Marketing Strategies

Question 1

Market segmentation

Answer 1

The process of breaking down a total market into small markets based on the similar characteristics of a customer group.

Question 2

Geographic segmentation

Answer 2

The process of dividing a market or customer group into smaller markets based on different geographic locations, such as nations, states or local government areas.

Question 3

Demographic segmentation

Answer 3

The process of dividing a market into smaller markets based on customers’ age, gender, income, family size and level of education.

Question 4

Psychographic segmentation

Answer 4

The process of dividing a market into smaller markets based on consumers’ lifestyles, personalities, values and interests.

Question 5

Behavioural segmentation

Answer 5

The process of dividing a market based on people’s knowledge of, attitudes towards and use of a product.

Question 6

Price

Answer 6

The cost to the consumer of buying a good or service.

Question 7

Positioning

Answer 7

The image that a product has in the mind of the consumer. How consumers compare one product against alternative products.

Question 8

Branding

Answer 8

The reputation that a business or product has developed over a period of time.

Question 9

Penetration pricing

Answer 9

A pricing strategy whereby prices are set at the lowest possible price to gain an immediate group of customers.

Question 10

Loss leader

Answer 10

A pricing strategy that involves providing a limited number of goods at a price that generates minimal profit or even loss to encourage consumers to purchase goods from the business.

Question 11

Product-deletion pricing

Answer 11

A pricing strategy that is used to clear stock that a business believes is no longer selling or attracting interests from consumers.

Question 12

Market skimming

Answer 12

A pricing strategy that is used when a business wants to recover the high costs involved in establishing a product and releasing it onto the marketplace by setting a high price.

Question 13

Cost-plus pricing

Answer 13

A pricing strategy whereby the business considers the total cost to the business of manufacturing or providing a good or service to the consumer and then adds an amount to allow for a profit margin.

Question 14

Relationship marketing

Answer 14

The process of building and maintaining long-term relationships with customers.

Question 15

Place

Answer 15

The methods of distributing and availability of a good from different outlets and locations.

Question 16

Distribution channels

Answer 16

The channels by which a product is moved from the place of manufacture (the product’s place of origin) to the consumer (the product’s final user).

Question 17

Selective distribution

Answer 17

Involves the use of only a limited number of stores/locations to sell or distribute a product.

Question 18

Exclusive distribution

Answer 18

A form of distribution where there is a restriction on the number of products and/or availability of the product. The product is available at a very limited number of outlets.

Question 19

Intensive distribution

Answer 19

Occurs when a product is readily available to a wide selection of businesses or locations.

Question 20

Competitive positioning

Answer 20

Involves the formal process of a business determining how to differentiate itself from its competitors and, in doing so, develop strategies for the business to create value from those differences.