Theory question 106
Pricing(a) State five factors that a manufacturer would consider before setting prices for his products.
(b) Explain five advantages of television over electronic billboard as a medium of advertising.
Show the model answer
(a) Any five: cost of production; level of demand; competitors' prices; pricing objectives (profit, market share); government regulations and taxes; nature of the product; stage in the product life cycle; customers' ability to pay; cost of distribution and promotion.
(b) Any five, explained: TV reaches a much larger, nationwide audience while a billboard is seen only by people passing one place; TV combines sound, sight and movement; TV can demonstrate how the product works; TV messages are longer and can explain more; TV reaches viewers inside their homes, including those who do not travel; TV programmes let firms target audiences by time and programme; TV carries more prestige.
Give each point as a full sentence, with an example where possible.