Marketing Mix

Question 1

What is price skimming

Answer 1

Setting a high introductory price and decreasing it over time

Question 2

What is penetration pricing?

Answer 2

price of a product is initially set low to rapidly reach a wide fraction of the market and initiate word of mouth

Question 3

What is competition based pricing?

Answer 3

price is determined more by the price of a similar product sold by a powerful competitor than by considerations of consumer demand and cost of production

Question 4

What is psychological pricing

Answer 4

based on the theory that certain prices have a psychological impact

Question 5

What is cost-price pricing

Answer 5

selling price of a product is determined by adding a specific fixed percentage to the product’s unit cost

Question 6

What is marginal pricing

Answer 6

the marginal cost is the change in the total cost that arises when the quantity produced is incremented, the cost of producing additional quantity.

Question 7

What is contribution pricing

Answer 7

pricing strategy which works without any mention of gross margin percentages.

Question 8

What is price elasticity of demand

Answer 8

a measurement of the change in consumption of a product in relation to a change in its price.

Question 9

What is income elasticity of demand

Answer 9

economic measure of how responsive the quantity demand for a good or service is to a change in income.

Question 10

Cross elasticities of demand

Answer 10

evaluates the relationship between two products when the price in one of them changes

Question 11

Evaluate the usefulness of price elasticity of demand

Answer 11

to create inelastic demand for the products they market. They achieve that by identifying a meaningful difference in their products from any others that are available

Question 12

The importance of price to stakeholders

Answer 12

it defines the value that your product are worth for you to make and for your customers to use

Question 13

Channels of distribution

Answer 13

direct selling, selling through intermediaries, dual distribution, and reverse logistics channels.

Question 14

What is promotion

Answer 14

The marketing communication used attract the target audience of the business

Question 15

Distinguish between above and below the line promotion

Answer 15

Above the line is generalised brand awareness and below is for fostering direct customer contact

Question 16

What is branding

Answer 16

The way to identify the business whether by name, logo, slogan etc

Question 17

What is personal selling

Answer 17

Where sales representatives meet with a potential client for the purpose of transacting a sale

Question 18

What is social media

Answer 18

A social media outlet used to showcase the business which can be more personal to a customer or generalised eg instagram

Question 19

What is the importance of promotion

Answer 19

Sets the business apart from competitors in order inform, persuade and show potential customers the good aspects of purchasing from them

Question 20

What is drip marketing

Answer 20

Pre-written messages sent over a standardised time to a customer to remind them of the businesses existence

Question 21

What is viral marketing

Answer 21

Using media that has gone ‘viral’ allowing the information to be passed on by shares/ word of mouth rapidly

Question 22

What is advertising elasticity of demand

Answer 22

Measures the effects of increase and decrease of advertising in a market

Question 23

Advertising elasticity of demand formula

Answer 23

dividing the percentage change in the quantity demanded by the percentage change in advertising expenditures