making marketing decisions

• Design mix

  Function , cost , appearance and it can differentiate it from other products
• Function

  How well a product does what it is meant to
• Cost

  Linked to price . Try to keep costs low improve functionality and appearance will increase cost .
• Appearance

  Style and elegance are important for many products
• Product life cycle

  Introduction , Growth , Maturity , Decline
• Life of product can increase using extension strategies involving changing the product so that it has fresh appeal to target market or appeals to a new market segment
• Product differentiation makes a product different from others . helps businesses to position their products and target different market segments . To gain an advantage over rivals when faced with competition. Consumers notice needs met more effectively by one product
• Differentiating a product

  Unique and catchy product name

  Quality

  Design, Formulation or function

  Packaging

  Customer service

  Differentiate across the value chain
• Importance of price in marketing mix

  Price of a product gives customers indication of quality , in competitive markets changes in price can have a significant influence on demand . Branded products generally have a higher price than non-branded products because they're more expensive to produce and promote
• Luxury brands can charge a premium price for products . Pricing decisions based on comparing average market price - what other businesses charge for their products and services . Known as competitive pricing . Low price may be used by generic / non-branded products or to encourage product trial when a product is first launched.
• Business improve its profits by increasing price of products and services. If strategy is to succeed customers must perceive the businesses products and services to be of sufficiently high value in relation to competitors products . If they do not the business may find that it's sales volume falls
• Margin strategy involves setting a price that achieves a high profit margin
• Volume strategy involves setting a price with a low profit margin which requires high sales volume in order to be profitable
• choice of pricing strategy depends often on the nature of the product and the quantity of the product that a business intends to sell
• business with high volume low margin strategy must be able to keep costs low and have facilities to produce and distribute large quantities
• low volume high margin strategy might be determined by the quality of the product and its brand image . Businesses using this strategy will target the premium end of the market
• influences on pricing strategy

  competition

  costs

  Market segment

  Product life cycle

  Technology

  Branding
• competition

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

  different prices may be applied to customers with different characteristics
• product life cycle

  the products stage in the product life cycle will influence pricing decisions
• costs

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

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


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

  can have a big impact and grab customer attention if the advert is in the right place and uses the right medium . Can be expensive and it can also be difficult to work out the impact of advertising on sales .
• benefits and drawbacks of Sponsorships

  Can provide a business with a lot of exposure and associate it with a good cause . Communicates very little information about the features and benefits of products and services
• benefits and drawbacks of product trials

  Can encourage customers to use a new product or service that they may not try otherwise . Can be expensive to give away free products
• benefits and drawbacks of Special offers

  Can boost short-term sales and clear stock levels . Not sustainable in the long term as selling at a discount will reduce profits
• benefits and drawbacks of product trials

  Can encourage customers to connect with the brand , trust it and become loyal to it . Takes a long time to develop a strong brand and brand image can be damaged quickly by bad publicity
• promotion methods

  advertising , sponsorship , product trials , special offers , public relations
• Branding

  Brand represents characteristics and personality of a business . Strong brand created by investing in successful promotion .
• Value of strong brand

  Customers may instantly recognise the brand and what it represents . Customers associate positive characteristics with brand . a well-known brand may become first choice for customers, increasing brand loyalty . customers may trust a strong brand . Strong brand may allow a business to charge premium for products and services
• Technology in promotion

  Apps , Targeted advertising, Email , social media
• Social media is a cheap form of communication that provides opportunities for viral advertising
• Email -communities eg e-newsletters that can be tailored to needs and interests of customers
• Apps- for consumers and opportunity to advertise through third party apps
• Targeted advertising - website adverts that use cookies and are targeted at particular consumers or market segments
• Benefits of e-tailing

  Businesses do not have to rent or own expensive retail space.

  Customers can buy at any time of any day. Businesses can access customers around the world.

  Small businesses are able to compete with larger businesses without needing retail space
• Location


  when choosing a site to locate a store business should consider the cost , proximity to competitors, proximity to the labour market , proximity to resources and transport links
• Linking 4 ps 


  If one aspect of the marketing mix does not link up with others then it is highly likely that the businesses marketing strategy will fail
• 4ps form one Joined up or integrated marketing strategy to meet customer needs