Marketing and finance Flashcards
What is a product’s life cycle
From when it’s introduced to the market, grows through recognition and increased sales, to it’s maturity when it’s at peak sales, through to it’s decline when it gets taken from the market.
What is an extension strategy and give an example
Used to extend the life of a product during it’s maturity. Such as updating the image, rebranding/repackaging.
Describe the 5 types of price to set
Competitor pricing - Looking at competitors and setting the prices according, usually slightly lower.
Loss Leader - Setting a price that is lower than it cost to make it because although it makes a loss on the product, by buying this product other products get bought as well, or are dependant upon it. E.g. razor really cheap but razor blades expensive.
Cost plus pricing - Unit cost of the product plus a markup, usually a markup percentage. This ensures a profit will be made.
Price skimming - Really high price to show quality and this maximises revenue. Will fall over a product’s life cycle.
Price penetration - Setting a low price in order to gain market share and recognition.
What does DASS stand for in promotional terms
D - Direct marketing straight to the customer
A - Advertising as leaflets, tv, newspapers, billboard
S - Sales promotion, smaples, BOGOFF
S - Sponsorship, football, celeb endorsements
Name 5 places to sell a product
Online Telesales Mail order (Avon) Retailers Wholesalers
4 types of finance for large businesses
Retained profits - Internal source from left over profits
New share issue - Selling shares
Loan/mortgage - Borrowing money with interest
Selling assets - If land, property or machinery isnt being used they can be sold to raise finance
Advantages and disadvantages of retained profit
A: Instantly available, no interest, still got control
D: Limited funds available, shareholders may not agree
Advantages and disadvantages of new share issue
A: No repayment or interest
D: Loss of control, shareholders will expect dividends
Advantages and disadvantages of loan or mortgage
A: No control lost, large amount available quickly
D: Interest
Advantages and disadvantages of selling assets
A: No repayment, dispose of unwanted assets
D: Take a long time, resale value may be low
What’s a balance sheet
Financial statement which shows how much money they currently own and are owed.
What are the current ratio and acid test ratio
Current ratio: Measures the liquidity of the business Current assest / current liabilities (liability is something you owe) If it's over £1 good, thats the amount you have to pay back per £1 you owe
Acid test ratio:
Measures how much the business has to pay back liabilities minus the stock
