Crispy Crunch is the brand name of a breakfast cereal made by Banbury. The business spends a lot of money on promoting its brands. Some Banbury managers think this spending is not cost effective. ‘Perhaps modernising our factories to automate the production process would be a better use of our capital’ said one manager, ‘I think a lot of our marketing expenditure is wasted’. What is meant by the term ‘brand name’? What is meant by the term ‘capital’? Identify and explain two reasons why spending money on advertising might not be cost effective. Reason 1: Explanation: Reason 2: Explanation: Identify and explain three factors that a company should consider in deciding on the name for a new brand of breakfast cereal. Factor 1: Explanation: Factor 2: Explanation: Factor 3: Explanation: Do you think that automation in the factory would benefit Banbury’s employees and shareholders? Justify your answer.

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THEORY

2011

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BBT makes a range of breakfast cereals. One of BBT’s objectives is to act in an ethical way with all of its stakeholders. The Marketing Director has been looking at BBT’s marketing strategy for some of its products. BBT uses competitive pricing. She thinks that product A, one of its popular brands, is in the decline stage of the product life cycle. She cannot decide what to do with product A. Table 2: Information about BBT’s products Product C Product B Product A $120000 $360000 $500000 Revenue 2016 +50% +30% -40% % Change in revenue compared to 2015 Years in market What is meant by ‘marketing strategy’? Identify two reasons for a business to set objectives. Reason 1: Reason 2: Identify and explain two ways in which BBT could act in an ethical way. Way 1: Explanation: Way 2: Explanation: 1 9 Identify and explain one advantage and one disadvantage to BBT of using competitive pricing. Advantage: Explanation: Disadvantage: Explanation: Do you think BBT should stop selling product A? Justify your answer. [ 1 9

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THEORY

2017

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Made Fresh is a company that manufactures high quality organic foods. The company uses ingredients that have been grown by local farmers in country J. Market research has shown that branding has helped the company to achieve its objectives. Recent bad weather in country J has led to many of the farm crops failing. Made Fresh is thinking about importing organic food ingredients from other countries nearby. What is meant by ‘market research’? Identify two possible objectives Made Fresh could have. Objective 1: Objective 2: Identify and explain two advantages to a business of branding. Advantage 1: Explanation: Advantage 2: Explanation: Identify and explain three possible problems Made Fresh might face if they have to import organic ingredients for the foods they manufacture. Problem 1: Explanation: Problem 2: Explanation: Problem 3: Explanation: The Government in country J wants to encourage international trade. Do you think this would be an advantage to Made Fresh? Justify your answer.

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THEORY

2012

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Made Fresh is a company that manufactures high quality organic foods. The company uses ingredients that have been grown by local farmers in country J. Market research has shown that branding has helped the company to achieve its objectives. Recent bad weather in country J has led to many of the farm crops failing. Made Fresh is thinking about importing organic food ingredients from other countries nearby. What is meant by ‘market research’? Identify two possible objectives Made Fresh could have. Objective 1: Objective 2: Identify and explain two advantages to a business of branding. Advantage 1: Explanation: Advantage 2: Explanation: Identify and explain three possible problems Made Fresh might face if they have to import organic ingredients for the foods they manufacture. Problem 1: Explanation: Problem 2: Explanation: Problem 3: Explanation: The Government in country J wants to encourage international trade. Do you think this would be an advantage to Made Fresh? Justify your answer.

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THEORY

2012

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$LAND sells a wide range of products from food to toys. It has 400 shops in country B. $LAND's marketing strategy is based on penetration pricing. $LAND does no advertising and buys all its products directly from manufacturers. Revenue and profit have increased despite the country being in recession. The Marketing Director wants to expand the business by opening shops in other countries. He believes $LAND will be successful in other countries. What is meant by ‘marketing strategy’? What is meant by ‘penetration pricing’? Identify and explain two possible advantages to $LAND of advertising. Advantage 1: Explanation: Advantage 2: Explanation: 1 10 Identify and explain one advantage and one disadvantage to $LAND of buying direct from manufacturers. Advantage: Explanation: Disadvantage: Explanation: Do you think that $LAND will be successful in other countries? Justify your answer. [ 1 10

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THEORY

2016

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PCS is a multinational company in the private sector. It makes 500 brands of soft drinks which are sold in plastic bottles. PCS has a large marketing budget for promotion. Many of the countries where PCS sell its products have introduced legal controls to reduce the amount of litter . PCS plans to start recycling plastic bottles. PCS’s Operations Manager said: ‘Everything has an opportunity cost. We want to protect the environment but recycling costs money.’ Define ‘opportunity cost’. State two features of a private sector business. Feature 1: Feature 2: Identify four aims of promotion. Aim 1: Aim 2: Aim 3: Aim 4: 1 12 Explain two advantages to PCS of being a multinational company. Advantage 1: Explanation: Advantage 2: Explanation: Do you think all manufacturing businesses should use recycled materials? Justify your answer. [ 1 12

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THEORY

2020

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CFG is a social enterprise. It buys cocoa beans from local farmers and then uses the beans to make chocolate. Being ethical is important to the business. CFG has developed a new chocolate bar. The Marketing Manager plans to use skimming as its pricing method, and retailers as its distribution channel for the new product. He knows there are many legal controls over marketing that might affect a business. Define ‘social enterprise’. Identify two ways legal controls over marketing might affect a business. Way 1: Way 2: Outline one advantage and one disadvantage to CFG of using skimming as its pricing method. Advantage: Disadvantage: 1 9 Explain one advantage and one disadvantage to CFG of using retailers as its distribution channel for the new product. Advantage: Explanation: Disadvantage: Explanation: Do you think being ethical will always lead to lower profit for a business? Justify your answer. 1 9

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THEORY

2024

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S&V imports high quality spices and herbs and sells them to local restaurants and shops. S&V wants to increase added value. It is a business partnership so its owners do not have limited liability. One of the partners, Serena, is worried that supplies from some countries do not arrive on time or the wrong items are delivered. She said: ‘S&V cannot have communication barriers with its many suppliers. In addition, our customers demand up-to-date information about spices and herbs that are in season.’ Serena has to decide whether e-mail is the best way to communicate with S&V’s customers. What is meant by ‘limited liability’? Identify two ways S&V can increase added value. Way 1: Way 2: Identify and explain two possible barriers to communication between S&V and its suppliers. Barrier 1: Explanation: Barrier 2: Explanation: 1 19 Identify and explain one effect on S&V of each of the following changes: Effect of a 10% increase in import tariffs: Explanation: Effect of new legal controls over food quality: Explanation: Do you think using e-mail is the best way for S&V to inform customers about its products? Justify your answer. [ 1 19

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THEORY

2019

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DGC is a public limited company. It has a reputation for selling high quality branded clothes and shoes to women. It is a multinational company and owns shops in 10 countries. Each shop operates with a short chain of command between the shop manager and sales employees. DGC is planning to expand into country Z for the first time. DGC has carried out some secondary market research and has found that country Z has different cultural and social trends to its existing markets. The Managing Director thinks DGC should open the shops in country Z as a franchise. However, the Finance Director thinks DGC should buy its own shops using a suitable source of finance. Identify two methods of secondary market research. Method 1: Method 2: What is meant by ‘chain of command’? Identify and explain two advantages to DGC of being a multinational company. Advantage 1: Explanation: Advantage 2: Explanation: 1 16 Identify and explain two factors that DGC should consider when choosing a source of finance for expansion. Factor 1: Explanation: Factor 2: Explanation: Do you think DGC should open shops in country Z as a franchise? Justify your answer. 1 16

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THEORY

2019

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YMG is a private limited company. It is the largest manufacturer of soft drinks in country V. YMG produces 1 billion litres a year using flow production. The Managing Director wants YMG to expand. He said: ‘I plan to increase production to 3 billion litres over the next 5 years. This will allow us to start selling our products in new markets in other countries. I know import quotas and lack of local knowledge can cause problems but there are ways we can overcome them.’ The Managing Director also plans to invest $60m in new technology to improve efficiency. Define ‘flow production’. Identify two methods (other than technology) a business can use to improve efficiency. Method 1: Method 2: Outline two sources of finance YMG could use for the new technology. Source of finance 1: Source of finance 2: 1 12 Explain how each of the following problems might affect YMG when entering new markets in other countries. Problem caused by lack of local knowledge: Explanation: Problem caused by import quotas: Explanation: Do you think a joint venture is the best way for a business to enter a new market in another country? Justify your answer. [ 1 12

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THEORY

2020

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