EXAM Revision UNIT 2

Question 1

explain the challenges of the growth stage in the business lifecycle?

Answer 1

• Avoid getting too comfortable or complacent
• overextending the resources in order to expand
• cash-flow extended, inability to meet business obligations or debts
• forgetting current customer base in pursuit of new market
• expanding into new markets which are too small to support all competing business or the founder of business needs to relinquish control of some area to reliable staff.

Question 2

Explain the total product concept highlighting the different components

Answer 2

Total product concept refers to when customers purchase products, they are buying both the tangible attributes and intangible benefits that make up the total product. TANGIBLE attributes relates to the physical and touchable attributes or aspects of a product such as the packing, size, functions of the product e.g. reversible handle on a stroller or the number of airbags in a car. Whereas, INTANGIBLE aspects of a product are the features or qualities that are not touchable or seen but rather felt. Examples of intangible qualities of a product include; warranty, after-sales service, brand, reputation.

Question 3

what is marketing mix?

Answer 3

Marketing mix involves the 4 Ps and putting or positioning the right product at the right price, in the right place and at the right time. The marketing mix includes: price, promotion, place and promotion.

Question 4

Explain marketing mix of PRODUCT

Answer 4

What is being sold to satisfy the customers needs and wants, this includes the product line and variety of packaging and sizes to maximise the appeal to a wide variety of consumers.

Question 5

Explain marketing mix of PRICE

Answer 5

How much the offering will be sold for, it is finding the right pricing strategy to ensure brand and positioning is consistent. A variety of pricing strategies can be utilized from competition pricing to price skimming, prestige and premium pricing, penetration pricing, cost based pricing, loss leader to dynamic pricing and pyschological pricing.

Question 6

Explain marketing mix of PROMOTION

Answer 6

How best to communicate with potential and actual customers for example the correct platforms of social media to reach the target market including the use of influences, the use of personal selling and word-of-mouth.

Question 7

Explain marketing mix of PLACE

Answer 7

Where, or through what mode, the business is selling from, e.g. online or in-store or a combination of both, what is the distribution channel. Is the business the manufacturer selling direct to the consumer or indirect through another business e.g. manufacturer sells through distributor to the consumer and how is technology used.

Question 8

explain the promotional strategy of Advertising

Answer 8

Advertising is any form of paid, non-personal communications, by an identified sponsor, through a mass medium e.g. broadcast advertising, print advertising, outdoor advertising e.g. on a bus.

Question 9

name a variety of promotional strategies

Answer 9

advertising, sales promotion, publicity, personal selling, digital, social and emerging platforms.

Question 10

explain the promotional strategy of Sales Promotions

Answer 10

Sales promotion refers to the activities and incentives implemented to generate sales such as buy one get one half price, competitions, free samples, money off coupons and point of sales display at the end of supermarket aisles.

Question 11

explain the promotional strategy of Publicity

Answer 11

Publicity is mass marketing but isn’t paid for by the business as it is generate by news articles

Question 12

explain the promotional strategy of personal selling

Answer 12

personal selling is a two way communication with the business and the customer builds the relationship with the customer as it is tailored to the customer.

Question 13

explain the promotional strategy of word of mouth

Answer 13

word of mouth is where customers share their experience and it is unpaid and independent communication which is seen as unbiased.

Question 14

explain the promotional strategy of digital marketing

Answer 14

digital marketing is any kind of marketing delivered electronically, includes SEO, pay per click advertising, blogs, YouTubes, email and social media marketing. It is a cost-effective method if audience is receptive.

Question 15

explain the promotional strategy of emerging platforms

Answer 15

emerging platforms include social influences which is word of mouth amplified by social media, video, live streaming and augmented reality.

Question 16

explain the promotional strategy of creating a promotion mix

Answer 16

creating a promotion mix is used by business entering the growth stage as they have a limited budget and need to be cost effective. By creating the optimum mix requires consideration of the target market and positioning strategy as well as promotion objectives.

Question 17

name a variety of pricing strategies

Answer 17

price skimming, penetration pricing, prestige and premium pricing, competition - based pricing, loss leader, cost-based, psychological and dynamic pricing.

Question 18

explain the pricing strategy of of price skimming

Answer 18

the price skimming strategy is used when a new product with differentiation enters a market of a few competitors sets the price high at the start and gradually decreases the price.

Question 19

explain the pricing strategy of of price penetration

Answer 19

price penetration refers to setting the price low in order to generate high volume of sales.

Question 20

explain the pricing strategy of of prestige and premium pricing

Answer 20

Prestige and premium is used to create an image of high quality product and brand, prestige pricing is set to niche products offered to high income target market thus matching the brand and premium pricing of charging a higher price on a product than its competitors in order to add differentiation to the business’ product.

Question 21

explain the pricing strategy of of competition-based pricing

Answer 21

competition based pricing is used in a highly competitive market with similar products and customers will compare businesses especially now with the use of smartphones, customers can check prices without going into stores.

Question 22

explain the pricing strategy of of loss-leader

Answer 22

loss leader is where prices are set below cost price and they are selling at a discount - used at sales promotion and the business is happy to sell below cost price as customers will come in to buy the discounted item and buy other products which are not discounted.

Question 23

explain the pricing strategy of of cost-based pricing

Answer 23

cost-based pricing is where prices are set based on the costs involved in production, distributing and selling the goods.

Question 24

explain the pricing strategy of of psychological pricing

Answer 24

Psychological pricing involved charging an odd price of the goods where customers perceive the $19.99 price as cheaper than $20 or a higher price is set as customers see a higher price as better quality. even though we don’t use one cent pieces anymore, business still charge $19.99 for a product and customers buy it paying $20 if cash is used of $19.99 if a care is used.

Question 25

explain the pricing strategy of of dynamic pricing

Answer 25

dynamic pricing is used in response to supply and demand where prices are continuously adjusting - a higher price is set at peak times and cheaper price at low demand time

Question 26

explain the concept operations management

Answer 26

Operation managements: involves the planning, organizing, leading and controlling all the resources needed to produce a business' goods and services. It is overseeing the process of creating or transforming the resources (land, labor, capital, resources/materials) into the business' output, such as goods or services.

Question 27

explain the influences that customer have on operational process

Answer 27

Customers have a strong connection to operations and a strong customer focus is imperative to successful operation. This is due to customers looking for more than just low-cost products but businesses who: embrace sustainable practices, minimise their impact on the environment, who use resources in an efficient way to reduce waste and operate a lean production system, reflect fair value of labor used in process, support the local community and who operates in an ethical and socially responsible manner.

Question 28

explain the influences that suppliers have on operational process

Answer 28

Suppliers have a strong influence on the operational process as securing and maintaing reliable suppliers is vital to ensure the business is able to meet customer demand. The supply chain refers to the range of suppliers a business has a product passes through the production system to the consumer. If the supply chain involves a large number of hands or suppliers for the materials and product to pass through from the order to the customer due to outsourcing and products being manufactured overseas, there is a higher possibility of delays and difficulty in controlling the impact.

Question 29

Explain the materials management concept

Answer 29

Materials management is a system for planning, purchasing, moving and storing matiral in an optimum way that helps to minimise cost. Material management considers: materal inputs (raw materials, suppliers, parts) work in progress (semi-finished goods), outputs (finished goods that are yet to be delivered) spare parts for equipment. Materials management ensures the 5Rs - in the irght quantity, of the right quality, at the right time, from the right sources and at the right price.

Question 30

Explain the role of Gantt Charts in the production scheduling process.

Answer 30

Gantt Chat is a visual tool to show schedualed and actual progress of projects in a way everyone can understand. The role of the Gantt Chart in the production scheduling process it to support managers to quickly see: what the main activities are, when each activity is scheduled to begin and end, the time each activity is scheduled to take, and the sequence of activities necessary, including any overlaps.

Question 31

Explain the role of Sales Forecasting to businesses in the growth stage in one paragraph

Answer 31

Sales Forecast is an essential tool to ensure businesses have adequate inventory to meet projected demand and to ensure the market potential for a product. Its purpose is to devise information to plan growth and make smart business decision. It takes into account the projected sales, what internal and external factors will affect future sales as well as judging the effect of factors and market potential for the coming periods. By completing a sales forecast each year, a business can determine their peak and slow periods in sales and take action regarding how to increase sales, reduce or increase staff at those times, when greater/less inventory is needed.