1.3 Marketing mix and strategy Flashcards Preview

Buisness > 1.3 Marketing mix and strategy > Flashcards

Flashcards in 1.3 Marketing mix and strategy Deck (83)
Loading flashcards...
1

What is the marketing mix

combination of factors controlled by company -> influence consumers purchase its products.

2

What are the three elements of the design mix

function, economic manufacture, aesthetics

3

What is the design mix

the three aspects of design that companies need to consider when developing a product

4

Definition of aesthetics

-look, taste, texture or feel of an item

5

Definition of function

-whether an item does what its expected to do

-extent to whoch it surpasses expectations of quality of performance

6

Definition of economic manufacture

-ease and economy eith which product can be made on scale required

7

Name 5 benefits of good design

-can add value
-can provide point of differentiation
-can reduce manufacturing costs
-improves brand image
-may boost brand loyalty

8

Name 2 changes in the design mix to reflect social trends

-environmental concerns
-ethical sourcing

9

Name 3 key environmental concerns product design has focused on

-sustainability- ensure materials are sustainably sourced

-design for waste minimisation or reuse- need design products from outset with end of lives in mind- ensure parts of product that cannot be reused-> must be thrown away _> reduced

-recycling- parts of products that cannot be reused may be able to be recycled for another use

10

Why has there been changes in the design mix due to ethical sourcing

due to media coverage reporting things : child labour, unethical fishing methods- which can have a bad effect on a business

11

Name 2 methods ofcommunictaing

-branding
-promotion

12

What is promotion

methods used to communicate info & persuade consumers to purchase a product

13

What is sustainability

making something using materials that will still be avaliable in the future

14

What are the 2 types of promotion

-long term methods
-short term methods

15

Name 2 methods of long term promotion

-persuasive advertising
-public relations

16

Name 2 methods of short term promotion

-buy one get one free (BOGOF)
-seasonal price-cutting promotions

17

Name 3 benefits if branding

-added value
-ability to charge premium prices
-reduced price elasticity of demand

18

What is a brand

recognisable name or logo that helps differentiate a product or business

19

What is an individual brand

single product brands (Penguin biscuits)

-manufacturers make no attempt push brand focusing on just single brand

20

What is a brand family

brand name used used across a range of related products (Cadbury)

21

Give 2 advantages of brand families

-strong brand family encourages sales of each product within family through association wit others

-makes it easier to get retail distribution when launching new products

22

What is a corporate brand

-when a company uses company name as a brand (Nestle), it can convince all products across the range share similar benefits

23

Name 4 ways to build a brand and how

-advertising- reinforces messages company wants to portray about brand

-Unique selling point (USP)- particular feature that no rivals provide- key stimulus that launches brand

-Sponsorship- way of brand building by association- creates attachment in consumers minds that builds brands personality

-Digital media- using social media to build relationships with consumers- e.g. google ads popping up everytime a search is made

24

What is a unique selling point (USP)

-a particular feature of a product or service that no rival provides

25

Name 3 ways branding and promotion have changed to reflect social trends

-viral marketing- nowadays social media offers a wider and faster way to spread good and bad recommendations of a product

-social media- place where businesses can display promotional messages- more people use social media today

-emotional branding- attempts to create an emotional response to the brand from customers- social media- caused new emotional levels

26

Name the 2 types of pricing strategy used for new products

-price skimming
-penetration pricing

27

What is price skimming

launching a unique, new product at a high price

28

What is penetration pricing

launching a new product at very low price to entice customers to try it

29

Name 2 advantages and disadvantages of price skimming

+high prices generate rapid profits
+high prices help create desirable image for product
-image may suffer when price begins to fall
-will deter some customer- may see product as 'rip off'

30

Name 2 advantages and disadvantages of price penetration

+encourages customers to develop the habit of buying the product
+low price boosts sale volume cutting production costs
-products image may be seen as 'cheao'
-upmarket retailers may be unwilling to stock the product

31

Name the 4 types of pricing strategy used for existing products

-cost-plus
-predatory
-competitive
-psychological

32

What is cost-plus pricing

involves deciding price by adding a desired percentage onto total costs per unit

33

Name an advantage and disadvantage of cost-plus pricing

+guarantees a profit is made on each unit sold
-ignoring market may mean an unrealistic price is generated

34

When do firms with existing products use cost-plus pricing

when firm is a market leader with no need to worry about competition

35

What is predatory pricing

strategy that sets price low enough to force competitor out of business- local basis- where competitiors are smaller, local firms

36

Name an advantage and disadvantage of predatory pricing

+once rival has been forced to close prices can be pushed up higher- increasing margins
-if product proven to be specifically designed to drive rivals out of business- its illegal

37

When do companies with existing products sue predatory pricing

when firm is more financially powerful than smaller rivals

38

What is competitive pricing

charging price at market average or at discount to average price in market

39

Name an advantage and disadvantage of competitive pricing

+ensures price doesnt put off customers buying the product
-firms have little control over price they charge and so revenue generated

40

When do firms use competitive pricing

when company is trying to take on more powerful rivals

41

What is psychological pricing

tactic used to make fine-tuned descisions on price to charge- e.g. prives set at £9.99 instead £10

42

Name an advantage and disadvantage of psychological pricing

+can help customers into making a purchase by helping them believe they aren't spending quite £10
-little effect on planned purchases, might annoy customers

43

When do firms use psychological pricing

when selling impulse purchases or little treats

44

Name factors that determine the most appropriate pricing startegy and how

-level of product differentiation- highly differentiated products- more control over pricing

-price elasticity of demand- inelastic demand- firms can adjust prices how they want- elastic demand- firm must reduce prices to boost demand

-level of competition- higher level of competition, the less scope firm has moving away from competitive strategy

-strength of brand- strong brand differentiate products,- so have more control over pricing

-stage in product life cycle- introduction phase- key pricing decision, pricing changes when product grows

-costs and need to make profit- pricing below unit costs leads to loss, price sjould be above costs to make profit

45

How do changes in pricing reflect social trends

online sales- pricing online differs to shop -> consumers easily compare prices
-pricing levels lower online- no fixed costs

-price comparison sites- encourage firms to price competitively so their products show up on these sites,

46

Name the 5 distribution channels

-traditional physical channel
-direct to retailer
-own retailer
-direct online
-online retail

47

What is the traditional physical channel in distribution

when producers sell products -> wholesalers -> act as suppliers to smaller retailers.

-channel ^ selling price -> wholesalers, retailers add own markup

-mars -> wholsesaler -> independent store -> consumer

48

Definition of distribution channel

route a product takes from producer to consumer

49

What is the direct to retailer distribution channel

-larger producers ignore wholesalers and sell products in bulk to major retail chains

-save on the wholesalers markup but have tough negotiations with retail chains

-kelloggs -> sainsburys -> consumer

50

What is the be your own retailer distribution channel

producers that want to exter complete control over selling of products can set up their own retail outlet

-(e.g. apple stores sell only apple products)

-apple -> apple stores -> consumer

51

What is the direct online distribution channel

producers can set up their own websites to allow consumers to buy products directly from them

+producer keeps full price paid
-excludes consumers uncomfortable buying online

-e.g. dell -> dell website -> consumer

52

Name 2 changes in distribution to reflect social trends

-online distribution- allows small firms the chance to reach global audience-

-from product to service distribution-

53

What is the product life cycle

pattern of sales over time that most products tend to follow

54

Name the 4 phases of the product life cycle following a products launch

-introduction- (sales low)
-growth- (sales begin to rise)
-maturity - (growth in sales slow)
-decline - (sales fall)

55

Name 3 issues with the product life cycle model

-decline is not inevitable
-its hard to know precisely where a product is in its life cycle
-shape and duration of life cycle varies from product to product

56

What is an extension strategy

medium to long-term plan for extending life cycle of a product

57

Name 3 ways you can change a product nearing the end of its maturity stage that can lead to successful extension strategies

-launch slightly different variants of product
-add extra functions/ features
-change ingredients/ materials

58

Name 3 ways you can change the promotion of a product that can lead to successful extension strategies

-targeting different market segment
-finding new uses for product
-increasing use of product

59

What is the product portfolio

the range of items sold by a business.

60

What is the Boston Matrix

diagram -> bussinesses analyse product portfolio/ product mix

61

Name the 2 variables considered on the Boston Matrix

-market share
-market growth

62

Name the 4 quadrants found in a Boston Matrix diagram

-problem child
-cash cow
-rising star
-dog

63

What are problem child products

have low market share in fast growing markets
-may be successful in future

64

What are rising star products

have high market share in a fast growing market

65

What are cash cow products

products in stable markets that hold a high market share

-generate high sales with low marketing expenditure

-generate significant profit that business can help to further develop products in portfolio

66

What are dog products

products that have:
-low market growth --> low sales
-low market share
-unattractive

67

What are business to consumer (B2C) strategies

-keep good brand image for product is vital

-revisit marketing mix ensure meeting customer wants and needs

-ensure of customer loyalty

68

Definition of business to consumer

process of business selling products and services directly to consumers

-traditionally- manufacturers sold products to retailers with physical locations

-nowadays- online retailers- manufacturers sell goods online- e.g. company like Amazon

69

Benefits of business to business (B2B) model compared to business to consumer (B2C)

-B2B more profitable- purchasing/ selling in bulk- gaining profit on every item you sell

whereas B2C- only sell at market price
-customers may want discounted items


-deeper customer relationship between a B2B buyer and seller- leads to customer loyalty due to friendly service- more sales- increased profit

70

Benefits of business to consumer (B2C) model

-stringer customer loyalty

-no need for fixed costs- online payments

71

Definition of business to business

-transaction between one business and another (wholesaler and retailer)

72

Benefits of business to consumer (B2C) model compared to business to business (B2B) model

-reach of a B2C product can be much higher than a B2B product- more sales- more profitable

73

why is B2B better than B2C

-sell in bulk- gain profit on every item sold

-B2C- sell at market price- may want discounts

-better relationship w customers- customer loyalty- more sales- profit

74

What are intermediaries

businesses between producer & consumer in distrution channel

75

What is the online retail distribution channel

-when smaller producers use existing sites (ebay) to sell online - wide audience

76

Name 3 issues that are likely to determine the success of a new product

-understanding needs & wants of market

-creativity which solutions to problems can be found

-finding & committing resources needed for products success (money, ppl)

77

Name 5 step by step activities involved in new product development

-research & development
-product design
-packaging design
-advertising
-pricing

78

What is a marketing strategy

general approach to marketing used by a business

79

Name 3 ways marketinf stratgeies are likely to be successful

-strategy is about the future- predict future market conditions- ensure & ensure plan is devised for this

-strategy much be achieveable- plans must address real conditions operating in market

-strategy is company specific- usually only 1 space for 1 business following particular strategy -> e.g 1 firm would focus on being cheapest

80

What is a mass market strategy

when a business chooses to sell standard product to almost all consumers in market

81

Benefits of successful mass market dtrategy

-high distribution levels
-greater control over advertising & promotion
-degree of influence over pricing within the market

82

Benfits of sucessful niche market strategy

-able to meet consumer needs more precisely
-able to charge higher price than mass market products
-less direct competition

83

What is a niche market strategy

when business sells specialised product to smaller subsections of the market