1.3 - marketing mix and strategies Flashcards
(44 cards)
define and state what the design mix is
function, aesthetic and cost
= meeting identified market needs
how might design impact cost
better deign = creates usp
- sets business apart from competition
- creates competitive advantage
- brand loyalty
- economies of sales
- minimum cost and retain quality
how do changes in the design mix reflect social trends
- concern over resource depletion
- relating to any finite sources
- need to ensure sustainability and ethical sourcing
if sources deplete prices will rise
what is ethical sourcing - explain any positives/negatives
= ensuring that the products being sourced are created in safe facilities by workers who are treated well and work in safe conditions, fair wage…
+ builds brand credibility
+loyalty from customers
- results in higher costs
what are advantages of branding
- enables business to reduce amount spent on promotion
- increased chance of repeat purchases
- easier to persuade retailers to stock product
what is individual branding
- powerful and distinctive
- brands aren’t associated together
- publicity disasters don’t impact other brands
e. g. coca-cola, sprite, malteasers
what is corporate branding
- adds credibility to individual brand names
- promotes an entity compared to specific products
what are benefits to strong branding
- added value - provides reassurance
- charge premium prices - increased profit margin, perceived better quality
- reduced price elasticity - brand loyal customers
what are ways to build a brand
- unique selling points - temporary benefit
- advertising - increased superiority of product
- sponsorship
- digital media - social platforms
what is viral marketing and explain any advantages of it
= business strategy that uses existing social networks to promote a product
+targeted at precise markets and taste of consumers
+provides interactivity
+success of crowdfunding sites gains interest
what is emotional branding
creating a bond between the consumer and product by providing an emotional response to the advertising - often creates brand loyalty
what is cost plus pricing
setting the price of a product or service by calculating the cost, then adding a % to it
you can either:
- add a profit margin
- add a % mark up on top of cost of making product
how is price important in the context of customer sensitivity
= usually balance out factors with price to take into consideration if they should buy the product:
- quality of the product
- how much they want the product
- consumer income
what is competitive pricing
- priced in line with competitors
- customers have to judge product or service on non pricing methods
explain PRICE SKIMMING
advantages and disadvantages
= product is priced high to begin with (due to novelty and desirability) = can be lowered later on ADV \+establish product as a 'must have' item \+want exclusivity = will pay high prices DIS - may put off consumers with high prices - may impact business image - early purchasers may become frustrated with price drop
explain PRICE PENETRATION
advantages and disadvantages
= setting prices lower in order to gain market share
= encourages sales and persuades them to try new product
= aimed at mass market
= will recover development costs, lowering average costs
ADV
+attract high sales volume
+buying in bulk lowers purchasing price
DIS
- may affect brand image
- gain distribution in retail outlets
- price sensitive customers
explain PREDATORY pricing
= setting prices low enough to drive competitors out of business
- sets barriers to entry
- if low price elasticity, lower price will have less of an effect
APPROACH ONLY WORKS IF
- predator is strong financially
- competition are weak financially
what is psychological pricing
making small adjustments to prices in order to make them appear cheaper or more appealing
what factors determine the pricing strategy
product differentiation
- resort to cost plus pricing,, needs usp
strength of brand
- obtain a high market share
- cost plus,, or skimming with new product launch
PED
- ideal for cost plus if low,, if high use competitive pricing
what is a loss leader
pricing a product below cost in order to attract further, more profitable business
- ensures that all profits contribute to the fixed costs of the business
what influences pricing strategies
technology
- production more efficient
- economies of sales
- lower average costs
competition
- little product differentiation
- similar prices
market segments
- NICHE = sold for premium prices
- MASS = similar, low prices to encourage sales
product life cycle
define distribution
the process of getting the right amount of a product or service to the consumer in the right place
what issues are there for retailers when stocking new products
opportunity cost - missing out on the next best alternative
risk - what if no one buys product/service
what is a distribution channel
chain of businesses through which a good or service passes until it reaches the end consumer
- can include wholesalers, retailers, distributors, the internet etc
