2.2 Flashcards

1
Q

What does the marketing mix, often represented by the 4Ps, provide for businesses?

A

The marketing mix provides a framework for businesses to create and implement successful marketing strategies

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2
Q

Q: What are the key elements of a marketing strategy according to the 4Ps?

A

A: The 4Ps represent the key elements: Product, Price, Place, and Promotion.

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3
Q

What does the product design mix refer to?

A

A: The product design mix refers to the combination of elements that make up a product’s design, including function, aesthetics, and cost.

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4
Q

Q: What are the two main types of products?

A

A: Products can be tangible goods (physical items) or intangible services (something the customer pays for but cannot necessarily touch

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5
Q

: Why is it important to balance the elements of function, aesthetics, and cost in product design?

A

A: Balancing these elements helps the product to be both functional and attractive, while also being cost-effective for both the manufacturer and the consumer.

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6
Q

What does the function of a product refer to?

A

A: The function of a product refers to its intended purpose and the specific tasks it is designed to perform.

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7
Q

Q: What do aesthetics refer to in product design?

A

A: Aesthetics refer to the product’s visual and sensory appeal, including its form, shape, color, and texture.

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8
Q

Why is the cost of production important in product design?

A

A: The cost of production must be considered as it directly affects the price point at which the product can be sold.

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9
Q

Q: What are the typical stages in the product life cycle?

A

A: The typical stages are development, introduction, growth, maturity, and decline.

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10
Q

What are the implications for cash flow and marketing at each stage of the product life cycle?

A

A: The implications vary at each stage of the product life cycle, and companies should tailor their marketing strategies and manage their cash flow for long-term profitability.

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11
Q

What are the five stages in the product life cycle?

A

A: The five stages are Development, Introduction, Growth, Maturity, and Decline.

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12
Q

What characterizes the Development stage of the product life cycle?

A

A: The focus is on designing and developing the product. Cash flow is usually negative due to high costs, and marketing aims to create awareness and interest.

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13
Q

What characterizes the Introduction stage of the product life cycle?

A

A: The stage begins with the product launch, characterized by slow sales growth and negative cash flow. Marketing efforts focus on creating awareness and generating interest.

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14
Q

What characterizes the Growth stage of the product life cycle?

A

A: Sales increase rapidly, cash flow turns positive, and marketing focuses on building market share and brand loyalty.

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15
Q

Q: What characterizes the Maturity stage of the product life cycle?

A

A: Sales growth slows, cash flow is positive, and marketing aims to maintain market share and increase profitability through cost-cutting and finding new markets.

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16
Q

Q: What characterizes the Decline stage of the product life cycle?

A

A: Sales decline, cash flow turns negative, and the focus shifts to managing the decline by reducing costs. The marketing strategy may involve discontinuation, price reduction, or finding new uses for the product.

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17
Q

What are extension strategies in the context of the product life cycle?

A

A: Extension strategies are techniques used by businesses to extend the life of a product beyond its natural life cycle, including product-related and promotion-related strategies.

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18
Q

Q: What are the two types of extension strategies?

A

A: The two types are product-related extension strategies (modifying the product) and promotion-related extension strategies (changing marketing and promotion).

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19
Q

What is the purpose of product differentiation for a business?

A

A: Product differentiation is an attempt to distinguish products from competitors, create a unique selling point, develop a competitive advantage, increase demand, boost brand loyalty, and enable the business to charge higher prices.

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20
Q

Q: Can you provide examples of successful product differentiation?

A

A: Examples include Hyundai offering a three-year warranty when the industry standard was one year and Green & Black using Fairtrade cocoa and sugar in their chocolate production.

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21
Q

What are the two main pricing strategy options businesses usually focus on?

A

A: Businesses usually focus on high profit margin, lower volume pricing strategies (price skimming strategy) or lower profit margin, higher volume strategies (penetration pricing strategy).

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22
Q

Q: What factors should businesses consider when choosing a pricing strategy?

A

A: Businesses should consider the number of Unique Selling Propositions (USPs), technology, level of competition, strength of the brand, stage in the product life cycle, costs, and the need to make a profit.

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23
Q

Q: How has technology influenced pricing strategies?

A

Q: How has technology influenced pricing strategies?

A: Technology has led to new pricing strategies, such as freemium models. For example, Candy Crush Saga offers a free initial game and charges for additional features, generating a high profit margin

24
Q

How does competition influence pricing strategies in highly competitive markets?

A

How does competition influence pricing strategies in highly competitive markets?

A: In highly competitive markets, businesses may set low prices to remain competitive. For example, the budget airline industry keeps prices low to increase demand.

25
Q

Q: How does the strength of a brand affect pricing?

A

Q: How does the strength of a brand affect pricing?

A: A strong brand with a loyal customer base can command higher prices. Nike, with its strong brand, charges premium prices for its athletic shoes and apparel.

26
Q

How does the stage in the product life cycle affect pricing?

A

How does the stage in the product life cycle affect pricing?

A: In the introduction stage, prices may be set lower to attract customers. In the growth stage, prices can increase as demand rises. In the maturity stage, prices may need to be lowered again.

27
Q

Q: Why is it important for prices to cover the cost of production and provide a reasonable profit margin?

A

Q: Why is it important for prices to cover the cost of production and provide a reasonable profit margin?

A: Prices must cover costs and provide profit. For example, a restaurant needs to consider ingredient, labor, rent, and other expenses when setting menu prices.

28
Q

Q: How have retailers adjusted pricing strategies in the online marketplace?

A

Q: How have retailers adjusted pricing strategies in the online marketplace?

A: Retailers have adjusted pricing strategies with features like price matching policies to prevent customers from switching to competitors with lower prices.

29
Q

Q: Why is promotion considered an important element of the marketing mix?

A

A: Promotion is crucial in generating customer awareness, interest, and desire for a product or service. It helps businesses communicate their value proposition, differentiate from competitors, build brand awareness and loyalty, leading to repeat purchases and referrals.

30
Q

Q: What are the different types of promotional methods available to businesses?

A

Q: What are the different types of promotional methods available to businesses?

A: The promotional methods include advertising, branding, special offers, sponsorship, and product trials.

31
Q

What is advertising, and what are its advantages and disadvantages?

A

A: Advertising occurs through paid channels like TV, radio, print media, and online. Advantages include reaching large audiences and increasing brand awareness. Disadvantages include cost, difficulty in measuring effectiveness, and customers tuning out or ignoring ads.

32
Q

Q: What is branding, and what are its advantages and disadvantages?

A

A: Branding is creating a unique identity. Advantages include recognition, trust, and differentiation. Disadvantages include being expensive and requiring time to develop.

33
Q

Q: What are special offers, and what are their advantages and disadvantages?

A

Special offers are temporary incentives like discounts or loyalty cards. Advantages include boosting sales and customer engagement. Disadvantages include expense, attracting deal-seeking customers, and potentially reducing sales of full-priced products.

34
Q

Q: What is sponsorship, and what are its advantages and disadvantages?

A

A: Sponsorship involves providing support in exchange for marketing exposure. Advantages include building brand awareness and credibility. Disadvantages include cost, potential lack of direct sales impact, and negative publicity if the sponsored entity faces controversy.

35
Q

Q: What are product trials, and what are their advantages and disadvantages

A

Product trials involve testing the market with limited sales to gather feedback. Advantages include gauging demand and collecting feedback. Disadvantages include being time-consuming and not suitable for all products.

36
Q

Q: What technological trends are businesses adapting to in promotion?

A

Three trends are viral marketing, social media, and e-newsletters.

37
Q

What is viral marketing, and can you provide an example?

.

A

A: Viral marketing is using online platforms to create shareable content. Example: During COVID-19, Coca-Cola and McDonald’s ran campaigns emphasizing community support.

38
Q

How are businesses adapting social media strategies, and what platform has gained popularity?

A

Businesses adapt strategies to trends; for instance, Instagram for influencer partnerships. Recently, there’s a shift to short-form video content on platforms like TikTok.

39
Q

How do businesses use e-newsletters, and what should they be cautious of?

A

Businesses build mailing lists for promotion but must offer incentives. They use it to repeatedly promote products and build connections. However, they should avoid sending too many emails to prevent annoying potential customers.

40
Q

Q: What does “place” in the marketing mix refer to?

A

A: “Place” in the marketing mix refers to where customers purchase the business’s products/services.

41
Q

Q: What do distribution channels refer to?

A

A: Distribution channels refer to the various intermediaries through which goods/services move from the business to the end customer

42
Q

Q: What are the two types of distribution channels businesses can use to move products to the end customer?

A

A: The two types are the three-stage distribution channel and the two-stage distribution channel.

43
Q

Q: Describe the three-stage distribution channel.

A

A: The three-stage distribution channel moves the product from the producer to the retailer, who then sells it to the final customer. It is often used for products with high profit margins

44
Q

Describe the two-stage distribution channel.

A

The two-stage distribution channel moves the product directly from the manufacturer to the end customer. This is commonly used for products sold online or through direct sales channels, known as e-tailing.

45
Q

Q: Provide an example of a three-stage distribution channel.

A

A: Toshiba produces laptops and sells them directly to retailers like Currys, who then sells them to the end customer.

46
Q

Provide an example of a two-stage distribution channel.

A

RyanAir sells its service (passenger tickets) directly to the end customer on their website, using a two-stage distribution channel.

47
Q

Q: How has e-commerce impacted distribution?

A

Online distribution has become popular due to convenience and accessibility. Many businesses use drop-shipping, reducing distribution cost and complexity. Amazon, a third-party logistics provider (3PL), facilitates online sales for businesses.

48
Q

Provide an example of a business utilizing e-commerce for distribution.

A

Amazon is known as a third-party logistics provider (3PL), providing businesses with the infrastructure and an online marketplace, allowing them to reach a wider audience and increase sales without investing in their own distribution infrastructure.

49
Q

How have social trends, such as the growth of e-commerce, impacted distribution?

A

Social trends, like e-commerce growth, have prompted changes in distribution. Businesses adjust their strategies to meet customer needs and stay competitive, with many now generating a significant portion of their sales through platforms like Amazon

50
Q

Why is the interaction between the elements of the marketing mix crucial for the success of any marketing campaign?

A

The interaction is crucial because changes in one element can significantly impact the others, and the marketing mix evolves as a product moves through different stages of its product life cycle.

51
Q

How does changes to the product impact other elements of the marketing mix?

A

The product is at the core of the marketing mix, determining price, target audience, and promotion strategy. Changes to the product may necessitate changes in other elements, for example, launching a premium version may require adjustments in price, target audience, and promotion strategy.

52
Q

How is the price of a product closely linked to its perceived brand value?

A

A: The price of a product is closely linked to its perceived brand value. If priced too high, it may be seen as expensive, leading to lower sales. If priced too low, it may be perceived as low quality, also leading to lower sales. Changes in price may require corresponding changes in the promotion strategy to convince consumers of the product’s value

53
Q

Q: How can changes to the promotion strategy impact other elements of the marketing mix?

A

Changes to the promotion strategy can affect price and distribution channels. For instance, a high-end promotion strategy may lead to a price increase to reflect product value, and exclusive distribution channels may require a price adjustment to reflect exclusivity.

54
Q

What is a competitive advantage, and how can a firm build it using the marketing mix?

A

A: A competitive advantage is perceived superiority over rivals by customers. A firm can build a competitive advantage through innovation, reputation, building strong relationships, adding value, differentiation, market segmentation, and price leadership.

55
Q

What are some examples of sources of competitive advantage for businesses?

A

A: Examples include quality (Audi cars), delivery times (Amazon Prime), low price (Primark), reliability (Apple Macs), ethical stance (Tony’s Chocolonely), and design (Dyson vacuum cleaners).

56
Q

What is an integrated marketing mix, and how does it contribute to building a competitive advantage?

A

A: An integrated marketing mix combines each element effectively, creating a cohesive strategy that sets the business apart. It helps build a competitive advantage by resonating with customers and differentiating the business from competitors.