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Business > 1.3 - Marketing Risk and Strategy > Flashcards

1.3 - Marketing Risk and Strategy Flashcards

(52 cards)

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1
Q

Three factors of the design mix

A
  1. Function
  2. Cost
  3. Appearance/aesthetics
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2
Q

Function

A
  • Fit for purpose —> offer long warranties shows confidence
  • Easy and convenient
  • Ergonomically designed
  • Superior (USP)
  • Safe
  • Reliable
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3
Q

Aesthetics

A

Relates to appearance of a product, e.g. user friendly or luxury cars fuel economy

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4
Q

Design Mix

A

Combination of factors needed in designing a product/considers

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5
Q

Cost (DM)

A
  • Well designed = economically viable
  • Select materials and processes to minimise costs
  • Often reach compromise
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6
Q

Promotion

A

The way in which a b makes customers aware of the brand/business

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7
Q

Above the line promotion

A
  • Advertising in the media
  • Informative advertising
  • Persuasive advertising
  • Reassuring advertising
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8
Q

Informative advertising

A

Designed to raise consumer awareness, give info about features

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9
Q

Persuasive advertising

A

Put pressure on consumers, convince them over comp

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10
Q

Reassuring advertising

A

Aimed at existing customers, ‘right’ to buy and continue to do so

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11
Q

Below the line promotion

A

Advertising that doesn’t use media

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12
Q

Below the line promotion examples

A
  • Direct mailing and selling
  • Exhibition and trade fairs
  • Merchandise and packaging
  • PR
  • Sales promotions
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13
Q

Factors considered when choosing methods of promotions

A
  • Cost
  • Market type
  • Product type
  • Stage
  • Competitors promotions
  • Legal
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14
Q

Marketing mix

A

A plan for using the right blend of 4P in order to maximise sales

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15
Q

Brand

A

Symbol, logo or design that is recognisable and distinguishable

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16
Q

Types of branding

A

Manufacturer (created by producer)
Own label distributor or private labels (for wholesalers or retailers by other b)
Generic —> only contain name of prod category (carrots)

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17
Q

Social trends

A

Changing patterns in consumer behaviour reflected in changing demands

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18
Q

Benefits of strong branding

A
  • Add value
  • Charge prem price
  • Reduce PED
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19
Q

Cost plus

A

Cost-based method calculated by adding a mark-up % to the cost of the prod

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20
Q

Price skimming

A

Setting a high price at launch, to gain money back from R&D, and to take +ve of those wanting to be first to purchase. Lower it later, tech usually

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21
Q

Penetration pricing

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A

Set low price initially and accept limited short term profits/loss in order to build market share before switching

22
Q

Predatory pricing (illegal)

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A

Set low price forcing rivals out of the market

23
Q

Competitive pricing

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A

When a business sets a price similar to competitors selling similar/rivals

24
Q

Psychological pricing

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A

Setting a price slightly below a round figure

25
Changes in pricing to reflect social trends
- Personalized pricing - Price comparison sites - Subscriptions - Dynamic pricing (last min)
26
Distribution channel
Methods used by b to get their prods from manufacture to consumer
27
Some examples of distribution channels
- Consumers - Retailer —> consumers - Wholesalers —> retailers —> consumers - Agents/brokers —> wholesaler —> retailers —> consumers
28
Intermediaries
Who acts as a link between parties to a business deal, investment decision or negotiation
29
Direct selling
Selling directly to consumers
30
Advantages of direct selling
Saves intermediary costs
31
Retailers
Buy goods and sell to customers. Buy in bulk from manufacturers and wholesalers and sell in small amounts. Convenient locations, e.g. supermarkets, department stores, superstores
32
Wholesalers
A business that buys goods from manufacturers and sells them in smaller quantities to retailers
33
Agents or brokers
An intermediary that brings together buyers and sellers
34
Positives of online distribution
- Cheaper - Can shop 24/7 - Large choice - Shop anywhere
35
Drawbacks of online distribution
- Lots of comp - Tech issues - Security risks - Customers can’t physically see prod - Poor after sales service - Exclusion of some customers - People aren’t always available for delivery
36
Benefits to businesses of online distribution
- Less costs than operating stores - Lower start up costs - Less paper needed (invoice/receipts - Wider market - More choice where to locate
37
Different stages of the product life cycle
1. Development 2. Introduction 3. Growth 4. Maturity 5. Saturation 6. Decline
38
Development
R&D. Most fail here, b reluctant to take risks. High costs. NO SALES
39
Introduction
Launch. Initially slow sales. Costs occur —> new production line and plants. Promotion. Price high to cover promotion costs BUT low to break market
40
Growth
Sales grow rapidly. New customers and repeat purchase. Unit costs fall as production increase. Product becomes profitable. Comp launch own version
41
Maturity and saturation
Growth levels. More established and stable market share. More firms enter some forced out. Extension strategies
42
Decline
Sales eventually decline. Lose appeal. Withdrawn or sold to another b. Little spent on promo or other costs
43
Advantage of extension strategies
Cheaper than product development
44
Boston matrix
Product portfolio matrix developed by the Boston consulting group. Categorises stage of life cycle of products according to market growth and relative market share. Help manage
45
Disadvantage of Boston matrix
Hard to tell what stage of the life cycle it is at
46
Rising star
- High market growth high market share - Valuable and very profitable - B needs to invest to cope with growing market and competition - Cash flow nearly 0
47
Cash cow
- High market share low market growth —> little chance of increasing sales - Still quite profitable little need for invest - Positive net cash flow
48
?
- Aka problem child - Low market share high market growth - Unclear - Potential to turn into star - Net cash flow 0 or -ve - Investment needed
49
Dog
- Low market share low market growth - Poor future prospects - May gen some +ve net cash flow - Little need for investments
50
Outbound marketing strategies
Involves directing marketing materials at potential customers expecting it or not
51
Hybrid marketing strategies
Combine both inbound and outbound
52
What are different ways a b can develop customer loyalty?
- Communication - Customer service - Customer incentives - Personalisation - Preferential treatment

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