Chocolatier Nof & Co sells handmade chocolate bars at weekend markets and through a small website. A competitor has started selling imported bars at a much ...
Question 1 Report
Chocolatier Nof & Co sells handmade chocolate bars at weekend markets and through a small website. A competitor has started selling imported bars at a much lower price. Nof & Co has asked 25 regular customers which features they value most. Customers mentioned unusual flavours, clear allergy labels and gift-ready boxes. The business is considering a new orange and cardamom bar, a lower price for its existing bars, or a loyalty card offering a free bar after six purchases. Each option could improve sales, but the owners do not want customers to think that quality has fallen. They must use the results to decide how to market the business.
(a) What is meant by customer loyalty? [2]
(b) State one product feature Nof & Co could use as a USP. [2]
(c) Calculate the average number of bars bought per customer if 25 customers bought 100 bars in total. [2]
(d) Analyse one reason why clear allergy labels may help Nof & Co increase sales. [2]
(e) Discuss whether Nof & Co should lower its prices to compete with imported bars. [2]
Answer Details
(a) Customer loyalty is when customers repeatedly buy from the same business rather than switching to competitors. [2]
(b) A possible USP is the unusual orange and cardamom flavour. Handmade chocolate or gift-ready boxes are also valid because they distinguish the product from competing bars. [2]
(c) Average bars bought per customer:
\[\frac{100}{25}=4\]
Customers bought an average of 4 bars each. [2]
(d) Clear allergy labels give customers with allergies information needed to make a safe choice. More customers may therefore be willing and able to buy the bars. [2]
(e) Lower prices may attract price-sensitive customers. However, they reduce profit and may damage Nof & Co's premium-quality image. The business should lower prices only if the additional sales are likely to outweigh the lower profit per bar without harming its brand. [2]
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