Section 1.3 Marketing Mix and Strategy

Comprehensive vocabulary flashcards covering marketing mix, design, branding, promotion, pricing, distribution, and the product life cycle based on the lecture notes.

Design Mix

The combination of: Function, Aesthetics, and Economic (cost) manufacture when developing a new product

Function

An element of the design mix referring to the way a product works, its reliability, and whether it performs its intended task.

List 5 features of products that successfully emphasise function in the design mix

More predictable and stable demand

Longer product life cycles

Lower promotional costs

Build reputation for quality based on reliability

Economic manufacture through economies of scale

Aesthetics

The element of the design mix concerning how a product appeals to a customer's senses (looks, feels, etc.) based on subjective judgement.

List 5 features of products that successfully emphasise aesthetics in the design mix

High added value

Demand fuelled by customer aspiration

Potentially shorter product life cycle

Easy for competitors to copy the design / style (need for design protection so competitors can’t copy)

Because aesthetic appeal is subjective and often comes with a higher price tag, the business must invest heavily in marketing and advertising to build a strong brand image

Economic manufacture

The design element that considers if the product can be made and sold profitably, focusing on value added during production.

List 5 features of products that successfully emphasise economic manufacture (cost) in the design mix

High profit margins

Low retail prices - competitive pricing

Standardised components - using mass produced identical components to benefit from economies of scale

Basic aesthetic / function to save money

High sales volume - often relies on selling lots of products with low profit margins rather then a few with large profit margins

How is the design mix changing to reflect social trends

Consumers care about sustainability, ethical supply chains and waste minimisation which changes how firms use the design mix

For example before consumers cared about ethical supply chains, firms would focus on minimising costs, however now firms have to ensure they are sourcing materials ethically to stay competitive

Sustainability

The practice of making a product without compromising the long-term supplies of inputs for future generations

What are the pros of a business designing for sustainability

Improved brand image / attracts ethically conscious consumers

Reduces long-term costs (less energy/materials used)

May qualify for government grants or tax incentives

Competitive advantage as sustainability becomes more valued

What are the cons of a business designing for sustainability

Higher upfront R&D and production costs

May require sourcing new suppliers, causing disruption

Sustainable materials can be more expensive, squeezing margins

Consumers may not pay a premium, reducing competitiveness

What do businesses need to consider to achieve sustainability when designing a product

Use of raw materials, water and other resources (inputs)

Energy use and its impact on climate change

Waste and pollution produced by the business

The impact the business has on employees and the local wider international community

Ethical Supply Chains

A social trend in product design where businesses ensure products are made ethically. This avoids damage to reputation and satisfy consumer interest in buying from an ethical business

What are the pros of a business designing with ethical supply chains

Protects brand reputation

Attracts ethically-minded consumers and investors

Reduces risk of boycotts or negative press

Can improve employee morale

What are the cons of a business designing with ethical supply chains

Higher costs (fair wages, safe conditions abroad raise prices)

Harder to monitor overseas suppliers

May reduce profit margins if costs can’t be passed on

What do businesses need to consider to achieve ethical supply chains when designing a product

Whether materials are sourced from suppliers who pay fair wages and provide safe working conditions

Avoiding suppliers that use child labour or forced labour

The environmental impact of sourcing materials (e.g. deforestation, pollution)

Transparency and traceability throughout the supply chain — knowing where every component comes from

Whether suppliers hold ethical certifications (e.g. Fair trade)

The cost implications of switching to ethical suppliers and whether this affects pricing/profit margins

Consumer and stakeholder expectations around ethical sourcing

Waste Minimisation

Modifying product designs to use fewer resources, cut down on unnecessary packaging, and limit what ends up in landfills.

What are the pros of a business designing with waste minimisation

Cuts production costs (fewer materials/packaging needed)

Improves public image and meets consumer expectations

Helps comply with environmental regulations

What are the cons of a business designing with waste minimisation

High initial redesign/retooling costs

May require new supplier relationships

Can slow down production during the transition

What do businesses need to consider to achieve waste minimisation when designing a product

Using recyclable or biodegradable materials

Reducing packaging without compromising product protection

Designing for longevity/repairability to reduce disposal

Brand

a distinctive name, symbol, logo, design, or term used to identify a product or business and differentiate it from competitors

Product brand

Brands associated with specific products. For example marmite and pot noodle

Service brand

Brands that add perceived value to services either delivered face to face or via online and apps for example Netflix and uber

Umbrella brand aka family brand

Brands that market multiple related products or services under a single well established brand name for example dove and Cadbury

Corporate branding

Promoting the brand name of an entire company rather than individual products for example Nike, Sony or Microsoft

Own label brands

when a retailer manufactures or sources products and sells them under their own brand name, rather than selling third-party manufacturer brands for example Tesco finest and M&S

Global Brand

A brand that is easily recognised and operates worldwide based on familiarity, availability, and stability for example McDonald's and Coca-Cola.

Promotion

the element of the marketing mix (the 4Ps) focused on informing, persuading, and reminding customers about a product or brand

Promotional Mix

The mix of activities and approaches taken to promoting a product consisting of:

Advertising (online and offline)

Sales promotion

Personal selling

Public relationship / publicity / sponsorship

Direct marketing

What are 5 key influences on which promotional elements are used (and how)

Stage in the products life cycle - different stages require different promotional methods

Nature of the product - what info customers require before they buy

Competition

Marketing objectives and budget - what the promotion needs to achieve

Target market

Advertising

Paid, non-personal communication through mass media (TV, radio, social media, newspapers) to a large audience. The business controls the message. Examples: Coca-Cola TV ads, Nike billboards.

Pros of advertising

Reaches a very large audience quickly

Builds brand awareness and recognition

Business controls the message fully

Can be repeated frequently

Builds long term brand image

Cons of advertising

Exspensive - especially tv and radio

Non personal - cannot tailor to individuals

Audience may ignore or skip ads

Hard to measure effectiveness directly

Can take a long time to show results

Personal selling

Direct, face-to-face communication between a salesperson and a potential customer. It’s two-way, allowing the seller to tailor their pitch and handle objections in real time. Examples: car dealerships, B2B sales reps.

Pros of personal selling

Two way communication

Highly persuasive and tailored to the customer

Builds strong customer relationship

Immediate feedback from the customer

Effective for complex or high value products

Cons of personal selling

Very expensive (salaries, training, travel)

Only reaches one customer at a time

Quality depends heavily on salesperson

Time consuming process

Difficult to scale up

Sales promotion

Short-term incentives designed to boost sales quickly. Targeted at customers or the sales force. Examples: buy-one-get-one-free, discount vouchers, loyalty points, free samples.

Pros of sales promotion

Generates a quick, short term sales boost

Encourages customers to try a new product

Easy to measure (sales figures)

Can clear excess stock quickly

Motivates the sales force

Cons of sales promotion

Effects are temporary

Can damage brand image if overused

Reduces product margins

Customers may wait for next promotion

Competitors can easily copy the promotion

Public relations

Managing and protecting a business’s reputation with the public. Often involves generating positive media coverage without directly paying for it. Examples: press releases, sponsorship, charity partnerships, crisis management

Pros of public relations

Often free or low cost

Seem as more credible than paid advertising

Builds long term trust and reputation

Can reach a very wide audience

Useful for crisis management

Cons of public relations

No direct control over what the media says

Negative press can be very damaging

Results are difficult to measure

No guarantee coverage will be published

Takes time to build meaningful relationships

Direct marketing

Communicating directly with individual customers to get an immediate response, bypassing mass media. Examples: email campaigns, catalogues, targeted social media ads, telemarketing.

Pros of direct marketing

Highly targeted at specific customers

Easy to personalise the message

Response can be tracked and measured easily

Cost effective compared to mass advertising

Can build a direct relationship with customers

Personal Selling

A person-to-person promotional method involving two-way communication, meeting customers, and closing sales for high-priced or technical products.

Sales Promotion

Tactical incentives, such as free samples or BOGOF-style offers, designed to stimulate impulse purchases and provide a boost to sales.

Public Relations (PR)

Activities designed to create goodwill and a favourable image for a business and its products among customers and stakeholders.

Direct Marketing

The process of sending promotional materials directly to individuals via mail, email, social media, or phone to trigger a specific response.

Price

The amount of money charged for a product or everything a customer must give up to acquire it, expressed in terms of $£$.

Price Taker

A business that has no option but to charge the ruling market price for its products.

Price Maker

A business capable of setting its own price for a product without worrying about the actions of rivals.

Cost-plus Pricing

A pricing method where the selling price is set by applying a percentage margin to the unit costs of production or supply.

Price Skimming

Setting a high initial price for a new product to maximize profit per unit from early adopters before lowering it later.

Penetration Pricing

Offering a product at a low introductory price to quickly gain market share and build customer loyalty.

Loss Leader

A product advertised and priced below its normal cost to encourage customers to enter a store and buy other full-priced items.

Dynamic Pricing

A strategy where businesses set flexible prices for products or services based on current market demands, often used by Amazon or Uber.

Distribution Channel

The route a product takes to move through stages from the point of production to final consumption by the customer.

Wholesaler

An intermediary that 'breaks bulk' by buying large quantities from producers and selling smaller quantities to retailers.

Agent

A specialist type of distributor that does not hold stock and typically operates in service sectors like travel or insurance, earning commission on sales.

Direct Distribution

A distribution method where the producer and consumer deal directly with each other without any intermediaries.

Multichannel Distribution

A strategy where a business uses more than one type of distribution channel, such as selling through retail stores and online e-commerce.

Product Life Cycle

A theoretical model describing five stages a product goes through: Development, Introduction, Growth, Maturity, and Decline.

Extension Strategies

Methods used to prolong the life of a product in growth or maturity, such as re-styling, changing promotion, or finding new market segments.

Boston Matrix

A portfolio analysis tool that categorises products into Stars, Cash Cows, Question Marks, and Dogs based on market share and market growth.

Stars

Products in the Boston Matrix with high market share in high-growth markets that often require heavy investment.

Cash Cows

Successful products in the Boston Matrix with high market share in low-growth markets that generate strong cash flow for the company.

Question Marks

Products in the Boston Matrix with low market share in high-growth markets that require careful management decisions regarding investment.

Dogs

Products in the Boston Matrix with low market share in low-growth markets that are rarely worth investing in and are usually sold or closed.