Unit 3.1 Long answers

Question 1

What are the benefits of Primary research?

Answer 1

More accurate
Up to date
Specific to needs

Question 2

What are the benefits of Secondary research?

Answer 2

Less time consuming
More general and offers wide range of information
Inexpensive

Question 3

What are the benefits of Quantitative data?

Answer 3

Easy to analyse
Reliable
More accurate

Question 4

What are the disadvantages of Quantitative data?

Answer 4

Time consuming
Expensive
Question design can lead to Structural bias

Question 5

What are the benefits of Qualitative data?

Answer 5

Creates openness
Avoid pre-judgement (To expand on a response)
Concentrated issue analysed- maximum probing

Question 6

What is the Disadvantages of Qualitative data?

Answer 6

Less easily generalized
Time consuming
Takes more time to analyse and collect

Question 7

Explain how quantitative data might help a business to improve its marketing mix(3 marks)

Answer 7

Finding out about the amount of sales of a competitor, will give the firm info about competitors doing. Causing firms to increase amount of advertising it does to try increase sales and customer loyalty.

Question 8

Give 4 methods of Product trial.

Answer 8

Free samples
Viral marketing e.g Facebook
Advertisement
Low trial prices/ special offers

Question 9

Explain purposes of a product life cycle for a business?

Answer 9

It helps to manage a business cash flow,helps identify when products should be replaced and helps a business manage its products portfolio and extension strategies.

Question 10

What is happening in the Development stage?

Answer 10

Researching and developing a product

Question 11

What is the Introduction stage?

Answer 11

Strong advertisement and promotion campaigns, low sales and initially no profit, cash flow is negative.

Question 12

What is Growth stage?

Answer 12

The launch is successful, sales increase sharply and the products may make profit and are at a stage of break-even. Cash flow is positive but small.

Question 13

What is the Maturity stage?

Answer 13

Sales growth slows down, but repeat customers continue to buy and customers become loyal, the market is saturated as rivals bring out competing products. Cash flow is likely to be positive.

Question 14

What is the Decline stage?

Answer 14

Eventually, the product is outdated and there is big fall in sales leading to negative cash flow.

Question 15

What does Star mean in terms of market growth and market share?

Answer 15

High growth market with high market share

Question 16

What does Dog mean in terms of market growth and market share?

Answer 16

Low growth market and Low market share.

Question 17

What does Problem child mean in terms of market growth and market share?

Answer 17

High growth in market and low market share

Question 18

What does Cash Cow mean in terms of market growth and market share?

Answer 18

Low growth market and high market share

Question 19

Describe how the use of the Boston Matrix can benefit a business (3 marks)

Answer 19

The Boston matrix puts products in categories according to growth rates and market share. It tells the firm where they may have too many similar products and can help identify when they need to withdraw products or introduce new ones

Question 20

How can branding have an impact on the Product life Cycle?

Answer 20

• Creates awareness from potential consumers
• Increases repeat purchases
• Increases sales
• Can charge premium prices.

Question 21

What are 4 advantages of Branding?

Answer 21

Charge premium prices
Leads to repeat purchases
Target market aware of brand
increase sales and market share

Question 22

Explain 3 issues that can arise with establishing or maintain a brand name

Answer 22

Competition
Not an effective brand
Not known(just came into the market)

Question 23

What are the 6 ways you can differentiate your product from competitors

Answer 23

Unique and catchy product name
Quality 
Design, function
Packaging 
Customer service
Differentiation across the value chain

Question 24

List 4 reasons why marketing is important to businesses?

Answer 24

1) Reduce risk of product failure
2) Understand their customers
3) Communicate products effectively to encourage customers to buy them.
4) Keep up to date with market trends so products can continue to meet customer needs.

Question 25

Explain one way in which effective marketing can help improve the products of a business?

Answer 25

If a business understands their customer needs their products and services can be developed to meet their needs. This means that the products will be more attractive and desirable, leading to greater number of sales.

Question 26

Explain one method shake-away could use to encourage potential customers to give the millionaire’s milkshake a product trial?

Answer 26

Lower prices
If shake-away lower the price of its milkshake from £11.95, this would make the milkshake seem more attractive and affordable
This will lead to more people trialing the milkshake.

Question 27

What does a star mean?

Answer 27

A very successful product with high market share and growth.Stars have a USP and a competitive advantage but also growth has to funded to keep up with demand and recognition meaning cash flow may not be always positive because of spending.

Question 28

What is a Question mark?

Answer 28

These have low market share but high market growth. they present a problem because you do not know what to do with them. The business are going to need to invest to increase sales. Does it have the potential to become stars.

Question 29

What are Cash cows?

Answer 29

They have a high market share but a low market growth. they have a good cash flow in low growth market. They are an established product and profitable product. They bring a lot of revenue in the company without effort don’t need any major investments. The profit from cash cows can help stars and question marks.

Question 30

What are dogs in the Boston matrix?

Answer 30

They have a low market share and low growth. Declining products like in the PLC. These products have failed. They make little income but will need to be deleted from product portfolio. Even if market share of dogs can improve, there is limited opportunity for sales growth in a market where consumer demand is falling.

Question 31

What does Product portfolio analysis help a business to make decisions about?

Answer 31

1) What products to launch and when
2) When to withdraw a product
3) What products are doing well or badly now and in future.
4) How to increase sales

Question 32

What does the price of the product give indication to?

Answer 32

Give an indication of quality

Question 33

Name 2 reasons why businesses would like promote their business.

Answer 33

1) Boosting sales

2) Creating awareness

Question 34

What are the 3 ways business can have a product avaliable to customers?

Answer 34

Direct (internet sales directed to customers)
Retail ( improves buying experience of customers and improving customer service.)
Wholesale( distributes it to retails, they produce large quantities of a product)