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Business Theme 1 > 1.3 - Marketing Mix & Strategy > Flashcards

1.3 - Marketing Mix & Strategy Flashcards

1
Q

What is the Product Life cycle

A

A theoretical model which describes the stages a product goes through over its life.

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2
Q

What are the 5 stages of the product life cycle

A 
Development 
Introduction 
Growth 
Maturity 
Decline
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3
Q

Development stage -

A

High investment in product development, promotion is used to alert customers of the launch

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4
Q

Introduction stage -

A

Sales are low, launch costs are high therefore negative cash flow

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5
Q

Growth stage -

A

Fast growing sales, costs are reducing via economies of scale, distribution is rising and cash flow becomes positive.

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6
Q

Maturity stage -

A

Slower sales growth as rivals enter market, price and profit fall to maintain competitiveness

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7
Q

Decline stage -

A

Falling in sales, decline in profits and weaker cash flow, no spending on promotion and prices cut to maintain sales.

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8
Q

What is an extension strategy?

A

Extending the products life cycle by: lowering prices, changing the product, develop new market segments

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9
Q

What is product portfolio analysis

A

It assesses the position of each product in a firms portfolio to help determine the right marketing strategy.

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10
Q

What is a portfolio

A

A collection of businesses or products that make up a business

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11
Q

What is the Boston Matrix

A

It compares the market share of a firms products to the market growth.

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12
Q

Question mark products -

A

These have a low market share of a rapidly growing market, have potential to grow.

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13
Q

Shooting star products -

A

A high market share of a rapidly growing market. This requires high market spending

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14
Q

Cash cow products -

A

High market share of a slowly growing market, maturity stage of product life cycle

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15
Q

Dying dog product -

A

Low market share of a slowly growing market, no potential or at the decline stage of product life cycle.

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16
Q

Function -

A

The way the product works, does it do what it’s supposed to do? Is the product reliable?

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17
Q

Aesthetics -

A

How the products appeals to the customer in terms of looks, feels.

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18
Q

Economic manufacture -

A

Does the design allow the product to be made and sold profitably? How much value is added during the production process.

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19
Q

What is sustainability ?

A

Sourcing inputs that are not supplied by damaging the environment. E.g. Minimising waste in production, enabling recycling

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20
Q

Define Brand

A

A product that is easily distinguished from other products so that it can be easily communicated and effectively marketed.

21
Q

Different types of brand (5)

A 
Product 
Service 
Family 
Corporate
Own label
22
Q

Product brand -

A

Brands associated with specific products

23
Q

Service brand -

A

Brands that add perceived value to service, either delivered face to face or via online

24
Q

Family brands -

A

Brands that are assigned to more than one product. Makes different product lines easily identifiable by the consumer by grouping them under one brand name.

25
Q

Corporate brand -

A

Refers to the practice of promoting the brand name of a corporate entity, as opposed to specific products or services.

26
Q

Own label brand -

A

An example of corporate branding when retain outlets assign their corporate branding to a range of goods and services

27
Q

What is brand extension

A

Where a business uses a brand name on a new product that has some of the brands characteristics

28
Q

What is brand stretching

A

Where the brand is used for a diverse rand of products, not necessarily connected

29
Q

Main elements of the promotional mix :

A
  • advertising
  • sales promotion
  • sponsorship
  • direct marketing
30
Q

Key factors influencing promotional decisions :

A
  • stage in life cycle
  • nature of the product
  • competition
  • budgets
  • target market
31
Q

Price takers

A

They have no option but to charge the ruling price to stay in the market

32
Q

Price makers -

A

Able to fix their own price

33
Q

Price leaders -

A

Market leaders while price changes are followed by rivals

34
Q

Price followers -

A

Follow changing prices from the market leader

35
Q

What are the pricing strategies ( 4)

A
  • price skimming
  • predatory pricing
  • penetration
  • psychological
36
Q

Price skimming -

A

Set a high price to maximise profit, used to achieve which recovery of development costs.

37
Q

Penetration pricing -

A

Offer a product at a low introductory price, can be increased once target market is reached

38
Q

Predatory pricing -

A

Pricing low enough to drive rivals out of business

39
Q

Psychological pricing -

A

Getting into the customers brain to try and attract them e.g. 99p (rather than £1)

40
Q

What is Hook and Bait

A

Selling products at a low price however vital products needed for the original product to work have high prices.

41
Q

Cost plus -

A

Calculating the production costs per unit and adding a percentage mark up that reflects the profit levels.

42
Q

What is mark up ?

A

The difference between the cost of good or service and it’s selling price.

43
Q

What is a distribution channel ?

A

It moves a product through the stages from production to the final consumption.

44
Q

What is a retailer

A

It is the final step of the chain - they deal directly with the customers

45
Q

Who are wholesalers ?

A

They break bulk, buy in large quantities from the producers an break into smaller quantities to sell to the retailers.

46
Q

Direct distribution :

A

The channel where a producer and consumer deal directly with each other

47
Q

Indirect distribution ?

A

Involves the use of intermediaries between the consumer and producer.

48
Q

All the stages of distribution are : (4)

A
  • producer
  • wholesaler
  • retailer
  • customer

Business Theme 1 (5 decks)

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