Marketing
What's covered
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Key facts
Identifying and understanding customers
An ageing population may shift product design for a high-street retailer because larger fonts and accessible packaging become essential — older customers' physical needs change.
M-business
An app is software designed for mobile m-commerce — installed on the device, optimised for the screen and OS.
Promotion
Advertising is a paid-for method of promotion — the business pays to send messages to customers through media such as TV, radio, cinema, online, and magazines.
Segmentation
Behavioural segmentation can target customers based on how often they buy — heavy users vs occasional users.
Pricing and promotion strategies
Television advertising in a prime-time slot is an example of above-the-line promotion — mass media, broad reach.
Product life cycle and extension strategies
Businesses use the Boston Matrix alongside the PLC to manage their whole product portfolio and decide where to target investment across products.
The elements of the marketing mix
The Boston Matrix plots products by market share and market growth into four quadrants: Star (high share, high growth), Cash Cow (high share, low growth), Question Mark (low share, high growth), and Dog (low share, low growth).
Extended Response Practice
A benefit of penetration pricing is rapidly gaining market share; a drawback is the low launch price means a smaller profit margin per unit.
The purpose and methods of market research
A biased or unrepresentative sample can mislead business decisions — wrong conclusions from skewed data.
Identifying and understanding customers
The customer is the person who buys and pays for a business's goods or services; the consumer is the end user, who may not have paid (a supermarket is the customer of a ready-meal maker, the person who eats the meal is the consumer).
Sample questions
A taste of the 99 questions in this topic, answers marked. Sign up to practise the full set with spaced repetition.
Which is a customer 'want' rather than a 'need'?
- •Basic shelter
- ✓Designer trainers
- •Drinking water
- •Warm clothing
Which is an example of m-commerce?
- ✓Buying a coffee through a phone app
- •Ordering from a printed paper catalogue
- •Phoning a call centre to order goods
- •Walking into a supermarket and paying cash
What is price skimming?
- ✓Launch high, then lower the price over time
- •low price to gain market share
- •pricing at the same level as rivals
- •setting price below production cost
What are the four stages of the product life cycle in order?
- •development, launch, peak, withdrawal
- ✓introduction, growth, maturity, decline
- •launch, expansion, plateau, decline
- •research, introduction, growth, saturation
What is advertising as a method of promotion?
- ✓A paid-for message sent to customers
- •A short-term price cut to boost sales
- •Free media coverage earned by the business
- •Paying to sponsor a sports team
Which is an example of demographic segmentation?
- ✓Targeting customers aged 18 to 25
- •Targeting customers who live in coastal regions
- •Targeting customers who prefer luxury brands
- •Targeting customers who shop only on weekends
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