Category: Business Studies

Footwear retailer Lucy Shoes sells branded leisure, sport and fashion shoes for men, women and children. 

What is the most likely reason for Lucy Shoes to use market segmentation is to?

Select ONE answer:

1. limit the range of products being offered
2. reduce the need for market research
3. more effectively target its market
4. avoid the need to advertise

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct – market segmentation increases the range of products Lucy Shoes will need to offer to meet the needs of the different segments it caters for.
2. Not correct – Lucy Shoes will still need to do market research into the changing tastes and preferences of its market segments.
3. Correct – Definition of market segmentation: Categorises potential customers according to characteristics based on gender, age, income, etc. By segmenting the market Lucy Shoes can match its shoes to consumer wants/needs more accurately. This means it can potentially increase sales and profitability/reduce the threat of direct competition.
4. Not correct – Lucy Shoes still needs to advertise in order to increase awareness of its products to different segments.

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Fast food chain McDonald’s consistently reaches number one in the Top 100 Global Franchise Rankings. 

Which one of the following is an advantage of buying a McDonald’s franchise?

Select ONE answer:

1. Using an established brand name
2. Making all your own decisions
3. Finding your own suppliers
4. Keeping all the profits

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – is wrong because employees are more empowered as flexible eCorrect – Definition of a franchise: e.g. A way of running a business that allows an individual or business to pay for the right to use another firm’s branding, product knowledge and systems for a prescribed period of time. McDonald’s is a global fast food chain and recognised by consumers everywhere and symbolised. Which means buyers of McDonald’s franchises will find it easier and much less risky to build a fast food business rather than starting with an unknown and new business name.
2. Not correct – franchisees cannot make all the decisions because some decisions are made by the franchisor .
3. Not correct – the franchisor controls the suppliers.
4. Not correct – the franchisee will be required to pay a share of profits to the franchisor.

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Lucy’s website, a company that builds web applications, adopts flexible employment practices such as employees choosing their own working hours, lunchtimes and holidays. 

This is most likely to lead to a decrease in?

Select ONE answer:

1. empowerment
2. motivation
3. productivity
4. labour turnover

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct – is wrong because employees are more empowered as flexible employment gives employees more control or responsibility.
2. Not correct – is wrong because motivation is likely to increase because employees have more choice over working conditions 
3. Not correct – is wrong because productivity is likely to increase because employees will work harder when they are given more flexibility over their working conditions
4. Correct – Definition of labour turnover e.g. the proportion of a workforce who leave within a year.  Lucy’s Employees may feel  more valued; happier; or more motivated.  Which would therefore reduce the number of employees who choose to leave Lucy’s company

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Nando’s is a high street fast food chain with over 300 restaurants in the UK. Only a few of these restaurants serve Halal chicken.

This is an example of?

Select ONE answer:

1. niche marketing
2. social media marketing
3. mass marketing
4. viral marketing

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – Definition of design mix e.g. the combination of function, aesthetics and economic manufacture in the overall design.  Economic manufacture is concerned with how cheaply the cola can be made.  Tesco need to make the cola Correct – Definition of niche marketing e.g. selling to a small section/sub-section of market with distinct features.  In this case selling food which is targeting Muslim customers/customers who only eat Halal chicken.  Sales may increase for Nando’s because they are providing for specific needs of some of its customers.
2. Not correct – is wrong because this when a business uses social networks to advertise its products rather than selling to just one group of customers
3. Not correct – is wrong because mass marketing would be aimed at the whole of the population and this is only aimed at people who eat Halal chicken
4. Not correct – is wrong because this involves spreading Nando’s name via the internet to other customers rather than providing a type of chicken product

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Tesco sells a two-litre bottle of Coca Cola for £3. It also sells its own brand, called Everyday Value Cola, at 20p for a two-litre bottle. 

Which element of the design mix of Everyday Value Cola would be the most important to Tesco?

Select ONE answer:

1. Economic manufacture
2. Aesthetics
3. Function
4. High quality

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – Definition of design mix e.g. the combination of function, aesthetics and economic manufacture in the overall design.  Economic manufacture is concerned with how cheaply the cola can be made.  Tesco need to make the cola as cheap as possible so that it can be sold for 20p needed to ensure low costs to enable a profit to be made.
2. Not correct – is wrong because consumers will not be concerned about how the cola looks as they are purchasing it due to the low price
3. Not correct – is wrong because though value cola has to function as a drink and be suitable for consumers to buy, the taste is not the most important aspect when the price is just 20p.
4. Not correct – is wrong because quality would not be the most important consideration as the cola is only 20p and it is a value brand/ quality is not an element of the design mix

This work is licensed under a Creative Commons Attribution 4.0 International License.