2.2 Making Marketing Decisions Flashcards
(61 cards)
1
Q
What is the product design mix
A
Function
Aesthetics
Cost
2
Q
What is meant by function in the product deign mix
A
- The function of a product refers to the intended purpose and a specific task it is design to perform
3
Q
What is went by aesthetic in the product design mix
A
- aesthetics refers to the product, visual and sensory appeal, including the form, shape, colour and texture
- plays a role in attracting customers, creating brand, loyalty and generating positive word-of-mouth recommendations
4
Q
What is meant by cost in product design mix
A
- The cost of production must be considered when designing a product as it directly, affects the price point at which it can be sold
5
Q
What are the 5 stages of the product cycle
A
Development
Introduction
Growth
Maturity
Decline
6
Q
What is meant by development in the product life cycle
A
- The focus is on designing and development of the product.
- The business usually incurs high cost of research and development, research market and product testing.
7
Q
What are the implications in the development stage of product life cycle
A
- cash flow is usually negative during this stage as the company is investing highly in the product without generating any revenue.
- the marketing strategy during this stage is focused on creating awareness and generating interest in the product.
8
Q
What is meant by introduction in the product life cycle
A
- The stage begins when the product is launched.
- Characterised by slow sale growth as the product is still new and unknown to most consumers.
9
Q
What are the implications of introduction in the product life cycle
A
- cash flow is usually negative as the business usually incurs high cost of promotion, advertising and distribution.
- Marketing efforts are focused on creating awareness and generating interest in the product.
10
Q
What is meant by growth in the product life cycle
A
- The product enters this stage when sales begin to increase rapidly.
- The businesses focus shifts to building market share and increase production to meet the growing demand.
11
Q
What are the implications of growth in the product life cycle
A
- kasia, usually times positive during this stage as sales revenues and costs are spread out over a large volume of production.
- The marketing strategy is to differentiate the product from the competitors and builds brown loyalty.
12
Q
What is meant by maturity in the product life cycle
A
- Characterised by slow sales growth as a product reaches its peak in terms of market penetration
13
Q
What are the implications of maturity in the product life cycle
A
- Kasia is usually positive during this stage as sales revenue continues to come in and costs are reduced to economies of sale and efficient production process.
- The marketing strategy aims to maintain market share and increase profitability by cutting costs and finding new markets.
14
Q
What is meant by decline in the product life cycle
A
- Starts when sales begin to decline as the product becomes obsolete or is replaced by newer products.The business focus shifts to manage the products decline and reduce costs
15
Q
What are the implications of declinein the product life cycle
A
- cash flow usually turns negative at sales revenue declines and cost associated with the product decline increases.
- The marketing strategy may involve discontinuing the product reducing its price to clear inventory or finding new uses for the product.
16
Q
What are extensions strategies
A
- extension strategies used by a business to extend the life of a product beyond its natural life-cycle. - - This strategies are designed to boost sales and maintain profitability for a product that has reached the decline state of the life-cycle.
17
Q
What are two types of extensions strategies
A
- product related
- Promotion related
18
Q
What are the main extension strategies through product
A
- involves changing and modifying the product to make it more appealing to customers, and extending its life-cycle
- product improvements (new better version)
- line extensions (product range)
- Repositioning
19
Q
What are the main extension strategies through promotion
A
- involves changing the marketing and promotion of the products to extend its life cycle and could include one or more of the following changes:
- changes in advertising.
- Price promotions.
- sale promotions
20
Q
What is product differentiation
A
- product differentiation is an attempt by a business to distinguish its products from those of competitors
21
Q
How does differentiation of products help a business
A
- increases demand for its products.
- Increases brand loyalty.
- Allows charging higher prices.
22
Q
How does a business using pricing strategies to improve
A
- choosing the right pricing strategy is essential to a business to be profitable, competitive and successful in the long run
23
Q
What is price penetration
A
Start of low them over time increase price
24
Q
What is price skimming
A
Set a high price and lower overtime
25
What is loss leader
Loosing money on one product but making money on other
26
What is cost plus
Ass a percentage to the cost
27
What is competitive pricing
Match to competitors price
28
What are the 6 factors to consider when choosing a pricing strategy
- number of USP and differentiation
- technology
- level of competition
- strength of brand
- Stage in the product life cycle
- costs and the need to make profit
29
How does number of USP and differentiation impact choice of price strategy
- Products with many unique, selling points and high differentiation can command higher prices
30
How does technology impact choice of price strategy
- The use of online platforms and development of new markets has created new pricing strategies
31
How does level of competition impact choice of price strategy
- highly competitive markets. Businesses may need to set their prices low to remain competitive.
- In less competitive markets businesses may be able to set a higher price.
32
How does strength of brand impact choice of price strategy
- A strong brand and a loyal customer base can command higher prices
33
How does stage in the product life cycle impact choice of price strategy
- The introduction stage prices may be set lower to attract customers and build market share.
- In the growth stage prices may increase as demand for product increases.
- In the maturity stage, prices may need to be lowered.
34
How does costs and the need to make a profit impact choice of price strategy
- Prices must cover the cost of production and provide a reasonable profit margin
35
What’s re the 5 main types of promotion methods
- branding
- advertising
- special offers
- sponsorship
- product trials
36
What is meant by advertising
- promotion occurs through page channels, such as television, radio, printed, media, magazines, or online advertising
37
What are the advantages of advertising
- it’s can reach large audiences and increase brand awareness.
- Can also be used to create a specific brand image or message.
38
What are the disadvantages of advertising
- can be expensive.
- The effectiveness of advertising can be difficult to measure.
- Many customers tune out or ignore ads.
39
What is meant by branding
- branding is the process of creating unique and identifiable name, design, symbol, or other features that differentiate a product or service or company from its competitors
40
What are advantages of branding
- branding establishes recognition and identity
- branding builds trust and credibility
- branding differentiate a business from its competitors.
41
What are disadvantages of branding
- branding is expensive.
- developing a strong brand takes time
42
What are special offers
- These are temporary insensitive or discounts, such as free samples, buy one get one free discount, coupons, loyalty cards
43
Advantages of special offers
- can quickly boost sales or customers engagement.
- Can help to clear out stock or promote the new product.
- Can encourage impulse purchases. Can be targeted to specific segments of customers.
44
Disadvantages of special offers
- very expensive, especially if the promotion requires having discounting.
- Can attract Deal seeking customers who may not be loyal to the brand.
- May reduce the sales of full priced products.
45
What is a sponsorship
- This is an agreement to which a company provides financial other support to an event team organisation in exchange for marketing exposure
46
Advantages of sponsorship
- can you help to build brand awareness and credibility.
- Can create emotional connections with target audience.
- Can support specific business objectives such as entering new markets or reaching new customers.
47
Disadvantages of sponsorship
- can be expensive, especially for high-profile events or properties.
- May not directly drive sales.
- May be subject to negative publicity, if the sponsorship entity experiences, a scandal or controversy
48
What are product trials
- Product trials involve testing the market. Both are selling a product in a confined area such as Southwest London to gauge demand and collect feedback on the product
49
Advantages of product trials
- because the most reactions may generate information on how the products or marketing mix can be improved
50
Disadvantages of product trials
- Product trials, may not be suitable for all types of products.
- It takes time and money to run effective product trials.
51
What are the 3 current technological trends in promotion
- viral marketing = creating content at specific times which can be easily shared
- social media = adapt their social media strategy to keep up with latest trends
- e-newsletter = build a mailing list
52
What is the three stage distribution channel
Producer
Retailer
Customer
53
What is the two strange distribution channel
E-tailer
Customer
54
How has the growth of e-commerce effected distribution
- online distribution has become increasingly popular due to their convenience and accessibility offers to customers.
- Many businesses use Dropshipping which allows them to sell products without holding stock.
- Once the business has sold the product they are shipped directly to the producer to customer.
- This reduces the cost and complexity of distribution making it easier for businesses to sell online.
55
How do changes in the product effect the whole marketing mix
- The product/service is the heart of the marketing mix as it is what the customer is buying and all the elements are based on it.
- The product determines the price the target audience and the promotional strategy.
- If the product changes then all other elements of the marketing mix we need to change.
- for example if a business decides to launch a premium version of its products and they need to increase the price target different audience and his different promotional strategies to reflect of new product value.
56
How do changes in the price effect the whole marketing mix
- The price of a product is closely linked to the perspective brand view
- If a product is price is too high, it may be perceived as too expensive by the target audience leading to lower sales.
- If a product is price too low, it may be perceived as low quality leading to lower sales.
- Increase in the price may require changes to promotional strategy which are aimed at convincing customers to buy products
57
How do changes in the promotion effect the whole marketing mix
- The promotional strategy can affect the price and distribution channels.
- For example, if a business decides to launch high and promotional strategy and they need to increase the price reflected by the product.
58
How do changes in the place effect the whole marketing mix
- The distribution/sales channel kind affect the price and promotion strategy
- for example, if a business decides to use exclusive distribution channels, it means increase the price to reflect the exclusivity of the product
59
What does a defensible and distinctive product mean in terms of compilation
- Distinctive means that it is different from the competitors
- defensible means the business can prevent competitors from copying it
60
What are the 8 source of competitive advantage
- quality
- design
- delivery time
- price
- ethical
- Reliability
- brand image & reputation
61
What is an integrated marketing mix
- integrated marketing mix is one which correctly combines each element in its best possible way.
- They can help to build a competitive advantage by creating cohesive marketing strategies that resonate with customers, and set the business apart from capacitors.
