Marketing

Question 1

Explain marketing

Answer 1

Meeting the needs and wants of customers so that marketing’s primary aim of increasing sales can be met

Question 2

Explain the 4p’s of marketing

Answer 2

Product - the product the customer obtains
Place - how the product is distributed to the customer
Price - how much the customer pays
Promotion - how the customer is found and persuaded to buy the product

Question 3

Explain promotion

Answer 3

A collection of techniques used to inform and persuade potential customers to buy a product or service that meets their needs

Question 4

State the purpose of promotion

Answer 4

Inform customers or raise awareness
Increase sales
Encourage brand loyalty
Enhance the reputation/image of the business

Question 5

State what ‘above the line’ promotion is

Answer 5

Uses media where there is no direct contact with the potential customer

Question 6

State what ‘below the line’ promotion is

Answer 6

Uses the type of media where business can directly contact the potential customer

Question 7

State the above the line promotion techniques

Answer 7

Television
Radio
Newspapers
Cinema
Sponsorship

Question 8

State the below the line promotion techniques

Answer 8

Sales promotion
Packaging
Telesales
Personal selling
Trade fairs
Email
Merchandising
Direct and digital marketing

Question 9

Explain drip marketing

Answer 9

Where information is sent to consumers bit by bit over time using a particular method of promotion (usually emails) to keep them updated on new products/offers

Question 10

Explain viral marketing

Answer 10

The use of social media sites to increase brand awareness, usually in the form of posts or adverts so that people see it when using social media

Question 11

Explain advertising elasticity of demand

Answer 11

Shows the extent to which spending on advertising will affect sales

Question 12

Explain marker research

Answer 12

A systematic, objective collection and analysis of data about a particular target market

Question 13

Reasons market research is undertaken

Answer 13

Describe the market - identifying the customers to ensure they’re targeted in an appropriate manner
Explaining the market - understanding why changes in the market have taken place
Predicting the market - knowing how customers will react to changes in the price of products
Investigating the reactions of customers in the future

Question 14

Explain primary market research

Answer 14

New research that a business undertakes itself

Question 15

Explain secondary market research

Answer 15

When a business uses existing information from other sources

Question 16

Explain how interviews work

Answer 16

The candidates answer questions which help the business understand your skills, motivation and experience

Question 17

Advantages and disadvantages of interviews (for market research)

Answer 17

+ you can tailor the interview to the specific needs of the research project
- time consuming and expensive

Question 18

Advantages of surveys for market research

Answer 18

It’s a quick and economical method of gaining the opinions of consumers and potential customers

Question 19

Explain why surveys may not be effective for market research

Answer 19

They can be brief and respondents may misinterpret questions or skip them

Question 20

Explain focus groups

Answer 20

A small group of carefully selected participants who contribute to open discussions for research

Question 21

Advantages and disadvantages of focus groups for market research

Answer 21

+ they offer in-depth understanding of the customer
- participants may want paying for their contribution to the discussion

Question 22

Explain trial marketing

Answer 22

A system of ‘testing the waters’ before going ahead with the full launch of a product

Question 23

Advantages and disadvantages of trial marketing

Answer 23

+ reduces the risk of a full scale launch
- delays in the full launch may limit the potential revenue opportunity

Question 24

Advantages and disadvantages of market research reports

Answer 24

+ you’re better prepared to make decisions based on complete information
- time consuming and expensive to carry out

Question 25

Explain census data

Answer 25

Information recorded about the population of a country

Question 26

Explain quantitative research

Answer 26

Involves the collection of facts and the research concentrates on numerical data

Question 27

Explain qualititative research

Answer 27

Aims to gather and analyse non-numerical data in order to gain an understanding of individuals

Question 28

State factors affecting the price of a product

Answer 28

Objectives of the business
Consumers incomes and tastes
Cost of producing the good
Level of demand

Question 29

Explain price elasticity of demand

Answer 29

The responsiveness of demand to a change in price of a product

Question 30

Explain factors affecting price elasticity of demand

Answer 30

Whether the good is a necessity or luxury
The level of the price change
The income of the consumer
The number of previous price increases
Where there the purchase can be postponed

Question 31

Explain income elasticity of demand

Answer 31

The responsiveness of demand for a product to a change in the persons income

Question 32

Explain cross elasticity of demand

Answer 32

How the change in price for one good will affect the demand for another good

Question 33

Explain price skimming

Answer 33

Where the business sets a high price for its goods or services in an attempt to gain profits quickly

Question 34

Explain penetration pricing

Answer 34

Setting a low price to attract customers as it’s a new product, once this has been achieved the price may be raised

Question 35

Explain premium pricing

Answer 35

A high price is set for a product or service in an attempt to crests an image and indicate a high level of quality

Question 36

Explain psychological pricing

Answer 36

This involves setting a price that sounds less than it actually is - charging £0.99 sounds substantially cheaper than £1

Question 37

Explain loss leaders pricing

Answer 37

Used to entice consumers into a particular retail outlet - used by supermarkets where they reduce the prices of essential products to below costs

Question 38

Explain competitive pricing

Answer 38

A business sets their price below their competitors with the intention of gaining additional sales - only a short term strategy

Question 39

Explain predatory pricing

Answer 39

An established business in the market lowers its prices so that it’s harder for a new competitor to compete because of the price

Question 40

Explain market-based pricing

Answer 40

For products that are very similar or identical (homogenous), a business will take its price for the product form the market

Question 41

State types of promotional pricing

Answer 41

Buy one get one free
Price reductions
3 for 2 offers
Loss leaders

Question 42

Explain cost plus pricing

Answer 42

Adding a percentage to the cost of making the product to make a mark up

Question 43

Explain price discrimination

Answer 43

Occurs when different prices are charged for the same product in different parts of the world or country

Question 44

Explain Boston matrix

Answer 44

This categorises the products into one of four different areas, based on market share and market growth.

Question 45

Explain product life cycle

Answer 45

Describes the stages that a product goes through over time - introduction, growth, maturity and decline