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A business sells luxury cars - HSC - SSCE Business Studies - Question 21 - 2019 - Paper 1
Question 21
A business sells luxury cars. The cars are stylish, high performance and include advanced safety features integrating leading edge technology. a) Describe ONE facto... show full transcript
Worked Solution & Example Answer:A business sells luxury cars - HSC - SSCE Business Studies - Question 21 - 2019 - Paper 1
Step 1
Describe ONE factor influencing customer choice for this business.
Answer
One significant factor influencing customer choice for this business is the social status associated with owning a luxury car. Consumers often view high-end vehicles as symbols of wealth and prestige. For instance, a customer might choose a particular luxury car model not only for its performance and safety features but also to reflect their social status among peers. This factor is crucial as it drives customers to invest in luxury vehicles, leading to higher sales for the business.
Step 2
Explain the interdependence between marketing and finance for this business.
Answer
Marketing and finance are interdependent functions that coalesce to ensure the business's success. For this luxury car business, marketing efforts aim to create appealing campaigns that entice potential buyers and increase sales. In turn, finance provides the budget necessary for these marketing activities. An example of this interdependence is when the finance team allocates funds for advertising campaigns based on projected sales increases. Moreover, effective marketing strategies help to generate revenue, which finance uses to support further investments, creating a cycle of reliance between the two departments.
Step 3
Why is it important for this business to conduct market research?
Answer
Conducting market research is vital for this business as it provides insights into customer preferences, market trends, and competitive positioning. Through thorough research, the company can identify the features that attract consumers to luxury cars and adjust their offerings accordingly. Furthermore, market research helps minimize risks by understanding potential customer bases and testing new market strategies. This knowledge allows the business to make informed decisions, ensuring that its products meet the demands of the market and maintain a strong competitive edge.