Unit 5

• Factors affecting the promotional mix

  Target audience

  Competitors actions

  Nature of the market and product

  Finance
• Promotional methods

  Advertising

  Sales promotions

  Public relations

  Sponsorship

  Social media

  Personal selling
• Reasons for promotion

  To inform

  To remind

  To persuade
• What are dogs?

  Products with low market share in slow growing markets
• What are problem children?

  Products with a low market share in fast growing markets
• What are cash cows?

  Products with high market share in a slow growing market
• What are stars?

  Products with high market share in a fast growing market
• Advantages of intermediaries

  The producers can reach many thousands of customers because the intermediaries distribute widely

  It saves the manufacturer costs of trying to distribute direct to many different customers in many different places
• Disadvantages of intermediaries

  Intermediaries want to make a profit so the price is increased at each stage making the final product more expensive

  The producer loses control of the product and they may not agree with the intermediaries promotional method, displays, descriptions or store layout
• Modern channel of distribution

  Manufacturer -> retailer -> consumer
• Traditional channel of distribution

  Manufacture -> wholesaler -> retailer -> consumer
• Direct channel of distribution

  Manufacturer -> consumer
• Chain of distribution

  Describes how the ownership of the product passes from the producer to the final customer
• Public relations

  Creating a positive image with customers
• Product portfolio

  The product that a company produces
• Exchange process

  Businesses are usually involved in an exchange process where it provides a good or service in exchange for something, often money
• Reasons for identifying and satisfying customer needs

  Increasing sales

  Selecting the correct marketing mix

  Avoid costly mistakes

  Be competitive
• Marketing mix

  Product

  Price

  Place

  Promotion
• Segmentation

  Occurs when a business divides a market into different groups of wants and needs
• Why use market segmentation?

  Target the market

  Avoid waste
• How do you use market segmentation?

  Age

  Gender

  Income

  Ethnic, cultural, religions

  Socio-economic

  Geographic area
• Market growth equation:

  (change in market size / original market size) x 100
• Uses of market research

  Asses the effectiveness of actions that have taken

  Identifying opportunities in markets

  Weighing up different possible actions
• Advantages of primary research

  Can see how people react

  Can get in depth responses

  Cheap and quick
• Disadvantages of primary research

  Time consuming

  Small groups don’t reflect all customers

  May not find out views of online customers
• Advantages of secondary research

  Can be gathered quickly and cheaply

  Provides information on large sections of the population
• Disadvantages of secondary research

  Existing data may not be exactly what the business wants or may be out of date
• Test marketing

  Launching the product in small parts of the target market to find out how well a product or service will do
• Market mapping

  A diagram used to show the price and quality of a product
• Price skimming

  A high price is set for a product when it first enters a market, this is used when there is high demand
• Penetration pricing

  When a low price is set and then it increases
• Competitive pricing

  Trying to match the price to other companies
• Cost plus pricing

  Ensuring that the business covers its costs and also makes a profit
• Factors influencing price

  Cost

  Demand

  Nature of the market

  Business objectives and approach to pricing

  Position in the product life cycle

  Rest of the marketing mix

  Competitors pricing
• Sections of the product life cycle

  Development

  Intro

  Growth

  Maturity

  Decline