Chapter 7

Question 0

What are the benefits of having a product portfolio?

Answer 0

To attract new consumers by aiming at a different target market.
To diversify so that if cells of an original product the client increasing sales of a new product might replace it.
To offer a wider range of goods and services to support the original products.

Question 1

What is a product portfolio/product mix?

Answer 1

The range of products sold by a business, such as Tesco’s portfolio includes groceries, insurance, clothes etc.

Question 2

What are a few of the problems associated with having a large product mix ?

Name 4

Answer 2

Many managers have to be employed to take decisions about the products. By publicity from one product may harm the company’s whole image.
The cost of developing and selling so many products is high.
Some product may fail if the company has not done sufficient market research.

Question 3

Product life cycle?

+ name 4 stage

Answer 3

The lifespan of a product recorded in sales from launch to being taken off the market.
Launch 
Growth 
Maturity 
Decline

Question 4

What are extension strategies?

Answer 4

Extension strategies of the steps taken to extend the life cycle of a product

Question 5

Name 4 different types of extension strategies ?

Answer 5

Updating designs
New advertising campaign
Target new markets with existing product - such as promoting sports clothing as streetwear or selling in foreign markets
New brand image - much has Lucozade

Question 6

What are pricing decisions based on ?

Answer 6

Nature of the market
Degree of competition
Lost leader pricing
Costs of production

Question 7

What is competitive pricing

Answer 7

If market is very competitive and if the business still wants to grow by increasing sales set a price for a product based on prices charged by competitors. They may reduce prices or make prices the same as competitors selling very similar products.

Question 8

Why might a business deliberately set high prices for its products ?

Answer 8

To maintain a high quality brand image

Question 9

Price skimming

Answer 9

Setting a price at a high-level to create a high-quality and exclusive image and once the product starts to face competition prices can be decreased

Question 10

Penetration pricing

Answer 10

Setting a price at a low level to gain greater market share once the target is reached prices can then be increased

Question 11

Competitive pricing

Answer 11

Setting a price for a product based on the prices charged by competitors

Question 12

Loss leader pricing

Answer 12

Setting a price of certain products below the cost of production hoping to gain profitable sales from another products

Question 13

The reason for promotion ?

Answer 13

Inform consumers of new products
Creates a brand image and sense of identity
Helps a business to achieve sales growth

Question 14

Name a few methods of promotion ?

Answer 14

Advertising
Sponsorship
Direct mail

Question 15

What is promotion ?

Answer 15

All the ways a business communicates to consumers with the aim of selling products

Question 16

What is direct marketing?

Answer 16

Using direct means to contact consumers to increase sales eg. Email, telemarketing and direct mail

Question 17

The combination of promotion methods used by a business is known as the ….

Answer 17

Promotional mix

Question 18

Activities to attract consumer attention to the product increase sales this promotional method is known as…

Answer 18

Sales promotion includes games, competitions and special offers

Question 19

When selecting what promotional mix to use a business must bare in mind ?

Answer 19

Cost and affordability
Nature if the product
Nature of the market
Competitors promotion

Question 20

In the marketing mix the place means the …,

Answer 20

Channel of distribution used between the manufacturer and final consumer

Question 21

Wholesaler?

Answer 21

A wholesaler is the middleman or distribute that buys in bulk hold stocks and sells mainly to retailers and not consumers.

Question 22

Telesales?

Answer 22

Telesales is selling to the customer through telephone contact alone

Question 23

Direct marketing through mailshots leading to goods being delivered directly to the customer is called

Answer 23

Mail order