LBM operates as an online retailer of fashion clothing. LBM’s target market consists of 18-35 year olds. In the previous year, revenue rose by 25% to $600m. The Marketing Director stated: ‘Every business must meet customer needs. Customer service matters, so all staff are given induction training. LBM provides customers with a broader product range than its competitors. Promotion takes place via social media networks. Is there any reason to open our own shops?’ LBM intends to introduce 3500 new styles every week and will have to secure finance for the extra inventory.
(a)[2]
What does the term ‘induction training’ mean?
(b)[2]
Identify two reasons why it matters for LBM to satisfy customer needs.
(c)[4]
Identify and explain two problems for LBM arising from offering customers a wide product range.
(d)[6]
Identify and explain one advantage and one disadvantage to LBM of opening its own shops.
(e)[6]
Explain two appropriate sources of finance that LBM could use to buy additional inventory. Recommend which source of finance LBM should use. Justify your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “First introduction for new employees that outlines business activities, customs and procedures and introduces them to other workers” …