Principles of marketing/PMKT101/Optimizing the Marketing Mix/Quiz 3

The questions which follow provide a basic knowledge test of selected concepts covered in this learning pathway: Optimising the marketing mix.

The questions published at the end of each learning pathway are re-used for the knowledge test for learners interested in earning a digital badge or certificate of participation for the Core foundations of successful marketing (PKMT101) micro-course. Please consult the Certify participation page for more information.

True - false questions

Indicate whether the following statements are true or false:

• A "product" can be a good or service.
  • True
    • Correct, a 'product' can be a physical good (e.g. a pair of shoes, cereal or bulldozer) or a service (e.g. HR consulting services, plumbing or accounting services).
  • False
    • Incorrect, a 'product' is an umbrella term for an organization's physical product or service.
• A marketing or business degree is required for success in product marketing.
  • True
    • Incorrect, there is no substitute for experience - even if one has a marketing or business degree. Nevertheless, business training always helps people learn about the latest trends and actions, which can assist marketing efforts.
  • False
    • Correct, a business or marketing degree is not required to achieve marketing success. However, professional development of any kind can assist the development of one's competence and confidence in striving to achieve marketing goals.
• Competitors often try to gain market share by reducing their prices.
  • True
    • Correct, when a company lowers its price, there is a likelihood that it will be more affordable to a wider group of people. However, a company must be careful to ensure that its brand promise (e.g. a luxury item) does not conflict with its pricing strategy.
  • False
    • Incorrect, price is a key part of the marketing mix. Accordingly, companies try to increase their appeal to customers by reducing price by different means (i.e., lower unit price, coupons, special promotions) in an effort to increase market share.
• Pricing techniques such as "2-for-1" and "buy 1, get 1 free" have limited effectiveness.
  • True
    • Incorrect, psychological pricing works and consumers are attracted to buy items, particularly when they perceive or believe they are getting a bargain.
  • False
    • Correct, these techniques are highly effective, as they make the most of consumer psychology, to create a sense of urgency and scarcity in the buyer's mind.

Multiple choice questions

• Which of the following best describes what promotion is about?
  • Promotion is about differentiating a product
    • Not exactly - promotion includes other activities.
  • Promotion is about presenting information to consumers and others
    • Not exactly - promotion also includes product differentiation and increasing demand.
  • Promotion is about increasing market demand
    • Not only - it is also about differentiation and presenting information.
  • Promotion is about differentiating a product, presenting information to consumers and others, and increasing market demand
    • That is correct!
• Pricing above the competition requires a clear advantage on which of the following?
  • The non-price elements of the marketing mix
    • Correct - the company must be able to prove to the customer that it has premium value to justify the higher price.
  • Expensive, high quality raw materials for production
    • Not really - cost of production is not an advantage unless it is linked to product quality that is of value to customers.
  • Strong marketing research
    • No - even though marketing research contributes to understanding consumer behaviour and the competition, and informs the pricing strategy, it is not an advantage that will justify higher pricing.
• Which of the following statements best describes the features of a product?
  • Quality, variety, design, price, branding and packaging
    • Incorrect - price is not a product feature.
  • Quality, design, functionality, variety and packaging
    • Not exactly - brand name is a key product feature as well as post-sales services.
  • Variety, quality, design, features and functionality, brand name, packaging and a post-sales warranty
    • Correct - there are various elements to a product, which can improve its appeal to consumers.
• The first step when setting price and developing a pricing strategy is to:
  • Research and analyse the prices of competitors
    • Not exactly - even though researching the competitors and analysing their pricing is an important step in the process.
  • Estimate cost of production and distribution
    • Not really - but you will need to establish that to determine the profit margin you can achieve.
  • Forecast and determine demand
    • No - although understanding demand is important and can influence pricing.
  • Set a pricing strategy objective
    • Correct - you need to set a pricing objective first of what you are aiming to achieve (break into a new competitive market, expand and extend your potential market, maximise profit, etc.) that will focus your strategy and the decisions you make.