Edexcel GCSE (9-1) Business (1BS0) · Spec 2.2.1, 2.2.2, 2.2.3, 2.2.4 and 2.2.5
Making marketing decisions
Read the notes, then try the questions. Each one is marked the moment you press Check, and shows the right answer and why.
Key ideas
- Product: the design mix is function, aesthetics and cost. The product life cycle runs introduction, growth, maturity, decline.
- Price: methods include competitive pricing, cost-plus, price skimming and penetration pricing. The right one depends on the product and the market.
- Promotion: product trial, sponsorship, special offers, viral advertising, e-newsletters and targeted online advertising.
- Place: a retailer sells to the final customer. An e-tailer sells online only. Selling direct avoids a retailer's mark-up.
- An integrated marketing mix has all four elements sending the same message. A luxury watch has a high price, specialist shops and prestige promotion.
Key terms
- Design mix
- The three things that shape a product's design: function, aesthetics and cost.
- Price skimming
- Launching a new product at a high price, then lowering it over time.
- Penetration pricing
- Launching at a low price to win customers quickly.
- Product trial
- Letting customers try a product before they buy it.
- E-tailer
- A business that sells to customers online only.
- Integrated marketing mix
- A marketing mix whose four elements fit together and send the same message.
Common mistakes
- Mixing up price skimming (start high) and penetration pricing (start low).
- Calling a product's looks 'function'. Looks, feel or sound are aesthetics.
- Choosing a mix that does not fit: a luxury product with big discounts weakens its image.
Exam tip
Marketing mix answers need the context. Say why this price or this promotion suits this business and its customers, not just what the method is.
Free practice questions
8 questions, 22 marks. Answer, then press Check. The marking guide explains how the marks are worked out. Nothing is saved.
- Question 1 · Matching[4 marks]
Match each description to the correct design term.
- Question 2 · Multiple choice[1 mark]
Place these product life cycle stages in the correct order: maturity, introduction, decline, growth.
- Question 3 · Matching[4 marks]
Match each scenario to the pricing method being used.
- Question 4 · Matching[4 marks]
Match each promotion method to what it involves.
- Question 5 · Multiple choice[1 mark]
A shop lets customers taste a new juice free in store. Which promotion method is this?
- Question 6 · Fill the gaps[3 marks]
Complete each sentence about place and promotion using the word bank.
Word bank: e-tailer · sponsorship · retailer · trial · wholesaler · viral
A business that sells only through a website is an .
Letting customers try a product free before they buy is a product .
An advert that spreads quickly because users share it on social media is called advertising.
- Question 7 · True or false[4 marks]
Decide whether each statement about methods of distribution is true or false.
1. A retailer sells products to the final customer.
2. An e-tailer can only sell to customers who live near its warehouse.
3. A producer selling from its own website avoids paying a retailer's mark-up.
4. When a business sells through a retailer it always keeps the whole selling price.
- Question 8 · Multiple choice[1 mark]
Which pair of choices gives a luxury watch an integrated marketing mix?