Edexcel As Business Topic 1.3 Marketing Mix And Strategy

Front 1

Design Mix

Back 1

• Characteristics of a product, allowing it to both meet needs of market & effectively use a business' resources
• Design mix will include:

1. Function - what does product actually do, including core function, additional functions & quality
2. Aesthetics - how does product look - i.e. its physical appearance
3. Cost, economic manufacture - is it feasible to make the product?
   

Front 2

Branding

Back 2

• A promotional method involving creation of an identity for the business that distinguishes the firm & it's products from other firms
• Branding can add value to a product, allowing firms to charge higher prices
• Leads to brand loyalty whereby customers will continue to buy products from that firm
  

Front 3

Promotion

Back 3

• That part of marketing mix that informs & persuades customers about product, in order to sell the product
• A firm will look at its promotional mix in order to increase the scale of its products
• Promotion is designed to create Awareness, Interest, Desire and Action (AIDA)
  

Front 4

Differentiation

Back 4

• Making a product stand out from competitors' products
• Gives a business a competitive advantage. This can be achieved through:

1. A USP
2. Changing customer perceptions via advertising
3. Pricing strategies

Front 5

Pricing Strategy

Back 5

• Method used by an organisation to price a product in order to meet market objectives
• Strategies will be influenced by nature of product and degree of competition in market
• Price strategies include:

1. Price skimming
2. Price penetration
3. Predatory pricing
4. Competitive price
5. Psychological pricing

Front 6

Distribution

Back 6

The movement of goods & services from the source through a distribution channel, right up to the final customer, consumer or user.

Front 7

Wholesale

Back 7

Selling of goods in large quantities and at low prices to large wholesalers such as Bookers, typically to be bought and then sold on by small retailers.

Front 8

Product Lifestyle

Back 8

Stages a product may go through in its lifetime:-

1. R&D - negative cash flow due to market research and R&D costs and no sales revenue.
2. Launch - production & promotion costs can be high
3. Growth - sales revenue increases but as more units are sold production costs also increase, however, there will be economies of scale
4. Maturity - sales stabilise & product acts as a cash cow
5. Decline - at some point the product will start to lose sales
6. Extension strategies - products are adapted & given a new lease of life

Front 10

Extension Strategy

Back 10

• Strategy used to extend lifetime of a product - i.e. prolong maturity stage & halt decline
• Product life may be extended in a number of ways:

1. Altering the product
2. Using a new pricing strategy
3. Increased promotion
4. Identifying new markets to sell in

Front 11

Boston Matrix

Back 11

• Model used to analyse a firm's product portfolio by considering market share in relation to market growth for each product
• helps inform future marketing decisions
• Products are classified as:

1. Rising Stars
2. Cash Cow
3. Problem Child
4. Dog

Front 12

Product Portfolio

Back 12

• Looks at range of products & brands that a firm has under its control
• A business may analyse its portfolio to help identify where each of its products is positioned in the market. This will help inform future marketing decisions
• Boston Matrix is one such analytical tool

Front 13

B2B

Back 13

• When one business sells its goods / services to another business (B2B) - i.e. industrial markets
• B2B markets likely to involve fewer intermediaries with greater emphasis on relationship between buyers & sellers
• Within marketing mix greater emphasis is likely to be on price & quality of product

Front 14

B2C

Back 14

• When one business sells its goods / services to individual consumers (B2C) - i.e. consumer markets
• Represents end of supply chain
• An integrated marketing mix is crucial to generate demand from customers