ENTRY LEVEL CERTIFICATE
IN
BUSINESS STUDIES
COURSEWORKUNIT 2
BUSINESS AND ITS CUSTOMERS
How does a business decide what to sell?
HOW DOES A BUSINESS DECIDE WHAT TO SELL? / Activity 1When you and your friend leave school, you want to set up your own business. Before deciding what kind of business to set up you will need to do some research.
ASuggest TWO types of desk research you can do.
(i)______
(ii)______
BSuggest TWO types of field research you can do.
(i)______
(ii)______
Activity 1 / HOW DOES A BUSINESS DECIDE WHAT TO SELL?Buffalo Fashions is an American company which sells fashion clothing for young people. They want to start selling their products in this country.
They ask you to find out what price young people are prepared to pay to buy the brand name Wrangler.
CAsk TEN young people the questions provided in the questionnaire below.
QUESTIONS / TRAINERSHow often to you buy?
- once per year
- twice per year
- more than twice per year
How much do you pay?
- under £30
- £30-£50
- more than £50
What brand do you buy?
- Nike
- Adidas
- Other makes
DDraw THREE graphs to show the results of your survey. This can be done using a computer if you wish.
Entry Level Certificate in Business Studies – Unit 2
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How does a business set its price?
HOW DOES A BUSINESS SET ITS PRICE? / Activity 2AMOST BUSINESSES ARE RUN TO MAKE A PROFIT.
When Buffalo Fashions open their shop a decision will have to be made on the prices they will charge for the items they sell.
They will not be able to sell them at the same price they pay for them because they will have costs to pay for the running of the shop. They will also want to make a profit.
Make a list of FOUR expenses Buffalo Fashions will have when the shop is open.
(i)______
(ii)______
(iii)______
(iv)______
Activity 2 / HOW DOES A BUSINESS SET ITS PRICE?BBuffalo Fashions opened their shop and sold jeans for £40 a pair. Twenty pairs a week were sold.
The Manager then noticed that similar jeans were being sold in other shops for £45. /Buffalo Fashions put up the price of their jeans to £45 but only sold 16 pairs a week.
(i)How much did the shop take by selling 20 pairs at £40?
20 pairs @ £40 a pair
20 × 40 = £
(ii)How much did the shop take by selling 16 pairs at £45?
16 pairs @ £45 a pair
16 × 45 = £
HOW DOES A BUSINESS SET ITS PRICE? / Activity 2
CThe prices that Buffalo Fashions charge for the items they sell must be more than the cost price. Cost price is the price Buffalo Fashions buy their goods at from the wholesaler or warehouse. An amount is added to cover costs and make a profit. This is called the MARK UP.
(i)Buffalo Fashions buy jeans for £10 a pair. They decide to MARK UP the £10 by 100% to cover costs and make a profit. Work out the price the jeans will be sold at.
(ii)T-Shirts brought by Buffalo Fashions for £2 are marked up 150%. What is the selling price?
Activity 2 / HOW DOES A BUSINESS SET ITS PRICE?DIf the jeans cost the business £10 per pair, how much profit would they make if they sold 20 pairs @ £40 each?
PROFIT = TOTAL SALES - TOTAL COSTTOTAL SALES = Quantity Sold × Price
Total Sales = 20 × £ ______
Total Sales = £ ______(A)
TOTAL COST = Quantity × Cost Price
Total Cost = 20 × £ ______
Total Cost = £ ______(B)
PROFIT = Total Sales – Total Cost
Profit = £ ______(A) – £ ______(B)
Profit = £ ______
HOW DOES A BUSINESS SET ITS PRICE? / Activity 2EIf Buffalo Fashions sold 16 pairs of jeans at £45 each, how much profit would they make?
PROFIT = TOTAL SALES - TOTAL COSTTOTAL SALES = Quantity Sold × Price
Total Sales = 16 × £ ______
Total Sales = £ ______(A)
TOTAL COST = Quantity × Cost Price
Total Cost = Total Sales = 16 × £ ______
Total Cost = £ ______(B)
PROFIT = Total Sales Total Cost
Profit = £ ______(A) £ ______(B)
Profit = £ ______
FWhich price would you recommend?
The price set in A or the price set in B?
Give a reason for your answer.
______
______
How does a business promote its products?
HOW DOES A BUSINESS PROMOTE ITS PRODUCTS? / Activity 3AIn order to tell their customers about their products/services, businesses need to ADVERTISE.
There are many different types of advertising.
Research methods of advertising then complete the chart below.
TYPES OF ADVERTISING
LOCAL ADVERTISING / NATIONAL ADVERTISINGActivity 3 / HOW DOES A BUSINESS PROMOTE ITS PRODUCTS?
BDraw lines from each of the products or services in Column 1 to the best means of advertising the product listed in Column 2.
Column 1 / Column 2An expensive perfume / Local newspaper
A second-hand bike / Local Radio
A school play / National television
A new chocolate bar / Poster
Bank services / Leaflets
Local tourist attraction / National newspapers
Mobile phone details / National magazine
CSALES PROMOTION
Special offers are used to encourage customers to purchase goods, e.g. 10% off.
HOW DOES A BUSINESS PROMOTE ITS PRODUCTS? / Activity 3Buffalo Fashions are worried that fashions may be changing and that they will be left with clothes they cannot sell.
(i)Suggest TWO ways in which people could be encouraged to buy clothes from Buffalo Fashions.
1.______
2.______
(ii)Find TWO examples of advertisements for special offers. Attach them below.
Activity 3 / HOW DOES A BUSINESS PROMOTE ITS PRODUCTS?DList THREE examples of SPONSORSHIP in sport.
(i)______
(ii)______
(iii)______
EGive ONE reason why companies are involved in sponsorship.______
______
______
FWhy do people complain about tobacco companies sponsoring sporting events?
______
______
______
HOW DOES A BUSINESS PROMOTE ITS PRODUCTS? / Activity 3
GWhat is meant by a "brand name"?
______
______
______
HDraw lines to connect the brand name in Column 1 with the product in Column 2.
Column 1 / Column 2Cadbury's / Baked beans
Nescafé / Cornflakes
Kellogg's / Cat food
PG Tips / Chocolate
Daz / Coffee
Heinz / Tea
Fairy / Washing powder
Kit-e-Kat / Washing-up-liquid
Activity 3 / HOW DOES A BUSINESS PROMOTE ITS PRODUCTS
IBuffalo Fashions has asked a famous pop star to open their first shop in this country. Using a computer, design a poster advertising the event. Include the following:
- date of opening;
- time of opening;
- name of famous pop star;
- special offers;
- name and address of business.
HOW DOES A BUSINESS PROMOTE ITS PRODUCTS? / Activity 3
JWhy do you think Buffalo Fashions would ask someone famous to open their shop?
______
______
______
KWrite a short newspaper article about the opening of Buffalo Fashions' first shop by your favourite famous person. This may be word processed.
Activity 3 / HOW DOES A BUSINESS PROMOTE ITS PRODUCTS?Competitions encourage people to buy products.
LCollect information on TWO competitions which are running at the moment. Put the information in your folder.
MBuffalo Fashions is planning to give free gifts to its customers on opening day. Suggest TWO suitable free gifts.
(i)______
(ii)______
How does a business sell its products?
HOW DOES A BUSINESS SELL ITS PRODUCTS? / Activity 4Businesses sell their goods/services through a variety of outlets.
AMake a list of the different ways a business can sell goods and services, e.g. door-to-door.
______
______
______
______
______
______
BName your nearest market.______
CGive TWO examples of what is sold in the market.
(i)______
(iii)______
Activity 4 / HOW DOES A BUSINESS SELL ITS PRODUCTS?DGoods can be ordered, bought and sold without leaving your home.
Discuss this in a group and make a list of THREE ways in which this can be done.
(i)______
(ii)______
(iii)______
EWrite down the name of THREE well known mail-order catalogues.
(i)______
(ii)______
(iii)______
FWhat is the name given to a person who "runs a catalogue"?
______
GGive ONE reason why someone would want to "run a catalogue".
______
______/WHERE DOES A BUSINESS SELL ITS PRODUCTS? / Activity 4
Many goods sold in the shops are bought in other countries and brought into this country.
These goods are called IMPORTS.
HLook at the labels on TWOitems of clothing. Where were the clothes made?
(i)______
(ii)______
IWrite a paragraph saying why countries IMPORT goods and services.
______
______
______
Activity 4 / WHERE DOES A BUSINESS SELL ITS PRODUCTSOther countries buy goods and services from this country.
When these goods are sent out of the country they are called EXPORTS.
JMake a list of THREE goods exported from this country.
(i)______
(ii)______
(iii)______
Entry Level Certificate in Business Studies – Unit 2
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How does the business look after its customers?
HOW DOES THE BUSINESS LOOK AFTER ITS CUSTOMERS? / Activity 5ABuffalo Fashionswant their customers to come back again. They have decided to train their sales staff in customer care. Give TWO rules to be followed by staff when dealing with customers.
(i)______
(ii)______
BCustomers of Buffalo Fashions may need information on the clothes they are buying. Give TWO pieces of information which might be on the labels of the clothes.
(i)______
(ii)______
Activity 5 / HOW DOES THE BUSINESS LOOK AFTER ITS CUSTOMERS?CBigger shops have Customer Service desks. Some customers are angry when they approach Customer Services.
Imagine that Buffalo Fashions has a Customer Service desk and an angry customer is returning a pair of jeans that have shrunk in the wash.
Work in pairs, one person being the customer and the other the sales assistant. Prepare what each person may say to the other and write it down.
Your teacher may ask you to role-play this scene for the class.
DWord process a guidance sheet for staff to follow when dealing with difficult customers.
HOW DOES THE BUSINESS LOOK AFTER ITS CUSTOMERS? / Activity 5Some items that we buy require an after-sales service.
EChoose TWO pictures, from a magazine, of products that would require an after-sales service and state the type of after-sales service which may be needed.
(i)Product ______
Type of after sales service ______
______
(ii)Product ______
Type of after sales service ______
______
Activity 5 / HOW DOES THE BUSINESS LOOK AFTER ITS CUSTOMERS?FSome goods are too heavy and big for people to carry home from the shops themselves. Make a list of THREE items which would have to be delivered to your home.
(i)______
(ii)______
(ii)______
Entry Level Certificate in Business Studies – Unit 2
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What are the safeguards for customers?
WHAT ARE THE SAFEGUARDS FOR CUSTOMERS? / Activity 6AThe Manager of Buffalo Fashions knows that there are laws which look after customers so it is important that all the products they sell are of a high quality. Below are two laws that protect the consumer.
- SALE OF GOODS ACT
This Act states that goods sold must be of good quality, do what they were made to do and must be the same as they are described.
- TRADE DESCRIPTIONS ACT
Goods must not be falsely described.
Goods must only be marked "reduced" if they have been selling at a higher price for a certain amount of time.
BSay which of the two laws, Sale of Goods Act or Trade Descriptions Act, apply in the following cases.
(i)A jumper with a big hole in the sleeve.
______
(ii)A label on a shirt with "Pure Wool" on it. The jumper is actually made of acrylic fibres.
______
(iii)A price label marked "Reduced from £25 to £20". The price has always been £20.
______
(iv)A zip on a pair of jeans breaks after three weeks' wear.
______
Activity 6 / WHAT ARE THE SAFEGUARDS FOR CUSTOMERS?CFind out what a customer is entitled to if faulty goods are returned to a shop. Write a short paragraph on your findings.
______
______
______
______
DWhy is it important to keep the receipt when goods are bought?
______
______
______
EWrite down the number of the paragraph which matches the safety label.
1.Kite-mark. The product has been checked by the British Standards Institution and is a quality product.
2.Safety Mark. The product has been checked by the British Standards Institution and is safe for its purpose.
3.Shows that a firm doing electrical work does the job to a high standard.
Number ______/ Number ______/ Number ______WHAT ARE THE SAFEGUARDS FOR CUSTOMERS? / Activity 6
FName THREE items which should carry the Kitemark.
(i)______
(ii)______
(iii)______
Activity 6 / WHAT ARE THE SAFEGUARDS FOR CUSTOMERS?Design an A4 size leaflet about "The Citizens Advice Bureau". Make it suitable for a young person. In the leaflet, give THREE examples of the types of problems it can help with.
IH/MEW48(05)
24 May 2005
Entry Level Certificate in Business Studies – Unit 2
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