Marketing Mix
Product line
a variety of the same product that a business produce for customers of a particular market
Early adopters
brand awareness and loyalty among the customers
Going rate pricing
Average price being charged by competitors in the industry
Advertising
a method of informative and/or persuasive promotion that has to be paid for. The ultimate aim of advertising is to raise the level of demand for a firm's products
Cost-plus pricing
adding a profit margin (or mark up ) to the cost of production to determine selling price
Marginal cost pricing
additional cost of producing an extra unit of output. It consider the direct or variable costs of any extra output. Fixed or indirect cost do not change as output level change
Specialist media
advertise specialist products to niche markets
Product range
all lines of a firm's product mix
Ansoff matrix
an analytical tool that helps managers to devise their product and market growth strategies, depending on whether they want to market new or existing products in either new or existing market
Product
any physical or non physical item that is purchased by either commercial or private customers
Wholesaler
business that purchase large quantities of products from a manufacturer and then
Skimming pricing
technologically advanced and innovative products. Set very high price
Predatory procing
temporarily reducing price to force rival out of the industry since they cannot compete profitability.
Supply chain management
the art of managing and controlling the sequence
Determinant of the level of demand
- Customer income - Substitutes - Complements - Quality - Marketing - Fashion, habits and tastes - Utility (level of satisfaction) - Speculation - State of the economy - Value for money - Ostentatious consumption: purchase of expensive products which impress and make the customers feel good about themselves - Conspicuous consumption: lavish spending of some very rich customers - Expectation: - Giffen goods: when substitute is more expensive
Determinant of the level of supply
- Price of raw material - Barriers to entry - Technology (production methods) - Taxes - Subsidies (grants from government) - Price of related goods - Climate - Time
Advantage of brand
1) High market share 2) Able to charge premium price 3) Inelastic demand 4) Foster brand extension strategies 5) High barriers to entry: for new firm to enter the market
Stages of new product development
1) Market research 2) Product development and testing: enable the business to physically examine the product and to make any necessary alterations: producing prototype 3) Feasibility study: look into legal and financial viability of launching the new product. Cost of production and pricing decision need to be examine to allow forecast profit from launching the new product 4) Launching
Product differentiation
1) Price advantage 2) Consumer recognition and loyalty 3) Distribution advantage: retail place is limited so businesses will only stock the best selling brand
Objectives of promotion
1. Inform: alerts the market about a firm's products, especially new one 2. Persuade: encourage customers to make a purchase. Used in highly competitive market. Firms may adopt product differentiation technique such as branding to create a unique identity or to enhance the product's image. Successful persuasion can also generate impulse buying. 3. Remind: retain customer awareness and interest of an established product
Absorption cost pricing
Involve allocating overheads by working which department has incurred what proportion of each of the indirect costs. Hence, absorption costing doesn't not apportion costs based on a single criterion 1) Advantage: - Fairer (include more) 2) Limitation - More complex - Smaller firm may lack the time and resources to use this method
Boston's matrix
Problem children may also known as question mark or wild cards because it is not obvious whether a business should invest more in the product Cash cow: the market tends to be mature markets and the products are very well established (Coca-cola). Extension strategies to prolong high earning potential -> The ideal product portfolio for a business is to have a balance portfolio, which might include a few problem children and several cash cows
Promotion
a component of the marketing mix. It refers to the methods used to inform, persuade or remind people about its products, brands or business. It is a key element of any marketing strategy
Fast-moving consumer goods
everyday convenience products that are sold in retail outlets. Due to low profit margin of these products, businesses tend to rely on the high sales volume and turnover of such product
Specialty consumer products
exclusive and very expensive products
Price taker
firms that operate in highly competitive market, where barriers entry are low
Public relation
function of a business that deals with comments, complaints and criticism from the general public, including the firm's customers. PR is about raising awareness and building goodwill
Penetration pricing
low price for new product to enter new market
Price maker
monopolist, who dominate market share
Agents
negotiator who act on behalf of buyers and vendors of a product. Agents offer a range of product, from different suppliers, for the consumer to choose from
Innovators
people who like to be the first to own a certain product, perhaps due to prestige or because they are fantics of the product, brand or company
Price leadership
price maker. best selling product
Consumer durables
products that are purchased irregularly because they tend to last for a very long time
Consumer perishable
products that do not last for a very long time. Purchases are not frequent or stable; events, seasonal
Push promotion
promotional methods rely on intermediaries such as wholesales to get products to the customer eg: sales promotion, price reduction
Pull promotion
promotional techniques used to stimulate demand for a product
Retailers
sellers of products to the final consumer. They are often referred to as "shop" in every day language
Loss leader
selling a product at or below its cost value
Full cost pricing
the business to allocate the total fixed cost between all the products that are sold. This helps to ensure that the price cover all cost of production 1) Advantage: - Simplest - Greater cost control by allocating all costs of production to determine an appropriate price 2) Limitations - least accurate method - criterion used to allocate indirect cost may give misleading information - the allocation is arbitrary (độc đoán)
Promotional mix
the combination of individual promotional methods used by a business, such as advertising, direct marketing, packaging and sales promotion. In deciding on a promotional mix, marketers often consider: - Attention - Interest - Desire: generate desire of feeling of "need" for the product - Action: encourage customers to make action
Place
the distribution of a product, how product gets to the customers
Publicity
the process of promoting a business and its products by getting media coverage without directly paying for it
Product mix
the variety of the different product lines that a business produces
Product life cycle
typical process that products go through from their initial design and launch to their decline
Above-the-line promotion
use of mass media source to promote or to establish a favourable long-term image of a business, its brands and products
Below-the-line
use of non mass-media promotional activities
Price discrimination
used when the same product is sold in different market
Branding
useful in giving the product identity but it differentiates itself from competitors 1) Homogenous (generic) products are the same no matter what. Brand are unique 2) Customer pay premium price for them. Brand has specific brand image - a good brand can bring intangible benefits to customers 3) Brand can be individual product