Management of marketing (Unit 2)

Question 1

What is market segmentation

Answer 1

Market segmentation involves putting potential customers into groups based on specific criteria or characteristics.

Question 2

What criterea are commonly used to segment the market

Answer 2

A business can use many different criteria to segment the market:

age - consumers are divided into groups based on age brackets, e.g. 13-18 or over 55;

gender - consumers are grouped together based on the gender that they identify with as commonly used in the cosmetic and clothing markets;

income level - consumers are grouped together based on how much disposable income they have;

lifestyle/hobby - consumers who have a particular lifestyle or hobby are grouped together, e.g. vegetarians or gamers;

religion - consumers are grouped together based on their religious or cultural beliefs.

Question 3

What is target marketing

Answer 3

After segmenting the market the business will choose what group to target their products/services to.

Question 4

What are the benefits of target marketing

Answer 4

products or services will be better suited to the target market’s needs or wants, leading to improved customer satisfaction;

businesses will choose appropriate pricing that appeals to their target markets, leading to an increase in sales;

businesses will sell their products in appropriate places where the target market shops, leading to an increase in sales;

there is a decreased chance of product failure, leading to the likelihood of a reduction in wasted investment by businesses.

Question 5

What is market research?

Answer 5

Market research is the process of gathering, recording and analysing data about customers, competitors and market trends.

Question 6

What is the general purpose of market research

Answer 6

Conducting market research allows a business to make better informed decisions relating to the marketing of their product.

Question 7

What are some particular reasons a business may use market research

Answer 7

identifying what the target markets should be for their products or services;

finding out what the target market’s needs and wants are so as to design products that satisfy them;

finding out how much the target market would be willing to pay for products so as to set appropriate pricing;

gathering information about competitors, allowing them to gain competitive advantages.

Question 8

What are the two types of market research

Answer 8

Field research (Primary) and Desk research (secondary)

Question 9

What is field research

Answer 9

Field research involves a business gathering brand new information themselves using methods such as face-to-face interviews and focus groups. This type of research collects primary information.

Question 10

What are the advantages of field research

Answer 10

data collected is brand new and up-to-date;

data is not available to competitors;

the research is tailored to the specific requirements of a business, meaning that the data gathered is highly relevant.

Question 11

What is desk research

Answer 11

Desk research involves the use of pre-existing data that has been gathered by someone else. This type of research collects secondary information.

Question 12

What are the disadvantages of field research

Answer 12

it can be an expensive type of research compared to desk research;

it can be a time-consuming process, meaning that decisions cannot be made quickly.

Question 13

Name 6 methods of field research

Answer 13

Personal interview
Telephone survey
Postal survey
Online survey
Hall test
Focus group

Question 14

Describe a personal interview (field research)

Answer 14

the researcher conducts a face-to-face interview with the respondent using a questionnaire containing standardised questions.

Question 15

Describe a telephone survey (field research)

Answer 15

the researcher conducts an interview with the respondent over the telephone using a questionnaire containing standardised questions.

Question 16

Describe a postal survey (field research)

Answer 16

a questionnaire is sent through the post to respondents who mail it back upon completion. Postal surveys can cover a wide geographical area and can target specific target markets based on postcode; however, they have a very low response rate as many people view it as junk mail.

Question 17

Describe an online survey (Field research)

Answer 17

a questionnaire is hosted on the internet for respondents to complete. Many online surveying tools such as Survey Monkey will provide automatic analysis, graphs and summaries of the data collected; however, this method relies on people having internet access.

Question 18

Describe a hall test (field research)

Answer 18

respondents are given a sample of the product to try and their feedback is gathered.

Question 19

Describe a focus group (field research)

Answer 19

a group of volunteers from a target market are brought together to discuss a product. The researcher will record what is being said.

Question 20

Name 5 common sources of desk research

Answer 20

government reports and statistics (such as census data);

reports produced by market research companies such as Mintel;

competitors’ websites;

trade magazines and journals;

reputable newspapers.

Question 21

What are the advantages of desk research

Answer 21

it is a relatively inexpensive way of gathering and obtaining data;

it is relatively quick to gather compared to field research, meaning that decisions can be made quicker;

large amounts of information and data are available at little to no cost.

Question 22

What are the disadvantages of desk research

Answer 22

the data gathered could be out of date, leading to poor decisions being made;

the same information is also available to competitors;

the information might contain bias.

Question 23

What is observation (field research)

Answer 23

A method of market research conducted by watching consumer behaviour.

Question 24

What are the advantages of a face to face interview

Answer 24

Two-way communication

Researcher can encourage respondent to answer

Mistakes and misunderstandings can be cleared up right away

Question 25

What are the disadvantages of a face to face interview

Answer 25

Personal interviews can be expensive

Researchers have to be selected and trained

Home interviews unpopular with consumers

Time consuming

Question 26

What are the advantages of a postal survey

Answer 26

Inexpensive

No interviewer training needed

Question 27

What are the disadvantages of a postal survey

Answer 27

Questions must be simple and easy to answer

Response rate very low, incentives sometimes needed

Question 28

What are the advantages of a focus group

Answer 28

Qualitative information provided in the form of opinions, feelings and attitudes

Topics can be explored in some depth

Question 29

What are the disadvantages of a focus group

Answer 29

Can be difficult to analyse qualitative information

Expensive

Question 30

What are the advantages of a hall test

Answer 30

Qualitative information provided in the form of tasting or demonstrations

Question 31

What are the disadvantages of a hall test

Answer 31

Respondents may be too positive as they feel obliged to give favourable opinion

Question 32

What are the advantages of a telephone interview

Answer 32

Can reach a large geographical area

Inexpensive

Question 33

What are the disadvantages of a telephone interview

Answer 33

Response rate may be low as people may view it as a “nuisance call”

Question 34

What are the advantages of an online survey

Answer 34

Large sample sizes

Inexpensive

Question 35

What are the disadvantages of an online survey

Answer 35

Limited to people with internet access

Question 36

What are the advantages of observation

Answer 36

Quantitative information gathered

Real life and behaviours in action

Question 37

What are the disadvantages of observation

Answer 37

Samples are often random and not representative of all customers

Only shows actions, does not explain attitudes and feelings

Question 38

What is the marketing mix/ 4ps

Answer 38

The marketing mix is the name given to the key decision-making areas required in the marketing of a product or service.

Question 39

List the 4 parts of the marketing mix

Answer 39

Product
Price
Place
Promotion

Question 40

Why do customers buy a product

Answer 40

Customers buy a product to meet a need.`

Question 41

Describe the first stage in developing a product.

Answer 41

Conduct market research to identify a need or want of consumers.

Question 42

Describe the second stage in developing a product

Answer 42

Idea generation– Research and Development departments try to innovative and design products that are new or better than existing ones.

Question 43

Describe the third stage in developing a product

Answer 43

Development– Businesses aim to have an innovation in their new product that they can point to as a USP (Unique selling point).

Question 44

Describe the fourth stage in developing a product

Answer 44

Prototypes and testing–
Prototypes are made and then undergo tests to ensure the product is safe, reliable, fit for purpose and one that customers can and will use.

Question 45

Describe the fith stage in developing a product

Answer 45

Modifications– After seeing the prototype or early versions in use, alterations can be made to improve the product.

Question 46

Describe the sixth stage in developing a product

Answer 46

Patents and copyrights– Some products are registered for patents to protect the design from imitation by competitors.

Question 47

Describe the seventh stage in developing a product

Answer 47

Launch to market– Finally the product is put into production and a marketing and advertising campaign is launched to introduce and sell the product to customers.

Question 48

Name the 4 key stages of the product life cycle

Answer 48

Introduction
Growth
Maturity
Decline

Question 49

Describe the introduction stage of the product life cycle

Answer 49

The product is first launched onto the market.

Sales are low and slow as very few consumers are aware of the product.

Heavy advertising will be required to make consumers aware of the product.

Most products make a loss due to low sales and high advertising costs.

Question 50

Describe the growth stage of the product life cycle

Answer 50

Sales begin to rise quickly as more consumers become aware of the product and have been persuaded to buy it.

Heavy advertising is still required.

Most products begin to become profitable by the end of this stage

Question 51

Describe the maturity stage of the product life cycle

Answer 51

The product has been on the market for a while and has an established customer base.

Sales of the product reach their peak.
As the product is now well established, less advertising is required.

Due to high sales and a reduction in advertising costs, profits will reach their peak.

Question 52

Describe the decline stage of the product life cycle

Answer 52

Sales of the product fall quickly as the product has been on the market for a long time and newer products have been released which consumers are buying instead.

Profits also fall due to decreasing sales. The business will withdraw the product from the market before it starts to become unprofitable.

Question 53

What is a brand

Answer 53

A brand can be a name, symbol, logo, slogan or unique design that a business can use to give their products a strong identity and make them easily recognisable by consumers.

Question 54

What are the advantages of branding

Answer 54

consumers tend to perceive branded goods as being of higher quality;

customers will become brand loyal, meaning that they will only buy that brand;

customers are often willing to pay a higher price for branded goods;

costs and risks of launching a new product are reduced as consumers are already aware of the brand.

Question 55

What are the disadvantages of branding

Answer 55

establishing a brand can be a very expensive and time-consuming process;

the entire brand could be damaged by one poor product in the range;

branding goods makes them easy to copy for counterfeiters.

Question 56

What are extension strategies

Answer 56

When a product reaches the decline stage, a business can act to extend its life cycle. There are a number of extension strategies that they can use to prevent their product from becoming obsolete.

Question 57

Name 7 extension strategies

Answer 57

Change product
Change price
Change place
Change promotion
Chnage packaging
Change usage
Change name

Question 58

Describe the change product extension strategy

Answer 58

New and improved versions of the product can be released… version 2.0 and then version 3.0.

Question 59

Describe the change price extension strategy

Answer 59

Price can be lowered to allow new customers to buy it.

Question 59

Describe the change place extension strategy

Answer 59

Products can be sold in different countries or territories to gain more sales.

Question 59

Describe the change promotion extension strategy

Answer 59

Different advertising or sales promotion techniques can prolong the life of the product, giving it a new image.

Question 59

Describe the change packaging extension strategy

Answer 59

The style of the packaging may be changed to give the appearance of a new and improved product.

Question 60

Describe the change usage exdtension strategy

Answer 60

Existing customers can be encouraged to buy more of the product or to use it in a different way. For example breakfast cereals used advertising to show consumers eating cereal at different times of the day.

Question 61

Describe the change name extension strategy

Answer 61

If a product has suffered from bad publicity and sales are falling, a tried and tested technique is to simply change the name of the product.

Question 62

Why is packaging a necessary cost for all businesses selling products

Answer 62

protecting products from being damaged during transportation

helping to keep products fresh

providing legally required information, e.g. nutrition.

Question 63

How can packaging help with marketing of a product

Answer 63

packaging will be designed to reflect product branding, e.g. choice of colours and fonts;

packaging will be designed to appeal to the target market, e.g. choice of images and materials.

Question 64

What are the benefits of effective packaging

Answer 64

Attractiveness and increased sales
Brand Recognition
Protection
Reduced costs
Preservation of freshness
Promotional opportunities
Regulatory information

Question 65

What are the disadvantages of poor packaging

Answer 65

Increased costs
Negative impact on brand
Negative environmental impact

Question 66

Describe in detail the attractiveness and increased sales benefit of effective packaging

Answer 66

Well-designed and attractive packaging can enhance the product’s appeal, capturing the attention of consumers and influencing their purchasing decisions.

Question 67

Describe in detail the brand recognition benefit of effective packaging

Answer 67

Packaging helps in creating brand recognition and differentiation in a crowded marketplace. Unique and distinctive packaging can make a product stand out from competitors, reinforcing brand identity.

Question 68

Describe in detail the protection benefit of effective packaging.

Answer 68

Packaging provides protection during transportation, reducing the risk of damage and minimising associated costs. It ensures that the product reaches customers in good condition, enhancing customer satisfaction.

Question 69

Describe in detail the reduced costs benefit of effective packaging

Answer 69

Effective packaging might involve reduced packing materials such as cardboard and plastic, reducing production and transportation costs.

Question 70

Describe in detail the preservation of freshness benefit of effective packaging

Answer 70

Proper packaging helps to maintain the freshness and quality of perishable goods, extending their shelf life and ensuring customer satisfaction.

Question 71

Describe in detail the promotional opportunities benefit of effective packaging

Answer 71

Packaging serves as a platform for promotional messaging and advertising. Eye-catching designs, logos, and taglines on the packaging can effectively communicate the product’s features and benefits.

Question 72

Describe in detail the regulatory information benefit of effective packaging

Answer 72

Packaging provides space for legally required information, such as ingredient lists, nutritional values, safety warnings, and recycling instructions. It helps businesses comply with regulations and provides transparency to consumers

Question 73

Describe in detail the increased costs disadvantage of poor packaging

Answer 73

Poor packaging choices may result in higher costs, such as rework, damage during transit, or customer returns.

Question 74

Describe in detail the negative impact on brand disadvantage of poor packaging

Answer 74

Consumers may view the product as poor or inferior quality.

Question 75

Describe in detail the negative environmental impact of poor packaging

Answer 75

Packaging that is not recyclable or environmentally friendly can harm the environment and lead to negative publicity. Increasingly, consumers are concerned about sustainability and prefer brands that demonstrate environmental responsibility

Question 76

What is price (marketin mix)

Answer 76

Price is how much money a business charges their customers to buy their goods or services.

Question 77

Why is price important?

Answer 77

This is because the most important factor that many consumers consider when buying a product is the price. Consumers will only buy a product if they feel they are getting value for money - that is a good quality product at a reasonable price.

Question 78

What are the factors a business must consider when choosing a price

Answer 78

Cost of buying or producing the product
Amount of profit to be made
Price charged by competitors
Quality of the product
Price target market will pay
Government restrictions on pricing

Question 79

Further desribe the factor of choosing a price: “Cost of buying or producing the product”

Answer 79

the business will have to ensure that the price is higher than the costs to buy or make the product to ensure that a profit is made on each product sold.

Question 80

Further describe the the factor of choosing a price: “Amount of profit to be made”

Answer 80

the business will price the product higher or lower depending on the level of profit it wishes to make on each product sold.

Question 81

Further describe the factor of choosing a price: “ Price charged by competitors”

Answer 81

the business needs to consider whether to match the price charged by competitors or choose a different pricing strategy to stand out from the crowd.

Question 82

Further describe the factor of choosing a price “Quality of the product”

Answer 82

the price set by the business must reflect the quality of the product. If the business charges a high price for a poor quality product, the customer will feel that they have been ripped off.

Question 83

Further describe the factor of choosing a price: “Price target market will pay”

Answer 83

the business must choose a price that is acceptable to their target market otherwise they will struggle to persuade customers to buy it.

Question 84

Further describe the factor of choosing a price: “Governement restriction on pricing”

Answer 84

the government has legislation for specific products which restricts the minimum or maximum amount a business can charge for the product (such as the minimum unit pricing on alcohol set by the Scottish Government).

Question 85

List the long term pricing strategies

Answer 85

Premium (High) price
Low price
Competetive pricing
Cost-plus pricing

Question 86

Describe the premium (high) price strategy (long term pricing strategy)

Answer 86

A business will set the price of their product higher than that of their competitors. Premium pricing is used to give consumers the perception of quality and luxury. To justify the high price, the business must ensure their product is of high quality.

Question 87

Describe the low price strategy (Long term pricing strategy)

Answer 87

A business will set the price of their products lower than that of their competitors. Low price is effective in markets where there is little brand loyalty and customers place price above all other decision-making factors. However, some consumers will see low price as an indicator of poor quality and will be put off from buying the product

Question 88

Describe the competetive pricing strategy (Long term pricing strategy)

Answer 88

This strategy involves setting the price of the product at the same level as that of competitors. As there is no difference in competitive prices, businesses will then need to compete on other factors such as customer service and product quality to convince customers to buy from them.

Question 89

Describe the cost-plus pricing strategy (Long term pricing)

Answer 89

A business first calculates the cost of making or buying one unit of the product. They then add a percentage mark-up to the cost price to calculate the selling price. For example, a business which adds a 25% mark-up on a product which costs £1 to make will sell the product for £1.25. Cost-plus pricing ensures a profit is always made on any product sold as the selling price will always be higher than the cost price.

Question 90

List the short term pricing strategies

Answer 90

Price skimming
Penetration pricing
Promotional pricing
Psychological pricing
Demand orientational pricing
Destroy pricing

Question 91

Describe the price skimming strategy
(short term pricing strategy)

Answer 91

The price is set high when the product is first launched. Once there are no customers left willing to pay the initial high price, the price of the product is then gradually lowered over time. Price skimming is most effective in markets where there is little to no competition.

Question 92

Describe the penetration pricing strategy
(short term pricing strategy)

Answer 92

Penetration pricing is used to enter a new market. The price will be set lower than competitors to gain market share. Once a product becomes established the price will increase to be more like the market price.

Question 93

Describe the promotional pricing strategy
(short term pricing strategy)

Answer 93

A short-term reduction in the price of the product. It will be widely publicised and is used to generate increased sales or to sell off outdated products. Examples include Boxing Day sales and buy one get one free (BOGOF) offers.

Question 94

Describe the psychological pricing strategy
(short term pricing strategy)

Answer 94

A price is selected which makes the customer feel they are getting a much better deal than they actually are. When using this strategy, businesses will usually avoid rounding prices up to whole numbers. For example, a business will charge 99p rather than £1. Customers are more likely to buy at the 99p as their mind is tricked into thinking this is a lot cheaper than if it was priced at £1.

Question 95

Describe the demand orientated pricing strategy
(short term pricing strategy)

Answer 95

This short term pricing strategy is used when demand for a product or service may change due to changes in consumer demand. This means that you may pay different prices for the same product or service at different times of day or at different times of year. For example:

Question 96

Describe the destroyer pricing strategy
(short term pricing strategy)

Answer 96

Destroyer pricing is used to eliminate competition. It involves a business setting a very low price in order to attract customers away from competitors, who will struggle to match the low price and may go bust. Usually only large businesses can use this strategy as they can withstand the losses for a longer period than small businesses can. Destroyer pricing is illegal in the UK.

Question 97

List the factors a business must consider when choosing a lcoation

Answer 97

Type of business
Location of competitors
Cost of premises
Availability of labour
Transport links
Government incentives

Question 98

Describe the type of business factor of choosing a location

Answer 98

Depending on what the activity of the business is, some businesses need to be located in particular areas. For example, a wind farm needs to be in a rural area which is windy otherwise it will not generate much electricity.

Question 99

Describe the location of competitors factor of choosing a location

Answer 99

When researching locations, a business will find out which competitors already operate in each area. A business then must consider whether it makes greater business sense to locate next to competitors or far away from them. For example, a small independent coffee shop might try to avoid areas where well-known chains such as Starbucks and Costa are already located as they might find it difficult to compete with them. However, a shopping centre food court might attract lots of people to it so setting up next to competitors might result in greater sales.

Question 100

Describe the cost of premises factor of choosing a location

Answer 100

How much it costs to buy or rent premises in each possible location also needs to be considered. A business will need to choose a location that it can afford where the rent or mortgage is low enough to allow it to make sufficient profit. Most retail businesses would choose to locate in city centres (such as Buchanan Street in Glasgow) or shopping centres with high footfall; however, it is very expensive to rent premises in these locations, meaning that many smaller businesses cannot afford it.

Question 101

Describe the availability of labour factor of choosing a location

Answer 101

A business must consider whether the location they choose has enough people with the appropriate skills to employ. People will only be willing to travel so far to their place of work so the business will have to locate close enough to a populated area that has enough people with appropriate skills.

Question 102

Describe the transport links factor of choosing a location

Answer 102

A business should assess the transport links to the location. It is essential that the area has good road and public transport links to allow customers and employees to easily reach the location.

Question 103

Describe the government incentives factor of choosing a location

Answer 103

A country’s government might offer incentives, such as grants, to businesses who locate their operations in a specific area. By locating in a government specified area, the government will provide the business with money to help set up their operations there.

Question 104

What is E commerce

Answer 104

E-commerce is the buying and selling of products and services via the internet. The number of people using the internet to buy goods and services has grown significantly in the last decade and is expected to continue to rise exponentially in years to come.

Question 105

What are the advantages of e commerce

Answer 105

consumers across the world can buy from the business, which is likely to result in increased customers;

customers can buy at whatever time is most convenient to them, which will increase the number of sales;

businesses do not have to pay rent or buy fixtures and fittings for physical premises, which reduces costs;

websites can display an unlimited number of products, which improves customer choice and satisfaction.

Question 106

What are the disadvantages of e commerce

Answer 106

customers cannot see or handle products before buying them, which could result in businesses spending a lot of time processing returns and refunds;

there are high initial costs in creating a high-quality professional website;

increased competition as businesses now have to complete with online competitors across the world, which could result in a loss of customers;

ongoing maintenance and updates of websites and associated technology can be expensive.

Question 107

What are the 4 main methods of distribution

Answer 107

Road - Using trucks, vans and lorries to deliver via the road network.

Rail - Goods are transported by trains using the rail network.

Air - Transporting goods around the world using cargo planes.

Sea - Transporting goods around the world using cargo ships.

Question 108

What are the advantages of using road as a method of distribution

Answer 108

The only method which allows for direct door-to-door delivery.

A relatively quick and cheap method for delivering across short distances.

Question 109

What are the disadvantages of using road as a method of distribution

Answer 109

Traffic jams and bad weather can cause delays.

Only transports a relatively small quantity of goods.

Question 110

What are the advantages of using rail as a method of distribution

Answer 110

Large quantities of goods can be transported.

Relatively environmentally friendly.

Question 111

What are the disadvantagees of using rail as a method of distribution

Answer 111

Distribution is limited by where there are stations to stop at.

Goods still have to be transported to the customer from the train station.

Question 112

What are the advantages of using sea as a method of distribution

Answer 112

A much larger quantity of goods can be transported around the world than a plane.

Cheaper than air travel.

Question 113

What are the disadvantages of using sea as a method of distribution

Answer 113

Very slow compared to air travel.

Goods still have to be transported to the customer from the port.

Question 114

What are the advantages of using air as a method of distribution

Answer 114

The quickest method for transporting goods globally.

Planes can reach some parts of the world that other methods cannot.

Question 115

What are the disadvantages of using air as a method of distribution

Answer 115

Very expensive.

A very high carbon footprint.

Goods still have to be transported to the customer from the airport.

Question 116

What are the aims of promotion

Answer 116

inform consumers that the product exists;

provide consumers with information about what the product is and what it does;

persuade consumers to buy the product;

convince consumers to buy from the business instead of from its competitors.

Question 117

What are the two categories of advertising

Answer 117

Traditional advertising: advertising methods which have been around for a long time, e.g. print and television.

Digital advertising: methods which have come about due to developments in technology, e.g. SMS and websites.

Question 118

List the traditional methods of advertising

Answer 118

tv - adverts combining audio and video shown during the breaks of shows.

radio - audio adverts

cinema - adverts combining audio and video shown before the start of films.

newspapers/magazines - printed adverts containing text and images.

billboards - posters placed on large signs usually at the side of busy roads.

Question 119

What are the advantages of using TV advertising

Answer 119

Potential to reach very large audiences as many people watch TV.

Demonstrations of the product can be given.

Can reach wide geographical audience

Question 120

What are the disadvantages of using TV advertising

Answer 120

A relatively expensive method of advertising.

Modern technology and ‘channel hopping’ means consumers can avoid watching TV adverts.

Question 121

What are the advantages of using newspaper advertising

Answer 121

Consumers can cut adverts out to keep for future reference.

Customers can be targeted through choice of newspaper.

Question 122

What are the disadvatnages of using newspaper advertising

Answer 122

Limited to only text and images, which makes it difficult to make adverts memorable.

Newspapers contain many adverts, making it difficult to stand out from the crowd.

Question 123

What are the advantages of using billboard advertising

Answer 123

Consumers will see the advert repeatedly, increasing the chances of them remembering it.

Usually placed in busy areas, meaning that lots of consumers will see it.

Can promote business in a specific geographical area

Question 124

What are the disadvantages of using billboard advertising

Answer 124

Can only contain a small amount of information as most people will pass it quickly.

Can get vandalised or damaged by weather.

Only reaches a specific geographical area

Question 125

What are the advantages of cinema advertising

Answer 125

Advanced sound and screen technology can make adverts more engaging.

There is a captive audience who will see the advert.

Question 126

What are the disadvantages of cinema advertising

Answer 126

Only a relatively small number of people will see the advert at any one time.

Some consumers purposely arrive late to screenings to avoid the adverts.

Question 127

What are the advantages of using radio advertising

Answer 127

Can reach a wide geographical audience

Cheaper to advertise than on TV

Question 128

What are the disadvantages of radio advertising

Answer 128

Only sound, no products or demonstrations can be shown

Listeners can ‘tune out’ during the adverts

Question 129

List the types of digital advertising

Answer 129

Internet adverts
SMS
In-app advertising
Email advertising

Question 130

What are the advantages of internet adverts

Answer 130

Adverts can reach a global audience if consumers around the world visit the website.

Can target specific market segments by their interests and the websites that they use

Question 131

What are the disadvantages of internet adverts

Answer 131

Consumers will ignore the adverts if they are focused on the content of the website.

Can be difficult to stand out from the many other adverts consumers will see when browsing the internet.

Question 132

What are the disadvantages of SMS as a method of advertising

Answer 132

Customers can become annoyed if they receive lots of SMS adverts.

SMS message can only contain a very limited amount of information.

Question 133

What are the advantages of SMS as a method of advertising

Answer 133

Cost effective as the text can be sent to a large volume of consumers simultaneously.

Customers receive the SMS message instantly.

relatively inexpensive method of promotion

Question 134

What are the advantages of In app advertising

Answer 134

products can be targeted at specific customer groups

customers don’t have to be online to see ads

Question 135

What are the disadvantages of in app advertising

Answer 135

limited to smart phone or tablet owners

customers may be irritated by ads which interrupt game play or other activity

Question 136

What are the advantages of Email advertising

Answer 136

emails can reach a wide audience

a relatively cheap method of promotion

same email can be sent to many recipients

good for the environment as no paper needed

attachments can be added

Question 137

What are the disadvantages of email advertising

Answer 137

email may be treated as spam and not reach customer’s inbox

email can be easily deleted or ignored without reading

worry about viruses in attachments can put people off opening email

Question 138

List the types of sales promotion

Answer 138

Special offers
Discounts
Buy one, get one free
Point of sale displays
Loyalty cards
Free samples
Free gifts
Celebrity endorsement
Competition

Question 139

Describe the special offers method of sales promotion

Answer 139

Special offers are short-term pricing strategies that businesses, especially shops, will adopt to encourage customers to buy from them.

Question 140

Describe the discounts method of sales promotion

Answer 140

By offering products at a reduced price for a set period of time, a business can offer customers better value, for example 20% off the price of a brand of washing-up liquid. This can encourage customers to buy more or to buy from them rather than a rival company.

Question 141

Describe the buy one get one free method of sales promotion

Answer 141

Buy One, Get One Free (BOGOF) is a commonly used special offer. This deal is used to offer customers extra value and may encourage them to buy more or to choose one business or product over another.

Question 142

Describe the point of sales displays method of sales promotion

Answer 142

Point of sale displays are to be found at the checkout, for example at supermarkets. The point of sale display is most commonly designed to attract the customer to products that are new, for example the latest DVDs, books or video games.

Question 143

Describe loyalty cards as a method of sales promotion

Answer 143

Loyalty cards can encourage a customer to keep coming back to the same business. Most commonly, loyalty cards operate on a points-based system. The more that a customer spends in a shop, the more points are added to their loyalty card. These points can then be converted into some sort of reward, for example a discount on other products.

Question 144

Describe free samples as a method of sales promotion

Answer 144

Many food companies will offer free samples
as a way to let potential customers test a product. For example, supermarket shoppers will be given the chance to taste a new snack. The idea is that people will try the product and hopefully like it, encouraging them to buy.

Question 145

Describe free gifts as a method sales promotion

Answer 145

Often a business will encourage customers to buy by offering a free gift with its product. For example, fast food companies give away toys with children’s meals, or some products include tokens in their packaging which have to be cut out and posted off in order to claim the free gift.

Question 146

Describe competition as a method of sales promotion

Answer 146

The customer is entered into a draw to win prizes, e.g. electronics and holidays, by buying the product. This encourages the customer to buy the product more often as it increases their chance of winning a prize.

Question 147

Describe celebrity endorsement as a method of sales promotion

Answer 147

Celebrity endorsement involves using a famous, well-liked person to promote a product. The celebrity might appear in the advert for a product or make social media posts discussing it. Fans of the celebrity are likely to buy a product if they see that the celebrity also uses it.

Question 148

What should a business do to make sure its marketing is ethical

Answer 148

not intentionally mislead consumers by making false claims about a product;

ensure adverts do not contain indecent or obscene content that is intended to offend;

not intentionally include content which could offend consumers’ moral or cultural beliefs;

ensure that adverts conform to discrimination legislation;

make sure adverts comply with legislation regarding the promotion of products to children, e.g. avoiding ‘pester power’.

Question 149

How is the internet used in marketing

Answer 149

A business might sell their goods and services via the internet; this is known as e-commerce

The internet can also be used to conduct market research by gathering secondary information from reliable online sources or asking customers to complete an online survey.

A business can also place advert banners on websites which they know that their target market are likely to use

Question 150

How is desktop publishing used in marketing

Answer 150

Desktop publishing software can be used to create high-quality, attractive adverts and promotional materials.

Question 151

How is Email used in marketing

Answer 151

A business can use e-mail software to send information about new products and special offers directly to customers. Customers must consent to the business using their e-mail for this purpose and can get annoyed if they receive too many marketing e-mails from a business.

Question 152

How are smartphones used in marketing

Answer 152

A business might develop a smartphone app which allows customers to browse their product range and purchase directly through the app

The business might offer exclusive discounts and offers to encourage customers to download and purchase through their app. Push notifications can also be used to alert customers to new products or offers available via the app.

Question 153

How are databases used in marketing

Answer 153

A database could be used to store customers’ details. They query function can be used to quickly search the database to find customers who meet specified criteria.