How the finance function interacts with sales and marketing

Question 1

Marketing

Answer 1

The management process that identifies, anticipates and supplies customer needs efficiently and profitably.

Question 2

Marketing Orientation

Answer 2

Starts by understanding customers’ needs and then purchases products with benefits and features to fulfil these needs.

Question 3

Production Orientation

Answer 3

Focus is on high volume production to achieve low unit cost.

Question 4

Product Orientation

Answer 4

Focus is on continual improvement of products assuming customers simply want the best quality for their money.

Question 5

Sales Orientation

Answer 5

Uses aggressive promotional policies to entice the customer.

Question 6

Steps in the market planning process

Answer 6

Situation Analysis (SWOT/PESTLE)
Review Mission & Objectives
Set Marketing Objectives
Devise an appropriate Marketing Strategy
Implementation
Review

Question 7

Macro Environment

Answer 7

Includes all factors that influence an organisation but are outside of their control.

Question 8

The 7 P’s of the Marketing Mix

Answer 8

Product
Place
Promotion
Price
People
Processes
Physical Evidence

Question 9

The 4 C’s of deciding how to price a product

Answer 9

Cost
Customers
Competition
Corporate Objectives

Question 10

Cost-Plus Pricing

Answer 10

Cost per unit is calculated and then a mark-up is added

Question 11

Penetration Pricing

Answer 11

A low price is set to gain market share

Question 12

Perceived Quality Pricing

Answer 12

High price is set to reflect/create an image of high quality

Question 13

Price Discrimination

Answer 13

Different prices are set for the same product in different markets. E.g. peak/off peak rail fares

Question 14

Going Rate Pricing

Answer 14

Prices set to match competitors

Question 15

Dynamic Pricing

Answer 15

Prices are altered in line with demand, e.g. airline industry

Question 16

Price Skimming

Answer 16

High prices set when a new product is launched. Later the price is dropped to increase demand once customers who are willing to pay more have been ‘skimmed’ off

Question 17

Loss Leaders

Answer 17

One product may be sold at a loss with the expectation that customers will then go on and buy other more profitable products

Question 18

Captive Product Pricing

Answer 18

This is used where customers must buy two products. First is cheap to attract customer but the second is expensive, once they are captive.

Question 19

Promotion - ‘AIDA Sequence’

Answer 19

Awareness
Interest
Desire
Action

Question 20

Viral Marketing

Answer 20

Encourages individuals to pass on a marketing message to others, so creating exponential growth in the message’s exposure in the same way computer viruses grow.

Question 21

Guerrilla Marketing

Answer 21

Relies on well thought out, highly focused and often unconventional attacks on key targets. Often low cost and has allowed organisation with small promotional budgets to be very effective.

Question 22

Experiential Marketing

Answer 22

Interactive marketing experience aimed at stimulating all the senses, for example road shows, street theatre, product trials. The next time the consumer sees the product, it should trigger a range of positive memories making it the first choice.

Question 23

Digital Marketing

Answer 23

Promotion of products or brands via one or more forms of electronic media, for example using email, social media, the organisation’s website or Google search.

Question 24

Search Engine Marketing

Answer 24

Form of digital marketing that involves the promotion of an organisation’s website by increasing its visibility in search engine results pages, such as Google.

Question 25

Social Media Marketing

Answer 25

Form of digital marketing, refers to the process of gaining traffic or attention through social media sites.

Question 26

Postmodern Marketing

Answer 26

Philosophical approach to marketing which focuses on giving the customer an experience that is customised to them and in ensuring they receive marketing messages in a form they prefer.

Question 27

Market Segmentation

Answer 27

Sub-dividing of the market into homogenous groups to whom a separate marketing mix can be focused.

Question 28

Kotler’s three marketing segments criteria

Answer 28

Measurable
Accessible
Substantial

Question 29

Targeting

Answer 29

Process of selecting the most lucrative market segment(s) for marketing the product.

Question 30

Concentrated Marketing

Answer 30

Specialises in one of the identified markets only, where a company knows it can complete successfully.

Question 31

Differentiated Marketing

Answer 31

Company makes several products each aimed at a separate target segment.

Question 32

Undifferentiated Marketing

Answer 32

Delivery of a single product to the entire market.

Question 33

Market Positioning

Answer 33

Involves the formulation of a definitive marketing strategy around which the product would be marketed to the target audience.

Question 34

Porter’s Four Market Positioning Strategies

Answer 34

Cost Leadership, Low Cost/Broad Target
Differentiation, High Cost/Broad Target
Cost Focus, Low Cost/Narrow Target
Differentiation Focus, High Cost/Narrow Target

Question 35

Reasons for finance interacting with sales/marketing

Answer 35

Budgeting
Advertising
Pricing
Market Share
KPI’s

Question 36

Stages of Product/Service Development

Answer 36

Consider customers’ needs
Concept screening
Design process
Time-to-market
Product Testing

Question 37

Stages of the Product Life Cycle

Answer 37

Revenue
Introduction
Growth
Maturity
Decline
Cost

Question 38

Life Cycle Costing

Answer 38

Considers costs and revenues of a product/service over its whole life rather than one accounting period.

Question 39

Balanced Portfolio

Answer 39

Products/services at different stages in the lifecycle have different implications for resource requirements, risk and strategy.