Theme 1.3 Marketing mix and stratergy Flashcards
What is marketing
Marketing involves getting the right product to the right place, at the right price and promoting your product so that the consumers know about it.
What is the Marketing mix ( 4 P’s)
Place
Product
Price
Promotion
What is the design mix 3 aims
Function
Costs
Aesthetics
What is a product
A product is anything that is capable of satisfying customer needs
Features of Products that emphasise Function
Longer product life cycle
Lower promotional costs
More predictable and stable demand
Build reputation for quality
Features of Products that emphasise Aesthetics
High added value Demand fuelled by customer aspiration Potentially shorter product life cycle Attracts imitation = need for design protection Need for greater promotional support
Features of Products that emphasise cost
Brand development costs are reduced Demand fuelled by lower price Demand increases when there is a decline in the economy High levels of competition Low promotion costs
What is sustainability
Making a product without affecting the long-term supplies of the inputs into the product
What is a product portfolio
A product portfolio is a group of products that a company sells
What is a brand
A brand is a method of differentiating one product from another so that it can be easily communicated and effectively marketed.
What is a brand name
the name / logo / design / colour (etc) of the distinctive product.
Key benefits of effective branding
Adds significant value (from customer point of view)
Able to charge higher prices + demand is more price inelastic
Builds customer loyalty & aspiration
Types of branding
Manufacturer or Product brand Service brand
Umbrella (“Family”) brand
Own-Label brands
Generic brand
Example of product brand
Pot noodles
Marmite
Vaseline
(Any brand with specific products)
Examples of service brands
Uber
Vue
Example of Umbrella (family) brands
Cadbury
P&G
Unilever
Coca cola
Example of own-label brands
Tesco beans
Tu - Sainsburys
Example of Global brands
Coca cola
Ikea
Mc donald’s
Example of Generic brands
Tin foil
Carrots
Aspirin
(Products that are named after the product not company)
Benefits of branding
Added value
Premium pricing
Reduced PED
What are the 3 ways advertising can be categorised
Informative
Persuasive
Reassuring
What’s below the line promotion
refers to any form of promotion that does not involve advertising
Examples of below the line promotion
- Sales promotions
- Public relations
- Merchandising and packaging
- Direct mailing
- Direct selling or personal selling
- Exhibitions and trade fairs
What is public relations (PR)
Public relations activities are those that create goodwill toward an individual, business, cause or product
What is a sponsorship
when a payment for an event, person, organisation is given in return some consideration of benefit
Activities of a PR
- Promoting new products
- Enhancing public awareness
- Projecting a business image
- Promote social responsibility
- Projecting business as a good employer
- Obtain favourable product reviews / recommendations
What is direct marketing
Promotional material directed through mail, email, social media or phone to individuals or businesses
What is viral marketing
Viral marketing uses social media and online platforms to try to produce increases in brand awareness or to achieve other marketing objectives
Benefits and Drawbacks of Personal Selling
Advantages High customer attention Message is customised Interactivity Persuasive impact Potential for development of relationship Adaptable Opportunity to close the sale
Disadvantages High cost Labour intensive Expensive Can only reach a limited number of customers
Benefits and Drawbacks of Advertising
Advantages
Wide coverage
Control of message
Repetition means that the message can be communicated effectively
Effective for building brand awareness and loyalty
Disadvantages
Often expensive Impersonal
One way communication Lacks flexibility
Limited ability to close a sale
Benefits and Drawbacks of Sales Promotion
Advantages
Effective at achieving a quick boost to sales
Encourages customers to trial a product or switch brands
Disadvantages
Sales effect may only be short-term
Customers may come to expect or anticipate further promotions
May damage brand image
Benefits and Drawbacks of Direct Marketing
Advantages
Focus limited resources on targeted promotion
Can personalise the marketing message
Relatively easy to measure response & success
Easy to test different marketing messages
Cost-effective if customer database is well managed
Disadvantages
Response rates vary enormously
Negative image of junk mail and email spam
Databases expensive to maintain and keep accurate
Benefits and Drawbacks of Viral marketing
Advantages
Cheaper than other forms of marketing
Can personalise the marketing message and target through cookie analysis
Relatively easy to measure response & success - through clicks
Easy to test different marketing messages
Disadvantages
Response rates vary enormously
Negative image of viral marketing - can be annoying
Can be ignored / disposed of by the reader easily
Can reach the wrong audience
What are some main factors that influence pricing
Costs PED Market share Stage of pricy life cycle Marketing objectives Market positioning Competitor pricing
What is price skimming
Set a high price to maximise profit
What is penetration pricing
Offer a product at a low
introductory price
Examples of price skimming
iphones
Electronics
Examples of price penetration
Sainsburys value product
What is competitive pricing
Setting the price according to what the rivals are charging
What is dynamic pricing
Dynamic pricing is a pricing strategy in which businesses set flexible prices for products or services based on current market demands
Examples of dynamic pricing
Amazon
Uber (How far your travelling and location)
What is predatory (destroyer) pricing
Setting a low price forcing rivals out of business
What is psychological pricing
Setting the price slightly below a round figure
What is Loss leader pricing
Products are sold below cost to lure buyers into the store.
Main objective of distribution
To make products available in the right place at the right time in the right quantities
What is a distribution channel
A distribution channel moves a product through the stages from production to final consumption
Key advantages of retail distribution
- Convenience for customers
- Often UK-wide reach to customers
- Retailer chooses the final price
- Retailer handles the financial transaction
- Retailer holds the stock
- After-sales support (e.g. returns)
What is an agent
advertise and promote the products and services of a business to increase sales
What is multi-channel distribution
Multi-channel distribution involves a business using more than one type of distribution channel
Example of multi-channel distribution
Apple - 450+ retail stores in 15 countries, Online stores, Multiple retail partners (E.g EE)
What is a product life cycle
A theoretical model which describes the stages a product goes through over its life
Key uses of product life cycle
Forecast future sales trends
Help with market targeting and positioning
Help analyse & manage the product portfolio
What can cause products to be scrapped before launch
- Inadequate demand
- Action of competitors
- Change in the external environment
- Production problem
- High costs
- Does not fit in the firm’s product range
- Life cycle expected to be too short
What are the stages i’m in the product life cycle
- Development
- Introduction
- Growth
- Maturity
- Decline / End
What happens at the introduction stage
New product launched, low level of sales, high unit costs
What happens at the growth stage
Market expands, sales grow faster, unit costs fall with economies of scale
What happens at the maturity stage
Slower sales growth as rivals enter the market = intense competition + fight for market share, high profits for those with high market share
What is the decline stage
- Falling sales
- Market saturation and/or competition
- Decline in profits & weaker cash flows
- More competitors leave the market
- Decline in capacity utilisation
How can you extend the product life cycle
Lower price
Change promotion
Change product (re style or improve)
Alternative distribution channel
What is the boston matrix
A chart with an axis on market share and market growth
What are the 4 areas on the boston matrix
Question marks - Top left
Stars - Top right
Dogs - Bottom left
Cash cows - Bottom right
What do the 4 areas on the boston matrix show
Top left - High market growth, low market share
Top right - High market growth, high market share
Bottom left - Low market growth, Low market share
Bottom right - Low Market growth, High market share
