3. Marketing (AS Level)
A section of Business Studies, 9609
Listing 10 of 93 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 $14m Targeted market segment Teenagers and young adults Restaurants, events and hotels Type of market Consumer market (B2C) Industrial market (B2B) Identify one stage of the product life cycle. Explain the term limited liability (line 1). Refer to Table 2.2 and other information. Calculate the variance between TDC’s budgeted revenue and actual revenue for 2023. State whether the variance is favourable or adverse. Explain one possible benefit to TDC of using budgets. Analyse two ways in which TDC could use the Boston Matrix analysis in Table 2.1. Evaluate whether the planned merger with HL will enable TDC to achieve its objectives.
9609_w24_qp_22
THEORY
2024
Paper 2, Variant 2
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Vegan Burger (VB) VB is an established vegan burger chain in country X. Its Unique Selling Point (USP) is high quality, good value vegan meals. Hilda, the Managing Director, grew the business without external investment and within 5 years had 10 restaurants in the north of country X. VB was featured in a documentary exploring successful entrepreneurs in country X. This boosted VB’s national brand awareness. As a result, VB changed its objective from developing brand awareness to increasing market share. VB chose a franchise model to meet this objective. VB sold 25 franchise licenses in country X in 5 years. Two years ago, primary market research indicated pizza was a popular fast food in country X. VB added vegan pizza to its menu. Each pizza oven had a significant capital cost and required on-the-job training of the employees. VB invested in a six-month national television marketing campaign to promote the new menu item. Table 2.1 shows the financial data for producing pizzas. Table 2.1 Financial data for producing pizzas per restaurant ($) Fixed costs per month 1 000 Average variable costs per pizza Average selling price per pizza Vegan pizza has been sold by VB for two years. Tony, the Business Development Manager, provided sales data for these two years. Each restaurant sells on average 500 pizzas and 4500 burgers per month. Tony is worried that Patel’s Pizza, an established pizza franchise, is more popular. Tony has suggested removing pizza from the menu and repurposing the pizza ovens to cook hot desserts such as apple pies that complement the main burger meal. Hilda wants to continue marketing vegan pizza, as vegan food is currently very popular and the brand needs time and more marketing to be successful. Identify one feature of a franchise. Explain the term market share (line 6). Refer to Table 2.1. Calculate VB’s breakeven level of output per month per restaurant. Explain one reason for VB to have accurate cost information. Analyse two benefits for VB of on-the-job training. Evaluate whether VB should continue to market vegan pizza.
9609_w24_qp_23
THEORY
2024
Paper 2, Variant 3
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ML Computers (MLC) MLC is a successful private limited company that has been trading for 20 years in country K. The company makes a range of laptop computers. It is the market leader in a highly competitive market. MLC is developing a new touchscreen computer that will use the latest technology. Initially secondary market research was carried out, followed by primary market research. The market research data suggested a high potential demand for the new touchscreen computer. The Marketing Manager is planning the launch of the new touchscreen computer using price skimming. All computers are made in MLC’s two factories in country K. Operations are capital intensive. New machinery is needed to manufacture the new touchscreen computer. Maria, the Managing Director, decided to use leasing for the new machinery. MLC has 350 employees. One of its objectives is to reduce labour turnover to 8% by 2026. Labour turnover rates currently vary across the two factories. The labour turnover for Factory A is currently 14%. Table 2.1 shows employee data for Factory B. Table 2.1 Employee data for Factory B Total number of employees Employees who left during the year Maria is the majority shareholder with 55% of shares. She is concerned about the future growth of the company. Over the next three years she plans to launch five new computers using the latest technology. At a recent board meeting Maria proposed that the company changes the ownership of the business to a public limited company. Identify one secondary market research source. Explain the term leasing. Refer to Table 2.1 and other information. Calculate the difference in labour turnover between factory A and factory B. Explain one advantage to MLC of low labour turnover. Analyse one advantage and one disadvantage to MLC of using price skimming to launch the new touchscreen computer. Evaluate whether MLC should change from a private limited company to a public limited company.
9609_m24_qp_22
THEORY
2024
Paper 2, Variant 2
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Questions Discovered
93