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
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.
Define ‘focus group’
customers OR people who have similar characteristics to the target market who give their opinions on a product / service.
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
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,
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
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
Define ‘business plan’
A document containing the business aims/objectives and important details about the operations, finance and owners of a business
Outline two advantages to a business in a niche market.
Less competition, Clear focus/easier to target customers, Builds up specialist skills and knowledge, Can charge a higher price, Customers tend to be more loyal
Define ‘niche market.’
highly specialised sub part of a large market
Explain one advantage and one disadvantage to a firm of using e-commerce to sell its products.
Less rent/fewer employees needed which can help reduce costs. Lack of personal service
Do you think selling to different market segments is the best way for a small business to respond to increased competition? Justify your answer
Yes, selling to other segments means spreading risk as not reliant on one market for sales. This is much better than charging lower prices could revenue.
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
Identify and explain two ways of segmenting the market that the company could use