Marketing
Define ‘market share’.
Market share refers to the proportion of total sales in a market achieved by a business. It is expressed as:
(Sales of the business ÷ Total market sales) × 100.
What is meant by ‘customer loyalty’?
Customer loyalty refers to the likelihood of customers repeatedly purchasing from a business instead of its competitors due to satisfaction with the product or service.
Outline how providing a good quality service could help Samuel’s business increase added value.
Improving customer satisfaction – High-quality service ensures customers are satisfied, encouraging repeat business and referrals.
Justifying higher prices – Providing quality allows Samuel to charge premium prices, increasing revenue.
Building a strong reputation – Positive word-of-mouth and customer reviews boost visibility and trust in the business.
Differentiating from competitors – Quality service helps Samuel stand out in a competitive market, attracting more clients.
What is meant by takeover?
A takeover occurs when one company acquires control of another company, often by buying its shares or assets.
Identify and explain two possible reasons why senior managers at Telcom want to expand the business.
Increase market share – Expanding would help Telcom capture a larger share of the phone and network service markets.
Diversification – Acquiring a phone manufacturer or retail chain would diversify Telcom’s offerings and reduce reliance on its current services.
Outline two ways someone could increase added value.
Way 1: Use higher-quality ingredients to make drinks more premium.
This would attract customers willing to pay higher prices for better quality.
Way 2: Introduce attractive packaging to appeal to customers.
Well-designed, eco-friendly, or branded packaging can justify higher pricing.
Identify and explain one advantage and one disadvantage to a person of forming a joint venture.
Advantage: Shared risks and costs.
Disadvantage: Potential conflicts between partners.
Explain possible advantages and disadvantages of using division of labor to any business you choose.
Increased efficiency – Workers specialize in a single task, improving speed and expertise, e.g., in a car factory.
Cost-effective training – Specialized roles require less training time and cost for each worker.
Repetition and boredom – Repeating the same task may reduce job satisfaction and motivation.
Dependency on others – If one part of the production process is delayed, it can halt the entire operation.
Identify and explain two other ways a business might grow apart from takeovers.
Organic growth – The business expands through increasing sales, new product lines, or entering new markets.
Franchising – The business can expand by allowing others to operate under its brand and business model.
How does the existence of limited liability benefit an individual shareholder?
Limited liability means a shareholder’s financial risk is limited to the amount they invested in the company. They are not personally liable for the company’s debts, protecting their personal assets.
Explain two advantages to EQR of selling franchises as a way to grow its business.
Advantage 1: Rapid expansion with lower capital investment.
Advantage 2: Motivated franchisees.
Identify two features of a sole trader.
Feature 1: Full control over the business.
Feature 2: Unlimited liability for business debts.
Identify and explain two possible reasons why some ministers want to privatize some businesses in the public sector.
Increase efficiency – Private businesses are often more competitive, potentially leading to greater efficiency and lower costs.
Reduce government expenditure – Privatization can reduce the government's financial burden and enable funds to be redirected elsewhere.
Explain why a sole trader might not want to convert the business into a partnership.
Loss of control – A sole trader may not want to share decision-making power with a partner.
Profit sharing – In a partnership, profits must be shared, reducing the sole trader’s earnings.
Complexity – Partnerships can introduce more complexity in terms of legal arrangements and responsibilities.
Explain two features of an annual general meeting (AGM).
Voting on important issues – Shareholders vote on key company matters, such as the election of directors and approval of financial reports.
Presentation of financial reports – The company’s financial performance is presented to shareholders to ensure transparency and accountability.
What is meant by ‘limited liability’?
Limited liability means that the owners’ financial responsibility for the business’s debts is limited to the amount they have invested. Personal assets are not at risk if the business fails
Define ‘stakeholder groups’.
Stakeholder groups are individuals or entities that have an interest in or are affected by a business's activities. Examples include employees, customers, suppliers, shareholders, and the local community.
Do you agree with the government ministers’ view that: the public sector always produces goods and services more efficiently than privately owned businesses? Justify your answer.
I do not agree because:
Public sector inefficiencies – Governments can be slow and less responsive than private businesses, leading to inefficiencies.
Private sector innovation – Private companies often innovate more quickly and adapt to market demands faster than public sector businesses.
Identify and explain four personal characteristics that someone needs to be a successful entrepreneur.
Determination
Risk-Tolerance
Creativity
Decision-making
Identify four ways to measure the size of a business.
Employee Number
Revenue or Sales
Market Share
Number of locations
Identify two ways S&V can increase added value.
Way 1: Offer unique spice blends unavailable elsewhere.
Specializing in niche or customized products can attract premium pricing.
Way 2: Improve packaging with clear labeling on seasonal spices.
This makes the product more appealing and informative, increasing its perceived value.
Define ‘private limited company’.
A private limited company is a business owned by shareholders who have limited liability. Its shares are not available for public trading and are usually owned by family members or close associates.
Why do some businesses stay small?
Limited capital – Small businesses may lack the funds to expand and grow.
Niche market – Some businesses target a specific market segment, which limits their growth potential.
Owner’s preference – The owner may prefer to maintain control and avoid the complexities of running a larger business.
Competition – In competitive industries, small businesses may struggle to expand due to high costs and market pressure.
Define ‘mass market’.
A mass market refers to a large, broad group of consumers who have similar needs and desires. Businesses target this market by offering products that appeal to a wide audience, rather than specific, niche groups.
Identify four methods of primary market research that a business could use.
:
Method 1: Surveys A business can conduct surveys by asking customers to fill out questionnaires about their preferences, opinions, and buying behavior.
Method 2: Focus Groups Focus groups involve small groups of people discussing their views on a product or service, providing qualitative data about consumer attitudes.
Method 3: Interviews One-on-one interviews allow businesses to gain detailed insights into customers' opinions and experiences.
Method 4: Observation Observing customers in stores or while interacting with products provides businesses with data on customer behavior and preferences.