1.3 -marketing mix and strategy

Question 1

what are teh 4 key components of a marketing mix

Answer 1

the 4P’s
design of PRODUCT
PROMOTION and branding techniques
PRICING strategy
PLACE in which product is sold or type of distribution

Question 2

what does the design mix include

Answer 2

function- fit for purpose
aesthetic- good look
cost- not too costly

Question 3

how can changing social trends influene the design mix

Answer 3

businesses may need to alter the aesthetics or function of their products in relation to social trends
consumers concerned about overuse of resources and want to minimise waste so a business could make their process more efficient
raw materials ethically sourced

Question 4

what is the importance of promotion

Answer 4

designed to inform consumers about a product or persuade them to buy it
objectives include increasing sales and profits and increasing awareness of the product

Question 5

why do businesses advertise through meia

Answer 5

sdverts are used to promote goods and promote a firms public image
choice of media depends on target audience
digital communications used by many businesses- often cheaper
however customers often exposed to large number of digital ads so may ignore them

Question 6

what other promotions are there

Answer 6

sales promotions- special offers, bogof
direct marketing- sent through post
personal selling- communication between sales person and customer
event sponsorship- making customers aware of a firm an its products
public relations (PR)- involves liaising with the media, setting up tv interviews and organising product launches, conferences and other special events

Question 7

what is branding

Answer 7

creates a clear and obvious logo, name or statement- customers will instantly recognise

Question 8

what is product branding

Answer 8

• relates to specific individual products that a corporate brand makes
• individual product will have its own logo and slogan but will also often have corporate brand included in its packaging
• branded products usually have expensive amrketing so they usually have higher retail price
• many customers are willing to pay if they are buying a trusted product

Question 9

what is own branding

Answer 9

largely brands that are in house to a supermarket or retailer
- unlikely that large budgets have been spent on teh branding of these products- dont have distinctive logo or slogan - cheaper to produce

Question 10

what is rebranding

Answer 10

a marketing strategy that can involve a change in design, promotion or pricing or distribution of an existing brand
can also be used to create a new identity when a brand name is no longer suitable

Question 11

what benefits does strong branding have

Answer 11

to add value to its product
consumer perceives the product be of higher quality or more desirable than any substitutes and is prepared to pay a premium price
can create a barrier so it is harder for new comers to enter the market

Question 12

how can u build a brand

Answer 12

USP- unique selling point- clear usp will help consumers with product differentiation which may convince them to buy one brand over another
advertising is used to promote and maintain customer awareness of a brand
sponsorship is widely used in certain competitive market

Question 13

what is viral markeeting

Answer 13

involves platforms such as youtibe instagram facebook snapchat

Question 14

what is emotional branding

Answer 14

helps to engage cusomters
if the branding of a product is matched to the lifestyle, values or aspirations of consumers to trigger an emotional response so that they buy the product

Question 15

what are factors that affect pricing decisions

Answer 15

• all the other P’s in the marketing mix
• price is often set ot cover cost and making profit
• msut be acceptable to customers
• price elasticity of demand influences the pricing of a product
• stage of lifecycle that product is in
• price has to be in line with business objectives
• level of comeptition in market
• product with a strong usp will be able to command higher price

Question 16

pricing strategies

Answer 16

price skimming- sold high initially, then prices are dropped considerably when teh product has been on the market for a year or so
penetration pricing- launching product at low price in order to attract customers and gain market share, problem with this is that customers may expect the low price to conrinue. can be used as an extension strategy to prolong a products life
cost plus pricing- when a firm adds a % of markup to the costs of making or buying a single prodcut
predatory pricing- when business deliberately lowers price to force another business out of the market, once competitor has gone, it will raise its price again
competitive pricing- business monitor competitors prices to make sure their own prices are set equal or lower
psychological pricing- bases price on customer expectations- high price may think its really high quality

Question 17

how can changes in social trends affect pricing strategies

Answer 17

customers increasingly using online retailers- need to be more price competitve- cheaoest online retailer usually achieve the sale
use of price comparison sites increasing

Question 18

what is distribution

Answer 18

route a product takes from the producer to the consumer

Question 19

what are retailers

Answer 19

shops who sell to consumers

Question 20

what are wholesalers

Answer 20

make life easier for retailers and manufacturers
they buy goods from manufacturers in bulk and sell them in smaller quantities to retailers - breaking bulk

Question 21

what are agents

Answer 21

sell products to consumers on behalf of businesses
they are often paid commission for the products that they sell

Question 22

what are the different channels of distribution

Answer 22

direct selling ( 2 stag channel)- manufacturer- consumer
indirect selling ( 3 stage channel)- manufacturer- retailer- consumer
indirect selling ( 4 stage channel)- manufacturer- wholesaler- retailer- consumer

Question 23

what is multichannel distribution

Answer 23

when businesses sell through more than one method e.g. online and in store
may have added cpsts but allows them to target a wider market

Question 24

what is online distribution

Answer 24

streaming, or downloading of media content via the internet
consumer is purchasing the right to download the media content as opposed to bying the good - purchasing service instead of physical product

Question 25

what is a product lifecycle

Answer 25

shows the sales of a product ovetime
- its valuable for planning marketing strategies and has implications for cashflow
- marketing decisions will be based on where a product is its lifecycle

Question 26

stages of a product lifecycle

Answer 26

development- the research and development deoartment develop to product
marketing department does market research
costs are high and arentany sales yet to cover the costs
development has a high failure rate, becuase often not enough demand
introduction- product launched either in one market or several markets, somtimes launched with complementary products
business often promotes the product heavily to increase sales
initial price may be high to cover promotional costs- price skimming
price can start low to encourage sales- pemetration pricing
sales go up but sales revenue has to pay for the high fixed cost of development before the product can make profit
competition may be limited
growth- sales grow fast. new customers and repeat customers
competitors may be attracted to the market
product is often improved or developed and may be targeted at a different market segment
rising sales encourage more outlet to stock the product
maturity- sales reach a peak and profitability increases because fixed costs of development have been paid for
when market has reached maximum growth sales amy begin to drop depending on teh product
price often reduced to try stimulate demand
arent many new customers
decline- product doesnt appeal to customers any more, sales fall rapidly and profit decreases
if sales carry on falling product is withdrawn or sold to another business

Question 27

what are extension strategies

Answer 27

used to improve sales of products that are starting to decline
product development involves business improving or redisgning a product
business can change the way it promotes a product

Question 28

why should a business have a mixed product portfolio

Answer 28

• variety of products
• a business aim to have a produt portfolio that contains a variety of different products at different stages of the life cycle that way if one product fails, the business could still be able t depend on others

Question 29

what is the boston matrix

Answer 29

compares market growth with market share
each circle in the matrix represents one product
size of each circle represents the sales revenue of each product
shows where a business’s products are positioned in the market which then dictate a businesses decisions
- all new products are question marks
small market share and high market growth, arent profitable yet
- cash cows
high merket shae, low market groeth
in maturity phase - they have already been prmotoed and theyve produced in high volumes so costs are low
cash cows bring in plenty of money
- stars
have high market share and growth
in their profitabke growth phase and have most potential
future cash cows
spend a lot on promoting their product to keep the market share
- dogs
low market share and growth
if still profitable but no longer growing, business will harvest profit in the short term
if the product is no longer making a profit, it can be sold off

Question 30

what is a mass marketing strategy

Answer 30

appeal to wide market instead of individual market segments
mass markets tend to be dominated by competing products so businesses may need to promote their produxts in certain ways to stay competitive:
- expensive advertising campaigns
- sponsorship and product endorsement deals
- promotional activities- percentage discounts
- customer loyalty cards and saver schemes

Question 31

what is a niche marketing strategy

Answer 31

creating product that is differentiated and unique compared to what is available in a mass market
developpment of usp is key
business needs to have done effective market research into understanding customer needs
businesses operating in niche markets need to find more cost effective ways of raising awareness as they dont have big budgets to spend on expensive advertising campaigns
theyre market size is smaller so they will concentrate more on their reputation nd establishing customer loyalty - loyalty schemes
pricing strategy used in niche markets depend on the products

Question 32

what is B2B marketing

Answer 32

business to business
sale of one business product to another business
does need to focus on emotional component instead on focus on being more informative than B2C marketing
rarely uses traditional advertising
trade journals and trade shows are more likely to be used to advertise the products
B2B customers more interested in the quality of the product but more concerned with any cost savings or potential revenue as tehy dont have emotional interest in the product
much stronger emphasis in building a long term relationship between the 2 businesses and ahving highly effective customer service compared to B2C msrketing

Question 33

what is B2C

Answer 33

business to consumer
sale of a business product to the consumer

Question 34

why is customer loyalty important

Answer 34

strong customer service both before and after sales is key aspect to building strong brand and customre loyalty- it creates good relationships with customers and may lead to repeated purchases
salespeople try to make customers feel happy so they’re more likely to make a sale
after sales service is also important to customers, so they can get help and advice with any problems
more expensive the brand, the more a business will invest in a strong customer service