Random Questions
What is Jason's football cleat brand?
Adidas
Name 5 different pricing methods.
Cost-plus pricing, penetration pricing, predatory pricing, the loss leader, premium pricing, dynamic pricing, competitive pricing and contribution pricing.
What is a product
A product is any good or service that is offered to the market with the aim of satisfying consumer needs or wants.
What is promotion and its aims?
Promotion is concerned with communicating information about a firm’s products to consumers.
Main aim: obtain new customers, retain existing ones & provide useful information to enable them to purchase a firm’s product
What is a distribution channel?
What is "the path taken by a product from the producer to the consumer."
When is Harold's birthday?
April 12
Total cost of production = $20,000. No. Products = 10,000. Mark-up = 50%. What will the selling price be?
Average cost of production = 20,000/10,000 = $2. Mark-up profit = 50% of $2 = $1. Selling price = 2+1=$3
Name at least 4 different extension strategies.
Selling into new markets
finding new uses for the product
changing the product's packaging
targeting different market segments
developing new promotional strategies
What are the 4 types of promotion?
Above-the-line production, below-the-line production, through-the-line production and social media marketing
What is a 0 intermediary channel and give an example.
What is "where a product is sold directly from the producer to the consumer."
Examples are perishable products or mail-order catalogs and e-commerce
What is Jason's birthday?
November 4th
Calculate the PED when the price increases from $10 to $12 and the quantity demanded goes from 100 to 65?
PED = -35/20 = -1.75 = 1.75
What are the 5 different stages of the product life cycle?
Development, introduction, growth, maturity, saturation and decline.
What factors should one consider when choosing a promotional method?
(name at least 3)
Cost, legal framework, target market, stage in the product life cycle and type of product
Who (what type of business) typically uses a two-intermediary channel?
Usually wholesalers and retailers
(Walmart!)
Heath Ledger
Describe 1 advantage and 1 disadvantage of using the loss leader pricing method?
Advantages: Businesses that sell a large number of their most bought products will attract many customers and businesses can advertise their loss leader to bring customers.
Disadvantages: Firms may be accused by competitors by using unfair business practices and firms can lose money if customers only/mainly buy their loss leader instead of their other products.
Describe 5 steps in the development stage.
Generating ideas
Screening ideas
Creating a prototype
First or trial form of a product, Allows for visual & physical examination of the product
Carrying out test marketing
After necessary changes, samples of the product are launched into small but representative part of the market to assess the product’s potential sales/demand
Commercialisation
After successful test marketing, the product is fully launched.
What are the advantages & disadvantages of social media marketing?
Wide reach, engagement, speed, cost savings, market information (trends)
Accessibility problems, lurkers (people who absorb information online rather than promote/share it) and is just used as a supplement
What are the advantages and disadvantages of a 0 intermediary channel?
Advantages:
Low cost, fast, ideal for perishable products, the producer is the key decision-maker in the distribution process.
Disadvantages:
Promotion is done by the producer, which could be time-consuming and expensive.
The producer incurs all storage and delivery costs.
Who won the World Cup in 2002?
Brazil
Describe 2 advantages and disadvantages of predatory pricing.
Advantages: firms can gain a dominant position, competition is reduced and new businesses trying to enter the market will be deterred
Disadvantages: it is a form of anti-competitive behaviour and is illegal in some parts of the world and it may be difficult to sustain in the long term
Describe what happens in the saturation stage.
At this stage, many competitors have entered the market and saturated it. Sales were at their highest, point, and are now falling. However, cash flow is still positive. Some businesses/competitors are forced out because of stiff competition. Prices will have been reduced, so a promotional pricing strategy is used again.
What is through-the-line production? Name one advantage, one drawback and two methods.
Improved brand awareness and visibility, but has a high cost involved.
360 degree marketing - integrating previous two (e.g.) supplementing a TV ad with pamphlets of the advertised product attached to newspapers.
Digital marketing - cookie-based type of advertising, highly personalised
Advantages:
The wholesaler incur storage costs, therefore reducing these costs for the producer.
The wholesaler breaks the bulk for the retailer by providing large quantities in smaller batches.
This is an appropriate channel when selling over long distances.
Disadvantages:
Two profit mark-ups could lead to a more expensive product offered to consumers.
This channel further reduces the producer’s responsibility for promoting products.