1.3 marketing mix and strategy Flashcards
(41 cards)
4 parts of the marketing mix
- promotion - advertsing
- product - features,quaility,branding,packaging
- place - channels, location, transport
- price - discounts, price,priceing strategies
3 parts of the design mix
function
aesthetic
costs
function - design mix
- intended purpose
- most important aspect of its design
- meet the needs of intended users
aesthetics - design mix
- visual and sensory appeal
- shape, colour, texture
- they create brand loyalty and recognition
2 social trends which change the design mix
- resource depletion - conserve natural resources and reduce waste.
re use/ minimal waste/ recycle/ more durable products - ethical sourcing concerns - products need to be produced WITHOUT exploitation of workers or environmental damage. companies should use sustainable materials and ensure there is no forced labour etc
types of promotion
advertising
direct marketing
sales promotions
personal selling
sponsorship
public relations
digital communications
3 types of branding
- manufacture / corporate branding - this is the companies name or logo which promotes all services or products sold by that company eg Nike/ Apple
- product branding - unique name, design, or symbol to promote a specific product eg KitKat/ Coca-Cola
- own branding - private label branding refers to the use of a retailer’s name to promote a specific product or service. often used by supermarkets E.g. ASDA chocolate, Tesco’s Finest range, and Sainsbury’s Basics range
pros and cons of manufacture / corporate branding
PROS
- strong brand recognition and reputation - brand loyalty and trust
- can introduce new products more easily
- helps build economies of scale by promoting multiple products under one brand which can reduce marketing costs etc
CONS
- reputation can be damaged easily - effect the whole business
- if the business faces competition it can effect all the products
pros and cons of product branding
PROS
- distinct product identity which can differentiation from competitors
- the company can make different segments of the product - coke zero/ diet coke
CONS
- £££ creating a new brand for each product
- the different products within the brand may have different qualities which can affect customer satisfaction
pros and cons of own branding
PROS
- retailors can differentiate themselves from their competitors - unique products
- lower costs which increases sales
- builds customer loyalty
CONS
- stereotypically own branding products are seen to be low quality
benefits of branding
- adds value - reliability, trust
- charge higher prices - well established brand
- reduced price elasticity of demand - because customers are loyal to the brand
steps to build a brand
- USP - eg apples premium quality
- advertising - create ads for emotional connection with audience. eg - cokes iconic ads ‘share the coke’ campaigns - share coke with your friends
- sponsorship - helps brands gain exposure. eg Nike sponsors high profile athletes in the Olympics and world cup
- social media - creates a community and awarness - glosier has lots of social media following - build a community
viral marketing, social media and emotional branding
- viral marketing - businesses use online platforms to promote their products
- social media - adapt their strategies to keep up with trends
- emotional branding - build strong emotional connections - values/beliefs and emotions eg Patagonia has built their brand around sustainability and ethical - built a community
price skimming
- when new innovative products are sold at HIGH prices
- consumers will pay more because the product has SCARCIRTY VALUE and the high price will BOOST ITS IMAGE for example computers and tech products
- prices then get dropped after a year or so
penetration pricing
- when new products enter the market at a LOW price to attract customers and gain market share
- its effective in markets that are price sensitive eg new food/washing powder
- works best for businesses that benefit from lower costs when manufacturing large quantities
- cons - customers like the low price so when the price gets risen lots of customers are lost. this can also damage brand image
- ## it can also be used as a pricing strategy to prolong a products lifecycle
cost plus pricing
- Calculating the total cost of producing a product and adding a fixed percentage (markup) to determine the selling price.
- eg A bakery calculates the cost of ingredients and labor for a cake is £5. They add a 50% markup (£2.50) and sell the cake for £7.50.
- simple easy, all costs are covered, doesnt consider demand or competitor pricing
predatory pricing
- Setting prices below cost to drive competitors out of the market, then raising prices once the competition is eliminated. It’s illegal in many countries.
- eg A large supermarket chain drastically lowers the price of milk below cost in a specific region to force smaller local shops out of business. Once they’re gone, the supermarket raises milk prices again.
competitive pricing
- Setting prices based on what competitors are charging for similar products or services.
- wo coffee shops located near each other both sell a regular latte for £3.
- focuses on market share and requires monitoring of competitive prices
psychological pricing
- Setting prices to influence customer perception and make products seem more appealing.
- A clothing store prices a shirt at £29.99 instead of £30, making it seem significantly cheaper.
- creates the illusion of a bargain.
factors that affect pricing decisions
- the marketing mix - during high promotion of a product its price may decrease
- price needs to cover the costs - in order to make profit
- price must be acceptable to customers - which depends how price sensitive the target market is
- the price elasticity of demand - depends on availability of substitutes, type of product and strength of brand
- stage in the product lifestyle its in
- price needs to be in line with the businesses objectives
- level of competition will affect the price
- strong USP - higher price because its highly differentiated
4 stage distribution channel
producer –> wholesaler –> retailor —> consumer
- eg groceries, clothing, electronics
3 stage distribiution channel
producer –> retailor —> consumer
- had no wholesaler bc the producer sells directly to retailor
- used for products with high demand where the cost of distribution is high
- used for products with high profit margins
2 stage distribution channels
producer –> consumer
- gets rid of wholesaler and retailor
- only really used for products sold online or through direct sale channels like Ryanair selling a passenger ticket on their website
