Theme 2.2 Making Market Decisions Flashcards
what is the design mix
-Function
-Costs
-Aesthetics
what is function in the design mix
-Function refers to what the product or service is meant to do, its purpose.
-If it does what it is meant to do then the product or service is more likely to be successful.
what is cost in the design mix
Cost refers to the amount of money spent on producing a product or supplying a service.
what is aesthetics in the design mix
Aesthetics refers to how a product looks and feels.
what is the product life cycle
The stages through which a product passes from its development to being withdrawn
what are the stages of the product life cycle
-Introduction (including research and development and launch)
-Growth
-Maturity
-Decline
How can the product life cycle help a business
the product life cycle can help a business to make decisions about its pricing, promotion, production levels and other products within its product portfolio
what is a product portfolio
the range and services offered by a business
what are extension strategies
methods used to extend the life of the product before it goes into decline
what are ways to extend the product life cycle
-widen product range
-find new markets
-extra advertising
-adding additional value
-special promotions
what is product differentiation
Differentiation is about making a product or service stand out from another
how can businesses differentiate goods and services
-providing unique functions
-unique style or design
-creating a distinctive brand
what is a brand
a named product that customers see as being different from other products.
what is a pricing strategy
A pricing strategy is the way in which a business decides on the price of a product or service
what is price strategies for new products
Price Skimming (high price)
Penetration Pricing (low price)
what are short term pricing tactics
-loss leaders
-psychological pricing(ed £5.99)
what influences pricing decisions
-market segmentation
-competitors price
-technology
-branding
-costs
-product life cycle
what is a promotion strategy
A promotion strategy is the technique that a business uses to make existing and potential customers aware of and interested in its products.
what are some examples of promotion strategies
Advertising
Sponsorship
Product trials
Special offers
Branding
what is advertising
Advertising is when a business pays to put out an advert in order to communicate a message to customers and potential customers
what are advantages of advertising
-Reaches a wide audience
-Can have a significant impact on customer awareness and sales
what are the disadvantages of advertising
-Can be very expensive (small businesses cannot afford to advertise on national TV)
-It can be difficult to analyse the impact on sales
what is sponsorship
When a business supports an event, activity, person or organisation, either financially or by providing its products or services
what is product trials
Free access to a product or giveaway of a product to encourage potential customers to sample a new product
what is publicity
Publicity is any communication about a business that is created by the business, its customers or a third party.
what is the positive influence of technology on businesses
-Businesses are able to reach a wider variety of customers
-Lower costs than most traditional methods of
promotion
-The promotion can be tailored to individual customers
what is the negative influence of technology on a business
-Bad reviews can spread wider
-There are so many companies using social media that the message might not get the
desired attention and sales might not increase as much as expected
what are the methods of using technology in promotion
-Targeted advertising on websites
-Social media
-Apps
-Emails and newsletter
what is place in a business
how a business gets its products to its customers. Place also refers to the physical location of a business
what is E-tail
Selling products and services online through websites and mobile devices.
what are the benefit of retailing
-customers can browse and try products
-retail offers point-of-sale promotion
-retailers can provide customers with help and advice
-customers enjoy it
Benefits of e-tailers
-businesses do not have to rent or own expensive retail space
-customers can buy at any time of the day
-customers can access customers around the world
-small business are able to compete with larger businesses
what are disadvantages of retailer
-Owning or renting a shop can be expensive
-The price needs to reflect the markup
what are the disadvantages of e-tailing
-Customers can be worried about quality
-Fake websites
-An e-commerce site is not enough to guarantee sales
