Component 3

Question 1

What are the 2 broad categories of markets that enterprises target?

Answer 1

B2C (business to consumer) and B2B (business to business)

Question 2

What features differ in a B2B market?

Answer 2

A business customer might negotiate price more, a business customer might be buying in bulk, you might need to customise your order for a B2B customer, B2B customers might expect trade credit

Question 3

What is meant by the term ‘market’?

Answer 3

Any place where buyers and sellers meet to trade.

Question 4

Give examples of tyoes of market

Answer 4

Physcial, virtual, local, national, global

Question 5

What is market segmentation?

Answer 5

ividing the market into different sections (segments) to enable the business to specifically target customers with the most appropriate products and promotions

Question 6

Give 4 types of market segmentation

Answer 6

Demographic, Psychographic, Geographic, behavioural

Question 7

Give 4 characteristics used in psychographic segmentation

Answer 7

social class, attitudes, lifestyle and personality characteristics

Question 8

Name 9 charactersistics used in demographic segmentation

Answer 8

age, race, religion, gender, family size, ethnicity, income, education level, socio-economic group

Question 9

Name 5 characteristics in behavioural segmentation

Answer 9

spending, consumption, usage, loyalty status and desired benefits

Question 10

What type of segmentation looks at the social and economic characteristics of individuals and households?

Answer 10

demographic

Question 11

What classifications are given in socio economic segmentation?

Answer 11

A, B, C1, C2, D, E

Question 12

What type of segmentation looks at consumer’s personality traits?

Answer 12

Psychographic

Question 13

What types of charactersitics are used in psychographic segmentation?

Answer 13

people’s attitudes, lifestyles and personality types

Question 14

Which segmentation technique uses people’s hobbies?

Answer 14

Psychographic

Question 15

Which type of segmentation uses consumers loyalty or product usage or frequency of consumption?

Answer 15

behavioural

Question 16

Give 3 benefits to the enterprise of using market segmentation

Answer 16

Able to adapt the product, able to adapt the marketing, able to focus on and dominate one particular segment

Question 17

Name 5 pricing strategies

Answer 17

Cost plus, skimming, premium, penetration and competitive

Question 18

What is the difference between skimming and pricing stategies?

Answer 18

Skimming starts high and then drops the price, premium stays high

Question 19

What is an advantage of skimming?

Answer 19

Gain high revenues to cover development costs

Question 20

Who does skimming target?

Answer 20

Early adopters (people that are open to being the first to try something)

Question 21

How does cost plus pricing work?

Answer 21

Set the price based on the cost + a fixed percentage for profit

Question 22

Give an advantage and disadvantage of cost plus

Answer 22

Adv = predictable rate of profit because the price always has a fixed mark up. disadv = might lose revenue because the price is higher than competitors

Question 23

Give a disadv of competitor pricing

Answer 23

It could result in a price war if competitors try to lower their prices

Question 24

How does competitor pricing work?

Answer 24

Set the price around the level of the competition and then find a different way to differentiate your product

Question 25

Give an advantage and disadvantage of penetration pricing

Answer 25

Adv= should get high sales because the price is low disadv = small profit margins because price is low so very little flexibility if costs go up.

Question 26

What are the 5 stage of the product life cycle?

Answer 26

Development, Introduction , Growth, maturity, decline

Question 27

What happens in the development stage?

Answer 27

No sales, just research and development. So high costs and no profit

Question 28

What happens in the development stage?

Answer 28

Customers try the product so use advertising and sales promotion strategies. Sales not yet high, costs are high

Question 29

What happens in the growth stage?

Answer 29

Sales grow rapidly. Businesses try to get loyalty and repeat sales as well as new customers. Advertising high, loyalty cards. Profit is high

Question 30

What happens in the maturity stage?

Answer 30

Customers are now loyal but competition increases. Need to retain customers. Bring out new features. Use loyalty.

Question 31

What happens in the decline stage?

Answer 31

Sales drop. Some profit still because marketing costs are very low. Decide whether to sell off the brand or extend the product with a relaunch.

Question 32

Why does a business want to know its Product Life Cycle?

Answer 32

To help decide what the marketing priorities are at each stage, eg sales promotions in the introduction phase at get customers to try it.

Question 33

What is a brand?

Answer 33

the unique and recognisable identitiy of the company. It can include logo, colour, slogan

Question 34

Why is brand important?

Answer 34

It helps you to stand out from competitors. Customers get to know what you stand for. You can bring out other products in the same brand for your loyal customers.

Question 35

What is a brand personality?

Answer 35

A human characteristic given to the brand eg Chanel is sophisticated

Question 36

What is a USP?

Answer 36

Unique Selling Point. An attribute that can't be copied by a rival eg a patent, your brand, a recipe

Question 37

Name the 5 strategies in the promotional mix

Answer 37

Advertising, sales promotion, personal selling, direct marketing and public relations

Question 38

What is the purpose of advertising?

Answer 38

To persuade and inform

Question 39

What is the purpose of sales promotion?

Answer 39

To offer an incentive to customers

Question 40

What 2 aspects of advertising must be planned?

Answer 40

Medium and message

Question 41

What is meant by the 'medium' of advertising?

Answer 41

The channel used to coummincate

Question 42

What 5 mediums are there for advertising?

Answer 42

Digital, audio, ambient, print and moving image

Question 43

Name 6 methods of sales promotion

Answer 43

Buy one Get one Free, discounts, coupons, competitions, money off, loyalty incentives

Question 44

Give 4 methods for Personal Selling

Answer 44

Face to face, telephone, email, video/web conferencing

Question 45

What is meant by Public Relations

Answer 45

promoting a produce/service, brand or enterprise by placing information about it in the media without paying for the time or media space directly.

Question 46

Give 3 methods of public relations

Answer 46

Sponsorship, exhibtions or press releases

Question 47

What is direct marketing?

Answer 47

Establishing a personal relationship between the enterprise and the customer, addressing the customer by name

Question 48

Name 4 methods of direct marketing

Answer 48

Junk mail, catalogues, magazines and telemarketing (telephone)

Question 49

When advertising, what name is given to what an enterprise to trying to communicate

Answer 49

message

Question 50

What is the ambient channel of advertising?

Answer 50

unusual methods in public spaces eg guerilla advertising

Question 51

Give 6 ways the size of the enterprise will effect the promotional mix

Answer 51

size of the market being targeted, amount of finance available to spend on promotion, whether they have a dedicated marketing team, marketing expertise within the enterprise, type of promotional methods used, frequency of promotions

Question 52

What word, beginning with 'c' is a limit to this amount of money that therefore limits the promotional methods the enterprise can use?

Answer 52

constraint

Question 53

What promtional strategy is more likely to be used in B2B?

Answer 53

Direct marketing and Personal Selling

Question 54

How might a local business chose to segment its market?

Answer 54

Geographic, choosing to use advertising through local mediums such as local radio and papers

Question 55

What promotional strategies might have high impact on a small budget?

Answer 55

guerilla advertising

Question 56

What promtional strategy might be easy to update regularly on a low budget?

Answer 56

digital advertising

Question 57

What promotional strategy might be used to support a local cause?

Answer 57

Public Relations through sponsorship

Question 58

What promotional strategy might be used to atract local B2B customers?

Answer 58

Local trade fairs like the Chamber of Commerce and direct marketing through cold calling

Question 59

What promotional strategies might be suitable for a small, local business targetting tourists?

Answer 59

vouchers in local outlets, leaflets distributed in the Tourist Information or local hotels, print advertising on bus stops

Question 60

It is cheaper for an enterprise to keep hold of customers rather than win new customers. How does this influence the promotional mix?

Answer 60

Invest in sales promiotions that use loyalty schemes