B&G manufactures a popular hair shampoo called Slick. The Managing Director thinks that Slick is near the end of its product life cycle. He believes it would be better to use extension strategies rather than develop a new product. The Operations Director thinks quality control can help the business comply with new consumer protection laws. What is meant by ‘quality control’? Identify two stages of the product life cycle. Stage 1: Stage 2: Identify and explain two ways in which consumer protection laws could benefit B&G’s customers. Way 1: Explanation: Way 2: Explanation: Identify and explain three possible problems for B&G when developing a new product. Problem 1: Explanation: Problem 2: Explanation: Problem 3: Explanation: Explain two possible extension strategies that B&G could use for Slick. Recommend which strategy the company should use. Justify your answer. Strategy 1: Strategy 2: Recommendation:

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THEORY

2013

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Kipta manufactures a range of cleaning products. All products are made using batch production. The safety of workers is important as chemicals are used to make the products. Revenue is falling due to increasing competition. The owner plans to develop new products. She believes that market research would be useful to the successful introduction of any new products. What is meant by ‘revenue’? Identify two features of batch production. Feature 1: Feature 2: Identify and explain two ways that Kipta could improve the safety of workers. Way 1: Explanation: Way 2: Explanation: Identify and explain three benefits for consumers of increased competition. Benefit 1: Explanation: Benefit 2: Explanation: Benefit 3: Explanation: How important is market research to the successful introduction of a new product? Justify your answer.

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THEORY

2013

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EDGE makes mobile phones. It operates in a competitive market. The Marketing manager believes that because EDGE is good at maintaining customer loyalty demand for its phones is price inelastic. Its best selling product, Z, is near the end of its product life cycle. The Marketing manager has to decide whether to spend money on developing new products or use extension strategies for product Z. X 20% Y 25% Z 40% T 15% Total quantity sold: 800 000 Fig. 1: EDGE – quantity sold by product type in 2015 What is meant by ‘customer loyalty’? Calculate the quantity of product Z sold in 2015. Explain the possible effect on EDGE if the prices of its products are reduced. 1 24 Identify and explain two advantages to EDGE of developing new products. Advantage 1: Explanation: Advantage 2: Explanation: Explain two extension strategies that EDGE could use for product Z. Recommend which one of the two strategies it should choose. Justify your answer. [ 1 24

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THEORY

2016

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MTD manufactures specialist cleaning products including soap. Batch production is used. The business uses just-in-time inventory control. MTD took 18 months to develop its latest environmentally friendly cleaning product. The Marketing Manager has to decide on the packaging and method of promotion for this new product. She said: ‘All our stakeholders, including pressure groups, are important. MTD wants to contribute to sustainable development.’ Define ‘pressure group’. Identify two features of batch production. Feature 1: Feature 2: Outline two factors MTD should consider when deciding on the packaging for its new product. Factor 1: Factor 2: 1 15 Explain two possible advantages to MTD of using just-in-time inventory control. Advantage 1: Explanation: Advantage 2: Explanation: Do you think using social media is the best way for a business to promote a new product? Justify your answer. [ 1 15

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THEORY

2022

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Sweet Scent is a company that manufactures toiletries such as soap, sun cream and toothpaste. Fig.1 and Fig. 2 show the product life cycles of two of its brands of face cream coded W and X. Sales Value $ Time Sales Value $ Time Fig. 1: Product W Fig. 2: Product X What is meant by a product life cycle? Identify the four stages of the product life cycle of product X. Stage 1: Stage 2: Stage 3: Stage 4: Identify and explain two main differences in the life cycles of the two products shown in Fig. 1 and Fig. 2. Difference 1: Explanation: Difference 2: Explanation: Sweet Scent is soon to launch a new range of toothpaste called Gleam. Identify and explain three factors that the management of Sweet Scent should consider before setting a price for Gleam. Factor 1: Explanation: Factor 2: Explanation: Factor 3: Explanation: The management of Sweet Scent believe that the more the company spends on advertising, the more profitable the product will be. Do you think they are right? Justify your answer.

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THEORY

2010

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Gorgeous Chocs is a manufacturer of high quality chocolates. The company spends a lot of money on marketing but the management knows that it is important that such spending is cost effective. The company accountant has just introduced new financial budgets for each department. What is meant by ‘cost effective’? What is meant by a ‘financial budget’? Identify and explain two factors that Gorgeous Chocs needs to consider in designing the packaging for its products. Factor 1: Explanation: Factor 2: Explanation: Identify and explain three factors that Gorgeous Chocs should consider when advertising its products. Factor 1: Explanation: Factor 2: Explanation: Factor 3: Explanation: Do you think that the prices charged by Gorgeous Chocs for its products are important in determining the success of these products? Justify your answer.

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THEORY

2010

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Cycles4u make a wide range of bicycles. The business is ‘product orientated’ as it believes that good products will sell easily. The business does not use any market research to help in decision making. However, Cycles4u does spend a lot of money on promoting its products to the target markets. What is meant by the term ‘product orientated’? What is meant by the term ‘target market’? Identify and explain two possible disadvantages to a business of having a wide product range. Disadvantage 1: Explanation: Disadvantage 2: Explanation: Identify and explain three channels of distribution that Cycles4u could use to help launch a new range of bicycles. Channel 1: Explanation: Channel 2: Explanation: Channel 3: Explanation: Do you think that Cycles4u should use market research in the future? Justify your answer.

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THEORY

2011

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Kruger Enterprises manufactures a range of electrical products such as washing machines. Its best-selling product is in the decline stage of its life cycle. The management uses cost plus pricing and believes that the demand for the company’s products is price inelastic. Changes in Kruger’s marketing mix are being considered. The company is researching the market and plans to introduce some new products next year. Label on Fig. 1 the other two stages of the product life cycle. Time Sales Introduction I II III IV Decline Fig. 1: Product life cycle What is meant by ‘cost plus pricing’? Identify and explain two possible advantages to Kruger Enterprises of researching the market. Advantage 1: Explanation: Advantage 2: Explanation: Identify and explain three benefits to Kruger Enterprises of introducing new products. Benefit 1: Explanation: Benefit 2: Explanation: Benefit 3: Explanation: Do you think reducing the price of its washing machines will increase the sales turnover of Kruger Enterprises? Justify your answer.

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THEORY

2012

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Rhiannon Enterprises manufactures ladies clothes. Its best selling products are fashion jeans and T-shirts. Figure 1 shows sales data for these products. In 2014 the value of the sales of these 2 main products was 50 % of the total sales of the business. The market for ladies’ clothes is very competitive. In 2013 the business reduced the price of its jeans by 25 %. It is now trying to find low cost suppliers of cloth to increase its profit margins. Sales of some other products have been falling despite Rhiannon Enterprises increasing advertising spending on them. Figure 1 Jeans T-shirts Value of Sales $000 What is meant by a market being ‘very competitive’? Calculate the total value of sales of Rhiannon Enterprises in 2014. Identify and explain two possible reasons why Rhiannon’s sales of some other products fell despite an increase in advertising. Reason 1: Explanation: Reason 2: Explanation: Identify and explain two factors that the business should consider before deciding on a new supplier of cloth. Factor 1: Explanation: Factor 2: Explanation: Do you think Rhiannon Enterprises should reduce the prices of all its products in 2015? Justify your answer.

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THEORY

2014

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Kruger manufactures advanced technology products such as computers and mobile phones. Some of its products are in the maturity stage of their product life cycle. Technology markets are very competitive. Rival businesses are always introducing new products. Kruger’s Marketing Director would like to see better market segmentation and increased brand awareness of products. She also wants the company to launch new products. What is meant by ‘the maturity stage’ of a product life cycle? Identify two costs to Kruger of launching a new product. Cost 1: Cost 2: Identify and explain two ways Kruger could increase consumers’ brand awareness of its mobile phones. Way 1: Explanation: Way 2: Explanation: Identify and explain two ways of segmenting the mobile phone market. Way 1: Explanation: Way 2: Explanation: Recommend an appropriate pricing strategy to Kruger for a new mobile phone. Justify your answer.

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THEORY

2014

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