Theme 2.2 Making Market Decisions

Question 1

what is the design mix

Answer 1

-Function
-Costs
-Aesthetics

Question 2

what is function in the design mix

Answer 2

-Function refers to what the product or service is meant to do, its purpose.
-If it does what it is meant to do then the product or service is more likely to be successful.

Question 3

what is cost in the design mix

Answer 3

Cost refers to the amount of money spent on producing a product or supplying a service.

Question 4

what is aesthetics in the design mix

Answer 4

Aesthetics refers to how a product looks and feels.

Question 5

what is the product life cycle

Answer 5

The stages through which a product passes from its development to being withdrawn

Question 6

what are the stages of the product life cycle

Answer 6

-Introduction (including research and development and launch)
-Growth
-Maturity
-Decline

Question 7

How can the product life cycle help a business

Answer 7

the product life cycle can help a business to make decisions about its pricing, promotion, production levels and other products within its product portfolio

Question 8

what is a product portfolio

Answer 8

the range and services offered by a business

Question 9

what are extension strategies

Answer 9

methods used to extend the life of the product before it goes into decline

Question 10

what are ways to extend the product life cycle

Answer 10

-widen product range
-find new markets
-extra advertising
-adding additional value
-special promotions

Question 11

what is product differentiation

Answer 11

Differentiation is about making a product or service stand out from another

Question 12

how can businesses differentiate goods and services

Answer 12

-providing unique functions
-unique style or design
-creating a distinctive brand

Question 13

what is a brand

Answer 13

a named product that customers see as being different from other products.

Question 14

what is a pricing strategy

Answer 14

A pricing strategy is the way in which a business decides on the price of a product or service

Question 15

what is price strategies for new products

Answer 15

Price Skimming (high price)

Penetration Pricing (low price)

Question 16

what are short term pricing tactics

Answer 16

-loss leaders
-psychological pricing(ed £5.99)

Question 17

what influences pricing decisions

Answer 17

-market segmentation
-competitors price
-technology
-branding
-costs
-product life cycle

Question 18

what is a promotion strategy

Answer 18

A promotion strategy is the technique that a business uses to make existing and potential customers aware of and interested in its products.

Question 19

what are some examples of promotion strategies

Answer 19

Advertising
Sponsorship
Product trials
Special offers
Branding

Question 20

what is advertising

Answer 20

Advertising is when a business pays to put out an advert in order to communicate a message to customers and potential customers

Question 21

what are advantages of advertising

Answer 21

-Reaches a wide audience
-Can have a significant impact on customer awareness and sales

Question 22

what are the disadvantages of advertising

Answer 22

-Can be very expensive (small businesses cannot afford to advertise on national TV)
-It can be difficult to analyse the impact on sales

Question 23

what is sponsorship

Answer 23

When a business supports an event, activity, person or organisation, either financially or by providing its products or services

Question 24

what is product trials

Answer 24

Free access to a product or giveaway of a product to encourage potential customers to sample a new product

Question 25

what is publicity

Answer 25

Publicity is any communication about a business that is created by the business, its customers or a third party.

Question 26

what is the positive influence of technology on businesses

Answer 26

-Businesses are able to reach a wider variety of customers -Lower costs than most traditional methods of promotion -The promotion can be tailored to individual customers

Question 27

what is the negative influence of technology on a business

Answer 27

-Bad reviews can spread wider -There are so many companies using social media that the message might not get the desired attention and sales might not increase as much as expected

Question 28

what are the methods of using technology in promotion

Answer 28

-Targeted advertising on websites -Social media -Apps -Emails and newsletter

Question 29

what is place in a business

Answer 29

how a business gets its products to its customers. Place also refers to the physical location of a business

Question 30

what is E-tail

Answer 30

Selling products and services online through websites and mobile devices.

Question 31

what are the benefit of retailing

Answer 31

-customers can browse and try products -retail offers point-of-sale promotion -retailers can provide customers with help and advice -customers enjoy it

Question 32

Benefits of e-tailers

Answer 32

-businesses do not have to rent or own expensive retail space -customers can buy at any time of the day -customers can access customers around the world -small business are able to compete with larger businesses

Question 33

what are disadvantages of retailer

Answer 33

-Owning or renting a shop can be expensive -The price needs to reflect the markup

Question 34

what are the disadvantages of e-tailing

Answer 34

-Customers can be worried about quality -Fake websites -An e-commerce site is not enough to guarantee sales