Marketing exam revision

Question 1

what does the S stand for in SMART TARGETS

Answer 1

STRENGTHS

Question 2

a BUSINESS that sells its products to a specified market

Answer 2

Niche Market

Question 3

why marketing is important to a business

Answer 3

1) to identify target market
2) to identify competitor activity
3) to understand consumer behavior
4) to identify market trends
5) to identify growth of the market

Question 4

source of external data

Answer 4

• books
• newspapers
• magazines
• trade journals
• government information
• tv
• radio
• market industry report
• competitor website

Question 5

use of qualitative data

Answer 5

• it allows organizations to collect customer opinions/reactions/feelings which then allows the business to make improvements changes to their marketing decisions
• qualitative responses provide information on market trends which can be used by a business to develop new products in line with market demand
• it allows organizations to collect customer feedback which can be used to identify new target markets

Question 6

complete the product life cycle

1) development
2) introduction
3) growth
4) maturity
5) ….

Answer 6

decline

Question 7

state what the term bench marking means

Answer 7

Compares the business practices / performances with
competitors’ practices / performances (1)
 Comparing the business to another business (1)
 A process for identifying and implementing best / better practices (1)
 Analyses the business processes of others (1)

Question 8

state the meaning of the term market trend

Answer 8

 The rate at which a market is growing/reducing (1)
 Performance in the market overtime (1)
 Market trend is to see what is popular at the current
moment in time (1)
 Ongoing patterns within the market (1)

Question 9

benefits of a business increasing their market share

Answer 9

 Increasing market share will lead to a business having
more customers compared to its competitors (1) which
will lead to greater profits / revenues (1)
 Increasing market share will bring cost savings (1)
because the business can use its strength to negotiate
lower prices with its suppliers (1)
 Increasing market share may lead to expansion of the
business (1) because the business is more recognizable

Question 10

implications of having a target market

Answer 10

Helps the business to determine exactly what it should offer/sell. This should increase/maintain sales.
 More likely to offer the services that people want
meaning that it will be more likely to be in demand/be
successful.
 Advertising will be appropriate for the customer and therefore more likely to persuade people to become customers.
 Promotion will be targeted at the right people using the correct media, and so be more cost effective.
 Prices will be set at the correct level and so potential customers are more likely to be able to afford/purchase.
 Marketing plan can focus on specific customers and so serve them better, increasing the popularity/revenue of the business.

 Having a specific target market may lead to smaller
market share which will require increased advertising and promotion to ensure the business is successful.
 The business is unlikely to benefit from economies of scale due to having a smaller target market, which may lead to the business charging higher prices for products.
 Increased market research may need to occur in order to gather customer opinions, behaviours and motivations due to having a limited customer market available.

Question 11

A clothing business that sells to customers, what type of market does it operate in?

Answer 11

B2C- Business to consumer

Question 12

State the meaning of the term ‘product portfolio’.

Answer 12

A product portfolio is all the products/services of a business/the range of items sold by a business (1)

Question 13

what does the S stand for in USP

Answer 13

SELLING

Question 14

WHAT ARE THE DIFFERENT METHODS TO PROMOTE

Answer 14

Below the line/BTL (1)
 Direct/Direct mail (1)
 Direct mail promotion (1)
 Direct advertising (1)
 Direct Promotion (1)
 Direct marketing (1)

Question 15

benefits to a business of having a brand.

Answer 15

Helps the business stand out from the competition/gives competitive advantage (1)
 Creates loyalty / trust (1)
 Gives an image of quality (1)
 Helps develop brand extensions (1)
 Adds value (1)
 Business can create brand personality (1)
 Makes the business / product more recognisable /
identifiable (1)
 Brands can demand higher (or lower) pricing in line with their brand strategy (1)

Question 16

methods of collecting primary market research data.

Answer 16

Questionnaires (1)
 Interviews (1)
 Surveys (1)
 Focus groups / product testing (1)
 Polls (1)
 Observation of customer behaviour

Question 17

TYPES OF SITUATIONAL ANALYSIS

Answer 17

SWOT

PESTLE

Question 18

BENEFITS OF SITUATIONAL ANALYIS

Answer 18

 Situational analysis helps the business forecast/predict trends (1) and this helps the business to make marketing decisions (1)
 Situational analysis can be used to gain insight into the market (1) and this gives the business a better
understanding of its competition/develop business
aims/objectives (1)

Question 19

WHAT ARE THE DIFFERENT PRICING STRATEGIES

Answer 19

Cost-plus (1)
 Mark-up (1)
 Competitive (1)
 Price taking (1)
 Skimming (1)
 Penetration (1)
 Psychological (1)
 Premium (1)

Question 20

BENEFITS OF SELLING ONLINE

Answer 20

Selling online could increase the sales revenue/profits of the business (1) because it allows sales 24/7 (1)
 Selling online could give the business a competitive
advantage (1) because high street stores/shopping
centres are open for set hours only (1)
 Selling online could extend the market reach of the
business (1) because it allows customers who are not in
the area of the physical store to purchase goods (1)
 Having online sales may allow the business to reduce
costs (1) because there may be less need for staff /
rental (1)
 Having online sales allows for web pages to be shared (1) so there is more awareness / promotion of the business (1)

Question 21

ADVANTAGES OF LOYALTY CARDS

Answer 21

Product awareness – every time the customer
makes a purchase the card is swiped. This
identifies the customer and each item bought so
buying habits can be analysed.
 Mailing lists – can be used to send out tailored
advertisements/promotional material.
 Repeat business – customers collecting points think
of that business first when they come to a buying
decision.
 Increased sales – encourages customers to shop
more frequently.
 Improved customer satisfaction – benefits of
rewards and receiving targeted
information/incentives

Question 22

DISADVANTAGES OF LOYALTY CARDS

Answer 22

Cost – giving discounts affects profits.
 Cost of administering the scheme.
 Many businesses have loyalty schemes so it may
be hard to stand out from those offered by the
competition.
 Privacy – business will have to adhere to the law
and will be fined for any breaches
 Data does not give the full picture – cannot track
where else the customer shops/what they buy.
 Sensitivity – customers may not want to give out
sensitive personal data to a business for fear of
fraud, etc.