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Questions and Answers
What is the primary focus of behavioral segmentation?
What is the primary focus of behavioral segmentation?
Which of the following is NOT a component of psychographic segmentation?
Which of the following is NOT a component of psychographic segmentation?
What strategy is commonly used to encourage customer loyalty in cinemas?
What strategy is commonly used to encourage customer loyalty in cinemas?
Which segment focuses on consumer spending habits and consumption patterns?
Which segment focuses on consumer spending habits and consumption patterns?
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How does geographic segmentation affect consumer choices?
How does geographic segmentation affect consumer choices?
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What benefit might cinemas promote to attract environmentally conscious consumers?
What benefit might cinemas promote to attract environmentally conscious consumers?
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Which factor would be least relevant in behavioral segmentation?
Which factor would be least relevant in behavioral segmentation?
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Which aspect does NOT typically influence consumers' relationships with products?
Which aspect does NOT typically influence consumers' relationships with products?
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What is a key feature of using a debit card for payments?
What is a key feature of using a debit card for payments?
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Which of the following describes a cheque?
Which of the following describes a cheque?
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What aspect of cash payments can be considered a disadvantage?
What aspect of cash payments can be considered a disadvantage?
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In terms of payment methods, what is a common use of services like PayPal?
In terms of payment methods, what is a common use of services like PayPal?
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What is one of the factors that determines the suitability of a payment method?
What is one of the factors that determines the suitability of a payment method?
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What do the terms 'creditors' refer to in a financial context?
What do the terms 'creditors' refer to in a financial context?
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In a statement of comprehensive income, which of the following is listed as a measure of profitability?
In a statement of comprehensive income, which of the following is listed as a measure of profitability?
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Which of the following terms is synonymous with 'fixed assets'?
Which of the following terms is synonymous with 'fixed assets'?
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Which financial statement summarizes the activities of an enterprise over a specific period, usually a year?
Which financial statement summarizes the activities of an enterprise over a specific period, usually a year?
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Which of the following is considered a long-term liability?
Which of the following is considered a long-term liability?
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What is the formula to calculate total running costs?
What is the formula to calculate total running costs?
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What does the term 'debtors' refer to in financial terminology?
What does the term 'debtors' refer to in financial terminology?
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In the context of financial statements, which of the following is NOT typically considered a category in the statement of financial position?
In the context of financial statements, which of the following is NOT typically considered a category in the statement of financial position?
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What does a large closing balance indicate to an enterprise?
What does a large closing balance indicate to an enterprise?
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Which month experienced the highest total receipts in cash inflows?
Which month experienced the highest total receipts in cash inflows?
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What was the total cash inflow from spare part sales in March?
What was the total cash inflow from spare part sales in March?
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What was the total cash outflow for rent in March?
What was the total cash outflow for rent in March?
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Which cash outflow category had the largest monthly spending in February?
Which cash outflow category had the largest monthly spending in February?
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What significant change occurred regarding rent in April?
What significant change occurred regarding rent in April?
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How much was the bank loan taken in March, and when did loan repayments begin?
How much was the bank loan taken in March, and when did loan repayments begin?
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What was the main reason for the increase in receipts between February and March?
What was the main reason for the increase in receipts between February and March?
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What can be calculated through break-even analysis?
What can be calculated through break-even analysis?
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Which of the following is a benefit of break-even analysis?
Which of the following is a benefit of break-even analysis?
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What risk is associated with not using break-even analysis?
What risk is associated with not using break-even analysis?
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What does the margin of safety indicate in break-even analysis?
What does the margin of safety indicate in break-even analysis?
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Which of the following represents an internal source of business finance?
Which of the following represents an internal source of business finance?
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What does retained profit allow an enterprise to do?
What does retained profit allow an enterprise to do?
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What is a potential consequence of selling inventory below cost price?
What is a potential consequence of selling inventory below cost price?
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In financial planning, what can be a strategy for an expanding enterprise?
In financial planning, what can be a strategy for an expanding enterprise?
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What is a significant risk of the owner investing in a new enterprise?
What is a significant risk of the owner investing in a new enterprise?
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Which of the following best describes the benefit of selling assets for an enterprise?
Which of the following best describes the benefit of selling assets for an enterprise?
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What is a potential drawback of using a bank overdraft as a source of finance?
What is a potential drawback of using a bank overdraft as a source of finance?
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Which statement regarding net current assets is accurate?
Which statement regarding net current assets is accurate?
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What misconception might an owner have about selling inventory?
What misconception might an owner have about selling inventory?
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Why might new enterprises struggle with retained profits?
Why might new enterprises struggle with retained profits?
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What is a common characteristic of short-term finance?
What is a common characteristic of short-term finance?
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Which factor could lead to high interest rates for a bank overdraft?
Which factor could lead to high interest rates for a bank overdraft?
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Study Notes
Promotion
- Promotion is any method used to encourage current and potential customers to buy products.
- Examples include advertisements, television commercials, and coupons.
- Promotion aims to create a positive image of an enterprise in the minds of customers and motivate them to buy the products.
Promotional Mix
- Enterprises use a combination of promotional methods, known as the promotional mix.
- This approach depends on the product and suitability for the size of the enterprise.
Methods of Advertising
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Moving image: Television, cinemas, video sites, promotional DVDs
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Print: Local and national newspapers, magazines, leaflets, billboards
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Ambient: Public places such as bus stops and shopping centres
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Digital: Company websites, social media (Pinterest, Instagram)
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Audio: Local and national radio
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Each method of advertising has specific benefits, including reaching a wide range of people or targeting very specific locations.
Advertising
- It aims to persuade and inform potential customers.
- Advertising message should focus on aspects of the goods or services like price, quality, or usefulness.
- The medium selected should properly target the correct customers.
Sales Promotion
- Methods to persuade customers to buy products that include coupons, money-off vouchers, free samples, competitions, prize draws, money off discounts, percentage reductions, loyalty incentives , points towards other products or free items, Buy-One-Get-One-Free offers, and free products on purchase of a full-price product.
- Benefits include attracting purchasers and encouraging repeat business.
- Limitations include possible impacts on profit if the cost of sales promotions is not covered.
Personal Selling
- A representative of the enterprise directly interacts with potential customers.
- The methods include face-to-face contact, phone calls (usually from a call center), emails, and video or web conferencing.
Public Relations (PR)
- PR is building and maintaining an enterprise's reputation.
- A positive public image is crucial to business success, impacting sales.
- It can incorporate activities like sponsorships, exhibitions, and press releases.
- Its purpose is to encourage positive views, positive publicity, and to protect the brand image.
- Methods like telemarketing are also important, such as contacting customers about products or offers.
Direct Marketing
- Includes mail order catalogues, leaflets, letters, brochures about new products
- This type of direct marketing is suitable for small to medium businesses.
Market Segmentation
- Market segmentation is the process of dividing a large market into smaller groups with similar characteristics.
- Enterprises do this for various reasons:
- Understanding customers better.
- Developing specific products for different segments.
- Selecting the best promotional methods for different groups.
- Types of segmentation include demographic, geographic, behavioural, and psychographic.
Financial Records
- Financial records track the buying and selling process.
- Documents used include purchase orders, delivery notes, invoices, receipts, credit notes, and statements of account.
- These documents record the sale and purchase of goods and services.
- Each documents has its own purpose and features.
- Accurate financial records are crucial to ensure the correct amount of expenses and revenue are recorded.
Cash Flow
- Cash inflows are the money coming into an enterprise (like sales revenue), while cash outflows represent money leaving the enterprise (such as purchases).
- The difference between the cash inflow and outflow amounts is the net cash flow. An enterprise needs to know this for effective planning and forecasting.
Financial Statements
- Financial statements are summaries of an enterprise's activities over a period of time.
- These statements can help people who are interested in the business understand how well it is performing.
- The statements include comprehensive income (showing turnover, costs, and profit), and statement of financial position (showing assets, liabilities, and owner's equity).
Profitability Ratios
- Profitability ratios measure the ability to turn revenue into profit.
- Gross profit margin is the profit made from each £1 of sales revenue.
- Net profit margin is the amount of net profit generated for each £1 of sales.
- Profitability ratios are analyzed to help understand profitability better.
Liquidity Ratios
- Liquidity ratios measure an enterprise's ability to pay its debts.
- The current ratio considers inventory (stock) while the quick or liquid capital ratio excludes it.
- A liquid asset ratio above 1.5:2.1 is likely to signify that the business can fulfil short term obligations.
Break-even Analysis
- Used to determine the point at which total revenue equals total costs, resulting in no profit or loss.
- It involves considering fixed and variable costs, and unit price to calculate the break-even point (the level of sales at which the enterprise makes no profit or loss).
- This analysis is essential in planning. It helps to understand how many units or products must be sold to avoid loss.
Sources of Business Finance
- Internal Sources: This includes owner funds (savings), retained profits, and the sale of assets.
- External Sources: These include bank overdrafts, loans, hire purchase and venture capital. There are also grants from local or national governments.
- Different sources have different features and requirements for usage.
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Description
Test your knowledge on market segmentation strategies, including behavioral, psychographic, and geographic approaches. This quiz covers various components and factors influencing consumer choices and loyalty in cinemas. Perfect for marketing students and professionals looking to deepen their understanding.
