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Management of marketing (Marketing mix (Price (Promotional pricing (The…

- - - - To develop a successful marketing strategy. And to make decisions about the product the organisation offers.
    - - Routine purchases
        
        buying something due to habit, eg shampoo’s biscuits, it’s linked to brand loyalty.
      - Limited decision-making purchases
        
        buying a product that requires some thought, eg clothes,
      - Impulse purchases
        
        buying a product without thinking about it, something on sale whilst on your way to the counter, it’s usually cheap or has an attractive display.
      - Extensive decision-making purchases
        
        buying something that requires a high degree of thought, it may take a long time to decide, eg car or house.
- - - - Advantages
        
        The researcher has gathered new information and is therefore more up-to-date than existing information. The information has been gathered for a specific purpose and is therefore more relevant to the business needs.
      - Disadvantages
        
        Can be expensive to carry out, which can affect the profits of the organisation. Can take a long time to carry out, which in turn means it takes longer to make decisions. Training is required for the employees to carry out the field research, which can be expensive and in turn affect sales.
    - - Hall Tests
        
        Allows customers to try the product out, eg free samples, this allows first hand information to be gathered. It also means businesses can then make alterations to existing products if negative feedback is received. Also it's inexpensive compared to the other methods. Although people may be dishonest about what they think about the product as they have tried it for free.
      - Focus Groups
        
        A discussion between a selected number of people and a researcher. People’s feelings towards different topics can be gathered as a discussion is taking place. It ensures new products meet customer needs and that businesses advertising strategy is targeted at the correct market segment and if its effective.
      - Observations
        
        Involves watching something then recording what happens. The observation may be counting the number of times something happens or someone does something, or what someone's reaction is to a particular situation
        
        Advantage
        
        Numerical information is gathered, which is easier to analyses than people's views or opinions. Often consumers are unaware that they are being observed so should act naturally.
        
        Disadvantage
        
        Those being observed cannot be asked for their opinion as to why they did or did not do something. Observers need to be trained in carrying out observations, which can be expensive.
      - Sampling
        
        When a businesses selects who to take part in their research
        
        Random sampling
        
        Randomly selecting people from a list (e.g. rom a telephone directory). These individuals are then questioned. This limits interviewer bias as they have not selected particular individuals to participate.
        
        Quota sampling
        
        Selecting people to question based on certain characteristics (e.g. age, gender or occupation). This may lead to bias. It is less expensive to carry out than random sampling.
      - Questionnaire/ Survey
        
        Asking people’s views and opinions on a product. This research will allow businesses to get feedback on their product which could then allow businesses to enter new markets or increase their market share.
        
        Postal survey
        
        A survey is sent through the post, is completed then sent back.
        
        Advantage
        
        Can interview people from a variety of geographical locations. Surveys can be completed at a time that people choose and is more convenient to them.
        
        Disadvantage
        
        Relies on people opening the letter containing the questionnaire in the first place, completing it and sending it back. Information is not obtained instantly. Clarification cannot be gained; the survey has to be designed carefully.
        
        Online survey
        
        A website is used to ask questions and people simply access the website to answer them.
        
        Advantage
        
        Online software can often be free of charge. No postal or telephone costs. Can interview people from a variety of geographical locations. Online software can often collect and analyse the results.
        
        Disadvantage
        
        Online software that is free might limit the number of questions that can be asked. People require access to the internet. Clarification cannot be gained; the survey has to be designed carefully.
        
        Telephone survey
        
        Consumers are contacted by telephone and asked to answer questions.
        
        Advantage
        
        Can interview people from a variety of geographical locations. Less expensive than a personal interview. Clarification can be obtained. Information is obtained instantly.
        
        Disadvantage
        
        People might not like taking part in a telephone survey. Large and time-consuming surveys are unlikely to be suitable for this method.
        
        Street survey
        
        Asking people in the street to complete a survey.
        
        Advantage
        
        Specific individuals can be chosen (e.g. based on their age or gender). Clarification can be gained.
        
        Disadvantage
        
        Expensive to carry out as individuals need to be employed to carry out the survey.
        
        Personal interview
        
        A face-to-face interview, with the interviewer asking a number of questions.
        
        Disadvantage
        
        Time-consuming and expensive to carry out. Not many people may be able to be interviewed in this way compared to other survey methods. Researcher requires training to be successful.
        
        Advantage
        
        Clarification can be gained on questions not understood. Body language and facial expression can be monitored. Information is obtained instantly.
  - - - Advantages
        
        Since the research has already been carried out, it is easy and faster to obtain. cheaper than field research, which save the business capital. Decisions can be made quickly because the information already exists.
      - Disadvantages
        
        Since the research was carried out for a different purpose, it is not as reliable and relevant as field research, also maybe not as useful. The research may have been gathered a long time ago therefore making the data irrelevant to todays society.
- - - - Above the line
        
        Mass media promotions to a large range of people, e.g. through newspapers, posters, TV and cinema adverts, radio advertising, billboards and other forms of mass media advertising.
      - Bellow the line
        
        Promotions to focused groups of people, e.g. sales promotions, public relations and direct selling.
    - - Look at oprations
    - - Into the pipeline
        
        Manufactures encourage retailers to stock their products.
        
        Sale or return.
        
        The manufacturer gives the retailer the opportunity to return products to reduce the risk of being stuck with stock that has not been sold.
        
        Staff training.
        
        The manufacturer may provide training and demonstrations to the retailer's staff so that they feel confident in promoting the manufacturer's product.
        
        Point of sale materials
        
        Often free posters, display standards and other material are given to retailers to display products to customer
        
        Dealer loaders.
        
        These are offers given to encourage the retailer to stock the manufacturers product (e.g. BOGOF)
      - Out of the pipeline
        
        Retailers encourage customers to buy from them.
        
        Vouchers.
        
        Usually given out in newspapers/ magazines in store. They entitle the customer to a discount on purchases they make at a later date.
        
        Free samples.
        
        Customers are given small samples of the product for free, so that they can see/ test the product in the hope they will buy it.
        
        Special offers.
        
        E.g. BOGOF and other reductions in the price of a product. They are usually short-term and only on selected products.
  - - - Personal selling.
        
        Involves a trained sales member of the organisation selling the product directly to the customer. It allows the sales member to demonstrate how the product works to the customer and to answer any questions that they may have. Customers might feel pressured into buying the product which may put them off. Also the employee requires training in order to have specialist knowledge of the product.
      - Direct mail.
        
        Involves posting leaflets directly to the homes of potential customers. This allows for specific market segments to be targeted, covering large geographical areas. However customers might not like receiving lots of mail in this way and just bin it.
      - Mail order
        
        This is through buying a catalogue. It is convenient to the customer as they can look through the catalogue in their own time and when they feel ready. It also reduces the costs associated with high street stores. However, catalogues are expensive to produce and are un-environmentally friendly.
    - - Train
        
        Advantages.
        
        Large products can be transported. Large quantities can be transported.
        
        Disadvantages
        
        There isn't a train station in every location or even a rail line. Not a door-to-door service.
      - Plane
        
        Advantages.
        
        Products can be transported across the world more quickly than by sea. Large amounts of small products can be transported.
        
        Disadvantages
        
        Large items cannot be transported. Products need to be taken to an airport to be loaded onto the aircraft- this could be expensive. Not a door-to-door service.
      - Car
        
        Advantages.
        
        Cheaper than other methods. Delivery is often quick. Customer receives the product direct to their door.
        
        Disadvantages.
        
        It is difficult to transport large products. Not as environmentally friendly as other methods. Roadwork's might cause delays.
      - Boat
        
        Advantages.
        
        Large products can be transported. Products can be transported across the world.
        
        Disadvantages
        
        It is time consuming to transport products across the world. Not a door-to-door service.
    - - E-tailer
        
        Shopping online and having the product delivered to you (e.g. amazon). This type of retailer often has lower overhead costs because they do not have to worry about having the costs associated with having a store. They often rely different logistic companies to distribute their products.
      - Discount retailer
        
        Often provide non-branded products at a low price. They have become increasingly popular due to the economic climate, this meant other retailers have had to discount their own products in order to remain competitive.
      - Convenience retailer
        
        Often referred to as the corner shop. This type of retailer normally has a small shop where a limited amount of products can be bought. Often found in busy residential areas and are normally more expensive than supermarkets. This is due to them not having the same buying power as supermarkets and because they are offering a product in a convenient place for their customer.
      - Supermarkets
        
        Often very large organisations that buy large quantities of products and then sell them in their stores. They mainly supply food and drink but have recently started providing electrical and home ware goods. E.g. Tesco (large supermarket). They often put smaller local businesses out of business.
    - - EPOS gathers data on consumer behaviour by monitoring their buying habits. This is done through the electronic stock record, it does this by scanning the barcodes on products and the data gathered is put into spreadsheets, which is automatically updated.
        
        Benefits
        
        Electronic Point of Sale (EPOS) gathers information on consumer behaviour by using an electronic stock record, it monitors their buying habits. EPOS scans barcodes on products and sends the information to be made into a spreadsheet, which is automatically updated using a formula. Promotions, offers and mail shots can be designed specifically
    - - Where finished products are held until they are ready to distribution to the customer. Needs to be designed to ensure the most efficient movement and flow of stock.
  - - - The price is charged is lower than normal for a short period.
        
        The product will be bought by customers because it is on special offer and they are getting a 'deal'
    - - The cost of making the is calculated before a percentage is added on for profit.
        
        Ensures that the cost of making the product is covered and that a profit is also made.
    - - The price charged is higher than the price charged by competitors.
        
        The product will be bought by customers because they think it is of a higher quality than competitors.
    - - The price charged makes the consumer think that the product is cheaper than it actually is.
        
        This method attracts consumers to by the product as they think it's cheap, attracts consumers who buy on impulse.
    - - The price charged is lower than the price charged by competitors.
        
        The product will be bought by customers because it is cheaper than competitors.
    - - The product is introduced to the market at a low price and will be increased once the product becomes known.
        
        Encourages customers to buy the product. Once customers are attracted, the price can then be increased.
    - - Pricing the product similar to competition.
        
        Attracts customers and allows businesses to compete.
  - - - Growth
        
        more people are aware of the product and are buying it, sales grow rapidly. The sales grow rapidly and profits begin to increase.
      - Maturity
        
        Sales are at it’s peak, the product is well known. Extension strategies could be used at this point by businesses to keep sales at it’s peak for a longer time. There is high profits.
      - Introduction
        
        The product is launched onto the market, it’s heavily advertised so that consumers will know the product exists, sales will being to increase. The sales are low and costs are high, which in turn means very little or no profit.
      - Saturation
        
        Everyone has now got the product meaning it’s no longer in demand. This might be a single point in time or it could be for longer. The sales begin to decrease which in turn decrease the profit.
      - Development
        
        This is the market research and development stage. Consumers are unaware of the product. There is no sales, high cost which in turn means no profit
      - Decline
        
        New and improved products are introduced onto the market, the product is no longer wanted meaning sales decline. The product is eventually withdrawn from the market. The profits fall and loss might be incurred eventually.
    - - Extension strategies are used to prolong the product's life cycle, especially to keep it in the maturity stage. Businesses may do this because they don’t want to risk starting again with a new product.
        
        Improve the quality, this could be done through by using higher quality raw materials.
        
        Change the price, place, name and purpose of the product.
        
        Change the size, variety or shape (appearance),to make it different from the original
        
        Change the method of promotion used to promote the product, eg BOGOF or use celebrities in adverts.
    - - Advantages
        
        To reduce the risk of failure of one product as one product might be doing better than another. To appeal to a variety of market segments as different products will appeal to different types of customers. To make introducing a new product easier as the businesses brand is already established.
      - Disadvantages
        
        The cost of promoting and advertising lots of different products could be high and could result in less profit. If one product receives a bad reputation or image this might impact upon all the products being sold by the business.
    - - Used to plot the range of products offered by an organisation. Shows the position of a product in relation to its market share and whether it is achieving market growth. Four components- problem child, star, dog, cash flow