Marketing Test - 55

A franchise is an agreement between two independent parties: the franchisor and the franchisee. One party (the franchisor) offers its business model, brand name, and intellectual property to another party (the franchisee) that will use the resources to start a business according to the existing system.

• To use a franchise, the franchisee needs to pay a one-time fee at the beginning to acquire the rights to use the franchisor’s business model.
• Franchising is a popular tool to scale business operations worldwide and accounts for a large portion of the U.S. market.
• Examples: McDonald's, Subway, KFC, and Pizza Hut.

There are five psychographic segmentation variables on the basis of which homogeneous segments can be prepared for proper research –  Personality, Lifestyle, Social Status, values, and Attitudes.

1. Personality
2. Lifestyle
3. Social status
4. Values
5. Attitudes

Stackelberg Model: The Stackelberg model, a game theory model that explains how to maximise profits, was created by two economists, Oskar Morgenstern, and John von Neumann.

Nash equilibrium: A player can obtain the desired outcome by sticking to their initial strategy, according to the Nash equilibrium, a decision-making theorem in game theory.

Peter's Strategic Framework: Peter's Strategic Framework is a comprehensive tool that helps organizations develop a clear understanding of their business environment and their own capabilities, and use that knowledge to develop effective strategic plans.

Prisoner's Dilemma: The Prisoner's Dilemma is a game theory model that is often used to analyze the behavior of firms in an oligopolistic market.

Hence, it can be concluded that the correct answer is A - III, B - IV, C - II, D - I.

Michael Porter's Generic Strategies:

1. Porter's generic strategies describe how a company pursues a competitive advantage across its chosen market scope.
2. The generic strategies are either lower cost, differentiation, or focus.
3. A company chooses to pursue one of two types of competitive advantage, either via lower costs than its competition or by differentiating itself along dimensions valued by customers to command a higher price.
4. A company also chooses one of two types of scope, either focus (offering its products to selected segments of the market) or industry-wide, offering its product across many market segments.
5. The generic strategy reflects the choices made regarding both the type of competitive advantage and the scope. The concept was described by Michael Porter in 1980.

Therefore, option (B) is the correct answer.

Sales and marketing information systems support Market research at the top management level.  ​It provides the information needed to make a structured decision.

Captive-product pricing is a pricing strategy in which a manufacturer or service provider sells a main product at a low price (or sometimes even at cost) and then sets high markups on the complementary products or services that are required to use or operate the main product effectively. This strategy is designed to create a dependency on the complementary products, ensuring a steady revenue stream.

In the statement provided, manufacturers of razors and cameras are employing captive-product pricing.

• The main product in this scenario refers to the razors and cameras. These are sold at a low price or sometimes even at cost, making them more accessible to consumers.
• Complementary Products - The complementary products are razor blades and films. These are necessary for the effective use of the main products (razors and cameras).
• High Markups on Complementary Products -The manufacturers set high markups on the razor blades and films. This means that the profit margin on these complementary products is significantly higher compared to the main products. 

Issues covered in Social Marketing are as follows- 

• Contraceptive products are made available and affordable through private-sector outlets thanks to social marketing in family planning initiatives.
• Public health promotion is social marketing's main goal, and it aims to improve everyone's health. Thus, prevention is the main focus of its strategy.
• The social good is a topic covered by social marketing, which focuses on facilitating beneficial changes in local, national, and global societies.
• According to conventional utilitarian ethics, it is often believed that the major objective of marketing, including social marketing, is to improve businesses' financial well-being.
• Social workers conduct anti-tobacco campaigns in various rural parts of India in an effort to persuade residents to stop using tobacco. The most direct route to the general public is through social media marketing.

Hence, All the issues are covered in Social Marketing.

The strategies for achieving growth through intensification are:

Market penetration: This strategy involves increasing sales to existing customers. This can be done by increasing the frequency of purchase, increasing the amount purchased each time, or attracting new customers to the product or service.

Market development: This strategy involves selling existing products or services to new customers. This can be done by expanding into new geographic markets, entering new market segments, or developing new applications for the product or service.

Product development: This strategy involves developing new products or services for existing customers. This can be done by improving existing products or services, developing new products or services that complement existing products or services, or developing new products or services that are unrelated to existing products or services.

Process improvement: This strategy involves improving the efficiency of the production process. This can be done by reducing waste, improving quality, or increasing productivity.

Capacity expansion: This strategy involves increasing the capacity of the production process. This can be done by adding new equipment, increasing the size of the production facility, or outsourcing production.

Possession utility is linked to both time utility and place utility because all forms of utility emphasize making it easy for consumers to make a purchase.

In planning for the future of their operations, businesses rely on three types of forecasting. These include economic, technological, and demand forecasting.

Types of forecasting:

1. Economic Forecast
2. Technological Forecast
3. Demand Forecast