19 - The marketing mix - price and product

Question 1

Define marketing mix

Answer 1

the four key decisions on product, price, promotion and place that must be taken to enable the effective marketing of a product

Question 2

Define Goods

Answer 2

products which have a physical existence

Question 3

Define services

Answer 3

products which have no physical existence, but satisfy consumer needs in other ways

Question 4

Define brand

Answer 4

an identifying symbol, name, image or trademark that distinguishes a product from its competitors

Question 5

Define intangible attributes

Answer 5

the subjective opnions of customers about a product, which cannot be measured or compared easily

Question 6

Define tangible attributes

Answer 6

the measurable features of a product, which can be easily compared with other products

Question 7

Define New product development (NPD)

Answer 7

the design, creation and marketing of new goods and services

Question 8

Define Unique selling point

Answer 8

the special feature of a product that makes it different from competitors’ products

Question 9

Define product differentiation

Answer 9

the unique qualities of a product that lead to a difference between the product and competitors’ products

Question 10

Define product positioning

Answer 10

consumers’ view of a product or service as compared to its competitors

Question 11

Define Product portfolio analysis

Answer 11

analysing the range of existing products of a business to help allocate resources effectively between them

Question 12

Define Product life cycle

Answer 12

the pattern of sales for a product from launch to withdrawal from the market

Question 13

Define consumer durable

Answer 13

a manufactured product that can be re-used and is expected to have a reasonably long life, such as a car or washing machine

Question 14

Define extension strategy

Answer 14

a marketing plan to extend the maturity stage of the product before a completely new one is launched

Question 15

Define Boston matrix

Answer 15

a method of analysing the product portfolio of a business in terms of market share and market growth

Question 16

Define mark-up pricing

Answer 16

adding a fixed mark-up for profit to the unit cost of buying in product

Question 17

Define cost-plus pricing

Answer 17

setting a price by calculating a total unit cost for the product and then adding a fixed profit mark-up

Question 18

Define contribution-cost pricing

Answer 18

setting prices based on the variable costs of making a product, in order to make a contribution towards fixed costs and profit

Question 19

Define competitive pricing

Answer 19

making pricing decisions based on the price set by competitors

Question 20

Define price discrimination

Answer 20

charging different groups of consumers different prices for the same good or service

Question 21

Define dynamic pricing

Answer 21

offering products at a price that changes according to the level of demand and the customer’s ability to pay

Question 22

Define penetration pricing

Answer 22

setting a relatively low price to achieve a high volume of sales

Question 23

Define market skimming

Answer 23

setting a high price for a new product when a firm has a unique or highly differentiated product with low price elasticity of demand

Question 24

Define psychological pricing

Answer 24

setting a price at a level which matches consumers’ views about a product’s perceived value