making marketing decisions

• design mix - function , cost, appearance
• function

  how well a product does what it is meant to
• introduction

  the product is launched
• growth

  sales increase and profit is made
• maturity

  sales slow down, repeat customers continue to buy
• decline

  product is outdated
• introduction -> growth -> maturity -> decline
• product life style - a business model that represents the sales of a product through different stags of its life
• product differentiation - making a product different from other products. it helps businesses :

  • to position their products and target different market segments
  • to gain an advantage over rivals when faced with competition
• differentiating a product :

  • unique product name
  • quality
  • design
  • packaging
  • customer service
• the importance of price in the marketing mix

  • the price of a product gives customers an indication of quality
  • branded products generally have a higher price that non-branded products
  • in competitive markets, changes in price can have a significant influence on demand
• competitor pricing - many pricing decisions are based on comparing the average market price - what other businesses charge for their products and services
• price and profit

  a business may try to improve its profits by increasing the price of products and services, if this strategy is to succeed, customers must perceive the business's products and services to be of sufficiently high value in relation to competitions products.
• margin strategy

  setting a price that achieves a high profit margin
• volume strategy

  setting a price with a lower profit margin , which requires high sales volumes in order to be profitable
• a business with a high volume low margin strategy must be able to keep costs low and have the facilities to produce and distribute large quantities
• a low volume high margin strategy might be determined by the quality of the product and its brand image
• technology

  new technology can lower the costs of production and allow a business to set a more competitive price
• branding

  products with a strong brand can demand a higher price due to the perceived value and desirability
• costs

  a business may set itself a profit margin target that it adds to the cost of the product or service in the order to set its price
• product life cycle

  the product's stage in the product life cycle will influence pricing decisions
• market segmentation

  different prices may be applied to customers with different characteristics
• competition

  a business has to consider its competitors and the position of its brand in the market
• advertising 


  TV, radio, posters
• advertising benefits

  grab customer attention
• advertising drawbacks

  expensive
• sponsorship

  sponsorship sporting events, festivals
• sponsorship drawbacks 


  communities very little information about the product
• product trials benefits

  can encourage customers to buy the product
• product trials drawbacks

  expensive
• special offers benefits

  can boost short-term sales and clear stock levels
• special offers drawbacks 



  not sustainable in the longterm
• public relations

  using a recognisable logo on all promotional materials so that customers remember it
• public relations benefits

  customers can connect with the product
• public relations drawbacks

  brand image could be damaged by bad publicity