EXAM QUESTION + MARK SCHEME

Question 1

Explain one reason why it is important for a business to identify customer needs

Answer 1

(1) To Prevent a business from producing goods that customers do not want and save valuable resources
-avoid costly mistakes
(2) Allow a business to become more competitive as it can develop goods that offer better value

Question 2

Explain one factor that would influence the selection of the promotional mix

Answer 2

-target market
-nature of the market

Question 3

explain one negative impact for a business if it fails to follow the law

Answer 3

-loss of reputation (discourage customers from returning)
-fine (result in business being made to pay a fine, reducing profit)

Question 4

state and explain two categories of the boston matrix

Answer 4

dog - low market share in a low-growth market

Question 5

explain one characteristic of the growth stage of the product life cycle

Answer 5

-sales are increasing at a faster rate as customers are becoming more familiar with the product due to advertising

Question 6

Explain one economic influence on consumer spending

Answer 6

A fall in interest rates will encourage people to borrow more money so there would be an increase in consumer spending

High unemployment will reduce customer spending because people will have less income

Question 7

state and explain two reasons why a business would create a business plan

Answer 7

Predict future problems. plans can be put in place to reduce impact

set objectives

manage growth