Chatper 4.5 - The four Ps (Product, Price, Promotion, Place)

Question 1

Boston Matrix (Boston Consulting Group Matrix)

Answer 1

Is a marketing tool for analyzing the product portfolio of a business. It showdown whether products have high or low market share and operate in high or low growth industries

Question 2

Brand Awareness

Answer 2

Measures the extent to which potential customers or the general public recognize a particular brand. It is usually expressed as a percentage of the sample surveyed.

Question 3

Brand Development

Answer 3

Is a long-term product strategy that involves strengthening the name and image of a brand to boost its appeal and sales

Question 4

Brand Loyalty

Answer 4

Occurs when customers buy the same brand of a product time and time again. They are devoted to the brand since they have brand preference over other brand names

Question 5

Brand Value

Answer 5

Refers to the premium that customers are willing to pay for a brand over and above the value of the product itself, i.e. Customers are willing to pay more for a reputable brand

Question 6

Branding

Answer 6

Refers to the use of an exclusive name, symbol or design to identify a specific product or organization. It differentiates a product from similar ones by rival firms

Question 7

Cash Cow

Answer 7

Is a term used by Boston Consulting Group to refer to any product that generates significant money due to its large market share in a mature market

Question 8

Consumer Goods

Answer 8

Are products bought for personal consumption, such as CONSUMER DURABLES (e.g. furniture, computers, cars) and PERISHABLES (e.g. food and flowers).

Question 9

Dogs

Answer 9

Are products in the BCG matrix that have low market share and operate in low growth or stagnant markets. Hence, dogs do not generate much cash or profit for a business

Question 10

Extension Strategy

Answer 10

Is an attempt by marketers to lengthen the life cycle of a particular product, typically used during maturity or early decline stages of the product’s life cycle

Question 11

Product

Answer 11

Refers to any physics or non-physics item (good or service) that is purchased by commercial or private customers

Question 12

Product differentiation

Answer 12

Refers to any strategy used to m are a product appear to be distinct from others, such as quality, branding and packaging

Question 13

Product Life Cycle (PLC)

Answer 13

Is the typical process that products go through from their initial design and launch to their decline and eventual withdrawal. Different products undergo each of the five stages (research, launch, growth, maturity and decline) at varying speeds.

Question 14

Product Porfolio

Answer 14

Refers to the range of products or strategic business units owned and developed by an organization at any one point in time

Question 15

Question Marks (or problem children)

Answer 15

Are products in the BCG matrix that compete in high market growth industries, but have low market share. They consume lots of cash but do not generate much profit, if any

Question 16

Rising Stars (or stars)

Answer 16

Are products in the BCG matrix that have high or rising market share in a high growth market

Question 17

Cost-plus Pricing (or mark-up pricing)

Answer 17

Involves adding a percentage or predetermined amount of profit to the cost per unit output to determine the selling price

Question 18

Loss Leader Pricing

Answer 18

Involves setting the price of a product below its cost of production. The purpose is to entice customers to buy other products with high profit margins in addition to purchasing the loss leader products

Question 19

Penetration Pricing

Answer 19

Involves temporarily setting prices so low that rivals, especially smaller firms, cannot compete at a profitable level

Question 20

Price

Answer 20

Refers to the amount paid by a customer to purchase a good or service

Question 21

Price Discrimination

Answer 21

In voles charging different prices to different groups of customers for the same product, e.g. Adult and child airline tickets

Question 22

Price Leadership

Answer 22

Is used for best-selling products or brands in a particular market. Customers perceive there to be few substitutes for such products so the dominant firm can set its own prices. Competitors set their prices based on the price of the market (or price) leader.

Question 23

Price Skimming

Answer 23

Involves initially charging high prices for innovative or high-tech products. Price is reduced as the novelty wears off and as substitute products appear

Question 24

Price Wars

Answer 24

Involve businesses competing by a series of intensive price cuts to threaten the competitiveness of rival firms

Question 25

Psychological Pricing

Answer 25

Involves rounding down numbers such as $9.90 or $14 995 to make prices seem lower (than $10.00 or $15 000 respectively)

Question 26

Above the line (ATL promotion)

Answer 26

Is any form of paid-for promotion through the mass media (such as television and radio) to reach a wide audience

Question 27

Advertising

Answer 27

Is a method of informative and/or persuasive promotion that is usually paid for. The aim of commercial advertising is the raise the level of demand for a firm's products

Question 28

Advertising Clutter

Answer 28

Refers to the huge volume of advertisements that the public is bombarded with

Question 29

Below the line (BTL) promotion

Answer 29

Does not use paid-for mass media sources, e.g. Free sales (toiletries, food, drinks, etc.), discount vouchers (to entice customers to buy the product) and added-value promotions (e.g. Special introductory deals).

Question 30

Direct Marketing

Answer 30

Refers to promotional activities that aim to sell a product straight to a customer rather than by using an intermediary

Question 31

Guerrilla Marketing

Answer 31

Is a promotional strategy that aims to ambush or catch the attention of customers through innovative, unconventional and/or shocking techniques, on a relatively low budget

Question 32

Logos

Answer 32

Are a form of product differentiation that use a visual symbol to represent a business, its brands or its products, e.g. Nike's Swoosh, Rolex's golden crown, or the globe of Wikipedia

Question 33

Promotion

Answer 33

Is a component of the marketing mix. If refers to the methods used to inform, persuade and/or remind people about a firm's products or brands

Question 34

Promotional Mix

Answer 34

Refers to the combination of individual ATL and BTL promotional methods used by a business, such as advertising, direct marketing, packaging and sales promotion

Question 35

Public Relations (PR)

Answer 35

Refers to business activities aimed at establishing and protecting the desired image of an organization. PR is concerned with it getting food media coverage, usually without directly paying for it.

Question 36

Publicity

Answer 36

Is the process of promoting a business and its products by getting positive media exposure without directly paying for it

Question 37

Sales Promotions

Answer 37

Are short-term incentives designed to simulate demand for a product, e.g. Discount coupons, prize draws, price cuts and trade fairs

Question 38

Social Media

Answer 38

refers to the marketing practice of gaining Internet traffic through social media websites such as Facebook, Twitter, YouTube and Google

Question 39

Social Netoweking

Answer 39

refers to any platform used mainly by individuals to build social relationships between people, often because they are friends or share things in common. Social networking services include Google+, Instagram and Facebook

Question 40

Slogans

Answer 40

Are catchphrases designed to represent to essence of a business or its products using a memorable set of words

Question 41

Sponsorship

Answer 41

Is a promotional technique that involves funding, supporting or donating resources for an event or business venture in return for prominent publicity

Question 42

Viral Marketing

Answer 42

Is a promotional strategy that combines online technologies with word of mouth (WOM) techniques. It is usually done through the Internet via emails and social networks

Question 43

Word of Mouth (WOM)

Answer 43

Is the spreading of marketing messages about a firm and the quality of its products or its customer service. It is perhaps the most cost-effective form of promotion

Question 44

Agents (or brokers)

Answer 44

Are negotiations who help to sell a vendor's products, such as real estate agents selling residential and commercial property for their clients

Question 45

Channels of Distribution

Answer 45

Are the ways that a product gets from the manufacturer to the consumer. Examples include wholesalers, agents, retailers, e-commerce and vending machines

Question 46

Direct Mail

Answer 46

Refers to promotional materials sent directly to people's homes or places of work, often with personal details gathered from a database containing information about known customers.

Question 47

Direct marketing

Answer 47

Refers to any promotional activity that involves making direct contact with customers, e.g. Personal selling and direct mail

Question 48

Distribution (or place)

Answer 48

Refers to the process of getting the right products to the right customer at the right time and place in the most cost-effective way

Question 49

Distributors

Answer 49

Are independent businesses that act as intermediaries by specializing in the trade of products made by certain mangufacturors

Question 50

Intermediaries

Answer 50

Are agents or other businesses that act as a middle person in the chain of distribution

Question 51

Intermediation

Answer 51

Is the process of using intermediaries in the chain of distribution between the manufacturers and consumers of a product

Question 52

Retailer

Answer 52

Are the sellers of products to the general public (i.e. Consumers) that operate in outlets (or 'shops' in everyday language)

Question 53

Speciality Channel of Distribution

Answer 53

Is any indirect way to distribute products that does not involve retailers, i.e. Distribution without the use of intermediaries such as e-commerce, vending machines and mail order

Question 54

Telemarketing

Answer 54

Refers to the use of telephone systems (audio and text messaging) to sell products directly to potential customers

Question 55

Wholesalers

Answer 55

Are businesses that purchase large quantities of products from a manufacturer and then separate or 'break' the bulk-purchases into smaller units for resale, mainly to retailers