Marketing

Question 1

Marketing

Answer 1

The process of identifying, anticipating and satisfying the needs of customers in a mutually beneficial exchange process.

Question 2

Market segmentation

Answer 2

Separating the marketing into groups of consumers with clearly identifiable needs and wants.

Question 3

USP (Unique selling point / proposition)

Answer 3

A USP is a feature of a product that makes it distinctive and can usually add value.

Question 4

Niche marketing

Answer 4

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

Question 5

Mass marketing

Answer 5

Mass marketing is where a business sells into the largest part of the market, where there are many similar products offered by competitors.

Question 6

Market orientation

Answer 6

When marketing decision-making is based on customers’ needs.

Question 7

Product orientation

Answer 7

When marketing decision-making is based on what the firm can product and hopes that it will fit with customer requirements.

Question 8

Integrated

Marketing mix

Answer 8

The combination of the elements that work together / complement each other to influence a customer’s decision whether or not to buy a product. (These include product, price, place, promotion).

Question 9

Market share

Answer 9

This measures a business’s sales as a percentage of the total market sales.
CALCULATION: Company sales/total market sales x 100

Question 10

Barrier to Entry

Answer 10

This is something that makes entering a market more difficult for businesses, such as the need for specialist skills.

Question 11

Competitive market

Answer 11

A competitive market is one in which a large numbers of producers compete with each other to satisfy the wants and needs of a large number of consumers. In a competitive market no single producer, or group of producers, and no single consumer, or group of consumers, can dictate how the market operates.

Question 12

Product portfolio analysis

Answer 12

Product portfolio analysis examines the market position of a firm’s products. The Boston Matrix can be used to analyse a firms range of products and services.

Question 13

Product life cycle

Answer 13

The product life cycle traces the sales of a product over its life. The typical path for a product can be divided into five stages (development, introduction, growth, maturity, decline).

Question 14

Extension strategy

Answer 14

A strategy used by a firm to prevent the sales of a product / service going in to decline.

Question 15

Distribution channel

Answer 15

Describes how the ownership of a product moves from the producer to the consumer.

Question 16

Zero distribution

channel

Answer 16

This is when the good or services passes directly from producer to the consumer without any intermediaries.

Question 17

Promotional mix

Answer 17

The combination of ways in which a business can communicate with its customers (Public relation, advertising, personal selling, direct mail and sales promotion.)

Question 18

Wholesaler

Answer 18

A wholesaler buys products in bulk from producers and sells them onto retailers.

Question 19

Pricing tactics

Answer 19

Pricing tactics are short-term policies aimed at achieving a particular objective (loss leaders, psychological pricing, price discrimination).

Question 20

Price skimming

Answer 20

Price skimming uses a high price to enter the market. People are usually willing to pay the high price to try the new product. Once sales have been exhausted, the price is dropped to attract new customers.

Question 21

Price penetration

Answer 21

Price penetration uses a low price to enter the market and gain market share.

Question 22

Competitive pricing

Answer 22

Competitive pricing is a strategy whereby firms set their price at the same level as their competitors or deliberately undercut their rivals. E.g John Lewis – “never knowingly undersold”

Question 23

Price taking

Answer 23

Price taking us a strategy whereby firms accept the price that dominates the market.

Question 24

Loss leaders

Answer 24

A pricing tactic whereby a product is sold at a loss to generate business for other profitable products sold by the firm.

Question 25

Psychological pricing

Answer 25

A pricing tactic whereby products are sold at a price intended to create a particular impression of the product. (e.g £10 product labelled as £9.99)

Question 26

Price elastic

Answer 26

Demand is elastic if the % change in price leads to a greater % change in quantity demanded. (Greater than 1)

Question 27

Price elasticity of demand

Answer 27

Measures the responsiveness of quantity demanded to a change in price. (% change in QD / % change in price)

Question 28

Distribution channels

Answer 28

A distribution channel moves a product from production to consumption

Question 29

Place

Answer 29

Place (or distribution) refers to the way in which a product or service is distributed from the producer to the final consumer.

Question 30

Advertising

Answer 30

Advertising is a paid for means of communicating with customers.

Question 31

Promotion

Answer 31

The ways in which a business communicates with existing and potential customers to encourage demand.

Question 32

Sales Promotion

Answer 32

Tactical point of sale material or other incentives designed to stimulate purchases, often for the short-term.

Question 33

Direct Marketing

Answer 33

Promotional material directed through mail, email or telephone to individual households or businesses.

Question 34

Personal Selling

Answer 34

Promotion or person to person basis – promotion using two-way communications.

Question 35

Price inelastic

Answer 35

Demand is inelastic if the % change in price leads to a smaller % change in quantity demanded. (Less than 1)

Question 36

Competitiveness

Answer 36

The ability of a business to deliver better value to customers than competitors - value could be same product lower price or high quality product etc (other USP)