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Business
Spec 2.2 (Making Marketing Decisions)
| Question | Answer |
|---|---|
| What are the 4 P's of marketing? | Place, Price, Product, Promotion |
| Why do businesses use the 4 P's? | to create and implement successful marketing strategies |
| What are the 3 elements of the product design mix? | Cost, Aesthetic, Function |
| What are the 5 stages of the product life cycle? | development, introduction, growth, maturity and decline |
| During a products development stage, a company usually has ______________ | high costs |
| Why might a company have high costs during a product's development phase? | money is needed for development, market research and product testing |
| Why might cash flow still be negative during the introduction phase of the product life cycle? | money is spent on promotion, advertising and distribution |
| During the introduction phase of the product life cycle, a company should see ________________________ | slow sales growth |
| What should happen during the growth phase of the product life cycle? | sales should begin to increase rapidly |
| Cash flow usually ________________ during the growth phase of the product life cycle | turns positive |
| During the maturity phase of the product life cycle, a business should experience _________________ and the product will reach it's_______ in terms of market penetration | slowing sales growth, peak |
| During the decline phase of the product life cycle, sales begin to __________ and the product becomes ___________ | decline, obsolete |
| During the decline phase of the product life cycle, a business will want to try and _________________ | reduce costs |
| What 3 things might a company's marketing strategy include during the decline phase of the product life cycle? | 1. Discontinuing the product 2. Reducing price to clear inventory, 3. Finding new uses for the product |
| What are extension strategies? | strategies to boost sales and maintain profitability for a product that has reached the decline stage of its life cycle |
| What are the 2 types of extension strategies? | 1. Product-related 2. Promotion-related |
| What are the 3 product-related extension strategies? | 1. Product improvements 2. Line extension 3. Repositioning (in the market e.g. high-end/low-end) |
| What are the 3 promotion-related extension strategies? | 1. Changes to advertising 2. Price promotions (e.g. price discounts) 3. Sales promotions (e.g. loyalty program, 1 free coffee for every 5 bought) |
| Why might a business utilise product differentiation? | to distinguish a product from it's competitors |
| What 2 things could product differentiation give a business? | 1. A competitive advantage 2. A USP |
| What 3 things could successful product differentiation do for a business? | 1. Increase demand for its products 2. Increase brand loyalty 3. Allow the business to charge higher prices |
| It is essential that businesses choose a pricing strategy that reflects the _________________________________ | brand and quality of the product/service |
| What 6 factors must a business consider when choosing a pricing strategy? | 1. USP/differentiation 2. Technology 3. Level of competition 4. Strength of brand 5. Stage in product life cycle 6. Need for profit |
| What are the 5 main types of promotion? | 1. Branding 2. Advertising 3. Special offers 4. Product trials 5. Sponsorship |
| Give an advantage/disadvantage of advertising | Can create specific brand image or message/can be expensive |
| Give an advantage/disadvantage of branding | Differentiates a business from its competitors/takes time to build image |
| Give an advantage/disadvantage of special offers | Can quickly boost sales and customer engagement/reduces sales of full priced products |
| Give an advantage/disadvantage of sponsorship | Can help build brand awareness/may be subject to negative publicity (if sponsored entity experiences a scandal) |
| Give an advantage/disadvantage of product trials | Customer reaction generates info how how product can be improved/time and money consuming to run effective product trials |
| What are the 3 forms of promotion through technology? | 1. Viral marketing 2. Social media 3. E-newletters |
| Define drop-shipping | When a business can sell products without holding stock (shipped directly from producer to customer) |
| What are the advantages of drop-shipping? | Reduces cost and complexity of distribution |
| What will most likely happen if a business decides to change the product? (marketing mix) | All other elements will likely need to change |
| What will most likely happen if a business decides to change the price? (marketing mix) | Will need to change promotional strategy to convince consumers of the products value |
| What will most likely happen if a business decides to change the promotion? (marketing mix) | Price and distribution channels will be affected (e.g. high end promotion strategy, increase price needed to reflect product's value) |
| What will most likely happen if a business decides to change the place? (marketing mix) | Distribution/sales channels can affect price and promotion strategy (e.g. using exclusive distribution channels --> increase price to reflect exclusivity) |
| What are the main sources of competitive advantage? (name 5/8) | 1. Quality 2. Delivery times 3. Customer service 4. Price 5. Reliability 6. Brand image & reputation 7. Ethical stance 8. Design |
| What is an integrated marketing mix? | One that combines each element of the marketing mix in the best possible way |
Created by:
JoeMather
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