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Marketing Mix (all of the activities that are involved when marketing a…
Marketing Mix
(all of the activities that are involved when marketing a product or service)
Product (This includes the quality and the design of the product, including its packaging)
Product Life-Cycle
– the stages a product will go through all the way from development until decline (stop selling)
Development
of product – market research carried out and product is tested, before launching (no sales)
Product
introduced
to market – Sales growing slowly because customers don’t know it exists yet (no profit)
Growth
- Sales grow quickly – advertising is changed to encourage customer loyalty
Maturity
- Sales still increase, but slowly, competition is high so prices are changed (profits are at highest)
Saturation
– competition is very high, profits start to fall as sales reached maximum point. Price reduced
Sales
decline
– new products are made or trend is gone. Prices are so low it is unprofitable to make it. Advertisement is stopped
Unique Selling Point (USP)
– the special feature of a product that makes it different from other products
Advantages and Disadvantages
Advantages
Since the product has its USP, the business will be the first into the market with the new product
Diversification for the business – more range of products to sell, more customers
Allows business to expand into new (or existing) markets
Disadvantages
Carrying out new market research & analysis is expensive
Deterioration of brand image if the new product fails to meet consumer needs.
Lack of sales if the target market is wrong
Brand image
– the identity of a product which separates it from competitor products
The product brand is advertised to inform all the qualities about the product and encourage consumers
Pricing
Types of pricing
Penetration – priced lower than competitors’ prices to enter new market (consumers will try out cheaper product and see if they like it)
Competitive – priced just below the competitors’ prices to get more market share and increase sales
Price Skimming – a high price is set for a new product on the market. (used for new inventions or development of an old product)
Promotional – priced very low for a short period of time to increase sales. when there is lots of stock but no one is buying. don’t make much (if any) profit
Cost Plus – the cost of manufacturing plus a profit. it will cover costs and make sure profit will be made
Price Elasticity
– a measurement of how responsive the market is when there is a change in price of a product
Price-Elastic Demand
is when the % of the loss in demand is GREATER than the % of the increase in price
Price-Inelastic Demand
is when the % of the loss in demand is LESS than the % of the change in price
Place (Where a product is sold will affect how well it will sell)
Distribution Channel - the method a business will use to send a product from the factory to customer/retailer
Distribution channel 1
- Manufacturer sells products directly to consumer
Distribution 2
- Producer sells to retailers which sell to consumers
Distribution channel 3
- Producer sells to wholesalers to retailers which sell to consumers
Distribution 4
- Producer sells to an agent to wholesalers to retailers which sell to consumers
Promotion
(publicizing a product/brand to increase
customer awareness or increase sales)
aims of promotion
create a brand image
introduce a new product into a market
increase competition
improve the company’s image
increase the sales
types of advertisements
Informative Advertisement
– where the promotion of a product focuses on giving information about a product
Persuasive Advertisement
– where the promotion of a product focuses on persuading the consumer that they really need the product and they should buy it
Advertising media
Television
Radio
Newspaper
Magazines
Billboards
Internet (Social Media)
Sales Promotions – when incentives are used to increase sales (short term)
Sales (price reductions)
Gifts
“Buy one get one free”
Competitions
Free Samples