Marketing Strategies and Pricing Quiz
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Questions and Answers

What is line stretching and what is its main objective?

Line stretching is the strategy of adding more products to an existing line to capture new customer segments. Its main objective is to reach customers not covered by the current product range.

What is the primary purpose of line filling?

The primary purpose of line filling is to exploit gaps in the marketplace, thereby reducing competition by increasing the variety of products in the existing range.

Explain downward stretching and its target market.

Downward stretching is introducing a lower-function and less expensive product within a product line to appeal to less demanding users seeking lower prices.

What does upward stretching involve and who is it aimed at?

<p>Upward stretching involves launching an upgraded version of an existing product aimed at more discerning customers willing to pay more for improved features.</p> Signup and view all the answers

How do marketing objectives influence pricing decisions?

<p>Marketing objectives impact pricing by dictating whether a company sets a high price to maximize profits or a low price to maximize market share and survival.</p> Signup and view all the answers

What role does management philosophy play in setting prices?

<p>Management philosophy can lead a company to consider social factors in pricing strategies, sometimes resulting in prices below costs due to social responsibility goals.</p> Signup and view all the answers

How does the nature of the market affect pricing strategies?

<p>The nature of the market influences pricing by allowing higher prices in less competitive markets and necessitating lower prices in more competitive environments.</p> Signup and view all the answers

Why should a company consider competitors' strategies when setting prices?

<p>A company should consider competitors' strategies to align its pricing with market standards and ensure its products remain competitive in terms of price and quality.</p> Signup and view all the answers

What is a key benefit of using personal selling in a travel agency?

<p>It allows salespersons to explain product information and obtain customer feedback for customised services.</p> Signup and view all the answers

List three product strategies a travel agency can adopt to attract customers.

<p>Offering various theme tours, providing high-quality services with professional guides, and including add-on services like car rental.</p> Signup and view all the answers

Define brand extension and provide an example.

<p>Brand extension is using a successful brand name to launch new products in different categories, like Apple introducing a new iPhone model.</p> Signup and view all the answers

Explain the concept of multi-branding and give an example.

<p>Multi-branding involves using different brand names for similar products within the same category, such as P&amp;G’s Head &amp; Shoulders and Pantene.</p> Signup and view all the answers

How can Mr. Choi utilize product strategies to increase sales at his new restaurant?

<p>He can offer unique cuisine themes, provide exceptional service standards, and include special promotions or loyalty programs.</p> Signup and view all the answers

What role does building customer relationships play in personal selling?

<p>It fosters loyalty and preference for the product through personal interaction and communication.</p> Signup and view all the answers

In terms of branding, what is one potential advantage of Mr. Choi opening a new restaurant in Central?

<p>Leveraging his existing brand recognition can attract new customers based on previous positive experiences.</p> Signup and view all the answers

Identify a product strategy that could differentiate a new restaurant in a competitive area.

<p>Offering a signature dish or exclusive menu items can set the restaurant apart from competitors.</p> Signup and view all the answers

What is the primary goal of a skimming pricing strategy when launching a new product?

<p>The primary goal is to capture higher profits from price-insensitive customers.</p> Signup and view all the answers

How does a penetration pricing strategy differ from skimming pricing?

<p>Penetration pricing sets a low initial price to attract a large customer base, while skimming sets a high price to maximize profits.</p> Signup and view all the answers

List two marketing objectives a smartphone manufacturer should consider when setting a price for a new phone.

<p>The manufacturer should consider whether to maximize profit or capture greater market share.</p> Signup and view all the answers

What role does the nature of the market play in determining the price of a smartphone?

<p>The presence of competitors affects pricing; fewer competitors can allow for a higher price, while more can require a lower price.</p> Signup and view all the answers

Identify two types of channel members involved in distribution and their functions.

<p>Wholesalers buy products from manufacturers to sell to retailers, and retailers sell products directly to consumers.</p> Signup and view all the answers

What should a newly-established bicycle company consider regarding costs when choosing to use middlemen for distribution?

<p>The company should consider commissions and fees that middlemen will charge.</p> Signup and view all the answers

Explain how customers' perception affects a smartphone manufacturer's pricing strategy.

<p>If customers perceive the product as unique and valuable, the manufacturer can set a higher price.</p> Signup and view all the answers

What factor should align pricing strategy with other marketing mix strategies?

<p>The pricing strategy should match the objectives of product, place, and promotion strategies.</p> Signup and view all the answers

How can a restaurant illustrate the marketing concept?

<p>The restaurant can analyze customer preferences and tailor its menu to meet those needs, thereby increasing customer satisfaction and profit.</p> Signup and view all the answers

What comprises the marketing mix?

<p>The marketing mix consists of the 4Ps: Product, Price, Place, and Promotion.</p> Signup and view all the answers

Suggest a pricing strategy a restaurant can use to enhance competitiveness.

<p>The restaurant can adopt a penetration pricing strategy by setting prices slightly lower than competitors to attract customers.</p> Signup and view all the answers

How can promotion be effectively used by a restaurant?

<p>The restaurant can utilize online advertisements and encourage staff to recommend popular menu items to customers.</p> Signup and view all the answers

What product strategy should TechPower consider for the low-priced tablet?

<p>TechPower should focus on offering basic features in the low-priced tablet to minimize costs while meeting essential customer needs.</p> Signup and view all the answers

Describe a suitable promotion strategy for TechPower’s low-priced tablet.

<p>TechPower can conduct sales promotions like Road Shows to showcase the low-priced tablets and attract potential buyers.</p> Signup and view all the answers

What channel strategy should TechPower use for selling the low-priced tablet?

<p>TechPower should implement selective distribution, using only a few intermediaries to control the sales process.</p> Signup and view all the answers

How can Ken Ton leverage its relationship with property development companies?

<p>Ken Ton can offer bulk discounts and tailored products to meet the specific needs of property development companies.</p> Signup and view all the answers

What are the four primary communication objectives marketers aim to achieve?

<p>Build awareness, increase interest, increase desire, and generate purchase.</p> Signup and view all the answers

Explain the significance of message structure in communication design.

<p>Message structure determines how conclusions are presented to customers, influencing their interpretation and response to the product.</p> Signup and view all the answers

Describe the role of message sources in a marketing communication strategy.

<p>Message sources refer to the parties delivering the message, such as manufacturers or spokespeople, which can affect credibility and appeal.</p> Signup and view all the answers

What factors should a marketer consider when designing the message format?

<p>A marketer should consider the media type, as well as the specific words, sounds, and visuals used to communicate the message.</p> Signup and view all the answers

List two forms of communication and illustrate each with a unique example.

<p>Mass communication (e.g., advertising) and personal communication (e.g., direct marketing).</p> Signup and view all the answers

What is exclusive distribution and why might a company choose this strategy?

<p>Exclusive distribution is a strategy where manufacturers grant a limited number of dealers the right to sell their products in specific regions, often to maintain brand prestige and control sales.</p> Signup and view all the answers

List two advantages of using a direct distribution channel for a company.

<p>Direct distribution channels save costs on intermediaries and provide better insights into customer needs.</p> Signup and view all the answers

Identify one method of sales promotion Samsung might use to boost sales in their stores.

<p>Samsung could issue discounts or cash coupons to loyalty customers to stimulate sales.</p> Signup and view all the answers

What is the first step in developing a promotion campaign?

<p>The first step is identifying the target audience.</p> Signup and view all the answers

Explain how effective advertising can impact customer engagement for a brand.

<p>Effective advertising can significantly enhance customer engagement by creating awareness and interest in the brand.</p> Signup and view all the answers

Describe the relationship between the number of intermediaries and control in selective distribution.

<p>In selective distribution, the company has medium control over a fewer number of intermediaries.</p> Signup and view all the answers

What role does communication objective setting play in a promotion campaign?

<p>Setting communication objectives ensures that the marketer knows what they want the audience to understand or do.</p> Signup and view all the answers

What might be an effective public relations strategy for Samsung when launching new products?

<p>Holding a press conference could be an effective public relations strategy for Samsung to generate buzz for new products.</p> Signup and view all the answers

Flashcards

Marketing Concept

A business philosophy that emphasizes understanding and meeting customer needs to achieve profitability.

Marketing Mix

The combination of controllable marketing variables (also known as the 4 Ps) used by a company to produce desired responses in its target market.

Low-priced product strategy

Focusing on reducing costs and offering a basic version of the product to appeal to consumers.

Penetration Pricing

Setting a low price for a product initially to attract a large number of customers and gain market share.

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Selective Distribution Channel

Using a limited number of intermediaries to distribute a product, often used for specialized or premium products.

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Sales Promotion

Marketing activities aimed at generating short-term sales increases, such as discounts or promotions.

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Road Show

A type of marketing strategy involving activities like exhibitions or demonstrations for a product.

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Bulk Sales

The strategy of selling goods in bulk to businesses, such as property developers, for their projects.

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Upward Stretching

A strategy that expands a company's product range by adding products with more features or higher quality, targeting more demanding customers who are willing to pay a premium.

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Downward Stretching

A strategy that expands a company's product range by adding products with fewer features or lower quality, targeting price-sensitive customers who are looking for a cheaper option.

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Line Filling

A strategy that expands a company's product range by adding more products within an existing category, targeting existing customers with more options.

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Line Stretching

A strategy that expands a company's product range by adding products outside of its existing category, targeting new customers with different needs.

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Cost-Plus Pricing

The price of a product is set above the cost of production plus a profit margin, ensuring profitability but potentially making the product less competitive.

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Value-Based Pricing

The price of a product is set based on the perceived value of the product by the customer, rather than just the cost of production.

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Premium Pricing

The price of a product is set high to communicate quality and exclusivity, targeting customers willing to pay a premium.

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What is personal selling?

Personal selling involves direct interaction between a salesperson and a customer to explain product features, address concerns, and provide customized recommendations.

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How does personal selling build customer relationships?

Personal selling helps build customer relationships by fostering trust, understanding customer needs, and providing ongoing support. This leads to loyalty and repeat business.

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What's a variety of tours product strategy?

A travel agency can attract customers by offering various types of trips to cater to different interests and travel styles, such as adventure tours, cultural tours, or family vacations.

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How does quality of services attract customers?

A travel agency can build trust by providing reliable and knowledgeable tour guides who deliver high-quality services, ensuring a positive customer experience.

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What are add-on services in tourism?

A travel agency can offer additional services like airline tickets, hotel bookings, and car rentals, making it convenient for customers to plan and book their entire trip with a single provider.

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What is brand extension?

Brand extension involves using a successful brand name to launch new or modified products in a new category, leveraging the existing brand reputation.

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What is multi-branding?

Multi-branding refers to a company using multiple brand names for similar products within the same category, targeting different customer segments and price points.

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What are three product strategies for Mr. Choi's new restaurant?

Mr. Choi can implement strategies like offering a unique menu featuring new dishes, adjusting pricing to attract a specific clientele, and creating engaging promotions to increase awareness and interest in his new restaurant.

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Skimming Pricing

A pricing strategy where the price is set high initially to capture the most profit from early adopters who value the product highly.

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Cost of Products

Considering the cost of production, marketing, and distribution when setting a price.

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Affordability

Determining the affordability of the product for target consumers, taking into account factors such as income levels and purchasing power.

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Competitors' Strategies

Assessing the prices set by competitors in the same market to inform pricing decisions.

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Consumers' Perception

Considering the perceived value and benefits of the product by consumers when setting a price.

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Wholesalers

Middlemen who purchase goods in bulk from manufacturers and sell them to retailers.

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Agents

Middlemen who specialize in selling products on behalf of manufacturers to retailers, often for a commission.

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Exclusive Distribution

A distribution strategy with a limited number of dealers selling in specific regions, often used for high-end or luxury products.

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Direct Distribution Channel

A company selling directly to customers, without using intermediaries.

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Advertising

Using advertisements on various media forms like magazines and the internet to reach a broad audience.

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Personal Selling

Personal interactions with customers, such as sales representatives recommending products.

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Identifying Target Audience

The first step in developing a promotion campaign, involving understanding the target audience's needs, preferences, and demographics.

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Setting Communication Objectives

Clearly defined goals for a promotion campaign, such as increasing brand awareness or driving sales.

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Elements of a Marketing Message

The content, structure, format, and source of a marketing message play a crucial role in effectively conveying the product's value proposition to the target audience.

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Message Content

This refers to the information or key points presented in the marketing message. It should highlight the product's benefits and resonate with the target customer's needs.

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Message Structure

This element focuses on how the message is structured and delivered. It involves considering whether the message should directly convey a conclusion or leave room for the customer to draw their own interpretation.

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Message Format

This refers to the chosen format and channels for delivering the message. For instance, a radio advertisement requires careful consideration of the words, sounds, and voices used.

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Message Source

This refers to the individual or entity conveying the marketing message. It could be the company, a spokesperson, or even another individual.

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Study Notes

Marketing Strategies for Goods and Services

  • Marketing concept involves analyzing customer needs and satisfying them to achieve profit. A restaurant, for example, should understand customer tastes and preferences to create a menu that caters to those needs.
  • Marketing mix refers to controllable variables (4Ps) that businesses use to generate desired responses from target markets.
  • Price: Restaurants can enhance competitiveness by pricing their items at a lower or similar cost to competitors.
  • Promotion: Restaurant promotion can involve online and print advertisements, and encouraging staff to recommend dishes.
  • Place: Longer operating hours and offering take-out improve competitiveness.
  • Low-priced tablet products should provide basic features due to their low cost.
  • Marketing mix strategy for business buyers should focus on tailored offerings, after-sales support, and bulk discounts to gain loyalty and profits.
  • A marketing mix strategy for individual buyers should offer standardized products, lower costs compared to competitors, discounts to customers, and marketing efforts online and in magazines to enhance competitiveness.
  • Public relations and sales promotion are two promotional strategies that can enhance a company's sales: offering discounts, gifts, and lucky draws, and sponsoring sports events use celebrities.
  • Personal selling promotes products through direct customer interaction. Examples include explanations of a product's features in person and getting feedback from customers to tailor the product for an enhanced experience.
  • Using personal selling for software allows for customized service by interacting directly with clients, enabling the gathering of feedback.
  • Product strategies (example) for a new restaurant can involve serving both Chinese and Western cuisine, naming the restaurant to connect to both cultures, and using a similar aesthetic to each culture in the interior design.
  • Line stretching increases products within an existing product range to attract new customers.
  • Line filling targets market gaps by adding to an existing product range to serve existing customers.
  • Downward stretching introduces a product with fewer features to serve less-demanding customers who seek lower prices, while upward stretching aims to appeal to customers who prefer higher-quality products and are willing to pay higher prices.
  • Internal factors affecting pricing include marketing objectives, cost, management philosophy and values.
  • External factors affecting pricing include nature of market, competitor strategies, and customers' perceptions of the benefits offered.
  • Skimming pricing utilizes high prices to generate a large profit margin for new products, while penetration pricing utilizes lower prices to attract more customers.
  • Cost of products, nature of market, competitor strategies, affordability, and consumers' perceptions all influence pricing strategies.
  • Wholesalers, distributors, and retailers are all parts of the distribution channels, with wholesalers buying from manufacturers and selling to retailers, distributors handling a select range of products, and retailers selling to consumers.
  • Companies must consider costs, customer needs, control of the sales process, and relationships with customers when deciding whether or not using middlemen in distribution.
  • Intensive, selective, and exclusive distribution strategies exist; intensive is for many intermediaries, selective for a limited number, and exclusive for a highly limited number of intermediaries.
  • Benefits of direct distribution channels include cost savings, enhanced customer relationships, and greater control over selling strategies.
  • Promotion strategies, including advertising, sales promotions, personal selling, and public relations, can be utilized to enhance store sales.

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Description

Test your knowledge on various marketing strategies and pricing decisions. This quiz covers concepts like line stretching, brand extension, and the role of management philosophy in pricing. Explore how travel agencies can attract customers and the implications of market nature on pricing strategies.

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