3.0 Decision making to improve marketing performance

A business collects information from a small group of customers in order to discover why they like a particular product. This is an example of which type of marketing research?

• Qualitative, primary market research

• Qualitative, secondary market research

• Quantitative, primary market research

• Quantitative, secondary market research

What are the features of a ‘cash cow’ in the Boston Matrix?

• High market share in a high-growth market

• High market share in a low-growth market

• Low market share in a high-growth market

• Low market share in a low-growth market

Price skimming involves setting a price that:

• is most appropriate when demand is price elastic

• allows a firm to target the mass market with a low price

• is high in order to ensure a high profit margin

• is suitable for a product in the decline stage of its product life cycle.

A 10% increase in the price of a product causes a 20% fall in the quantity demanded. This relationship between the price and the quantity demanded of the product shows:

• Negative correlation and price elastic demand

• Negative correlation and price inelastic demand

• Positive correlation and price elastic demand

• Positive correlation and price inelastic demand

The diagram indicates that between temperature and sales of Good ‘X’ there is a:

• Strong positive correlation

• Weak positive correlation

• Strong negative correlation

• Weak negative correlation

Product X has sales of £600,000 in a market with total sales of £5 million. The market share for Product X is:

• 15%

• 12%

• 1.2%

• 30%

Extrapolation can be defined as:

• A statistical technique used to establish the strength of a

  relationship between two sets of data

• The introduction of an extra product to a certain

  geographical area

• Using the previous patterns of numerical data in order

  to predict values in the future

• Additional data not considered in the final sample size of research

Statement 1: ‘Penetration pricing is more likely to be used if demand is price inelastic.’

Statement 2: ‘Price skimming is more likely to be used if demand is price elastic.’

Read statements 1 and 2 and select the correct option from the following options:

• Statement 1 is true. Statement 2 is true

• Statement 1 is true. Statement 2 is false

• Statement 1 is false. Statement 2 is true

• Statement 1 is false. Statement 2 is false

Which one of the products in Table 1 is most likely to be a luxury product with many close substitutes?

• Product A

• Product B

• Product C

• Product D