DP IB Business Management: HL 4.5 The Marketing Mix (7 P's)

Flashcards covering key vocabulary related to the marketing mix.

Marketing Mix

The seven elements that contribute to the successful marketing of a product: Product, Price, Place, Promotion, People, Process, Physical Evidence.

Product

Involves identifying the features, design, quality, branding, and packaging of the product/service to meet customer needs.

Price

Identifying the best pricing strategies considering customer willingness to pay, production costs, competition, demand, and perceived value.

Place

The distribution channels and physical locations used to make the product/service available to customers, including sales outlets, logistics, and supply chain management.

Promotion

Activities used to communicate and promote the product/service to the target market, including advertising, public relations, and sales promotions.

People

The human resources involved in customer interactions and product/service delivery to provide a positive customer experience.

Process

The operational processes and workflows that enable the smooth and efficient execution of marketing strategies, ensuring a consistent and streamlined customer experience.

Physical Evidence

Tangible elements that customers can perceive when interacting with a product/service, such as the physical environment, packaging, and branding.

Product Life Cycle

The different stages a product goes through from its conception to its eventual decline in sales: development, introduction, growth, maturity, and decline.

Development Stage

Generating and screening product ideas, designing and developing the product with high costs for R&D and market research; cash flow is usually negative.

Introduction Stage

The stage when the product is launched, characterized by slow sales growth and negative cash flow due to high promotion and distribution costs.

Growth Stage

The product enters this stage when sales increase rapidly, building market share, increasing production, and generating positive cash flow.

Maturity Stage

Characterized by slowing sales growth as the product reaches its peak in market penetration, with positive cash flow and focus on maintaining market share.

Decline Stage

Starts when sales begin to decline as the product becomes obsolete, shifting focus to managing the product's decline and reducing costs.

Extension Strategies

Techniques used by businesses to extend the life of a product beyond its natural life cycle, including product-related and promotion-related strategies.

Product Improvements

Changing or modifying the product to make it more appealing to customers and extend its life cycle.

Line Extensions

Introducing new products that are closely related to existing products, such as different flavors or variations.

Repositioning

Changing the market's perception of a product to make it more attractive to a new or existing target market.

Boston Consulting Group (BCG) Matrix

A tool used by businesses to analyze their product portfolio and make strategic decisions based on market share and market growth rate.

Cash Cow

Products with a high market share in a mature market, generating significant positive cash flow but having low growth potential.

Problem Child/Question Mark

Products with a low market share in a high-growth market, having the potential to become stars with investment.

Star

Products with a high market share in a high-growth market, generating positive cash flow and having the potential for continued growth.

Dog

Products with a low market share in a low-growth market, generating little revenue and having no growth potential.

Branding

The process of creating a unique and identifiable name, design, symbol, or other feature that differentiates a product/service or company from its competitors.

Manufacturer/Corporate Branding

The use of a company name or logo to promote all products or services offered by the company.

Product Branding

The use of a unique name, design, or symbol to promote a specific product.

Own Brand Product

The use of a retailer's name to promote a specific product or service, often used by supermarkets.

Unique Selling Points (USPs)

The features that make a product/service stand out from its competitors.

Emotional Branding

A strategy where companies build strong emotional connections with their customers by appealing to their values, beliefs, and emotions.

Cost Plus Pricing

The business calculates the cost of production and then adds a markup to determine the final price.

Penetration Pricing

The business sets a low price for a new product/service when it is first introduced to quickly capture market share.

Loss Leader Pricing

Charging a price below the average cost for a product to attract customers to buy other profitable products.

Predatory Pricing

The business sets prices so low that it drives its competitors out of the market; strategy is illegal in many countries.

Premium Pricing

The business sets a high price for its product, which gives customers an impression of high quality and luxury.

Competitive Pricing

Involves matching or undercutting the prices charged by competitors in order to increase sales.

Contribution Pricing

Contribution pricing involves setting prices that cover direct costs associated with producing a product and also contribute to covering indirect costs

Dynamic Pricing

Involves charging different prices to match demand patterns in an effort to optimize revenue.

Price Elasticity of Demand (PED)

Calculates how responsive the change in quantity demanded of a product will be to a change in its price.

Above the Line Promotion

Advertising activities aimed at reaching a wide audience through traditional mass media channels.

Below the Line Promotion

Marketing communications over which a business has direct control and which do not make use of mass media.