Basic Marketing & economic systems

Question 1

Odd pricing such as $19.95

Answer 1

Conveys an image of value independent of actual price

Question 2

Even pricing such as $50

Answer 2

Conveys an image of status

Question 3

Tools used for promotion (communication)

Answer 3

• Personal selling
• Product promotion
• Public relations
• Advertising

Question 4

Value=

Answer 4

Value= benefits + cost

Question 5

What is the basis of capitalism?

Answer 5

• Self interest
• Competition
• Private ownership

Question 6

Who is Adam Smith?

Answer 6

The father of economics and capitalism

Question 7

What kinds of things would we not have under a pure capitalist economy?

Answer 7

• Social security
• Child labor laws
• Minimum wage

Question 8

What are the four p’s of marketing?

Answer 8

• Product
• Price
• Place
• Promotion

Question 9

What are the four C’s of marketing?

Answer 9

• Customer
• Cost
• Convenience
• Communication

Question 10

What are the stages of the product life cycle?

Answer 10

• Development
• Introductory
• Growth
• Maturity
• Decline

Question 11

What are the characteristics of the introductory stage?

Answer 11

• Low sales
• Possible losses
• Few competitors

Question 12

What are the characteristics of the growth stage?

Answer 12

• Rapidly rising sales
• Very high profits
• Growing number of competitors

Question 13

What are the characteristics of the maturity stage?

Answer 13

• Peak sales
• Declining profits
• Stable number of competitors followed by a decline

Question 14

What are the characteristics of the decline stage?

Answer 14

• Falling sales
• Profits may fall to become losses
• Declining number of competitors

Question 15

What life cycle stage has declining profits?

Answer 15

Maturity

Question 16

What life cycle stage has peak peak sales?

Answer 16

Maturity

Question 17

What life cycle stage has low sales?

Answer 17

Introduction

Question 18

What is a skimming strategy?

Answer 18

Price skimming occurs when a company sets relatively high prices and slowly lowers them.

There must be high demand and no immediate competition

Question 19

What is a penetration strategy?

Answer 19

Initially offering the lowest price to get a larger share of the market

• Used when you have lots of competition
• Works only if you can absorb little or no profits in the short term