3.3 Marketing Mix (Cambridge (CIE) IGCSE Business) Flashcards

Packaging is the physical container or wrapping for a product, which is also used for promotion and selling appeal.

True.

Investing in creative and environmentally friendly packaging designs helps products attract attention and differentiate from others in the market.

Effective packaging is used to promote and sell the product, communicate quality to customers, catch the customer's eye, provide key information, and establish brand image.

New product development is the process of creating and launching new products or innovating existing ones through a series of stages such as idea generation, prototype development, and testing.

A test launch allows a business to sell the product on a small scale to assess its market performance and make necessary changes before a full launch.

True.

By offering more products, a business can spread risk and reduce dependency on any one group of customers or markets.

The product life cycle describes the stages a product goes through from its introduction to its decline in sales.

The four typical stages of the product life cycle are introduction, growth, maturity, and decline.

True.

In the introduction stage, high promotion and distribution costs usually result in negative cash flow.

During the maturity stage, sales remain high but growth slows.

Extension strategies are techniques used by businesses to extend the life of a product beyond its natural life cycle.

An advantage is that it increases potential sales and revenue. A disadvantage is that it may involve legal or cultural challenges.

Increasing advertising aims to boost brand awareness and bring back interest in the product.

A target market is the specific group of customers a business aims to reach with its products or services.

Two factors are the type of product and the target market.

Dynamic pricing is the practice of continuously adjusting prices in real time to reflect demand, supply and other market conditions, often using algorithms and data.

Cost-plus pricing is when a business calculates the cost of production and adds a markup to determine the final price, ensuring a profit margin is achieved.

Competitive pricing is when a business sets its prices based on competitors’ prices to attract or keep customers in markets with many similar products.

Penetration pricing is when a business sets a low price for a new product or service at launch to quickly capture market share and attract price-sensitive customers, then often raises the price later.

Skimming is a pricing method where a business sets a high price for a new product at launch and gradually lowers it to continue sales as demand from early adopters falls.

A business should consider USPs and differentiation, technology, level of competition, brand strength, product life cycle stage, and costs when selecting a pricing method.

False.

Competitive pricing does not always reflect the quality or value of the product.

A distribution channel is the intermediary or pathway through which products move from the business to the end customer.

The main advantage of selling direct to customers is that the business has full control over the customer experience and pricing, and can achieve higher profit margins since there are no intermediaries.

False.

When selling through retailers, the producer has less control over pricing, display, and customer service.

A wholesaler is a business that buys large quantities of products from producers and sells smaller amounts to retailers or customers.

Two factors a business should consider are: the type of product (e.g. perishable, technical) and the frequency of purchase. Other factors include price, durability, customer location, and competitors' channels.

True.

E-commerce enables businesses to offer convenience and fast delivery to customers who shop online.

A producer might use an agent to gain access to specialist knowledge and contacts in a foreign market, reducing the need for in-house sales teams and making it easier to enter unfamiliar markets.

A perishable product like fruit is best distributed through retailers, sometimes via wholesalers, to be sold quickly before spoiling.

A sales promotion is a short-term marketing strategy used to encourage customers to buy a product, often through special deals or incentives.

Vouchers encourage customers to return and make another purchase, helping to build customer loyalty.

True.

Reward schemes build loyalty by encouraging repeat purchases and help businesses retain customers.

Frequent special offers and discounts may damage the brand’s image and reduce profits.

Advertising is a form of paid promotion used by businesses to inform, persuade or remind customers about products or services.

Advantage: Social media allows businesses to reach a large audience quickly at low cost.

Disadvantage: Managing accounts and responding to customers can be time-consuming, and negative feedback can spread quickly.

False.

Billboards are expensive to rent in busy areas and have limited space, so they cannot provide detailed information.

The target market is the group of customers a business wants to reach with its products or promotions.

Sales promotions are often used at the launch stage to attract new customers (e.g. vouchers) or at maturity to boost slowing sales (e.g. discounts).

In advertising, reach refers to the number of people who see or hear an advert within the target market.

Two main aims of promotion are to increase sales revenue and to enhance brand and business image.

E-commerce is the trade of goods and services over the internet.

Two examples of payment systems used in e-commerce are Apple Pay and PayPal.

Businesses can sell goods through their own websites or via selling platforms such as Amazon, Ebay and Etsy.

Financial institutions, such as banks, provide services via mobile apps that allow customers to manage their accounts online.

E-ticketing refers to paper-free access to events or transport via electronic tickets.

Customers can manage bank accounts, transfer money and pay bills online.

False.

Online competition can help lower prices, but it does not always guarantee them.

A major concern for consumers is security risks such as credit card fraud or identity theft.

E-commerce can give businesses a competitive advantage by making life more convenient for customers and reaching large audiences.

A disadvantage for businesses is the global competition they face, which makes it easy for customers to switch brands.

It is important because each element of the marketing mix impacts consumer decisions and a change in one element can significantly affect the others, influencing the success of the marketing strategy.

If a business launches a premium version of a product, it may need to increase the price and redesign promotional activity to reflect the new product's image.

True.

If a product is priced too low, consumers may doubt its quality, leading to reduced sales.

A business with a large marketing budget can use mass media promotion, while a small budget may limit promotion to cost-effective methods like social media.

A balanced marketing mix means that all elements of the marketing mix complement each other and help achieve the business’s marketing objectives.

True.

Changing one element, such as price, can require adjustments to other elements like promotion or packaging to maintain a successful strategy.

A high price may make a product seem high quality but less affordable, while a low price may make it seem low quality, both impacting sales.

False.

Businesses with small budgets usually use cost-effective methods like social media rather than expensive mass media advertising.

Economies of scale occur when a business reduces its unit costs by increasing output, often through bulk buying or more efficient production.

If businesses do not adapt to local cultures, their products or marketing may offend or fail to appeal to customers, leading to lost sales.

Cultural differences are the unique customs, values, languages and expectations found in different countries that businesses must understand to succeed internationally.

By selling in more than one country, a business is less dependent on a single market, making it less vulnerable to economic or political problems in any one location.

True.

Not following local laws can lead to fines, legal action, or being excluded from the market.

A lack of local knowledge can lead to poor decisions about pricing, promotion, and product design, and difficulty in connecting with the right target market.

Selling products in overseas markets can extend their life cycle when demand falls in the domestic market, reducing the need for immediate new product development.

Brand recognition is how well customers identify and remember a business's name, logo, or products, often leading to increased loyalty and sales.