PAPER 3

Question 1

How to segment a market

Answer 1

Age
Gender
Location
Income
Interests
Religion

Question 2

What is market segmentation

Answer 2

how a business splits up its target market

Question 3

+ and - of market segmentation

Answer 3

+ identify niches
+ change marketing mix
- cannot target mass market
- missing out on segments

Question 4

Factors influencing demand

Answer 4

Seasonality
Trends
Substitutes
Income
Quality

Question 5

Cultural differences

Answer 5

poly
geo
ethno

Question 6

Global ethics

Answer 6

Conflict of profit v ethics
sustainability of materials
Child and slave labour
fast fashion and overconsumption

Question 7

Sustainable clothing become more popular

Answer 7

Focus on environmentally sustainable
For example, nike synthetic leather

Question 8

Sole trader

Answer 8

Unincorporated
Unlimited liability
One person

Question 9

Partnership

Answer 9

Unincorporated
Unlimited liability
2 -21 people

Question 10

Private LTD CO (LTD)

Answer 10

Incorporated
Limited liability
Privately sell shares

Question 11

Public LTD CO (PLC)

Answer 11

Incorporated
Limited liability
publicly sell shares

Question 12

Independant

Answer 12

PORTERS - Focus on differentiation

Question 13

Multinationals

Answer 13

Range from low cost mass market to highly differentiated

Question 14

Production location factors

Answer 14

Cost of production
Access / cost of raw materials
Access / cost to labour
Infrastructure
Location
Trade bloc

Question 15

India

Answer 15

H&M
Nike
M&S
Tommy Hilfiger
Largest cotton producer
45 million employed in cloth jobs

Question 16

Spain

Answer 16

ZARA
Higher labour costs, production seed responsive
change inv 12 times a year in comparison to average 3-4 in asian production

Question 17

China

Answer 17

Infrastructure in manufacturing
Strong business ecosystems
Large pool of workers
Labour costs rising

Question 18

Italy

Answer 18

Quality, craftsmanship
Innovative
Brands
Fashion hubs like Milan
Adds value
Location , trade

Question 19

Impact MNCs have on local economy

Answer 19

Create jobs, impact wages, working conditions and local community

Question 20

Impact MNCs have on national economy

Answer 20

FDI flows, tech and skills transfer, culture, tax revenue

Question 21

Controlling MNCs

Answer 21

Political influence
Legal control
Pressure groups
Social media

Question 22

Gross profit margin

Answer 22

(Gross profit / revenue ) * 100

Question 23

Operating profit margin

Answer 23

(Operating profit / revenue ) * 100

Question 24

Net profit margin

Answer 24

(net profit profit / revenue ) * 100

Question 25

Return on capital employed

Answer 25

(Operating profit / capital employed ) * 100

Question 26

Capital employed

Answer 26

Non-current liabilities + total equity

Question 27

Current ratio

Answer 27

Current assets / current liabilities

Question 28

Acid test ratio

Answer 28

( ( CURRENT ASSETSS - INVENTORIES ) / Current liabilities )

Question 29

Gearing ratio

Answer 29

(Non-current liabilities / capital employed ) * 100

Question 30

Payback period

Answer 30

(Amount needed to payback / cashflow in following year ) * 12

Question 31

Average Rate of Return

Answer 31

( (Net return / no of years of project) / initial investment cost) * 100

Question 32

Net present value

Answer 32

Multiple by discount and add together

Question 33

What does organic growth look like

Answer 33

Opening new branches Launching new product lines Expanding online

Question 34

What does inorganic growth look like

Answer 34

Mergers, vertical integration, takeovers

Question 35

Entrepreneurial motives

Answer 35

Profit maximisation Profit satisfying Independence

Question 36

Entrepreneurial characteristics

Answer 36

Risk taking Inititat ive Leadership Creativity

Question 37

Direct distribition

Answer 37

Direct to the consumer

Question 38

indirect distribution

Answer 38

Through a third party retailer to consumer

Question 39

Online retailer pros

Answer 39

Easy / convenience Order from anywhere anytime Bigger variety of options Less pressure to purchase

Question 40

Online retailer cons

Answer 40

Needs suitable tech Take longer Shipping issues No way to try before buying

Question 41

% change

Answer 41

new-old/old x 100

Question 42

Gross Profit

Answer 42

Sales revenue – cost of sales

Question 43

Operating profit

Answer 43

Gross profit- overheads

Question 44

Net Profit

Answer 44

Operating profit +/- finance costs

Question 45

Total variable cost

Answer 45

number of units sold x variable cost per unit

Question 46

Contribution per unit

Answer 46

selling price per unit – variable cost per unit

Question 47

Total contribution

Answer 47

contribution per unit x number of units sold

Question 48

Margin of safety

Answer 48

Actual output - breakeven output

Question 48

Break-even

Answer 48

fixed costs/ Contribution per unit

Question 49

Variance

Answer 49

Actual – Budget

Question 50

Job production

Answer 50

when individual products are made one at a time to meet specific customer preferences

Question 51

Batch production

Answer 51

Identical or similar items are produced together in groups (batches), each item passing through the production process at the same time

Question 52

Cell production

Answer 52

form of flow production whereby the production line is split into a series of self contained cells which teams in these cells work together to create one unit of output.

Question 53

Flow production

Answer 53

continuous movement of items through the production process