Consider the advantages and disadvantages of the following three ways CR could use to sell its products. Which way should Charly choose? Justify your answer. - Selling through CR's own shop - Selling online - Selling to a wholesaler Selling through CR's own shop: . . . . . Selling online: . . . . . Selling to a wholesaler: . . . . . Recommendation: . . . . .
Exam No：0450_m25_qp_22 Year：2025 Question No：3(b)
Answer:
Justification might include:
- CR should sell through its own shop as advice on the quality of the luxury rugs and how they should be cared for can be communicated effectively to the customers. This should improve the reputation of CR's rugs and make it more likely that customers become loyal. Selling online may be very expensive in terms of maintaining the website and sales may be low if customers prefer to see the rug before buying. A wholesaler may lead to the price of rugs being too high and less competitive as they will be sold on to retailers and their profit margin will be added on to the final price paid by customers.
- CR should sell its rugs online as this will be cheaper than setting up its own shop and even though there will be costs to monitor the website and process orders it will be a lot cheaper than operating its own shop.
- CR should sell through a wholesaler as it will buy in bulk making transport and marketing much easier and cheaper. The wholesaler will then sell on to many retailers across country P leading to CR's rugs being sold to a much wider market.
- CR should sell through its own shop as advice on the quality of the luxury rugs and how they should be cared for can be communicated effectively to the customers. This should improve the reputation of CR's rugs and make it more likely that customers become loyal. Selling online may be very expensive in terms of maintaining the website and sales may be low if customers prefer to see the rug before buying. A wholesaler may lead to the price of rugs being too high and less competitive as they will be sold on to retailers and their profit margin will be added on to the final price paid by customers.
- CR should sell its rugs online as this will be cheaper than setting up its own shop and even though there will be costs to monitor the website and process orders it will be a lot cheaper than operating its own shop.
- CR should sell through a wholesaler as it will buy in bulk making transport and marketing much easier and cheaper. The wholesaler will then sell on to many retailers across country P leading to CR's rugs being sold to a much wider market.
Knowledge points:
3.3.1.1. The limitations and benefits of developing new products
3.3.1.2. Brand image; impact on sales and customer loyalty
3.3.1.3. The role of packaging
3.3.1.4. The product life cycle: main stages and extension strategies; draw and interpret a product life cycle diagram
3.3.1.5. How stages of the product life cycle can influence marketing decisions, e.g. promotion and pricing decisions
3.3.2.1. Pricing methods (benefits and limitations of different methods), e.g. cost plus, competitive, penetration, skimming, and promotional
3.3.2.2. Recommend and justify an appropriate pricing method in given circumstances
3.3.2.3. Understand the significance of price elasticity: difference between price elastic demand and price inelastic demand; importance of the concept in pricing decisions (knowledge of the formula and calculations of PED will not be assessed)
3.3.3.1. Advantages and disadvantages of different channels, e.g. use of wholesalers, retailers or direct to consumers
3.3.3.2. Recommend and justify an appropriate distribution channel in given circumstances
3.3.4.1. The aims of promotion
3.3.4.2. Different forms of promotion and how they influence sales, e.g. advertising, sales promotion
3.3.4.3. The need for cost-effectiveness in spending the marketing budget on promotion
3.3.5.1. Define and explain the concept of e-commerce
3.3.5.2. The opportunities and threats of e-commerce to business and consumers
3.3.5.3. Use of the internet and social media networks for promotion
Solution:
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