1.4 - Making the Business effective

Question 1

1.4.1 - What is limited liability?

Answer 1

• In limited liability, the business and the shareholders that own it are distinct and so any debts can only be taken form the business.

Question 2

1.4.1 - What does it mean for a business if it is owned by its shareholders? what are the pros and cons?

Answer 2

It is a LTD (or PLC).
+ They have limited liability
+can sell shares to outside investores
- Desicions can be limited as company ia owned by many people
- Other people can buy more shares and take over

Question 3

1.4.1 - What is franchising?

Answer 3

The right given by one business to another to

sell goods or services using its name.

Question 4

1.4.1 - What is a franchisor and what are their pros and cons?

Answer 4

The business that gives franchisees the right to sell its product, in return for a fixed sum of money or a royalty payment:

\+ Growth
\+ Profit
\+ Customer Awareness
- Changing Demands
- Brand Image
- Poor Performance

Question 5

1.4.1 - What is a franchisee and what are their pros and cons

Answer 5

A person or company that is granted a license to do business under the franchisor’s trademark. The franchisee purchases a franchise from the franchisor:

\+ Training
\+ Equipment
\+ Materials
\+ Brand Name
\+ Exclusive Area
- Royalty Fee
- Franchise Fee
- Lack of Flexibility

Question 6

1.4.3 - What does the marketing mix consist of?

Answer 6

• Price
• Place
• Product
• Promotion

Question 7

1.4.3 - why is price important?

Answer 7

consumers may be expecting value for money. a low price may be cruicial in achieving high sales.

Question 8

1.4.3 - How does technology affect the marketing mix? (What does it introduce)

Answer 8

• E-commerce: Being able to use the internet as a place for selling items
• Digital communication: Promoting you product to potential customers online

Question 9

1.4.3 - why is place important?

Answer 9

it is how and where a product is distributed so customers can get it when they want it

Question 10

1.4.3 - why is product important?

Answer 10

targets customers that meets a specific market need

Question 11

1.4.3 - why is promotion important?

Answer 11

persuades customers to buy eg advertising on tv or buy one get one free