WAEC Past Questions and Answers - Page 2617

The pricing strategy adopted by a company that sells its product for ₦200 when the prevailing market price for the same product is ₦150 is competitive pricing. Competitive pricing involves setting the price of a product or service based on the prices charged by competitors in the market. The company sets its price at a similar or slightly higher level compared to competitors' prices to remain competitive and attract customers. In this case, the company is pricing its product at ₦200, which is aligned with the prevailing market price of ₦150, indicating a competitive pricing strategy.

Ernest Super Market, which buys products from OJ Ltd for resale, is classified as a retailer. Retailers are businesses that sell products directly to consumers, typically through physical stores or online platforms. In this case, Ernest Super Market acts as the intermediary between OJ Ltd (the producer) and the end consumers by purchasing bakery products from OJ Ltd and selling them to individual customers in its supermarket.

OJ Ltd, being a bakery that produces bread and confectioneries, is an example of a supplier operating in the reseller market. The reseller market consists of businesses that purchase products or services with the intention of reselling them to customers, rather than using them directly for their own operations. In this case, OJ Ltd sells its bakery products to Ernest Super Market, which acts as a reseller by purchasing the products for resale to consumers.

A form of sales promotion that rewards customers for consistently purchasing a company's product is a loyalty scheme. A loyalty scheme, also known as a customer loyalty program or rewards program, is designed to incentivize and reward customers for their continued loyalty and repeated purchases. Customers who participate in a loyalty scheme earn points, rewards, or other benefits based on their purchases or other predefined criteria. These rewards can include discounts, free products, exclusive offers, access to special events, or other incentives. By implementing a loyalty scheme, businesses aim to foster customer loyalty, increase customer retention, and encourage repeat purchases, ultimately strengthening the relationship between the customer and the company.

The selling concept holds that consumers and businesses, if left alone, will ordinarily not buy enough of the selling company's products. The organization must, therefore, undertake an aggressive selling and promotion effort.