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business > Topic 2.2 - Making Marketing Decisions > Flashcards

Topic 2.2 - Making Marketing Decisions Flashcards

1
Q

what are the elements of the design mix?

A
  • function
  • aesthetics
  • cost
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2
Q

what are the elements of the marketing mix?

A
  • price
  • place
  • product
  • promotion
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3
Q

product function

A

The purpose of the product or service

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4
Q

Product Aesthetics

A

This refers to how the product looks and feels

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5
Q

Balancing the elements of function, aesthetics, and cost, helps the product design to be both functional and attractive, while also being cost-effective for both the manufacturer and the consumer
Some manufacturers aim to balance all three elements e.g. Fentimans ginger beer is relatively affordable and is packaged in eye catching bottles and the product itself is very good quality
Other manufacturers may focus on one aspect, more than the others e.g. Asda own brand ginger beer is produced at the lowest possible cost and sold to consumers at a very low price

A

ok

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6
Q

what are the five stages in the product life cycle?

A
  • development
  • introduction
  • growth
  • maturity
  • decline
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7
Q

cash flow in development stage of product life cycle

A
  • usually negative as the company is investing heavily in the product without generating any revenue
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8
Q

marketing strategy in development stage of product life cycle

A

The marketing strategy during this stage is focused on creating awareness and generating interest in the product

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9
Q

marketing strategy in introduction stage of product life cycle

A

Marketing efforts are focused on creating awareness and generating interest in the product

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10
Q

cash flow in introduction stage of product life cycle

A

Cash flow is usually negative as the business usually incurs high costs for promotion, advertising and distribution

however. there is some cash inflow from sales (albeit slow sales growth)

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11
Q

cash flow in growth stage of product life cycle

A

Cash flow usually turns positive during this stage as sales revenue increases and costs are spread out over a larger volume of production

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12
Q

marketing strategy in growth stage of product life cycle

A

The marketing strategy is to differentiate the product from its competitors and build brand loyalty

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13
Q

marketing strategy in maturity stage of product life cycle

A

The marketing strategy aims to maintain market share and increase profitability by cutting costs and finding new markets

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14
Q

cash flow in maturity stage of product life cycle

A

Cash flow is usually positive during this stage as sales revenue continues to come in and costs are reduced through economies of scale and efficient production processes

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15
Q

cash flow in decline stage of product life cycle

A

Cash flow usually turns negative as sales revenue declines and costs associated with the product’s decline increase

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16
Q

marketing strategy in decline stage of product life cycle

A

The marketing strategy may involve discontinuing the product, reducing its price to clear inventory, or finding new uses for the product

may involve business retrenchment

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17
Q

draw a labelled graph of a product life cycle

A

check online

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18
Q

extension strategy

A

Extension strategies refer to the techniques used by businesses to extend the life of a product beyond its natural life cycle
These strategies are designed to boost sales and maintain profitability for a product that has reached the decline stage of its life cycle

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19
Q

what are the two types of extension strategies?

A

Product-related extension strategies
Promotion-related extension strategies

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20
Q

what are product-related extension strategies?

A

Involves changing or modifying the product to make it more appealing to customers and extend its life cycle

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21
Q

three Product-related extension strategies

A
  • Product improvements e.g. Samsung releases new versions of its Galaxy Smartphone every year with upgraded features and improvements to the previous model
  • Line extensions e.g. Coca-Cola introduced Diet Coke and Coke Zero as line extensions of its original Coca- Cola
  • Repositioning e.g. when IBM’s personal computer division started losing market share to other brands, it repositioned its products as high-end business machines and focused on the enterprise market
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22
Q

Promotion-related extension strategies

A

Involves changing the marketing and promotion of the product to extend its life cycle

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23
Q

three Promotion-related extension strategies

A
  • Changes to advertising e.g Kellogg’s continues to recreate adverts for its Corn Flakes cereal which has been around since 1906
  • Price promotions e.g. Cyber Monday occurs on the first Monday after Thanksgiving in the USA and electronic firms discount prices significantly in order to boost sales of their products
  • Sales promotions e.g. many coffee shops offer a loyalty program where customers can earn a free drink for every six consumed
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24
Q

product differentiation

A

Product differentiation is an attempt by a business to distinguish its products from those of competitors

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25
Q

purpose of product differentiation?

A

The development of product differentiation often helps a firm to create a unique selling point for its product which can help the business to stand out from its competitors.

Successful product differentiation helps the business to increase demand for its products, increase brand loyalty, and allow the business to charge higher prices

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26
Q

two main types of pricing strategies

A
  • high profit margin, low volume
  • low profit margin, high volume
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27
Q

Price Skimming Strategy

A

The selling price is initially set as high as possible and then gradually lowered over a period of time. Mostly used when companies have a strongly established brand identity

28
Q

penetration pricing strategy

A

The business sets a low price for a new product/service when it is first introduced. Once they have enough customers, the business will start to raise the price

29
Q

Freemium Strategy

A

A pricing strategy which uses a free version of the product to promote a premium version. The free version often allows users to see advanced features but not access them unless they pay

30
Q

how does technology influence pricing?

A

you can probs waffle

31
Q

how does competition influence pricing?

A
  • may lead to reduced price
  • in order to remain competitive
32
Q

how can market segments influence pricing strategy?

A
  • do market research to figure out how much each segment is willing to pay (uni students probs need everything cheap, but middle-aged customers may want to indulge in premium products)
    • Mass Market: some products are sold in a mass market (e.g: coca cola). They usually have lower prices because the product is quite generic. Customers have a wide choice of products to buy.
    • Niche market: usually have higher prices as product is specific. Customers have barely any choice in which products to buy,
33
Q

Value Proposition

A

A simple statement that summarises why a customer would choose your product or service. It communicates the clearest benefit that customers receive by giving you their business

34
Q

5 promotional strategies:

A
  • advertising
  • branding
  • special offers
  • sponsorship
  • product trials
35
Q

what is advertising?

A

Promotion occurs through paid channels such as television, radio, print media (magazines), and online advertising

36
Q

advertising pros (2)

A

It can reach large audiences and increase brand awareness

Can also be used to create a specific brand image or message e.g. the advertising campaign run by Compare the Market (Meerkat)

37
Q

advertising cons (3)

A

Can be expensive

The effectiveness of advertising can be difficult to measure

Many customers tune out or ignore ads

38
Q

what is branding?

A

Branding is the process of creating a unique and identifiable name, design, symbol, or other feature that differentiates a product/service or company from its competitors

39
Q

branding pros (3)

A

Branding establishes recognition

Branding builds trust and credibility

Branding differentiates a business from its competitors

40
Q

branding cons (2)

A

Branding is expensive

Developing a strong brand takes time

41
Q

what are special offers?

A

These are temporary incentives or discounts such as free samples, buy one get one free (bogof), discount coupons, loyalty cards, and rebates (customers have to mail in to receive money back)

42
Q

pros of special offers (4)

A

Can quickly boost sales or customer engagement

Can help to clear out stock or promote a new product

Can encourage impulse purchases

Can be targeted to specific segments of customers

43
Q

cons of special offers (3)

A

Can be expensive especially if the promotion requires heavy discounting

Can attract deal-seeking customers who may not be loyal to the brand

May reduce the sales of full-priced products

44
Q

what is sponsorship?

A

This is an agreement in which a company provides financial or other support to an event, team, person, or organization in exchange for marketing exposure

Can take many forms, such as logo placement or naming rights (Arsenal Emirates Stadium)

45
Q

pros of sponsorship (3)

A

Can help to build brand awareness and credibility

Can create emotional connections with target audiences

Can support specific business objectives, such as entering new markets or reaching new customers

46
Q

cons of sponsorships (2)

A

Can be expensive, especially for high-profile events or properties

May be subject to negative publicity if the sponsored entity experiences a scandal or controversy e.g. In 2022 Kanye West was dropped by Adidas after his anti Semitic outbursts 🦧

47
Q

product trials

A

Product trials involve testing the market by first selling the product (for free) in a confined area such as South West London, to gauge demand and collect feedback on the product

48
Q

pros of product trials (1)

A

The customer reaction may generate information on how the product or marketing mix can be improved

49
Q

cons of product trials (2)

A

Product trials may not be suitable for all types of products

It takes time and money to run effective product trials

50
Q

what are the three technological techniques businesses are using for promotion

A
  • viral marketing
  • the use of social media
  • e-newsletters
51
Q

viral marketing for promotion

A

Is a strategy where businesses use online platforms to promote their products by creating content at specific times, which can easily be shared and commented on
E.g. During the COVID-19 pandemic, Coca-Cola and McDonald’s ran campaigns that emphasised community which aligned with the public’s need for social support

52
Q

social media for promotion

A

As social media platforms evolve, businesses must also adapt their social media strategies to keep up with the latest trends
E.g. Instagram has been a popular platform for businesses to promote their products through influencer partnerships
More recently many businesses have shifted their focus to promoting their brands through short-form video content on platforms like TikTok

53
Q

e-newsletters for promotion

A

Businesses build a mailing list which they then use to promote their products/services to
The business may need to offer an incentive for potential customers to give up their email address e.g. name entered into a monthly draw to receive £150 Amazon voucher
Once the business has a list they can use it to to repeatedly to promote products and to build a deeper connection with potential customers
However, the business must be careful of sending too many emails which may annoy the potential customers

54
Q

Distribution channels

A

Distribution channels refer to the various intermediaries through which goods/services move from the business to the end customer

55
Q

Three Stage Distribution Channel

A

The three stage distribution channel moves the product directly from the producer to the retailer who then sells to to the final customer

56
Q

when is the three stage distribution channel typically used? (1)

A

This channel is often used for products with high profit margins, where the manufacturer can afford to sell directly to the retailer and still make a profit
Eg Toshiba produces laptops and sells them directly to retailers like Currys, who then sells them to the end customer

57
Q

Two Stage Distribution Channel

A

The two stage distribution channel moves the product directly from the manufacturer to the end customer

58
Q

when is the two stage distribution channel typically used? (1)

A

This channel is commonly used for products that are sold online or through direct sales channels and is referred to as e-tailing
E.g. RyanAir sells its service (passenger tickets) directly to the end customer on their website

59
Q

drop-shipping

A

Once the business has sold the products, they are shipped directly from the producer to the customer

which allows the business to sell products without holding stock

60
Q

Defensible (product)

A

Defensible means that the business can prevent competitors from copying it

61
Q

added value

A

the difference between the price that is charged to the customer and the cost of inputs required to create the product or service.

62
Q

possible sources of competitive edge (6)

A

Quality e.g. Audi is well known for the exceptional quality of the finishing inside their cars
Delivery times e.g. Amazon Prime delivers products within 24 hours of ordering
Low Price e.g. Primark is considered to provide the best value/low price combination
Reliability e.g. Apple Macs have an excellent reputation for long life and reliability
Ethical stance e.g. Tony’s Chocolonely only uses cocoa in their chocolate which is 100% free of slave/child production
Design e.g. Dyson vacuum cleaners stand out from the crowd with their original design

63
Q

Integrated Marketing Mix

A

An integrated marketing mix is one which correctly combines each element in the best possible way

64
Q

mass market

A

when a product is targeted at a large demographic + high competition

65
Q

niche market

A

when a product is targeted at a small demographic + has barely any competition

business (11 decks)

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