THEME 1, Marketing Mix

Question 1

What are the 4 elements?

Answer 1

Price
Product
Promotion
Place/distribution

Question 2

Explain some pricing strategies for a new business

Answer 2

1. Penetration pricing, start low and rise price gradually
   Gains customers
2. Price skimming, start high and drop price gradually
   Premium feel, when t lowers consumers think theyre getting a good deal

Question 3

Explain some pricing strategies for an existing business

Answer 3

1. Phycological pricing, eg 3.99 seems better value than 4
2. Competitive pricing, similar to rivals
3. Premium pricing, luxury feel to product
4. Cost plus pricing, adding a % mark-up to price to ensure you make a profit

Question 4

Explain the elements of the design mix

Answer 4

1. Aesthetics, how the product appeals to the senses
2. Cost, how much it is to make the product
3. Functionality, how the product works

Question 5

Explain the pros and cons of the 2 locations a product can be sold

Answer 5

1. Online
   PROS
   No physical shop cost, can offer lower prices=more competitive
   Convenient for the customer, open 24/7, can order from anywhere, can compare prices

CONS
More competition
Customers often want to see/try product, offer virtual assistance to combat this, also free returns

2. In a shop
   PROS
   Customer can try the product
   Might buy other items while in the shop
   Easy access to employee help

CONS
Have to hire employees
Pay for shop

Question 6

How can you promote a product?

Answer 6

BOGOF’s
Promotional pricing(temporarily reduced prices)
Social media
Sponsorships(business funds an event in return for positive promotion)

Question 7

What does promotion aim to do?

Answer 7

Improve a product/businesses brand reputation, image and awareness

Question 8

What is the Boston matrix?

Answer 8

A tool used by businesses to analyse their product portfolio and decide which product to invest in

Question 9

What is a star?

Answer 9

High market share in a high growth market

Question 10

What is a cash cow?

Answer 10

High market share in a low growth market

Question 11

What is a problem child?

Answer 11

Low market share in a high growth market

Question 12

What is a dog?

Answer 12

Low market share in a low growth market

Question 13

Explain the product life cycle

Answer 13

Introduction, growth, maturity, decline
Decline can be slowed using extension strategies(innovation, rebranding etc)