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What are the five stages of the product life cycle?
The five stages of the product life cycle are:
Development
Introduction
Growth
Maturity
Decline.
What is the product life cycle?
The product life cycle describes the different stages a product goes through, from its conception to its eventual decline in sales.
True or False?
The introduction stage of the product life cycle is characterised by rapid sales growth.
False.
The introduction stage is characterised by slow sales growth as the product is still new and unknown to most consumers.
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What are the five stages of the product life cycle?
The five stages of the product life cycle are:
Development
Introduction
Growth
Maturity
Decline.
What is the product life cycle?
The product life cycle describes the different stages a product goes through, from its conception to its eventual decline in sales.
True or False?
The introduction stage of the product life cycle is characterised by rapid sales growth.
False.
The introduction stage is characterised by slow sales growth as the product is still new and unknown to most consumers.
Describe the maturity stage of the product life cycle.
The maturity stage is characterised by slowing sales growth. The product reaches its peak in terms of market penetration.
True or False?
Cash flow is usually positive during the development stage of the product life cycle.
False.
Cash flow is usually negative during the development stage due to heavy investment in the product without generating any revenue.
What is the marketing mix?
The marketing mix refers to the seven elements that contribute to the successful marketing of a product.
What are the 7 P's of the extended marketing mix?
The 7 P's of the extended marketing mix are:
Product
Price
Place
Promotion
People
Processes
Physical evidence.
What is an extension strategy?
Extension strategies are techniques used by businesses to extend the life of a product beyond its natural life cycle.
What are the two types of extension strategies?
The two types of extension strategies are:
Product-related extension strategies
Promotion-related extension strategies
True or False?
Line extensions are an example of a product-related extension strategy.
True.
Line extensions are an example of a product-related extension strategy.
What is meant by the term repositioning?
Repositioning is a product-related extension strategy where a product is marketed differently to appeal to a new market segment.
Give an example of a promotion-related extension strategy.
Examples of promotion-related extension strategies include:
Changes to advertising
Price promotions
Sales promotions
What is the Boston Consulting Group (BCG) Matrix?
The Boston Consulting Group (BCG) Matrix is a tool used by businesses to analyse their product portfolio and make strategic decisions about each product.
What are the four categories in the Boston Consulting Group Matrix?
The four categories in the BCG Matrix are:
Cash Cow
Problem Child/Question Mark
Star
Dog
What is a cash cow in the BCG Matrix?
A cash cow is a product with a high market share in a mature market that generates significant positive cash flow but has low growth potential.
What characterises a star in the BCG Matrix?
A star has a high market share in a high-growth market.
True or False?
Dog products have a high market share in a low-growth market.
False.
Dog products have a low market share in a low-growth market.
What is a problem child in the BCG Matrix?
A problem child is a product with a low market share in a high-growth market that has the potential to become a star if the company invests in its development.
Describe the typical strategy for cash cows?
The typical strategy for cash cows is to harvest them, minimising investment while maximising profits.
True or False?
Businesses often invest heavily in dog products.
False.
Businesses often move away (divest) from dog products to focus on more profitable products.
In the context of the BCG Matrix, what is a build strategy?
A build strategy involves investing selectively in problem children with the highest potential to convert them into stars.
True or False?
A limitation of the BCG Matrix is its simplistic approach.
True.
A limitation of the BCG Matrix is its simplistic approach, which classifies products solely based on market growth rate and relative market share, ignoring other important factors.
True or False?
The BCG Matrix considers future market trends.
False.
The BCG Matrix is based on current market conditions and historical data and does not consider changes in the competitive environment.
True or False?
Dog products should always be divested.
False.
Dogs may be harvested or maintained if they still generate some cash flow.
What is branding?
Branding involves creating a unique and identifiable name, design, symbol, or other feature that differentiates a product or company from its competitors.
What are the three types of branding?
The three types of branding are:
Corporate branding
Product branding
Own branding
What is corporate branding?
Corporate branding refers to the use of a company name or logo to promote all the products or services offered by the company.
What is product branding?
Product branding refers to the use of a unique name, design, or symbol to promote a specific product.
True or False?
Own brand products are typically more expensive than branded products.
False.
Own brand products are typically offered at a lower price than branded products.
What is a unique selling point?
A unique selling point (USP) is a feature that makes a product stand out from its competitors.
What is emotional branding?
Emotional branding is where companies build strong emotional connections with their customers by appealing to their values, beliefs and emotions.
True or False?
Strong branding can lead to a reduced price elasticity of demand.
True.
Strong branding can lead to a reduced price elasticity of demand (more inelastic)
What is an own brand product?
An own brand product is one that uses a retailer's name to promote a specific product or service. It is often used by supermarkets.
True or False?
Branding can add value to a product.
True.
Strong branding can add value to a product by creating a perception of quality, reliability, and reputation.
What is brand loyalty?
Brand loyalty is the tendency of consumers to continue buying the same brand of goods rather than competing brands.
True or False?
Branding mainly affects the product element of the marketing mix.
False.
Branding can have significant effects on multiple elements of the marketing mix, including product, price, promotion, and sometimes place.
What is cost-plus pricing?
Cost-plus pricing is where the business calculates the cost of production and then adds a markup to determine the final price.
What is penetration pricing?
Penetration pricing is where a business sets a low price for a new product when it is first introduced to quickly capture market share.
What is a loss leader pricing strategy?
A loss leader pricing strategy involves charging a price below the average cost for a product so as to attract customers to buy other profitable products.
True or False?
Predatory pricing is legal in most countries.
False.
Predatory pricing is illegal in many countries as it is considered anti-competitive.
What is premium pricing?
Premium pricing involves setting a high price for a product to give customers an impression of high quality and luxury.
What is price skimming?
Price skimming involves setting a high price for a short period at a product's launch, after which it is gradually lowered.
True or False?
A business may use more than one method of pricing across its product range.
True.
A business may use more than one method of pricing across its product range.
True or False?
Penetration pricing is effective when a business wants to maintain high profit margins.
False.
Penetration pricing is effective when a business wants to quickly capture market share, often at the expense of short-term profit margins.
What is promotional pricing?
Promotional pricing is where prices are temporarily reduced to stimulate sales or attract customers.
What is the formula for calculating a selling price using cost-plus pricing?
Formula.
What is competitive pricing?
Competitive pricing is where prices are set based on what rivals charge for similar products or services.
True or False?
Price is the only element of the marketing mix that directly relates to sales revenue.
True.
Price is the only element of the marketing mix that directly relates to sales revenue.
What is dynamic pricing?
Dynamic pricing involves charging different prices to match demand patterns.
What is meant by the term price elasticity of demand?
Price elasticity of demand is a measure of the responsiveness of demand for a product to a change in its price.
What is the formula used to calculate price elasticity of demand?
Formula.
True or False?
A price elasticity of demand value greater than 1 indicates that demand is price inelastic.
False.
A price elasticity of demand value greater than 1 indicates that demand is price elastic.
What is price inelastic demand?
Price inelastic demand is when the quantity of a product demanded changes less than the change in price.
True or False?
A price skimming strategy is best for products with price inelastic demand.
True.
Price skimming strategies are best employed for products that with price inelastic demand.
True or False?
Raising prices for products with elastic demand will increase total revenue.
False.
Raising prices for products with elastic demand will decrease total revenue.
Why might dynamic pricing strategies raise ethical concerns?
Dynamic pricing strategies may raise ethical concerns when prices are increased significantly during emergencies or crises. This is called price gouging and can harm a business's reputation.
What is contribution pricing?
Contribution pricing involves setting prices that cover direct costs associated with producing a product and also contribute to covering indirect costs.
What is the main goal of competitive pricing?
The main goal of competitive pricing is to gain or maintain market share by offering prices that are in line with or slightly below those of rivals.
What are the three forms of promotion?
The three forms of promotion are:
Above the line promotion
Below the line promotion
Through the line promotion.
What is above the line promotion?
Above the line promotion refers to advertising activities aimed at reaching a wide audience through traditional mass media channels.
What is below the line promotion?
Below the line promotion includes marketing communications over which a business has direct control and which do not make use of mass media.
True or False?
Through the line promotion combines both above the line and below the line techniques.
True.
Through the line promotion combines both above the line and below the line techniques to create a comprehensive promotional campaign.
What are the three types of above the line promotion?
The three types of above the line promotion are
Informative
Persuasive
Reassuring.
What is social media marketing?
Social media marketing targets promotional activity at users of online communities such as Facebook, Twitter, and YouTube.
True or False?
Below the line promotion is generally more expensive than above the line promotion.
False.
Below the line promotion is generally less expensive than above the line promotion.
What is direct marketing?
Direct marketing involves communicating directly with customers through email, text message, social media, or post.
What is sales promotion?
Sales promotion refers to techniques that encourage the purchase of a product or service by offering temporary incentives or discounts.
What is personal selling?
Personal selling is where a salesperson interacts with customers one-on-one, either in person or through digital communication channels.
True or False?
Public relations involves paid advertising.
False.
Public relations often involves building relationships with the public and managing reputations through non-paid methods.
True or False?
Promotional strategies should be tailored to the target market.
True.
Promotional strategies should be tailored to the target market to be most effective.
What are distribution channels?
Distribution channels are the chain of intermediaries through which products move from the manufacturer to the end customer.
True or False?
A four-stage distribution channel consists of producer, wholesaler, retailer and consumer.
True.
A four-stage distribution channel consists of producer, wholesaler, retailer, and consumer.
What is a three-stage distribution channel?
A three-stage distribution channel eliminates the wholesaler stage, with the producer selling directly to the retailer.
What is a two-stage distribution channel?
A two-stage distribution channel eliminates both the wholesaler and retailer stages, with the manufacturer selling directly to the end consumer.
True or False?
A disadvantage of a three-stage distribution channel is that the retailer's mark-up increases the profit of the producer.
False.
A disadvantage of a three-stage distribution channel is that the retailer's mark-up reduces the profit of the producer or make the product more expensive for consumers.
What is e-commerce?
E-commerce is online distribution that has become increasingly popular due to the convenience and accessibility it offers to consumers.
What is drop-shipping?
Drop-shipping is a distribution method where businesses sell products without holding stock. Once sold, products are shipped directly from the producer to the customer.
What is meant by the term breaking bulk?
Breaking bulk is where a wholesaler takes on responsibility for breaking a large quantity of products into smaller batches for retailers to purchase
What is exclusive distribution?
Exclusive distribution involves targeting high-end customers by limiting the number of sales outlets in which products are sold.
True or False?
In a three-stage distribution channel, customer service is often carried out by the wholesaler.
False.
In a three-stage distribution channel, customer service and some promotional activities are carried out by the retailer.
Describe the people element of the marketing mix.
The people element refers to the human resources involved in customer interactions and product delivery so as to provide a positive customer experience.
True or False?
A satisfied workforce is more likely to provide excellent customer service and act as brand ambassadors.
True.
A satisfied workforce is more likely to provide excellent customer service, work hard to close sales and act as brand ambassadors.
True or False?
People play a crucial role in the marketing mix, as they are responsible for designing and carrying out marketing activities.
True.
People play a crucial role in the marketing mix, as they are responsible for designing and carrying out marketing activities.
What are the five key areas in which people contribute to the marketing mix?
The five key areas in which people contribute to the marketing mix are:
Customer interactions
Brand ambassadors
Customer service
Innovation and feedback
Sales and persuasion
True or False?
Innovation and feedback from employees are not important for refining marketing strategies.
False.
Innovation and feedback from employees are crucial for refining marketing strategies, developing new products and enhancing the overall customer experience.
In the context of the marketing mix, what are brand ambassadors?
Brand ambassadors are employees whose knowledge, enthusiasm and passion for the brand can have a significant impact on how customers perceive and connect with the brand.
True or False?
Interactions with customers can influence customer perceptions, build relationships and shape the overall customer experience
True.
Customer interactions can influence customer perceptions, build relationships and shape the overall customer experience
What is customer service?
Customer service involves skilled employees addressing customer inquiries, resolving issues and providing personalised support, contributing to customer satisfaction and positive word-of-mouth recommendations.
Describe what is meant by processes in the marketing mix.
Processes refer to the activities, procedures and systems a company employs to deliver a product or service to its customers.
True or False?
Processes directly impact the overall customer experience.
True.
Processes directly impact the overall customer experience, as they involve everything from how customers discover a product to how they make a purchase and receive support.
True or False?
Marketing processes need to be rigid and unchanging.
False.
Marketing processes need to be flexible and adaptable to changing customer preferences.
True or False?
Well-designed processes provide a seamless and positive customer journey.
True.
Well-designed processes provide a seamless and positive customer journey, enhancing customer satisfaction and loyalty.
What is meant by customer experience?
Customer experience refers to how processes impact the overall customer journey, from discovering a product to making a purchase and receiving support.
True or False?
Processes can lead to inconsistencies in delivering messages and experiences to customers.
False.
Processes help to maintain consistency in delivering messages, branding and experiences whenever an interaction with customers occurs.
Define the term efficiency in the context of marketing processes.
Efficiency refers to how effective processes improve operations and reduce costs, leading to increased profitability.
True or False?
Consistency of processes builds customer trust.
True.
Consistency of processes builds customer trust. reinforces the brand identity and helps to develop long-term relationships with customers.
True or False?
Processes help different departments work together effectively to meet objectives.
True.
Processes help different departments work together effectively to meet objectives.
What is physical evidence in the marketing mix?
Physical evidence is the tangible and visible signs of a product that customers interact with and perceive during their buying experience.
True or False?
Physical evidence is only important for physical products, not services.
False.
Physical evidence is particularly important for services, as it helps to shape customer perceptions and build trust in a process where the intangible product cannot be viewed.
State two common forms of physical evidence.
Common forms of physical evidence include:
Store/office ambiance
Packaging
Signage and displays
Digital presence
Staff appearance and behaviour
Equipment and facilities
Marketing materials
True or False?
Packaging rarely contributes to the overall impression customers have of a brand.
False.
The design, quality and functionality of product packaging contribute to the overall impression customers have of a brand.
What is meant by the term ambiance?
Ambiance refers to the physical environment in which a business operates, including factors such as store layout, interior design, lighting, colours and music.
True or False?
Staff appearance and behaviour towards customers do not contribute to physical evidence.
False.
The appearance, professionalism and behaviour of employees contribute to the physical evidence and impact customer perceptions.
What is a digital presence?
Digital presence refers to well-designed and user-friendly websites, social media profiles, online reviews and customer testimonials that act as virtual physical evidence.
True or False?
Physical evidence can support and embed a business's unique selling point.
True.
Physical evidence can support and embed a business's unique selling point as it reinforces values and provides visual cues with which customers may align.
What are product samples?
Product samples are physical evidence that customers can touch and take away to try out a product before they commit to buying it.
True or False?
In-store displays influence purchase decisions.
True.
Eye-catching in-store displays can draw attention to specific products or offers, influencing purchase decisions