Theme 1.3 Marketing Mix and Strategy Flashcards
Business
What is a product?
Anything that is capable of satisfying customer needs
What is the design mix?
The 3 fundamental elements of product/service design that must be taken into account during the research and development stage (prior to the launch)
3 parts of the design mix?
Function
Aesthetics
Economic manufacture
3 ways the design mix is changing to reflect social trends
Sustainability
Waste minimisation
Ethical sourcing
3 ways the design mix is changing to reflect social trends
Sustainability
Waste minimisation
Ethical sourcing
What is sustainability?
Making a product without affecting the long term supplies of the inputs into the product
3 examples of ethical sourcing?
Ethical supply chain
Organic products
Fairtrade
Penetration pricing?
A business initially sets a low price to begin with then increases the price when customers are gained
3 reasons that a business uses penetration pricing?
To break into a new market
If there’s lots of competition in the market
If product is not unique
Price skimming?
A price set high when launched e.g. tech/fashion industries
What 3 types of products is price skimming suitable for?
One that is superior to competitors due to USP
Latest product/invention on the market
High price interprets high quality
Cost plus pricing?
Adding a mark-up on top of cost to make a unit to gaurentee profit
2 drawbacks of cost plus pricing?
Ignores market conditions. The price could be much higher then competitors
May be difficult to identify precisely all the costs associated with the production of one unit e.g. wages per unit
Predatory pricing?
Involved charging a very low price for a period of time until one or more rivals leave the market
It is illegal
Psychological pricing?
Setting the price slightly below a round figure e.g. 99p or 9.99
Drip pricing?
When a firm only advertises part of a product/services price and reveal other prices later as the customer gets towards checkout online
e.g. booking a holiday
What is product portfolio analysis?
looks at the range of products and brands that a business has under its control e.g. Cadbury
5 aims of product portfolio?
Reached a wide audience through product and market development
Spread risk
Objective of growth
Identify and fill gaps in the market
EOS
What are ‘star’ products in the Boston Matrix?
Products that are sold in high growth markets and have high level of market share
What do ‘star’ products require?
Ongoing investment to maintain their market position
What are ‘cash cows’ products in the Boston Matrix?
Products sold in in low-growth markets and have a high market share e.g. Coca-Cola
They generate more cash than they need to maintain their position
What can cash cows do with the extra cash they earn?
To fund development of other products
What are ‘question mark’ products in the Boston Matrix?
Products that are sold in high growth markets and have a relatively low market share
What do ‘question mark’ products require if they are to improve their level of market share and become stars?
Significant investment
What are ‘dogs’ products in the Boston Matrix?
Products sold in low growth markets and have a low market share
What should businesses do with their dog products?
Divest so that finance and effort may be invested in other products
5 factors that determine the most appropriate pricing strategy for a particular situation?
Number of USP
Price elasticity of demand
Amount of competition
Strength of the brand
Stage in product life cycle
2 advantages of tv promotion?
Can reach a national audience
Can see the product
3 disadvantages of tv promotion?
People skip through adverts
Expensive especially at peak times
More people use netflix/prime/youtube instead of tv now
2 advantages of newspapers?
Can use cut out vouchers
Can include lots of info
Disadvantage of newspapers?
Very little people buy them anymore
2 advantages of magazines?
Can target audience
More likely to be engaged in magazine adverts
2 disadvantages of magazines?
Can be expensive
Magazines have deadlines
2 advantages of cinema promotion?
Viewers are more likely to pay attention
Targeted advertising
2 disadvantages of cinema promotion?
Some people don’t go into cinema until after the adverts
Very expensive
2 advantages of radio promotion?
Can target specific radio stations e.g. talksport
Engaging
2 disadvantages of radio promotion?
Cannot see the product
Have to remember details
2 advantages of posters and billboards as promotional methods?
Cheap and highly visible
2 disadvantages of poster and billboard promotion?
Limited audience and environmental impact
2 advantages of website promotion?
Can include lots of info
Can reach global audience
2 disadvantages of website promotion?
Can be costly to set up
Cybercrime
2 advantages of social media promotion?
Cheap
Target audience
2 disadvantages of social media promotion?
Costly to target all forms of social media
Time consuming
3 benefits of strong branding?
Added value
Ability to charge premium prices
Reduced PED
4 ways to build a brand?
USP
advertising
sponsorship
use of social media
Distribution?
Locations where consumers can buy from
Distribution channel?
The route taken by a product from the producer to the consumer
4 forms of direct selling?
Hairdressers
Direct mail
Door to door selling
dentists
Retailers?
Businesses that buy goods and sell them straight to consumers
4 common types of retail outlets in UK?
Independents
Supermarkets
Department stores
Online retailers
Why is the design mix important?
helps create a product that consumers want and at a price they’re willing to pay.
Aesthetics aspect of the design mix and what can they use?
How the product looks, helps the business differentiate their product from competitors including using premium materials and packaging that reflects the premium image of the brand
An example of aesthetics of a product?
the iPhone is aesthetically pleasing to look at, customers can choose one of many colours, and packaging is very attractive
What is the function aspect of the design mix?
How well the product does what it does. The function that your product has and its reliability can quickly become the products unique selling point
Example of function of a product?
iPhone reliability and the many functions it has
What is the economic manufacture aspect of the design mix?
How cost effective a product is to manufacture. If the cost of production is high then this cost will be passed onto the consumer which could make the product too expensive for its audience, however if costs are kept low by using basic materials, the quality and aesthetics will not be very attractive to their audience.
How is advertising a good way to build a brand?
Helps the business to increase brand awareness, build trust, and helps the brand to keep relevant
What are the positives of a business using sponsorship to help build their brand?
development of positive relationships, increase sales and increased brand awareness and authenticity or to strengthen its social and ethical morals
Why do businesses use social media to build their brand?
allows the business to connect and engage at target market in the places that they hangout online. There is 4 billion users on social media, meaning there is a potential to reach a very wide audience, increasing brand awareness and to create relevant and meaningful content for the target market
5 benefits that businesses get from using social media?
-Brand awareness (4.5 billion people)
-Customer engagement (tell your story, show behind the scenes, getting people involved using polls)
-Increased sales (post new collections, advertise sales, using celebrities to sell on their behalf)
-Communication
-Can see the insights and analytics that businesses post
