Chapter 13: The Marketing Mix: product, place, promotion and price – Flashcards
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a business's portfolio of product lines
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• Product mix:
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a group of similar products
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• Product line:
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o Convenience products: products that consumers buy frequently, instinctly with minimum thought o Shopping products: consumers buy carefully and less frequently o Speciality products: products that consumers buy infrequently with a deliberate thought process o Unsought products: products that consumers do not initially or readily recognise they need or want e.g. insurance
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• Classifying consumer products: (4)
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o Materials and parts: products businesses resell or use to create other products o Capital items: products businesses buy that have a life longer than one year and used in the acquiring, manufacturing and selling of products and services o Supplies and services: products businesses buy to operate the business that are not classified as materials and parts or capital items
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• Classifying business products: (3)
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relate to the physical and mental attributes that provide customers satisfaction when they use the product
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• Product features:
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relates to a products lack of defects
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• Product quality:
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relates to a business's attempt to differentiate its product from the product of competitors with a brand: o Creates value by reducing customer uncertainty and risk associated with their buying decision
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• Branding:
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a name, term, symbol, design, or combination thereof that identifies a product or business
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• Brand:
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when a business registers its brand with the law
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• Trademark:
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the term used to describe the ability of the brand to create value
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• Brand equity:
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unbranded products
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• Generic products:
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: relates to the designing and producing the container in which a product is sold or delivered o Creates value by creating benefits such as convenience and storage
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• Packaging:
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entails a business attaching printed words or graphics to its products to educate the customer o More informed customer, reduces risk
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• Labelling:
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a seller's promise regarding the property's quantity and quality • Guarantee: a promise by the business to the customer that the customer will be satisfied with the product o Warranties and guarantees reduce the risk of purchasing the product
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• Warranties:
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relate to the at-sale or post-sale services that a seller promises to the buyer
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• Support services:
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the location and means of distributing the product
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• Place:
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how and when a business delivers its product to its customer
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• Distribution:
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composed of the organisations that help the business make its product available for ultimate consumption
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• Marketing channel or distribution channel:
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members of the marketing channel
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• Marketing intermediaries:
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where the business doesn't use a marketing intermediary
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• Direct marketing channel:
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where the business uses one or more marketing intermediaries
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• Indirect marketing channel:
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an organisation that buys products for resale to retailers
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• Wholesaler:
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an organisation that sells products to the ultimate consumer of the product
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• Retailer:
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carries a limited product line
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• Specialty store:
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carries several product lines
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• Department store:
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carry numerous lines of food and household products
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• Supermarkets:
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small retailers, located in easily accessible places which sell a number of products used in everyday life
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• Convenience stores:
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• sell numerous product lines of household products to price-conscious customers
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• Discount stores:
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sell product lines at very low prices
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• Deep discount stores:
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retailers that have limited or no physical presence
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• Non-store retailers:
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buy and resell products
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• Merchant wholesalers
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• brings the buyer and seller together
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• Broker:
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represents either a buyer or seller
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• Agent:
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vary directly with the amount sold
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• Variable costs
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costs that do not vary with eh amount sold
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• Fixed costs:
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o Contribution margin per unit of sales = (Price per unit of sales) - (variable cost per unit of sales) o CM = P - VC
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• Contribution margin:
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o The point a business must achieve to generate a 0 operating profit o Break even point = Fixed costs/Contribution margin o BE = FC/CM
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• Break even point:
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the analysis of different pricing alternatives on the business's profitability
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• Cost-volume-profit analysis:
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when a business prices its products based on costs and desired profit
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• Cost-plus pricing:
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when a business focuses only on variable costs (marginal costs)
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• Pricing-on-the-margin:
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price per sale
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• Marginal revenue:
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when the state of the economy affects the demand for the product
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• Cyclical product:
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: when the state of the economy doesn't affect the demand for the product
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• Non-cyclical product:
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opposite of cyclical products
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• Counter-cyclical products
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products that are affected by the seasons of the year
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• Seasonal products:
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o Perceived absolute value of the product: customers create a perception of a products' value based on perceived benefits from owning the product o Perceived relative value of the product: customers compare the benefits and costs of that product with those of alternative or competing products
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• Price and the decision to buy:
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1. Sender 2. Message 3. Communication medium 4. Noise 5. Receiver 6. Feedback process
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• The communication process:
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1. Target a market segment and customer 2. Determine the communication objective 3. Design the message to be communicated (AIDA model: attention, interest desire and act) 4. Choose a medium to communicated the message 5. Execute by delivering the designed message through the selected medium 6. Collect feedback, review the feedback, and make adjustments as needed
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• Promotion process:
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the mix of advertising, sales, promotion, personal selling, direct-marketing techniques and public relations used by a business to communicate a marketing message
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• The promotional mix:
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1. Prospecting and qualifying potential customers 2. Researching and understanding how to approach targeted customers 3. Approaching targeted customers 4. Presenting and demonstrating the product 5. Dealing with customer concerns 6. Completing or closing the sale 7. Following up the sale to ensure customer satisfaction
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• Personal selling process:
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the techniques used to get customers to purchase products from their home, office or other non-retail settings
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• Direct marketing:
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refers to the process of communicating to a business's public that the business creates value for the public as a whole
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• Public relations:
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information that creates an image of the business and its products • Promotional pull strategy: the product producer uses a lot of advertising focused on the ultimate consumer
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• Publicity: i
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where the producer's promotional efforts are focused on retailers and other channel members
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• Promotional push strategy:
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o any non-personal presentation of ideas about a product or product line
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Advertising:
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techniques used to encourage the customer to buy the product in the short-term, businesses use them to create an immediate sale
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o Sales promotion:
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the personal interaction, intended to create a sale, between a business's sales force and potential customers
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o Personal selling:
