Marketing

Question 1

What happens in the introduction stage of the product life cycle?

Answer 1

Price can be high, profits are often low, advertising expenditure can be high

Question 2

What happens in the growth stage of the product life cycle?

Answer 2

Profits may start to be earned, advertising expenditure is still high, price may fall as the first competitors enter the market

Question 3

What happens in the maturity stage of the product life cycle?

Answer 3

Competition will increase, sales at their peak, profits should be high.

Question 4

What happens in the saturation stage of the product life cycle?

Answer 4

Firms should try reduce their costs so that pricing strategies can be more flexible, profits may be maintained but can start to fall.

Question 5

What happens in the decline stage of the product life cycle?

Answer 5

Sales can now fall fast, advertising costs will be reduced, total profits will fall, price is also likely to fall but by concentrating on remaining market niches there should be some price stability

Question 6

Advantage of the introduction stage

Answer 6

People become aware of the product

Question 7

Advantage of the growth stage

Answer 7

More sales&profits, more money invested

Question 8

Advantage of the maturity stage

Answer 8

Sales peak, profit will be made

Question 9

Advantage of the decline stage

Answer 9

Other products that the business have will begin to increase in sales

Question 10

Disadvantage of the introduction stage

Answer 10

Can be expensive, sales are low, low profit

Question 11

Disadvantage of the growth stage

Answer 11

Competition update their products

Question 12

Disadvantage of the maturity stage

Answer 12

Sales begin to decline, profit margin decreases

Question 13

Disadvantage of the decline stage

Answer 13

Market starts to shrink, promotion decreases, sales and profit decline

Question 14

What is a star in terms of market share and growth?

Answer 14

High market share

High market growth

Question 15

What is a cash cow in terms of market share and growth?

Answer 15

High market share

Low market growth

Question 16

What is a problem child in terms of market share and growth?

Answer 16

Low market share

High market growth

Question 17

What is a dog in terms of market share and growth?

Answer 17

Low market share

Low market growth

Question 18

Why is it good to use the Boston matrix?

Answer 18

By having a strong Boston matrix a business can use money from its cash cows to invest in the question marks so they can become stars. Because the products are all related in this way, it’s important to take them all into account when making decisions.

Question 19

The marketing mix-price

What is market skimming?

Answer 19

Charging a high price to maximise profits on each item sold.

Question 20

Market mix - price

What is market penetration?

Answer 20

This aims to gain market share so to achieve this they price the product at a lower level than the market leader. Gross profit margins using penetration marketing are usually relatively low but the objective is a high level of sales allowing a good net profit to be made.

Question 21

Market mix - price

What is going rate price?

Answer 21

They have to keep their prices at what consumers are used to paying.

Question 22

Market mix - price
Existing products and markets
What is customer value pricing?

Answer 22

Prices are set at a level that matches what consumers may expect to pay

Question 23

Market mix - price
Existing products and markets
What is price discrimination?

Answer 23

Different prices are charged to different groups of consumers, that are separated by lifestyle, time or geography.

Question 24

Market mix - price
Existing products and markets
What is loss leading pricing?

Answer 24

Selling of products at a loss with the expectation that this will produce further sales of some form, and these sales will recoup the initial loss and also make some profits.

Question 25

Market mix - price Existing products and markets What is destroyer pricing?

Answer 25

This is a predatory form of pricing where the objective is to force competitors out of the marketplace.

Question 26

Market mix - price Existing products and markets What is price leadership?

Answer 26

When the market has a price leader, then this product or brand has such market presence or power, all other producers can do is follow the price leaders lead.

Question 27

Market mix - price Cost based pricing What is cost plus pricing?

Answer 27

A profit percentage is added to the costs of producing the good.

Question 28

Market mix - price Cost based pricing What is full cost pricing?

Answer 28

This is the same idea as cost plus pricing but taking the concept further, now all the costs of the firm are being taken into consideration. This means that each good will bear its proportion of overhead costs such as marketing or administration.

Question 29

Market mix - price Cost based pricing What is contribution pricing?

Answer 29

This is almost the same thing as full cost pricing but in this case price will be based on the variable costs plus a contribution towards overheads and profits.

Question 30

Market mix - product Research and development What is desk research?

Answer 30

Secondary research, data gathered by someone else.

Question 31

Market mix - product Research and development What is field research?

Answer 31

Primary research, gathering data specifically for ones own use.

Question 32

Market mix - product Research and development Product development

Answer 32

``` Gathering data through market research. Use research data to recognise potential markets and to match these markets to product ideas. Test the feasibility of new ideas. Financial analysis of the product. Develop the product. Launch he product. ```

Question 33

Market mix - place or distribution | Why is place important?

Answer 33

They must be accessible and place can be used to establish brand identity.

Question 34

Market mix - place or distribution | What is direct selling 1?

Answer 34

Manufacturer - consumer

Question 35

Market mix - place or distribution | What is indirect selling 1?

Answer 35

Manufacturer - retailer - consumer

Question 36

Market mix - place or distribution | What is indirect selling 2?

Answer 36

Manufacturer - wholesaler - retailer - consumer

Question 37

Market mix - place or distribution | What is direct selling through an agent?

Answer 37

Manufacturer - agent - consumer

Question 38

Market mix - promotion | What are the objectives of promotion?

Answer 38

To provide potential customers with readily available information. To increase sales or market share. To give the products an image. To establish a corporate image. To enable long term planning to take place.

Question 39

Market mix - promotion | What is above the line promotion?

Answer 39

Advertising

Question 40

Market mix - promotion | What is below the line promotion?

Answer 40

Offers a wide range of alternative promotional strategies and these are often used to support above the line promotion. E.g. Personal selling, packaging, special offers, direct or junk mail, sampling, sponsorship

Question 41

What are the five stages of the product life cycle?

Answer 41

``` Introduction Growth Maturity Saturation Decline ```

Question 42

Market mix - promotion | What does clicks and bricks mean?

Answer 42

It's a marketing term which means firms need to have a web presence (clicks) plus a physical presence on the high street and shopping centres (bricks)

Question 43

How has the internet impacted marketing?

Answer 43

It's become easier to compare prices, it's become easier to sell niche products and it's become easier to promote products through things like click throughs, search engine listings and search engine advertising.

Question 44

What is a brand?

Answer 44

A brand is a named product which consumers see as being different from other products and which they can associate and identify with.

Question 45

Why use branding?

Answer 45

``` Increased loyalty. Separate product from competition. Increased asset value. Make consumer choice easier. Increase inelasticity of demand. ```

Question 46

What are the disadvantages of branding?

Answer 46

High cost of advertising. Loss of brand value for one product can affect a whole range of similarly branded products. Brands invite competition- often from copycat manufacturers. High cost of research and development in ensuring the brand continues to develop and lead the market.

Question 47

Protecting brands, to achieve this, firms must:

Answer 47

``` Be sure of the brands identity Offer value to customers Advertise and promote Carry out market research Ensure quality Continually develop the brand Remember what made the brand successful in the first place Protect the brand from competition and react to competition when it occurs ```

Question 48

How can you measure brand value?

Answer 48

On the balance sheet you can find a firms brand value and they can be measured by estimating the difference between what sales are likely to be like without their brand. The brand is likely to have more sales than their competitor because of brand loyalty. The difference in sales is part of the value of the brand.

Question 49

What is industrial marketing?

Answer 49

The sales of goods between businesses. These are goods that are not aimed directly at consumers.

Question 50

How do we use place in industrial marketing?

Answer 50

When we consider place in industrial marketing, two methods of attracting consumers to the fore, these are trade fairs or shows and B2B portals on the Internet.

Question 51

How do we use price in industrial marketing?

Answer 51

For business selling goods to other businesses it is not unusual for prices not to be fixed, but instead negotiated. The final price will depend upon quantity supplied, delivery dates, competitor actions and potential for future custom.

Question 52

How do we use product in industrial marketing?

Answer 52

As in consumer marketing we see both product and asset led firms, component suppliers may be required to change product design, or produce products to fit with the production methods of buyers.

Question 53

How do we use promotion in industrial marketing?

Answer 53

Typically promotion occurs through trade magazines and trade fairs. But personal. To person selling is also very important.

Question 54

What is international marketing?

Answer 54

This is all about selling a firms goods or services oversea i.e. Exporting

Question 55

Advantages of moving overseas

Answer 55

``` Higher earnings. Spreading of risks. Saturation of home market. Cashing in on the brand. Benefits of economies of scale. ```

Question 56

Problems with moving overseas

Answer 56

People in different countries have different needs, priorities, incomes and tastes. Currency change. Cultural differences. Distribution problems.