Pamela is a sole trader. She started her successful photography business 30 years ago. She specialises in taking pictures of people and places for use in posters, calendars and fashion magazines. It is a niche market. Pamela uses cost-plus pricing as part of her marketing mix. Offering a high quality service is important to Pamela and her 2 employees. Define ‘cost-plus pricing’. Define ‘marketing mix’. Outline two reasons why offering a high quality service might be important for Pamela’s business. Reason 1: Reason 2: 1 2 Explain two advantages to Pamela of operating as a sole trader. Advantage 1: Explanation: Advantage 2: Explanation: Do you think operating in a niche market will help a small business have a better chance of success than operating in a mass market? Justify your answer. [ 1 2

7115_s21_qp_12

THEORY

2021

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Travelscene is a company that specialises in holiday tours for people with interests in sport. It arranges trips like ski holidays and group visits to major events such as the Olympic Games. This is a niche market. Travelscene is a very profitable business. The company has an excellent reputation as an efficient business. It employs experienced tour managers who look after the needs of tourists during their trip. It currently has a vacancy for a tour manager. What is meant by the term ‘a niche market’? What is meant by ‘an efficient business’? Identify and explain two qualities that a new Travelscene tour manager will need. Quality 1: Explanation: Quality 2: Explanation: Identify and explain three possible reasons why Travelscene is a very profitable business. Reason 1: Explanation: Reason 2: Explanation: Reason 3: Explanation: The management of Travelscene is thinking of starting a new range of family beach holidays, aimed at the mass market. Do you think that this would be a good idea? Justify your answer.

7115_w11_qp_12

THEORY

2011

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Walt owns a company which has developed a new computer game for adults. A focus group report shows customers like it. Walt has been considering the marketing mix, including the packaging for this product which is likely to be sold in many countries. ‘I don’t want to use a wholesaler as it would affect my profit margin’ he said. What is meant by a ‘focus group’? Identify two reasons why packaging might be important for the new computer game. Reason 1: Reason 2: Explain why the profit margin might be important for Walt’s business. Identify and explain two advantages to Walt if he decided to use a wholesaler to distribute his products. Advantage 1: Explanation: Advantage 2: Explanation: Consider two possible methods of promotion that Walt could use for the new game. Recommend which method he should use. Justify your answer.

7115_w15_qp_12

THEORY

2015

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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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F&G is a leading fashion retailer. It has 20 shops in country C. The business uses market segmentation. Its target market is men aged between 25 and 40 years old. The Marketing Director has been looking at the marketing data shown in Table 1. She is worried that the amount the business spends on marketing is not cost effective. She would like to close down all F&G shops and just use e-commerce. Table 1 F&G’s marketing budget F&G’s market share Total value of the men’s clothing market Year $25m 15% $500m $40m 12% $700m What is meant by ‘marketing budget’? Calculate the value of F&G’s revenue in 2016. Identify and explain two benefits of market segmentation to F&G. Benefit 1: Explanation: Benefit 2: Explanation: 1 1 Identify and explain two possible reasons why the amount F&G spends on marketing might not be cost effective. Reason 1: Explanation: Reason 2: Explanation: Do you think F&G should close down all its shops and just use e-commerce? Justify your answer. [ 1 1

7115_s16_qp_12

THEORY

2016

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NLR manufactures a range of branded skincare products including hand cream. Packaging of the products is important. Like many businesses, NLR makes use of market segmentation. The Marketing Director knows the stage of the product life cycle can influence NLR’s pricing decisions. He is analysing market research data. This shows 85% of consumers expect businesses to respond to environmental pressures. Identify two factors that might affect the accuracy of market research. Factor 1: Factor 2: Identify two benefits to a business of using market segmentation. Benefit 1: Benefit 2: Outline two ways NLR might respond to environmental pressures. Way 1: Way 2: 1 2 Explain how NLR’s pricing decisions might be affected at two different stages of the product life cycle. 1: Explanation: 2: Explanation: Do you think promoting the brand image is the most important role of packaging? Justify your answer. 1 2

7115_s23_qp_11

THEORY

2023

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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

7115_w16_qp_11

THEORY

2016

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Following the end of a recession in country X, Beena wants to start up a hairdressing business. One option is to purchase a franchise from an established hairdressing business. Beena has $800 in savings and knows having enough working capital will be important for her business. She plans to use market research to help her decision-making. Beena knows there are many ways to segment a market. Define ‘recession’. Identify two ways of segmenting a market. Way 1: Way 2: Outline two reasons why having enough working capital might be important for Beena’s business. Reason 1: Reason 2: 1 3 Explain two possible advantages to Beena of buying a franchise. Advantage 1: Explanation: Advantage 2: Explanation: Do you think it is always better for a start-up business to use primary market research, rather than secondary market research, when making decisions? Justify your answer. 1 3

7115_w22_qp_11

THEORY

2022

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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.

7115_s15_qp_11

THEORY

2015

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DSY is a private limited company. It produces washing machines and cleaning equipment. The Managing Director wants DSY to expand into a different market. He plans to spend $2bn on developing electric cars. There is a lot of competition in the electric car market. This market is growing rapidly. A leading pressure group has identified the environmental problems of non-electric cars. The Managing Director knows that important decisions about the method of production and the new car’s brand image still have to be made. Define ‘pressure group’. Define ‘brand image’. Outline two advantages to DSY of being a private limited company. Advantage 1: Advantage 2: 1 3 Explain two factors DSY should consider when deciding on a suitable method of production for the new product. Factor 1: Explanation: Factor 2: Explanation: Do you think entering a growing market where there is a lot of competition is the best way for a business to expand? Justify your answer. [ 1 3

7115_w20_qp_12

THEORY

2020

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