Communicating with Customers

Question 1

Brand loyalty

Answer 1

Continuing to buy a particular product or buy from a particular business even if new and better products are being introduced by competitors

Question 2

Brand extension

Answer 2

Where new products launched by a business can benefit from the positive reputation associated with the business’s existing brands.

Question 3

Loss leader

Answer 3

A product offered by a business at a price that is below what it costs the business to produce it; the aim is to attract customers, who then purchase other products on which the business does earn a profit.

Question 4

Market segments

Answer 4

Groups of customers sharing distinct features in terms of, for example, age, income or lifestyle

Question 5

Marketing mix

Answer 5

The combination of factors that attracts and retains customers, eg supplying the right product at the right price and promoting it effectively. Sometimes summarised as the
4Ps or 7Ps.

Question 6

Price sensitivity

Answer 6

The degree to which the price of a product affects a consumer’s decision to buy it

Question 7

Product differentiation

Answer 7

The methods providers use to make one product different from and more attractive than others that perform a similar function

Question 8

Promotion

Answer 8

paid-for marketing activities, including advertising. It includes all activities that aim to communicate with people, inform them of goods and services, and persuade them to buy.

Question 9

Sales literature

Answer 9

Information such as brochures and leaflets, created by a provider’s marketing department.

Question 10

Unique selling point (USP)

Answer 10

An aspect of a brand that makes it different from and better than the brands of other providers