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Chapter 3.3 and 3.4 (Marketing Mix (3.3) (Life Cycle (Introduction (The…

- - - - Allows firms to benefit from first mover advantage
      - Creates competitive advantage and product differentiation so firms can set themselves apart from the competition.
  - - - Create and maintain loyalty through familiarity
      - Expand the product ranges as customers are more likely to try a new product from a brand they trust
  - - - Promote the product
      - Tell customer information
  - - - The product is launched into the market
    - - Sales are growing and competitors are entering the market
    - - Sales are growing at a decreasing rate and then the market reaches saturation
    - - Sales fall as new products enter the market or consumer tastes change
  - - - Cost Plus
        
        The average cost of one item is found and then a mark-up (profit margin) is added to find the final selling price
        
        Simple
        
        Can use profit targets to set price
      - Competitive
        
        Price is set at the same level as competitors in the market
        
        Customers expect to pay this price
      - Penetration
        
        Low price is set on a new item to attract customers
        
        Firms can gain customers at the expense of competitors
      - Skimming
        
        High price is charged when a product is first introduced into the market to get back money that was invested in the research and development of the product
        
        Helps the firm get back money invested in research
        
        Can make people think the product is superior
      - Promotional
        
        Reducing the price of a product to attract customers
        
        Increases brand awareness
        
        Can lead to short term sales increases
  - - - Producer sells directly to the customer
    - - Producer sells to a retail store that sells to the customer
    - - Large quantities are purchased from producer and then sold in smaller parts to customers
    - - Agent connects the buyer to the seller
  - - - Increase demand for the good or service the company produces
      - Establish a price for goods or services
      - Create, improve or maintain the brand image of the business
      - Raise awareness, emotion or concern for an issue or product
  - - - Businesses can access customers all over the world
      - Makes shopping easier
      - Can give detailed product information and reviews
    - - Increases competition
      - Can be expensive to create, update and maintain a website
      - May need to invest in complaint department
    - - Easier to find lowest prices
      - Can see reviews and feedback from other customers
    - - Customers can lose money through fake business or credit card scams
      - Customers can’t touch or try on the product before purchase
- - - - Mass media promotion
      - Low Prices
      - Blogs
    - - High Prices
      - Highly differentiated products
      - Specialized promotion that aims to reach the market segment
  - - - The marketing strategy a business uses must link with the objectives the business has set for itself. For example, a business that is trying to expand into international markets will adopt a marketing strategy to help achieve this objective
    - - Different types of marketing are more appropriate for different stages of the product life cycle. For instance, a new product in the market is best suited for penetration pricing or price skimming, while a product at the end of it’s life cycle is best suited for promotional pricing
    - - Businesses often make marketing decisions based on competitors
    - - Companies that sell industrial goods will need a different marketing strategy than a company selling consumer goods. Industrial goods generally have a small number of buyers and sellers and therefore developing new products for similar markets may be a strategy for a business to make
    - - Markets that change a lot in a short period of time need flexible marketing strategies. For example, clothing stores need to change constantly due to a. Changing styles and b. Changing weather
    - - The amount of money the business can afford to spend will impact the type of marketing the business does. For example, a new business with a small budget may choose to use social media and flyers for promotion
  - - - Increased Sales
        
        Increasing the number of customers while expanding means that more people will buy your products
      - Increased Customer Base
        
        Expanding their business would mean that more customers from where they are expanding to would be interested in your business
      - Culture-Specific products
        
        Culture-related products only works for the culture that the products are made for. So sales from a certain culture would be high if you make products that would only suit them
      - Product Differentiation
        
        Making a product that is superior to others of the same genre would attract more customers as it would be seen as something “premium”
      - Spreading risk
        
        Having your business overseas and on foreign soil would strengthen your business because if one sector of you business fails in one country, it doesn’t necessarily mean that it would be a downfall of your business
  - - - Working with another business when entering a new market
    - - Investing in training, new equipment and advertising
    - - Having a test period in the new market to see if customers like the product