Business and Commerce Concepts

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Questions and Answers

Why is retargeting considered effective?

It targets a wide audience regardless of behavior

It takes only one brand exposure to convert a lead

It only targets customers who have already made a purchase

It often takes multiple brand exposures before someone buys (correct)

What is the primary benefit of segmenting an audience based on behavior?

To create a single campaign for all audiences

To focus on targeting new customers only

To send timely, tailored marketing messages to each segment (correct)

To send generic marketing messages to everyone

What is one of the advantages of prospect targeting in behavioral targeting?

Targeting a wide audience regardless of behavior

Targeting customers who have already made a purchase

Creating a single campaign for all audiences

Targeting prospects who have demonstrated an interest in a product or service (correct)

How can behavioral targeting help marketers with their resources?

By making better decisions about how and where they’re directing their resources Signup and view all the answers

What is one of the benefits of behavioral targeting in terms of customer experience?

It creates a more interesting and engaging experience for visitors Signup and view all the answers

What does behavioral targeting teach companies about their brand?

How their target customers perceive their brand and interact with their assets Signup and view all the answers

What is the main goal of a cost-plus pricing strategy?

To determine the price of a product based on its production cost Signup and view all the answers

Which pricing strategy takes into account the psychological impact of prices on customers?

Psychological pricing Signup and view all the answers

What is the purpose of a bundle pricing strategy?

To sell multiple products together at a single price Signup and view all the answers

Which pricing strategy involves setting different prices for the same product based on the location of the buyer?

Geographic pricing Signup and view all the answers

What is the main difference between a premium product and a basic product in an optional product pricing strategy?

The features and benefits of the product Signup and view all the answers

Which pricing strategy sets a price based on the customer's perceived value of the product?

Value-based pricing Signup and view all the answers

What is the primary goal of trading?

To make a profit Signup and view all the answers

What type of business involves buying and selling products at a markup?

Buying and selling Signup and view all the answers

What is the primary function of marketing?

To provide information about a product and the company Signup and view all the answers

What type of service business focuses on providing financial services to customers?

Finance Signup and view all the answers

What determines the type of business organization?

The nature or purpose of the business Signup and view all the answers

What is a characteristic of a service business?

It provides an intangible valuable offering Signup and view all the answers

Which type of cost is directly related to producing a good or service?

Direct Cost Signup and view all the answers

What type of labor is considered a product cost?

Direct labor Signup and view all the answers

Which of the following is an example of a period cost?

Marketing expenses Signup and view all the answers

What is included in the Manufacturing Overhead Cost?

All the indirect costs incurred during manufacturing Signup and view all the answers

What is the main difference between Direct Cost and Indirect Cost?

Direct Cost is related to producing a good or service while Indirect Cost is not Signup and view all the answers

What are the three main components of Manufacturing Costs?

Direct Materials, Direct Labor, and Manufacturing Overhead Signup and view all the answers

What is the primary goal of a premium pricing strategy?

To create a perception of high-value products Signup and view all the answers

What is the main difference between a skimming pricing strategy and a competition-based pricing strategy?

The price of the product is higher at the start and then decreased Signup and view all the answers

What is the primary objective of a freemium pricing strategy?

To offer a basic version of a product and hope users will upgrade Signup and view all the answers

What is the result of using a competition-based pricing strategy?

A better position to win a customer's business Signup and view all the answers

What is product line pricing also known as?

Price lining Signup and view all the answers

What is the primary focus of a skimming pricing strategy?

The highest possible price for a new product Signup and view all the answers

Study Notes

Pricing Strategies

Optional Product Pricing: allows customers to pay a higher price for a product with additional features or a lower price for a basic version.
Bundle Pricing Strategy: offers two or more complementary products or services together for a single price.
Psychological Pricing Strategy: takes advantage of human psychology to boost sales, e.g., pricing at $99.99 instead of $100.
Geographic Pricing Strategy: prices products or services differently based on geographical location or market.
Cost-Plus Pricing Strategy: focuses on the cost of producing a product or service and adds a markup for profit.
Value-Based Pricing Strategy: prices products or services based on what the customer is willing to pay.

Costs

Direct Costs: can be easily traced to a product, department, or project, e.g., raw materials, labor, and distribution costs.
Indirect Costs: cannot be easily traced to a product, department, or project, e.g., overhead expenses, rent, and marketing expenses.
Manufacturing Costs: include direct material, direct labor, and manufacturing overhead costs.

Pricing Strategy Types

Skimming Pricing Strategy: charges the highest possible price for a new product and lowers it over time.
Competition-Based Pricing Strategy: focuses on the existing market rate for a product or service.
Premium Pricing Strategy: prices products high to present a high-value, luxury, or premium image.
Freemium Pricing Strategy: offers a basic version of a product for free, hoping users will upgrade to a paid version.
Product Line Pricing: separates goods and services into cost categories to create perceived quality levels.

Behavioral Targeting

allows marketers to target prospects who have demonstrated interest in a product or service.
helps convert leads into customers with personalized messaging.
creates a more engaging experience for visitors, increasing customer loyalty.
enables marketers to make better resource allocation decisions.

Business Concepts

Trading: the buying and selling of financial assets in markets to make a profit.
Buying and Selling: purchasing products at wholesale and selling them at a higher price.
Marketing: providing information about a product and company.
Service Business: provides an intangible valuable offering to customers, often handled by an individual or group of people.

Types of Service Businesses

Personal: one-on-one interaction between seller and buyer, e.g., hair salon.
Finance: provides services concerning financing needs, e.g., banking, insurance.
Recreational: provides service facilities for sports, entertainment, amusement parks, etc.

Types of Business Organizations

Profit Organizations: exist to make a profit.
Non-Profit Organizations: do not distribute profits to owners or shareholders.

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Description

Test your knowledge of fundamental business concepts, including trading, buying and selling, marketing, and aids to trade. Learn about different business models and strategies. Identify the key components of a successful business.