marketing Flashcards

Question

advantages and disadvantages of a product portfolio

Answer 1

✅**spreads risk** of failure ✅**meets the needs** of more segments/consumers so more sales ✅**revenue** from a mature product can **help fund** development of new products ✅**easier to launch** new products under same logo and **increased consumer awareness** ❌**bad publicity** can affect **all** the products ❌**complicated scheduling** of machines when producing many products ❌**staff** may need to be **knowledgeable** of many markets ❌**increasing costs** as many products and R&D costs can be high to help maintain variety of new products

Answer 2

used by organisation to **analyse their product range** and **allocate limited resources** to gain maximum benefit -**stars** - products that have *high market share* in a *high growth market* and earn large returns so must be protected from competitors -**question marks** - products with *low market share* in a *high growth market* so have potential and may yield high profits -**cash cows** - products which a *high market share* of a *low growth market* so are highly profitable -**dogs** - products that have a *low market share* in a *low growth market* so had little appeal or profit for business

Answer 3

-**loss of customers** because if the price is too high customers will buy rival products -**loss of revenue** as fewer customers means reduced sales as well as lost revenue -there needs to be a *balance* between sales and revenue

Answer 4

-**price strategy** - your price *compared* to competitors set over the *long term*, there is no known end date -**price tactic** - *change of price* over the *short term* designed to influence demand and will finish at a known date

Answer 5

-**low price strategy**, used if competition is strong and involves setting a price below rivals to attract consumers -**competitive/market price strategy**, used if product is a frequent purchase or is similar to competitors set -**premium/high price strategy**, used as a long term policy to establish an exclusive image, higher than similar products -**psychological pricing**, sets a price just below meaningful price barrier, eg setting it £99.99 instead of £100 -**discrimination pricing**, charges different prices for same product

Answer 6

for a NEW product: -**skimming**, sets a high price when launched to maximise sales then the price is lowered over time to appeal to mass market and increase sales -**penetration**, sets a low price when a product is launched onto a competitive market to attract customers from rivals then once loyalty has been established the price is raised for an EXISTING product: -**loss leader**, sets a very low price for a leading product to encourage more customers, hopefully consumer will see and buy other products which in turn generates additional revenue/profit -**destroyer pricing**, is an illegal practice under competition regulations and involves setting a very low price in an attempt to drive inefficient rivals out the market, once weaker firm closes price returns to market level -**promotional pricing**, sets a price below known RRP, helps to boost sales, sell inventory quick and aid cash flow in the short term

Answer 7

-**competition**, if there are no rivals there is less need to persuade customers to buy -**availability**, there is little need to promote a product in short supply -**product differentiation**, if the product has a USP there will be less need for promotion to inform consumers -**stage in life cycle**, at launch products have promotional support and over time periodic promotions remind consumers about product

Answer 8

-**increase demand** specifically from first time buyers or previous consumers -**increase revenue** in the short term -**increase profit** in the long term -**improve consumer loyalty** and encourage repeat purchasing

Answer 9

-**into the pipeline** - promotions offered by manufacturers to retailers to encourage them to stock their products -**out of the pipeline** - promotions are offered by retailers to consumer to encourage them to purchase the product -**product endorsement** - link a celebrity with a product -**product placement** - sell a lifestyle as products appear in appropriate tv programmes/films

Answer 10

-**dealer loaders** - used as inducements to retailers to increase the size of their orders eg buy 10 get 2 free -**sale or return** - encourages retailers to stock untried products which are often new to the market, supplier agrees to take back any unsold inventory after an agreed period so retailer not left with unsold items if unsuccessful -**dealer competitions/promotional gifts** - encourages retailers to push the sales of a particular product to gain the reward -**staff training** - improves sales staff knowledge so they can provide better customers service

Answer 11

-**free samples/trial packs** - allows consumers to try the product for free to see if it suits in the hope the consumers will like it and choose to buy -**buy one get one free(bogof)** - gives consumers better value as they get more for their money and encourages multi-purchasing -**promotional pricing** - offer better value for money in the short term so new consumers are persuaded to try and existing consumers buy more or purchase early -**free gifts** - given with another product to encourage consumers to purchase as they are attracted to something appealing that is free

Answer 12

involves *planned communication* at a corporate level or publicity -**press releases** are statements that outline something positive about the organisation to the general public to present them in a positive way and improve image -**holding press conferences** which bring to one room media representatives who will be told something positive about the organisation to broadcast to their users -**literature and feature stories** in the media eg providing services free in the hope a news story is created about it -**hold an open day** which allows members of the general public to see how the organisation works and find tour more about it -**partner with a charity** to support their cause and allow staff to volunteer or donate to the cause to be seen as a good neighbour -**manage social media** forums and handle complaints quickly to show consumer views and opinions matter -**merchandising** that can be give to agents to draw attention to organisation and act as a reminder

Answer 13

✅may **promote a positive image** and improve reputation ✅**increases public awareness** of business and products ✅*stories* in the media are free and **carry no extra costs** ✅*supports other promos* so **increases sales and customer loyalty** ❌the *public* might think the story is just a ‘spin’ and so **don’t believe the message** being given ❌both good and **bad publicity** on the media are **outwith the control** of the organisation ❌**no guarantee of media exposure** if a better story comes out the same day

Answer 14

the **route a product takes** to reach the final consumer and involves: >**manufacturer** who makes the product >**wholesaler** who buys directly from the manufacturer then sells to retailers >**retailer** who offers a direct service to the public >**consumer** who buys the product *direct* = manufacturer > consumer *short* = manufacturer > retailer > consumer *traditional* = manufacturer > wholesaler > retailer > consumer

Answer 15

✅**bulk buys** so saves manufacturer making many smaller deliveries ✅**admin costs reduced** as fewer big orders to process ✅**provides research data** which can inform future decisions ❌**loss of control** of how the product is presented in the warehouse ❌**less profits** as both manufacturer and wholesaler (middle man) must make a profit

Answer 16

✅wholesalers **break product down** into smaller more saleable sizes so retailer can buy the amount they need ✅wholesalers **provide more market research data** to retailer about (un)popular items ❌**may pay more** compared to buying directly from manufacturer ❌**own vehicle needed** so increased transport costs ❌**time out of business** to visit wholesaler, buy goods, load/unload stock

Answer 17

-**small independent retailers** eg corner shops, clothes boutiques and gift shops -**high street department stares** with specialist departments which could be franchises eg M&S -**chain stores** that may have a connected product range eg next, boots, ikea -**multi-branch supermarkets** which have a range of shop sizes and product ranges eg tesco superstore, sainsbury’s local

Answer 18

>eg independent store, chain store, discount store, pop up shop ✅**retailers are closer** to the customer so improved access ✅often have **customer loyalty** so regular sales guaranteed ✅**trained staff** know the products so better customer service ✅customers can **see and touch product before buying** ❌**cost of running** a branch network ❌**rent** in city or town centres is higher than out of town locations ❌**nearby rivals** located give consumers an easy choice ❌**inconvenience** of getting deliveries in city centre ❌customers may **not be able to park easily**, inconvenient

Answer 19

>eg farmers market, mobile van ✅products can be **accessed by consumers at different events** attended by the retailer ✅**increased brand awareness** ✅**less expensive** as lower running costs ✅**flexible** as can target highly profitable venues ✅**can move location** if low profits being made ❌only available to **stock very limited range** of items ❌only available to **target a narrow market** ❌**rivals** set up in same location ❌**cosy of vendors licence and petrol** needs to be paid

Answer 20

>eg pop up shop ✅**consumer interest increased** as outlet time limited ✅**good for seasonal items** at specific times ✅**no long term commitment** to a lengthy lease (less costs) ✅can create a **unique environment** and support a marketing campaign ❌consumers **may return** to buy but shop is **no longer there** ❌may be viewed **with suspicion** by consumers who question its validity/authencity ❌may be **difficult to recruit quality staff** as positions temporary ❌**reduced public image** which can have a negative impact on brand ❌**difficult to contact** retailer

Answer 21

>huge range of goods/ services available ✅**popular** as it **saves time** and hassle of shopping ✅**zoom, tilt and rotate** functions improves purchasing ✅**regular shopping basket** can be established which is easier and maintains sales ✅**can leave comments** providing useful market research ✅**no need to finance physical outlets** so cheaper prices offer consumers better value for money ❌**more returns** as consumers have not tried before they buy ❌some consumers **unwilling to buy** from a website as **security fears** or prefer to physically see item

Answer 22

>selling through a catalogue or by filling out form in magazine >often with specialist and luxury products ✅**reduced overheads** as fewer staff and premises passed on as **lower prices to consumers** ✅**home shopping** allows time to peruse and make more informed purchasing desicions so **fewer consumer returns** ✅possible to **target potential consumers** eg geographically ✅**good customer service** provided by experts ❌consumers **put off if prefer to see/feel/try on** ❌**design important** as adverts must have enough detail and info ❌**publication costs can be high** especially if large advert ❌**delivery must be organised** by the seller and delivery charges increases costs to consumer

Answer 23

>promotes product through personal contact eg kitchens ✅**experts** provide **good advice** to help consumer ✅**tailor-made** products (one off) **increases satisfaction** ✅personal **recommendations** and **positive feedback** used in marketing ❌consumers **put off** by *door to door* or telesales and *hard sell* tactics can give a **poor image** ❌**turnover** of sales staff **increases recruitment and training costs** and loss of expertise

Answer 24

>promotional letters, leaflet/brochures to home or work ✅can **target market** segment who should be interested in product so it is **more likely to generate sales** ✅feeling of **personalisation** as letters can be created using mail merge and mailing list of target consumers which **helps them feel valued** ❌**out of date** mailing lists have a **cost but no benefit** ❌consumers **may view the mail as junk** and **bin it** which has a detrimental impact on public image

Answer 25

-**actual product** eg short/direct channel is used with technical products that need a demonstration and also perishable items with a short life -**market size** eg mass market items are often sold via wholesalers and retailers to give the greatest number of consumers access -**buying habits** eg consumers may choose to access online whilst others prefer more traditional and buy from physical premises -**product image and target market segment** eg premium brands are more likely to be sold in department stores/boutiques to maintain exclusive image -**stage in the product life cycle** eg a mature product moving towards decline more direct distribution channels to make product more available -**legal restrictions** eg access to some products is restricted by as eg drugs and guns can only be sold from licensed premises -**distribution capacity** of organisation eg some businesses need to sell via other parties whilst others have their own branch network

Answer 26

all services should be underpinned by clearly defined and efficient processes -**effective procedures** ensures **good service** so helps *increase customer satisfaction* -good processes are **designed to take account needs** of organisation -*different* processes can be used depending on in/external influences -areas of concern: >**customer complaints** procedures >**waiting times** on phone >ability to **leave feedback** >**individual steps** involved -good processes are *clearly laid down* and *consistently applied* which **helps consumer loyalty and confidence** -must be **delivered effectively** or **little value and negative impression** eg if left hanging on phone may make them use a rival instead eg ordering mcd and receiving order fast and in good condition may make that your go to fast food place in future

Answer 27

-ensure there is **no invasion of privacy** (market research) -**not draw unfair/in appropriate conclusions** from stereotypes -make **product available to all** and don’t refuse certain groups -ensure the **product is safe** and meets **high safety standards** -cause **no harm to the environment** and supplies sourced from **ethical traders** -ensure **adverts don’t cause offence** to public -**appropriately priced** and not exploit consumers

Answer 28

-**social media** to get **consumer information** which **helps marketing activities** and products at consumers who will be most interested and most likely to buy -setting up a **website** so **more potential consumers** can use e/s/m-commerce facilities and sales, market share and profits and also to use for internet advertising -**text alerts** to mobile phones **informs consumers** of new products etc which can **help increase sales** -**online survey** or customer feedback form on website **gathers info** from customers and this can help make informed decisions to **improve satisfaction**

Answer 29

the way a service and everything related to it appears from the outside -customers look for physical evidence to **support decisions** and reassure them -encompasses **every single visual element** about organisation which is important as **judgements made based on what they see** -can be used to charge a **premium price** and **establish a positive experience** -where service is being delivered from: >**premises** and **temp/air con** to help keep **fresh and clean** >**parking** at building and **landscaping** outside >**interior design/furnishing/layout** -other physical evidence might include **easy to open packaging, good condition, paperwork, uniform, info sources** eg logos on tickets and players wearing uniforms, impressive stadium and comfortable seats, business eg disney world

Answer 30

essential in services and help deliver customer satisfaction -one of the **few elements that customers see/interact with** -the **public image** of business and can **leave a positive or negative impression** -**belief** that **’good people equates to good service’** -recruiting and training **right staff** is key to creating a **competitive advantage/satisfaction** -staff **add value** to service by **skills quality** -**level of after sales support** and advice can lead to **consumer loyalty** eg volunteers during london olympics and call centre staff who work to keep response time down

marketing Flashcards

(54 cards)