Exam

Question 1

Product orientation

Answer 1

A situation where a business prioritises research and development of high quality, specialised products, rather than prioritising market research.

Question 2

Patent

Answer 2

A patent is the legal right to be the only producer and seller of a good for a period of time

Question 3

Market leader

Answer 3

The product or brand with the highest market share.

Question 4

Market orientation

Answer 4

A situation where the sole focus of a business is on the needs and wants of a market segment. Extensive and ongoing market research will be at the centre of all decision making.

Question 5

Unique selling point

Answer 5

A feature of the product that distinguishes it from its competitors.

Question 6

Social organization

Answer 6

Any organisation that has a social and/or environmental purpose at its core; it describes the primary purpose of a business, not its legal form.

Question 7

Market share

Answer 7

The value of a single company’s sales or revenues compared with the sales of all businesses in a market

Question 8

Market growth

Answer 8

The increase in sales revenues or sales volume in an individual market over time.

Question 9

BCG matrix

Answer 9

is a tool that helps businesses that have multiple products to decide on their marketing strategies. Products are placed onto the matrix depending on two variables: market share and market growth.

Question 10

Marketing Plan

Answer 10

A document that outlines a company’s entire marketing process.

Question 11

The main elements of a marketing plan

Answer 11

the marketing objective
the marketing budget
segmentation and the target market
market research
marketing strategies
control tools

Question 12

Marketing objective

Answer 12

The marketing objective will provide direction for the marketing function. If achieved, the marketing objective should help the company achieve its overall business objectives.

Question 13

Budget

Answer 13

A plan that outlines a business’ revenue and expenditure over a period of time. The way in which the budget is set could be:

objective based, where an estimate is made of the budget needed to achieve the marketing objective
sales based, where a fixed percentage of the company’s sales revenue is allocated to marketing
incremental based, where the previous year’s marketing budget is used as a guide, with a percentage increase to cover inflation

Question 14

Segmentation

Answer 14

The process of dividing a broad market group into various segments (age, interests, special needs, location and so on); allows businesses to develop marketing strategies to meet the needs of diverse groups.

Question 15

Marketing research

Answer 15

Market research involves gathering information about consumers’ needs, tastes, habits and preferences in order to aid marketing decisions.

Question 16

Marketing strategies

Answer 16

Marketing strategies are long-term actions that aim to achieve the marketing objective

Question 17

Control tools

Answer 17

​​Control tools allow managers to assess whether marketing strategies have been successful. This involves gathering quantitative and qualitative data to see whether the objectives of the business have been met. Data can be gathered from a number of sources, including:

sales revenue and profit data
the number of repeat customers
surveys and focus groups

Question 18

Target market

Answer 18

The market segment at which a product is aimed

Question 19

Main methods of segmentation

Answer 19

geographic segmentation
demographic segmentation
psychographic segmentation

Question 20

Geographic segmentation

Answer 20

Geographic segmentation involves dividing potential customers based on their geographic location.

Question 21

Demographic segmentation

Answer 21

Demographic segmentation involves dividing consumers according to characteristics such as age, gender and occupation.

Question 22

Psychographic segmentation

Answer 22

Psychographic segmentation divides the population according to lifestyle and personal interests.

Question 23

Targeting

Answer 23

Selecting the most appropriate market segment for a marketing campaign.

Question 24

Mass markets

Answer 24

A market for goods that are produced in very large quantities.

Question 25

Niche markets

Answer 25

A small part of a larger market where customers have very specialised needs.

Question 26

Product positioning maps

Answer 26

Product positioning maps are visual representations of how various competitors might attempt to position their brands in the eyes of the consumer

Question 27

Differentiation

Answer 27

The process of highlighting the differences between a product and its rivals

Question 28

Product life cycle

Answer 28

is a model that helps businesses make decisions about a product’s marketing mix. The model shows a product’s typical trend in sales over time

Question 28

Product

Answer 28

is the result of a production process where resources are used to create a good or service to satisfy a need or a want

Question 29

The product life cycle is split into five stages:

Answer 29

Research and development (R&D)
Introduction
Growth
Maturity
Decline

Question 30

Extension strategies

Answer 30

are methods that businesses use to lengthen the maturity stage of the product life cycle. Using extension strategies can be a cost-effective way of extending the sales of a product.

Question 31

Brand

Answer 31

A name, symbol or design that is used to identify a product or company.

Question 32

Brand awareness

Answer 32

The degree to which consumers recognise a product by its name and special characteristics.

Question 33

Brand development

Answer 33

Building brand awareness by cultivating the business’s values and consumer perceptions of the product

OR
is the process of creating and making a new strong brand. A strong brand will allow a company to launch secondary products with relative ease.

Question 34

Brand loyalty

Answer 34

When customers continue to buy a particular brand, even where alternatives exist

Question 35

Brand value

Answer 35

can mean the value of the intellectual property associated with the brand
OR
the additional value that consumers assign to the product because of its strong brand.

Question 36

Cost-plus (markup) price

Answer 36

A pricing strategy where the price charged for the product reflects a markup added to the direct and indirect costs of production.

Question 37

Penetration pricing

Answer 37

A pricing strategy where the business sets a very low price on a new product or service to encourage customers to buy it; later the price is increased.

Question 38

Loss leader pricing

Answer 38

is to price a product lower than its production cost, in order to attract customers who can then be sold other, more expensive products

Question 39

Predatory pricing

Answer 39

A pricing strategy where a business sells a product or service at such a low price that other businesses cannot compete and are forced to leave the market; illegal in many countries.

Question 40

Premium pricing

Answer 40

A pricing strategy where a business sets the price of its products higher to create the impression that the products are higher quality or value than their lower-cost equivalents

Question 41

ProMotion

Answer 41

is the use of advertising, sponsorships, sales promotions and personal selling to inform and persuade customers to buy a product.

Question 42

Above the line promotion

Answer 42

Promotion aimed at mass audiences, generally not targeted

Question 43

Place

Answer 43

is related to how products are delivered from the producer to the customers, and it involves various distribution channels.

Question 43

Intermediary

Answer 43

A person or business that acts as a go-between in a transaction.

Question 44

Wholesalers

Answer 44

specialise in purchasing large quantities of stock from producers, storing the stock, and then selling it on to retailers and – sometimes – consumers.

Question 45

Retailers

Answer 45

purchase goods from wholesalers and producers, then sell them to the final consumer

Question 45

Agent

Answer 45

A person who acts on behalf of another person or group.

Question 46

Commission

Answer 46

A type of payment to an employee or agent based on the number of sales or a percentage of the value of sales