Unit 7: Marketing

Question 1

What is the definition of marketing?

Answer 1

Marketing is the process of identifying and satisfying customer’ wants and needs, possibly for profit.

Question 2

Product orientated businesses

Answer 2

Businesses that do not care for marketing. The only thing that matters for them is the product’s efficiency.

Question 3

Market orientated businesses

Answer 3

Take their direction from what the customers want

Question 4

What is the primary research consist of?

Answer 4

Field research: Questionnaires, Interviews, Focus Groups.

Question 5

What are the advantages of primary research?

Answer 5

Face to face interaction, allowing the customer to elaborate on their answer (asked in person)
Quick and easy (Telephones)
Easy to analyse answers (Questionnaires)
Up to date data
Quiantifiable

Question 6

What are the disadvantages of primary research?

Answer 6

Poor responses
Not reliable
Misleading/biased questions
Limited responses
Expenses
Time consuming

Question 7

What does the secondary research consist of?

Answer 7

Using the data generated from others

Question 8

What are the methods for presenting the results of the research? Explain it’s ads and disads.

Answer 8

Pictogram: Easy to understand. Time consuming.
Pie charts: Shows the size of items, not very clear.
Bar charts: Used to compare relative sizes of items that change over time.
Line graphs: Show changes over time to specific variables.

Question 9

Market Segmentation

Answer 9

Businesses segment the market up into groups of people with different characteristics.
It is easier to meet the wants and needs of those groups of people.
Main segments: Location, Age and Gender, Income and Social Class, Behaviour.

Question 10

Define the features of a Niche Market

Answer 10

A small market segment
Specialised business
Unique products
Little competition
E.g. Tailors who make suits.

Question 11

Define Mass Market

Answer 11

Large market
Similar products from different businesses
More competition
Large scale production
Products are targeted at general consumers

Question 12

What does the Marketing Mix consists of?

Answer 12

The 4 Ps: Price, Product, Promotion, Place

Question 13

What are the 5 pricing strategies? Explain.

Answer 13

1) Cost plus pricing: put a price on a product then put a percentage on.
2) Psychological pricing: E.g. $1.99. Making people think the price is lower than it is.
3) Competitive pricing: Setting just below their their rivals
4) Skimming: Setting a high price to begin with and then lowering the price to attract a wider market segment.
5) Penetration pricing: Setting a low price to begin with to win customers

Question 14

Price elasticity

Answer 14

Price elasticity = %change in quantity sold / % change in price
from -1 and lower = Responsive
-1 = Equally responsive
0 and above = Unresponsive

Question 15

What are the packaging purposes?

Answer 15

Enable branding
Attractive boost
Easier storing
Protection
Written Guidance

Question 16

What is a brand?

Answer 16

A product or a group of products with an easily recognisable character

Question 17

A product’s life cycles (A graph) stages

Answer 17

Introduction, Growth, Maturity, Saturation, Decline

Question 18

What are the strategies to prolong the product’s life cycle?

Answer 18

Modify the product
Changing prices
Promotional campaign
Altering distribution patterns

Question 19

What are the organisations that take part in distribution? Explain.

Answer 19

Manufactures: firms that make the product
Wholesalers: Store goods
Retailers: Sell goods to customers
E-tailers: Retailers via the internet.

Question 20

What is promotion (in marketing)?

Answer 20

A process of making consumers aware of the product

Question 21

what are the forms of promotion? Explain.

Answer 21

Advertising: TV advertisements, Posters, Banners…
Sales promotions: E.g. Competitions, discounts, free gifts
Personal selling: Building a personal relationship with costumers
Public relation: Communication through publication, website, newsletter. Only positive messages.

Question 22

Advantages of Advertising

Answer 22

Customer’s awareness
Improve business reputation
Adds value to the product
Brings profit from taxes to the government

Question 23

Disadvantages of Advertising

Answer 23

Adverts can be deceiving
Advert may target the wrong people
Expensive
Can create envy

Question 24

How to make up a marketing strategy

Answer 24

To choose the right combination from the marketing mix to support to product. The best possible mix will depend on the stage of the product’s life cycle. Over time the marketing mix would need adjustments.

Question 25

What is a Marketing Budget?

Answer 25

A budget is a financial plan for a business. It is a plan usually agreed in advance to which sets out the targets or goals that must be reached in an organisation.
Budget acts as a control on business spending or what the business has to achieve for example, sales.
Budgets must be realistic and agreed on (SMART)

Question 26

What is cost effectiveness?

Answer 26

Cost effectiveness describes the relationship between the cost of an activity and the returns from it.
High cost, High impact = Cost effective
High cost, Low impact = Cost ineffective
Low cost, High impact = Cost effective
Low cost, Low impact = Cost ineffective