LO4

Question 1

What factors should you consider when pricing a product?

Answer 1

• Cost of production.
• Income level of target customers
• Price of competitors products

Question 2

What is competitive pricing?

Answer 2

Setting a price similar to competitors.

Question 3

What is Price skimming?

Answer 3

Introduce product at high level and then lower it.

Question 4

What is price penetration?

Answer 4

Introduce product at low level and then lower it.

Question 5

What is Psychological pricing?

Answer 5

E.g. 0.99, 1.99,2.99.

Question 6

What are 3 benefits of leaflets?

Answer 6

• Quiet cheap to create.
• Can be targeted to customers in local area.
• Easy to read.

Question 7

What are 3 disadvantages of leaflets?

Answer 7

• Often thrown away.
• Seen as junk mail.
• Not have a long term effect.

Question 8

Is social media cheap or expensive to advertise with?

Answer 8

Reality cheap.

Question 9

Name 2 benefits of advertising using social media:

Answer 9

• Social media can be used to updates customers.
• Allow to reach international market.
• Enable customers to provide feedback:

Question 10

Name 2 disadvantages of using social media:

Answer 10

• Increase the risk of negative reviews, people can leave fake reviews.
• Social media isn’t successful when targeting an older generation.
• Needs daily monitoring.

Question 11

Name 2 benefits of websites:

Answer 11

• Reality cheap
• Update customers on new offers.
• Have been proven to increase profits.
• Allow access to International markets.

Question 12

Name 2 disadvantages of websites:

Answer 12

• Increase the risk of negative reviews, people can leave fake reviews.
• Social media isn’t successful when targeting an older generation.

Question 13

Name 2 benefits of newspapers:

Answer 13

• Relative cheap to market to local market.
• Easy to market local.
• National newspaper has broader reach.
• Effective for targeting older people.

Question 14

Name 2 disadvantages of newspapers:

Answer 14

• Advertising in the national newspaper is expensive.
• Not effective for targeting younger generation.
• Most newspaper ads are not targeted.

Question 15

What is BOGOFF?

Answer 15

Buy one get one for free, a sales promotion technique.

Question 16

Why is BOGOFF good?

Answer 16

• Encourages sales
• Good way for the consumer to notice the product/service
• Applying to the consumer.

Question 17

Name 2 benefits of advertising in the newspaper?

Answer 17

• Targeted at a particular audience.
• People tend to keep magazines.
• People often pass on magazines.

Question 18

Name 2 disadvantages:

Answer 18

• Costs can be very expensive.
• Vast number of adverts in magazines.
• Deadlines for adverts may be months in advance, good business planning is required to ensure adverts are placed in time.

Question 19

What is point of sale advertising?

Answer 19

-Promotional product used where the product is sold.

Question 20

How can you retain and attract customers?

Answer 20

• Customer engagement
• Product knowledge
• After sales service.