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 3 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 3

7115_s21_qp_11

THEORY

2021

Paper 1, Variant 1

View

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 1 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 1

7115_s22_qp_11

THEORY

2022

Paper 1, Variant 1

View

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.

7115_w10_qp_12

THEORY

2010

Paper 1, Variant 2

View

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.

7115_w11_qp_12

THEORY

2011

Paper 1, Variant 2

View

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.

7115_s15_qp_12

THEORY

2015

Paper 1, Variant 2

View

Sunil is a sole trader. He likes owning a small business. His shop sells low price raincoats. Sales vary throughout the year. The market for raincoats is competitive, but as Sunil makes a profit he doesn’t think competition is a problem for his business. In order to protect consumers, the Government of Sunil’s country has recently introduced new laws to protect consumers. What is meant by ‘profit’? Identify two factors which could affect demand for Sunil’s products. Factor 1: Factor 2: Identify and explain two reasons why profit is important to small businesses like Sunil’s. Reason 1: Explanation: Reason 2: Explanation: Identify and explain one way in which consumer protection laws might affect Sunil’s business and one way consumer protection laws might affect his customers. Way consumer laws affect Sunil’s business: Explanation: Way consumer laws affect Sunil’s customers: Explanation: Do you think the advantages of owning a small business are greater than the disadvantages for Sunil? Justify your answer.

7115_s12_qp_11

THEORY

2012

Paper 1, Variant 1

View

GKA is a food retailer. It has 300 shops located in areas where average consumer incomes are low. GKA sells a limited range of own-label products including breakfast cereal and toothpaste. GKA does no promotion or market research. The Managing Director said: ‘Last year our market share increased to 5%. Profit increased by 40%. Keeping costs low means GKA can offer customers quality products at low prices.’ GKA is planning to open 100 shops in areas with high average consumer incomes.The Managing Director must decide whether GKA should change its pricing strategy as the business expands. What is meant by ‘market share’? Identify two aims of promotion. Aim 1: Aim 2: Identify and explain two methods of market research that GKA could use. Method 1: Explanation: Method 2: Explanation: 1 1 Identify and explain two ways in which GKA could keep costs low. Way 1: Explanation: Way 2: Explanation: Do you think GKA should change its pricing strategy as the business expands? Justify your answer. [ 1 1

7115_s18_qp_11

THEORY

2018

Paper 1, Variant 1

View

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.

7115_w14_qp_12

THEORY

2014

Paper 1, Variant 2

View

Wilde Soup Stop (WSS) makes a range of soups and hot drinks. It owns 30 shops and has sold its franchise to 10 other shops in country Z. The Marketing Director said: ‘Results from our focus group show that being an ethical business is important’. WSS plans to extend its product range to include curries and cakes. WSS will need to change its brand image. The Marketing Director cannot decide whether to use sponsorship or newspaper advertising as the main method of promotion. Fig.1: Existing logo for WSS Identify two ethical issues for a business. Issue 1: Issue 2: What is meant by a ‘focus group’? Identify and explain two advantages to WSS of selling its franchise. Advantage 1: Explanation: Advantage 2: Explanation: 1 4 Identify and explain one advantage and one disadvantage to WSS of changing its brand image. Advantage: Explanation: Disadvantage: Explanation: Do you think WSS should use sponsorship or newspaper advertising as the main method of promotion? Justify your answer. [ 1 4

7115_s17_qp_11

THEORY

2017

Paper 1, Variant 1

View

Gayle’s Soaps is a business which manufactures health and beauty products. Its market share has remained constant at 15% despite new businesses entering this market. The business uses market segmentation. Most of its customers are women. The Marketing manager believes the company could increase its profits if it increases the price of each of its most popular products. What is meant by ‘market share’? Identify two ways (other than gender) that Gayle’s Soaps could segment its market. Way 1: Way 2: Identify and explain two advantages of market segmentation for Gayle’s Soaps. Advantage 1: Explanation: Advantage 2: Explanation: Identify and explain three problems that a business might have when trying to enter a new market. Problem 1: Explanation: Problem 2: Explanation: Problem 3: Explanation: Do you think that if Gayle’s Soaps decides to increase prices then this will lead to higher profits? Justify your answer.

7115_s13_qp_11

THEORY

2013

Paper 1, Variant 1

View

---