topic 8

Question 1

Brand extension

Answer 1

Where new products launched by a business can benefit from the positive reputation associated with the business’s existing brands

Question 2

Brand loyalty

Answer 2

Continuing to buy a particular product or buy from a
particular business even if new and better products are being introduced by competitors

Question 3

Branding

Answer 3

the name, design, logo or symbol that distinguishes the
product of one provider from that of another

Question 4

Customer-led approach

Answer 4

Where a provider finds out what people need or want and
then designs a product to satisfy this need

Question 5

Customer retention

Answer 5

Activities undertaken to persuade existing customers to stay with a business

Question 6

Direct selling

Answer 6

Sales that are arranged directly between the customer and the provider without the intervention of a financial adviser

Question 7

Loss leader

Answer 7

A product offered by a business at a price that is below what it costs the business to produce it; the aim is to attract customers, who then purchase other products on which the business does earn a profit

Question 8

Market segments

Answer 8

Groups of customers sharing distinct features in terms of, for example, age, income or lifestyle.

Question 9

Marketing mix

Answer 9

The combination of factors that attracts and retains
customers, eg supplying the right product at the right price and promoting it effectively. Sometimes summarized as the 4Ps or 7Ps

Question 10

Pareto principle

Answer 10

A principle which states that, in many situations, 80% of the effects arise from 20% of the causes. Also known as the 80:20 rule

Question 11

Peer-to-peer (P2P) lenders

Answer 11

Online marketplaces that enable people to lend to and
borrow from each other without using a traditional financial institution such as a bank or building society

Question 12

Price sensitivity

Answer 12

The degree to which the price of a product affects a
consumer’s decision to buy it.

Question 13

Product differentiation

Answer 13

The methods providers use to make one product different
from and more attractive than others that perform a similar function.

Question 14

Promotion

Answer 14

Paid-for marketing activities, including advertising. It includes all activities that aim to communicate with people, inform them of goods and services, and persuade them to buy

Question 15

Public relations (PR)

Answer 15

A specific aspect of promotion known as ‘below the line’
expenditure. It is advertising that is not paid for directly but which keeps a business’s product in the public eye. It is the part of promotion in which the entire message is implicit

Question 16

Relationship marketing

Answer 16

An approach that is centred on building a long-term
relationship with customers

Question 17

Sales literature

Answer 17

Information such as brochures and leaflets, created by a
provider’s marketing department.

Question 18

transactional selling

Answer 18

An approach to finding and keeping customers that centers on the product rather than the customer

Question 19

Unique selling point (USP)

Answer 19

An aspect of a brand that makes it different from and better than the brands of other providers.

Question 20

The 4Cs of marketing are:

Answer 20

commodity, cost, communication and channel

Question 21

The factors that make a brand different from and better than competing brands are known as its:

Answer 21

unique selling proposition

Question 22

The pricing of an insurance policy is based primarily on

Answer 22

risk

Question 23

Regardless of how good a product is, people will not buy it unless

Answer 23

they know about it

Question 24

A perceived disadvantage of online banking is:

Answer 24

its lack of personal service

Question 25

One of the 3Ps of services is:
a)people
b) provider
c)personal

Answer 25

A) people

Question 26

Within the retail banking sector, each provider is competing

Answer 26

more on product and less on price

Question 27

The final stage of successful advertising is:

Answer 27

the customer continues to buy

Question 28

An example of a loss leader is:

Answer 28

a children’s savings account

Question 29

The approach to finding and keeping customers that centres on the product rather than the customer is known as:

Answer 29

transactional selling

Question 30

The ‘marketing mix’ is a tool used by marketing professionals to describe what a firm is offering.

Answer 30

True

Question 31

To achieve long-term sales, it is better to use a transactional selling approach than a relationship selling approach.

Answer 31

False

Question 32

the 80:20 rule is also known as the Pareto principle.

Answer 32

True