3.4 The Marketing Mix (AQA A Level Business): Flashcards

False.

At A-Level the mix is the 7Ps — product, price, place, promotion, people, process, and physical environment.

True.

Many strong rivals push a firm towards aggressive pricing and continuous promotional activity.

The 'physical evidence' element includes the store or website environment, packaging and branding.

E.g. choosing growth over profit (like Spotify) leads to discounts and free trials to hit the target.

Consumer products are bought for personal use (e.g. shampoo); industrial products are bought for business use (e.g. an office photocopier).

The Boston Matrix analyses a product portfolio, classifying products by their market share and market growth rate.

Star, cash cow, problem child (question mark), and dog.

A product with high market share in a mature (low-growth) market — strong positive cash flow, used to fund new products.

A product with high market share in a high-growth market — invested in to maintain share, with strong growth potential.

A product with low market share in a high-growth market — could become a star with investment (often negative cash flow).

A product with low market share in a low-growth market — little revenue, often divested.

It is simplistic (ignores competition/trends), backward-looking, treats products in isolation, and is time-consuming.

Development, introduction, growth, maturity, and decline.

Cash flow is usually negative — heavy spending on R&D, promotion and distribution before sales build.

Differentiating the product and building brand loyalty, as cash flow turns positive.

In the decline stage, a business may reduce the price to clear inventory, or find new uses for the product.

A technique to extend a product's life beyond its natural cycle (e.g. product improvements, line extensions, price promotions).

Generate ideas, select the best idea, develop a prototype, test launch, and full launch.

A new income stream, a competitive advantage/USP, spread risk, and the ability to charge higher prices.

Expensive R&D, costly trial production, low sales if mistargeted, and brand damage if it fails.

A new, innovative product can create a USP, which can be used to charge a high price.

False.

Not necessarily — in a highly competitive market, high share can come with low margins (e.g. US airlines).

True.

Sales revenue continues and economies of scale reduce costs, so cash flow is positive.

Costs, price elasticity of demand (PED), and the other elements of the marketing mix (any two).

Elastic demand → keep prices low and use promotions; inelastic demand gives room for higher prices.

A price must at least cover the unit cost, or the firm loses money.

Penetration pricing launches a product at a deliberately low price to win market share fast, raising it later.

Price skimming sets a high introductory price and lowers it over time, so early adopters pay more.

Cost-plus pricing sets the price by adding a percentage mark-up to the unit cost.

Dynamic pricing continuously adjusts prices in real time using algorithms, reflecting demand, supply and competitor prices.

Rapid sales growth / market share, and it deters new entrants (who see low profits).

Low profit margins at first, and difficulty raising prices later without losing customers' trust.

Quick recovery of R&D costs and it creates a prestige image.

It ignores customer and competitor factors, risking overpricing in price-elastic markets.

Uber raising fares during peak demand and lowering them when demand falls.

Gillette often discounts razor handles but prices the blades high, knowing users keep buying refills.

True.

Sudden price surges can feel unfair, harming brand reputation and loyalty.

False.

That's penetration pricing; skimming sets a high initial price, lowered over time.

To generate customer awareness, interest and desire, communicate the value proposition, and differentiate from competitors.

Above-the-line promotion is advertising through mass media (e.g. TV, radio, billboards), reaching a wide audience.

Below-the-line promotion is marketing a business controls directly and that does not use mass media (e.g. direct marketing, PR).

The message, the target audience, the available budget, and the technology available (any two).

Promotion must be matched to the target audience, as different audiences consume different media.

A brand is the set of names, symbols, design elements and associations customers link to a product — a promise of a consistent experience.

Clear differentiation, customer loyalty, the ability to charge premium prices, and easier new-product launches.

It adds value beyond the physical product, so customers pay more (e.g. Apple iPhones vs rivals).

A respected brand appears on the balance sheet under goodwill and can be sold or licensed.

Viral marketing encourages consumers to share information about a company's products via the internet.

Owned content, paid advertising, influencer partnerships, user-generated content, and social listening (any two).

Huge reach for little money and stronger brand engagement.

Unpredictable results (virality can't be guaranteed) and loss of message control.

Viral campaigns often start with a strong emotional hook, such as humour or surprise, to make people share.

False.

Below-the-line promotion does not use mass media; above-the-line (advertising) does.

True.

Positive brand associations rub off on new items, cutting introductory advertising (e.g. Cadbury).

Place is where customers purchase a business's products and the distribution channels used to move products from producer to consumer.

Cost of distribution, nature of the product, degree of coverage required, control, customer expectations, and technology (any two).

Intensive = everywhere (e.g. Coca-Cola); selective = key outlets; exclusive = a few prestige stores (e.g. Rolex).

Producer → wholesaler → retailer → consumer, often used by small retailers who buy little and often.

Producer → retailer → consumer, common where customers need advice (e.g. Toshiba laptops via Currys).

Producer → consumer, common for products sold online / direct, cutting out intermediaries.

A drawback of the four-stage channel is that two extra markups push the selling price up for customers.

Multichannel distribution makes a product available through two or more different channels at the same time (e.g. stores, website, app).

The rise of e-commerce/smartphones, click-and-collect, competitive pressure, and falling technology costs.

Wider customer reach, greater convenience/loyalty, resilience, and richer data collection.

Complex inventory management, higher data-handling costs, and the risk of channel conflict.

Channel conflict occurs when online prices or promotions are not matched in store, confusing customers.

False.

Two-stage (producer → consumer) uses no intermediaries; the four-stage channel uses the most.

True.

E.g. Rolex restricts sales to a limited number of jewellers worldwide.

E-commerce, apps and real-time tracking enable direct-to-consumer sales and faster delivery, reducing the need for intermediaries.

The staff who interact with customers, sell products, act as brand ambassadors, and deliver a positive experience.

Their interactions shape customer perceptions; positive, knowledgeable staff enhance brand loyalty.

A satisfied workforce is more likely to provide excellent customer service and act as brand ambassadors.

The activities, procedures and systems a business uses to deliver a product or service to customers.

They improve the customer experience, boost efficiency, ensure consistency, and allow adaptability.

L'Oréal using AI face-scanning to recommend skincare, or Airbnb self-check-in removing the need for a host.

The tangible, visible signs of a product that customers interact with and perceive during their buying experience.

It shapes customer perceptions and builds trust when the product cannot be seen or touched before buying.

Ambience, packaging, signage/displays, digital presence, staff appearance, equipment/facilities, and marketing materials (any two).

Celine's boutique uses elegant decor, soft lighting and soothing music to create a luxurious atmosphere.

False.

It is especially important for services, where the product cannot be seen or touched before buying.

True.

Knowledgeable, enthusiastic staff shape positive perceptions and enhance brand loyalty.

Consistent processes build trust, reinforcing brand identity and long-term customer relationships.

Uniforms, grooming and courteous behaviour shape perceptions — e.g. Legoland's consistent staff uniforms.

An integrated marketing mix combines each element in the best, most consistent way, so all parts reinforce one message.

One clear message, greater trust, effective use of money, and it is harder for rivals to copy.

Competitors can match a single advert or discount, but not a whole, cohesive package.

The product life cycle stage, Boston Matrix position, type of product, objectives, target market, competition, and brand positioning (any two).

In an integrated mix, all parts tell the same story so customers understand what the brand stands for.

E-commerce is the buying and selling of goods or services over the internet, including payment and distribution.

Digital marketing is using online channels (websites, social media, email, search, apps) to promote products and engage customers.

Online shops are open 24 hours and reach customers worldwide without renting extra store space (e.g. ASOS).

Software can adjust prices in seconds to match demand or competitors (e.g. Booking.com).

One-click checkout, saved details and tracked delivery make buying smoother (e.g. Amazon Prime).

False.

An integrated mix means all elements tell the same, consistent message.

True.

Adverts can be aimed at specific ages, interests or postcodes and changed instantly if they underperform.