Unit 3.3 Marketing Mix Flashcards
(28 cards)
Marketing Mix Definition
A combination of factors that can be controlled by a business to influence consumers to buy its products
4 parts of the Marketing Mix
- Product
- Price
- Place
- Promotion
Developing New products Advantages (3)
- Ability to enter new markets
- Developing more innovative products to customers, better meeting their needs and building customer loyalty
- Increased recognition of the business making it more competitive
Developing New products Disadvantages (3)
- Conducting market research for it is expensive
- Competitors may copy the invention leading to failure to make adequate profit
- Product may not be liked by consumers or popular leading to low sales
Brand Image Impact (4)
- Creates Brand Loyalty
- Helps differentiate the company’s product
- Product can be charged a higher price than less well-known brands because customers will still buy it
- Easier to launch new products into the market
What branding involves
- A unique name
- Unique packaging
- A higher price than unbranded product
- Better quality than unbranded products
Role of packaging (3)
- To protect the product during shipping from the manufacturer until selling at the store
- Helps sell the product by sharing information e.g nutritional information etc
- Vital role in the branding process of the product, increasing price elasticity of demand
Product Lifecycle (4 parts)
- Introduction
- Growth
- Maturity
- Decline
Introduction Phase (4)
- Sales grow slowly
- Informative advertising starts to attract customers
- Price skimming could be used if the product is new to the market
- Main aim is to BREAKEVEN
Growth Phase (4)
- Sales rise rapidly
- Persuasive advertising is used to encourage brand loyalty
- Prices may reduce a bit
- Sales start to generate profit
Maturity Phase (4)
- Sales rise more slowly
- Competition forces prices to be lowered hence competitive pricing is used
- Advertising is used to maintain sales
- Profit is at its highest
Decline Phase (4)
- Product goes out of fashion
- Sales and profit start to decline
- Advertising eventually stops
- No longer profitable to produce the product
Extending the product life cycle
A business may take up extension strategies to stop sales falling during its maturity stage, extending the product life cycle and increasing sales
Extending the product life cycle METHODS (3)
- Introducing variations of the product
- Selling in new markets
- Making small changes in the product and updating it
Price
The amount of money that has to be paid by a customer to acquire a given product
Cost-Plus Pricing
Covering all costs and adding a percentage mark up for profit
Cost-plus Pricing advantages
- Easy to apply
- Guaranteed to make profit
Cost-Plus Pricing disadvantages
- You lose sales if your prices are higher than competitors
- Costs may keep changing which may lead to fluctuations in price
Penetration Pricing
Setting a low price to entice customers to purchase from the business and increase market share
Penetration Pricing Advantages
- Ensures that sales are made when the product comes into the market
- Brand loyalty is built by creating mass demand for the product sold at a low price
Penetration Pricing Disadvantages
- Sales might still be low because the product is relatively unknown, so it may not be sufficient profit to cover for expenses
- A lower price may be linked to low quality of the product by consumers
