Chapter five

1.What is marketing ?
The action or business of promoting and selling products or services, including market research
and advertising. Marketing refers to activities undertaken by a company to promote the buying
or selling of a product or service. Marketing includes advertising, selling, and delivering
products to consumers or other businesses.

2.What Is Market Segmentation?

Market segmentation is a marketing term that refers to aggregating prospective buyers into
groups or segments with common needs and who respond similarly to a marketing action.
Market segmentation enables companies to target different categories of consumers who
perceive the full value of certain products and services differently from one another.

Broad Questions

1. Describe market segmentation descriptor variables

Market segmentation is a business practice relying on research that leads the direction of how a
business divides its target market into smaller, more manageable groups based on common
ground they share .The purpose of segmentation is that you are able to introduce a more
tailored message that will be received successfully.

Geographic segmentation

Geographic segmentation targets customers based on a predefined geographic border. For

example ,Different countries (and even different states) recognize different holidays, so it's
important to keep up to date on different events around the world. At WeVideo.com, Max
Thorpe highlights the importance of keeping your finger on the pulse of different holidays and
events to spur new marketing initiatives.

Demographic segmentation

Demographic segmentation divides a market through variables such as age, gender, education
level, family size, occupation, income, and more. This form of segmentation is a widely used
strategy due to specific products catering to obvious individual needs relating to at least one
demographic element.

Psychographic segmentation

Psychographic traits can range from values, personalities, interests, attitudes, conscious and
subconscious motivators, lifestyles, and opinions. To understand your target customers on this
level, methods such as focus groups, surveys, interviews, and case studies can all prove
successful in compiling this type of conclusion.

Behavioral segmentation

Behavioral segmentation has similar measurements to psychographic segmentation but focuses

on specific reactions and the way customers go through their decision making and buying
processes. Brand loyalty is an excellent example of behavioral segmentation.

Chapter six : Short questions

1. What is fashion ?
When A specific style is followed by a group of people for a certain period of time then it is
defined as fashion .

2.What is fad ?
A style, activity, or interest that is very popular for a short period of time. On the other hand fad
is a style or activity that suddenly becomes popular but which usually does not stay popular for
very long.

Describe product life cycle stages

The product life cycle is the process a product goes through from when it is first introduced into
the market until it declines or is removed from the market. The life cycle has four stages -
introduction, growth, maturity and decline.
1. Introduction

Once a product has been developed, the first stage is its introduction stage. In this stage, the
product is being released into the market. When a new product is released, it is often a high-
stakes time in the product's life cycle - although it does not necessarily make or break the
product's eventual success.

2. Growth

By the growth stage, consumers are already taking to the product and increasingly buying it.
The product concept is proven and is becoming more popular - and sales are increasing. As the
market expands, more competition often drives prices down to make the specific products
competitive.. Marketing in this stage is aimed at increasing the product's market share.

3. Maturity

In this stage, saturation is reached and sales volume is maxed out. Companies often begin
innovating to maintain or increase their market share, changing or developing their product to
meet with new demographics or developing technologies. The maturity stage may last a long
time or a short time depending on the product. For some brands, the maturity stage is very
drawn out, like Coca-Cola (KO) - Get Report .

4. Decline

Although companies will generally attempt to keep the product alive in the maturity stage as
long as possible, decline for every product is inevitable.In the decline stage, product sales drop
significantly and consumer behavior changes as there is less demand for the productMarketing
in the decline stage is often minimal or targeted at already loyal customers, and prices are
reduced.

Chapter 7 : Short questions

1.What is pricing strategy ?

Pricing strategy refers to method companies use to price their products or services. Almost all
companies, large or small, base the price of their products and services on production, labor
and advertising expenses and then add on a certain percentage so they can make a profit.
There are several different pricing strategies, such as penetration pricing, price skimming,
discount pricing, product life cycle pricing and even competitive pricing.
 Broad questions

Describe pricing strategy

Penetration Pricing Here the organisation sets a A television satellite company

Skimming Pricing
Competition Pricing
low price to increase sales and
market share. Once market
share has been captured the
firm may well then increase
their price.
The organisation sets an
initial high price and then
slowly lowers the price to
make the product available to
a wider market. The objective
is to skim profits of the
market layer by layer.
Setting a price in comparison
with competitors. In reality a
firm has three options and
these are to price lower, price
the same or price higher than
competitors.
sets a low price to get
subscribers then increases the
price as their customer base
increases.
A games console company
reduces the price of their
console over 5 years, charging
a premium at launch and
lowest price near the end of
its life cycle.
Some firms offer a price
matching service to match
what their competitors are
offering. Others will go
further and refund back to the
customer more money than
the difference between their
price and the competitor's
price.

Pricing Strategies Table Continued

Pricing Strategy Definition Example

Product Line Pricing Pricing different products within An example would be a DVD
the same product range at manufacturer offering different
different price points. DVD recorders with different
features at different prices e.g. A
Pricing Strategy Definition
Bundle Pricing The organisation bundles a group This strategy is very popular with
of products at a reduced price. supermarkets who often offer
Common methods are buy one BOGOF strategies.
and get one free promotions or
BOGOFs as they are now
known. Within the UK some
firms are now moving into the
realms of buy one get two free
can we call this BOGTF I
wonder?
Premium Pricing The price is set high to indicate
that the product is "exclusive"
Psychological Pricing The seller here will consider the
psychology of price and the
positioning of price within the
market place.
Example
HD and non HD version.. The
greater the features and the
benefit obtained the greater the
consumer will pay. This form of
price discrimination assists the
company in maximising turnover
and profits.
Examples of products and
services using this strategy
include Harrods, first class
airline services, and Porsche.
The seller will charge 99p
instead £1 or $199 instead of
$200. The reason why this
methods work, is because buyers
will still say they purchased their
product under £200 pounds or
dollars, even thought it was a
pound or dollar away. My
favourite pricing strategy.

Pricing Strategy Definition Example

Optional Pricing The organisation sells This strategy is used
optional extras along with commonly within the car
the product to maximise its industry as I found out
 Pricing Strategy Definition
turnover.
Cost Plus Pricing The price of the product is
production costs plus a set
amount ("mark up") based
on how much profit
(return) that the company
wants to make. Although
this method ensures the
price covers production
costs it does not take
consumer demand or
competitive pricing into
account which could place
the company at a
competitive disadvantage.
Cost Based Pricing This is similar to cost plus
pricing in that it takes
costs into account but it
will consider other factors
such as market conditions
when setting prices.
Value Based Pricing This pricing strategy
considers the value of the
product to consumers
rather than the how much
it cost to produce it. Value
is based on the benefits it
provides to the consumer
e.g. convenience, well
being, reputation or joy.
Example
when purchasing my car.
For example a product
may cost £100 to
produce and as the firm
has decided that their
profit will be twenty
percent they decide to sell
the product for £120 i.e.
£100 plus 100/100 x 20
Cost based pricing can be
useful for firms that
operate in an industry
where prices change
regularly but still want to
base their price on costs.
Firms that produce
technology, medicines,
and beauty products are
likely to use this pricing
strategy.
Chapter 8 Short question

1.what is Franchising ?
Franchising is an arrangement where franchisor (one party) grants or licenses some rights and
authorities to franchisee (another party). Franchising is a well-known marketing strategy for
business expansion. Franchising is basically a right which manufacturers or businesses give to
others. This right allows the beneficiaries to sell the products or services of these
manufacturers or parent businesses. These rights could even be in terms of access to
intellectual property rights.

1.Broad Questions Advantages and Disadvantages of franchising

Advantages

Cost-Effective Expansion – Franchisees handle the research and funding for outlets in your
chain, which means you do not have to spend your own capital or request additional funding
from banks or investors in order to grow your business.

Marketing Support – Every franchise location uses the same tried and true marketing plans,
which helps eliminate the costly guess work when starting an independent business. You will
also have the power of a national and/or regional advertising fund.

Additional Sources of Revenue – As the franchisor, you will receive additional income in the
form of on-going royalties paid by your franchisees, depending on your franchise agreement.
Royalties typically include a monthly fee including a percentage of the franchisees gross sales.

Acquiring Talented Managers – The managers chosen to run each franchised location will have
a vested interest in its success, unlike a salaried employee, and will be responsible for handling
any issues related to employees, workers’ compensation, etc.

Scalability – Depending on your needs and goals, you can customize your franchise agreement
to focus on large volume national growth or low volume regional growth.

Disadvantages

Capital Investment – Establishing a franchise requires investment of time and money in

business development, a flagship store, legal document preparation, marketing and packaging
plans, and recruiting franchisees.

Less Control – The franchisees will agree to follow your training and instructions, but you may
not be able to make changes without running into disagreements. Your franchisees are still
independent businesses and negotiations may be necessary.
 Costly Legal Action – In the event that a franchisee refuses to cooperate or proves
unprofitable, legal action may be required, which can be both costly and damaging to your
reputation among other franchisees.

Regulation – Franchises are regulated by state and federal laws, requiring the development of a
Franchise Disclosure Document (FDD) and other Regulatory Documents with the help of an
attorney.

Chapter 9

What is marketing communication mix ?

Marketing communications are those techniques that the company or a business individual
uses to convey promotional messages about their products and services. Experts of marketing
communication design different types of persuasive communication and send it to the target
audience.

Broad questions

Describe the elements of marketing communication mix

Advertising

Advertising is the most important element of the Marketing Communications Mix because it

includes all paid messages a company delivers through various mediums, in order to reach their
target audience. Advertising includes two main categories, above-the-line advertising where
the advertising agency takes the commission and below-the-line advertising, done for a
standard charge.

Personal selling

Personal selling is often part of the direct marketing element, although many businesses
consider Personal selling takes place when an individual salesperson sells a service, solution or
product, matching the benefits of the offering to the wants and needs of the customer.
Companies that sell high-end products require more efforts to convince customers to buy, such
as developing a long-term client relationship.

Sales promotions

Sales promotions, also known as discounts, serve the same function as advertising, promoting
through paid strategies. This key element of the marketing communication aims to increase
cash flow and revenue, clear out extra inventory and attract new buyers. The most popular
promotions include discounted prices, buy one get one free, free gifts, vouchers, coupons and
free samples.

Public relations

Public relations (PR) is a broad concept because it includes many elements in the process of
communication between a company and the public. Although PR is similar to advertising, the
most notable difference is that you don’t pay for the message. This means that companies can’t
always control the message and the media can present a negative story. PR aims to build and
maintain a positive image of the organization, a process known as goodwill.

Direct marketing / Internet marketing

In the last few years, Digital marketing was giving tough competition to television advertising as
well as newspaper advertising. As of end quarter of 2016, digital marketing has practically
overtaken Television advertising and has a major spend amongst all media.

Packaging

Although packaging is supposed to be a part of the marketing mix and not the communications
mix, lately, due to competition and the increasing rivalry between businesses, even packaging is
considered as an important medium of communicating with your consumers.

Chapter 10 –Short Question

1.What is swot Analysis ?

SWOT analysis (strengths, weaknesses, opportunities and threats analysis) is a framework for
identifying and analyzing the internal and external factors that can have an impact on the
viability of a project, product, place or person. On the other hand A SWOT analysis is a
technique used to determine and define Strengths, Weaknesses, Opportunities, and Threats –
SWOT. Of an organization or individual.