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48 Cards in this Set
- Front
- Back
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What is the pricing strategy called when businesses charge a high price to target customers who will pay most? |
Price skimming |
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What is the pricing strategy called when a business makes no profit on a sale but expects customers to buy other products? |
Loss leader |
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What pricing strategy plays on customer's perception of value? E.g. 99p rather than £1 |
Psychological pricing |
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Give 5 examples of how to segment the market |
Age, gender, interests, socio economic group, location |
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Product portfolio |
The range of products sold by a business |
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Diversify |
Spreading risk by selling in different markets |
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Product life cycle |
The lifespan of a product, recorded in sales from launch to being taken off the market |
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Extension strategies |
Steps taken to extend the life cycle of a product |
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Competitive pricing |
Setting a price for a product based on prices charged by competitors |
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Price skimming |
Setting a product at a high price to create a high-quality and exclusive image |
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Loss leader pricing |
Setting a price below cost hoping to gain other profitable sales |
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What is market share? |
The proportion of the market controlled by a business or product |
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What is the marketing mix? |
The combination of factors which help the business sell a product, usually summerised as the 4 P's. Product, Price, Place, Promotion. |
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Problems of entering a foreign market |
- Lack of market knowledge - Difference in language & culture - Economic differences |
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Pros of ADs |
- Raise awareness - Attract new customers - Build brand loyalty - Maintain market share - Remind existing customers - Able to target different customers |
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Pros of skilled workers |
• Less training - lower cost • Make less mistakes/higher quality - less waste • More output - meet any increase in customer demand • More productive - lower unit cost • Brand image - good reputation |
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What are the 5 stages of the product life cycle? |
Development, Introduction, Growth, Maturity, Decline |
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What are the 4 areas if the boston matrix? |
Star, cash cow, question mark, dog |
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Why customer/consumer spending patterns may change |
- The price of the product - The price of competitor's products - Changes in consumer income - Changes in population size & structure - Changes in taste and fashion - Spending on advertising and other promotional activities |
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What is 'cost-plus' pricing? |
A pricing method that adds a percentage for profit to the total costs of production. This gives the selling price. |
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What is penetration pricing? |
Setting a price lower than the competitors business. Often used by the business to break into a market. Short-term strategy. |
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What is differential pricing? |
Changing prices to customers fir the same product/service (transport industry: trains, planes) |
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What is promotional pricing? |
Lowering price to sell product or old stock |
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What is a wholesaler? |
Breaks bulk; they buy in large quantities from a producer and sell to retailers. |
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What are direct sales? |
Larger businesses selling directly to the customer |
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What is the extension strategy? |
A method used to prolong the duration of which a product is on the market |
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What is unit cost? |
The costs associated to make 1 product/service |
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What is promotion? |
Encouraging customers to buy a product and increase their awareness of it |
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What is the promotion mix? |
Range of activities aimed at encouraging customers to buy a product and increasing their awareness of it |
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Advantages & disadvantages of advertising |
+ Draws attention to the product + Wide reach - quite costly - time disadvantage (video ads) |
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Advantages and disadvantages of sponsorship |
+ Promotes an image + Positive reputation + Spreads business name (increase awareness) - Wont necessarily reach many people |
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Advantages and disadvantages of public relations |
- Initial large costs |
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Advantages and disadvantages of personal selling |
+ Direct confrontation (personal) - Inconvenient (people turn you down) - Time and effort |
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Advantages and disadvantages of sales promotion |
+ Get rid of old stock and things which are going to be replaced (seasonal products) - Loss profit margin |
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Advantages and disadvantages of direct marketing |
+ Cheap - People disregareded |
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Methods of advertising for a large company |
TV/radio, national nrwspaper/magazines, billboard/buses, leaflets |
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What is sponsorship? |
Associate the companies name with events, teams or programmes |
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What is celebrity endorsement? |
A famous person is used to add value to the product |
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What is public relations? |
Communicating with the media and other interested parties to enhance the image of the business and its products |
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Types of sales promotion... |
BOGOF, joint promotions, collector schemes, competitions, free draws |
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What is direct marketing? |
Selling through post, leaflets or by pop-ups |
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What is personal selling? |
In person on a shop floor, through home or business customer visits or over the telephone |
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What is place? |
Getting the right product in the right place at the right time in the right market segment |
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What is the channel of distribution? |
The route a product takes from producer to consumer |
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What are intermediaries? |
The people in between the producer and the comsumer in any of the channels are referred to as intermediaries |
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Why use intermediaries? |
Reach more customers/locations (increase awareness) |
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Benefits of intermediaries |
+ Access to more customers + Wide distribution + Comparison for customers (with competitors products) |
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What are the drawbacks of intermediaries? |
- Price is increased at each stage (higher cost) - Producer loses control ( cant control where product is sold, affect image) |
