Chapters 11-17 Marketing

Question 1

Asset-led marketing

Answer 1

When marketing decisions are based on the needs of the consumer and the strengths of the business.

Question 2

Market orientation

Answer 2

When a business bases its marketing mix on its perception of what the market wants.

Question 3

Product orientation

Answer 3

When a business bases its marketing mix on what the business sees as its internal strengths.

Question 4

Product portfolio

Answer 4

The mix of products that a business produces and sells.

Question 5

Product breadth

Answer 5

The number of product lines a business produces or sells. E.g. toothpaste, razors, shampoo

Question 6

Product depth

Answer 6

The number of product varieties within each product line. E.g. sensitive toothpaste, whitening toothpaste, children’s toothpaste.

Question 7

Unique selling point

Answer 7

The product or service has a feature or features than can be used to differentiate it from the competition to give it a competitive advantage.

Question 8

Extension strategy

Answer 8

A strategy that is used to extend the life cycle of a product. E.g. repositioning (Lucozade), repackaging, new features.

Question 9

Star

Answer 9

A product with high market share & fast market growth.

Question 10

Cash cow

Answer 10

A product with high market share & low market growth.

Question 11

The Boston Matrix

Answer 11

A business tool used to analyse a business’s product portfolio by market share and market growth

Question 12

Price taker

Answer 12

A business that has little or no control over price and so must accept the going market price.

Question 13

Market penetration

Answer 13

Charging an initially low price in order to gain market share, and once customers become loyal the price is increased.

Question 14

Market skimming

Answer 14

Charging a high price to maximise profits when a product is new and unique.

Question 15

Psychological pricing

Answer 15

Charging a price that consumers may expect to pay based on perceived quality and value for money. Also includes pricing goods just below a round figure E.g. £9.99 as consumers may believe they are getting better value for money.

Question 16

Going rate pricing

Answer 16

Charging a price that is in line with the price charged by competitors.

Question 17

Cost-plus pricing

Answer 17

Adding a profit percentage, or mark-up, to the average cost of producing a good.

Question 18

Above the line promotion

Answer 18

Advertising, using various independent media (TV, magazines, newspapers, radio, posters, internet and social media) to reach a mass audience.

Question 19

Product differentiation

Answer 19

When a business makes its product or brand different in some way so that it stands out from the crowd. E.g. Ethical reputation, additional features the competition don’t have.

Question 20

Multi-channel distribution

Answer 20

Using a combination of distribution channels. E.g wholesalers, retailers, direct selling online.

Question 21

Direct-selling

Answer 21

Where the producer sells goods directly to the consumer without any intermediaries such as wholesalers or retailer. Can be done online or through mail order catalogues and junk mail.

Question 22

Mass marketing

Answer 22

When a business targets it advertising and promotion at the whole market, so all consumers are advertised to in the same way.

Question 23

Niche marketing

Answer 23

Where a business targets a smaller segment of a larger market, where customers have specific needs and wants.

Question 24

Clicks and bricks

Answer 24

Where businesses have a web presence (clicks) as well as physical presence (bricks) on the high street or in shopping centres. E.g. Argos.

Question 25

M-commerce

Answer 25

Mobile commerce is the buying and selling of goods and services through wireless hand-held devices such as mobile phones.