The diagram shows the proposed layout for a new HTL sportswear pop-up shop at a city-centre station. HTL sells running clothing and has limited space for fo...
Question 1 Report
The diagram shows the proposed layout for a new HTL sportswear pop-up shop at a city-centre station. HTL sells running clothing and has limited space for four weeks. The manager wants commuters to notice the business, browse quickly and buy items before catching trains. The business must select how to use its selling space because rent is high. The public entrance is at the bottom of Fig. 1.
HTL has a small social-media budget and may also offer a 15% opening-week discount. Its managers want to improve sales but avoid reducing profit too far.
(a) Which area, C or D, is most suitable for a new product display? [1]
(b) State one reason why the position of C may help HTL sell new running shoes. [2]
(c) Define point-of-sale promotion. [2]
(d) Calculate the sale price of a $60 top after a 15% discount. Show your working. [3]
(e) Analyse one possible benefit to HTL of using the discount in opening week. [3]
(f) Discuss whether HTL should use the station pop-up shop rather than sell only through its website. [3]
Answer Details
(a) The area labelled as the new shoes display is most suitable for a new product display. [1]
(b) This display is close to the entrance, so commuters are likely to see the new running shoes as they enter the shop. [2]
(c) Point-of-sale promotion is promotion displayed where customers make a purchase, such as in a shop, to encourage an immediate purchase. [2]
(d) Calculate the discount first:
\[15\%\text{ of }\$60=0.15\times\$60=\$9\]
\[\$60-\$9=\$51\]
The sale price is $51. [3]
(e) The lower price can encourage commuters to try the products. This may increase sales during the short period that the pop-up is open, helping HTL cover high rent or build awareness. [3]
(f) A station pop-up allows customers to see, try on and buy clothing immediately. A website has lower premises costs and can reach customers beyond the station. HTL should use the pop-up only if the extra station sales are likely to cover rent and staffing costs. [3]
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