The marketing mix & strategy

Question 1

Things that businesses may consider when designing a new product include s_____, a___________, its f_________, d____________, its i________, as well as it’s ease in being _____ effectively produced.

Answer 1

shape
appearance
function
dimensions
image
cost

Question 2

Explain why the function of a potential product is important for businesses to consider.

Answer 2

A product must be fit for purpose and reliable, working every time a customer tries to use it. Products that do not do what they say will not suceed. Products should also be convenient, making it as easy as possible for the customer to enjoy the product.

Question 3

Aesthetics - Products and services should provide __________ __________ and _________ __________. This can change over time due to changes in __________ _______.

Answer 3

sensory stimulation
aesthetic appeal
consumer tastes

Question 4

Explain why the cost of a potential product in important for businesses to consider.

Answer 4

A well designed product is more likely to be bought if it is cheap. Businesses will want to try and produce at the lowest possible price to make more profit.

Question 5

What are some examples of how businesses will try to reduce waste when producing new products?

Answer 5

1= Making products more durable so they can last a lifetime.

2= Designing products smaller and lighter.

3= Design for reuse or recycling

Question 6

What are the benefits of a buisness designing a product to be recycled?

Answer 6

As well as reducing the costs of production, businesses can develop a positive brand image by presenting themself as being good to the environment by promoting recycling.

Question 7

What is the definition of promotion?

Answer 7

Promotion is when buisnesses attract attention to their products.

Question 8

What are some of the aims of promotion?

Answer 8

Tell consumers about a new product
Remind consumers about a product
Reassure consumers about a product
Reach a new target audience
To show customers that a rival is bad

Question 9

What is the difference between above-the-line and below-the-line advertising?

Answer 9

Above-the-line advertising involves paying for promotion, wheras below-the-line advertising involves non-paid promotion.

Question 10

What are the three types of above-the-line advertising?

Answer 10

1= Informative advertising
2= Persuasive advertising
3= Reassuring advertising

Question 11

What are some benefits of advertising?

Answer 11

1= Reaches a huge amount of customers
2= They may be seen repeatedly
3= It can be targeted

Question 12

What are some drawbacks of advertising?

Answer 12

1= Very expensive
2= May lack impact / be ignored
3= Can be controversial

Question 13

What are some examples of sales promotions?

Answer 13

1= Free gifts
2= Coupons
3= Loyalty cards
4= B1G1F

Question 14

How can public relations be used as a form of below-the-line advertising?

Answer 14

Communicating with customers, via press releases, social media or donations can be used to improve the image of a business.

Question 15

What are some benefits of having strong branding?

Answer 15

1= Added value & loyalty
2= Ability to charge premium prices
3= Reduced price elasticity of demand

Question 16

What are some ways to build a brand?

Answer 16

1= Unique selling point (USP)
2= Advertising
3= Sponsorship
4= Social media
5= Aligning with social trends

Question 17

Explain cost plus pricing.

Answer 17

This is where businesses add the mark-up costs onto the unit cost to decide their prices. This can sometimes be bad as it ignores market conditions.

Question 18

Explain price skimming / creaming.

Answer 18

Price skimming is where you launch a product into a new market charging a high price for a limited time. It takes advantage of a new market until competitors arrive.

Question 19

Explain penetration pricing.

Answer 19

This is where a business enters a new market and charges a low price for a limited time, aimed at gaining a foothold in the market.

Question 20

Explain predatory pricing.

Answer 20

Predatory Pricing aim is to eliminate competitors from the market, by charging a very low price for a period of time until one or more rivals leave the market.

Question 21

Explain competitive pricing.

Answer 21

This is where businesses set their prices very similar to rivals. It is usually regarded as a way to avoid a price war with rivals.

Question 22

Explain psychological pricing.

Answer 22

This strategy puts prices just below whole figures (e.g. £99.99 instead of £100, aiming to trick customers into believing prices are lower than they actually are.

Question 23

Explain dynamic pricing.

Answer 23

This is a strategy commonly used in the travel and event industry. It is where revenue us maximised by adjusting prices due to the time of day, week, closeness to event, or availability of tickets.

Question 24

What are some factors affecting which price strategy is most appropriate?

Answer 24

1= Whether they have a USP
2= PED of the product
3= Degree of competiton
4= Strength of the brand
5= Stage in the product life cycle
6= Unit costs and the need to make profit

Question 25

Define distribution channels.

Answer 25

Distribution channels is the route taken by a product from the producer to consumer.

Question 26

Define direct selling and give an example.

Answer 26

This is where you sell products directly to your customer. Examples include the internet, door-to-door selling or telephone selling.

Question 27

Give one benefit and one drawback of direct selling.

Answer 27

Direct selling does not require the use of an intermediatary. However, it do

Question 28

What are wholesalers?

Answer 28

Wholesalers buy products from manufactuers and sell them to retailers. They act as an intermediatary. A famous example of a wholesaler is Costco.

Question 29

What are agents / brokers?

Answer 29

They link buyers to sellers.

Question 30

What are some factors that influence which distribution channel a company decides to use?

Answer 30

1= Nature of the product 2= The market 3= Cost 4= Control

Question 31

Why would the nature of a product influence which distirbution channel a company decides to use?

Answer 31

Most services are sold directly to consumers, for example, window cleaners use intermediataries. Fast moving consumer goods cannot be sold directly because such goods would not be sold effectively by manufacturers in single units.

Question 32

What is the main recent trend in terms of the distribution of products?

Answer 32

The main change in social trends with distribution is the move to online selling, often known as e-commerse.

Question 33

What are the benefits of online distribution to consumers?

Answer 33

1= Normally a lower price 2= Can shop 24/7 3= Can shop anywhere 4= Huge amount of choice

Question 34

What are the benefits of online distribution to businesses?

Answer 34

1= Low startup costs 2= Payments can be made online 3= Less money spent on staff and premesis

Question 35

What are some drawbacks of online distribution to businesses?

Answer 35

It is very easy for competition to form as it can be done from anywhere and cheap. Customers are also not able to touch / see the product before they buy it.

Question 36

What is the product life cycle?

Answer 36

It shows the different stages that a product passes through over time and the sales that can be expected at each stage.

Question 37

What are the six stages of the product life cycle?

Answer 37

1= Development 2= Introduction 3= Growth 4= Maturity 5= Saturation 6= Decline

Question 38

What are extension strategies?

Answer 38

They are a way of prolonging the life of a product before it starts to decline. There is normally two methods, product adjustment and promotion.

Question 39

What would it mean if I were to say a business was effectively managing the product portfolio?

Answer 39

Managing the product portfolio is phasing out old products and introducing new ones. By organising launch at regular intervals, there is never a gap in the market.

Question 40

What are the two variables that the Boston Matrix assesses?

Answer 40

Market growth and relative market share.

Question 41

Stars are valuable to businesses. They exist where a business has ____ growth and ____ share. They are already ___________, but need ___________ to be able to cope with a growing market. Net cash flow may be _____.

Answer 41

high high profitable investment zero

Question 42

Cash Cows are likely to be profitable. They have ____ growth, ____ share. Due to this, little ____________ is needed and it will have a _________ net cash flow.

Answer 42

low high investment positive

Question 43

Question marks exist where a product has ____ growth, ____ share. These are a problem for businesses due to their _____________ on whether they will be profitable. It has the potential to be a _____. Net cash flow is likely to be ____.

Answer 43

high low uncertainty star low

Question 44

Dogs exist where a product has ____ growth, ____ share. These have relatively _____ prospects for sales and profits. However it can have _________ cash flow due to little need for _____________. Businesses should try to get rid of these assets.

Answer 44

low low poor positive investment

Question 45

Why would it be bad if a business had too many products in the same category of the Boston Matrix?

Answer 45

Having too many items at the top of the boston matrix can drain resources. Balancing these with cash cows will mean positive cash flow from the cash cows can be used to support products in a growing market.

Question 46

Define marketing strategies.

Answer 46

Marketing strategies are a set of plans aimed at meeting a specific marketing objective.

Question 47

Define marketing.

Answer 47

Marketing is the management process of identifying, anticipating and satisfying consumer demands for profit.

Question 48

What are the 4 P's of the marketing mix?

Answer 48

1= Product 2= Price 3= Promotion 4= Place

Question 49

What marketing strategies are more aligned with competing in a mass market? - Link one point to each of the 4 P's.

Answer 49

1= Developing a USP 2= Following the market price 3= Invest heavilly into promotion 4= Use multiple distribution channells

Question 50

What marketing strategies are more aligned with competing in a niche market? - Link one point to each of the 4 P's.

Answer 50

1= Design carefully to meet customer needs 2= Charge a premium price 3= Targeted advertising 4= Selective distribution channels

Question 51

What is the difference between an inbound marketing strategy and an outbound marketing strategy?

Answer 51

Outbound marketing strategies direct marketing materials at potential customers, wheras inbound marketing strategies attract customers to websites when they are looking for solutions to problems.

Question 52

What are some ways businesses can develop customer loyalty?

Answer 52

1= Communication 2= Customer service 3= Customer incentives 4= Personalisation 5= Preferential treatment