NECO Marketing 2024 Theory — Question 5

Model answer

(a) Four reasons/sources from which Adamu could get funds: i. Bank Finance: Obtaining loans, overdrafts and other credit facilities from banks. This provides flexible funding but often requires collateral or security. ii. Government Grants and Subsidies: Receiving funding or support from government programs for specific industries, projects or initiatives. These are often competitive and require meeting specific criteria. iii. Internal Funds: Using profits, reserves or retained earnings to finance business activities. This is the most cost-effective and controlled source of finance to a business. iv. Leasing and Hire Purchase: This involves financing specific assets such as equipment or vehicles through leasing or hire purchase agreements, allowing businesses to use assets without owning them outright. (Also acceptable: trade credit, crowd funding, debt finance.) (b) Four factors that would influence Adamu's choice of location: i. Market Proximity: Being close to his target customers and understanding their needs and serving them effectively is important. ii. Transportation and Logistics: Easy access to transportation modes (air, sea, land) for smooth supply chain management and distribution. iii. Access to Funding and Finance: Proximity to banks, investors and venture capital firms for easy access to funding. iv. Energy and Utilities: Access to affordable and reliable essential services such as electricity, road, water and gas. (Also acceptable: environmental factors, proximity to partners and suppliers, government policies.)