised advice and guidance to customers

DISADV: can be expensive due to the cost of hiring and training sales staff & can be intrusive as customers may perceive it as spam

Question 21

what is promotion?

Answer 21

-an attempt to obtain and retain customers by drawing their attention to a firm or its products

Question 22

what are public relations?

Answer 22

-an organisation’s attempt to communicate with interested parties through putting positive stories into the media.

Question 23

what are sales promotions?

Answer 23

-methods of promoting products in the short term to boost sales. For example, BOGOF.

Question 24

what is sponsorship?

Answer 24

-making a financial contribution to an event in return for publicity.

Question 25

what is viral marketing?

Answer 25

-any strategy that encourages people to pass on messages to others about a product or business electronically.

Question 26

what is emotional marketing?

Answer 26

-any advertising that aims to appeal directly to customers’ needs and aspirations.

Question 27

what is competitive pricing?

Answer 27

-Pricing strategies based on charging the same as your competition.

Question 28

what is cost plus pricing?

Answer 28

-Adding a percentage (the mark up) to the costs of producing a product to get the price

Question 29

what is penetration pricing?

Answer 29

-Setting a low price when launching a new product in order to get established in the market

Question 30

what is predatory pricing?

Answer 30

-Setting a low price forcing rivals out of business

Question 31

what is psychological pricing?

Answer 31

-Setting the price slightly below a round figure e.g. £3.99

Question 32

what is price skimming?

Answer 32

-Setting a high price initially and then lowering it later

Question 33

what is the product life cycle?

Answer 33

-Shows the different stages in the life of a product and the sales that can be expected at each stage

Question 34

what are the 4 stages of the product life cycle?

Answer 34

-introduction( the product is released into the market for the very first time with a lot of marketing and promotional activities used)

-growth(the product becomes popular and results in increased sales. there are other companies also that notice the product as it starts getting more attention and revenue- competition= decrease prices)

-maturity(sales slow down, indicating that the market has begun to reach saturation, is one of the stages of the product life cycle when pricing becomes most competitive- altered products are introduced)

-decline(the sales drop due to a change in consumer behaviour and demand, the product loses its market share and competition also deteriorates so eventually, the product retires from the market)

Question 35

what are extension Strategies?

Answer 35

-used when sales are slowing, in order to increase sales by re-launching the product with a new image or aiming at a different market segment or promoting it in new ways.

Question 36

what is the Boston Matrix?

Answer 36

-analyses a company’s product portfolio in relation to the rate of market growth and the level of market share.

Question 37

what is a product portfolio?

Answer 37

-The collection of products a business is currently marketing

Question 38

what are Stars (Boston Matrix)

Answer 38

-these have high market share of a high growth market.

Question 39

what is a Problem Child (Boston Matrix)

Answer 39

-these have a small share of a fast growing market, but have potential for faster growth in the future. They may need to be promoted and adapted to fit customer requirements more closely.

Question 40

what is a Cash Cow (Boston Matrix)

Answer 40

-These have a large share of a slow growing or static market and selling well. They are usually relied upon to provide a steady stream of profits that can be used to help develop potential Stars or support Problem Children.

Question 41

what are Dogs (Boston Matrix)

Answer 41

-These have a low share of a low growth market. Usually best too discontinue production, unless they can be repositioned.

Question 42

advantages and disadvantages of boston matrix:

Answer 42

ADV: A useful tool for analysing product portfolio decisions.
DISADV: But it is only a snapshot of the current position.
Has little or no predictive value.
Does not take account of environmental factors. v

Question 43

MARKUP % FORMULA:

Answer 43

selling price - cost divided by cost x 100