marketing

Question 1

product led

Answer 1

• putting a product on the market without
  prior market research
• the organisation focuses on product
  research and testing
• often drug companies product led. They
  will develop a new drug and then sell the
  patent to a larger drugs company who will
  then do all the testing and trials
• assumption of best available and no real
  competition
• often products that are highly technical
  or new inventions like Dyson vacuum
  cleaners
• risky approach which can fail.

Question 2

market / customer led

Answer 2

• customer needs and wants are identified
  through market research.
• product is produced based on customer wants
• competition has led to companies focusing on
  the needs of the customer
• also looks at the influences on purchasing
  decisions like changes in social factors eg
  trends and fashion
• little risk as they know the product is one that
  customers want
• a market led approach is more able to deal with
  changes in customer tastes
• supermarkets are market led

Question 3

market segments

Answer 3

• age
• gender
• social class
• education level
• income
• religion
• ethnic group
• location
• lifestyle preferences - hobbies, politics
• personality

Question 4

market segmentation
advantages

Answer 4

• seller can meet buyers’ requirements – products can
  be specifically tailored to customer requirements
• prices can be set to reflect the market
• advertising can be focused - less wasteful
• the product can be sold in the most appropriate place.
• expertise developed for a specific market
• higher sales
• increased profits

Question 5

undifferentiated marketing

Answer 5

product is sold to the entire market eg Heinz markets
baked beans for entire market and not to different
groups

Question 6

differentiated marketing

Answer 6

different products are sold to different/targeted
market segments eg car companies produce different
cars for different markets

Question 7

niche marketing

Answer 7

niche marketing Where an organisation concentrates on selling to a very small specific market segment

Question 8

method of field research
street survey

Answer 8

• stopping people in the street or visiting
  them at home.
• allows 2 way communications and allows the
  interviewer to clarify questions.
• however, interviewers have to
  be trained and it can be very time consuming and expensive.
• people don’t like being stopped in the street.

Question 9

method of field research
postal survey

Answer 9

• sending out questionnaires by post for
  people to complete and return.
• it is a relatively cheap method
  and it can reach a large geographical area.
• however, questions need to be fairly simple and easily understood
• there is usually a poor response rate.

Question 10

method of field research
observation

Answer 10

• watching how customers shop and behave
  and recording their reactions to products on display. - - there is no direct contact so no bias
• you cannot clarify any situations or ask for clarification
• free

Question 11

method of desk research
online research

Answer 11

• viewing competitors websites can give
  very useful information on their products and services.
• time consuming
• free or cheap
• bias

Question 12

method of desk research
newspapers / magazines

Answer 12

• give useful info about changes in tastes/trends that could affect the market
• free or cheap
• time consuming
• bias

Question 13

method of desk research
government statistics

Answer 13

• the government collect lots of data about consumers ie, income, buying patterns, opinions and changes in the market
• free
• unbiased and accurate
• time consuming

Question 14

random sampling

Answer 14

• individuals are pre-selected from a list in no particular order (randomly), perhaps from the electoral register.
• This reduces possible bias as they are selected completely at random.
• However, it won’t focus on any particular market
  segment and the people selected must be interviewed.
• The interviewer has to return if selected individuals are out – this is expensive.

Question 15

stratified random sampling

Answer 15

• sampling divides the sample up into segments based on how the population is divided.
• this gives a more representative view of the population.

Question 16

quota sampling

Answer 16

• researchers are given instructions to interview a number of people with specific characteristics.
• those chosen are selected in proportion to the whole population.
• it is the job of the researcher to find and interview these people who fit the categories eg, males over the age of 25.
• this is cheaper than random sampling.
• results can be less representative than using random sampling
• it is easier to introduce bias
  which can affect the results.

Question 17

product life cycle stage
development

Answer 17

• market research, test
  marketing, prototype
• at this stage there are no sales and high costs
  and therefore a loss is being made

Question 18

product life cycle stage
introduction

Answer 18

• product is launched and is heavily advertised to raise awareness.
• sales are low and costs are high therefore low or no
  profit.
• the product may not yet have broken
  even.

Question 19

product life cycle stage
growth

Answer 19

• customers more aware of product
  due to advertising and promotion and sales
  growing rapidly.
• profits begin to increase.

Question 20

product life cycle stage
maturity

Answer 20

• sales are at a peak.
• this is the highest level of sales the product will achieve without the business taking further action.
• little advertising required as the product is fully established on the market and development costs have been repaid.
• profits at their highest
• the business will have to work hard to keep the product in this stage as competitors come along and they will have to look for ways to extend its popularity.

Question 21

product lifecycle stage
decline

Answer 21

• newer and better products are on the
  market.
• profits fall and a loss may be made eventually due to changes in customer wants
• when the business sees profits fall the product will be withdrawn from the market as resources would be
  better used on other products

Question 22

extending product life cycle strategies

Answer 22

• changing the product > shape, size, colour, taste, weight, quality
• providing variants
• altering the packaging for different market segments
• altering the channels of distribution > where it is sold
• changing the price to reach a different market segment
• special promotions > offers, gifts, competitions
• change the use of the product
• change name
• change advertising
• rebrand

Question 23

long term pricing strategies
low price

Answer 23

used to attract sales of products that have lots of competition

Question 24

long term pricing strategies
market price

Answer 24

set similar to those of competitors

Question 25

long term pricing strategies high / premium pricing

Answer 25

priced to appeal to certain customers. giving the products a feeling of exclusivity

Question 26

short term pricing strategies market skimming

Answer 26

used to price new products with no competition. price is initially high then dropped when competition arrives.

Question 27

short term pricing strategies penetration pricing

Answer 27

new organisation trying to break into an existing market uses this. prices start very low and gradually increase.

Question 28

short term pricing strategies destroyer pricing

Answer 28

organisation enters an established market selling product at a very low price to destroy the smaller competition.

Question 29

above the line advertising

Answer 29

- TV newspapers - radio - billboards to reach mass audience.

Question 30

below the line advertising

Answer 30

- sales promotion - personal selling - direct mail - trade–fairs targeted consumers who may be interested.

Question 31

into the pipeline promotions

Answer 31

- dealer loaders , offers given to retailers to encourage them to stock product eg, buy so many get one free - sale or return , retailers can return products so they don’t get stuck with products they can’t sell - staff training , manufacturer may give training and demos to retailers staff

Question 32

out of the pipeline promotions

Answer 32

- free samples , so customers can try the product before buying - loyalty schemes , customers collect points which can be used for future purchases of can be spent in other places - price reductions , short term pricing strategies to encourage sales eg, a pack may carry ‘50p off’ on its packaging

Question 33

public relations

Answer 33

- supporting and promoting a charity - sponsoring sporting or cultural events - product endorsement by celebrities - press conferences and press releases in times of difficulty or when good publicity can be obtained - PR have the responsibility for responding to bad publicity and attempt to counteract bad media attention. - issuing publicity literature - giving out company merchandise

Question 34

celebrity endorsement advantages

Answer 34

- people may want to buy the product to be associated with the celebrity - photos of the celebrity can be used to create visual connections to the product - high prices can be charged

Question 35

celebrity endorsement disadvantages

Answer 35

- celebrities are expensive to pay - the celebrity has to be carefully chosen to match the image of the product - negative publicity about the celebrity can impact negatively on sales