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3.1. The nature of marketing
A subsection of Business Studies, 9609, through 3. Marketing (AS Level)
Listing 10 of 42 questions
Fuzz Buzz Ltd (FBL) FBL is a small private limited company with 10 shareholders. Its unique selling point is that its toys are handmade. They are aimed at children aged 4 to 10. Its latest product, a hand-held soft spinning toy, called Tommy Turner, has become a fashion item amongst young children. Demand for these toys exceeds the ability of FBL to supply them. Stores are desperate to secure more inventory in order to make the most of the high demand. FBL sells these toys for $6 each. It is considering how to respond to the excess demand. If FBL increases the price of the Tommy Turner then the price elasticity of demand is estimated to be –2. The quantity demanded at the current price is 120 000. If FBL increases the supply of Tommy Turners it would require investment. The new machinery would cost $100 000 and allow mass customisation. The concern is that this fashion may not last. The work will be a lot less skilled, although a design team will still be required to develop future toys. FBL’s employees take great pride in their work and are very loyal to the company and their co-workers. Most of the employees have been with the company for over 10 years and enjoy good relationships with all the directors. Anindita, the Marketing Director, thinks FBL should make the most of the fashion for the Tommy Turner by extending the product life cycle. Define the term ‘unique selling point’ (line 1). Explain the term ‘mass customisation’ (line 10). Calculate the new quantity demanded of the Tommy Turner if FBL increases the price by 10%. Explain one factor influencing the supply of the Tommy Turner. Analyse two methods FBL could use to extend the product life cycle of the Tommy Turner. Discuss the likely impact on the morale and welfare of FBL’s employees if supply of the Tommy Turner is increased.
9609_s19_qp_23
THEORY
2019
Paper 2, Variant 3
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Questions Discovered
42