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Marketing Mix
4 P's of Marketing
| Term | Definition |
|---|---|
| Marketing Mix | The four tools a business can use to persuade customers to buy its product or service: Product, Price, Promotion, Place |
| Branding | creating an identity for a product that makes it easily identifiable and clearly distinguishes it from competitors |
| Own Brands | names which are registered by retailers rather than manufacturers |
| Packaging | involves designing and making the container or wrapper for the product. |
| Patent | provides legal protection of an invention or a design of a product to the inventor or designer. |
| Trademarks | are logos that are registered by businesses to distinguish them and their products from competitors. |
| Development stage of the product life cycle | much time will be spent designing and testing the product concept. A prototype will often be test-marketed, in order to assess the potential sales and profitability of the new product. |
| Introduction Stage of the Product Life Cycle | this is when the product is first launched. Sales grow very slowly and large amounts must be spent on advertising and promotion. Companies usually are making a loss at this stage. |
| Growth Stage of the Product Life Cycle | The product becomes known and sales and profits begin to increase rapidly. New competition enter the market at this stage. |
| Maturity | The rate of sales growth slows. Sales of the product are at their highest rate. The business is making large profits. There is intense competition |
| Saturation | Sales growth stops and sales remain at their peak for some time. The market is now full of similar products. To maintain sales businesses will cut their price or update the product. |
| Decline | Sales of the product fall off rapidly. This could be due to advances in technology, a change in consumer tastes or increased competition |
| Product Development Strategies | seek to modify and revamp the existing product to make it more appealing or to develop the number of products in the product line. “New and improved” |
| Market Development Strategies | attempt to find new markets or new uses for existing products through market segmentation or niche marketing |
| Price Skimming Strategy | The business charges a high price for the product when it comes out initially. This helps recoup the cost of developing the product. The price drops later on as competition enters the market |
| Price Penetration Strategy | : the business deliberately charges a low price so that it is cheaper than competitors. The aim is to get as many customers to switch over as possible to increase market share |
| Price Discrimination | The business charges different prices to different consumers for the same product |
| Loss Leader | The business sells one product at below cost price in order to attract consumers into the shop so they will buy other products. |
| Fixed Costs | are the costs that remain the same, regardless of the number of products produced, e.g. rent, insurance. |
| Break Even Point | the minimum price a business must charge for its product, it shows the amount of sales needed to cover its costs |
| Margin of Safety | the amount by which a firm’s sales can drop before reaching the break-even point |
| Promotion | refers to all the efforts (excluding price) made by the seller to communicate and influence the target market to buy a product. |
| Advertising | consists of messages designed to inform, persuade or remind people to buy a product or service. |
| Reminder Advertising | keeps the product in the consumer’s mind |
| Persuasive Advertising | convinces the consumer the product will make him/her happier. |
| Generic Adveritising | advertises the product for an industry not just one company, |
| Advertising Standards Authority | a voluntary organisation set up by people who work in the advertising industry. It does not have the legal powers to stop ads but if an ad is found to be offensive they ask a company to withdraw it. |
| National Consumer Agency | a State agency which can ban advertisements that break the Consumer Protection Act 2007 by misleading a consumer |
| Sales Promotion | Incentives that a business offers customers to encourage them to buy more of its product and to buy it sooner than they normally would. |
| Merchandising | refers to point-of-sale promotional displays designed to attract attention to a product and increase sales. It relies on impulse buying. |
| Public Relations | communicating with the media using news stories to create good publicity for a firm or its products or to respond to negative publicity. |
| Sponsorship | the firm donates money to an event or team in return for exposure of their name and logo |
| Press Release | news items about the company, sent to the media |
| Press Conference | meetings where statements are made and reporters can ask questions about specific events |
| Personal Selling | a salesperson meets with the customer face to face to give them information about a product and to persuade them to buy it |
| Telemarketing | means communicating with customers by telephone to generate sales and deal with customer queries and complaints. |
| Direct Mail | involves sending promotional messages directly to target customers, |
| Place | focuses on where customers will be able to access the goods or services. |
| Channel of Distribution | describes the various paths that goods may follow from producer to consumer |
| Wholesaler | a business that buys products directly from the manufacturer in huge quantities and then sells them on to the retailer in smaller quantities |
Created by:
jennymarshall
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