Questions

Question 1

Describe how high levels of promotion could have a negative feedback?

Answer 1

• expensive/ increases fixed costs.
• too much promotion could cheapens brand image.
• competitors may respond by increasing promotion.
• may result in S&G neglecting other aspects in the marketing mix

Question 2

Discuss ‘share capital’ being used to fund new projects for expansion?

Answer 2

Adv:

• cheaper than any sources of finance such as bank loans.
• can raise a large share capital
• other sources of finance may not be available or too risky.

Disadv:

• -takes time to find potential buyers.
• ownership may become diluted.
• new shareholders may insist on changing the direction of the company

Question 3

Describe why advertising may be effective in promoting a product?

Answer 3

• enhance branding
• target market segments
• increase repeat purchases
• expen
• not promised to guarantee sales
• will other manufactures increase adv?

Question 4

two cash outflows a business can have?

Answer 4

• rent
• salary
• elec
• advertisement

Question 5

What can the adv and disadv be on a business for paying a salary rather a remuneration?

Answer 5

adv- greater motivation as security of income- more productivity- more satisfied- less likely to go to rivals
disadv-lower profits- by paying salaries can incr cost for a business which will reduce their overall profit and less mone invested back into business

Question 6

Adv and disadv of using breakeven?

Answer 6

Adv:

• can see how many products need to be sold to break even
• set sales targets

disadv:

• does not take in external influences- market changes quickly
• only really useful with other techniques such as market research
• too simplistic/ only a forecast.

Question 7

Define marketing

Answer 7

• the process of identifying,anticipating and satisfying customer needs