Marketing Flashcards
(30 cards)
Market
All the customers and potential customers for a product.
Marketing
The bringing together of buyers and sellers to exchange goods and
services.
Target market
The specific group of potential buyers that the firm aims to sell to.
(eg. age-group? Living where? Male/female? High-end or budget
buyers?)
The marketing mix
The essential elements of a good marketing strategy – the
combination of product, place, price and promotion.
Define the 4Ps
Product, place, price and promotion
Product
The features of the good or service being sold
Place
The distribution channel which gets the product to the customer (eg.
retail store, online catalogue, Trade Me)
Promotion
Increasing the awareness of the product to potential customers to
persuade them to buy. (eg. branding, advertising, sponsorship)
Price
What a buyer must pay to purchase the good or service. (The price
includes the cost of producing it and a mark-up for profit.)
Cost-plus pricing
Where the price is the cost of making the product plus a profit
mark-up.
Competitive pricing
Where the price is the same as, or just below, what competing firms
are charging.
Price skimming
Where the price is set high because it’s a new product so it has
‘novelty value’.
Penetration pricing
Where the price is set well below competitors prices in order to enter
a new market.
Promotional pricing
Where the price is set very low for a short time only.
Phsycological pricing
Using numbers and decimals to make the customer believe the
product is cheaper than it really is.
Dynamic pricing
Where businesses charge different prices for their products depending on which customers are buying them or when the products sell.
Price competition
Where the firm lowers the price of its product to encourage customers
to buy it.
Examples of price competition
Discount or sale, interest-free terms, Buy one-get one free, using loss leaders
Price war
When a group of competing firms all reduce their prices to try and have the lowest price (even if it causes a loss for a short time.)
Non-price competiton
When a firm tries to increase sales by any method APART FROM
reducing the selling price
Examples of non-price competition
Gift with the purchase, loyalty programmes, great service, location,
branding, advertising, packaging, sponsorship
Loyalty programme
Offering special deals for customers who continue to purchase from
the firm, or group of firms eg. Fly Buys, BP petrol card
Service
Extra help the firm provides to support customers using its goods or services eg. online trouble-shooting advice
Location
The site of the business. Having free parking or being near a motorway
is a non-price advantage.
