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Why might a business move from a production approach to a selling approach? A - HSC - SSCE Business Studies - Question 16 - 2021 - Paper 1
Question 16
Why might a business move from a production approach to a selling approach? A. In response to increased competition B. In order to increase promotional expenditure C... show full transcript
Worked Solution & Example Answer:Why might a business move from a production approach to a selling approach? A - HSC - SSCE Business Studies - Question 16 - 2021 - Paper 1
Step 1
A. In response to increased competition
Answer
A business may shift from a production approach to a selling approach primarily due to increased competition in the market. In a production approach, the focus is on manufacturing goods efficiently, assuming that customers will automatically purchase available products. However, when competition rises, businesses must adapt by actively promoting and selling their products to attract customers.
Step 2
B. In order to increase promotional expenditure
Answer
While increasing promotional expenditure might be a strategy within a selling approach, it is not a primary reason for the transition from production to selling. The core reason lies more in the need to generate sales through an understanding of customer needs rather than simply increasing expenditures.
Step 3
C. In order to better understand customer needs
Answer
Transitioning to a selling approach allows a business to prioritize understanding customer preferences and demands. This understanding is critical to develop effective marketing strategies and enhance customer satisfaction, making it a plausible reason for the transition.
Step 4
D. In response to an inability to satisfy current demand
Answer
If a business faces challenges in meeting current demand, it may find it necessary to adopt a selling approach that focuses on customer engagement and effective sales strategies. This shift can help address the gap between production capacities and actual market demand.