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Additional school-assessed coursework answers

Unit 2: Establishing a business

Chapter 5: Marketing a business

Outcome 2

Explain the importance of establishing a customer base and a marketing presence to

achieve the objectives of the business, analyse effective marketing and public relations

strategies and apply these strategies to business-related case studies.

Time allowed: 50–60 minutes

Marks allocated: 30 marks (the marks for each question are indicated at the end of the

question)

Conditions: closed book (no notes or textbooks may be used when completing this task)

Read the case study and answer all the questions in the spaces provided.

Great Expectations

Mrs Jane Fielding is the owner of an up-market gift shop called Great Expectations. The

store predominantly stocks seasonal items that are of high quality and generally high prices.

The business has been located at Armadale shopping village for the last 15 years, as well as

online for the last three years. Armadale is considered to be a relatively up-market suburb of

Melbourne. This year, the rent on her shop has increased and Jane needs to move her

business to a similar location with lower rent. She has found a store with a similar layout in

the nearby suburb of South Yarra. The shopfront is in a side street off Chapel Street, a very

busy road. The store in South Yarra is being vacated by another gift shop called Veronica’s

Fine Gifts, which is moving into Melbourne city.

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Unit 2: Establishing a business Chapter 5: Marketing a business

ASSESSMENT task — media analysis

1 What type of distribution channel does Jane’s business use? Explain your answer.

Jane’s business, Great Expectations, would probably use the following distribution

channel: producer to wholesaler to retailer to customer. This is because as a small

business it would not have the purchasing power to deal directly with the producer but

can purchase items in a smaller quantity from a wholesaler.

2 marks

2 What is the market coverage for Great Expectations? Justify your choice.

The market coverage for Great Expectations is exclusive distribution. This is because

the products are rare and not stocked by many local retailers and are expensive.

2 marks

3 How could Great Expectations promote their move?

Great Expectations could promote their move from Armadale to South Yarra by

undertaking personal selling, advertising the move and placing the news on the store’s

website.

2 marks

4 Outline two reasons why physical evidence would need to be an important element in the

marketing mix of this business.

Physical evidence is important in the following ways:

 The physical state of the business would be very important. As an exclusive

business selling high-priced goods, the customer base is likely to be people who

are relatively wealthy, and who would expect a high-quality environment when

browsing for gifts.

 Gaining positive feedback from customers would be important and could be

achieved by providing a means for customers to write reviews and place them on

the store’s website.

4 marks

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5 When Jane moved the business to South Yarra, she decided to leave the name

Veronica’s Fine Gifts on the shopfront and add Great Expectations below it. Identify two

reasons why this might be the wrong action to take.

 This action may be confusing to her regular customers from her previous premises

and may make it harder for some of them to identify the new premises.

 It could also be deemed unethical, as it is using a business name another company

operates under and misleads customers about which business is operating on the

premises.

4 marks

Suzie’s Sweet Shop

An unfortunate event occurred at Suzie’s Sweet Shop when the sucrose from the storeroom

leaked into the glucose. Suzie could not afford to repurchase the items, as her business was

only just starting out. It was her decision that sucrose and glucose were so close in their

makeup that the difference would be negligible, so Suzie and her workers continued to make

lollies using the cross-contaminated ingredients. Generally, this would not have affected

most customers, but a member of the public collapsed and was taken to hospital after eating

one of the lollies, as they were allergic or sensitive to sucrose. The media picked up the

story and today it was published in the newspapers and on radio and TV news bulletins.

Answer the following questions.

6 What are the two principles Suzie should follow once the story has broken?

Suzie should follow these two principles:

 bring the crisis under control — limit the damage.

 deal competently and openly with the media (and public) scrutiny.

4 marks

7 Suzie attempts to deal with the crisis by carrying out the following actions. Identify which

of these are appropriate and which are not appropriate and explain why in each case.

(a) Initially Suzie shut the shop and refused to talk to any of the media.

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This is not appropriate. Information should be given as quickly as possible, and all facts

and regular updates should be publicised through all media.

(b)When eventually confronted by a TV camera and interviewer outside her shop, Suzie

simply said, ‘No comment’, and walked away to her car as quickly as possible.

This is also not appropriate. A ‘no comment’ response just gives the impression that the

business has something to hide, so this response could actually make matters worse.

(c) Suzie’s sister, who works in marketing, advised her to set up a crisis management

plan and helped to formulate it.

This is appropriate and should have been done at the beginning. A crisis management

plan will provide Suzie with a series of steps to follow to allow her to bring the crisis

under control, and deal with the media and public scrutiny.

(d)As part of the plan, Suzie contacted all the main media outlets, explained the

problem and outlined the steps she was taking to fix it.

This is also appropriate and should also have been done from the beginning. Providing

full and factual information should be an essential part of a crisis management plan.

8 marks

8 What was the main problem with what Suzie did? Explain your answer.

The problem is that Suzie was unethical in her decision to continue to use the mixture

of both the sucrose and the glucose, even though she was aware of the cross-

contamination.

2 marks

9 Outline one positive action Suzie can take to attempt to win back her customer base and

demonstrate a level of social responsibility.

She could attempt to demonstrate a level of social responsibility by involving the

business in community sponsorships or promoting and environmental awareness by

the use of green marketing.

2 marks

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