1.3

• Design mix


  • Aesthetics (design and appearance)
  • Functionality
  • Cost
• Designing products to meet social trends

  • Products designed for waste minimisation
  • Products designed for re-use
  • Products designed to be recycled or produced from recycled materials
  • Products sourced ethically (e.g. Fairtrade products)
• Ethical sourcing involves paying workers a fair wage and ensuring the working practices of suppliers are ethical, such as not using child labour
• Benefits of adapting designs to changes in social trends

  • Reducing waste helps businesses cut costs
  • Reflecting social trends through product design means they are more likely to sell large quantities
  • Social trends can be used as a USP to differentiate products and services
  • Attending to social trends means businesses are more likely to be seen as being socially responsible
• Social trends a business might consider when designing new products and services

  • Products designed for waste minimisation
  • Products designed for re-use
  • Products designed to be recycled or produced from recycled materials
  • Products sourced ethically (e.g. Fairtrade products)
• Above-the-line promotion


  Any form of advertising through the media (e.g. TV, radio, cinema, posters, internet, direct marketing)
• Below-the-line promotion


  All other forms of promotion that are not advertising (e.g. sales promotions, public relations, merchandising, packaging, direct selling, exhibitions and trade fairs)
• The purpose of promotion is to create awareness, understanding and a desire for the product
• Methods of promotion

  • Above-the-line (advertising)
  • Below-the-line (sales promotions, public relations, merchandising, packaging, direct selling, exhibitions and trade fairs)
• Below-the-line forms of promotion can offer a two-way form of communication, encourage customers to try new products, and can be more believable than advertising
• Advertising can be used to inform, persuade, remind or reassure customers
• Promotional methods suitable for targeting children aged 5 to 8 years might include sales promotions (e.g. free gifts), merchandising, and direct selling
• Brand


  More than just a logo or slogan - it represents the characteristics and personality of a business
• Ways to build a brand

  • Exploiting USP
  • Advertising
  • Sponsorship
  • Using social media
• Types of brand


  • Manufacturer's brands
  • Own-label brands
  • Generic brands
• Importance of branding


  • Brands can be traded
  • Makes a product recognisable
  • Helps a business position itself in the market
  • Allows a premium price to be charged
  • Product may become the natural choice for the novice consumer
• Large amounts of money are invested in the promotion of manufacturer's brands
• Social trends businesses should maximise to build their brands

  • Social media
  • Viral marketing
  • Emotional branding
• Businesses often associate their brands with things that consumers have strong emotional connections to, such as sports teams or good causes
• Price


  A key factor in any product decision that determines the demand for a product, contribution, and overall profit margin
• What influences price

  • Other elements of the marketing mix
  • Branding and customer perceptions
  • Costs and profit margins the business is hoping to achieve
• Influences on price


  • Product life cycle stage
  • Price elasticity of demand
  • Level of competition and market prices
• Price is very subjective
• Dynamic pricing


  Pricing strategy applied to products where price can fluctuate with the level of demand, such as hotel rooms
• Penetration pricing


  Pricing strategy applied to a new product attempting to enter the market, with a low price to undercut competitors and penetrate the market
• Price skimming


  Pricing strategy used to capitalise on 'early adopters' willing to pay a premium to be the first to own a product. The initial price is high so the profit in the market can be 'skimmed'.
• Predatory pricing is also known as destroyer pricing
• Predatory pricing


  The business sets a low price in order to price competitors out of the market, potentially making a loss for a period of time until the competitor fails
• Competitive pricing


  The business sets prices based on the nearest competitor, used in very competitive markets to avoid price wars
• Psychological pricing


  The business uses a price just below the next whole number to trick consumers into thinking the price is lower
• Factors affecting the choice of price

  • Costs
  • Competitor pricing
  • Value customers place on the product
  • Unique selling points
  • Social trends
• Cost-plus pricing


  A business bases a price on the unit cost and then adds a percentage as a mark-up, considering the profit margin the business is willing to accept
• Online comparison sites


  Have changed the way people shop by making it easy to compare prices and choose the best deal
• Personalised pricing


  Technology and online databases collect customer information and allow businesses to target them with a personal price
• Subscription pricing


  A business charges customers a monthly fee to use a service, suitable for online services such as film rental sites
• Distribution


  How the product gets to the customer, using multi-channel methods to make distribution easy and convenient
• Parties in the distribution network

  • Agents or brokers
  • Retailers
  • Wholesalers
  • Direct selling
• Many modern products use multiple distribution channels, such as direct, click and collect and in-store purchasing
• Factors influencing distribution


  • Scope and scale of the product
  • Nature of the product
  • Control over promotion and pricing
  • Expectations of customers
• There is a growth in direct ordering of products through the internet, with many manufacturers using courier businesses to deliver their products directly to customers