SBL1300 business studies PDF

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SBL1300 CHCJD201 Question 1 Businesses use a number of different pricing strategies to encourage customers to buy their products and services. Some of such pricing strategies are market penetration; price skimming and competition based pricing methods. Market penetration pricing set the initial price low for the introduction of the new product, providing an incentive to purchase the product immediately aiming at attracting large numbers of buyers, building sales, maximizing market share and profits quickly and expecting unit costs to drop significantly as the accumulated volume sold increases, resulting in 'experience curve effect' as a result of which sales continuously grow and costs continuously drop. Because of this, competitors who later enter the market will face higher unit costs at least until their volume catches up with the early entrant. This also discourages competitors from entering the market since the profit margin is relatively low. Price skimming pricing appeals to the segments of consumers who are willing to pay the very high premium price to have the innovation first with exciting product enhancements. This pricing strategy is particularly adopted for new and innovative goods and services. This strategy could also be used to signal high quality to the market, to earn back some of the high research and development investments and to even test their customers price sensitivity. Competition based pricing methods is a pricing strategy of setting prices according to the competitors’ prices, aiming to reflect how the firm wants consumers to interpret its products relative to the competitors’ offerings

Question 2 In situation like the above where I had served a customer with under-cooked food on his birthday celebration which had made him really angry there are three steps in the effective service recovery I could follow to handle the situation. First step is to, ‘listen to the customer and involve them in the service recovery’. I would first let him explain the problem to me completely and listen to his complaint carefully, being a sympathetic listener actually being sorry about the whole problem, appearing anxious to rectify the situation to ensure it won’t happen again being apologetic as possible. The second step is to find a fair solution for the problem. After listening to the complaint I would try to provide a fair solution. I would ask if I could bring something else in place

of the undercooked food, making sure its properly cooked and assuring him it won’t happen again or I will ask him what I can do to compensate for this or I’d try talking to the manager about the issue and try not to charge them on the bill as a negative word of mouth could be very harmful for the restaurants image and also if the customer goes and complains at some higher authority the restaurant will have to face unnecessary issues. The third step is to resolve the problem quickly, not taking too much of the customers time which is only going to irritate him more.

Question 4 There are four fundamental differences involved in services marketing when compared with products marketing which are its intangibility, inseparability, heterogeneous and perishability. Intangibility means they cannot be seen, touched or seen like a pure product can, making it difficult to be promoted, shown or describe its benefits. For example visiting the doctor due to fever, although you can see and hear the doctor the service provided by him is intangible, you can’t see or touch the service he provided. Inseparability means the service can only be produced and consumed at the same time; it cannot be separated from the service provider. For example getting a hair cut in the salon unless you’re physically present when and where the service is provided you won’t be able to get the service. Heterogeneous means the differences between the marketing of goods and services, the delivery of services is more variable as more humans are needs to provide a service and there’s a variability in the service quality etc. For example haircuts you get from a hair stylist may differ time to time you get it done even though it ’s from the same person. Perishability means that services cannot be stored for future use. For example lecture at the university can’t be stored for later use it needs to be then and there received if you want to get the service....