THEME 1.3 : MARKETING MIX AND STRATEGY Flashcards
what is the design mix?
-the combination of three factors needed to create an effective design: function, aesthetics and costs.
what is marketing?
-a management process involved in identifying, anticipating and satisfying consumer requirements profitably
what is the marketing mix?
-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
what is above-the-line promotion?
-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
what is below-the-line promotion?
-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.
what is advertising?
-communication between a business and its customers where images are placed in the media to encourage the purchase of products
what is merchandising?
-the practice and process of displaying and selling products to customers (the marketing and selling of commodities)
what are own-label brands?
-products that are manufactured for wholesalers or retailers by other businesses
what is a producer?
-a business that makes, grows or supplies good or commodities for sale.
what is a wholesaler?
-a business that acts as a link between the producer and retailer; it buys in bulk and sells to resellers rather than too customers.
what are retailers?
-a business that sells goods or services directly to the customer.
what is the Four Stage Distribution Channel?
-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
what is the Three Stage Distribution Channel?
-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
what is the Two Stage Distribution Channel?
-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
how have social trends impacted distribution channels?
-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
what are advantages & disadvantages of Four Stage distribution channel?
-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
what are advantages & disadvantages of Three Stage distribution channel?
-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
what are advantages & disadvantages of Two Stage distribution channel?
-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
what are advantages & disadvantages of Above the Line Promotion?
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.
what are advantages & disadvantages of Below the line promotion?
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
what is promotion?
-an attempt to obtain and retain customers by drawing their attention to a firm or its products
what are public relations?
-an organisation’s attempt to communicate with interested parties through putting positive stories into the media.
what are sales promotions?
-methods of promoting products in the short term to boost sales. For example, BOGOF.
what is sponsorship?
-making a financial contribution to an event in return for publicity.
what is viral marketing?
-any strategy that encourages people to pass on messages to others about a product or business electronically.
what is emotional marketing?
-any advertising that aims to appeal directly to customers’ needs and aspirations.
what is competitive pricing?
-Pricing strategies based on charging the same as your competition.
what is cost plus pricing?
-Adding a percentage (the mark up) to the costs of producing a product to get the price
what is penetration pricing?
-Setting a low price when launching a new product in order to get established in the market
what is predatory pricing?
-Setting a low price forcing rivals out of business
what is psychological pricing?
-Setting the price slightly below a round figure e.g. £3.99
what is price skimming?
-Setting a high price initially and then lowering it later
what is the product life cycle?
-Shows the different stages in the life of a product and the sales that can be expected at each stage
what are the 4 stages of the product life cycle?
-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)
what are extension Strategies?
-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.
what is the Boston Matrix?
-analyses a company’s product portfolio in relation to the rate of market growth and the level of market share.
what is a product portfolio?
-The collection of products a business is currently marketing
what are Stars (Boston Matrix)
-these have high market share of a high growth market.
what is a Problem Child (Boston Matrix)
-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.
what is a Cash Cow (Boston Matrix)
-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.
what are Dogs (Boston Matrix)
-These have a low share of a low growth market. Usually best too discontinue production, unless they can be repositioned.
advantages and disadvantages of boston matrix:
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
MARKUP % FORMULA:
selling price - cost divided by cost x 100
