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3.3. The marketing mix
A subsection of Business Studies, 9609, through 3. Marketing (AS Level)
Listing 10 of 30 questions
The Drink Company (TDC) TDC is a multinational carbonated drinks manufacturer with limited liability. TDC had budgeted that its annual revenue would be $400m for the year ended 2023. In 2023, TDC commissioned some primary market research to analyse its product portfolio using the Boston Matrix (see Table 2.1). Table 2.1: Boston Matrix analysis Market growth % Market share % High Low High VKola VTropical Low VLemon VOrange The Board of Directors has set two objectives for TDC to achieve by the end of 2025: • to increase TDC’s profit margin by reducing the cost of raw materials • to increase TDC’s market share of the business to consumer (B2C) market for carbonated drinks. As part of its business plan to achieve these objectives, TDC is now merging with one of its main competitors, Harvest Liquids (HL). Table 2.2 shows some data about TDC and HL. Table 2.2: Data about TDC and HL in 2023 TDC HL Revenue $340m $280m Profit for the year $23.8m $14m Targeted market segment Teenagers and young adults Restaurants, events and hotels Type of market Consumer market (B2C) Industrial market (B2B) Identify one stage of the product life cycle. Explain the term limited liability (line 1). Refer to Table 2.2 and other information. Calculate the variance between TDC’s budgeted revenue and actual revenue for 2023. State whether the variance is favourable or adverse. Explain one possible benefit to TDC of using budgets. Analyse two ways in which TDC could use the Boston Matrix analysis in Table 2.1. Evaluate whether the planned merger with HL will enable TDC to achieve its objectives.
9609_w24_qp_22
THEORY
2024
Paper 2, Variant 2
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Great Resources (GR) GR is a business partnership that creates educational resources. It sells direct to schools and teachers via its own website. Sanjay, Rukmal and Boris are entrepreneurial teachers who formed the GR partnership. One year ago, they identified a gap in the market to supply interactive, digital resources. GR’s website is subscription only. An online marketing campaign, which used penetration pricing, attracted 250 subscribers in the first six months of operation. The start-up costs were financed with a $5000 bank overdraft, which is GR’s only debt. Reviews for GR’s products in teaching journals are positive but cash flow is poor. Many customers have taken advantage of a recent sales promotion for one month’s free membership and posted positive reviews. Unfortunately, few have then taken out a regular subscription. As revenue has not increased as much as the entrepreneurs had hoped, they must now consider alternative promotion methods. They have researched possible promotion methods and decided to advertise in an educational newspaper. The newspaper has a readership of half a million people. Expert Materials (EM) is a large national company that also advertises in the newspaper. EM is GR’s closest competitor. The EM brand is well-known and trusted in the educational resources market. Table 1.1 shows some marketing data. Table 1.1 Marketing data GR EM Total market Revenue ($000) Number of customers Annual advertising spend ($000) 7.5 Identify one barrier to entrepreneurship. Explain the term partnership. Refer to Table 1.1. Calculate GR’s market share by revenue. Explain one factor which may influence the supply of GR’s products. Analyse one advantage and one disadvantage to GR of using a bank overdraft. Evaluate whether price or promotion is the most important element of GR’s marketing mix.
9609_s23_qp_21
THEORY
2023
Paper 2, Variant 1
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Questions Discovered
30