Making Marketing Decisions: using the marketing mix

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Elements of the marketing mix
Product, Place (where the purchase is made), Price, Promotion, People (anyone who represents the firm), Process (system involved ensuring that theres an efficient service), Physical Environment (nature+appeal of the physical evidence).
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Influences on the elements of the marketing mix
Competitors, Cash flow, Discounts, Marketing budget+cost of promotions, Location, Target market, Type of product you are marketing.
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Effects of changes on Product, Price, Place and Promotion
Product-Should possess the features that appeal to its TM+are consistent. Price-Low price attracts greater vol of customers but high prices are profitable. Place-Wants product available in as many places poss. Promo-Can increase sales.
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Effects of changes on Process, People and Physical Environment
Process-Process of buying must be conducted with speed+efficiency. People-People involved either directly or indirectly should be knowledgable, enthusiastic+well trained. Physical-A good impression must be given when customers come into contact.
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Define industrial marketing
Where a firm sells its products to another business.
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What are the main features of industrial marketing
Large transactions, quality, specialist buyers+sellers, informative advertising, pricing, buyer-seller relationship
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Define consumer marketing
Where a firm targets individual customers with its product.
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Define convenience products and their features
Purchases frequently+with minimum though+effort by customers. Consumed+purchased regularly, purchased by habit, tend to be low price, limited scope for consumers saving money, impulse buys placed at tills in shops are an example.
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Define shopping products and their features
Products that customers want to be readily accessible, but which involve thought+planning before purchase. Purchased quite often+do not need to be displayed so prominently in stores+likely to be available in fewer stores. More scope for higher prices
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Define speciality products and their features
Purchase is planned by consumers, product usually has unique characteristics. Consumers are more selective+greater emphasis on image and brand. People may travel some distance to purchase+price is not a key consideration.
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Define the Boston Matrix
Tool of product portfolio analysis that classifies products according to the market share of the product and the rate of growth of the market in which the product is sold. Includes stars, cash cows, problem child, + dogs.
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Define the 4 sections in the Boston Matrix
Stars- High MS, High MG (need lots of promotional spending+capital expenditure). Cash cows- High MS, low MG (spend less on advertising+is great for firms seeking profit). Problem C- Low MS, High MG (need lots of market research). Dogs- Low MS,low MG.
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Define the product life cycle
Shows the sale of a product over time, it is valuable for planning marketing strategies and changing the marketing mix. Marketing decisions will be based on where a product is in its life cycle (5 stages).
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State the 5 stages of the PLC
Development (has high failure rate due to low demand), Introduction (products launched, will have high costs), Growth (sales grow), Maturity (sales reach a peak+profitability increases as fixed costs have been paid for, Decline (sales fall).
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Define an extension strategy and what it does
Tries ot prolong the life of a product by changing the marketing mix. Methods of doing this: product development, market development (find new markets or new uses), promotion, distribution (e.g. selling online), price.
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State some ways that the PLC is valuable when changing the marketing mix
Helps a firm adapt the marketing mix cotrecly. In development the focus should be on product+price. Introduction should focus on place+promotion. Growth should be physical environment+process. Maturity should be price+promotion again.
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Define penetration pricing and price skimming
PP- Launching product at a low price to attract customers+gain market share. Effective in price-sensitive+budget conscious market segments. PS- New products sold at high prices to boost image+increase appeal. Prices are usually dropped after a while.
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Define loss leaders and psychological pricing
LL- Product sold at or below the cost price. Allows them to make a profit indirectly (e.g. consumers buy lots of other items as well). PP- Bases the price on customers' expeditions (e.g. 99p seems better that 1 pound).
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Define price discrimination and competitive pricing
PD- When a firm sells its product at different prices to different groups (e.g. according to age). CP- Company monitors their competitors' prices to set them equal or at a lower level.
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Define predatory pricing and cost plus pricing
PP- Firm deliberately lowers prices to force another business out of the market then raises them once competition is gone. CPP- Price set is the average cost of production plus a sum to ensure a profit.
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Influences on the pricing decision
Costs of production: Price set has to be high enough to cover costs. To make sure that the price suits both customers+the firm, they often use cost plus pricing. PED- Whether the product is elastic or inelastic.
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Define promotion and how can it be categorised
Process of communicating with customers or potential customers. Categories: Above the line promotion through media. Below the line promotion with all other promotional activities.
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Define branding
The process of differentiating a product from its competitors through the name, sign, symbol, design or slogan linked to that product. It builds customer loyalty, but can be expensive.
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4 Aims of promotion
Attention (improve awareness), Interest (make consumers want to find out more about the product), Desire (informative advertising), Action (point-of-sale displays, special offers+competition entries are popular methods of achieving this aim.
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Influences on the choice of promotional mix
Campaign objectives, costs+budgets, target market, balance of promotions in a campaign (e.g. advertising must be planned along with other promotions), Legal factions (e.g. restrictions on the use of media for alcohol advertisements on TV).
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Forms of promotions (elements of the promotional mix)
Merchandising, PR, sales promotion (e.g. free offers, BOGOF), Direct selling, Advertising.
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Importance of location?
Convenience, accessibility, cost of access, reputation, localisation.
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Define multi-channel distribution
When a firm uses more than once type of distribution channel. It gives flexibility for customers+wide market coverage for manufacturers.
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Factors influencing the method of distribution?
Size of the retail (if large they may want to bypass wholesaler), Type of product, Technology (internet bypasses the wholesaler+retailer), Geography of the market, Complexity of the product, Degree of control desired by the manufacturer.
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Define digital marketing
The anticipating and satisfying of consumer wants through the use of different forms of technology. Includes social media marketing, the use of search engine marketing, digital displays, and marketing through other forms of digital media.
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Benefits of digital marketing to businesses
Reduce costs, more personalised+targeted marketing, more immediate impact (digital promo is more flexible), marketing can be related to consumers' interests, easy to evaluate successes+failures, greater exposure international markets.
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Define e-commerce
The buying and selling of goods and services through the use of electronic media.
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Benefits of e-commerce to businesses
Saves costs, saves time, facilitates customisation of products, inventory levels can be reduced, can improve cash flow.
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Issues involving digital technology and e-commerce
Security, initial costs (technology can be very expensive to install), integration problems (different departments work on different systems), user resistance, lack of direct contact with the product.
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Other cards in this set

Card 2

Front

Influences on the elements of the marketing mix

Back

Competitors, Cash flow, Discounts, Marketing budget+cost of promotions, Location, Target market, Type of product you are marketing.

Card 3

Front

Effects of changes on Product, Price, Place and Promotion

Back

Preview of the front of card 3

Card 4

Front

Effects of changes on Process, People and Physical Environment

Back

Preview of the front of card 4

Card 5

Front

Define industrial marketing

Back

Preview of the front of card 5
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