Making Marketing Decisions Flashcards

Question

when pricing a product, a business should consider what

Answer 1

how much it cost to make The availability of the product or service – how many it can make and sell How much customer is willing to pay? Price competitors are charging Quality of product or service

Answer 2

Directly affect revenue must be consistent with other elements of marketing mix. Making the wrong decision could have serious effect on sales and cash flow.

Answer 3

involves business calculating the cost of making the product or service. Business adds a markup percentage to the cost price to ensure a profit

Answer 4

Price= unit cost+ (mark up X unit cost)

Answer 5

Ensure selling at profit as production costs already factored Easy 2 calculate

Answer 6

High cost = high selling price Doesn't consider price customers willing to pay

Answer 7

When business charges similar price to competing businesses

Answer 8

Business won't lose customers to competition.based price alone

Answer 9

It business undercut competitors too much, risk making a loss

Answer 10

Setting initially low price then graduates Increases it over time

Answer 11

Low initial price attract customers. Customer remain loyal, even when price raised.

Answer 12

Low price equals low profit. No guarantee customers will buy when it is more expensive.

Answer 13

when business at high price, initially then reduces it over time

Answer 14

hi initial price can make product/service more desirable and therefore enable business to maximise profit

Answer 15

High price may deter potential customers By the time, the product comes down in price, there may be something new or more attractive on the market

Answer 16

strategy business uses when they always keep the price is high

Answer 17

exclusive nature of product makes it more desirable, meaning a high profit margin can be put on the product

Answer 18

income falls customers may look for cheap substitutes

Answer 19

aggressive pricing, strategy Prices that set so low competitors will not be able to compete

Answer 20

if successful, a business can eliminate competition. Business will be losing money and may jeopardise their own future success.

Answer 21

Used to lead customers to believe they’re getting the best deal for money. Most common example, round down the price by 1p

Answer 22

Technology. Competition. Market segments. The product life-cycle. state of the economy legislation in the market

Answer 23

Flexible pricing Product purchases. Price comparison websites. New technology enables a business to sell a premium price. However, as soon as a new technologies introduced, the price must be reduced.

Answer 24

Competition could: Release new product. Improve on existing product. Improve at customer service. Reduce its price. Have a sale.

Answer 25

some companies were target different customers with different Mass and niche markets

Answer 26

main aim of mission is to ensure customers are aware of existence and potential benefit of product promotion used to persuade customers that product is better than competing products and to remind customers about why they may want to buy it

Answer 27

Sales promotion Branding Sponsorship. Advertising.

Answer 28

Special offers Products trials Additional products (BOGOF) Loyalty cards

Answer 29

Print media? TV and radio? Billboards and signs. Social media. Online advertising E – newsletters.

Answer 30

stage in the product life-cycle. Nature of the product. Competition. Market objectives and budget. Target market

Answer 31

Tactical point of sale, material or other incentives designed to stimulate purchases. E.g. competitions, demonstrations products, trials, loyalty points. Special offers such as free gifts ,point of sale displays, buy one get one free ,price reductions ,coupons

Answer 32

Quick boost sales encourages customers to try a product or switch brands

Answer 33

sales effect may only be short time customers may come to expect, or anticipate further promotions May damage brand image

Answer 34

Free samples encourage customers to try product and encourage them to buy product in the future However, costs of producing samples may not be covered

Answer 35

Any method of promotion that is paid for Aims to reach target market through different media

Answer 36

Wide coverage Control of message Repetition Means message can be communicated effectively Effective for building brand awareness and loyalty

Answer 37

Often expensive Impersonal One way communication Limited ability to close a sale

Answer 38

wide coverage control of message being promoted segmentation possible through choice of media used repetition means that the message can be communicated effectively Can be used to build brand loyalty

Answer 39

expensice impersonal and not accurate at aiming at customers so high wastage one-way communication and no guarantee message is being received East to get lost in competing adverts

Answer 40

product with unique character

Answer 41

inspires customer loyalty, leads to repeat sales and word-of-mouth recommendation can charge higher prices, especially if brand is market leader

Answer 42

process of persuading a potential customer to buy the product.

Answer 43

how a business gets its products to the customers

Answer 44

to make products available in the right place at the right time in the right quantities

Answer 45

retailers wholesales Distributors / sales agents Direct

Answer 46

all the organisations through which a product must pass between its point of production and consumption

Answer 47

break the bulk efficient distribution logistics costs may be lower

Answer 48

costs are increased due the wholesaler’s “middle-man” profits customers may expect choice Producers may not have sufficient resource or expertise to sell direct

Answer 49

no need to share profit margins producer has complete control over sales process products not sold alongside those of competitors