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BUSINESS THEME 1 - TOPIC 1.3 - marketing mix and strategy - Coggle Diagram
BUSINESS THEME 1 - TOPIC 1.3 - marketing mix and strategy
product and service design
the design mix
refers to the way in which function, aesthetics and economic manufacture are combined in the overall design of a product or service
design mix triangle
social trends
social trends are the ways society as a whole behaves and the values that determine that behaviour
3 main social trends...
waste minimisation
scarce resource depletion
ethical sourcing
ethical sourcing
this is sourcing your goods and making them ethically e.g not using sweatshops
basic ethical sourcing principles...
creating opportunity for economically disadvantaged producers
integrity
fair payment
working conditions
gender equality and childrens rights
1 more item...
benefits of adapting to social trends on
firm
better image
can be cheaper
more customers
customers
more appealing product
firms could drop prices
healthier products
larger range of products
the
marketing mix
are 4 elements of a business' marketing that help firms
promotion and branding
promotion
is the element of the marketing mix that focuses on persuading people to buy the product/service
types of promotion
digital promotion
pros
cheap
worldwide
not time consuming
cons
lots of competition
sales promotion
increase sales by dropping price
pros
beat rivals
cons
lower profit margin
public relations
improve image
pros
customer loyalty
cons
no guarantee in more sales
merchandising + packaging
make product eye catching
3 types of advertising
informative advertising (features product)
persuasive advertising (better than competition)
reassuring advertising (existing customers made right decision
pros
widely viewed
quick to do
increase sales
cons
difficult to get noticed
expensive
branding
is the skill of giving a product or service 'distinctiveness'
why firms want a recognisable brand..
USP
reputation
brand loyalty
can then charge higher prices
types of branding
individual brand e.g marmite
corporate brand e.g nestle own kit kat, cheerio ,etc
umbrella brand e.g cadburys
ways to build a brand
advertising
sponsorship
USP
social media
changes to reflect social trends
viral marketing
social media
emotional brand
pricing
factors influencing price
cost of raw materials
customers (PED)
time to make product
pricing strategies
cost plus pricing
costs + %mark up = price
simple but doesn't take competition into account
competitor pricing
setting prices in line or slightly below the competition
ideal in highly competitive market
psychological pricing
setting a price designed to put notions of value into the customers minds
e.g 99p rather than £1
predatory/destroyer pricing
setting prices at below cost price so that you put the competition out of business
this usually leads to them raising their prices after
price skimming
setting an initial high price when launching a new product, aimed at getting extra revenue
pros
higher revenue
looks like a luxury
cons
lose customers
customers expect quality
penetration pricing
setting an initial low price in order to build market share before increasing price
pros
attracts more customers
quick revenue income
cons
lower revenue per purchase
very risky if sales don't rise
factors influencing pricing strategy
competition
brand strength
PED
product life cycle
product life cycle ^
changes to reflect social trends
spread of internet and online sales e.g amazon has dropped market prices drastically
distribution
distribution is getting products/services to the right place and at the right time for consumers
a distribution channel is the route taken by a product as it moves from producer to consumer
4 stage channel
producer > wholesaler > retailer > customer
e.g groceries
cheap products
mass markets, lots of sales
well established firms
cons
can be expensive
need to be a big firm
relying on someone else
pros
can sell on large scales
don't have to oversee
no storage
3 stage channel (v1)
large producer > small retailer > customer
e.g car companies
large volume of sales
large firm in mass market
pros
no storage
don't have to sell product
cons
misleading
retailer can damage producers reputation
3 stage channel (v2)
small producer > large retailer > customer
mass market
small firms
e.g supermarket
pros
can use retailers customer base
gives product good repuation
cons
product may be belittled
have to pay retailer
2 stage channel
producer > consumer
e.g farm shop
lower volume, high prices, small firms
niche market
cons
low volumes
small customer base
you have to oversee
pros
don't rely on others
more ethical
can charge higher prices