Business, end of unit 2 ( 4 p's)

Question 1

Loss leader

Answer 1

Product priced below cost, attracts consumers into a shop or online store

Question 2

Invention

Answer 2

introduction of a totally new idea

Question 3

Innovation

Answer 3

Improvement of an original idea

Question 4

Design

Answer 4

Important element in different products e.g style (clothing), technology (i.e smart phone screens becoming bigger)

Question 5

Product life cycle and the stages

Answer 5

Describes the stages a product goes through from first thought of until it’s finally removed from market.

1) introduction
2) growth
3) maturity
4) decline

Question 6

Introduction (product life cycle)

Answer 6

researching, developing and launching the product

Question 7

Growth (product life cycle)

Answer 7

when sales are increasing at their fastest rate

Question 8

Maturity (product life cycle)

Answer 8

sales are near their highest, but the rate of growth is slowing down e.g because of new competitors in the market

Question 9

Decline

Answer 9

Final stage of the cycle, when sales begin to fall

Question 10

Place (4 p’s)

Answer 10

where products and services are sold AND how the business gets products and services to the consumer (distribution channels)

Question 11

Distribution channel

Answer 11

All the organisations through which a product must pass between its point of production and purchase by the consumer

Question 12

Physical distribution channel 1

Answer 12

Producer -> Consumer

Biscuit factory -> buying biscuits directly from factory

Question 13

Physical distribution channel 2

Answer 13

Producer -> Retailer -> Consumer

Sony -> John Lewis -> customer buying sony TV from John Lewis

Question 14

Physical distribution channel 3

Answer 14

Producer -> Wholesaler -> Retailer -> Consumer

Heinz -> Food wholesaler -> Tesco -> customer buying heinz beans from tesco

Question 15

Wholesaler

Answer 15

A large storage centre able to take in deliveries direct from producers. The role of a wholesaler is to ‘break bulk’. (buying large amounts from producer then selling small amounts to retailer)

Question 16

Regional Distribution Channel (RDC)

Answer 16

Owned by the retailer (e.g Next) and are used to store products they will later sell in their stores

Question 17

Physical distribution

Answer 17

Movement of goods that we can see and touch i.e a desk distributed by road transport

Question 18

Digital distribution

Answer 18

Distribution of goods digitally by downloading from a website or app i.e a song purchased and downloaded from apple music

Question 19

Advantages of digital distribution

Answer 19

• Goods are downloaded so available instantly
• Cost saving to either businesses or customer, as there is no postage and packing involved
• The business does not have to store goods in a warehouse, leading to decreased costs

Question 20

Disadvantages of digital distribution

Answer 20

• Not suitable for all products, foods cannot be downloaded
• Not all customers have access to internet or slow internet so cannot download large files
• Easier to illegally download content for free, legal platforms such as Amazon Prime are facing rivalry from illegal platforms
• Costly to set up website/apps

Question 21

Market data

Answer 21

Information that will help a business make marketing decisions e.g changes in demand, market share

Question 22

Sales in the market are £500,000. A business has a 23% share. What are the business’ sales?

Answer 22

500,000 x 0.23 = £115,000

Question 23

Sales in the market are 3M. A business has a 5% share. What are the business’ sales?

Answer 23

3,000,000 x 0.05 = £150,000