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Business > 1.3 > Flashcards

1.3 Flashcards

1
Q

What is the design mix?

Three elements?

A

The way in which all aspects of the product design are considered so that the product will match every customer requirement.

Function
Aesthetics
Cost

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2
Q

What are social trends?

A social trend that affects demand?

A

The way society as a whole behaves and the value that determine that behaviour

Sustainability

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3
Q

What is branding?

A

Creating a positive and recognisable image of the product or service in the mind of the consumer

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4
Q

Types of promotion?

A 
Advertising
Sales offers
Digital
Sponsorship
Direct sales
Public relations (PR)
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5
Q

What is product branding?

A

A single product that is recognised by that name e.g. jacuzzi

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6
Q

What is multiple branding?

A

A business uses a range of different brand names for its product

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7
Q

What is umbrella branding?

A

A business that uses the same brand name for a range of different but related products e.g. Hoover

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8
Q

What is corporate branding?

A

The name of the business is the brand e.g. Microsoft

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9
Q

What is own label branding?

A

Common amongst supermarkets to compete with ‘name’ brands e.g. Waitrose essentials

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10
Q

What is personal branding?

A

Individuals who have become their own brand e.g. Stella McCartney

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11
Q

What is a USP?

A

Distinctive features that no competing product can match precisely

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12
Q

Advantages of using social media for advertising?

A

Inexpensive
Can be informative
Can be persuasive
Good way to seek new or improved products to existing products
Provides instant feedback for the business

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13
Q

What is viral marketing?

A

Describes any strategy that encourages individuals to pass on a marketing message to someone else e.g. YouTube

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14
Q

What is emotional branding?

A

The creation of brands that appeal to a consumers emotional nature their logjam side

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15
Q

What are pricing strategies?

A

A range of ways in which a business might decide on the price of its product/service

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16
Q

What is cost plus pricing?

Advantages and disadvantages?

A

Adding a certain percentage to the average total cost of the product e.g. 10% which would be a 10% mark up.

Easy and simple to calculate and ensures a profit.

Does not consider whether the consumer is willing to buy at that price or the prices charged by competing suppliers

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17
Q

What is premium pricing?

Advantages and disadvantages?

A

The ability to charge a higher price than competition without losing sales

Increases profitability

Only successful if a product is perceived as better quality than rival products

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18
Q

What is price skimming?

Advantages and disadvantages?

A

Means charging a very high initial price for the product.

Profit is maximised while initial demand is at its highest

Usually short lived rival products soon appear and the demand for and price of the original product falls

19
Q

What is competitive pricing?

Advantages and disadvantages?

A

Charging about the same as, or a little less than, the prices of competing products

Useful in markets where there are many substitutes

Rescue to raise prices as sales may fall as customers switch to a cheaper rival products

20
Q

What is penetration pricing?

Advantages and disadvantages?

A

A lower price than the competition is set to try and persuade customers of existing products to give the new product to try in an attempt to penetrate the market and gain share

If PED is elastic, sakes & customers gained and may remain loyal

Reduces profitability in the short run, no guarantee that customers will stay loyal

21
Q

What is psychological pricing?

Advantages and disadvantages?

A

Makes price seem more attractive than it is e.g. £9.99 instead of £10

Best when consumer is looking for value for money

High end products avoid this to reinforce their customers expectations of high quality

22
Q

What is predatory pricing?

Advantages and disadvantages?

A

A dominant business sets a very low price, even below costs, to destroy competition

Can be effective

It’s illegal

23
Q

What to consider when choosing the best pricing strategy?

A 
Number of USPS or amount of differentiation
PED
Level of competition 
Strength of brand
Stage in product life cycle
Costs and the need to make a profit
24
Q

What is a distribution channel?

A

The route taken by the product as it moves from the producer to the customer

25
Q

Four stage distribution channel?

Three stage distribution channel?

Two stage distribution channel?

A

Producer ➡️ wholesaler ➡️ retailer ➡️ customer

Producer ➡️ retailer ➡️ customer

Producer ➡️ customer

26
Q

What is the product life cycle?

Stages?

A

Shows the different stages a product passes through.

Development
Introduction
Growth
Maturity
Decline
27
Q

Development

Impact on cash flow?

Impact on marketing mix?

A

Research and development and high levels of investment with zero sales means negative cash flow

Limited promotion to alert retailers and consumers prior to launch

28
Q

Introduction

Impact on cash flow?

Impact on marketing mix?

A

Still negative cash flow as low initial sales do not outweigh high costs

Heavy promotion to create awareness

29
Q

Growth

Impact on cash flow?

Impact on marketing mix?

A

Sales grow, promotional costs still high but cash flow should be positive

Promotion may change emphasis to building brand loyalty; prices may rise to premium level or fall to match competition and secure a mass market

30
Q

Maturity

Impact on cash flow?

Impact on marketing mix?

A

Cash flow should be maximised as sales begin to peak; average costs fall as rising production levels reduce costs

Promotion may ease as brand becomes established with occasional bursts to maintain sales or differentiate from rival products

31
Q

Decline

Impact on cash flow?

Impact on marketing mix?

A

Sales will fall but cash flow may remain positive as costs are low

Little promotion, price is likely to fall to maintain some sales until product reaches the end of its life

32
Q

What is an extension strategy?

A

Used when sales are slowing to increase sales by relaunching the product either new image or aiming at a different market segment or promoting it in new ways

33
Q

What is the Boston matrix?

A

A method of analysing a company’s products in terms of their market share and growth potential

34
Q

What are stars?

A

Products which have a significant market share of a fast growing market

35
Q

What are problem children/question marks?

A

Products that have a small share of a fast growing market but have potential for faster growth in the future. Need to be promoted and adapted to fit requirements more closely

36
Q

What are cash cows?

A

Products that have a large share of a slow growing or static market and are selling well. May be the cash cows of the future

37
Q

What are dogs?

A

Products that have a low market share of a low growth market. Usually best to discontinue production, unless they can be repositioned.

38
Q

What are marketing objectives?

What are marketing strategies?

A

Objectives - longer term marketing goals that a business is trying to reach

Strategies - used in order to meet the marketing objectives set by the business

39
Q

Mass marketing strategy?

Target markets?

Methods used?

A

Aims to reach a large number of people.

Aims to attract all kinds of buyers often with a standardised, heavily promoted product.

Price and promotion.

40
Q

Niche marketing strategy?

Target markets?

Methods used?

A

Product is carefully differentiated and specifically aimed at the niche market segment

Focuses on a specific segment that is likely to respond positively to their product or service

Must reach niche market precisely using specialist publications, websites or social media groups

41
Q

Business to business marketing strategy?

Target markets?

Methods used?

A

Refers to selling products or services to other businesses.

Aimed at individuals who acts as buyers for their organisations and purchase products or services to use in their companies

Price is important. Product must be of quality and able to deliver on time or guarantee future supplies

42
Q

Business to consumer marketing strategy?

Target markets?

Methods used?

A

Involves selling directly to customers who are buying products or services for personal use.

Target market may the general public but likely to be a specific market segment where buyers are located in many different places

Advertising using press, magazines, websites, distributed catalogues or cold calling. Not TV

43
Q

How to develop customer loyalty?

A

Customer service
Loyalty cards and saver schemes
Promotion
Strong brand image

Business (15 decks)

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