marketing strategies Flashcards
(35 cards)
market segmentation
- demographic: features of a population including: age, sex, income
- geographic
- psychographic
- behavioural: according to the customers’ relationship to the product
Points of Differentiation
- customer service
- environmental concerns
- convenience
Positioning
refers to the technique in which marketers try to create an image or identify for a product/service compared with the image of competing products or services
Product
Most products are tangible and intangible. When customers purchase products, they buy both the tangible and intangible benefits - a total product concept and can be conceptualised by:
- branding
- packaging
Branding
A symbol design that identifies a specific product and distinguishes it from its competition, branding helps consumers:
- identify the specific products that they like
- evaluate the quality of products
Symbols and Logos
Categorised into five basic types:
- brand mark logo
- wordmark logo: logo is the name of business
- watermark logo: typography-based logo that’s comprised of a few letters, usually a company’s initials e.g BMW
- combination mark logos: contains a combination of a brand mark and a wordmark e.g pepsi
Emblem
logos that combine images with text. The difference is that emblem logos encapsulate these design features within a frame or border e.g Starbucks
Packaging
labelling is the presentation of information or its package. Marketers can use labels to promote other products or to encourage proper use of products → greater customer satisfaction with products
Price
Refers to the amount of money a customer is prepared to offer in exchange for a product. Many businesses have difficulty selecting the ‘correct’ price for their products. Pricing strategies are used to adjust the basic price, depending on the marketing objectives and conditions within the marketplace
Cost based method
Business determines the total cost of producing one unit then adds an amount to cover additional costs and to provide an adequate profit margin
Cost + (Cost x mark) - up percentage = price
Market-based Method
Setting prices according to the level of supply and demand, whatever the market is prepared to pay.
→ when demand for a product is greater than its supply, there will be a shortage in the market which will force up the price of goods
Pricing Strategies
Once the price method has been set using the preferred pricing methods, the business then tweaks this price in accordance with its pricing strategies
Skimming price strategy
Occurs when a business charges the highest possible price of the product during the introduction of its life cycle.
→ Some consumers are willing to pay a higher price for the product’s novelty features because of the prestige or status that ownership gives
Penetration pricing strategy
Occurs when a business charges the lowest price possible for a product.
This strategy aims to quickly achieve a large market share for a product as the objective is to sell a large number of products during the early stage of the life cycle and thus discourage competitors from existing businesses.
The main disadvantage of this strategy is that it more difficult to raise prices significantly than lower them e.g Netflix
Loss leader
Is a product sold at or below cost price.
- the psychology behind this strategy is that once the consumers are in the store, they will usually buy the products and spend on more than what attracted them into the store to begin with.
Price Points
Is selling products only at certain predetermined prices. This pricing strategy is used mainly by retailers, especially clothing stores and boutiques
Using this pricing strategy makes it easier for the customer to find the type of product they need. It also makes it easier for businesses to encourage the customer to trade up to a more expensive model.
Price and Quality Interaction
Charging a high price allows the product to develop an aura of quality and status. This pricing strategy is referred to as prestige or premium pricing and is designed to encourage status-conscious consumers to buy the product.
Promotion
Attempts to:
- attract new customers by heightening awareness of particular products
- increase brand loyalty by reinforcing the image of the product
- encourage new and existing customers to purchase new products
Promotion Mix
- Advertising
- Personal selling
- Relationship marketing
- Sales promotion
- Promotion Publicity and Public Relations
Advertising
A term for the many forms of electronic and print communication used to reach an audience:
- print publications
- television ads
- Radio ads
- Outdoor ads e.g billboards
Personal Selling
Involves the activities of a sales consultant to a customer to make a sale; involves the human aspect of promotion
- these products in particular require the personal contact of a sales representative to familiarise the customer with the product
Relationship Marketing
Ultimate aim is to create customer loyalty by meeting the needs of customers on an individual basis
- creating reasons to keep customers coming back e.g woolworths
Sales Promotion
A business may decide to offer a direct inducement to customers in an attempt to sell more of its sale promotion and aims to:
- entice new customers
- encourage free trial purchase of a new product
- increase sales to existing customers and repeating purchases
Publicity and Public relations
Any free news story about a business’s products, differs from advertising in that is is free and timing is not controlled by the business
Public Relations (PR) are activities aimed at creating and maintaining favourable relations between businesses and its customers e.g using unpaid third parties as outlets
