________________________________

Student Name

ST ALOYSIUS’
COLLEGE
2010

Commerce Mid-Year Exam-Answers

Total marks – 100

PART A Page 2-7

General Instructions Multiple Choice
• Reading time – 5 minutes 30 marks
• Working time – 90 minutes • Allow about 25 minutes for this section
• Write using black or blue pen PART B Page 8
• Write your Name at the top of Short response
each page of the answer 10 marks
Attempt Questions 31 and 32
sheets • Allow about 10 minutes for this section
• The multiple choice answer
PART C Pages 9-13
sheet is a single sheet!
Extended response
• All other answers are to
50 marks
written in the answer booklet. Attempt ALL questions.
• Allow about 45 minutes for this section

PART D Pages 14-15

Stimulus question

10 marks
• Allow about 10 minutes for this question
PART A
(This is worth 30 marks)
Multiple choice
Circle the correct answer.

1. What type of issues is the Trade Practices 1974 designed to deal with?

d) Legal issues

2. What type of products do people tend to pay more for?

b) Highly differentiated products

3. What does product promotion involve?

c) Methods used to inform, persuade and remind customers

4. Which of the following statements is correct?

b) Consumers can be targeted by age and other social characteristics

5. What is advertising?

c) A paid, non-personal message

6. What does convenience in product differentiation refer to?

a) Providing a “quick-and-easy” product

7. What is the name of a form of voluntary consumer protection?

c) Extended warranty

8. What does “monitoring selling techniques” involve?

d) Checking and observing the progress of selling techniques.

9. How can a market leader be recognised?

d) It has higher sales than all others.

10. Which of the following best illustrates merchantable quality?

a) The product is an acceptable quality in keeping with the product’s price

.

11. What is materialism?

c) An individual’s desire to constantly buy possessions

12. What do most consumers base their buying decisions on?

b) Value for money

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13. What does service include?

a) the range of products the business provide

14. Products are usually an outcome of:

c) Both market and scientific research

15. What sort of policy does a retailer have who gives refunds regardless of reasons?

a) Unconditional

16. How can products be differentiated by a salesperson?

b) Through additional features suited to individual customers

17. Which of the following selling practices are correctly matched?

d) Unconditional returns – ethical

18. Which of the following pieces of legislation is correctly identified?

c) Trade Practices Act 1974

19. Tony often forgets to pay his bills on time and recently lost the chance to buy a great
Mother’s Day present because he missed the last payment. Which method of
payment should Tony use for future consumer purchases?

d) Credit card.

20. When does product differentiation occur?

d) Products that are the same or similar are made to appear different.

21. What is the strategy designed to enhance the image of the product called?

a) Publicity

22. Which of the following is a type of below-the-line promotion?

a) Telemarketing

23. What promotion strategy uses the inclusion of advertising into entertainment?

c) Product placement

24. Which of the following best describes a target market?

d) The group of customers to whom the business intends to sell its product

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25. Petrov is a sales representative for a pharmaceutical company. He visits doctors
outlining the benefits to them of the company’s products. What promotional activity is
Petrov undertaking?

d) personal selling

26. If companies make false claims in promoting their products, which federal law could
they be breaking?

b) Trade Practices Act

27. What unethical marketing method is being used when a business sells under the
guise of a market research survey?

d) sugging

28. Which of the following describes a very small segment of the total market that a
business might target?

c) niche market

29. Which of the following statements is true?

b) Publicity is any free news story about a business’s products

30. Which of the following best describes public relations?

a) Business activities aimed at creating and maintaining a customer’s favour

END OF PART A

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 NAME: _________________________
PART B: Short Response

(This is worth 10 marks)

“The Trade Practices Act provides legal rights whenever a consumer buys a
good or service.
These rights cannot be denied to the consumer by any business.”

31. List the four basic rights of a consumer? (4 marks)

1. Safe products

2. Accurate product information and descriptions

3. Full disclosure of the terms of sale

4. Warranties and guarantees are honoured

32. “The Australian Consumers’ Association (ACA) has found that many consumers fail to
follow the legal advice of caveat emptor.”

What does this mean? What are some things a wise consumer can do to avoid
problems with the goods they buy? (6 marks)

“Let the buyer beware”- take care when handing over

your money because
Legal rights can be given away by
careless actions
e.g., losing receipts, getting angry
with seller, not
acting quickly.

Wise consumers:
• Avoid impulse buying;
• Use comparison shopping to get the best deal:
• Always keep receipts;
• Choose from payment options carefully:
• Act quickly when they have a complaint; and
• Ask questions BEFORE they spend their money.

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 NAME: _________________________

PART C: Extended Response Section

(This section is worth 50 marks)

Question 33 is based on the material given below.

(This question is worth 16 marks).
Coke Lives On!

It's hard to believe that, in this day and age, the monster
conglomerate corporation that is Coca-Cola is still out of
reach of owning everything short of our personal bodies.
(Although even that is arguable, as many of us are
afflicted with severe withdrawal symptoms - temper
tantrums being the main one - if the product is not
ingested at least once daily.)

It's therefore surprising that Coca-Cola Amatil only

recently purchased - for an undisclosed amount - the
iconic Coke sign that stands sentry to the gateway of our
very own Kings Cross. At 41 metres wide and 13 metres
high, it is the largest neon billboard in the Southern
Hemisphere.

More than just a sign, it is a symbol of our society. Generation upon generation have stared up at the
mammoth sign, bemused and glassy-eyed, and have been reminded of a way of life. So thank you Coca-
Cola Amatil. May your legacy live on in the heart of our Sin City.

33. Outline the way Coke has made its way into the Australian way of life (6marks).

Explain the selling techniques available to Coke and outline how four of these
would be used to maximise sales in Australia that will maximise sales. (10marks)

See pages 162 and 163 of textbook.

Product development
•Wide range of products can be used to dominate the soft drink market and
make it hard for competitors to enter the market and compete against Coke.

Product promotion
•Coke uses School sports sponsorship and Olympic games;
•Interactive web page www.coke.com.au is used for Target market (under 16s);
•Product placement is also used in major cinema releases;
•More distribution outlets are used around Australia;
•Sales representatives are used to maintain customer loyalty.

Product niche focus

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 •Targeted promotion strategies, e.g., Sms messaging to 18-30 generation

Product pricing
•Reduce prices for supermarket sales.

NAME: ____________________________

The stimulus material for Question 34 is given below.

(This question is worth 14 marks)

Advertising buzzwords

Definitions by Lisa Pryor from “The (Sydney) Magazine”

The Sydney Morning Herald Issue # 25 May 2005

Microwaiting = The time when you are forced to read ads for two minutes and
30 seconds whilst you reheat your leftovers.

Golden Voucher = A $50 note can be used to pay a mobile phone bill, buy a new
toaster or take the typical family out for dinner.

The advertising industry uses buzzwords like the ones above to help when they are
evaluating ads. Some better known buzzwords are: “Baby boomers”, “empty nesters”,
“DINKS”, “Generation X”, “Generation Y” and “schoolies”. This is an example of market
segmentation! For example, the main market segment targeted for fast foods is
“schoolies”. A lot of product placements are used to get these segments to recognise
brands.

Advertisements use materialism for promotions. The monitoring of advertisements is done

by various ratings agencies. This can be backed by product differentiation, advertising and
even sugging.

The whole aim of promoting and selling is to identify the target market and persuade it that
the product gives value for money! The hard part is to come up with the right promotion
mix for the product.

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Question 34(a).

You have been appointed Product Promotion Manager for a large fast food company!

• One outline the market segmentation and target market for the following products
and explain 2 suitable promotion strategies.
1. Coffee flavoured milk
2. Zero fat frozen TV dinners
(10 marks)

1. This is for the teenage market covering both males and

females that are living in a major city and has pocket
money of over $30 a week. Two suitable promotion
strategies would be interactive internet website and
promotions at big days out;
This is for female market over the age of 13 and under
the age of 35 that are unit dwellers in cities with a low
income who prefer quick and easy
meals.________________________________________________________
_________________

(b) Due to the recent media attention on the role of ethics in product promotion, you
must decide how your promotion mix will avoid unethical behaviour. What are
some of the ethical issues related a fast food company sponsoring schools?
(Write down FOUR (4) such issues below). (4 marks)

See page 160 of textbook.

1. Over-commercialisation of schools
2. direct marketing to children
3. health implications of promoting some food and drink
products
influence on school
curriculum___________________________________________________
_______________________________________________________________
___

Question 35 (6 marks)

Consumers can redress, or set right, the things that are wrong. For example, they can
lodge a claim with the Consumer, Trader and Tenancy Tribunal.

(a) How can the Consumer, Trader and Tenancy Tribunal help a consumer redress their
claims?

__SEE pages 24 and 25 of

textbook._____________________________________________________
_____________
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 ____________________________________________________________________

____________________________________________________________________

(b) Why is the Tribunal so effective when it gives a decision on consumer claims?

_Retailers know that they must comply because the decision is

enforceable by
law___________________________________________________________
_______

Question 36
(This question is worth 14 marks)

“The Office of Fair Trading and the Australian Competition and Consumer Commission are
the two most effective organisations that provide assistance for consumers.”

(a) List the responsibilities of the Office of Fair Trading. (8 marks)

SEE page 22 of textbook.

1._________________________________________________________________________

___________________________________________________________________________

2._________________________________________________________________________

___________________________________________________________________________

3.__________________________________________________________________________

___________________________________________________________________________

4.__________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

(b) How does the Australian Competition and Consumer Commission operate to
provide assistance for consumers? (6 marks)

_____SEE page 22 of
textbook__________________________________________________________
__________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________
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 _________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

(Go to the next page for PART D )

NAME: _________________________

PART D: Stimulus question

(This is worth 10 marks)

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 Aston Martiin DB9 Coupe Touchtronic 2

Sales and Promotion on Drive.com

Price: $350,000* Year: 2009 (of release)

Trans: Automatic Body: coupe

Doors: 2 Special Edition: No

Seating Capacity: 4 Origin: Great Britain

* RRP (does not include on road costs)

37. (a) Outline two key factors which differentiate this product from other passenger
vehicles? (2 marks)

1. STYLING- sleek, built for speed, low to ground

2. SIZE OF ENGINE- status
3. ALLOY WHEELS-expensive and makes statement about
owner

(b) Outline three suitable advertisement mediums (eg: K-Mart or Monster truck
Magazine) suitable to promote this car. (3 marks)

1. PRINT MEDIA- “Wheels” magazine, NRMA monthly

magazine
2. TV (PRIME TIME)- 15 second ad with follow up around
9pm
3. INTERNET- interactive web site.

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 (c) Create an advertisement in the space below, which would target and the needs of
a Driver of this car and increase sales (5 marks)

STORYBOARD SHOWING HOW SCENE FOLLOWS SCENE.

ANY HEADINGS AND VRBALS SHOWN CLEARLY.

END OF PAPER

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