Chapter 3 - marketing mix and strategy: AS Edexcel business studies summary notes
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Course
Business economics
Institution
Bachillerato
These notes/summaries were made by me personally during the course of Y12, referring to the following book: 9781292239170. These are spectacular notes, which I complete using the indicated book together with other platforms in order to finish the entire syllabus in detail. Finally using these docum...
MARKETING MIX AND STRATEGY (3)
UNIT 1 – marketing and people
Contents
MARKETING MIX AND STRATEGY (3)..................................................................................1
MARKETING OBJECTIVES AND STRATEGY (9)..................................................................1
THE PRODUCT LIFE CYCLE........................................................................................... 2
EXTENSION STRATEGIES............................................................................................. 3
BOSTON MATRIX AND PRODUCT PROFOLIO................................................................3
THE MARKETING MIX................................................................................................... 5
PRODUCT/SERVICE DEISGN (10).....................................................................................5
THE DESIGN/PRODUCT MIX......................................................................................... 5
LEGISLATION TO PROTECT NPD – INTELLECTUAL PROPERTY (IP).................................6
PROMOTION AND BRANDING (11)...................................................................................6
ABOVE-THE-LINE PROMOTION.....................................................................................7
BELOW-THE-LINE PROMOTION.....................................................................................7
PRICING STRATEGIES (12).............................................................................................. 9
DISTRIBUTION (13)....................................................................................................... 10
MARKETING OBJECTIVES AND STRATEGY (9)
MARKETING OBJECTIVES
These are the goals that the business wishes to achieve from its marketing department.
These are normally described as SMART objectives (specific, measurable, achievable,
realistic, and time-bound).
Increase market share: increase sales volume compared to those of competitors.
By having a larger market share, they are likely to have a competitive edge. Many
factors such as pricing and economies of scale will depend on market share and
levels of production.
Build a brand: brand recognition and product differentiation. Improve customer
perception and increase customer loyalty. This is essential for businesses,
especially for those that operate in highly competitive markets.
Product innovation: provide more choice for customers which are different from
competitors
Sales volume and value refers to quantity sold and sales revenue
Profitability: effective pricing
Improve customer satisfaction: lead to customer loyalty and repeated purchases
Improve visibility and brand awareness: may identify different market segments
or place a focus on a new type of customer
Therefore, marketing objectives and strategies should place a focus in specific steps
necessary to achieve marketing goals.
MARKETING STRATEGIES
A strategy is a set of plans designed to meet the objectives of the business. These can
depend on whether the markets they operate in are mass or niche markets.
MASS:
Product: in mass markets lots of competitors offer similar products and so product
differentiation is crucial. Developing a USP will help a business’s product’s stand
out from the pack. This will aid a business improve competitiveness and help
them stand out against competitors
1
, Business AS revision summaries
Borja Jimenez
Price: in mass markets, price will be very similar between substitutes as
competitors often avoid price wars.
Promotion: This serves as an essential strategy as price competition is normally
nonexistent. This will help businesses improve competitiveness and encourage
customer to buy their products. This will help businesses to increase market share
and brand awareness.
Place: businesses here often use multiple distribution channels. Businesses here
are likely to have both physical stores and online websites, to accommodate to all
customers and ensure their needs and wants are satisfied
NICHE:
Product: Products here are likely to have significant differences. This is because
products will be designed carefully to fully satisfy the needs of smaller market
segments.
Price: Businesses selling in niche markets have more flexibility in their pricing.
There is less competition, and products are uniquely made to satisfy specific
needs and so higher and more premium prices can be charged
Promotion: Promotion will tend to be more targeted. Businesses need to identify
their customer profile very accurately to ensure that advertising and promotion
expenditure is not wasted.
Place: businesses here are more selective. They are likely to use more private,
exclusive distribution channels. They may sometimes also use websites.
MARKETING PLANNING
This is a detailed programme of action about what the business will do in the future. This
may involve factors such as stock, staffing…
THE PRODUCT LIFE CYCLE
This shows the different stages that the product passes through over time and the sales
that are expected during each stage. By considering product life cycles, businesses can
plan for the future
Development: during this stage the product is being researched and designed.
Suitable ideas must be investigated, developed, and tested. A decision will then
be made about whether or not to launch the product. Here, it is likely that the
business will invest in development and costs will be high.
Introduction: at the start of this stage, the product will be launched. As the
product is new to the market, initial sales are likely to be low. Costs will also be
elevated as the business will have to meet with rising orders, promotion,
distribution… therefore it is likely that at this stage products may still not be
profitable. This is a stage of uncertainty as outcomes are unpredictable.
Growth: once the products is established and consumers are aware of it, sales
may begin to grow rapidly, new customers buy the product and there are
repeated purchases. Unit costs may fall as production increases. The product is
likely to become profitable. Here, competitors may also launch their own versions.
Maturity and saturation: at this stage growth rate will decrease. The products
have become established with a stable market share at this point. Sales will have
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