IGCSE Business Exam Questions

A pricing strategy where a business sets its prices based on the prices of its competitors.

The combination of elements a business uses to market its products or services effectively to its target audience.

The total amount of money a business allocates for its marketing activities during a specific period.

The overall perception that consumers have of a brand based on its products, services, and marketing efforts.

The packaging for a product can be important for a business as it protects the product during transportation and storage, but a well-designed package can also attract customers and communicate key product information.

The money required to cover day-to-day operating expenses for a business. This includes things like inventory, salaries, and rent.

The point at which a business's total revenue equals its total costs, meaning the business is neither making a profit nor a loss. It represents the break-even point.

The process of using online platforms to raise funds from a large number of individuals, often for a new venture.

When a business sells products directly to a manufacturer, it eliminates the need for intermediaries, leading to lower costs and faster order fulfillment. This allows the business to potentially negotiate better prices with the manufacturer.

Selling directly to a manufacturer provides access to large-scale orders, which can lead to economies of scale. This means that the business can produce more products at a lower cost per unit, leading to higher profits.

When a business introduces a new product, developing and testing it can be expensive due to research and development costs. This also includes costs associated with market research, prototypes, and production trials.

Introducing a new product can lead to a competitive advantage as the business can capture a first-mover advantage and attract new customers. This can lead to increased market share and revenue.

Import tariffs are taxes on imported goods, aiming to protect domestic industries by increasing the cost of imported products. This can lead to lower demand for imported goods as consumers switch to locally-produced alternatives, potentially helping the government achieve its economic objectives.

Import quotas are limits placed on the quantity of goods that can be imported. These limits can artificially increase the price of imported goods as supply decreases, potentially helping the government achieve its economic objectives. However, this can also lead to higher prices for consumers and reduced competition for domestic producers.

Cost-plus pricing involves setting a price by adding a predetermined profit margin to the cost of production. This method ensures that the business covers all costs and makes a profit, but it can be inflexible and may lead to losing customers to competitors offering lower prices.

Giving out free samples is effective for promoting new food products as it allows potential customers to try the product before making a purchase. This can increase awareness and trial, leading to higher sales and customer loyalty. However, this strategy can be expensive and may not be suitable for all businesses.

Selling products directly to customers through a business's own website, eliminating the need for intermediaries like retailers.

Selling products to large retailers, who then resell them to customers. This allows the business to reach a wider market but requires a partnership.

The price a business sets for its products based on their cost of production plus a markup for profit.

A pricing strategy where a business sets a low price for its product initially to gain market share quickly and attract more customers.

A pricing strategy where a business sets a high price for its new product to maximize profit margins during the initial stages of its release.

The stage of the product life cycle affects marketing decisions. In the introduction stage, focus on building awareness and trial. During the growth stage, emphasize differentiation and expand distribution.

Price inelastic demand means that a change in price has little effect on the quantity demanded. This could be due to the product being a necessity, having few substitutes, or consumers being unaware of price changes.

Advertising methods include television, radio, print, online, social media, and direct mail. Choosing the right method depends on the target audience, budget, and product characteristics.

Packaging plays multiple roles: Protecting the product, communicating brand identity, providing information, and facilitating usage. It can enhance the customer experience and differentiate the product.

Adding new features to a product can be an effective extension strategy to increase sales and attract new customers. However, it must be aligned with consumer needs and offer real value, or it may backfire.

Retailers are the best channel for distributing manufactured products because they provide easy access to customers, offer customer service, and promote products. They are also responsible for logistics, handling inventory, and payment processing.

Cash flow is how much money a business has available at any given time. It is essential to pay expenses, invest in growth, and manage debt. A lack of cash flow can lead to financial difficulties.

Income statements show a business's revenues and expenses over a period. Analyzing this information helps understand profitability, identify areas for improvement, and make informed business decisions.

Advertising in specialist magazines can be effective for promoting high-quality products as it targets a specific audience interested in the product category, increasing the likelihood of reaching potential customers.

Packaging plays a crucial role in brand image as it is the first point of interaction with consumers. It conveys brand values and personality, influencing purchase decisions.

A "buy one, get 50% off second purchase" promotion can attract customers and encourage impulse purchases, but it can also reduce profit margins.

Offering a 10% discount for a week after opening can generate initial excitement and attract customers but might not be sustainable long-term.

Hiring a celebrity to open a shop can generate media attention and attract customers but can be expensive and might not be effective in the long run.

Wholesalers provide bulk distribution and reduce storage costs but may reduce control over pricing and distribution.

Retailers offer wider reach and customer service but may have higher marketing costs and reduced profit margins

Direct selling to customers offers higher control and profit margins but requires higher marketing and customer service costs.

The stage of the product life cycle where a product is first launched. The focus here is on building awareness and encouraging trial. Prices are often set high to recoup development costs.

The stage where a product gains momentum in the market. It starts to attract more customers, and the focus shifts to expanding market share. Prices may be adjusted slightly to be competitive, but still prioritize profitability.

The stage where a product has achieved stability in the market. It has a loyal customer base, and competition is likely present. Pricing strategies might focus on maintaining market share, promoting loyalty, and potentially lowering prices to defend against competitors.

A key measure of business performance, calculated by dividing net profit by the total assets employed in the business. It reflects how efficiently a company is using its assets to generate profit.

A business strategy of offering products and services that are environmentally friendly and ethical. This includes considering the impact on the environment, labor rights, and social responsibility.

A business strategy of regularly reviewing and refining products and services to meet changing customer needs and market trends. This includes developing new features, improving existing products, and adapting to current market demands.

The process of creating awareness and interest in a product or service through various communication channels. It encompasses a wide range of activities like advertising, social media marketing, public relations, and promotions.

The process of selling products or services directly to end consumers, often through physical stores or online platforms. It typically involves building relationships and providing personalized service.