A market-research company interviewed customers in three cities before a Canadian sportswear business decided whether to begin selling abroad. Customers in ...
Question 1 Report
A market-research company interviewed customers in three cities before a Canadian sportswear business decided whether to begin selling abroad. Customers in Sweden liked the high-quality recycled fabric but thought the selling price was too high. Customers in Chile preferred brighter colours. The owner must decide how to use this evidence.
(a) Identify one piece of information collected by the research company. [1]
(b) Explain one reason why market research is useful before entering a foreign market. [2]
(c) Explain one way the business could respond to the comments from customers in Chile. [2]
(d) Calculate the total revenue if 240 jackets are sold in Sweden at a selling price of CAD85 each. Show your working. [2]
(e) Which one business objective could be helped if the new overseas market is successful? [1]
Answer Details
(a) One piece of information collected was that Swedish customers thought the selling price was too high. The preference of Chilean customers for brighter colours, or Swedish customers liking recycled fabric, is also acceptable. [1]
(b) Market research identifies customer needs and likely demand before the business enters a foreign market. This reduces the risk of selling an unsuitable product and helps the owner make decisions that improve sales. [2]
(c) The business could produce brighter-coloured jackets or offer a wider colour range. This makes the product more suitable for Chilean customer preferences, increasing likely sales. [2]
(d) Revenue equals quantity sold multiplied by selling price:
\[240 \times \text{CAD}\,85 = \text{CAD}\,20\,400\]
Total revenue is CAD20 400. [2]
(e) A successful overseas market could help achieve an objective such as increasing sales, profit, growth or market share. [1]
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