Deco is an electronics company manufacturing a wide range of products. The company operates in a highly competitive and fast changing market. The management of Deco believe that the company is ‘market orientated’. What is meant by a ‘market orientated’ company? Identify two possible disadvantages to Deco of having a wide range of products. Disadvantage 1: Disadvantage 2: Deco is about to carry out some market research. It intends to use sampling to research the market. Identify and explain two methods of sampling that Deco could use. Method 1: Explanation: Method 2: Explanation: Deco also uses secondary market research. Identify and explain three reasons why the results of secondary market research might not always be useful to a business. Reason 1: Explanation: Reason 2: Explanation: Reason 3: Explanation: Deco wants to spend more on developing new products. In order to do this it will have to spend less on market research. Do you think Deco should do this? Justify your answer.

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THEORY

2010

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Grimshaw manufactures mobile phones for the mass market. Last year its market share increased by 3%. The Managing Director is planning to set up a new factory in country T to supply the mobile phone market in that country for the first time. Grimshaw plans to sell a new model of mobile phone. The Managing Director has asked for market research to be done. He said: ‘As a multinational, we can set up a new factory anywhere; I want to know whether the Government of country T will offer us any help to build our factory there.’ What is meant by ‘mass market’? What is meant by ‘market share’? Identify and explain two advantages of market research to Grimshaw. Advantage 1: Explanation: Advantage 2: Explanation: Identify and explain two advantages to Grimshaw of developing new products. Advantage 1: Explanation: Advantage 2: Explanation: Do you think the Government of country T should help businesses such as Grimshaw set up in its country? Justify your answer.

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THEORY

2015

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Anouk is a sole trader. She designs and makes jewellery at home, using hired equipment. Anouk enjoys selling the jewellery at local markets. Last year her sales revenue increased by $500 to $3000. She plans to use $50 for a marketing budget. Anouk would like to do some primary market research when she has time. Anouk thinks she should have a business partner. What is meant by a ‘marketing budget’? Identify two methods of primary market research that Anouk could use. Method 1: Method 2: Identify and explain two possible advantages for Anouk of hiring equipment. Advantage 1: Explanation: Advantage 2: Explanation: Identify and explain two disadvantages to Anouk of having a business partner. Disadvantage 1: Explanation: Disadvantage 2: Explanation: Anouk could use either leaflets or local newspaper advertising as methods of promoting her jewellery. Recommend which method you think Anouk should use. Justify your answer.

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THEORY

2014

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Si and Ramon are friends. They want to set up a photography business. They would take pictures at weddings, birthdays and other special events. The business will be a partnership. Based on their primary market research, Si believes there is enough demand. Ramon has produced a business plan which shows they need $8000 for a shop and $4000 for equipment. They plan to spend $500 on promotion, but cannot agree on the best method to use. What is meant by a ‘partnership’? Identify two methods of primary market research that Si and Ramon might have used. Method 1: Method 2: Identify and explain two possible sources of finance that they could use to obtain the equipment. Source 1: Explanation: Source 2: Explanation: Identify and explain two advantages to Si and Ramon of having a business plan. Advantage 1: Explanation: Advantage 2: Explanation: Consider two methods of promotion that would be suitable for Si and Ramon to use. Which of these two methods would be the most appropriate? Justify your answer.

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THEORY

2015

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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.

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THEORY

2015

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Early Tots makes wooden toys for children. The business uses both primary and secondary market research data to decide what products to make. It has a wide range of toys but some of the products are nearing the end of their product life cycle. The managers are thinking about using extension strategies for these products. What is meant by the term ‘secondary market research’? What is meant by the term ‘product life cycle’? Identify and explain two methods that Early Tots could use to gather primary market research data. Method 1: Explanation: Method 2: Explanation: Identify and explain three extension strategies that Early Tots could use. Strategy 1: Explanation: Strategy 2: Explanation: Strategy 3: Explanation: Consider the advantages and disadvantages of two channels of distribution that Early Tots could use for a new range of wooden toys. Recommend which channel Early Tots should use. Justify your answer. Channel 1: Channel 2: Recommendation:

7115_w11_qp_11

THEORY

2011

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Yura is the Managing Director of a company that sells holidays. The company organises hotels, air flights and car hire for customers. For the first time, the company is going to do some market research. Secondary sources will be used and a sample of customers will be selected for primary research. What is meant by ‘market research’? Identify two advantages of using secondary sources. Advantage 1: Advantage 2: Identify and explain two methods of sampling that the company could use. Method 1: Explanation: Method 2: Explanation: Identify and explain two ways of segmenting the market for holidays that the company could use. Way 1: Explanation: Way 2: Explanation: Yura believes that the price is the most important part of the marketing mix for holidays. Do you think that he is correct? Justify your answer.

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THEORY

2013

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YOGO is a new business which Amelia has just set up using Government support. YOGO makes a range of sweets targeted at adults. It is a niche market. Amelia has been looking at the marketing part of her business plan. She has to decide which pricing method to use. Amelia is spending a lot of money on packaging. She did not do any primary market research as she thinks she can use secondary data to make decisions. She believes that all adults like sweets. Identify two reasons why a Government might support business start-ups. Reason 1: Reason 2: Identify two parts (other than marketing) of a business plan. Part 1: Part 2: Identify and explain two possible pricing methods that Amelia might use. Method 1: Explanation: Method 2: Explanation: 1 2 Identify and explain two reasons why packaging is important for YOGO’s products. Reason 1: Explanation: Reason 2: Explanation: Do you think Amelia’s business would benefit from primary market research? Justify your answer. [ 1 2

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THEORY

2016

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Delwar makes car tyres. The business is located in country Z. At present, all its sales are to customers in country Z. Delwar is the market leader in this country. Fig. 1 gives data regarding its market share. The total value of car tyre sales in country Z in 2010 was $50m. This market is no longer growing. The Managing Director of Delwar thinks that exporting tyres is the way forward. There will be both costs and benefits of exporting tyres. Fig. 1: Bar chart showing market share % market share = Delwar year = other companies What is meant by the term ‘market leader’? Calculate the value of Delwar’s sales in 2010. Identify and explain two possible reasons why the market for car tyres in country Z is no longer growing. Reason 1: Explanation: Reason 2: Explanation: Identify and explain three methods Delwar could use to increase its market share in country Z. Method 1: Explanation: Method 2: Explanation: Method 3: Explanation: Do you think Delwar’s profits would increase if the business were to export its tyres? Justify your answer.

7115_s11_qp_12

THEORY

2011

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Cheung owns a small retail shop in the city centre selling fashion clothing for children. As it is a competitive market, Cheung knows market research is important. Cheung is worried about the effect of an increase in shop rent on his costs. Cheung said: ‘I will have to pay this higher rent as it is a good location. I need to increase revenue or reduce other costs.’ Cheung buys all his supplies from a wholesaler located in a nearby town. He is thinking of buying directly from a clothing manufacturer in another country. What is meant by ‘market research’? Identify what will happen to each of the following when Cheung’s shop rent increases. Variable cost: Fixed cost: Identify and explain two possible reasons why Cheung thinks the shop is in a good location. Reason 1: Explanation: Reason 2: Explanation: 1 4 Identify and explain two ways that Cheung could use to increase revenue. Way 1: Explanation: Way 2: Explanation: Do you think Cheung should change his supplier? Justify your answer. [ 1 4

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THEORY

2017

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