The marketing mix-product and price

Question 1

Product

Answer 1

Goods or services that are the end result of the production process and are sold on the market to satisfy customer needs.

Question 2

Marketing mix

Answer 2

The four key decisions on product, price, promotion and place that must be taken to enable the effective marketing of a product.

Question 3

Goods

Answer 3

Products which have a physical existence, such as washing machines and chocolate bars.

Question 4

Services

Answer 4

Products which have no physical existence, but satisfy consumer needs in other ways, such as hairdressing, car repairs, childminding and banking.

Question 5

Brand

Answer 5

An identifying symbol, name, image or trademark that distinguishes a product from its competitors.

Question 6

Intangible attributes

Answer 6

The subjective opinions of customers about a product, which cannot be measured or compared easily.

Question 7

Tangible attributes

Answer 7

The measurable features of a product, which can be easily compared with other products.

Question 8

Unique selling point (USP)

Answer 8

The special feature of a product that makes it different from competitors’ products.

Question 9

Product differentiation

Answer 9

The unique qualities of a product that lead to a difference between the product and competitors’ products.

Question 10

Product positioning

Answer 10

Consumers’ view of a product or service as compared to its competitors.

Question 11

Product portfolio analysis

Answer 11

Analysing the range of existing products of a business to help allocate resources effectively between them.

Question 12

Product life cycle

Answer 12

The pattern of sales for a product from launch to withdrawal from the market.

Question 13

Consumer durable

Answer 13

A manufactured product that can be re-used and is expected to have a reasonably long life, such as a car or washing machine.

Question 14

Extension strategy

Answer 14

A marketing plan to extend the maturity stage of the product before a completely new one is launched.

Question 15

Boston Matrix

Answer 15

A method of analysing the product portfolio of a business in terms of market share and market growth.

Question 16

Mark-up pricing

Answer 16

Adding a fixed mark-up profit to the unit cost of buying in a product.

Question 17

Cost-plus pricing

Answer 17

Setting a price by calculating a total unit cost for the product and then adding a fixed profit mark-up.

Question 18

Contribution-cost pricing

Answer 18

Setting prices based on the variable costs of making a product, in order to make a contribution towards fixed costs and profit.

Question 19

Competitive pricing

Answer 19

Making pricing decisions based on the price set by competitors.

Question 20

Price discrimination

Answer 20

Changing different groups of consumers different prices for the same good or service.

Question 21

Dynamic pricing

Answer 21

Offering products at a price that changes according to the level of demand and the customer’s ability to pay.

Question 22

Penetration pricing

Answer 22

Setting a relatively low price to achieve a high volume of sales.

Question 23

Market skimming

Answer 23

Setting a high price for a new product when a fir has a unique or highly differentiated product with low price elasticity of demand

Question 24

Psychological pricing

Answer 24

Setting a price at a level which meets consumers’ views about a product’s perceived value.