Question Two
Franchise
It is a form of license grant by a company or sometimes by the government to a group, a firm, or an individual to allow them to perform certain commercial activities. The concept is applied in the economy where companies are given access to franchisor trademarks, processes as well as proprietary knowledge. In other words, it is selling an individual or a firm right to distribute or supply services and products of one’s company. An example is where a company like Toyota may grant a given group a franchise, thus being their agents in assigned geographical areas in sales of their motor vehicles.
Gross margin
This can be defined as the firm’s net revenue of their sales, less the costs of the number of products sold. It can be said to be the sales revenue retained by a business after it incurs the direct costs which are associated with the production of the products it sells as well as the services it offers. For example, a given business may have a gross margin of 40%; however, its margin of profit is 2 % of net sales.
Direct Marketing
This is a product campaign strategy that depends on the individual supply of sales pitch towards potential buyers. The fact that it eliminates intermediaries like advertising agents makes its direct marketing. There exist three significant elements of direct marketing, which include the list, the offer, and the creative. It is thus worth noting that the mailing list is the vital aspect of direct marketing. An offer is an act of enticing buyers to respond to the posts through buying, donating, or signing up. Direct marketing is aimed at obtaining immediate order from the target consumers. Examples of direct marketing include the use of text messaging, newspapers, emails, flyers, promotional letters, as well as online adverts and phone calls marketing.