THEME 2- Marketing Mixture.

Question 1

How is colour important in branding?(2)

Answer 1

-Helps increase brand recognition and increases pos feeling in customers. Certain colours can be associated with the brand.

Question 2

Define branding and give 6 examples of branding

Answer 2

Branding creates an identity that customers see as different from other products.

Forms of branding:

1) The product’s shape and size.
2) Colour.
3) Tagline.
4) Packaging.
5) Theme- memorable tune.
6) Celebrity endorsement.

Question 3

What can extensive promotion aid with? What’s the drawback?

Answer 3

Extensive promotion could help increase competition as awareness increases for the brand, therefore, more customers will be inclined to buy it.

The drawback could be the heavy expense businesses will have to pay and if promotion doesn’t work, money is lost and can result in higher costs but lower profit.

Question 4

Give 5 methods of promotions?

Answer 4

Give 5 methods of promotions?

1) Advertisting.
2) Promotion.
3) branding.
4) Sponsorship.
5) Product trials.

Question 5

Explain one benefit of a business using a product trial?(3)

Answer 5

Product trial helps raise awareness and promote brand- effective as free sample will help customer validate their purchase and feel more comfortable. For eg Mr Pretzel.

Question 6

How to structure a 9 marker?

a 6 marker?

Answer 6

a 9 marker-
Give + and however of the chosen options then give with a conclusion to justify which option depending on long-term effect.

a 6 marker:
Give a positive and however and conclusion by linking long term effects.

Question 7

What is the design mix?

Answer 7

1) Aesthetic- how it looks, feel, appearance.
2) function- serves the purpose, durability.
3) cost- the lower the cost to produce a product, the better it’ll give a competitive environment, cost of production determines cost of product

Question 8

What is a ‘brand’?

Answer 8

A ‘brand’ is a named product which consumers percieve as being different from competing companies

Question 9

What is the definition of promotion?

Define advertising, promotion and sponsorship?

Answer 9

To raise awareness or desire for product.

1) Advertising- businesses pay to put out an advertising in order to communicate a message to customers- may include colour, humour, emotive language.
2) Sales promotion- 50% off, 60% off- encourages customers to buy now than later.
3) Sponsorship- businesses can gain publicity by financially supporting an event or business.

Question 10

What factors influence price? List 3

Answer 10

Customers- lowering price increases customer demand.

• Competitions- takes into account price charged by rival business.
• Costs- cover the costs of business to ensure profit.

Question 11

What is cost-plus pricing?

What is Price discrimination?

Answer 11

1) Cost plus pricing-a price set, to cover cover the cost of labour and production
3) Price discrimination- charging different prices to different customer groups for the same ite

Question 12

What is predatory pricing?

What is psychological pricing?

Answer 12

the pricing of goods or services at such a low level that other suppliers cannot compete and are forced to leave the market. This is usually done by large businesses and drives out competition.
-illegal.

What is psychological pricing?
-The aim of psychological pricing is to make the customer believe the product is cheaper than it really is. Pricing in this way is intended to attract customers who are looking for “value”. (£9.99 instead of £10)

Question 13

What is loss-leader?

Answer 13

2)Loss leaders- products is sold at a lower than cost price to attract customers and this is usually used as a method of sales promotion to encourage customers to make purchase of profitable goods in store.

Question 14

How is Price Penetration a pricing strategy for new products?

Answer 14

Price Penetration: set at a low price to begin with to attract customer and build loyal customers and obtain a high market share.
-Short term good but for long term- have low profit but have higher market share.
Penetration pricing is often used to support the launch of a new product, and works best when a product enters a market with relatively little product differentiation and where demand is price elastic - so a lower price than rival products is a competitive weapon.

Question 15

How is Price Skimming a pricing strategy for new products?(3)

Answer 15

How is Price skimming a pricing strategy for new products?

• Price is set high at launch to maximise profit-> usually for new products that face little to no competition due to technological advantages.
• products bought by ‘early adopters’ who are prepared to pay a higher price to have the latest edition.
• Apple.
• Price skimming cannot last for long as rivals release new products which puts pressure on the price( competitiors with Apple)

Question 16

How do businesses determine to prices? List 3-4 reasons

Why is setting prices important?

Answer 16

According to: profit desired, demand anticipated, competition expected, target market, quality and influence of brand and technology.

Why is setting prices important?
-Helps establish quality of product.

Question 17

What are some extension strategy examples?

Answer 17

business leads to the group developing a similar and improved one which consumers buy and sales all for the out dated one.

Question 18

What is the high volume low price strategy?

Answer 18

What is the high volume low price strategy?
Producing a lot of the products at a low cost so buying in builk is cheaper- costs are low.
-low production costs= low prices.
-low profit but still succesful as large quantities are sold,

Question 19

What is high margic and low volume strategy?

Answer 19

What is high margic and low volume strategy?

• High price.
• Difference between costs to make the product and the price charged.
• Used for premium products.
• Low volume,
• Exclusive products and high quality.

Question 20

What is a product life cycle

Describe the 5 stages of the product’s life cycle and define each stage.

Answer 20

Describes the stages of a product life( showing products sales over time) and how it lasts in the market.

Describe the 5 stages of the product’s life cycle and define each stage.
1)Introduction- product launches- high levels of promotion-> create awareness. Sales are initially low
2) Growth- sales will be increasing as it starts to become well known.
3) Maturity- Sales reach highest, competition increases and rivals bring out new and better products. The MM and/or target market of product is changed in an attempt to increase its life in the market.
4) Decline- Sales fall significantly- profit- as consumer switch to competitions’ products that are new improved, up to date.
(4)- Extension strategy- increase advertising or campaight or reduce price of product in order to increase its life in the market.
5- Withdrawal of product.- removed from market.

Question 21

How is MR different to Research & Development?

Answer 21

Market research is where you research competitors and customers to decide on market mix whereas R&D is scientific research to make prototypes of final product to test how it works and improve final product(Dyson)

Question 22

What are the benefits of the design mix?(4)

Answer 22

• Helps add value for quality- builds customer trust and loyalty.
• helps business prioritise what factor they want to solely focus on and spend the most money on.
• customer needs into consideration-changes in what consumer wants
• make successful product.

Question 23

List some (4) advantages of a strong brand and (2)disadv?

Answer 23

Adv:

• Greater consumer awareness,
• able to charge premium prices.
• more shops would stock.
• increase sales and profit due to good rep

Disadv:

• product could have negative publicty
• higher costs to promote brand in first place

Question 24

Why is it important for a business to develop a strong brand?

Answer 24

-Brands can be easily recognised and customers would be familar with brands which means there would be less hesitance when purchasing.

Question 25

Formulae for calculate % mark up?

Answer 25

difference in how much the product is sold for- the cost to make it divided by the price of the product x 100

Question 26

What is the definition of place? 2 forms of place?

Answer 26

Place is how you get the product from a business to the customer.

Retailing- selling goods/ services in a physical shop.
E-tailing- retailing through the internet.

Question 27

2 methos of retailing?

Answer 27

1) Retailing is from manufacture- retailer- customer.
For eg Rolex is sold from goldsmiths directly to customer.

2) Independant retailer are often privately owned busineses and is when the retailer sells directly something from themselves to the csutomer.

Question 28

2 forms of e-tailing?

Answer 28

1) Manufacture-> Customer where products and services are sold directly to a customer through a wesbite and site can be accessed through e-commerce.
2) Third party e-tailing
Manufacture- third party- customer.
Eg Amazons buys from manufactures and customers buy from amazon.

Question 29

Benefits of retailing?(4)

Answer 29

• Trustworthy for customers to buy from.
• Convenient- products are gotten straight away.
• retail offers a point of sale promotions( eg. displays).
• Retailers can provide customer with help & advice

Question 30

2 Advantages & 3 Disadv of e-tailing?

Answer 30

• Lower costs as do not have to own or rent rental space.
• can get global customers as they can enter through international markets.
• Disadv: customers are unable to check the quality of the product,
• worried if it’s a face.
• having e-commerce site is not strong enough to guarantee sales.

Question 31

Why is place an important aspect of the marketing mix?

Answer 31

If businesses get ‘place’ right- products are more easily accessible to customers and greater customer awareness could lead to increased sales over time.

Question 32

Which elements of the marketing mix link together?

Answer 32

• Product & Price- price should reflect and indicate the quality of product.
• Price & Promotion- promotion could show a premium product.
• Place and Product- if it’s e-tailing for example, businesses need to think about size of deliveries, packaging,etc

Question 33

Why may a business charge two separate prices for the same product?(5)

Answer 33

1) Urgency(eg 1 hour dry cleaning)
2) Personalised vs automated( eg fitted clothing)
3) Early-bird actions or offers( eg plane tickets, booking conferences)
4) geography
5) customer segment.