Medis & Mariah Summit 1

Set of questions by the grusome twosome!

Price Taking (Stolen from tutor 2 u as I am lazy)

Competitor-based pricing

If there is strong competition in a market, customers are faced with a wide choice of who to buy from. They may buy from the cheapest provider or perhaps from the one which offers the best customer service.  But customers will certainly be mindful of what is a reasonable or normal price in the market. 

Most firms in a competitive market do not have sufficient power to be able to set prices above their competitors. They tend to use “going-rate” pricing – i.e. setting a price that is in line with the prices charged by direct competitors.  In effect such businesses are “price-takers” – they must accept the going market price as determined by the forces of demand and supply.

An advantage of using competitive pricing is that selling prices should be line with rivals, so price should not be a competitive disadvantage.

The main problem is that the business needs some other way to attract customers.  It has to use non-price methods to compete – e.g. providing distinct customer service or better availability.

Above the line and below the line

Above the line promotion

This is paid for communication in the independent media e.g. advertising on TV or in the newspapers.  Though it can be targeted, it can also be seen by anyone outside the target audience.

The main aims of above-the-line promotion are to inform customers, raise awareness and build brand positioning.  Above-the-line tends to have a higher cost since the promotional methods used are less precise.

Below the line promotion

This concerns promotional activities where the business has direct control over the target or intended audience. There are many methods of below-the-line, including sales promotions, direct marketing, personal selling and sponsorship.

Sponsorship is controlled because you can decide who is being sponsored and what event. 

http://businesscasestudies.co.uk/kia-motors/using-sports-marketing-to-engage-with-consumers/above-the-line-and-below-the-line-promotion.html#axzz2V2T5IKb8

Product Design Mix

The design mix is defined as: Where an organisation considers the three main aspects of a potential product weighing up the different features and how they will best fit the target market.