KCSE Business Studies Topical Questions and Answers

Benefits that accrue to a company by using prize winning competition to promote its products

17/3/2022

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Prize winning competition has become common in product promotion. Explain five benefits that will accrue to a firm which uses this method of promotion. (10 marks)

Benefits that accrue to a company by using prize winning competition to promote its products

many people will try to buy the product with the aim of winning hence promoting sales.
the dates of the draws can be post-poned to enhance more sales
people may become more used to buy the product even after the promotion period is over
competition helps in creating a good image of the firm
it is relatively cheap to use this kind of sales promotion compared to other methods as the cost incurred may be low
it creates product awareness to the potential customers

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Briefly explain the meaning of the following forms of advertising

8/11/2021

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Briefly explain the meaning of the following forms of advertising (8mks)

(i) Celebrity advertising

This is a form of advertising that uses of a prominent person on the product to encourage people to buy the product e.g a president, athlete, a footballer etc.

(ii) Product advertising

This is a form of advertising that put emphasis on the brand name of a product.
It is meant to promote that particular product.

(iii) Informative advertising

This is an advertising that gives general information of a product to a customer e.g price quality, uses, and side effects and where it is found.

(iv) Institutional advertising

This is a form of advertising which is meant to popularize or a business.
More emphasis is put on the name of the business.

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State four limitations of billboards as a tool of product promotion.

5/11/2021

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State four limitations of billboards as a tool of product promotion. (4mks)

Four limitations of billboards as a tool of product promotion.

They can be destroyed by weather, since they are exposed to the elements of nature.
They can be vandalized, since no security is provided for them.
They are not useful to the blind persons since they can neither see nor read the message.
They can be ignored since they are silent.
The do not target a particular group of consumers.
They are expensive to erect and maintain.
They may cause obstructions to motorists if they are not well erected.

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Differentiate between Generic competition and Enterprise competition

19/9/2021

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Genetic competition	Enterprise competition
refers to competition where products are used for the same purpose though the products are different e.g. Cinemas and discus competing forms of entertainment	Enterprise competition are a kind of competition which is fund where firm products are similar to those of other firms e.g a local shoe company manufacturing competing with imported shoes.

Differentiate between Generic competition and Enterprise competition

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Explain five advantages of advertising to the consumer.

21/12/2020

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Explain five advantages of advertising to the consumer.

Advantages of advertising to the consumer include:

Consumers become aware of existence of a product and where it can be found.
Consumers enjoy high quality goods resulting from competitive advertising/Producers seek to maintain very high standards of quality.
Makes it easy for consumers to choose products from a variety offered in the market based on their advertised quality and contents.
Protects consumers from exploitation since they are aware of prices and quality of items and can therefore enforce their rights.
Communicates changes about the producer like new product lines, change of name and physical address. This enhances convenience for the customers.
Educates the consumers on the proper use of products where advertising messages involve demonstrations of product u sage.
Entertainment by use of drama/music/plays.
Aiding budget planning as they are made to know about price and existence of goods.
May enjoy lower prices due to competition.
Correct misconceptions hence assist in making decisions.

Explain five advantages of advertising to the consumer.

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Highlight four advantages of promoting sales through the internet.

20/12/2020

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Highlight four advantages of promoting sales through the internet.

Advantages of promoting sales through the internet include:

A firm can advertise goods universally.
Access to world markets for increased sales.
Instant receipt of orders from all over the world.
Payment received through electronic fund transfer (EFT).
Reduced paperwork on customer records.
Reduced cost of sales promotion.

Highlight four advantages of promoting sales through the internet.

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Discuss factors that may be considered when choosing a method for promoting a product.

17/12/2020

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Discuss factors that may be considered when choosing a method for promoting a product.

Factors to consider when choosing a method of promoting a product include:

Cost of the method. The organization should choose a promotion method that is affordable.
Geographical area of coverage. The organization should choose a method that will reach the customers in their various locations.
Target group. The organization must choose a method that appeals to the relevant target group.
Speed of the medium or method in relation to urgency of the message. The organization should choose a method that will reach the customers within the desired time frame.
Nature of the product. Different methods may be chosen depending on the nature of the product e.g. technical products may require demonstrations best achieved through personal selling.
Nature of the message. The organization should choose a method that will best present the various aspects of the message.

Discuss factors that may be considered when choosing a method for promoting a product.

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State four benefits that a trader may get by advertising products in a newspaper.

17/12/2020

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State four benefits that a trader may get by advertising products in a newspaper.

Benefits that accrue to a trader who advertises products in a newspaper include:

wide coverage - message can reach a lot of people
evidence of the message exists
graphical details can be included
a trader has a chance to compete with other traders
a trader has a chance of increasing sales.

State four benefits that a trader may get by advertising products in a newspaper.

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Explain four reasons for which traders observe ethical practices in product promotion. (8 marks)

17/12/2020

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Reasons for which traders observe ethical practices in product promotion

Reasons for which traders observe ethical practices in product promotion include:

To avoid misleading the consumers by not making false claims about their products.
To ensure that consumers are not offended by not making use of appeals that go against their cultural values.
To avoid exploiting certain vulnerable groups like children since they lack the knowledge and experience to understand and evaluate the purpose of persuasive appeals.
To avoid negative influence on the consumers’ values and lifestyles that may lead to immorality and ill health like glorifying the image of alcohol and cigarettes.
To avoid portraying rival businesses negatively in an attempt to capture the market or gain undue advantage.
To create a positive image reputation of business hence maintaining customer loyalty.
To abide by the laws of the country to avoid law suits/conflicts/frictions with law enforcement agencies s/government.

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State four merits of promoting products through personal selling. (4 marks)

15/12/2020

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Merits of promoting products through personal selling

Merits of promoting products through personal selling include:

Enhances personal appeal between the buyer and the seller.
Can effectively counteract customers negative attitudes towards the product.
Questions and complaints from customers are channeled directly to employees of the company and not middlemen.
Demonstration on the use of the goods can easily be done.
Flexibility in presentation to suit customer needs.
Provide immediate feedback from and to the clients.
Effective in conducting market research.

State four merits of promoting products through personal selling

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Highlight four reasons for which businesses should observe ethical practices. (4 marks)

15/12/2020

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Reasons for which businesses should observe ethical practices

Reasons for which businesses should observe ethical practices include:

To ensure fair competition.
To protect consumers/customers.
To protect the environment.
To protect the rights of employees.
To promote social responsibility.
To maintain a positive image.
To abide by the country’s laws.
To maintain suppliers.
To promote positive cultural practices.

Vertical Divider

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Amboseli Enterprises has been spending heavy on promotion for its products though its sales have consistently declined. Outline four measures that the company take to reverse the trend

14/12/2020

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Amboseli Enterprises has been spending heavy on promotion for its products though its sales have consistently declined. Outline four measures that the company take to reverse the trend

Measurers that may be taken to reserve declining sales include

Ensure that the product reaches the target market
Redesign the salient product features
Improve the quality of the product
Provision of information on alternative uses
Lower the price of the product
Ensure that the product meets the fast and preference of target group
Review the production strategy
Diversify the use of product

Amboseli Enterprises has been spending heavy on promotion for its products though its sales have consistently declined. Outline four measures that the company take to reverse the trend

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Explain four circumstances in which a trader may offer after sales service to the buyer. (8 marks)

13/12/2020

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Explain four circumstances in which a trader may offer after sales service to the buyer.

Circumstances in which a trader may offer after sales service to the buyer.

Where goods sold are of technical nature and may need advice/demonstration on use.
Where expertise is required in installation and the trader has technical knowledge/ability/backup.
Where the product is new in the market and the trader requires feedback on the product’s performance.
Where competition is stiff and the trader uses after sales services as a product promotional tool to win more customers and increase sales.
Where expertise is required in maintenance/service/repairs and the trader is able to provide the service.
Where it is the policy of the business as a way of improving customer relations and improve business image.
Where it is the government policy. the trader will have no option.
Where the nature of the product is such that is requires specialized transport and the trader can provide it.

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State four reasons why ethical practice is necessary in Product Promotion.(4 marks)

13/12/2020

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State four reasons why ethical practice is necessary in Product Promotion.

Reasons why ethical practice is necessary in Product Promotion.

To encourage selling of quality goods.
To safeguard cultural practices.
To encourage disclosure of information about the product.
To ensure compliance e with existing government legislation.
To curb environmental degradation.
To safeguard competitors in the market.
To safeguard consumers against misleading advertisements.

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A firm wishes to introduce a new product into the market. Outline four factors that should be considered in choosing an appropriate medium for promotion.

11/12/2020

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A firm wishes to introduce a new product into the market. Outline four factors that should be considered in choosing an appropriate medium for promotion.

Target group so as to reach the intended group
Availability of the medium – convenient to use only to medium that is available
Cost of medium – saving in method used should be considered
Reachability- How well the medium reaches the target
Time of promotion – medium that can reach many intended group
Medium used by competition – Find the strengths and weakness to improve on
Speed/ urgency
Flexible
Quality of the medium
Physical characteristics of the medium
Legal requirement/ government policy
Nature of the product
Duration of the promotion

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Give four reasons for observing ethical practices in product promotion. (4 marks)

8/12/2020

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Reasons for observing ethical practices in product promotion

Reasons for observing ethical practices in product promotion include:

Ensures fair competition among businesses.
Ensures consumer’s interests are protected eg. false advertisement, overpricing.
Ensures that businesses comply with the law.
It protects the environment from degradation.
improves the image of the business.
Maintain morality in the society/cultural values.

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What are the advantages of personal selling as a method of sales promotion? (4mks)

6/12/2020

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Advantages of personal selling as a method of sales promotion?

Creates goods relationship between customers and seller
The seller has a chance to explain finer details of the product
The seller can collect information regarding the demand of the product
Seller can persuade the customer to buy the product
Full knowledge of the product
Ability to tailor the product according to customers needs
Capable of targeting a specific group.

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Traders are required to observe ethical practices when carrying out product promotion. Explain five reasons for observing such ethical practices.(10 marks)

5/12/2020

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Traders are required to observe ethical practices when carrying out product promotion. Explain five reasons for observing such ethical practices

To ensure fair competition.
To protect consumers/customers.
To protect the environment.
To protect the rights of employees.
To promote social responsibility.
To maintain a positive image.
To abide by the country’s laws,
To maintain suppliers.
To promote positive cultural practices.

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Highlight four factors that should be considered by a firm when deciding on the method to use for promoting its products. (4 marks)

27/11/2020

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Factors that should be considered by a firm when deciding on the method to use for promoting its products

Factors to be considered by a firm when deciding on the method to use for promoting its products include:

Nature of the product.
The competitors’ promotional strategies.
The cost of the methods.
The target audience.
The level of demand for the product.
Urgency of the promotional message.
Availability of the promotional media.
Government policy/legal requirements.
Objectives of the firm/promoter.
Geographical coverage of the method.

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Highlight four merits of using sales people to promote the sales of a particular product

30/5/2020

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Answer

Merits of using sales people to promote the sales of a particular product include:

It gives a personal touch which elicits positive response from potential clients.
It can be used to target specific groups of customers.
It is flexible since the message can be tailored to suit the needs of each client.
Allows for demonstration on product usage.
Source of immediate feedback from the buyer.
Buyer’s questions/concerns are immediately addressed
It leads to more sales since customers may be convinced persuasive salespeople.

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Prize winning competition has become common in product promotion. Explain five benefits that will accrue to a firm which uses this method of promotion. (10 marks)

Benefits that accrue to a company by using prize winning competition to promote its products

Briefly explain the meaning of the following forms of advertising (8mks)

​(i) Celebrity advertising

​(ii) Product advertising

(iii) Informative advertising

​(iv) Institutional advertising

State four limitations of billboards as a tool of product promotion. (4mks)

Genetic competition

Enterprise competition

Explain five advantages of advertising to the consumer.

Highlight four advantages of promoting sales through the internet.

Discuss factors that may be considered when choosing a method for promoting a product.

State four benefits that a trader may get by advertising products in a newspaper.

Reasons for which traders observe ethical practices in product promotion

Merits of promoting products through personal selling

Reasons for which businesses should observe ethical practices

Amboseli Enterprises has been spending heavy on promotion for its products though its sales have consistently declined. Outline four measures that the company take to reverse the trend

Explain four circumstances in which a trader may offer after sales service to the buyer.

State four reasons why ethical practice is necessary in Product Promotion.

A firm wishes to introduce a new product into the market. Outline four factors that should be considered in choosing an appropriate medium for promotion.

Reasons for observing ethical practices in product promotion

Advantages of personal selling as a method of sales promotion?

Traders are required to observe ethical practices when carrying out product promotion. Explain five reasons for observing such ethical practices

Factors that should be considered by a firm when deciding on the method to use for promoting its products

Answer

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(i) Celebrity advertising

(ii) Product advertising

(iv) Institutional advertising