Marketing

1

100

Define market segmentation 

the process of dividing a market of potential customers into groups, or segments, based on different characteristics.

200

State two advantages of mass marketing 

Larger amount of sales, can benefit from economies of scale, risks are spread, more chances for the business to grow

300

Identify 3 roles of marketing in a business

Identifying customer needs, satisfying customer needs, maintaining customer loyalty, building customer relationships

400

Explain four factors that determine the reliability and accuracy of market research 

• How carefully the sample was drawn up, its size, the types of people selected etc.
• How questions were phrased in questionnaires and surveys
• Who carried out the research: secondary research is likely to be less reliable since it was drawn up by others for different purpose at an earlier time.
• Bias: newspaper articles are often biased and may leave out crucial information deliberately.
• Age of information: researched data shouldn’t be too outdated. Customer tastes, fashions, economic conditions, technology all move fast and the old data will be of no use now.

500

Explain the concept of price elasticity of demand (what does it mean, what is the formula, what should the business do if the product has elastic demand, what should the business do if the product has inelastic demand)

The PED of a product refers to the responsiveness of the quantity demanded for it to changes in its price.

2

100

Identify three ways how a market can be segmented

according to age, socio-economic grouping, location, gender

200

Give four examples of external secondary market research

Government statistics 

Newspapers 

Market research agencies 

Internet

300

Define niche marketing and identify one advantage and one disadvantage of it

Identifying and exploiting a small segment of a larger market by developing products to suit it. 

Adv: small firms can thrive in niche markets, can sell products at a high price, focus on the needs of just one customer group 

Disadv: Lack of economies of scale, risk of over-dependence on a single product, likely to attract competition 

400

State four benefits of developing new products 

Can create a Unique Selling Point (USP) 

Charge higher prices for new products 

Helps spreads risks

Increase potential sales, revenue and profit

500

Explain five factors that affect place decisions 

The type of product it is 

The technicality of the product 

How often the product is purchased 

The price of the product 

The durability of the product 

Location of customers 

Where competitors sell their product

3

100

Define market research 

the process of collecting, analysing and interpreting information about a product.

200

Give three reasons why packaging is important

• It protects the product
• It provide information about the product (its ingredients, price, manufacturing and expiry dates etc.)
• To help consumers recognize the product (the brand name and logo on the packaging will help identify what product it is)
• It keeps the product fresh

300

Explain three reasons why some markets become more competitive 

Globalization 

Improvement in transportation infrastructures 

Internet/E-Commerce

400

State two pricing methods and explain one advantage and one disadvantage of each method 

*answer*

500

State 4 stages of the product life cycle and explain the 4Ps for one of the stages. 

*answer*

4

100

Define product-oriented business

firms produce the product first and then tries to find a market for it.

200

State two reasons why brand image is important

Consumers recognize the firm’s product more easily 

Their product can be charged higher than less well-known brands 

Easier to launch new products

300

Explain why is market research important/needed

Firms need to conduct market research in order to ensure that they are producing goods and services that will sell successfully in the market and generate profits. If they don’t, they could lose a lot of money and fail to survive. Market research will answer a lot of the business’s questions prior to product development

400

State 4 aims of promotion

• Inform customers about a new product
• Persuade customers to buy the product
• Create a brand image
• Increase sales and market share

500

Explain three legal controls on marketing 

• laws that protect consumers from being sold faulty and dangerous goods
• laws that prevent the firms from using misleading information in advertising Example: Volkswagen falsely advertised environmentally friendly diesel cars and were legally forced to pull all cars from the market
• laws that protect consumers from being exploited in industries where there is little or no competition, known as monopolising.

5

100

Define product life cycle 

the stages a product goes through from it’s introduction to it’s retirement in terms of sales.

200

Define what extension strategy is and give one example of the strategy

marketing techniques used to extend the maturity stage of a product (to keep the product in the market) 

• Finding new markets for the product
• Finding new uses for the product
• Redesigning the product or the packaging to improve its appeal to consumers
• Increasing advertising and other promotional activities

300

Explain what a focus group is, and state one advantage and one disadvantage of focus group 

A group of people representative of the target market (a focus group) agree to provide information about a particular product or general spending patterns over time. They can also test the company’s products and give opinions on them. 

Adv: they can provide detailed information about the consumer’s opinions

Disadv: time-consuming, expensive, opinions could be influenced by others in the group 

400

Explain the following terms:

Below-the-line promotion 

Personal selling

• Below-the-line promotion: promotion that is not paid for communication but uses incentives to encourage consumers to buy. Incentives include money-off coupons or vouchers, loyalty reward schemes, competitions and games with cash or other prizes.
• Personal selling: sales staff communicate directly with consumer to achieve a sale and form a long-term relationship between the firm and consumer.

500

Explain five problems of entering foreign markets 

Difference in language and culture 

Lack of market knowledge 

Economic differences 

High transport costs

Social differences 

Difference in legal controls to protect consumers