Summer Test

Question 1

Explain the term market research.

Answer 1

Market research is gathering, recording and analysing information about consumer preferences for a good or service in order to make informed decisions about a potential market.

Question 2

Identify the two types of research

Answer 2

Two types of research are field research and desk research

Field research involves gathering information directly from the marketplace.

Desk research involves analysing information that has already been collected.

Question 3

Explain 3 types of primary research a business like Ponaire conducts

Answer 3

Surveys involves asking consumers questions about products and services.

A focus group is a group of consumers brought together to discuss a particular product. An advantage of this would be It is an efficient way to gather reactions and opinions from a group of people at the same time. A disadvantage might be some members of the group may dominate the responses and influence the views of other group members.

Observation involves watching or viewing consumers in action eg. Watching the number of consumers selecting a specific product.

Question 4

Explain 2 reasons/uses of market research for a business like the Workshop Gym Newport

Answer 4

To identify what is happening in a market. For example, Apple may want to identify trends in sales of iPads or smartphones.

To identify what is likely to happen in the future. For example, Sunway Travel may research the kinds of holidays people are interested in taking in the next three years

Question 5

Explain the term unique selling point

Answer 5

A business will try to create a unique selling point (USP) for its product or service. This is what makes the product different from its competitors. For example, Volvo’s USP is safety,

Question 6

Explain the term target market

Answer 6

A target market is the group of people to whom a business aims to sell its products or services.

Question 7

Name 3 pricing strategies

Answer 7

Cost-plus pricing: The business calculates how much it costs to produce a product, then adds a percentage mark-up to make a profit.

Competitive pricing: The business sets a price that is similar to rival products.
For example, Coca-Cola and Pepsi have similar prices.

Premium pricing: The business charges a permanently high price to convey an image of exclusivity or quality, for example designer clothing.

Question 8

Draft the product life cycle

Answer 8

1. The new product is launched
2. Sales increase as more consumers learn about the product
3. Sales growth increase at a slower pace and may start to level off
4. Sales reach their peak because there are many competitors in the market
5. Sales fall due to changes in taste/fashion or the introduction of anew or better product and
   eventually the product will be withdrawn from the market

Question 9

Explain the term niche market

Answer 9

A niche market is a small, specialised segment of a larger market for a particular product or service. Eg. Bridal shoes are an example of a niche product within the shoe market.

Question 10

Outline three characteristics/skills with being an entrepreneur.

Answer 10

Time management: Entrepreneurs use their time carefully to achieve their goals.

Ability to manage money
Entrepreneurs need to have good financial skills in order to prepare budgets and manage cash flow.

Human relations skills
Entrepreneurs use good communication and listening skills to get on with people, such as employees, suppliers, investors and customers.

Question 11

Explain the term business plan

Answer 11

A business plan is a written description of a business’s aims, strategies, target markets and financial forecasts. It explains what the business plans to do and how it plans to do it.

Question 12

Name 5 sections of a business plan

Answer 12

1. Background of the business
2. The business team
3. Market and marketing
4. Production
5. Costings and finance

Question 13

Explain the term SWOT analysis

Answer 13

A SWOT analysis identifies the current strengths and weaknesses of a business as well as the opportunities and threats facing it.

Question 14

Define the term enterprise

Answer 14

Enterprise is any attempt to start or do something new. Enterprise is about turning ideas into actions, using creativity and a willingness to try new things.

Question 15

Outline on reward and one risk of being an entrepreneur

Answer 15

Reward: you can choose to keep all the profit the business makes
Risk: you may lose all the money and time you put into the business if it fails

Question 16

Define and Explain 3 methods of promotion

Answer 16

Promotion means making customers aware of the product or brand in order to increase sales and create brand loyalty

1. Advertising involves communicating with the public to let them know about a product and get them interested in buying it. Eg. TV advertising
2. Sales promotion are offers for customers to get the to buy the product. Eg. Free sample or buy one get one free.
3. Public relations are to help create a positive image of the business and product. Eg. AIB Sponsor the Dublin jerseys

Question 17

What is standing order?

Answer 17

standing order is an instruction to a financial institution to pay a fixed amount to a specific person or organisation on a certain date.

Question 18

What is direct debit?

Answer 18

Direct debit is used when the amount to be paid and/or the payment date are likely to change.

Question 19

What is a current account used for?

Answer 19

A current account is used for your day to day banking needs and it is also where you receive your income

Question 20

What is a deposit account used for

Answer 20

A deposit account is a safe for you to store your money while earning interest on it.

Question 21

What is a financial institution

Answer 21

A financial institution provides financial services for its customers, including storing their money, managing payments and providing loans.

Question 22

What is a commercial bank?

Answer 22

A commercial bank is a bank that offers financial services to the general public and to businesses.

Question 23

What is an entrepreneur?

Answer 23

An entrepreneur is a person who takes the initiative as well as the personal and financial risk involved in setting up an organisation.