Unit 2-marketing 2

Question 1

Describe the five stages of the product life cycle

Answer 1

Development
Introduction
Growth
Maturity
Decline

Question 2

What is a product portfolio

Answer 2

A product portfolio is the range of different products that a firm sells.

Question 3

What is an extension strategy

Answer 3

When a firm wants to extend their products life. they might make changes to the product, or offers

Question 4

What is diversification

Answer 4

Designing and producing more products.

Question 5

Give four market-led pricing and what they do?

Answer 5

Penetration pricing - is where a firm charges a very low price when the product is new to get lots of people interested in it.
Loss leader pricing- is when a price is set below cost, once product established product price increases.
Price skimming - is opposite to penetration pricing.
Competitive pricing - this is where the Firm has to charge similar prices to other firms.

Question 6

When will a firm use cost-plus pricing and give two example

Answer 6

Firms will use this method if they are not in price competition with other producers.
Mark-up
Profit Margin

Question 7

What is direct marketing

Pro and con

Answer 7

When the business contacts the potential customer directly without going through other media.

Business can measure success
However creates lots of junk mail, people will get annoyed.

Question 8

Name the four distribution channels

Which ones are indirect and direct

Answer 8

1) Manufacturer - wholesaler - consumer (indirect)
2) manufacturer - wholesaler - retailer - consumer (indirect)
3) manufacturer - retailer - consumer (indirect)
4) manufacturer - consumer (direct)