Sample Answer: Factors Determining the Success of Online Shop

Discuss factors that could determine the success of a business that has decided to set up an online shop to sell beauty products. (12 mark) [9609/12/O/N/16]

To ensure that the online shop is successful, the business must have the right marketing mix.  The business must offer the products that can meet customers' needs and wants'.  Failure to do so will result in not getting sales and subsequently it will have to close shop.  Therefore, it is important that the business find the right target segments and offer the right product.  Also beauty products are considered to be luxury.  So in times of recession, people will have less money and must spend on necessity goods and service.  They will have less disposable income and therefore they will not choose to buy beauty products.  As such, the business will fail.

The price must be made affordable.  If the products are too expensive, then the customers cannot afford to buy because there is high inflation.  If the products are too cheap, then the customers may view the products as having low quality and refuse to purchase.  The business must also decide the right pricing strategy and determine whether to use penetrative pricing or skimming pricing.  Penetrative pricing is where the business sell the products at low price and then later increase it when the demand grows.  This is often applies when businesses want to encourage trial purchase and when the brand of the products are not so well-known.  Skimming pricing is where the price is firstly price high and then be reduced when the demand becomes stagnated.  This is highly important to business that manufactures technology-based products as they need to recover the cost of R&D fast.  Also, technology product have very short product life-cycle and can quickly become obsolete when more sophisticated products are produced and introduced by the competitors.

For the business to be successful, the business must have good promotion.  The online shop must consider using 'above-the-line' promotion and 'below-the-line' promotion. It must advertise on many different platforms so customer will be aware.  Therefore, the online shop must use both traditional and contemporary media of advertisement like newspapers, magazines, television, billboards, Internet, social media, and mobile marketing.  It needs to shows sexy women using the beauty product so the users can see the benefit.  For 'below-the-line' promotions, the online shop needs to offer discounts or rebates.  This will make it attractive for the customers to buy.  Also, the online shop can have contest and use celebrity to promote its products.

For place because the shop is online, there will be no physical retail.  This means the business is selling directly to the customers.  Direct selling can eliminate intermediary costs and this means the business can reduce the price of the products when selling online as costs will be reduced.

After reading the above answer, how many marks you will award the above answer.  Give your justification.  Analyse whether there are any weaknesses in the above writing.  Do you think the ideas presented above are relevant to the context of the question?  Do you think that the scope of discussion is adequate. Identify also if you think there are any ideas which may be relevant (but perhaps not appropriately written).

After evaluating the above answer, ask yourself can your provide a better one.  For those who are my students, you may want to show to me your draft answer for the above question.  You are recommended to submit a handwritten answer directly to me. Or (if you don't have time) just discuss with me about your evaluation of the above answer on this blog.

IMPORTANT NOTE: THE ABOVE IS NOT CONSIDERED AN IDEAL ANSWER BUT A SAMPLE TO SHOW TO YOU HOW A LOWER GRADE ANSWER IS WRITTEN AND FOR YOU TO THINK FOR YOURSELF HOW THIS ANSWER CAN POSSIBLY BE IMPROVED.