What term describes sales generated when customers are already in the local area?

Study for the NCEA Level 1 Business Studies Test. Engage with interactive questions, complete with hints and detailed explanations. Prepare effectively for your exam!

The term that accurately describes sales generated when customers are already in the local area is "Passing Trade." This concept emphasizes the idea that businesses can generate sales from individuals who happen to be nearby, typically without having planned to visit the business beforehand. Such sales often arise from attracting customers who notice a shop or a service while they are going about their daily activities, like walking through a shopping area or driving down a street.

Understanding passing trade is essential for businesses, especially those in retail or service industries, as it highlights the importance of location and visibility. Effective marketing strategies, appealing storefronts, and promotional displays can capture the attention of this spontaneous customer base, leading to increased sales opportunities.

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