5. Marketing

Question 1

5.1 Key terms - exchange

Answer 1

An exchange occurs when someone gives up something in return for something else, e.g. a business exchanges a product for money.

Question 2

5.1 Key terms - need

Answer 2

A need is something that needs to be fulfilled for us to survive.

Question 3

5.1 Key terms - want

Answer 3

A want is what we would like to satisty our needs.

Question 4

5.1 Key terms - customer

Answer 4

A customer is someone who buys a product from a business.

Question 5

5.1 Key terms - consumer

Answer 5

A consumer is someone who uses goods and services produced by businesses.

Question 6

5.2 Key terms - Sales volume

Answer 6

Sales volume measures the number of items sold.

Question 7

5.2 Key terms - Sales value

Answer 7

Sales volume measures the number of items sold.

Question 8

5.2 Key terms - Segmentation

Answer 8

Segmentation occurs when a market is divided into different groups of needs and wants.

Question 9

5.3 Key terms - market research

Answer 9

Market research is the process of gathering, analysing and processing data relevant to
marketing decisions.

Question 10

5.3 Key terms - market segment

Answer 10

A market segment is a group of buyers with similar needs within the overall market.

Question 11

5.3 Key terms - primary market research

Answer 11

Primary market research uses data gathered for the first time.

Question 12

5.3 Key terms - secondary market research

Answer 12

Secondary market research uses data that has been gathered already.

Question 13

5.4 Key terms - marketing mix

Answer 13

The marketing mix refers to all the activities influencing whether or not a customer buys a product. The elements of the mix can be analysed using the four Ps: price, place, product and promotion.

Question 14

5.5 Key terms - product portfolio

Answer 14

A product portfolio is the collection of products that a firm produces.

Question 15

5.5 Key terms - boston matrix

Answer 15

The Boston Matrix is a way of analysing a product’s share and growth in their market.

Question 16

5.5 Key terms - dog product

Answer 16

A dog product has a low market share in a low-growth market.

Question 17

5.5 Key terms - cash cow product

Answer 17

A cash cow product has a high market share in a low-growth market.

Question 18

5.5 Key terms - question mark product

Answer 18

A question mark product has a low market share in a fast-growth market.

Question 19

5.5 Key terms - star product

Answer 19

A star product has a high market share in a fast-growth market.

Question 20

5.5 Key terms - product life cycle

Answer 20

The product life cycle shows how the sales of a product may change over time.

Question 21

5.5 Key terms - extension strategies

Answer 21

Extension strategies are attempts to maintain the sales of a product and prevent it from entering the decline stage of the product life cycle.

Question 22

5.5 Key terms - price skimming

Answer 22

Price skimming is setting a high price for a product when it first enters the market.

Question 23

5.5 Key terms - penetration pricing

Answer 23

Penetration pricing is launching a new product at a low price to achieve fast sales.

Question 24

5.5 Key terms - competitive pricing

Answer 24

Competitive pricing is matching the prices that competitors charge.

Question 25

5.5 Key terms - loss leader

Answer 25

A loss leader is a product sold at a loss in the hope that the customer will buy other items from the business where they make a profit.

Question 26

5.5 Key terms - cost plus pricing

Answer 26

Cost plus pricing is where products are priced by covering the cost of it to the retailer and adding a percentage on top.

Question 27

5.5 Key terms - sales promotions

Answer 27

Sales promotions are short-term incentives to encourage customers to buy.

Question 28

5.5 Key terms - advertising

Answer 28

Advertising involves paid for communications.

Question 29

5.5 Key terms - promotional mix

Answer 29

The promotional mix is the combination of promotional methods used by a business to communicate with its customers.

Question 30

5.5 Key terms - distribution channel

Answer 30

The distribution channel describes how the ownership of a product passes from the producer to the final customer.

Question 31

5.5 Key terms - wholesalers

Answer 31

Wholesalers break bulk; they buy in large quantities from a producer and sell to retailers.

Question 32

5.5 Key terms - retailers

Answer 32

Retailers are shops that sell direct to the customer.

Question 33

5.5 Key terms - e-commerce

Answer 33

E-commerce involves online trading.

Question 34

5.5 Key terms - m-commerce

Answer 34

M-commerce involves online trading via a mobile phone.

Question 35

5.5 Key terms - direct marketing

Answer 35

Direct marketing occurs when there is a direct link from the producer to the customer with no intermediaries.

Question 36

5.5 Key terms - intermediary

Answer 36

An intermediary is a link in the distribution chain between the producer and the customer.