question

Cost-Plus Pricing

answer

Adding a fixed mark-up for profit to the unit price of a product

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Competition-Based Pricing

answer

A firm will base its price upon the price set by its competitors

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Price Leadership

answer

One dominant firm in a market sets a price and other firms simply charge a price based upon that set by the market leader.

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Predatory Pricing

answer

Deliberately undercutting competitors' prices in order to try and force them out of the market

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Penetration Pricing

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Setting a relatively low price often supported by a strong promotion in order to achieve a high volume of sales

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Skimming

answer

Setting a high price for a new product when a firm has a UNIQUE or HIGHLY DIFFERENTIATED product with low price elasticity of demand

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Loss Leader

answer

an aggressive pricing strategy in which a store sells selected goods below cost in order to attract customers who will (hopefully) make up for the losses on highlighted products with additional purchases of profitable goods.

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Psychological Pricing

answer

Setting prices that take account of customers' perception of value of the product

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Promotional Pricing

answer

Special low prices to gain market share or sell off excess stock - includes 'buy one get one free'

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Cost-Based Pricing

answer

Setting prices based on the COSTS OF PRODUCTION rather than the level of demand or the prices set by competitors

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Demand

answer

The amount of products that customers are willing and able to buy at each price. For the vast majority of products, as the price increases, demand will fall

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Price Discrimination

answer

A pricing strategy that involves charging different prices to different groups of customers for the same product (e.g. child and adult fares at the cinema and on flights)

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Price War

answer

Firms compete by a series of intensive price cuts

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Boston Matrix

answer

Is a tool for analysing the product portfolio of a business. It measures whether products have a high or low MARKET SHARE and operate in HIGH or LOW GROWTH industries.

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Brand development

answer

Is a long-term product strategy that involves strengthening the name and image of a brand in order to boost its sales.

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Brand extension

answer

Refers to the use of an existing reputable brand name to launch a new or modified product

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Branding

answer

Refers to the use of an exclusive name, symbol or design to identify a specific product or business. It is used to differentiate itself from similar products used by rival firms.

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*Cash cow* in BCG Matrix

answer

Is a term used by the BCG Matrix to refer to any product that generates significant sales revenue due to its large market share in a slowly expanding or mature market.

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Consumer goods

answer

Are items bought by the final user for their own personal consumption. Examples include CONSUMER DURABLES (such as furniture, computers and cars) and PERISHABLES (such as flowers and food)

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Differentiation

answer

Refers to any strategy used to make a product appear to be dissimilar from others. Examples include quality, branding and packaging.

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Product differentiation

answer

Refers to any strategy used to make a product appear to be dissimilar from others. Examples include quality, branding and packaging.

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Extension strategy

answer

Is an attempt by marketers to lengthen the product life cycle of a particular product. Such strategies are typically used during the maturity or early decline stages of a product's life cycle.

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Generic brands

answer

Are trademarks that have become synonymous with the name of the product/service itself. Examples include Coke, Rollerblade, Google and Frisbee.

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Marketing myopia

answer

Refers to the short-sightedness and complacency of marketers in adapting to changes in the market place. This may be especially true of product-oriented businesses.

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Product

answer

A broad term that refers to any physical or non physical item that is purchased by either commercial or private customers.

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Product line

answer

Describes the varieties of of a particular product that serves the same purpose in a particular market. For example there are many different varieties of the BMW Mini, ranging from the basic model to the top of the range Mini Cooper S.

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Product mix

answer

Describes the variety of different product lines that a business produces. BMW produces a line of high performance sedans, a line of SUVs, a line of compact cars, etc.

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Product life cycle

answer

Is the typical process that products go through from their initial R & D and launch to their decline and withdrawal from the market.

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Stages of the product life cycle

answer

R & D. Launch/Introduction. Growth. Maturity. (Saturation). Decline.

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Product portfolio

answer

The range of products or strategic business units owned and developed by an organisation.

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Product range

answer

All product lines of a firm's product mix; i.e. all the products sold by the business.

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Brand

answer

An exclusive name, symbol or design used to identify a specific product or business.

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Extension strategies and the product life cycle

answer

- Price reductions - Redesigning - Repackaging - New markets - Brand extension

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*Price reductions* - PLC extension strategy

answer

Lowering prices increase the demand for a product. Discounting can help a firm get rid of excess stocks of those products in danger of becoming obsolete.

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*Redesigning* - PLC extension strategy

answer

This may involving the introduction of special features, or releasing limited editions of a product. All of which may add value in a customer's perception of a product.

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*Repackaging* - PLC extension strategy

answer

The appearance of a product can significantly affect demand. Changing the appearance of the product's packaging - more attractive materials and colours - can increase demand.

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*New Markets* - PLC extension strategy

answer

Entering a new market with an existing market can extend the life of a product. This could involve a new export market or even just having the product being stocked with a new retailer.

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*Brand extension* - PLC extension strategy

answer

Building on a brand's success to launch a new or existing version of a pproduct

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*Dogs* in the BCG matrix

answer

Products with low market share in a low growth market. Firms need to use a product extension strategy or dispose of these products altogether.

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*Stars* in the BCG matrix

answer

Products with high market share in a high growth market. As the market grows, develops and matures, a 'star' product could become the next 'cash cow' for a business.

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*Question marks (problem children)* in the BCG matrix

answer

Products with low market share in a high growth market. Considerable investment in these products may be needed to capture more market share from competitors and turn them into 'stars'.

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Advantages of successful branding

answer

1. Price advantages 2. Recognition and loyalty 3. Distribution advantages

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Price advantages

answer

Firms that's sell undifferentiated products that have a variety of substitutes tend to compete on price and find it difficult to charge higher prices than their rivals.

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Distribution advantages

answer

The best brands are more likely to be stocked in retail outlets, given better store locations, and shelf positions. A good brand will enable the product to 'fly off the shelf'!

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Brand awareness

answer

Measures the extent to which a particular brand is recognised amongst potential customers or the general public. It is usually measured as a percentage; e.g., if 999 out of 1000 people surveyed recognise the brand Coke®, then Coke's brand awareness is 99.9 per cent.

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Brand loyalty

answer

The faithfulness of consumers to a particular brand as shown by their repeat purchases irrespective of the marketing pressure from competing brands.

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Brand value

answer

The premium that accrues to a brand from customers who are willing to pay extra for it.

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Packaging

answer

Packaging in marketing concerns itself with the presentation of a product to a consumer.

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4 Functions of packaging

answer

1. Customer perceptions 2. Product differentiation 3. Protection 4. Information

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Channel of distribution

answer

The chain of intermediaries a product passes through from producer to consumer

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Agent

answer

Business with authority to act on behalf of another firm; e.g. to market its products

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Broker

answer

A wholesaler who does not take title to goods and whose function is to bring buyers and sellers together and assist in negotiation

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Supply chain management

answer

The process of managing the network of businesses that are involved in the provision of products to the final consumer

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Direct mail

answer

Promotional material sent directly to people's homes or place of work

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Direct marketing

answer

Any promotional activity that involves making direct contact with existing or potential customers, such as door-to-door selling, personal selling and direct mail

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Distribution

answer

The process of getting products/services to customers at the right time and in the most cost-effective way; it is the PLACE in the marketing mix

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Distributors

answer

Are independent businesses that act as intermediaries by specialising in the trade of products made by certain manufacturers

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Intermediaries

answer

Agents or firms that act as a "middle man" in the chain of distribution between the producers and consumers of a product

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Telemarketing

answer

The use of telephone systems (calls and messaging) to sell products directly to consumers

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Retailers

answer

The sellers of products to the general public (i.e. consumers) that operate in outlets

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Wholesalers

answer

Businesses that purchase large quantities of products from a manufacturer and then separate or 'break' the bulk purchases into smaller units for resale to retailers

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Promotion

answer

The use of advertising, sales promotion, personal selling, direct mail, trade fairs, sponsorship and public relations to inform consumers and persuade consumers to buy

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Above-the-Line Promotion

answer

A form of promotion that is undertaken by a business by paying for communication with consumers; e.g. advertising

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Below-the-Line Promotion

answer

Promotion that is not a directly paid-for means of communication but based on short-term incentives to purchase

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Promotion Mix

answer

The combination of promotional techniques that a firm uses to communicate the benefits of its products to customers

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Advertising

answer

A method of informative and/or persuasive promotion that has to be paid for. The ultimate aim of advertising is to raise the level of demand for a firm's products.

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Personal Selling

answer

A form of promotional technique that relies on keen and knowledgeable sales staff directly helping and persuading customers to make a purchase

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Publicity

answer

The process of promoting a business and its products by getting media coverage without directly paying for it

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Sales Promotion

answer

A short-term incentive designed to stimulate sales of a product; e.g. discount coupons, prize draws, trade fairs and free product samples

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Sponsorship

answer

A promotional technique which involves a business funding, supporting or donating resources for an event or business venture in return for prominent publicity

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Word of Mouth (WOM)

answer

The spreading of good or bad messages about a firm, its products or its customer service. Many people argue that this is the most cost-effective form of promotion

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Guerrilla marketing

answer

an advertisement strategy concept designed for businesses to promote their products or services in an unconventional way with little budget to spend

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Marketing

answer

The management task that links the business to the customer by identifying and meeting the needs of customers profitably.

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Market Leaders

answer

Are firms that dominate the market share in a particular market. The business that has the largest market share in an industry, as measured by value or volume of sales.

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Market Orientation

answer

Is an approach adopted by businesses that are outward looking. They focus on making products that they can sell, rather than trying to sell products they can make.

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Market Share

answer

Measures the value of a firm's sales revenue as a percentage of the industry's total; e.g. a business with 35% means that for every $100 sold in the industry, the firm earns $35 of the sales revenue.

question

Marketing Audit

answer

A review of the firm's current marketing mix, in terms of its strengths, weaknesses, opportunities and threats.

question

Marketing Mix

answer

The main elements of a firm's marketing strategy: PRODUCT, PRICE, PROMOTION & PLACE.

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Marketing Plan

answer

The document outlining a firm's marketing objectives and strategies for a specified time period.

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Marketing Strategy

answer

Any medium-to long-term plan for achieving the marketing objectives of a business.

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Product Orientation

answer

A marketing approach adopted by businesses that are inward looking. They focus on selling products they can make, rather than making products they can sell.

question

Social Marketing

answer

Any activity that seeks to influence social behaviour to benefit the target audience and society as a whole. It does NOT mean social media.

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Consumer Markets

answer

Markets for goods and services bought by the final user of them.

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Industrial Markets

answer

Markets for goods and services bought by businesses to be used in the production process of other products.

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Market Size

answer

The total level of sales of all producers within a market.

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Market Growth

answer

The percentage change in the total size of a market (volume or value) over a period of time.

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Marketing mix

answer

*Product*: making sure that the right products are supplied to meet the needs and wants of consumers. *Price*: Establishing the correct price to balance the needs and wants of consumers with the objectives of the firm (e.g., profit maximisation, maximising market share.) *Place*: Finding the right distribution channels to get products into the hands of customers. *Promotion*: Informing customers and potential customers about the product and persuading them to take action (i.e. buy the product).

question

The *benefits* of being the *market leader* with highest market share include:

answer

1. Sales are higher than those of any competing business 2. Retailers will be keen to stock and promote the bestselling brands 3. Can be used in advertising and other promotional material 4. Consumers are often keen to buy the most popular brands

question

Characteristics of markets:

answer

1. Market size 2. Customer base 3. Barriers to entry 4. Competition 5. Market growth rate 6. Demographics

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Market

answer

A market is a place or a process where suppliers and customers can buy and sell goods and services .

question

Marketing *objectives* of *non-profits*:

answer

1. Building membership support and connections with new donor clients 2. Raising the profile of the cause being championed 3. Brand awareness and positive information about activities being engaged in

question

Marketing objectives

answer

The goals set for the marketing department to help the business achieve its overall objectives.

question

Marketing strategy

answer

Long-term plan established for achieving marketing objectives.

question

Examples of marketing objectives:

answer

1. Increasing market share - perhaps to gain market leadership 2. Increasing brand awareness 3. Increasing total sales levels - either in terms of volume or sales value 4. Development of new markets for existing products to spread risks.

question

Sales forecasting

answer

A quantitative technique that attempts to estimate the level of sales a business expects to achieve, over a given time period.

question

Seasonal variations

answer

Regular and repeated variations that occur in sales data during certain times of year and fewer than 12 months in length.

question

Random variations

answer

May occur at any time and will cause unusual and unpredictable sales figures; e.g. exceptionally poor weather, or negative public image following a high-profile product failure.

question

Trend

answer

Underlying movement of the data in a time series.

question

Moving-Average Method

answer

The simplest method of time-series forecasting; assumes that the time series has only a level component plus a random component.

question

*Advantages* of *Moving-Average Method* of sales forecasting

answer

1. Useful for identifying and applying the seasonal variation to predictions. 2. Reasonably accurate for short-term forecasts in reasonably stable economic conditions. 3. Planning for each quarter in future.

question

*Disadvantages* of *Moving-Average Method* of sales forecasting

answer

1. Fairly complex calculation. 2. Forecasts further into the future become less accurate as the projections made are entirely based on past data 3. Forecasting for the longer term may require the use of more qualitative methods that are less dependent on past results.

question

Correlation

answer

shows the degree to which two sets of numbers or variables are related, e.g. sales revenue over a period of time. Marketers are interested in establishing a strong correlation between marketing expenditure and sales growth. (Higher Level)

question

Cyclical variations

answer

are recurrent fluctuations in sales linked to the economic cycle of booms and slumps. Unlike seasons variations, cyclical variations can last longer than a year. (Higher Level)

question

Extrapolation

answer

is a forecasting technique used to identify the trend by using past data and extending this trend to predict future sales. (Higher Level)

question

Moving averages

answer

are used to find underlying trends by smoothing out variations in a data set caused by seasonal, cyclical and random variations. It is common to use up to four-part moving averages, i.e. averaging sales figures for four consecutive-time periods. (Higher Level)

question

Time series analysis

answer

is a sales forecasting technique that attempts to predict sales levels by identifying the underlying trend from a sequence of actual sales figures. (Higher Level)

question

Customer Relations Management (CRM)

answer

Refers to the use of people in the marketing mix. CRM focusses on what can be gained during the lifetime of a positive relationship with customers.

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Ethical marketing

answer

The moral aspects of a firm's marketing strategies. It can be encouraged by the use of moral codes of practice.

question

Marketing audit

answer

A systematic examination and review of the current position of a firm in terms of its strengths and weaknesses.

question

Marketing mix

answer

The four main elements of marketing strategies: PRODUCT, PRICE, PROMOTION and PLACE. (The 4Ps)

question

Packaging

answer

The eighth 'P' in the marketing mix which focuses on the ways in which a product is presented to the consumer.

question

Physical evidence

answer

The image portrayed by a business (or perceived by customers) regarding its observable and tangible features such as the cleanliness and physical size of a business or the presentation of its staff.

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Position map

answer

A visual aid that shows customers' perception of a product or brand in relation to others in the market.

question

Primary research

answer

Involves data being collected by the researcher since the dtaa does not currently exist.

question

Process

answer

Part of the extended marketing mix which refers to the methods and procedures used to give clients the best possible customer experience.

question

Repositioning

answer

A strategy that involves changing the market's perception of a product or brand relative to those offered by rival firms.

question

Sampling

answer

The practice of selecting a representative group (known as the sample) of a population for primary research purposes.

question

Segmentation

answer

The process of categorising customers into distinct groups of people with similar characteristics (such as age or gender), and similar wants or needs for research and targeting purposes.

question

Targeting

answer

Each distinctive market segment will have its own marketing mix. Different markets can also be targeted, depending on whether they operate in niche, differentiated or mass markets.

question

Unique Selling Point (USP)

answer

Any aspect of a product that makes it stand out from those offered by rival businesses.

question

Coordinated marketing mix

answer

Key market decisions complement each other and work together to give customers a consistent message about the product.

question

Marketing objectives

answer

The goals set for the marketing department to help the business achieve its overall objectives.

question

Marketing strategy

answer

A long term plan established for meeting marketing objectives.

question

Test marketing

answer

Marketing a new product in a geographical region before the full scale launch.

question

Market segment

answer

A sub-group of a whole market in which consumers have similar characteristics.

question

Market segmentation

answer

Identifying different segments within a market and targeting different products or services to them.

question

Consumer profile

answer

A quantified picture of consumers of a firm's products, showing proportions of age groups, income levels, location, gender and social class.

question

Target market

answer

The market segment that a particular product is aimed at.

question

Corporate image

answer

Consumer perception of a company behind a brand.

question

International Marketing

answer

Selling products in markets other than the original domestic market

question

Pan-Global Marketing

answer

Adopting a standardised product across the globe as if the whole world were a single market - selling the same good in the same way everywhere

question

Global Localisation

answer

Adapting the marketing mix, including differentiated products, to meet national and regional tastes and cultures

question

Global marketing

answer

Adopting a standardised product across the globe as if the whole world were a single market - selling the same good in the same way everywhere

question

Business etiquette

answer

The manner, social and cultural context in which business is conducted. International etiquette differs from one country to another so it is important for marketers to be aware of the different protocols that exist

question

Exporting

answer

The practice of selling domestically produced goods and /or services to overseas buyers to gain access to international markets

question

Direct Investment

answer

A business setting up a production and/or distribution facilities in foreign countries

question

E-Commerce

answer

Trading via the internet

question

Joint Ventures

answer

When two or more companies invest in a shared business project, pooling their resources to form a SEPARATE BUSINESS. The companies retain their separate legal identities but share the risks and returns from the joint venture

question

Strategic Alliances

answer

When two or more businesses pool their human, capital and financial resources in a SHARED PROJECT. They DO NOT form a new business with a separate legal identity

question

Franchising

answer

A business allowing others to trade under its name in return for a fee and a share of the profits

question

Mergers

answer

Two businesses (occasionally more) agree to integrate as a single organisation.

question

Acquisitions

answer

This is when another business buys out another by purchasing a majority stake in the target company

question

Takeovers

answer

This is when another business buys out another by purchasing a majority stake in the target company

question

Economies of Scale

answer

Reductions in a firm's unit (average) costs of production that result in an increase in the scale of operations; i.e. by producing more

question

E-Commerce

answer

The buying and selling of goods and services on the internet

question

Viral Marketing

answer

The use of social networking sites or SMS text messages to increase brand awareness or sell products

question

B2B

answer

Stands for business-to-business and refers to online trade conducted directly for the BUSINESS CUSTOMER rather than the end-user; an example would be Amazon.com supplying books to other book retailers

question

B2C

answer

Stands for business-to-consumer and refers to online business conducted directly for consumers;p an example would be Amazon.com selling books directly to private individuals

question

C2C

answer

Consumer-to-Consumer marketing takes place between consumers on an e-commerce platform such as eBay. Consumers are directly buying and selling to each other.

question

Clicks and Mortar

answer

Refers to businesses that combine the traditional main-street existence with an online presence. By contrast, other businesses may have just an online presence (e.g. Zappos.com)

question

E-tailers

answer

Are businesses that operate predominately online (e.g. Zappos.com). They are different to retailers that operate physical stores in shopping malls and other physical outlets

question

Online Presence

answer

A business has a dedicated website for e-commerce. This could be limited to providing information about the business and its products,and may extend to selling products online.

question

Spam

answer

Unwanted e-mail (usually of a commercial nature sent out in bulk)

question

Search Engines

answer

Find web pages related to your request; e.g. Google, Bing and Yahoo!

question

SEO

answer

Search Engine Optimisation

question

Search Engine Optimization

answer

A systematic process of ensuring that a firm comes up at or near the top of lists of typical search phrases related to that business

question

Price Transparency

answer

The ease with which consumers can find out the variety of prices in a market

question

Market research

answer

The range of marketing activities designed to discover the opinions, beliefs and feelings of potential and existing customers to identify and anticipate the needs and wants of customers.

question

Primary research

answer

Involves data being collected by the researcher since the dtaa does not currently exist.

question

Qualitative research

answer

Focusses on the comments, suggestions and opinions of respondents. Qualitative research data are not statistical but can generate in-depth findings.

question

Quantitative research

answer

Focusses on the collection and interpretation of statistical and numerical data for market research purposes.

question

Quota sample

answer

A sampling method that involves segmenting the population and then selecting a certain number (the quota) in each market segment.

question

Random sample

answer

A sampling method that gives every person in the population an equal chance of being selected.

question

Sampling

answer

The practice of selecting a representative group (known as the sample) of a population for primary research purposes.

question

Secondary research

answer

Using data and information that has already been collected by another party; i.e. the data or information already exists.

question

Test marketing

answer

Marketing a new product in a geographical region before the full scale launch.

question

Sampling error

answer

Errors in research caused by using a sample for data collection rather than the whole target population.

question

Stratified sampling

answer

Draws a sample from a specified sub-group or segment of the population and uses random sampling to select an appropriate number from each stratum.

question

Cluster sampling

answer

Using one or a number of specific groups to draw samples from and not selecting the whole population; e.g. using one region or town.

question

Quota sampling

answer

Gathering data from a group chosen out of a specific sub-group; e.g. a researcher may ask 100 individuals between the ages of 20 and 30 years.

question

Snowball sampling

answer

Using existing members of a sample study group to recruit further participants through their acquaintances.

question

Consumer profile

answer

A quantified picture of consumers of a firm's products, showing proportions of age groups, income levels, location, gender and social class.

question

Non-sampling errors

answer

Occur during the course of the survey activities, rather than from the survey itself. Such as response bias, data entry error, undercoverage etc.

question

Population

answer

The entire set of items from which a sample is drawn; i.e. all potential customers of a particular market,

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