IB business 4.5

what is the marketing mix

it is a term originally created in order to describe the four key components of marketing physical goods However, 3 new Ps were added to cover the marketing of intangible services.

what is a product

a physical good or intangible service provided by a business

what are consumer goods

products bought for personal consumption, rather than for business use

what are producer goods

products bought by a business for its commercial use

what are extension strategies?

marketing approaches used to lengthen the product life cycle to make it more financially rewarding

what is the product life cycle

a model that shows the different stages products typically go through. they are research and development, launch, growth, maturity, decline

what is investment

purchase of a fixed asset

what is cash flow

it refers to the actual movement of money in anda out of the organization.

what is branding

a marketing technique used to give a product or a business a unique name or identity

what is brand awareness

it is the extent to which potential existing customers know about and recognize and remember an individual brand

what is brand development

it is part of a firm’s marketing strategy in communicating the value of a brand and what it stands for

what is brand loyalty

it is when customers repeatedly and habitually buy the same brand

what is brand value

it is about the expected earning of a brand

what is price

it refers to the value of a good or a service that is paid by a customer.

what is cost-plus pricing

it adds a profit margin to the costs of production in order to determine the selling price of a good or a service.

what are three advantages of cost plus pricing

it is simple to understand and calculate

it is suitable for most goods and services

it makes sure the selling price is more then the total cost of production, ensuring each sale is profitable

3 disadvantages of cost-plus pricing

ignores competitor’s pricing

concentrates on price rather than demand

doesn’t consider the needs of the customer

what is penetration pricing

it is setting a low price to enter an industry

3 advantages of penetration pricing

can discourage other firms from entering an industry because there are low profit margins

the low prices can encourage word of mouth as promotion

gives brands a price advantage over other competitors

3 disadvantages of penetration pricing

it is not suitable long term

costs may suddenly rise due to external factors leaving it unprofitable

it can make customers think it is low quality, so when prices are being increased, they will not want it

what is loss leader pricing

it consists of pricing a product below its cost of production to attract customers to buy other products

3 advantages of loss leader pricing

helps business attract customers

increases sales revenue from customers who buy a lot

helps businesses penetrate a market

3 disadvantages of loss leader pricing

customers may expect it to stay cheap so it is hard to sustain

the business lose money and there is no guarentee they will purchase anything else

it can be unethical

what is predatory pricing

it is a pricing strategy where a business charges low prices, possibly below the cost in order to damage the sales of rivals

what are the advantages of predatory pricing

custo

what are the disadvantages of predatory pricing

it is illegal in some places

some people will question the quality

it is not sustainable

what is premium pricing

it involves a business permanently setting a high price for a product in order ot be associated with high quality products.

advantages of premium pricing

creates a perception of the business being valuable and disirable

higher profit margins

acts as a signal of quality and reliability

disadvantages of premium pricing

limits the number of customers

there are higher costs involved in producing higher quality goods

gives customers higher expectations

what is promotion

refers to the various marketing processes used to inform customers about a product and persuade them to purchase it

what is through the line promotional strategy

it is a marketing strategy that involves using both atl and btl

what is placee

it refers to the plans and processes of getting the right prroducts to the right customers in the most convenient and cost effective way

what are intermediaries

entities that act on behalf of the sellers and buyers in the distribution of goods and services

what is distribution

it refers to the process getting a product to consumers

what is a distribution channel

it is the path taken to get a product from the producer to the consumer

what is a distribution network

intermediary in the supply chain that gets the product from the manufaturer to the consumer

what is direct distribution, or zero-channel distribution network

it does not use any intermediaries

what what are the advantages of direct distribution

maintains close connection with customers

all revenue is kept by the business

it is faster for customers

what are 2 disadvantages of direct distribution

relies on the producer to do all the marketing

the producer is responsible for storage and delivery cost

what are agents

they are individuals who act as intermediaries in the distribution channel

advantages of using an agent

specialised services can increase sales

they may have more skills in reaching more customers

they are incentivized to work hard as they are able to earn commission

disadvantages of an agent

they need to be paid, decrease sales revenue

the manufacturere will be reliant on them to sell

their reputation can be affected if the agent is bad

what are retailers

they are commercial businesses that sell a manufacturer’s product directly to customers

advantages of using retailers

they take responsibility fot the marketing of the products

they attract many customers

they are convenient

disadvantages of retailers

they have high costs, so the products will be pricier

there isn’t much control over how the products are presented

the higher prices make it less attractive to customers

what are wholesalers

they are businesses that purchase their products in large quantities directly from the manufacturer in to resell them in smaller quantities to customers and retailers

2 advantages of wholesalers

the producer doesn’t have to focus on the marketing

they getter lower transaction costs because they have less customers

2 disadvantages of wholesalers

they are only for large manufacturers

they tend to demand a price discount becauese they are buying in bulk

what is customer care

it is the attentiveness and courtesy of employees towards meeting the needs of their customers when deliviring a good or service

what is processes

the way in which a service is provided or delivered to customers. the operational aspects.

whau is physical evidence

it refers to the tangible aspects of the service..

what is a brand

A name, symbol or design that is used to identify a product or company.