Course based on marking schemes

Question 1

Market Skimming

Answer 1

• a high price is initially set for the product
• once more competition enters the market and many consumers
  have the product, the price will decrease
• this is for products with no competition yet, for example new technology

Question 2

Penetration Pricing

Answer 2

• a low price is set initially to attract customers away from
  competitors
• once the product has become popular/has established a customer
  base the price will increase/in line with competitors’ prices
• used when an organisation is trying to break into an established
  market

Question 3

Destroyer Pricing

Answer 3

• organisation launches the product at artificially/unsustainable/
  very low price to destroy any competition within the market
• once the competition has been destroyed prices will increase

Question 4

Promotional Pricing

Answer 4

price of product will be set lower (than a market price) as it has
just been launched
to help create interest in the new product

Question 5

describe extension strategies (8)

Answer 5

• launch an advertising campaign
• reduce the price
• improve the product (by adding new features/reducing the
  weight/size etc)
• change the product use (to appeal to different markets)
• introduce line extensions/variety
• change the place of sale (for example, online/retail/agent/
  wholesaler/abroad)
• rebrand the product
• change the packaging

Question 6

Quality circle

Answer 6

is a group of workers who meet at regular intervals
with management

Question 7

worker director

Answer 7

a lower level employee is chosen to be on a board of directors, however they have no voting powers or director privilages

Question 8

Works Councils

Answer 8

• made up of an equal number of employees
  and managers meeting to discuss issues
• they allow for consultation between workers and managers

Question 9

Trade Union Representation can improve employee relations by:

Answer 9

• allowing members to benefit from collective bargaining power
• experienced union members can represent the employees

Question 10

state 10 ways to promote positive employee relations

Answer 10

• quality circle
• worker director
• works councils
• trade union representation
• appraisals
• consultation
• empowerment
• delegation
• training
• ## flexible working practices