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