1.3

Design mix

Product design is meeting the design mix identifies market needs e.g. function/ aesthetics/ cost

Function

How well does the product perform and will the product or service be fit for purpose

Ergnomonics, usability, safety, reliability and functionality

Dyson vacuum cleaner

Function- cleans without needing a bag inside which lost suction when full

Aesthetics

Through market research consumers at easked hwo it looks, tastes, feels

How the senses repsond to the products, more stylish products tend to seek better and can have premium price charges, emotional attachement

Cost

Minimum costs to retain profit whilst maintaining quality, can the product be made efficiently and using productive capacity, lower costs than competitors

change in elements of the design mix to reflect social trends

Concern over recourse depletion l/ eco consideration: design for waste minimisation- make products which use lids of energy more durable, smaller lighter products, no disposable products

recycling: clothes form recycled plastics, adapting products to incorporate recycled materials, reefer sail company, use waste discarded from other businesses e.g barnaba uses up cycled dehydrated banana snacks left form bananas in plantations, recycle stories in media

ethical sourcing: ensuring products being sourced are created in safe facilities by workers who are treated well and paid fair wages, supplier respects environmental during the production and manufacture of the products , Starbucks and fair trade

Benefits of adapting product design in line with environment consideration

Fewer recourses- lower cost- higher profit

More likely to be popular- raise sales

Use design feature gives a usp- more price elasticity of demand

More likely to be viewed as good corporate citizens- use if corporate social responsibility

Promotion

Draws attention to the business

• tells customer about a new product

• Remind customer about existing Product

• Reach a target audience

• Reassure customer about product

• Distinguish product

• Develop usp

• Improve or develop image of business

Above the line promotion

Advertising

• informative/ persuasive and reassuring

• Various media’s- tv/ internet/ print/ radio

Below the line

Any promotion taht is not advertising

• sales promotion: free gifts, deals, loyalty cards

• Public relations: press releases, conferences

• Merchandising and packaging: product layout in shop, display material, stock

• Direct mailing: leaflets, direct social media

• Direct and personal selling: telephone, face to face

• Exhibition and trade fairs

Choosing method of promotion

• cost

• Market

• Product or service type

• State in product life cycle

• Competitors Actions

• Legal factors

Branding

A business that is public distinguished from other businesses so that it can be easily communicated and usually marketed

Reasons for branding

• established recognition and identity

• Builds trust and credibility

• Differentiates a business from its competitors

• Creates emotional connection with customers which helps generate repeat purchases

• Supports marketing and advertising efforts

Corporate branding

• Improves reputation for company

• Increases customer loyalty

• Allows introduction of new products

• Can promote multiple products which reduces marketing costs

  cons

• Can be time consuming and costly

• Influences sale of products strongly

Manufacturing/ product branding

• can charge premium price

• Customers stay loyal

• Repeat purchases

  cons

• Creating and branding new brands for each product can be expensive

• Can be difficult to make new brands form scratch

Own brand branding

• ties consumer to retailer

• value for money

• High profit from low costs

• Can lead to bargaining power with brands as consumers prefer cheaper brands so brands supply at discounted prices

  cons

• May be seen as Lower quality from packaging and brand as well as cheaper piece

Ways to build a brand

USPS- can give competitive advantage as there isn’t a market yet

advertising- differentiate (emotional branding)

Sponsorship- associates with celebrities for more trustworthy brand

Social media- reach target audience

Benefits of strong branding

Added value

Ability to charge premium prices

Reduced price elasticity of demand

Changed in branding and promit on to reflect social trends

Viral marketing- brand awareness through word of mouth

Social media

Emotional branding- created bond between consumer and business

Cost plus pricing

The cost to produce the product and then money added on top

Price skimming pricing

A product is priced high to begin with because it has a desirability factor and then after a while price is decreased so customers will want it when new

Penetration pricing

Setting prices really low on a new product to encourage sales and persuade customers to try it then when they lien the product and keep buying it, raise pricing, low prices should gain the business more market share

Predatory pricing

existing business may hold if the threat of a new entrant by lower the prices so that any competition can’t make profit, deters and pushes competitors out the market

Competitive pricing

Some products or service as priced in line with competitors, means a costumer will judge business on other non price factors

Psychological pricing

Making products appear cheaper by only reducing the price by a couple p, pricing something at 1.99 instead of 2.00

Factors that determine pricing strategy

• number of usps/ differentiation

• Price elasticity if demand

• Level of competition in the business environment

• Strength of brand

• Stages in the product life cycle

• Costs and the need to make a profit

Changes in prices to reflect social trends

Online distribution

Changing form a product to a service

Dynamic pricing, personalised, auction, subscription, comparison sites

Distribution channels

The process un getting the right products or service to the consumer in the right place

Manufacture→ consumer

Two stage, direct selling, factory shops (pottery shops), solicitors

Manafavturer→ retailer→ consumer

Three stage, electrical goods, manufacturer sell to retailers which are spread all over the country it gives manufacturer the distribution and volume of sales they’re looking for, applies to most mass markets

Mana facturer→ wholesaler→ retailer→conumer

Four stage, foods, some manufacturers deal with a few wholesalers who buy in larger quantaties or may sell to both wholesalers and retailers, wholesalers “break bulk” kurdes into smaller quantities that independent retailers will buy (can offer trade credit to smaller business)

Manufacturer→ agent→wholesaler→retailer→consumer

Selling in a different country may require agents who speak taht language, understand regulations, they are the middle man between manufacturer and foreign wholesaler

Changes in distribution to reflect social trends

• Online distribution: niche products can meet a wider audience, low barrier to entry, small costs, can cater much further than shops

• Changing from a product to a service: you don’t have to own something to use it( music)

Marketing

The management process of identifying, anticipating and satisfying consumer demands for profit

Product life cycle

Development:

introduction: high cost for read watch and development

growth: rapid growth in sales and could gain economies of scale, investment would be in promotion

maturity: products face intense competition now all producers have joined the market

decline: limited on production or it any cease altogether

Extension strategies

Product: updating or adding value to existing product, change packaging

promotion: find new uses for product, new markets, advertising, encourage grater it more frequent consumption (lucozade)

Boston matrix: star

Star- high market share, high market growth, growth phase, production should remain consistent while profits are harvested

Boston matrix: cash cow

High market share, low market growth, maturity phase but Still have customer loyalty, products should be produced until decline

Boston matrix: dog

Low market share, low market growth, declining sales in declining markets, decline phase, video tapes, should be removed from sale

Boston matrix: question mark

High market growth, low market share, may have just been launched and is building customer loyalty, should be invested in

Marketing strategy for mass markets

• market which caters to everyone

• Marketed to consumers all over the world in The same way

• Large quay hairs means lower cost and higher profits (EOS)

• Media will be in tv, radio, mass media

Marketing strategy for a niche market

• one that caters to a small subset of a segment and targets in very specific ways

• Designed for specific purpose

• Small turnover keeps larger firms away from the market

• Inelastic demand means higher prices

• Specialist magazines, trade fairs, websites, leaflets

B2B marketing

• business to business, schools deal with specialist paper suppliers

• Advertising need to be informative rather than persuasive and clever

• Typically involve larger transactions

• Suppliers need to build relations

• Focus on quality product and service

B2C marketing

• business to consumer

• Consumers want to know benefits (short messages)

• Not looking to build relations usually one off purchase (sofa) but need emotional connection

• Want a variety of distribution channels for convenience