Economic growth in country X has created many opportunities for new businesses such as TGH. TGH manufacture a range of personalised mobile phone cases using job production. Quality assurance is important to all 8 employees. TGH operate in a niche market. The Marketing Manager uses e-commerce as TGH’s channel of distribution. She is considering ways to build customer relationships. Define ‘economic growth’. Define ‘quality assurance’. Outline two reasons why building customer relationships might be important to TGH. Reason 1: Reason 2: 1 9 Explain one advantage and one disadvantage to TGH of using job production. Advantage: Explanation: Disadvantage: Explanation: Do you think cost-plus is the best pricing method for a new business to use when selling products to a niche market? Justify your answer. 1 9

0450_s21_qp_11

THEORY

2021

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WYP is a business partnership. Greg and his 3 friends started the business 7 years ago. WYP make eyeglasses which are only sold through its website. The price of each pair of glasses is $95. This is $200 cheaper than its main competitor. Greg said: ‘It was difficult at the start as we could not get trade credit. We also knew it would take time to develop customer loyalty.’ Greg thinks choosing the right method of promotion is important to the success of any new product. Define ‘partnership’. Define ‘customer loyalty’. Outline two possible reasons why WYP could not get trade credit. Reason 1: Reason 2: 1 12 Explain two possible problems for WYP of selling products at low prices. Problem 1: Explanation: Problem 2: Explanation: Do you think promotion is more important than product for a new business? Justify your answer. [ 1 12

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THEORY

2021

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Pamela is a successful entrepreneur. She is the owner of a gift shop selling celebration cards, toys and candy . When Pamela started her business 30 years ago she had no help to manage the shop. She now has 5 employees. Pamela knows maintaining customer loyalty is important. She uses competitive pricing. Most of her marketing budget is spent on sales promotion. Pamela does not use e-commerce. Define ‘competitive pricing’. Define ‘marketing budget’. Outline two possible threats to Pamela’s business of using e-commerce. Threat 1: Threat 2: 1 13 Explain two methods Pamela’s business can use to maintain customer loyalty. Method 1: Explanation: Method 2: Explanation: Do you think being a risk-taker is a more important characteristic of a successful entrepreneur than being creative? Justify your answer. [ 1 13

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THEORY

2022

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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.

0450_w10_qp_12

THEORY

2010

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Mayfair Solutions, a public limited company, develops software packages for customers. The staff it employs are highly paid, but Mayfair Solutions believes that this is money well spent. The company has to keep updating its software packages because customer requirements keep changing. The software market is very competitive. What is meant by the term ‘public limited company’? Identify two features of a very competitive market. Feature 1: Feature 2: Identify and explain two possible reasons why the staff at Mayfair Solutions are paid high wages. Reason 1: Explanation: Reason 2: Explanation: Identify and explain three problems that the need to keep updating its software packages may create for Mayfair Solutions. Problem 1: Explanation: Problem 2: Explanation: Problem 3: Explanation: Mayfair Solutions has recently received a takeover bid from a large rival software company. Do you think that this takeover would benefit both employees and shareholders of Mayfair Solutions? Justify your answer.

0450_w11_qp_12

THEORY

2011

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RGO is a large airline business. It provides flights to 120 countries using the latest up-to-date planes. Most of RGO’s customers are people travelling on holiday. RGO sells 80% of its tickets through its website. It operates in a competitive market so maintaining customer loyalty is important. One of RGO’s objectives is to increase market share from 8% to 10%. The Managing Director said: ‘One option is to lower ticket prices but to do this we will have to reduce costs.’ What is meant by ‘customer loyalty’? Identify two advantages to RGO of being a large business. Advantage 1: Advantage 2: Identify and explain two possible problems to RGO of reducing prices. Problem 1: Explanation: Problem 2: Explanation: 1 19 Identify and explain two ways (other than lower prices) that RGO could use to increase its market share. Way 1: Explanation: Way 2: Explanation: Explain two ways in which RGO could reduce its costs. Recommend which way RGO should choose. Justify your answer. [ 1 19

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THEORY

2019

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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

0450_s16_qp_11

THEORY

2016

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GBU is a public limited company. It makes a range of beauty products including shampoo and soaps for the mass market. Last year GBU’s revenue fell. The Marketing Director has been looking at the results from its primary market research based on a sample of 2000 consumers. An extract is shown in Fig. 1. She believes maintaining customer loyalty is more important than attracting new customers. Fig. 1: Extract from GBU’s market research Where do you buy your beauty products? Would you buy our beauty products? shop online mail order yes no What is meant by ‘mass market’? Calculate the percentage (%) of consumers who buy beauty products online. Identify and explain two possible reasons why GBU's market research might not be useful to the Marketing Director. Reason 1: Explanation: Reason 2: Explanation: 1 11 Identify and explain two advantages to GBU of using shops as a channel of distribution. Advantage 1: Explanation: Advantage 2: Explanation: Do you think maintaining customer loyalty should be more important to GBU than attracting new customers? Justify your answer. [ 1 11

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THEORY

2016

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LRL makes skincare products including face cream. It is a private sector business in country X. One of LRL’s objectives is to contribute to sustainable development. Maintaining customer loyalty is important and the Marketing Director knows a business must have an appropriate marketing mix. He is analysing data to calculate the value of LRL’s market share. An extract is shown in . The total value of sales of skincare products in country X for 2023 was $120 million. Market share data for skincare products in country X in 2023 (%) LRL 30% Competitor A 20% Competitor B 15% Others 35% Define ‘private sector’. Calculate the value of LRL’s market share in 2023. Working: Final answer: Outline two ways LRL could contribute to sustainable development. Way 1: Way 2: Explain two advantages to LRL of maintaining customer loyalty. Advantage 1: Explanation: Advantage 2: Explanation: Explain two elements of the marketing mix. Which do you think is the most important element for a business? Justify your answer.

0450_w24_qp_13

THEORY

2024

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Mabel wants to set up her own hairdressing business. She will need to build good customer relationships. She has done some secondary market research to find out possible demand and what methods of promotion to use. She has decided to buy her inventory from a wholesaler. Mabel is now looking for the right location for her business. She thinks that location will be more important than price charged to the success of her business. Identify two ways that a business could build good customer relationships. Way 1: Way 2: What is meant by ‘secondary market research’? Identify and explain two methods of promotion (other than promotional pricing) that Mabel might use. Method 1: Explanation: Method 2: Explanation: Identify and explain two possible disadvantages to Mabel of buying her inventory from a wholesaler. Disadvantage 1: Explanation: Disadvantage 2: Explanation: Do you think that the right location is more important than the prices she charges to the success of Mabel’s business? Justify your answer.

0450_s15_qp_12

THEORY

2015

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