Product & Price
A business charges $19.99 instead of $20.00. What pricing strategy is used?
Psychological pricing
What is the name given to the route a product takes from the producer to the customer?
Distribution Channel
What are the THREE things promotion aims to do to customers?
Inform, persuade and remind
True or False:
The People element only refers to employees who have direct contact with customers.
Explain your answer
Answer: False
People is everyone involved in the product, whether they have direct or indirect contact with customers. Customers can also be a part of 'People'
A business's website is messy, difficult to navigate and doesn't clearly display contact information.
Which element of the 7Ps is being described?
Physical Evidence
A business gives its product a distinctive name, symbol and design so customers can identify it and distinguish it from competitors.
What aspect of Product is being described?
Branding
Which intermediary purchases products in bulk from producers and then sells smaller quantities to retailers?
Wholesaler
Which promotional method involves a sales representative communicating directly with a customer in an attempt to make a sale?
Personal selling
A restaurant receives complaints because employees don't understand the menu and cannot answer basic customer questions.
Which action would directly improve the People element?
Training the employees
A takeaway restaurant has two problems:
Problem 1: Its tables and floors are regularly dirty.
Problem 2: Customers wait 30 minutes for their orders.
Identify the 7P associated with each problem.
Problem 1 = Physical Evidence
Problem 2 = Process
A newly released piece of technology is initially sold at a very high price because enthusiastic early buyers are willing to pay more. Several months later, the business reduces the price to attract a larger group of customers.
Identify the pricing strategy and explain
Price skimming
High at launch → lowered later
A soft-drink manufacturer wants its drinks available through supermarkets, petrol stations, convenience stores, vending machines and takeaway restaurants.
Which market coverage strategy is being used?
Intensive distribution
Scenario A: A company pays a television network to show a promotional message about its new product.
Scenario B: A television news program independently reports on the company's new product.
Identify the promotional method being used in Scenario A and Scenario B.
A: Advertising
B: Publicity
Sarah receives excellent service from a cafe. She returns regularly and tells several friends about it. What role is Sarah now performing for the business.
Answer: An advocate for the business
Before hiring a builder, a potential customer is given the contact details of previous customers who can confirm the quality of the builder's work.
Under Physical Evidence, what are these previous customers acting as?
reviews/testimonials
A smartphone business releases a new model with a longer-lasting battery, an improved camera and new safety features. Each change is designed to provide customers with additional benefits.
What Product concept is being demonstrated? and why?
Product development
Why: Product development involves creating a product with new or different characteristics that provide new or additional benefits to customers.
A manufacturer sells its products to another business in large quantities. That business then divides the products into smaller quantities and supplies them to many different retail stores.
Identify the complete distribution channel being described.
Producer → Wholesaler → Retailer → Customer
Monster decides to sponsor Patterson River's soccer team
What promotional method is being described and what is their reasoning behind using it?
Public Relations
A business want customers to think of their brand positively, not necessarily encouraging them to buy it, but show consumers that they care.
The owners of a business establish shared expectations about how employees should behave and treat customers. Over time, these expectations influence whether staff provide positive or poor service.
What concept within the People element is being described?
Business culture
A tech retailer demonstrates the features of a refrigerator, provides detailed information and helps a customer compare different models.
What is the PURPOSE of providing this information and demonstration according to 5.9?
To provide the customer with evidence needed to make an informed/best choice.
Provide evidence to customers need to make purchase decision