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2 marksPricing Decision

CAPE Management of Business Unit 2 · 2017 · Paper 2 · Question 2(a)(ii)

LeAnn Furnishings Ltd has struggled against competitors in Tango, leading to falling sales. After researching factors influencing customer buying behaviour, the owner/manager Petula Jones decided to reduce prices by removing some value-added features.

Define the term 'price elasticity of demand'.

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Other parts of this question

  1. 2(a)(i)Define the term 'value added'.[2 marks]
  2. 2(b)Explain how THREE named factors influence customer buying behaviour.[9 marks]
  3. 2(c)Discuss THREE promotion tools that the owner/manager, Petula Jones, of LeAnn Furnishings Ltd could use to help boost sales.[12 marks]

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