Unit 3 - marketing

Question 1

What is market growth?

Answer 1

The % increase of sales in the market

Question 2

What is market share?

Answer 2

The percentage of all sales in the market made by one firm

Question 3

What is market mapping?

Answer 3

It is used to identify the position of different brands within a market

Question 4

What is sampling?

Answer 4

This is the size and type of people chosen when carrying out research

Question 5

What is correlation?

Answer 5

Comparing 2 sets of data to show how closely linked they are

Question 6

What is a confidence interval?

Answer 6

The possible range of outcomes for a given confidence

Question 7

What is extrapolation?

Answer 7

Predicting what will happen based on previous trends

Question 8

What is market segmentation?

Answer 8

Dividing the market into different subgroups that each have different needs

Question 9

What are the 3 types of goods?

Answer 9

Convenience
Shopping
Speciality

Question 10

What is the Boston Matrix?

Answer 10

This plots the position of each product in terms of market share and relative market growth

Question 11

What are the 4 parts to the Boston Matrix?

Answer 11

Rising stars-high share high growth
Problem children-low share high growth
Dogs-low share low growth
Cash cows-high share low growth

Question 12

WHat should a firm do with its problem children?

Answer 12

Let them die out if they don’t think they are going to go anywhere or use the money generated from the cash cows to invest in the, and try and turn the into rising stars

Question 13

What is the product life cycle?

Answer 13

This shows the sales of a product over its life

Question 14

What are the 5 stages of the PLC

Answer 14

Development, introduction, growth, maturity, decline.

Question 15

What can a firm do to prevent a product dying out?

Answer 15

Use extension strategies, e.g. Promotion or redesign product

Question 16

What is penetration pricing?

Answer 16

Selling at a low price at first before raising it

Question 17

What is price skimming?

Answer 17

Selling at high prices that give high profit margins

Question 18

What is e-commerce

Answer 18

Trading over the internet

Question 19

Why is technology good for the marketing department?

Answer 19

Can target consumers more specifically
Can extrapolate more easily
Can communicate with consumers more easily
Can use ‘relationship marketing’

Question 20

What is elastic demand?

Answer 20

When the change in price/income leads to a greater percentage change in the quantity demanded

Question 21

How does a rise in price affect a business selling goods or services that are elastic in demand?

Answer 21

The demand for the product is going to decrease by a bigger % than the change in price

Question 22

What does a firm do after it has segmented the market?

Answer 22

It then targets the consumers it wishes and positions itself in the market in the way it wishes

Question 23

What’s is market positioning?

Answer 23

This is how a product is viewed by the customers

Question 24

Why might a firm want to change its market positioning?

Answer 24

It may want to gain competitive advantage

It may have had bad PR and want to change how it is seem

Question 25

What are the advantages of targeting a mass market?

Answer 25

- large scale production can cut unit costs - potential for huge revenues - increases brand awareness - access to more markets

Question 26

What are the advantages of niche marketing?

Answer 26

- may be less competition - a firm can adapt to meet the demand of the customers better - less advertising costs

Question 27

What are the 7Ps?

Answer 27

``` Price Place Product Promotion Physical environment Process People ```

Question 28

For which kind of businesses is the quality of the product more important?

Answer 28

For those selling goods, particularly shopping and speciality goods

Question 29

Why might people be more important than product for some firms?

Answer 29

If they deliver a service

Question 30

What are the different ways of promoting/selling?

Answer 30

PR Merchandsing Sales promotions-short term incentives to encourage consumers to purchase Direct selling, e.g. Door to door, direct mail

Question 31

What are loss leaders?

Answer 31

Very low prices that are used to encourage to buy other, fully priced products

Question 32

Psychological pricing, what is it?

Answer 32

Prices that are set to give an impression of good value, e.g. £99 rather than £100

Question 33

What is a price taker?

Answer 33

A small business that tends to follow the prices set by other firms.

Question 34

WHat is cost plus pricing?

Answer 34

Calculating costs and then setting a mark-up to allow for risk and help the firm to make a profit by setting a price that exceeds costs

Question 35

What is a traditional method of getting products to the consumer?

Answer 35

Producer>wholsesaler>retailer>consumer

Question 36

WHy might it depend on the business as to whether e-commerce should be used?

Answer 36

It depends on a number of things: - what is being sold - how much competition there is in the market and therefore whether or not there is a need to invest in e-commerce - how much face to face contact needs to be had with customers - how much money a firm has - the expertise a firm has in IT

Question 37

Name on benefit of market segmentation to a business

Answer 37

It allows the business to understand the needs of different groups within the market better.