Marketing Strategies

Question 1

How is market segmented

Answer 1

• Demographics: age, gender, job, education
• Sociocultural factors: religion, culture
• Geographics: location (urban country)
• Psychographics: lifestyle/buyer behaviour
• Behavioural: depending partly on psychographic factors but focusing specifically on customer’s buying behaviour (brand loyalty), purpose of purchase, usage rate and perceived benefits of purchase

.

Question 2

Apple and geographic segmentation

Answer 2

• Apple uses geographic segmentation to target customers in the Asia Pacific region especially in China and India as highest demand for smartphones has been in these regions
• Resulted in changes such as a larger iPhone screen size which is preferred in these regions
• Apple utilises psychographic segmentation through understanding that their users are more likely to view their phones as a status symbol also more iPhone users are extroverted than their android counterparts shown in a 2016 report

Question 3

What are four main points of product differentiation

Answer 3

• Customer service:
• Environmental concerns:
• Convenience:
• Social/ethical issues:

Question 4

What is product/service positioning

Answer 4

• Closely related to product differentiation à It is the technique in which marketers try to create an image or identity for the product/service compared with a competing one in a highly competitive market.
• This is done in the minds of target market. (must understand target market i.e. market research) à all about how the product is perceived.

Question 5

What is total product concept

Answer 5

• Total product concept refers to the combination of tangible and intangible benefits that a product possesses

Question 6

What are benefits of branding

Answer 6

• A brand is a name, term, symbol, design or any combination of these that identifies a specific product and distinguishes it from its competition.
• Branding benefits businesses as it encourages repeat sales as customers can develop trust in a particular brand. Also allows businesses to easily introduce new products into the market under a pre-established brand
• Benefits customer’s as it allows them to identify products they like, evaluate quality and reduce risk.

Question 7

What are two aspects of product

Answer 7

• Product branding
• Product packaging

Question 8

How do businesses attempt to gain control over price

Answer 8

• Businesses attempt to gain some control over price by differentiating their products and then they have more leverage over price e.g. Designer label clothing

Question 9

What does price represent

Answer 9

• Price refers to the amount of money a customer is prepared to offer in exchange for a product.

Question 10

What are the 3 pricing methods

Answer 10

• Cost based
• Market based
• Competition based

Question 11

What is market based pricing

Answer 11

• Pricing system where prices are set by demand and supply of markets
• If demand>supply prices increase
• If demand<supply>
  </supply><li>Method is difficult to apply as demand and supply are in constant state of flux</li>

</supply>

Question 12

What is competition based pricing

Answer 12

• Competition-based pricing is where the price covers costs (cost of raw materials and the cost of operating the business) and is comparable to the competitor’s price
• Used in high degree of competition
• Business can choose to set price:
• Below competitors- undercutting is effective way to break into the market
• Equal to that of competitors- following a price leader
• Above competitors- used to make product appear as superior to its competitors

Question 13

What is cost-based pricing

Answer 13

• Simplest of the three methods.
• Business determines the total cost of producing one unit of the product and then adds an amount to cover additional costs (overheads such as insurance, transport) and to also provide an adequate profit margin. The total of the cost plus the mark-up is the selling price of the product

Question 14

What are the four pricing strategies

Answer 14

• Price skimming
• Price penetration
• Loss leaders
• Price points

Question 15

What is price skimming

Answer 15

• Occurs when a business charges the highest possible price for the product during the introduction stage of its life cycle.
• The objective is to recover the costs of research and development quickly before competitors enter the market.

Question 16

What is price penetration

Answer 16

• Price penetration occurs when a business charges below their competitors’ price for a product.
• The strategy aims to quickly achieve a large market share for a product
• Objective is to sell a large number of products during the early stages of the life cycle and discourage competitors from entering the market
• Main disadvantage is that business can be locked into selling product at lower prices until they make substantial changes

Question 17

What is loss leaders as a pricing strategy

Answer 17

• A loss leader is a product sold at or below cost price
• Retail stores deliberately sell a product at a loss to attract customers to the shop.
• The retailer hopes that the extra customers will buy other products as well so they can recover the loss on the low-price item from the sale of the other items or services that the consumer buys
• This strategy is often used when the business:
• Is overstocked
• Wants to increase traffic flow in the expectation of gaining new customers.
• Wants to build a reputation for low prices

Question 18

What is price points as a pricing strategy

Answer 18

• The business chooses a limited number of key prices or price points for selected product lines
• Used mainly by retailers, especially clothing stores and jewellers (and also McDonalds $2 menu
• Makes it easier for the customer to find the type of product they need.
• It is also easier for the business to encourage the customer to ‘trade up’ to a more expensive model

Question 19

What is price and quality interaction

Answer 19

• Price–quality relationship helps determine the image customers have of products or brands
• <price>
  <li>&gt;price = &gt;quality</li>
  <li>Price and quality are proportionally related</li>
  <li>Expensive products are perceived as higher quality</li>
  </price>

</price>

Question 20

Apple and price

Answer 20

• When releasing new iPhones Apple uses price skimming positioning it as a leading-edge product, quality product
• When a new iPhone is introduced the older model’s, price is reduced to be more competitive (competition-based pricing)
• 2019 Apple released iPhone 11, iPhone 11 pro, iPhone 11 pro max and continued the iPhone
• Each phone was released at a different price to reflect varying quality and targeted different groups
• Example of price points

Question 21

Main elements of the promotion mix

Answer 21

• Advertising
• Personal selling and relationship marketing
• Sales promotions
• Publicity and public relations

Question 22

What is personal selling

Answer 22

• Involves the activities of a sales consultant directed to a customer in an attempt to make a sale; it involves the human aspect of promotion
• Generally, most successful strategy for goods and services
• Allows sale person to have personal interaction with customer, explain the features of a product, and adapt their strategy so a sale can be made at any time

Question 23

What is relationship marketing

Answer 23

• Relationship marketing occurs when a long-term arrangement between sales consultant and the customer develops so that there is a satisfying exchange between buyer and seller
• Aims is to create customer loyalty

Question 24

What is purpose of sales promotions

Answer 24

• Sales promotion is the use of activities or materials as direct inducements to customer and aim to:
• Entice new customers
• Encourage trial purchase of a new product
• Increase sales to existing customers and repeat purchases

Question 25

What is publicity and PR

Answer 25

• Public relations (PR) is concerned with developing a positive public image that is reported by relevant television, radio, print and online media outlets also rising influence of social media

Question 26

What is communications process within promotional mix

Answer 26

• Main role of promotion is to communicate with consumers about a product, creating a demand and building long-term loyalty
• Effective communication is determined by the consumer’s perception and interpretation of the information presented rather than the business intent and understanding of the information provided
• Any interference or distraction that affects the promotional communication process is referred to as noise

Question 27

What are two ways to improve communication within promotional mix

Answer 27

• Opinion leaders
• Word of mouth

Question 28

Why is it necesssary to use a mix of promotional strategies

Answer 28

It’s important to use a mix of promotional strategies to market a product in order to appeal to different target markets, influence the same customer in different ways. Thus, to successfully achieve marketing objectives a coordinated approach is necessary.

Question 29

What does the place strategy refer to

Answer 29

• The place strategy refers to getting the product to the customer. They are any activities that make the products available to customers when and where they want to purchase them

Question 30

What are distribution channels

Answer 30

• Distribution channels or marketing channels are the routes taken to get the product from the business to the customer

Question 31

What are the main distribution channels

Answer 31

• Producer to customer: simplest with no intermediaries. e.g. All services from accountant to car repairs use this method
• Producer to retailer to customer: the retailer is the intermediary who buys from producers to resell to customers. e.g. Bulky or perishable products such as furniture or fruit
• Producer to wholesaler to retailer to customer: most commonly used method for consumer goods. Wholesaler is an intermediary who buys in bulk from the producer then resells in smaller quantities to retailers.
• Producer to agent to wholesaler to retailer to customer.: Agent distributes but never owns the product and are paid a commission by the producer (think travel agent!!). A business that does not have any sales representatives will often use an agent instead

Question 32

What are the main channel choice options

Answer 32

1. Intensive distribution. This occurs when the business wishes to saturate the market with its product. Many convenience goods, such as milk, lollies and newspapers, are distributed this way e.g. Coca-Cola
2. Selective distribution. This involves using only a moderate proportion of all possible outlets. Clothing, furniture and electrical appliances are often distributed using this method. The customer is prepared to travel and seek out a specific retail outlet that stocks a certain brand. e.g. Apple products
3. Exclusive distribution. This is the use of only one retail outlet for a product in a large geographic area. This method of distribution is commonly used for exclusive, expensive products e.g. Designer brands such as Louis Vuitton.

Question 33

What are the main physical ditribution issues

Answer 33

1. Transport: The four most common methods of transportation are rail, road, sea and air. The most efficient mode must be chosen to deliver the goods without damage and in a timely manner
2. Warehousing: Warehousing is a set of activities involved in receiving, storing and dispatching goods. A warehouse acts as a central organising point for the efficient delivery of products.
3. Inventory: Refers to stock control/inventory control which must be managed well. Too much stock leads to storage costs and waste. Not enough stock can mean loss of sales. The goal of inventory is to achieve the best balance between these two situations

Question 34

What is people as a marketing strategy

Answer 34

• The people element refers to the quality of interaction between the customer and those within the business who will deliver the service and are the most important element in any service

Question 35

What is processes

Answer 35

• Processes refers to the flow of activities that a business will follow in its delivery of a service.
• Processes must be well-planned and highly efficient to achieve customer satisfaction
• Processes must be customer friendly and must satisfy customer need
• Procedures and policies can include replacement of faulty goods, refunds

Question 36

What is physical evidence

Answer 36

• Physical evidence refers to the environment in which the service will be delivered.
• It includes the location of where the service will be provided but also includes materials needed to carry out the service such as décor, signage, brochures, business logo and website
• For example, a restaurant will have attractive décor and clean tables and chairs.

Question 37

What are different approaches to E-marketing

Answer 37

• One-to-one: With this approach a person who is using the internet becomes the subject of attention for e-marketers
• Appeal to specific interests: This type of marketing is aimed at a market segment based on different characteristics
• Niche marketing: Aims at creating websites that deal with products that cater for a specialised market.
• Geo-targeting: the object with geotargeting is to find out the geographic location of people accessing a particular website.

Question 38

What are advanatges of E-marketing

Answer 38

• It is inexpensive
• Making it easy to reach a large target audience for a relatively low outlay of funds
• Easy for the consumer to research the product
• Easy for marketers to assess the success of the technique by measuring hits on the site compared to online purchases

Question 39

What are aspects of global marketing

Answer 39

• Global branding
• Standardisation
• Customisation
• Global pricing
• Competitive positioning

Question 40

What is standardised approach in relation to global marketing

Answer 40

• standardised approach is a global marketing strategy that assumes the way the product is used and the needs it satisfies are the same the world over
• Therefore, the marketing mix will be the same in all markets – a globalisation of the marketing mix
• E.g. mobile phones, cosmetics, soft drink
• Cost savings are achieved through longer production runs and hence economies of scale, R&D costs are reduced; promotion strategies can be standardised.

Question 41

What is global branding

Answer 41

• This is the worldwide use of a name, term, symbol or logo to identify the seller’s products.

Question 42

What are reasons for global branding

Answer 42

• It can be cost effective one advertisement can be used in a number of locations.
• It provides a uniform worldwide image.
• The successful brand name can be linked to new product being introduced into the market.
• A successful brand is one of the most valuable resources a company has – it equates to global recognition irrespective of the language barrier.

Question 43

What is goodwill

Answer 43

• Goodwill is an intangible asset that arises as a result of the acquisition of one company by another for a premium value. The value of a company’s brand name, solid customer base, good customer relations, good employee relations and any patents or proprietary technology represent goodwill

Question 44

What are global pricing strategies

Answer 44

• Customised pricing: occurs whenever consumers in different countries are charged different prices for the same product. Cost-plus method is used to cover the added cost of exportation
• Market-customised pricing: sets prices according to local market conditions. If there is a lot of domestic competition in the country, then prices may need to be adjusted according to the competition. Also, fluctuations in the exchange rate can change prices charged and is a major risk for global businesses.
• Standard worldwide pricing: practice of charging customers the same price for a product anywhere in the world

Question 45

What are disadvantages of e-marketing

Answer 45

• Customer’s cannot physically examine the product
• Higher chances of insecure payments and identity theft

Question 46

What does marketing strategy of people involve

Answer 46

• Involves business having well trained staff in order for business to be meeting its goals of quality, speed and dependability. As staff represent face of business