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Howorth/Car > 1.3.1 > Flashcards

1.3.1 Flashcards

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1
Q

The core product

A

-What consumers want to get out of their product
-The reason why we want it

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2
Q

The actual Product

A

-The product itself- quantity, design
-The tangible, physical product

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3
Q

The Augmented Product

A

-Things that go along with the product e.g. garentees, branding
-Non-physical part of a product

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4
Q

The 4 most important features when creating an actual/augmented product are:

A

-Reliability-product must be fit for purpose
-Quality-must be at a certain standard
-Design-the size, colour, weight and shape should be attractive and appropriate to the product.
-Image-The product should create an image that appeals to the customer

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5
Q

The design mix refers to

A

The design mix refers to three aspects (price, function, aesthetics) of design that companies need to consider when developing a product.

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6
Q

Aesthetics is

A

-Appearance of the product, shape, smell, taste
-Includes packaging

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7
Q

Function is

A

-Does it do what it is meant to do
-Unique selling point
-Extra features

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8
Q

Cost is

A

-Do the economics makes sense
-needs to be economically viable
-should be able to produce and sell the product or service at a profit

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9
Q

Factors which may change the design mix due to social trends

A

-Waste management (e.g.less packaging)
-Design for reuse (products can be taken apart easily to repair or refuse)
-Design for recycling (increased recycling/ recycled materials used)

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10
Q

Resource depletion is

A

Resource depletion is the exhaustion of raw materials within a region.

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11
Q

Advantages of resource Depletion strategies

A

-you can save money through more efficient use of raw materials, packing and technology
-it allows you to cut your waste disposable costs
-compliant with environmental legislation becomes cheaper and more straight forward

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12
Q

Disadvantages of resource Depletion strategies

A

-businesses may need to redesign products and production methods
-sourcing of recycled materials can be difficult

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13
Q

Ethical souring

A

The business only uses materials, components and services from suppliers that respect the environment, treat their workforce well by paying then fair wages and providing a safe work environment, and generally trade with honestly

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14
Q

Pros of ethical sourcing

A

-used to market the business and build trust in brands
ethical produce is growing market, so can help atttract investors
-sourcing ethically helps motivate staff and promotes loyalty
-prevents future problems

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15
Q

Cons of ethical sourcing

A

-finding ethical suppliers and enforcing strict regulations can be time consuming, difficult to manage and costly
-production costs are increased
-need to balance profit margins with what consumers are prepared to pay

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16
Q

Factors influencing price

A

-Target market (if PED for the market is inelastic then a higher price can be set
-Competitors (monopoly can set the price but in high competitive markets firms have to keep price close to other firms)
-Customer expectations (most markets have a range of prices that cutworms expect products to fall into)
-Production costs
-Business objects

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17
Q

what is price skimming

A

Price from high to low

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18
Q

What is penetration pricing

A

Price from low to high

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19
Q

What is Prestige/premium pricing

A

Pricing at the high end of possible price range
(Rolex watch)

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20
Q

What is Price discrimination

A

Charging different customers different prices for the same product
(different customers are in different groups)

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21
Q

What is Cost Plus pricing

A

Is adding a mark up to the costs if the good/service to arrive at a selling point

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22
Q

What is Promotional pricing

A

Reducing price for a short period of time

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23
Q

What is going rate

A

Setting prices that are exactly in line with competitors prices

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24
Q

What is Psychological pricing

A

Businesses price products so that customers believe they are paying less
(99p)

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25
Brand is
A distinguishing symbol, mark, logo, name that companies use to distinguish their product from others in the market.
26
Brand experience is
A brand experience is a brand’s action perceived by a person
27
Brand equity is
The value of a brand
28
Brand extension is
Using an existing brand name on new product
29
The benefits of strong branding are
-added value -ability to charge premium prices -reduced price elasticity of demand
30
Ways to build a brand are
-unique selling points (USPs)/differentiation -advertising -sponsorship -the use of social media
31
Changes in branding and promotion to reflect social trends
-viral marketing -social media -emotional branding
32
Promotion is
The attempt, through various forms of media, to draw attention to a product and thereby gain and retain customers.
33
Above-the-line promotion is
what is generally called advertising. It is used to reach a mass audience.
34
Below-the-line promotion
targets consumers directly and are often used to support above-the-line promotion: personal selling, direct mailing, exhibitions and trade fairs.
35
Changes to Promotion because of social media are
-People watch less tv -People read fewer newspapers and magazines -More time is spent online -As a consequence, businesses now use emotional marketing, social media and viral marketing to promote their business
36
Distribution is
The process of getting the right product or service to the consumer in the right place
37
Channels of distribution are (definiton)
The paths business used to get the goods from the manufacturer to the consumer
38
The channels of distribution are (3)
1. Multi-channel (producer-wholesaler-retailer-consumer) 2. Single channel (producer-retailer-consumer) 3. Direct (producer-consumer)
39
Wholesalers
Take bulk quantities from manufacturers and distribute them to smart stores in a local area
40
Advantages of Wholesalers
-Wholesalers deal with storage of products -sells products on to smaller companies -employ sales teams to increase sales
41
Disadvantages of Wholesalers
-wholesalers will need to make a profit so final price is higher -business has less direct contact with the customer -need to rely on promotion by the wholesaler
42
Retailer are
A business or company that sells to the consumer directly. A retailer will buy goods from a manufacturer, distributor or wholesaler and sell them on to the cusotmer at a markup price
43
Retailer advantage
-Retailers are spread all over the country so sales can be increased -the retailer will display the products, creating an appropriate image and offering customer care
44
Retailer disadvantage
-retailers will build relationships with customer -competition between retailers may lead to lower prices for the product -rely on retailer to display and sell the product
45
Direct distribution is
Direct selling which means that the products are sold directly from the manufacturer to the customer. The growth of the internet has increased direct sales
46
Advantage of direct distribution
-full control of the sales process -since selling directly to consumer you get direct line of feedback
47
Disadvantage of direct distribution
-high costs- developing and managing a sales team is expensive -higher costs of distribution -difficult to grow the business quickly
48
Agents
-Sell the products and services for a return of commission -You will often find them working in service sector e.g. Tavel agents, insurance agents, music events
49
Aims of distribution (4)
1. To get its product to as many customers as possible 2. To issue the most cost-effective way to get its products 3. To make the product easily available to its customers 4. To highlight the exclusivity of the product by controlling distribution
50
Changes in distribution due to social trends are
-OIine distribution -Home delivery -Changing from product to services
51
E-commerce involves
The buying and selling of goods and services online. Including transactions between businesses carried out online
52
M-commerce involves
The buying and selling of goods and services online through a mobile device
53
What are the impacts of E-commerce
-Reduction of sales on the high street -Retailers specialised in e.g. CD's have been replaced -Retailer outlets are still relatively popular, e.g. clothing stores, but now offer multi-channel distribution -Supermarkets are offering online shopping and delivery
54
Multi-channel distribution is
-The use of several methods of distribution in order to maximise sales, profit, loyalty by giving customers choice and convenience
55
Pros of E-commerce
-Customers interact with the website and make purchases and leave important data about themselves -Computer ownership and usage are increasing in all countries of the world -Dynamic prices charging different prices to different consumers is easier -Selling products on the internet involves lower fixed costs than traditional retail stores
56
Cons of E-commerce
-Products returns may increase if consumers are dissatisfied with their purchase once they have been received -The websites must be kept up to date and user friendly good websites can be expensive to develop -The cost and unreliability of delivery services in some countries may reduce the cost average of internet selling -Increased risk of hacking and fraud -Competitors can see everything
57
A Product Portfolio
Analysis assesses the position of each product or brand in a firms portfolio to help determine the right marketing strategy for them
58
Advantages of wide product portfolio
-Targets new customers -Spread risks -Increases sales/profits -Can encourage customer loyalty as customers are more like to buy multiple products from same brand -Can earn higher market share -Can lead to greater brand awareness (as more products)
59
Disadvantages of wide product portfolio
-Increased advertising -Danger of cannibalisation -Lack of economics of scale -High costs in researching and developing so many products -Bad publicity for all products if one is bad -Promotion costs may be high as there are many products
60
A Marketing Strategy is
Is a coherent plan by a business to achieve its marketing objectives
61
Marketing Strategy involves
-Their Product portfolio -The Product life cycle/Boston Matrix -Whether to marketing to mass, niche and business customers -How to develop consumer loyalty -How much to spend on a marketing budget
62
The Product Life Cycle is
the length of time from a product first being introduced to consumers until it is removed from the market. Through the four stages, introduction, growth, maturity, and decline.
63
Introduction
-New product launched on the market -Likely to be a low level of sales – penetration pricing may help build customer demand -Low capacity utilisation & high unit costs -Usually negative cash flow -Distributors may be reluctant to take an unproven product -Heavy promotion to make consumers aware of the product
64
Growth
-Fast growing sales, helped by wider distribution -Rise in capacity utilisation – should lower unit costs -Product gains market acceptance -Cash flow may become positive -The market grows, profits rise but attracts the entry of new competitors
65
Maturity
-Slower sales growth as rivals enter the market = intense competition + fight for market share -High level of capacity utilisation -High profits for those with high market share -Cash flow should be strongly positive -Weaker competitors start to leave the market - Prices and profits fall
66
Decline
-Falling sales -Market saturation and/or competition -Decline in profits & weaker cash flows -More competitors leave the market -Decline in capacity utilisation – switch capacity to alternative products
67
Extension Strategies
Extension Strategies -Lowering the price -Changing promotion (e.g. new promotional message) -Changing the product - re-styling and product improvement -Looking for alternative distribution channels -Developing a new market segment -Find new uses for the product -Repositioning the product
68
Pros of the Product Life Cycle
-Helps the business to forecast sales -A business can adapt its strategies depending on the stages -Simple to use -Can be applied across a portfolio of products
69
Cons of the Product Life Cycle
-The shape and duration of the cycle varies from product to product -It is difficult to recognise exactly where a product is in its life cycle -Length cannot be reliably predicted -Decline is not inevitable -Not all products follow the product life cycle
70
What is the Boston Matrix
A model which helps businesses analyse their portfolio of businesses and brands Categories into one of the 4, cash cow, star, question mark/problem child and Dog
71
What is the cash cow
-Low growth -High market share (Monopoly Businesses) Cash cows are very profitable products with an established brand image Customers know and understand the product, and the company spends very little on advertising or product development Examples of such products would be the Ford Focus, Kellogg’s Corn Flakes and Cadbury’s Dairy Milk.
72
What is the star
-High growth -High market share The market may be somewhat immature, with new customers and new competitors. Competition is high – businesses are fighting for a share of potentially huge profits. Stars are products that have a high market share in a fast growing market. Star products have high levels of revenue, but also have high levels of costs. Advertising and marketing expenditure is high.
73
What is the question mark/problem child
-High growth -Low market share This is one of the worst situations for professional marketing people. They have a product in a fast growing market but the products are not selling. They are being beaten by the competition. They are failing, but it is likely to be worth doing something about it.
74
What is the Dog
-Low growth -Low market share Dogs have low market share in a mature market. It is not generally worth spending money on redeveloping, redesigning or advertising the products as it is unlikely to be recouped in increased revenue. Even so, dogs may still be marginally profitable.
75
Mass marketing is
Is a market strategy whose aim is to appeal to the largest portion of the market
76
A niche market is
Is a segment of a larger market that can be defined by its own unique needs, preferences, or identity that makes it different from the market at large
77
Business to Business Marketing (BSB)
Many businesses just deal with other businesses rather than consumers.
78
marketing mix
price place promotion product
79
marketing mix product
-changing consumer tastes -raw materials impacts on production -colours/aesthetics of product -red tape
80
marketing mix price
-local economies and impact on income / disposable income -development of a country and access to prices used
81
marketing mix place
-ways local / domestic consumers purchase -availability
82
marketing mix promotion
-images / colour -language -misunderstanding of cultures -not exploiting cultural difference

Howorth/Car (9 decks)

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