Chapter 19: The Marketing Mix (Product And Price)

Question 1

Define marketing mix

Answer 1

Marketing mix: the four key decisions that must be taken in the effective marketing of a product.

Question 2

Define customer relationship management (CRM)

Answer 2

Customer relationship management (CRM): using marketing activities to establish successful customer relationships so that existing customer loyalty can be maintained.

Question 3

Define brand

Answer 3

Brand: an identifying symbol, name, image or trademark that distinguishes a product from its competitors.

Question 4

Define intangible attributes of a product

Answer 4

Intangible attributes of a product: subjective opinions of customers about a product that cannot be measured or compared easily.

Question 5

Define tangible attributes of a product

Answer 5

Tangible attributes of a product: measurable features of a product that can be easily compared with other products.

Question 6

Define product

Answer 6

Product: the end result of the production process sold on the market to satisfy a customer need.

Question 7

Define product positioning

Answer 7

Product positioning: the consumer perception of a product or service as compared to its competitors.

Question 8

Define product portfolio analysis

Answer 8

Product portfolio analysis: analysing the range of existing products of a business to help allocate resources effectively between them.

Question 9

Define product life cycle

Answer 9

Product life cycle: the pattern of sales recorded by a product from launch to withdrawal from the market and is one of the main forms of product portfolio analysis.

Question 10

Define extension strategies

Answer 10

Extension strategies: these are marketing plans to extend the maturity stage of the product before a brand new one is needed.

Question 11

Define consumer durable

Answer 11

Consumer durable: manufactured product that can be reused and is expected to have a reasonably long life, such as a car or washing machine.

Question 12

Define price elasticity of demand

Answer 12

Price elasticity of demand: measures the responsiveness of demand following a change in price.

Question 13

Define mark up pricing

Answer 13

Mark-up pricing: adding a fixed mark-up for profit to the unit price of a product.

Question 14

Define target pricing

Answer 14

Target pricing: setting a price that will give a required rate of return at a certain level of output/sales.

Question 15

Full cost pricing

Answer 15

Full-cost pricing: setting a price by calculating a unit cost for the product (allocated fixed and variable costs) and then adding a fixed profit margin

Question 16

Define competition based pricing

Answer 16

Competition-based pricing: a firm will base its price upon the price set by its competitors.

Question 17

Define contribution cost pricing

Answer 17

Contribution-cost pricing: setting prices based on the variable costs of making a product in order to make a contribution towards fixed costs and profit.

Question 18

Define penetration pricing

Answer 18

Penetration pricing: setting a relatively low price often supported by strong promotion in order to achieve a high volume of sales.

Question 19

Define dynamic pricing

Answer 19

Dynamic pricing: offering goods at a price that changes according to the level of demand and the customer’s ability to pay.

Question 20

Define market skimming

Answer 20

Market skimming: setting a high price for a new product when a firm has a unique or highly differentiated product with low price elasticity of demand.