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Business a level theme 1 > 1.3 Marketing mix and strategy > Flashcards

1.3 Marketing mix and strategy Flashcards

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1
Q

What does the design mix consist of

A
  1. Aesthetic
  2. Cost
  3. Function
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2
Q

What do each element of the design mix mean

A

Aesthetic- refers to the style and appearance of a product. About making it desirable

Function- refers to the benefits that a product or service provides. Includes how well a product meets a need.

Cost- Encapsulates all production costs of a product. Specifically cost per unit

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3
Q

How can products be designed to meet social trends

A

Products now in society are environmentally conscious which demands products that are sustainable

These could be:
- products designed for waste minimisation
- Products designed for re-use
- Products designed to be recycled
- Products sourced ethically (fair trade)

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4
Q

The drawbacks of product design (design mix)

A

Adapting any one of the elements of the design mix can have a detrimental impact on the other two. For example, reducing costs could mean poorer functionality or aesthetic look of the product

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5
Q

The benefits of adapting products to social trends

A
  • reducing waste helps businesses cut costs
  • Producing products align with social trends means they are more likely to sell large quantities
  • Social trends can be used as a USP to differentiate products
  • More likely seen with good CSR
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6
Q

Define above the line promotion

A

involves any form of advertising through the media such as:

-television
- radio
- billboards
- internet
- direct marketing (emails)
- newspapers
- cinema

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7
Q

Define below the line promotion

A

Includes all other forms of promotion that are not advertising like:

  • sales promotion (free gift, coupon)
  • public relations (press conference)
  • merchandising and packaging
  • personal selling
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8
Q

What is the impact of successful promotion

A

Can create awareness, understanding and a desire for the product

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9
Q

What are the influences on promotion

A

Target audience- a business must choose the right method and channel to reach the right people

Technology- helps a business narrow down its promotion to reach right people

The message- different messages may suit different types of promotion E.g public apology on website compared to new product launch on social media

Promotion budget- will determine which methods are available to the business

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10
Q

What is the purpose of an advert

A
  1. To inform customers
  2. Persuade customers to buy
  3. Remind customers about products
  4. Reassure customers
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11
Q

Define Brand

A

represents the characteristics and personality of a business

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12
Q

What are 4 ways to build a brand

A
  • exploiting a USP
  • advertising
  • sponsorship
  • using social media
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13
Q

What is the importance of branding

A
  • adds value to the product
  • builds trust
  • allows a premium price to be charged
  • makes a product recognisable
  • helps a business position itself in the market
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14
Q

What are the 3 types of brands

A
  1. manufacturers brands- e.g. kellogg’s
  2. own-label brands- e.g. Sainsbury’s crisps
  3. generic brands-e.g. carrots (don’t have a brand association)
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15
Q

How can businesses use social trends to build their brands

A
  • social media, can attract followers
  • viral marketing, sharing of images and videos can build brand awareness
  • emotional branding, associating their brands with things that consumers have strong emotional connections to. E.g. Sports teams
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16
Q

What can influence price

A

Costs

elements of the marketing mix- 7p’s must complement each other

branding- may add value

product life cycle- the stage it is in

competition

the price elasticity of demand

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17
Q

What are the 7 pricing strategies

A

dynamic pricing
penetration pricing
cost plus pricing
price skimming
predatory pricing
psychological pricing
competitive pricing

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18
Q

Define dynamic pricing

A

applied to products that price can fluctuate with the level of demand

E.g. hotel rooms

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19
Q

Define penetration pricing

A

applied to a new product attempting to enter the market

Initial price is low to undercut competitors

over time price may increase as demand grows

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20
Q

Define predatory pricing

A

Where the business sets a low price in order to price competitors out of the market

The business may make a loss for a period of time until the competitor fails to

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21
Q

Define competitive pricing

A

The business sets prices based on the nearest competitor

This helps avoid price wars

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22
Q

Define psychological pricing

A

The business bases the price below the next whole number to trick consumers into thinking that the price is lower

E.g £9.99 instead of £10

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23
Q

Define price skimming

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A

The business sets an initial high price for a new product when it is in high demand. The price will then fall overtime

24
Q

Define cost-plus pricing

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A

A business bases a price on the unit cost and then adds a percentage as a mark-up.

This strategy is effective as it considers the profit margin the business is willing to accept

25
What are some adaptations to reflect social trends
Auction sites- can allow consumers to gain best prices, but also encourages people to bid to not feel missed out Price comparison sites- These make it easy for customers to compare prices and choose the best deal Personalised pricing- technology and data allows businesses to target customers with a personal price Subscription pricing- charge customers a monthly fee to use a service
26
Define distribution
Refers to how the product gets to the customer
27
Who works in the distribution network
Agents or brokers Retailers Wholesalers Direct selling
28
Define agents or brokers
Agents link buyers and sellers together and operate in industries like insurance Agents have specialist knowledge
29
Define retailers
Provide customers with a specialist service and give customers the opportunity to browse, enjoy the shopping experience and get advice/support from employees
30
Define Wholesalers
Take bulk quantities from manufacturers and distribute them across a network of retailers
31
Define direct selling
This is when goods go straight from the producer to the consumer Mainly through e-commerce and online sales
32
What influences distribution
Scale- a product sold internationally may require distribution through an extensive network of wholesalers, agents and distribution companies Nature of the product- some products aren’t suitable to certain channels. E.G hard to ship flowers and delicate objects Control over promotion and pricing- a business may opt to use its own website or retail chain Expectations of customers- Do customers expect to access the product via multi-channels or one?
33
What does the value of digital marketing and e-commerce allow for
Allows small businesses to target a global audience Allows businesses to gather customer information easily Opportunities for personalisation and involving customers in the design of products Builds relationships through a more personal service by tracking buying habits targeting specific segments makes it easier for businesses
34
Ads of Online distribution for BUSINESSES
- don’t have to meet costs of operating retail stores - Lower start-up costs makes it easier for small businesses to launch - Businesses can take sales 24/7 - Transactions can take place in a secure online environment - Businesses can offer goods to a wider market
35
Ads of online distribution for CUSTOMERS
- Can shop 24/7 - Benefit from lower prices as businesses pass on lower costs - Comparison between brands is easier - Usually a wider choice available - Can see reviews of products and services before making decision
36
What are the stages of a product life cycle
Introduction Growth Maturity Saturation Decline
37
What happens in the first stage of the product life cycle
Introduction: -Price may be low to initiate sales - Heavy promotion to create awareness
38
What happens in the second stage of the product life cycle
Growth: - Price may increase with popularity - New distribution methods introduced - Must keep up with demand
39
What happens in the third stage of the product life cycle
Maturity: - Consider cutting prices to maintain demand - promotion slows as customers are aware of product - focus is on retention and repeat purchases
40
What happens in the fourth stage of the product life cycle
Saturation: - The market is full, all customers have the product and there is other better/cheaper alternatives -Price may be cut to maintain competitiveness
41
What happens in the fifth stage of the product life cycle
Decline: - Further price cuts to maintain demand - Business may consider discontinuing product if replacement can be introduced - EXTENSION STRATEGY may be introduced to boost new growth, E.G changing packaging
42
Ads and dis of product portfolio analysis
Ads: - Useful for businesses with wide product range - Useful for making decisions for where funds should be allocated Dis: - Products and markets are complicated so may not follow a pattern - Doesn’t provide a clear solution for a business
43
What are the 4 in the Boston matrix
Stars Cash cows Question marks Dogs
44
What does the star mean in Boston matrix
Has high market share and high market growth rate May be a leading brand in the market. Distribution must be effective to ensure product availability
45
What does cash cows mean in Boston matrix
Has a high market share but a low market growth rate Successful products in mature markets, can generate high revenues to reinvest into the business. Little promotion is required
46
What does the question mark mean in Boston matrix
Has Low market share but high market growth rate May be a fast growing market but not an established product yet Requires heavy investment to develop and ensure success due to lots of competition from rival brands
47
What does the Dog mean in Boston matrix
Has a Low market share and low market growth rate Business may invest to revitalise or discontinue the product
48
Define market strategy
A market strategy is a set of plans that aim to achieve a specific marketing objective E.G becoming market leader
49
What are some typical marketing objectives
Becoming market leader Building customer loyalty Improving brand recognition Increasing market share
50
What are the 4p’s
Place Promotion Product Price
51
How do businesses adapt the 4p’s in a mass market
Product- Find ways to differentiate products due to generic products Price- Competitor pricing due to products having similar price Promotion- Heavy advertising and promotion may be used to build a brand image Place- Multiple channels will be used to distribute and sell goods
52
How do businesses adapt the 4p’s in a niche market
Product- Important to communicate the differences in their product and the benefits of them Price- can offer premium pricing due to having a USP Promotion- Promotion is targeted using specialist media and direct methods Place- More likely to sell direct to customers or use a small number of selected channels
53
Define outbound marketing strategy
Includes any strategy that involves pushing a message out to customers
54
Define inbound marketing
Includes any technique that attracts potential customers to a website when they are looking for a particular service or product E.G search engine optimisation
55
Define hybrid strategies
Involve a combination of Outbound and inbound marketing. Inbound is more long term Outbound is more short term
56
Ways to develop customer loyalty
- Excellent customer service - Preferential treatment for returning customers - Good communication, keeping informed of new products - Customer incentives, E.G reward schemes/ money-off
57

Business a level theme 1 (5 decks)

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