Making marketing decisions

• What is the design mix in marketing?

  A combination of function, cost, and appearance
• How does the design mix vary among different products?

  It depends on the target market
• What does 'function' refer to in the design mix?

  What the product does or can be used for
• Why is cost important in the design mix?

  Lower production costs provide a competitive advantage
• What role do aesthetics play in the design mix?

  Products must appeal to the target market
• What are the stages of the product life cycle?

  1. Introduction
  2. Growth
  3. Maturity
  4. Decline
  5. Withdrawal
• What happens during the introduction stage of the product life cycle?

  Launch with advertising and stock purchase
• What occurs during the growth stage of the product life cycle?

  Increased purchases and sales figures
• What characterizes the maturity stage of the product life cycle?

  Peak sales and customer loyalty
• What happens during the decline stage of the product life cycle?

  The product becomes outdated and less popular
• What is an extension strategy?

  Prolonging sales of a product
• What are some strategies for extending a product's life cycle?

  1. Finding new uses for the product
  2. Changing appearance or packaging
  3. Encouraging more frequent use
  4. Adapting the product as 'new and improved'
• What are the two main types of pricing strategies?

  High margin and high volume strategies
• How did McDonald's extend its product life cycle?

  By expanding its menu for a wider audience
• What is a high margin pricing strategy?

  Setting a price for high profit margin
• What is a high volume pricing strategy?

  Producing large amounts for a low cost
• What are economies of scale?

  Cheaper average cost per product with more production
• What is penetration pricing?

  Setting a low price to attract customers
• What is price skimming?

  Setting high initial prices that decrease over time
• What is price discrimination?

  Charging different prices based on market willingness
• What is cost plus pricing?

  Cost plus markup equals the selling price
• What are loss leaders?

  Products sold at a loss to attract customers
• How does psychological pricing work?

  Setting prices just below whole numbers
• What is premium pricing?

  Pricing higher than competitors for exclusivity
• What is competition-based pricing?

  Pricing influenced heavily by competitors
• What is predatory pricing?

  Setting prices unrealistically low to eliminate competition
• What is promotional pricing?

  Setting a lower price for a limited time
• What are the benefits of retailing?

  • Customers can try products
  • Impulse purchases are encouraged
  • Displays attract customers
  • Immediate help and advice available
  • Enjoyable shopping experience
• What are the benefits of e-tailing?

  • Lower costs without physical space
  • Open 24/7
  • Attracts customers beyond local areas
• How does technology affect pricing strategies?

  Consumers have more information about products
• How does the product life cycle affect pricing strategies?

  • Introduction: Low price, high volume
  • Growth: Price rises, premium pricing
  • Maturity: Stable or increasing prices
  • Decline: Decrease prices, loss leader
• What are the positives and negatives of having a strong brand?

  Positives:

  • Charge premium prices
  • Greater consumer awareness
  • Increased sales and profit
  • More retailers stock the product

  
  

  Negatives:

  • Risk of negative publicity
  • High promotion costs
• What is direct distribution?

  Producer sells directly to the customer
• What is indirect distribution?

  Producer sells through intermediaries to customers
• What is traditional distribution?

  Producer sells through wholesalers to small shops
• What is the role of a retailer?

  A business that sells goods to the public
• What is e-tailing?

  Retailing through online stores
• Why is it beneficial for businesses to use multiple distribution channels?

  To make products easily accessible to customers
• How can businesses use the marketing mix to inform decisions?

  To implement strategies aligned with objectives
• What is the purpose of promotional strategies?

  To attract and retain customer loyalty