Exam Revision 4 Flashcards
What are the five stages of the Product Life Cycle?
- Introduction: The product is launched, requiring heavy marketing investment. Sales are low, and profits may not yet cover costs.
- Growth: Sales increase rapidly, profits rise, and competitors may enter the market.
- Maturity: Sales peak and stabilize. Competition is intense, and businesses may focus on differentiation.
- Saturation: The market is full, with little to no growth. Prices may decrease as businesses compete for existing customers.
- Decline: Sales fall due to outdated technology, changes in consumer tastes, or competition from newer products.
What are the main price strategies a business can use?
- Cost-plus pricing: Adding a percentage markup to the production cost to set the price.
- Penetration pricing: Setting a low price to attract customers and gain market share quickly.
- Price skimming: Introducing a product at a high price and gradually lowering it as demand decreases.
- Competitive pricing: Matching or undercutting competitors’ prices to remain competitive.
- Psychological pricing: Using prices like €9.99 instead of €10 to make the product appear cheaper.
- Loss leader: Selling a product at a loss to attract customers who might buy other profitable items.
- Premium pricing: Charging a high price to reflect exclusivity and quality.
What are the different types of advertising a business can use?
- Informative Advertising: Focuses on educating customers about a product’s features and benefits.
- Persuasive Advertising: Appeals to emotions, desires, or social trends to encourage purchases.
- Reminder Advertising: Keeps the product in consumers’ minds, often used for established brands.
- Comparative Advertising: Highlights the superiority of a product compared to competitors (less common in Ireland).
- Sponsorship: Associating the brand with events, teams, or influencers to increase exposure.
What are the advantages and disadvantages of branding?
Advantages:
• Encourages customer loyalty and repeat business.
• Allows premium pricing due to brand reputation.
• Facilitates easier product expansion (brand extension).
• Enhances the business’s credibility and trustworthiness.
Disadvantages:
• High costs of creating and maintaining the brand (e.g., marketing and design).
• Risk of reputational damage if a product or service fails.
• Legal challenges if competitors dispute branding rights.
Define the primary, secondary, and tertiary sectors.
• Primary Sector: Involves extracting natural resources directly from the earth (e.g., farming, fishing, forestry, mining).
• Secondary Sector: Focuses on manufacturing and production, transforming raw materials into finished goods (e.g., factories).
• Tertiary Sector: Provides services to individuals and businesses (e.g., retail, education, tourism, healthcare).
What are two trends affecting the construction industry in Ireland?
- Sustainability: Increased focus on using eco-friendly materials, renewable energy, and green building designs.
- Government Housing Initiatives: Efforts to address housing shortages through policies encouraging public-private partnerships and affordable housing.
What are two trends affecting the farming sector in Ireland?
- Diversification: Farmers are branching into alternative income streams like organic farming, agri-tourism, or renewable energy.
- Technology: Adoption of advanced technologies such as GPS-guided machinery, drones for monitoring, and automated systems for efficiency.
What is the difference between a franchise and a strategic alliance?
• Franchise: A franchisor grants a franchisee the right to operate under its brand, selling its products or services in exchange for fees and royalties (e.g., McDonald’s).
• Strategic Alliance: Two or more independent businesses collaborate for mutual benefit while maintaining their autonomy (e.g., sharing research or co-developing products).
What are two advantages of setting up a business as a co-operative?
- Democratic Control: Each member has an equal say in decision-making, regardless of their financial contribution.
- Shared Benefits: Profits are distributed fairly among members, fostering loyalty and a sense of ownership.
