PPQ - Marketing

Question 1

Describe the sales promotions which could be used when launching a new product. (4)

Answer 1

• Free samples to try
• Free entry to competitions
• Credit facilities allow customers to buy and pay back over a period of time
• BOGOF – buy new product, get another item free

Question 2

Discuss the factors an organisation might consider before selecting a channel of distribution. (4)

Answer 2

• Type of Product – suitable transportation/storage for type of product; product durability eg electrical, frozen food, flowers, liquid, livestock
• Finance available – if finance is limited this may affect the choice of channel selected
• Image of Product – channel should reflect the quality of the product eg high quality distributed through exclusive, up-market retailers
• Legal restrictions – some products can only be sold in certain ways/places eg cigarettes/alcohol/medicines

Question 3

Compare the use of random sampling and quota sampling when carrying out market research. (2)

Answer 3

• Random sampling is when respondents are picked randomly whereas quota is picked from a group of people with specific characteristics
• Random is expensive to carry out because specific respondents must be interviewed and contacted until they are available whereas Quota is less expensive as the interviewer simply needs to find suitable respondents

Question 4

Discuss the methods of market research. (5)

Answer 4

• Focus groups - Detailed feedback can be given to the organisation.
• Focus groups - Participants are more likely to give better feedback as they have agreed to take part.
• Personal interviews - Interviews allow the organisation to directly gain the views of customers.
• Personal interviews - Can clarify any questions to aid understanding.
• Postal surveys - Can target customers in selected areas.

Question 5

Explain the benefits to an organisation of using loss leaders as a pricing tactic. (2)

Answer 5

• Brings customers into the shop to buy the products − and then customers may be enticed to buy other full priced items.
• Can be used in advertising campaigns to attract customers to come into the organisation − therefore increasing the number of customers.

Question 6

Explain the advantages to an organisation of having a varied product portfolio. (4)

Answer 6

• spreads the risk if one product fails - because there are others to rely on
• maximise sales - because you are attracting different market segments
• consumers see a variety of products with the same brand – so brand recognition is high
• increased market share - as they are able to meet the needs of a
  number of different market segments

Question 7

Describe the pricing strategies which could be used by a retailer. (8)

Answer 7

• Promotional pricing - price may be lowered for a period of time
• Promotional pricing - used to quickly sell inventory and aid cash flow
• Penetration pricing - low price initially
• Penetration pricing - may be used to launch a product in a new market
• Market skimming - price initially set high
• Market skimming - price will lower over time
• Cost-plus - cost of production plus a mark-up
• Psychological pricing - just bellow whole number

Question 8

Explain the advantages to an organisation of using a smartphone application (app) to promote products. (3)

Answer 8

• allows quick updates on product info and offers, keeps customers updated
• allows product photos and videos, shows benefits of product
• can be accessed by anyone with internet signal - allows business to contact customers

Question 9

Describe the following elements of the extended marketing mix:
• people
• process
• physical evidence. (6)

Answer 9

• people - good after sales service
• people - well trained staff for customer care
• process - live chat/FAQ
• process - short waiting times
• physical evidence - clean premises
• physical evidence - suitable ambience