chapter 7-11 marketing

Question 1

asset led marketing

Answer 1

marketing decisions based on the needs of the customer and the strengths of the business

Question 2

market orientation

Answer 2

when a business bases its marketing mix on what the market wants

Question 3

product orientation

Answer 3

marketing mix bases on its internal strengths

Question 4

product portfolio

Answer 4

the mix of products that business sells

Question 5

product breath

Answer 5

the number of products lines a business sells

Question 6

product depth

Answer 6

the number of products varieties in each product lines

Question 7

star

Answer 7

high market share
high market growth

Question 8

cash cow

Answer 8

high market share
low market growth

Question 9

question mark

Answer 9

low market share
high market growth

Question 10

dog

Answer 10

low market share
low market growth

Question 11

price taker

Answer 11

a business that has little to no control over the price of their products

Question 12

market penetration

Answer 12

initially changing low prices to gain market share then slowly increasing over time

Question 13

market skimming

Answer 13

initially charging high prices then reducing the price over time

Question 14

psychological pricing

Answer 14

charging a price the consumer may expect due to perceived quality and value for money

Question 15

cost plus pricing

Answer 15

adding a profit percentage to the average cost of production

Question 16

above the line promotion

Answer 16

It is used to reach a mass audience using independent media
-tv
-magazine
-newspaper
-radio
-social media

Question 17

multi channel distribution

Answer 17

using a combination of distribution channels
-wholesaler
-retailer
-online

Question 18

clicks and bricks

Answer 18

when a business has a web and physical presence

Question 19

Extension strategy

Answer 19

A strategy that is used to extend the life cycle of a product. E.g. repositioning (Lucozade), repackaging, new features.

Question 20

Unique selling point

Answer 20

The product or service has a feature or features than can be used to differentiate it from the competition to give it a competitive advantage.

Question 21

The Boston Matrix

Answer 21

A business tool used to analyse a business’s product portfolio by market share and market growth

Question 22

Direct-selling

Answer 22

Where the producer sells goods directly to the consumer without any intermediaries such as wholesalers or retailer. Can be done online or through mail order catalogues and junk mail.

Question 23

Mass marketing

Answer 23

When a business targets it advertising and promotion at the whole market, so all consumers are advertised to in the same way.

Question 24

Niche marketing

Answer 24

Where a business targets a smaller segment of a larger market, where customers have specific needs and wants.

Question 25

drawbacks of the boston matrix

Answer 25

- only measures market share and market growth - doesn't represent a change in market share (increasing or decreasing) - assumes that products with high market share generates a profit, pricing strategies strategies such as penetration pricing and loss leading don't aim to make a profit and there's aren't considered

Question 26

4 main functional departments

Answer 26

- operations - HR - financial - marketing

Question 27

other functional departments

Answer 27

- legal - IT - security - logistics - purchasing - design - transport

Question 28

price maker

Answer 28

a business that has enough market power to set their desired prices

Question 29

market orientated pricing strategies

Answer 29

- market skimming - market penetration - psychological pricing - going rate pricing - destroyer pricing - loss leader pricing

Question 30

loss leader pricing

Answer 30

This strategy involves the selling of products at a loss, with the expectation that this will generate further sales of some form, elsewhere in the business. The additional sales that occur will hopefully recoup the initial loss and subsequently make a profit for the business

Question 31

going rate pricing

Answer 31

For many small businesses accepting the current market pricing structure is all they are able to do. When this is the only option there is a strong element of being a price taker

Question 32

destroyer pricing

Answer 32

This is also known as predatory pricing. This involves setting a price low enough to drive competitors out of the market. This type of pricing is not only used by the largest businesses on a national scale, but it can also appear in battles between local businesses. Destroyer pricing is often seen as anti-competitive and therefore illegal.

Question 33

cost based pricing strategies

Answer 33

- cost plus pricing - full cost pricing - contribution pricing

Question 34

full cost pricing

Answer 34

This is similar to cost plus pricing but it takes the concept further. Now all the costs of the business are taken into consideration. This means that each good will bear its proportion of overhead costs such as marketing and administration

Question 35

contribution pricing

Answer 35

This is another variation on the same theme, but in this case price will be based on the variable costs plus a contribution towards overheads and profits.

Question 36

disadvantages of cost plus pricing

Answer 36

Actions of competitors are often totally ignored. This can lead to loss of sales or loss of profits if a higher price could be charged because of little or no competition. Also, for exporters, this method makes no allowance for currency changes that will affect the price of goods and order levels.

Question 37

disadvantages of cost based pricing strategies

Answer 37

- cost-based pricing takes no account of customers’ needs or wishes. If prices are set too high then sales will inevitably suffer. Using these methods means that a further increase in prices must occur as overheads are redistributed. - when a business produces a large range of products, allocating overheads is a complex and time-consuming procedure. - Cost-based pricing takes no account of the situation in the marketplace and is too rigid when the pattern of demand changes

Question 38

4 methods of distribution

Answer 38

- to retailers - to wholesalers - direct selling, through own store - online website

Question 39

advantages for the wholesaler distribution method

Answer 39

- The manufacturer has the convenience of selling in bulk to the wholesaler.Single drops of very large quantities lower distribution expenses. - The small retailer, who buys in quite small quantities, benefits because they do not have to store large quantities of stock and can buy at their own convenience.

Question 40

advantages for to retailer distribution method

Answer 40

a reduction in the need for the middleman – wholesalers are cut out of the chain. This reduction in the length of the distribution chain cuts costs for large businesses and represents a good example of a purchasing economy of scale.

Question 41

advantages of the direct to consumer distribution method

Answer 41

- they face no competition as they aren't on shelves with other brands - the manufacture has more control over the pricing they set