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Define ‘focus group’
customers OR people who have similar characteristics to the target market who give their opinions on a product / service.
Identify two reasons why market research is needed.
A firm needs to find out how many people would want to buy the product it is planning to offer for sale. It can identify customer needs in a competitive market.
Identify and explain two advantages of selling franchise.
Cheaper way to expand the franchisees pay some costs. Widen brand awareness as logo is seen in more places
Identify and explain one advantage and one disadvantage of changing its brand image.
Customers like something new therefore they are more likely to try the product. Damage customer loyalty as existing customers do not like the new logo created
Do you think a firm should use sponsorship or newspaper advertising as the main method of promotion? Justify your answer.
Sponsorship can target the intended market attracting more customers. Newspaper advertising can be seen by a lot of people
Define ‘niche market.’
highly specialised sub part of a large market
Outline two benefits of having skilled workers.
skilled workers likely to work more efficiently and likely to make fewer mistakes [
Identify and explain two factors a firm need to consider when setting a price for its products
production cost, need to cover at least fixed costs or face a loss, Level of demand if it is a popular product might be able to charge a higher price
Explain two methods (other than pricing) a firm could use to improve sales. Recommend which a firm should use. Justify your answer.
advertising, other promotional methods e.g. discounts, introduce new designs/features, target new markets e.g. country or gender
Define ‘market research
Process of collecting, recording and analysing data about customers, competitors and market for a product
State two objectives (other than expansion) a business might have.
survival, make a profit, increase market share, provide a service to the community, be socially/ethically/environmentally responsible
State four factors a business should consider when deciding the price of a product
Actions of competitors, Government or legal controls/tax, Stage in product life cycle, Type of productnew product,
Identify and explain two ways of segmenting the market that the company could use
Age, Socioeconomic/income groups, Tastes/interests, Geographic, Culture/religious background
Do you think selling franchises is a better way for a retail business to expand than opening more of its own shops? Justify your answer
Franchisor shares risks with franchisee, More of its own shops: Have total control over the operations
Define ‘business plan’
A document containing the business aims/objectives and important details about the operations, finance and owners of a business
Identify two reasons why a business might downsize its workforce
Economic crisis, Factory/shop/office closure, Merger or takeover, Need to reduce costs, Changes in management/strategy, Automation or replaced by machinery
