Observation

 

Most candidates attempted this question and their performance was good. However, some candidates could not answer the (b) part of the question.

Expected responses are.

1. Channels of Distribution for Consumer Products

 

1. Manufacturer – Consumer
2. Manufacturer – Wholesaler – Consumer
3. Manufacturer – Retailer – Consumer
4. Manufacturer – Wholesaler – Retailer – Consumer
5. Manufacturer – Agent – Wholesaler – Retailer – Consumer
6. Manufacturer – Distributor – Wholesaler – Retailer – Consumer
7. Manufacturer – Agent – Consumer
8. Explanation of Four Pricing Strategies

1. Cost – plus pricing method/markup pricing strategy: With this method, the firm calculates cost of producing the product and adds a percentage profit to get the price.
2. Geographical pricing; With this method, different prices are set for the same product in different locations.
3. Prestige pricing: This is used to create a high image for a product by pricing it high. For most people, a high quality product must be associated with high cost.
4. Customary pricing: This is where firms are rather traditional in their approach to prices. Such firms would adjust the products in terms of size and content rather than changing the prices.
5. Promotional pricing: It is setting a lower price for certain products so as to encourage customers to buy the product.
6. Target rate-of-return; The price is set by adding a desired return on investment to the cost of the product.
7. Premium pricing: This is setting price higher than competitors during the introduction of the product.
8. Market penetration: It is setting price lower than competitors to attract buyers.
9. Psychological pricing; The price is set so as to encourage customers to buy a product on the basis of emotion than logic.
10. Price lining: This is setting of different prices for products within a specific group.
11. Price leadership strategy: this is setting a product price at a level of the market leader’s price. 
12. Loss leader pricing strategy; This is setting a price below cost so as to attract prospective buyers to buy other products in the shop.

Competitive bidding pricing strategy; This is setting a price at the lowest offer of a bidder in relation to other bidders