Making marketing decisions

• The design mix 


  Function- should do and how well

  Cost- How cost effective the product is to manufacture

  Aesthetic- how the product appeals to consumers
• Product lifecycle : Introduction

  • High research + development costs
  • low levels of sales
  • Usually negative cash flow
• Product lifecycle: Growth

  • fast growing sales
  • product becomes known
  • Cash flow may become positive
  • advertising to continue to build brand awareness
• Product lifecycle: Maturity

  • Slower sales growth as rivals enter the competition
  • Cash flow is strongly positive
  • advertising ins persuasive
  • Peak
• Product lifecycle: Decline

  • falling sales
  • Markery saturation for competition
  • Decline in profits and weaker cash flow
  • Products could be withdrawn from production
  • Remaining products may be solid at a reduced service
• uses of product lifecycle

  • forecast future sales trends
  • Helps correctly position the product and successfully target the right market
  • Helps analyse and manage the product portfolio
• What influence the product life cycle

  • how dynamic the market is
  • how strong the brand image
• Extension strategies 


  Advertising- try to gain a new audience or remind the current audience of the product

  Price reduction- makes the product more attractive

  Adding value- add new features to the current product

  New market- exploring a new market

  Increase marketing activity- new advertisement to remind customers
• Price 


  Penetration- low initial price that rises over time

  Price skimming- setting a high price for a product when it first enters the market

  Cost plus pricing- adding a fixed amount or percentage to the cost of making

  competitor pricing- setting price in line with competitors

  Promotional pricing- a short term strategy to attract customers
• Influence of price

  • Cost of making the products
  • Quality of the product
  • Brand image of the product
  • Demand and supply of a product
• Technology and price

  • innovations
  • frequency of businesses reviewing their prices
• Competitors and price

  • compete on price
• Market segments and price

  • consider the kind of consumers their products are aimed at
• Product lifecycle and price
• Promotion to

  • inform
  • persuade
  • remind
• Promotional methods

  • Advertising e.g social media, websites, newspaper
  • Sponsorship- provide financial support, product is prominently displayed
  • Product trials- try product for free or at a reduced price
  • Special offers- discounts, vouchers, loyalty cards
  • Branding- establish positive brand
• Use of technology in promotion

  > Traditional methods expensive

  • Viral marketing on social media
  • Targeted online advertising
  • Apps
  • E newsletters
• benefits/drawbacks of sales promotion

  benefits:

  > Effective at achieving a quick boost to sales

  > Encourages customers to trial products

  Drawbacks:

  > Short term

  > May damage brand image
• Benefits/ Drawbacks of adverting

  Benefits:

  > Wide coverage

  > Control of message

  Drawback

  > Expensive

  > one way communication- limited ability to close sale
• Place

  • where the product is sod and how a business gets its product to their consumer
• Channel of distributions

  • producers
  • Retailers
  • e-tailers
  • Producer to consumer
  • Producer to intermediaries to consumer
  • Producer wholesaler intermediaries consumer
• Intermediaries

  • easier for producer to distribute product
  • Convenient for customers to buy products
  • Retailers and e-tailers
  • Buy product in bulk and sell at smaller quantities
  • Adv- aces to larger customers, saves costs
  • Disadvantage- increased price at each Lebel, producer may lose control of how and where the product is sold
• retailers

  • business that sells good to the public
  • Physical shop
  • Advantage- customer experience- see and feel the product
  • Disadvantage- premises required
• E-tailer

  • sells products and services to customers online
  • Advantage- Convenience 24/7, wide range of products not limited by size of shop
  • Disadvantage- customers who don't have Internet access, items cannot be seen in person , customers will have to wait for delivery
• Marketing mix 


  gain competitive advantage

  > offering lower prices

  ensure the product has added value and has differentiation
• Penetration 


  Advantages

  > profitability in long term

  Disadvantages

  > short term- lower profit as price is initially low
• Skimming 


  Advantages:

  > Initial high price- profit

  > High quality

  Disadvantage

  > Profit goes down

  > doesn't appeal to low income demographics