Year 12 Business Studies: Marketing

Questions and Answers

What is the primary benefit of market segmentation for a business?

It reduces marketing costs significantly.

It increases the number of products offered.

It guarantees higher sales in all segments.

It improves the understanding of market needs. (correct)

Which of the following is NOT a common basis for market segmentation?

Technological (correct)

Behavioral

Demographic

Geographic

What does product differentiation primarily aim to achieve?

To simplify the purchase process.

To standardize product features across the market.

To lower production costs.

To distinguish a product from competitors. (correct)

Which of the following factors is most often used in product positioning?

Quality Signup and view all the answers

What are tangible benefits of a product?

Physical attributes like design and color. Signup and view all the answers

How does branding influence consumer behavior?

It establishes trust and expectations about quality. Signup and view all the answers

Which of the following statements about intangible benefits is true?

They include prestige and after-sales service. Signup and view all the answers

What primarily drives market positioning?

Price, quality, and product benefits. Signup and view all the answers

What is one primary aim of marketing?

To maximize sales and increase market awareness Signup and view all the answers

How does marketing provide consumers with choice?

By differentiating products through price, quality, and loyalty Signup and view all the answers

What is required on cigarette packs in relation to health?

They must display health warnings. Signup and view all the answers

Which of the following constitutes unfair competitive behavior?

Engaging in price-fixing among competitors. Signup and view all the answers

Which organization is responsible for ensuring fair competition in Australia?

Australian Competition and Consumer Commission (ACCC) Signup and view all the answers

What impact does marketing have on the standard of living?

It enhances lifestyles by improving product features Signup and view all the answers

Which of the following is a function of brand awareness?

Increasing consumer knowledge of a product's features and availability Signup and view all the answers

What is the relationship between market share and profitability?

Increased market share typically leads to increased profitability Signup and view all the answers

What does SWOT analysis help management understand?

The business's current position and future direction. Signup and view all the answers

How does marketing contribute to employment?

By creating demand for goods and services Signup and view all the answers

What is the focus of the 'Introduction' stage in the Product Life Cycle?

Slow sales, low profit, and heavy promotion needed. Signup and view all the answers

What type of behavior does 'sugging' refer to in marketing?

A technique aiming to deceive. Signup and view all the answers

Which strategy is NOT a common method to increase consumer preference?

Reducing advertising efforts Signup and view all the answers

Which of the following are considered external forces in SWOT analysis?

Opportunities and threats. Signup and view all the answers

What is one way businesses improve their income streams through marketing?

By catering to diverse consumer health concerns with varied products Signup and view all the answers

Which of the following is NOT a stage in the Product Life Cycle?

Diversification. Signup and view all the answers

What type of branding is owned by retailers or wholesalers?

Private branding Signup and view all the answers

Which aspect is NOT a function of packaging?

Providing a warranty Signup and view all the answers

What pricing method ignores the state of the market and focuses on production costs?

Cost-based pricing Signup and view all the answers

During which phase of the product lifecycle is skimming pricing typically employed?

Introduction phase Signup and view all the answers

What is the purpose of loss leader pricing?

To attract customers for additional purchases Signup and view all the answers

Which pricing strategy involves setting a price based on competitors' prices?

Competition-based pricing Signup and view all the answers

What is a characteristic of generic branding?

It has no specific brand name. Signup and view all the answers

What is a key limitation of cost-based pricing?

It ignores market demand. Signup and view all the answers

What is one key influence of culture and subculture on consumer behavior?

They influence what people wear and how they eat. Signup and view all the answers

Which group is primarily responsible for making household purchasing decisions related to healthcare products?

Women Signup and view all the answers

How do peer groups influence individual buying behavior?

By encouraging choices based on friends' experiences. Signup and view all the answers

What economic factors influence consumer spending habits?

General economic trends like unemployment and interest rates. Signup and view all the answers

What is a purpose of consumer laws like the Australian Consumer Law?

To protect consumers from deceptive business practices. Signup and view all the answers

What is an example of deceptive advertising under the Competition and Consumer Act?

Promoting a product with an exaggerated claim of health benefits. Signup and view all the answers

What is the primary concern of laws like the Competition and Consumer Act 2010?

To promote competition among businesses. Signup and view all the answers

What is the bait and switch advertising tactic?

Advertising a product on sale that is unavailable and redirecting to a higher-priced item. Signup and view all the answers

Study Notes

Role of Marketing

Involves developing products and implementing strategies for promoting, pricing, and distributing to target customers.
Essential to research consumer preferences and align business resources with market needs.
Goals include maximizing sales, increasing market awareness, and enhancing consumer choice and satisfaction.

Strategic Role of Marketing Goods and Services

Choice: Differentiation of products leads to consumer choice based on price, quality, and brand loyalty.
Improved Standard of Living: Ongoing enhancements in product features cater to diverse consumer health needs, such as varied milk types.
Employment: Creates jobs and income opportunities, enabling consumers to fulfill needs for goods and services.
Brand Awareness: The consumer's knowledge of a product influences buying decisions; achieved through effective advertising.
Increasing Market Share: Represents the percentage of total sales relative to competitors, driving sales and profitability.

Influencing Factors on Consumer Behavior

Culture and Subculture: Shared values and traditions impact lifestyle choices such as clothing and food.
Family and Household Role: Women often play key roles in purchasing decisions for healthcare and household products.
Peer Groups: Consumers may alter buying choices based on friends' experiences and influences.
Economic Factors: Economic trends, such as unemployment and interest rates, along with socioeconomic status, shape spending habits.
Government Policies: Regulations affect business activities and consumer expenditures, influenced by laws like the Competition and Consumer Act 2010.

Consumer Laws

Australian Consumer Law (2011): Governs interactions between consumers and businesses.
Deceptive and Misleading Advertising: Prohibits false claims regarding product features, overstating benefits, and fake discounts.
Health Warnings: Cigarette packs must display health risks; similar regulations proposed for alcohol and junk food advertising aimed at children.
Fair Competition: Enforced by the Australian Competition and Consumer Commission (ACCC), preventing practices like price-fixing and misleading competitor ads.
Sugging: An unethical marketing technique presenting as market research to mislead consumers.

Marketing Processes

Situational Analysis (SWOT):
- Strengths: Unique competencies of the business.
- Weaknesses: Areas where competitors excel.
- Opportunities: External factors that can be leveraged for growth.
- Threats: External challenges that may impede objectives.

Product Life Cycle

Each stage (Introduction, Growth, Maturity, Decline) demands tailored marketing strategies.
Introduction Stage: Slow sales necessitate strong promotion for market awareness.

Market Segmentation, Differentiation, and Positioning

Market Segmentation: Groups markets by demographics, geography, psychographics, and behavior, allowing businesses to cater specifically to segments.
Differentiation: Distinguishing product features encourages a superior brand perception based on price, quality, and service.
Positioning: Crafting product images relative to competitors, often based on attributes like quality and benefits.

Products

Consist of goods/services aimed at fulfilling consumer needs, providing both tangible (physical attributes) and intangible (prestige, service) benefits.

Branding

Refers to the reputation built over time, influencing consumer perceptions and loyalty through brand names and logos.
Types of Branding:
- Manufacturer Branding: Owned and marketed by the creator (e.g., Sunbeam).
- Private Branding: Owned by a retailer or wholesaler (e.g., Myer’s Miss Shop).
- Generic Branding: No-name products targeting budget-conscious consumers (e.g., Woolworths Select).

Packaging

Physical presentation of products impacts consumer perceptions; it must attract attention, protect, and communicate brand identity.

Pricing Methods

Cost-based Pricing: Set by adding a profit margin to production costs; limited by market demand understanding.
Market-based Pricing: Aligns prices with supply and demand dynamics.
Competition-based Pricing: Adjusts prices according to competitor pricing strategies.

Pricing Strategies

Skimming: High initial pricing to recoup costs before gradually lowering prices.
Penetration: Low introductory prices to gain market share rapidly.
Loss Leaders: Selling at a loss to attract customers, hoping they purchase additional items.
Price Points: Establishing fixed price levels based on consumer demand stability.

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Description

Prepare for your Year 12 Business Studies examination with this focused study on Marketing. This quiz covers the role of marketing, product development, and strategies for promotion, pricing, and distribution. Enhance your understanding of how to effectively target potential customers.