3. Marketing
A section of Business Studies, 0450
Listing 10 of 67 questions
STC manufactures toothpaste for the mass market. STC’s products have price elastic demand as there is a high level of competition in this market. STC uses a competitive pricing strategy . The marketing manager is thinking of changing this pricing strategy to increase sales (see Table 2). The head office of STC is located in country X, but the factory is in country Y. There have been complaints about communication issues between the managers and workers. STC has continued to grow but the managers still have a laissez-faire leadership style. Table 2: Forecast effect of changing price Forecast quantity demanded Planned new price Quantity demanded Current price 150000 per month $1.50 100000 per month $2.00 What is meant by ‘mass market’? What is meant by ‘price elastic demand’? Identify and explain two disadvantages to STC of business growth. Disadvantage 1: Explanation: Disadvantage 2: Explanation: 1 15 Identify and explain two ways STC could improve communication between managers and workers. Way 1: Explanation: Way 2: Explanation: Do you think STC should change its pricing strategy? Justify your answer. [ 1 15
0450_m18_qp_12
THEORY
2018
Paper 1, Variant 2
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Ella has just left college and wants to start up her own business. She has designed a new bicycle light with a safety feature not found in any rival products. Ella knows obtaining finance will be difficult. She plans to have the lights produced in another country. Each light will cost $8 to produce. Ella cannot decide whether to use price skimming. She said: ‘I have received orders for 300 lights and I have not even started promoting them’. Ella wants to be a successful entrepreneur. Table 1: Information on possible promotion options for Ella’s bicycle light. Option 2: Advertise in specialist magazine Option 1: Set up her own website $300 for full page colour advertisement $500 for web page to show product specifications and contact details Cost information One of the most popular cycling magazines in the country. For extra $750 website would allow customers to order online Other information Identify two characteristics of a successful entrepreneur. Characteristic 1: Characteristic 2: Identify two possible reasons why Ella plans to produce the lights in another country. Reason 1: Reason 2: Identify and explain two reasons why obtaining finance might be difficult for Ella’s business. Reason 1: Explanation: Reason 2: Explanation: 1 8 Identify and explain one advantage and one disadvantage to Ella of using price skimming. Advantage: Explanation: Disadvantage: Explanation: Recommend which promotion option Ella should choose. Justify your answer using the information in Table 1. [ 1 8
0450_w17_qp_11
THEORY
2017
Paper 1, Variant 1
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Party Pops is a business that sells products such as cakes and balloons for childrens’ birthday parties. The Marketing Director thinks that the demand for the company’s products is price elastic. Party Pops advertises on television. The products are sold through the company’s own retail shops. However, the Marketing Director is thinking of changing this to selling only on the Internet. Identify two aims of advertising. Aim 1: Aim 2: Identify two methods of pricing that Party Pops could use. Method 1: Method 2: Identify and explain two reasons why the demand for the company’s products is likely to be price elastic. Reason 1: Explanation: Reason 2: Explanation: Identify and explain two methods of promotion (other than advertising) that Party Pops could use to increase sales. Method 1: Explanation: Method 2: Explanation: Do you think Party Pops should stop selling through shops and sell only on the Internet? Justify your answer.
0450_w13_qp_12
THEORY
2013
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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
0450_s20_qp_13
THEORY
2020
Paper 1, Variant 3
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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
0450_s24_qp_11
THEORY
2024
Paper 1, Variant 1
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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
0450_w20_qp_11
THEORY
2020
Paper 1, Variant 1
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Abdula manages a business partnership that makes sports clothing. The business is working at full capacity. It employs 12 people who are paid on a piece rate basis. The partners have an objective to increase profits by 10 % each year for the next 5 years. They are thinking about a joint venture with another manufacturer of sports clothing as one way of achieving this objective. What is meant by a ‘business partnership’? Identify two ways of paying workers that the partnership could use (other than by piece rates). Way 1: Way 2: Identify and explain two advantages to this business of setting objectives. Advantage 1: Explanation: Advantage 2: Explanation: Identify and explain two advantages to the partnership of a joint venture with another manufacturer of sports clothing. Advantage 1: Explanation: Advantage 2: Explanation: Explain two ways (apart from a joint venture) that the partnership could use to achieve its objective of a 10 % annual increase in its profit over the next 5 years. Recommend which way is most likely to be successful. Justify your answer.
0450_w14_qp_12
THEORY
2014
Paper 1, Variant 2
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Questions Discovered
67