The Multiple Choice Questions Blog

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.

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