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9609_s18_qp_21
A paper of Business Studies, 9609
Questions:
2
Year:
2018
Paper:
2
Variant:
1
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1
Clifford’s Supermarkets (CS) CS owns 28 supermarkets which sell food and non-food products. Each CS supermarket has a large product portfolio with over 10 000 different products. CS uses a number of different promotion methods and pricing strategies. The most effective of these is when CS temporarily reduces the price of a product. Each week 20 different products are selected and their prices reduced. Table 1 shows the sales data from a recent price reduction on bottled water from $0.90 to $0.63. Table 1: Sales data for bottled water Sales in week before price reduction 20 000 bottles Sales in week of price reduction 40 000 bottles CS has had poor cash flow for the past year and its profit margins are falling. The owners have decided to close one supermarket. They have short-listed two of the least profitable supermarkets and must decide which to close (see Table 2). Table 2: Data to help decide which supermarket to close Supermarket A Supermarket B Sales revenue (2017) $2 000 000 $1 500 000 Rent (2017) $400 000 $250 000 Local unemployment (2017) High Low Local population 150 000 80 000 Number of years supermarket has been open Profit/(Loss) ($20 000) ($10 000) ($5000) $5000 $3000 $2000 Define the term ‘cash flow’ (line 10). Briefly explain the term ‘product portfolio’ (line 2). Using Table 1 and any other relevant data, calculate the price elasticity of demand for bottled water when the price was reduced. Explain how your answer to 1could be used by CS. Using Table 2 and any other data, recommend which supermarket CS should close. Justify your recommendation. Analyse how the closure of the supermarket that you have recommended in your answer to 1could affect two stakeholders of CS.
8. Marketing (A Level)  →  8.1. Marketing analysis
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2
Veg Cans (VC) VC is a public limited company which produces canned vegetables. VC is supplied with fresh vegetables by 20 farms. VC processes and packages the vegetables in cans. These are then sold to food retailers. VC sells over 50 varieties of canned vegetables. Each year the Board of Directors analyses sales figures and decides where each variety is on the product life cycle. The directors then base their marketing decisions on this information. VC has recently published its statement of financial position (Table 3). Table 3: Extract from VC’s statement of financial position $m Non-current assets Current assets Current liabilities Non-current liabilities Equity The Board of Directors of VC want to use retained earnings to pay for a new factory that can package and freeze vegetables. These frozen vegetables will be sold through the same channel of distribution as VC’s current products. Market research has suggested that VC’s customers want a range of frozen vegetables that are convenient for consumers to use at home. The new factory will require a manager. A job advertisement has been created (see Fig. 1). Fig. 1: Job advertisement for manager of the new factory Manager required An experienced manager is required for a new factory producing frozen vegetables. The successful applicant will have: • a good degree from a university in a business subject • the ability to motivate employees • the ability to manage inventory • finance and accounting skills. Define the term ‘retained earnings’ (line 15). Briefly explain the term ‘public limited company’ (line 1). Calculate VC’s working capital. Explain two ways in which VC could increase its working capital. Analyse two methods of selection VC could use when choosing a new manager for the factory. Evaluate the usefulness of the product life cycle to VC when making marketing decisions.
10. Finance and accounting (A Level)  →  10.4. Finance and accounting strategy
10. Finance and accounting (A Level)  →  10.1. Financial statements
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