4.5 - The 7 Ps Of The Marketing Mix Flashcards

Question

What the relationship between promotion and introduction

Answer 1

Informative advertising is used

Answer 2

Persuasive advertising used

Answer 3

There is extensive advertising to remind customers of the product

Answer 4

Aggressive advertising is carried out to emphasise the brands benefits and differences

Answer 5

Advertising is reduced to a minimum

Answer 6

Selective or restrictive distribution takes place

Answer 7

Intensive distribution or more distribution outlets are used

Answer 8

There is more intensive distribution or a wide range of distribution outles

Answer 9

The widest range of geographical distabution outlets is used

Answer 10

There is selective distraction and unprofitable outlets are eliminated

Answer 11

High research and development costs

Answer 12

High costs on promotion

Answer 13

Average to high costs on promotion

Answer 14

Lower costs on promotion

Answer 15

Cost focus is on extension strategies

Answer 16

Very low costs on promotion

Answer 17

Some profit and rising

Answer 18

Some profit and rising

Answer 19

High profit;reaches it peak

Answer 20

High and mostly stable profit

Answer 21

Decreasing profit

Answer 22

Negative but with improved sales

Answer 23

Positive but decreasing cash flow

Answer 24

a method of analysing the product portfolio of a business in terms of market share and market growth. It was developed by the Boston Consulting Group, so it is also be called the BCG Matrix. It is one of the most powerful tools a firm can use to assist strategic decision-making. It allows not only for an analysis of the existing product portfolio but also what future strategies the firm could take.

Answer 25

Stars, cash cows, question marks, dogs

Answer 26

Star (high market growth/high market share) – A successful product in an expanding market. The firm will be keen to maintain the market position for this product in a fast-changing market. Promotion costs will be high to help differentiate the product and reinforce its brand image. Despite the promotion costs, a star will generate a lot of income. If their status and market share can be maintained, they should become the cash cows of the future.

Answer 27

Cash Cow [low market growth/high market share]- This is a well-established product in a mature market. Typically this type of product creates a high positive cash flow (as per its name!). Sales are high and promotion costs are low as a result of high consumer awareness. The cash from this product can be "milked" and put into some other products in the portfolio. The business will want to maintain cash cows for as long as possible.

Answer 28

Problem Child/Question Mark [high market growth/low market share] - The problem child consumes resources, but it generates little return. If it is a newly launched product it is going to need heavy promotional costs to become established (money from cash cow) The future is uncertain, so quick decisions need to be made if sales do not improve such as revised design, relaunch or even a withdraw from the market. It should have potential as it is a growing market sector. Businesses need to look carefully at which problem children are worth developing and investing in and which need to be dropped and stop selling.

Answer 29

Dogs [low market growth/low market share] - Dog products offer little to a business either in terms of existing sales and cash flow or future prospects because the market is not growing. They may need to be replaced shortly or the firm could decide to withdraw from the market sector altogether and position itself into faster growing sectors.

Answer 30

Boston Matrix Strategies - by identifying the position of all of the firm's products a full analysis of the portfolio is possible. This should help focus on which products need support or which need corrective action.

Answer 31

- holding strategy - building strategy - harvesting strategy - divesting

Answer 32

continuing support for star products so that they can maintain their good market position. Work may be needed to "freshen" the product in the eyes of the consumers so that high sales growth can be sustained.

Answer 33

supporting problem child products with additional advertising or further distribution outlets. The finance for this could be obtained from established cash cow products.

Answer 34

taking the positive cash flow from established products and investing in other products in the portfolio.

Answer 35

identifying the worst performing dogs and stopping the production and supply of these. This strategic decision should not be taken lightly as it will involve other issues such as the impact on the workforce and whether the spare capacity freed up by stopping production can be used profitably for another product.

Answer 36

n summary, a product that has a good number of stars and cash cows (finance generators) will effectively be able to invest in the other high market growth products (i.e. problem children). Nevertheless, a relatively large number of dogs and problem children can seriously drain any positive cash flow from the business if it’s not well checked. Therefore, the BCG matrix shows that the ideal product portfolio of a business is to have a balanced portfolio which might include some stars, a few problem children and several cash cows.

Answer 37

Some limitations of the BCG are: •It focusses on the current market position •It can be time-consuming and complex •High market share does not necessarily equal profits The next graph, is useful to relate the BCG matrix and the product cycle

Answer 38

brand is a name, symbol, sign or design that differentiates a firm's products from its competitors. Branding is the process of distinguishing one firm's product from another and can add great value to a product.

Answer 39

A)Aspects of branding b)The importance of branding c)The importance of packaging

Answer 40

Brand awareness Brand development Brand loyalty Brand value

Answer 41

the extent to which a brand is recognized by potential customers and is correctly associated with a particular product (i.e. McDonalds “big M”)

Answer 42

any plan to improve or strengthen the image of a product in the market. It is a way of enhancing brand awareness of a product by increasing the power of its name, symbol or sign leading to higher sales and market share (i.e. Pepsi changed the background of his logo from white to blue)

Answer 43

the faithfulness and commitment of consumers to a particular brand as shown by their repeat purchases irrespective of the marketing pressure from competing brands (Kellogg's vs other cereals)

Answer 44

This refers to how much a brand is worth in terms of its reputation, potential income and market value. It is the extra money a business can make from its products because of its brand name (i.e. Louis Vuitton vs Monsoons handbags)

Answer 45

•Customers know what to expect from the company and products. •An emotional attachment can develop between the brand and the customer creating customer loyalty. •Increases the value of the business above the value of its physical assets. • Promotes instant recognition of a company and product, especially through the use of logos and images. •Helps differentiate the company and its products from rivals •Aids in employee motivation since they can be committed to the brand. •Generates referrals from customers, especially in the use of social media. • The power of a successful brand in the minds of consumers cannot be overstated. This explains why many companies spend millions of dollars each year reminding, persuading and reassuring customers that there brand is the one to go for.

Answer 46

packaging refers to the designing and production of the physical container or wrapper of a product. Packaging plays a significant role in marketing and can help in distinguishing one product from another

Answer 47

- it provides physical protection - it offers convince - it provide information - it can help reduce security risks - it aids promotion

Answer 48

It provides physical protection - packaging protects a product from getting spoiled or damaged, especially during transportation. It must also provide a good cover against, dust, direct light, or high temperatures.

Answer 49

It offers convenience - A good package should make it easy for consumers and distributors to handle the product. This could include the ability to reuse, recycle and easily dispose of the product.

Answer 50

It provides information - The labels on packages are used to relay important information to the consumer. Food and cosmetics will provide information on the ingredients a product contains. Technological products may include information on how to use the item (It is often a legal requirement for companies producing cigarettes and alcohol, to provide warnings on their packages regarding the consumption of these products).

Answer 51

It can help reduce security risks - especially during transportation. Packages designed with tamper-proof features can deter intentional tampering with the product.

Answer 52

It aids promotion - The package should be eye-catching and appealing to the consumer. The colour and shape of the package is key in reinforcing and projecting a brand image of the product.

Answer 53

Considering the important role packaging plays today, it is not surprising that a great deal of time and money is spent by firms on researching the best way of designing and producing a package that will attract the majority of the consumers to their products.

Answer 54

refers to the money customers pay or give up for having or using a good or service. Therefore, to meet their marketing objectives businesses need to set the appropriate pricing strategies for new and existing products.

Answer 55

1.Cost-plus pricing (mark-up pricing) 2.Penetration pricing 3.The loss leader 4.Predatory Pricing 5.Premium pricing

Answer 56

refers to adding a mark-up to the average cost of producing a product. The mark-up is a percentage of the profit a firm wishes to gain for every product it sells. The average cost is the cost per unit, or the total cost divided by the number of products produced.

Answer 57

The main advantage of the Cost-plus pricing is that it is a simple and quick method of calculating the selling price of a product. It is also a good way to ensure that a business covers its costs and makes a profit.

Answer 58

However, the disadvantage is that it fails to consider the market needs or customer value when setting prices. Since competitors' prices are not considered, a firm could lose sales if it sets a selling price that is higher than its competitors (i.e. £6 for a coffee!)

Answer 59

when the firm sets a low initial price for a product with the aim of attracting a large number of customers quickly and gaining a high market share. This could be used by businesses either introducing a new product in an existing market or entering new markets with existing products. As a firm gains market share it can start to raise its prices slowly.

Answer 60

1. As the prices are low, consumers are encouraged to buy the products, and this leads to high sales volume and market share for the business 2. The high sales volume can lead to desaceras in the cost of production and increases in stock turnover

Answer 61

1. Gaining high sales volume does not necessarily mean achieving high profits 2. Customers may pervieve the product to be of low quality if the price is kept too low 3. Penetration pricing is only suitable for markets that are very proce sensitive. Therefore, as a business increase their prices over time they risk losing potential customers, who may seek lower priced products for rival firms

Answer 62

when businesses that charge a low price for a product, usually below cost, refer to that product as a loss leader. The aim of this strategy is to attract many customers. Supermarkets will use this strategy by selling some products at a loss with the view that customers will also buy other products and therefore compensate for any losses made (i.e. £1 shops).

Answer 63

1)Businesses selling a large number of frequently purchased products may attract many customers and benefit from higher overall profits. 2)Businesses may use loss leaders as a promotional strategy to encourage consumers to switch to their brand instead of buying the competitors' brand.

Answer 64

•Firms using this strategy may be accused by competitors of undercutting them by using unfair business practices.

Answer 65

happens when a dominant company aggressively lower prices in order to try to force its smaller competitors out of the market. After most of the companies are out of the market then the firm increasers its prices and gets it profits back. Amazon and supermarkets use this strategy. This is an illegal pricing strategy in some countries as it is unfair to new entrants trying to compete against established companies. However, it is difficult to prove and therefore many Governments impose anti-competitive laws, so firms can be fined for using predatory pricing with the intent to restrict competition

Answer 66

1)Lowering prices to benefit consumers and likely increase demand for the business may reduce the number of competitors in the long term and increase monopoly power of the "predator". 2)After using predatory pricing, the remaining firms in the market could potentially gain higher sales revenue due to the price increase.

Answer 67

If proven, it is illegal in many countries and considered a form of anti-competitive behaviour, so heavy fines can be imposed. Consumers may try to find alternative products if the newly created monopoly increases prices in the long term.

Answer 68

also known as image pricing or prestige pricing, this strategy permanently sets a high price for their products – generally higher than its competitors – to send the message that their product is superior. Examples include luxury brands, organic food or first-class traveling. This is different than price skimming, where the price is set high at first and then brought down. In the case of premium pricing, the price is set high to reflect the quality of the product.

Answer 69

1)Since the perception of the customer is that the product is high quality they won't negotiate the price, which allows the firm to focus on quality. 2)The firm gains a high status in society since its products become a symbol of luxury 3)A high price send the message of exclusivity

Answer 70

1)Marketing cost are very high 2)The firm might miss whole sector of conscious consumers in the market.

Answer 71

also known as surge pricing, demand pricing or time-based pricing, this pricing strategy is flexible, and it adapts to factor such as demand, supply and other market conditions. The firm charges different prices depending on which customers are buying them or when the product sells. Hence, the prices are “tailored” to specific customer preferences.

Answer 72

Businesses can increase sales revenue by capturing the willingness of customers to pay more during peak periods and when demand of the product increases. It helps with stock management; high prices can be charged for highly demanded products and low (slae) prices for overstock products that couldn't be sold. Dynamic pricing enables customers to avoid queues (caused by excess demand) and surpluses (caused by excess supply). Without dynamic pricing, it may be harder to incentivize business to supply their services, such as trying to catch a taxi during off-peak times when taxi drivers are less willing to work.

Answer 73

Surge pricing is often associated with being unethical as it is perceived to exploit customers, such as pharmaceutical companies charging higher prices during a major pandemic. There is also the potentially high cost to the business of monitoring and evaluating the data needed for dynamic pricing It can lead to significant price fluctuation in the markets (i.e. if a firm charges a lower price the other firs will have to lower the price, then the other firm reduces the price even further, etc.) There is also the potentially high cost to the business of monitoring and evaluating the data needed for dynamic pricing Consumers who are charged higher prices may feel disgruntled

Answer 74

when a firm sets the price of a product or service based on what the competition is charging. This pricing method is used more often by businesses selling similar products, since services can vary from business to business, while the attributes of a product remain similar. Competitive pricing is one of the simplest pricing methods available, especially for new and small businesses. This method simply requires the business to determine who their main competitors are and collect the prices charged by these firms before making a final pricing decision. However, it required in-depth market research analysis of competitors behaviour.

Answer 75

It is a low-risk pricing strategy as the possibility of making a mistake with pricing decisions is minimized. This is because competitive pricing helps to ensure a firm's prices are not too high or too low from the average price being charged in the market It is a low-risk pricing strategy as the possibility of making a mistake with pricing decisions is minimized. This is because competitive pricing helps to ensure a firm's prices are not too high or too low from the average price being charged in the market. Since nowadays customers tend to check online prices first, competitive prices will help keep and stable customer base. There is flexibility as the business can make changes to prices to accommodate changes in the industry

Answer 76

A firm might find difficult to differentiate form other companies in the marketing, since they are basing their pricing only on co-market players. The task of collecting and comparing price data from competitors can be time consuming and expensive, especially for smaller businesses. This could include the cost of purchasing price monitoring software.

Answer 77

is a pricing method that involves setting the price greater than the “variable costs per unit (𝑨𝑽𝑪)of production” to ensure that a positive contribution is made towards the firm's fixed costs.

Answer 78

Contribution per unit = P-AVC Recall the concept of “contribution per unit” as the “contribution” that goes towards covering the unpaid Fixed Costos (FC) of production.

Answer 79

BEQ=FC/contribution per unit

Answer 80

A firm must have a positive contribution to have any chance of earning a profit - the selling price must exceed the variable cost per unit (AVC). Only once sufficient units of the product are sold can the total contribution cover the Fixed Costs (FC). After that, more sales will generate a profit for the business.

Answer 81

Cost plus (mark up) pricing with contribution pricing

Answer 82

1. Contribution pricing helps managers to know how much profit the business will earn on each unit sold after the firm has reached its break-even level of sales. 2. It is a useful pricing method for when deciding on the price to charge customers for a special or additional order. 3. Contribution pricing enables managers to determine which products from the firm’s product portfolio generates the highest (and the least) amount of total contribution. Products with the highest total contribution are prioritised as these contribute the most towards paying the firm's fixed costs. Products that contribute the least amount or have a negative total contribution may need to be discontinued.

Answer 83

1. It can be extremely difficult to allocate fixed costs appropriately between the many products sold by a large business so this would lead to inaccurate prices being set. 2. Contribution assumes that the selling price of a product is constant, but in reality, customers are often given a price discount for larger orders (purchasing economies of scale). 3. Contribution pricing assumes that manufacturers produce and sell exactly the same number of units. However, in reality, producers often make more than they can sell, and there are often damaged stocks (inventories) which cannot be sold to customers.

Answer 84

-PED measures how much the quantity demanded of a good responds to a change in the price of that good. -PED is measured as a percentage change in the quantity demanded divided by percentage change in the price.

Answer 85

PED = %Q/%P

Answer 86

Step 1 - calculate the percentage change in the price Step 2 - calculate the percentage change in the quantity demand Step 3 - calculate the PED

Answer 87

If the price of the candles drops by 10% and the quantity demanded increased by 20%. The change in the quantity demanded is Twice as large as the change in price.

Answer 88

Cost plus pricing - Focus - focuses on a firms total costs when setting the price of a product Calculations - add all costs associated with producing or delivering the product, then add a desired profit to determine the price Purpose - to ensure that a firm covers all its costs and makes a predetermined profit Contribution pricing - Focus - focuses on the contribtuion each sale makes towards covering a firms fixed costs in order to generate a profit Calculation - calculate the variable costs of producing the product, then subtracting these from the selling price to find the contribtuion per unit Purpose - To ensure that each sale contributes enough to cover variable costs and towards covering fixed costs so as to generate a profit

Answer 89

In this case 0 < PED < 1. If any good has an Inelastic Demand, then the change in the price leads to a proportionally smaller change in quantity demanded. Example: The price of a candle increases from £8 to £9,20 (15%). The firm will find that the quantity demanded decreases from 14,000 to 12,600 (10%). Hence, 15% increase in the price of a candle reduces the quantity demanded for candles in 10%

Answer 90

So, if the change in Price leads to a grater proportional change in the quantity demanded, the consumer will have a price ELASTIC demand; which means that they are very sensitive to changes in Price (products that have many substitutes – i.e. yogurt) . Therefore, the firms will reduce the Price of their products since it will give them a higher Revenue.

Answer 91

In contrast, if the change in Price lead to a less proportional change in quantity demanded, consumer will have a price INELASTIC demand. So, they are less sensitive to a change in price (products that have very few or no substitutes, i.e. petrol – you will buy it regardless of the price change)

Answer 92

when firms charges different prices to different groups of consumers for the same product. This takes place in markets where sub-groups of consumers exist, and it is possible to charge different prices for the same product (i.e. airlines charge different rates for the same journey, movie theatres charge different prices based on the age of the movie goers)

Answer 93

- The business must have some degree of market power (monopoly) to set prices (i.e. energy companies, providers of water, etc) -Costumers must have different degrees of willingness to pay, otherwise businesses cannot set different prices to different segments of the market. -Markets must be kept separate to prevent resale (i.e. a child cannot sell his or her theatre ticket to an adult)

Answer 94

An advantage of price discrimination is that time-based discrimination can be of benefit to either consumers or producers. That is, during peak times businesses such as phone companies can charge high prices and so generate higher revenues, while during off-peak times consumers benefit from the lower prices charged (same example as airline tickets).

Answer 95

Promotion refers to communicating information about the firm’s product to consumers. The main aim of promotion is to get more costumers and/or retain existing ones.

Answer 96

Promotional activities should be clearly communicated to consumers and provide information on how and where to get the product.

Answer 97

Promotional objectives should aim to: ●Increase sales by raising consumer awareness of a new product ●Remind consumers of an exciting product and its distinctive qualities ●Create or reinforce the brand image or "personality" of the product ●Encourage increased purchases by existing consumers or attract new customers demonstrating the superior specification or qualities of a product compared to those of competitors (i.e. when the product has been updated or adapted in some way) ●Correct misleading reports about the product or the business and reassure customers after a "scare" or an accident involving the product ●Encourage retailers to stock and actively promote products to the final consumers.

Answer 98

Promotion is about communicating with actual or potential customers. An effective promotion not only increases awareness of products but can create images and product "personalities" that consumers can identify with

Answer 99

A)Above-the-line promotion (ATL) b)Below-the-line promotion (BTL) c)Through-the-line promotion (TTL)

Answer 100

this is when the control or responsibility of the product promotion is passed onto another organization. So the business uses paid communication that uses mass media promotion of their products (i.e. TV, radio, newspapers, to reach a greater audience)

Answer 101

Advertising plays a key role in promotion, since it globally passes the information about the product choosing the right media for promotion. The main forms of advertising includes television, newspapers, magazines , cinema, radio, posters , billboards and the Internet.

Answer 102

Informative, persuasive, reassuring

Answer 103

refers to advertisements that give information to potential purchasers of a product, rather than just trying to create a brand image. This information could include price, technical specifications or main features and places where the product can be purchased. This style of advertising could be particularly effective when promoting a new product that consumers are unlikely to be aware of or when communicating a substantial change in price, design or specification. It can also be used by Governments to promote policies like “don’t drink and drive”

Answer 104

This involves trying to create a distinct image or brand identity for the product. It may not contain any details at all about materials or ingredient used, prices or places to buy it. This form of advertising is very common, especially in those markets where there might be little actual difference between products and where advertisers are trying to create a perceived difference in the minds of consumers. It's aimed to make consumers make unplanned purchases knows as impulse buying (i.e. promote at shopping malls halls or on the street).

Answer 105

when a firm wants to remind its costumers that they make the right decision on choosing their product, for example remind them of their product’s quality.

Answer 106

This refers to promotional activities where the business has direct control over the target or intended audience. The firm can focus on their promotional activities on consumers they know or those who are interested in the product.

Answer 107

There are many methods of below-the-line, including sales promotions, direct marketing, personal selling and public relations.

Answer 108

they are temporary methods to improve sales by attracting new customers and encouraging existing customers to purchase more. Although offers may be short-term, there is a belief that trial of the firm's product will create brand loyalty. Of course, sales promotion come at a cost and hence reduce a firm's profit margin.

Answer 109

Examples of sales promotions are: coupons, BOGOF (buy one get one free), competitions, free samples and point-of sale (where promotional activities directed at customers in retail outlets, such as special displays, tastings, demonstrations and sales presentations. These are normally combined with vouchers and other special offers on purchases in that shop to encourage impulse buying)

Answer 110

Firms communicate straight to with consumers (no intermediaries used) with advertising techniques such as fliers, catalogues and promotional literature. If an advertisement asks the customer to respond in some way, such as calling a free phone number or visiting a website, this is called direct response advertising (i.e. restaurants send menu’s direct to houses and offer a discount for using the flyer with a menu). However, customers might disregard the information and bin it without reading it.

Answer 111

when the firm uses personal contact to sell their products , the sale is done face-to-face or by telephone. Its used in cases of really expensive products like cars or specialized machinery where costumers need to be advise and reassured that they are making the right decision. Even tough it could increase sales it also increases cost for the company since they have to pay sales representatives and train them specifically on the products.

Answer 112

Traditional PR tools include press releases and media kits which are sent out to generate positive press on behalf of the organization which consist of promotional materials that give information about an event, organisation, business, or person. The purpose is to show the company in a positive light no matter what. Good publicity has greater longevity than advertising. For example, Samsung sponsoring Chelsea football club; Benetton sponsoring Formula ; McDonalds sponsoring football matches.

Answer 113

This form of promotion combines both ATL and BTL, using a holistic approach of the market to get to the customer from as many was as possible. For example, a movie production company might choose to supplement television advertisements with trailers of the latest film with point of sales promotions at the cinema where they can sell merchandise related to the movie.

Answer 114

A downside of this strategy is the high costs involved. Therefore, only well-established and financially stable companies can afford this method.

Answer 115

This is a marketing campaign that uses a consistent marketing message using all ATL and BTL platforms. For example, movie producers may use the same marketing message to promote a new film on television, radio, newspapers, Facebook, YouTube, buses, train stations, etc.

Answer 116

Large multinational companies such as Adidas and McDonald's also use 360-degree TTL marketing during major sporting events that they sponsor, like Summer Olympic Games or FIFA World Cup.

Answer 117

This is a promotional strategy is used to advertise and market products or services over the Internet. It involves using various online marketing channels, including search engines, social media platforms, and emails, to target specific audiences. Some examples are pop-up advertisements, online banners, social media posts, blogs, and vlogs. It used “cookie-based targeting”; which refers to using data (cookies) to target audiences based on their browsing behaviour. This is a “personalized communication” with the customer.

Answer 118

1. Cost 2. Legal framework 3. Target market 3. Stage of the product life cycle 4. Type of product 5. Social media marketing

Answer 119

does the marketing budget support the use of a particular promotional method?

Answer 120

Has the law been taken into account when deciding on the various promotional methods to use?

Answer 121

What specific segment of the market is the product aimed

Answer 122

Which promotional methods will be most appropriate at the different life cycle stages?

Answer 123

Has the promotional method considered the nature of the product and how it would be successfully be sold to customers?

Answer 124

With the revolution of Digital technology businesses are relying more and more on social media marketing (SMM). Social media marketing is the use of online content that users can upload to a website using a suitable medium (such as a blog, podcast, video, image, slideshow, infographic, or online newsletter). Examples of such platforms include Facebook, Twitter, Instagram, LinkedIn, Pinterest and TikTok. The aim of this is to engage customers and ultimately for them to interact with the product or brand.

Answer 125

1. Wide reach - firms can reach out to more consumers on a more personal and interactive level 2. Engagement - in most cases, customers are participants rather than passive viewers allowing the firm to find out if the customer is finding challenges and what they like about the product. 3. Market information - provides valuable measurable data on trends, consumer interaction, feedback, public opinion, brand activity and consumers buying habits. 4. Cost savings - using social networking, SMM and viral marketing is relatively less expensive than using traditional methods such as television advertising 5. Brand recognition - the sharing and spreading of information especially due to repeat exposure, can increase consumers awareness of particular brands, leading to brand loyalty and enhanced brand image. 6. Speed - coupled with high Internet speed, advertisements can reach a wide audience in a short space of time.

Answer 126

1. Accessibility problems – regions with poor or not internet will miss out on any promotional campaign. 2. Negative feedback - social media makes the negative feedback public. Could damage a brands image. 3. Security issues - there is concern of security of information. Social media cannot be the only form of promotion used by business if they want to contact the widest range of potential consumers possible. 4. Time investment - setting up a social media account takes less than 30 minutes but managing a social media account needs a huge time commitment. 5. Lurkers – individuals who just absorb the information and don’t use it or don’t know how to use it.

Answer 127

refers to how the product reaches costumers. "Place” decisions are concerned with how products should pass from manufacturer to the final consumers. Several different channels of distribution are available for firms to use. The distribution system includes getting the right product to the right place at the right time

Answer 128

•It refers not only to the location of a business but also to the location of the customers. Businesses should therefore develop strategies to get goods from their present location to the location of the customer. •It enables businesses to come up with the best ways to distribute their products efficiently and effectively to consumers. •The use of intermediaries such as wholesalers and retailers helps businesses to store and market their products and enhance their brand image •The growing global use of the internet is making it easier for businesses to reach a wide range of consumers directly with their products.

Answer 129

a distribution channel is the path taken by a product from the producer to the consumer. Some distribution channels use intermediaries to allow their product to pass from producer to final consumer.

Answer 130

1. Zero intermediary channel 2. One intermediary Chanel 3. Two intermediary channel

Answer 131

when the product is sold directly to the customer (without any intermediary) (i.e. order from a catalogue, agricultural products or airline tickets booking)

Answer 132

this involves the use of one intermediary like a retailer or an agent to sell the products to the consumer (i.e. travel agents, expensive jewellery or furniture)

Answer 133

this involves the use of two intermediary by producers to sell the product to the consumer, which usually include wholesalers and retailers. This channel is good when selling goods over long geographical distances.

Answer 134

1. Low cost 2. Fast 3. Ideal for perishable products 4. The producer is the key decision maker in the distribution process

Answer 135

- promotion is done by the producer which could be time consuming and expensive

Answer 136

- promotion and consumer services are done by the retailer - the costs of holding stock and incurred by the retailer - the retailer assists in selling the product at conviene places to customers

Answer 137

- as they retailer profit mark up is included in the selling price, -the producer may not be aware of the promotional startegy used by the retailer

Answer 138

- the wholesaler incurs storage costs there reducing these costs for the producer - the wholesaler breaks the bulk for the retailer by providing large quantities in smaller batches - this is an appropriate channel when selling over long distances

Answer 139

- 2 profit mark ups could lead to more expensive product offered to customers - this channel further reduces the producers responsibility for promoting products

Answer 140

It refers to the human capital in terms of skills, attitudes and abilities necessary in the production of goods and provision of services. It is important to clarify, that the P for “People” mainly applies to service (since the production of goods does not have the same connotation) As a service is intangible, the people delivering the service to the consumer must have sufficient training in order to ensure customer satisfaction (i.e. a waiter in a restaurant). This will also include after-sales service (i.e. feedback)

Answer 141

A firms’ ability to retain “good people” and get rid of “wrong people” is crucial for a firm. Collins (2001) stated: “get the right people, on the bus and the wrong people off the bus”. With the “right” people onboard of the “bus” the next step is to "get the right people in the right seats on the bus“ so the responsibilities of the firm can be properly assigned. “People” basically refers to the employees and managers of a business and how they relate to customers and communicate with them. The people employed by a business can either give it a competitive edge or can lead to poor customer reaction and disloyal customers.

Answer 142

Poor customer experiences can be posted on social media and then the whole world knows about it, of course this will have a negative effect on the business. The relationship between customer and employee is key for a good service. Basically, people buy from a person they

Answer 143

Getting good people - well trained confident and well-motivated employees who deal with customers (online or in person) in an efficient, speedy manner helps to create customer loyalty. This is called Customer Relationship Management (CRM) It is always much cheaper to keep existing customers than to find and attract new ones.

Answer 144

It is also VERY important to take the cultural aspect into account, as this is mainly a “people’s” aspect. As culture includes the way employees perceive or behave in an organization; this needs to be carefully managed. Different cultures react in different manners and some cultures are more dominant than others, creating a “culture gap” in the organization. It is the firm’s responsibility to close this gap and to create a sense of unity between the employees.

Answer 145

If the employees are united and motivated this will be transferred to the customer. Additionally, marketers need to understand cultural dimensions of costumers to be able to satisfy their necessities. Hofstede’s cultural dimensions (HL) help with this

Answer 146

Refers to the procedures and policies relating to how an organization’s product is provided and delivered. It is basically, the system used to deliver the goods or services. These are the procedures and policies that are put in place to provide the service or the product to the consumer. (i.e. what processes does McDonald's put in place if a customer walks into one of its restaurants and orders a Bic Mac meal and it is delivered within two minutes)

Answer 147

Short waiting times, quality information given to customers and the helpfulness and knowledge of employees are all expectations of customers that should be met if the process is effective and well tested. Firms need to consider a number of processes for marketing to be effective, such as identifying costumers' requirements, how to handle customer complaints and handling orders. These processes are all focuses on developing customer loyalty.

Answer 148

➢ Processes to improve the speed of products delivery to customers ➢Provide a variety of payment methods (i.e. card, cash, PayPal, credit, etc.) ➢ Offer technical support after the product is purchased ➢Informing customers on the length of the services (i.e. how long their meal will take to be served)

Answer 149

Overall, ensuring that the right processes are in place is time consuming and expensive for firms, specially start up ones. However, firms need to ensure that at least the basic process are in place. On the other hand, Processes must change for a business to remain competitive. For example, online shopping offers customers a much quicker and more convenient ordering/payment/delivery process than traditional retail shopping. Hence, if a business selling goods that did not embrace this technology, then its procedures would be outdated.

Answer 150

This refers to the tangible or visible points that are observable to customers in a business. More specifically, refers to the ways in which the business and its products are presented to customers. This is how the business's goods or service “appears from the outside”. This element of the marketing mix can help distinguish a company from its competition. Physical evidence can support the charging of a premium price for a service and establish a positive customer experience.

Answer 151

For example, customers who walk into a restaurant expect a clean and friendly environment, if the restaurant is smelly or dirty customers are likely to walk out before they have even ordered or received the service. Physical evidence can also refer to the appearance of employees and how they dress and act. If restaurant servers are unclean or untidy this will not inspire customer confidence.

Answer 152

Services are examples of intangible products as they provide a benefit to the customer, but they do not have a physical form. However, with tangible products (goods) the packaging is a key part of physical evidence. Customers use other senses apart from sight to make judgements about the physical environment they find themselves in. The smell of freshly baked bread is now a common feature in supermarkets. Similarly, customers expect to smell food in food establishments not cleaning products.

4.5 - The 7 Ps Of The Marketing Mix Flashcards

(184 cards)