1

1 State two elements of the marketing mix.

Element 1: ...............................................................................................................................................

..................................................................................................................................................................

Element 2: ...............................................................................................................................................

.................................................................................................................................................................. [2]

[Total: 2]

2 SSG manufactures mobile (cell) phones using batch production. Quality control is important. SSG has 130
employees who all receive on-the-job training. The Marketing Manager is analysing cost and output data for
product X. An extract is shown in the table below. As product X is in the maturity stage of the product life
cycle SSG is considering possible extension strategies.

Extract from SSG’s cost and output data for product X

Rent and other expenses per month $300 000

Variable cost per unit $80

Output per month 12 000

Do you think adding new features to a product is the best extension strategy for a manufacturing business to
use? Justify your answer.

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

.................................................................................................................................................................. [6]

[Total: 6]
 2

3 Identify one benefit and one cost to a business of developing new products.

Benefit: ....................................................................................................................................................

..................................................................................................................................................................

Cost: ........................................................................................................................................................

.................................................................................................................................................................. [2]

[Total: 2]

4 MTD manufactures specialist cleaning products including soap. Batch production is used. The business uses
just-in-time inventory control. MTD took 18 months to develop its latest environmentally friendly cleaning
product. The Marketing Manager has to decide on the packaging and method of promotion for this new
product. She said: ‘All our stakeholders, including pressure groups, are important. MTD wants to contribute
to sustainable development.’

Outline two factors MTD should consider when deciding on the packaging for its new product.

Factor 1: ...................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

Factor 2: ...................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

.................................................................................................................................................................. [4]

[Total: 4]
 3

5 BEF is a large business based in country X. It uses flow production to manufacture a wide range of products
including toothpaste and shampoo. All BEF’s products are currently sold in country X. BEF knows that
having effective methods of internal communication are important. The Operations Director is analysing
production data. An extract is shown in the table below. BEF is considering exporting its products to country
Y.

Extract of BEF’s production data for one of its products

2019 2020

Average number of production workers 240 250

Total output per week 300 000 310 000

Do you think it is better for a large business to produce a wide range of products than a small range of
products? Justify your answer.

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

.................................................................................................................................................................. [6]

[Total: 6]

6 Define ‘brand image’.

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

.................................................................................................................................................................. [2]

[Total: 2]
 4

7 Define ‘brand image’.

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

.................................................................................................................................................................. [2]

[Total: 2]
 5

8 RVC uses batch production to manufacture a large range of products including soap and shampoo. Many of
the products are at different stages of the product life cycle. The Marketing Director has been reviewing some
data for one brand of soap, as shown in the Table. She said: ‘Last year sales were 80 000 units a week. I want
to know the current level of profit and margin of safety.’ The Marketing Director has to decide on a suitable
extension strategy. The choice is between new packaging or targeting new markets.

Table:

Do you think targeting new markets is a better extension strategy than new packaging for a manufacturing
business ? Justify your answer.

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

.................................................................................................................................................................. [6]

[Total: 6]

9 Identify two stages of the product life cycle.

Stage 1:.....................................................................................................................................................

Stage 2:..................................................................................................................................................... [2]

 6

[Total: 2]

10 LBM is an online fashion clothing retailer. LBM’s target market is 18-35 year olds. Last year revenue
increased by 25% to $600m. The Marketing Director said: ‘All businesses have to satisfy customer needs.
Customer service is important which is why all employees receive induction training. LBM offers customers
a wider range of products than its competitors. Promotion is through social media networks. Is there any
reason to open our own shops?’ LBM plans to add 3500 new styles each week and will need to arrange
finance for the additional inventory.

Identify and explain two problems for LBM of having a wide range of products available to customers.

Problem 1: ...............................................................................................................................................

..................................................................................................................................................................

Explanation:.............................................................................................................................................

..................................................................................................................................................................

Problem 2:................................................................................................................................................

..................................................................................................................................................................

Explanation: ............................................................................................................................................

.................................................................................................................................................................. [4]

[Total: 4]
 7

11 MF is a public limited company. It was set up 30 years ago in country X and produces a large variety of food
products. The objectives of MF are to increase profits and increase market share. Most of MF’s competitors
are small partnership businesses. MF is the largest food producer in country X.

The Operations Director is planning to produce a new ice cream that does not contain sugar. Production of
the new product will require a new automated production line. It will require new equipment to be purchased.
Additional skilled workers will need to be recruited by the Human Resources department and existing workers
will need to be retrained. To manufacture ice cream that does not contain sugar, MF will have to use ingredients
that are extracted from plants in the rainforests in country X. This will cause environmental damage when
the plants are cut down.

MF’s Operations Director is worried about the high cost of this raw material and the cost of removing all the
waste from the production of this new ice cream. The cheapest way to get rid of the waste is to take it to local
landfill sites, which are nearly full. The Government is responsible for the costs of managing landfill sites.
Farmers lose their land when new landfill sites are created.

The new ice cream will be targeted at people who want to lose weight or who, for medical reasons, are not
allowed to eat products that contain a lot of sugar. Statistics show that 10% of the adult population should
not be eating sugary foods and a further 40% are thought to be overweight.

Country X has several new TV programmes aimed at people who are health conscious and new gyms are
being set up. Several other food businesses in country X are planning the introduction of new food products
that are low in sugar but they are not yet ready to launch them. MF and its competitors sell food products
through wholesalers and to large supermarkets.

Daily news article

Country X is experiencing increasing numbers of overweight people and this is causing serious health
problems. Food products which contain a lot of sugar are being blamed for this crisis. Treating people who
are overweight increases costs to public sector organisations such as health care services. Businesses in
country X also complain that when employees are ill they do not work efficiently or they need time off work
to get better.

Identify and explain one benefit and one cost to MF of developing the new product.

Benefit:.....................................................................................................................................................

..................................................................................................................................................................

Explanation:.............................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

Cost:.........................................................................................................................................................

..................................................................................................................................................................
 8

Explanation:.............................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

.................................................................................................................................................................. [8]

[Total: 8]

12 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.

Existing logo for WSS

Identify and explain one advantage and one disadvantage to WSS of changing its brand image.

Advantage:................................................................................................................................................

..................................................................................................................................................................

Explanation:.............................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

Disadvantage:...........................................................................................................................................

..................................................................................................................................................................

Explanation:.............................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

.................................................................................................................................................................. [6]
 9

[Total: 6]

13 What is meant by ‘brand’?

..................................................................................................................................................................

.................................................................................................................................................................. [2]

[Total: 2]

14 PCB is a public limited company. It makes a well-known brand of mobile (cell) phones. Pricing is important
as it sells in a competitive market. PCB wants to increase its product range. It plans to make luxury headphones
as the demand for these is growing fast. The Operations Director has to decide whether PCB should develop
its own brand of headphones or take over an existing producer

Identify and explain two advantages to PCB of increasing the range of products it sells.

Advantage 1:.............................................................................................................................................

..................................................................................................................................................................

Explanation:.............................................................................................................................................

..................................................................................................................................................................

Advantage 2:.............................................................................................................................................

..................................................................................................................................................................

Explanation:.............................................................................................................................................

.................................................................................................................................................................. [4]

[Total: 4]
 10

15 Do you think TXE should sell a wider range of products? Justify your answer.

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

.................................................................................................................................................................. [6]

[Total: 6]

16 YOGO is a new business which Amelia has just set up using Government support. YOGO makes a range of
sweets (candy) 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.
 11

(a) Identify and explain two reasons why packaging is important for YOGO’s products.

Reason 1:..........................................................................................................................................

..........................................................................................................................................................

Explanation:.....................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

Reason 2:..........................................................................................................................................

..........................................................................................................................................................

Explanation:.....................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

.......................................................................................................................................................... [6]

[Total: 6]
 12

17 EDGE makes mobile (cell) 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.

Fig: EDGE – quantity sold by product type in 2015

Explain two extension strategies that EDGE could use for product Z. Recommend which one of the two
strategies it should choose. Justify your answer.

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

.................................................................................................................................................................. [6]

[Total: 6]
 13

18 EDGE makes mobile (cell) 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.

Fig: EDGE – quantity sold by product type in 2015

Identify and explain two advantages to EDGE of developing new products

Advantage 1:.............................................................................................................................................

..................................................................................................................................................................

Explanation:.............................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

Advantage 2:.............................................................................................................................................

..................................................................................................................................................................

Explanation:.............................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

.................................................................................................................................................................. [6]

[Total: 6]
 14

19 Ramford is a private limited company. It has four factories which make a wide range of food products
including breakfast cereal and ice cream. The Finance Director is worried about the company’s financial
performance. She has read that many businesses failed in the last year. ‘I think we are suffering from
diseconomies of scale’ she said. Ramford’s directors have decided to cut the number of different products it
makes from 80 to 10.

Table: Extract from accounts

Identify and explain two factors that Ramford should consider when deciding which products to remove
from its product range.

Factor 1: ...................................................................................................................................................

..................................................................................................................................................................

Explanation:.............................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

Factor 2:....................................................................................................................................................

..................................................................................................................................................................

Explanation:.............................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

.................................................................................................................................................................. [6]

[Total: 6]
 15

20 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.

Identify two reasons why packaging might be important for the new computer game.

Reason 1: .................................................................................................................................................

..................................................................................................................................................................

Reason 2:..................................................................................................................................................

.................................................................................................................................................................. [2]

[Total: 2]

21 What is meant by a ‘brand’?

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

.................................................................................................................................................................. [2]

[Total: 2]
 16

22 HPT makes frozen food products. The Finance Director wants to improve HPT’s cash flow position. The
Finance Director thinks HPT should not use expensive packaging. He is also worried that new Government
health & safety laws will not benefit the company and will only add to its costs.

Identity and explain two reasons why packaging might be important for HPT.

Reason 1:..................................................................................................................................................

..................................................................................................................................................................

Explanation:.............................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

Reason 2:..................................................................................................................................................

..................................................................................................................................................................

Explanation:.............................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

.................................................................................................................................................................. [6]

[Total: 6]

23 SENG manufactures cameras. Last year its market share increased by 2% to 18%. Production is capital
intensive. This allows SENG to use lean production methods such as just-in-time. Cameras have a short
product life cycle.

Identify two possible reasons why cameras might have a short product life cycle.

Reason 1:..................................................................................................................................................

..................................................................................................................................................................

Reason 2:..................................................................................................................................................

.................................................................................................................................................................. [2]

[Total: 2]
 17

24 SENG manufactures cameras. Last year its market share increased by 2% to 18%. Production is capital
intensive. This allows SENG to use lean production methods such as just-in-time. Cameras have a short
product life cycle. SENG spends $200m each year on extension strategies. The Marketing manager thinks
that an increase in market share will lead to higher profits.

Identify and explain two possible extension strategies that SENG could use for one of its types of camera.

Strategy 1:.................................................................................................................................................

..................................................................................................................................................................

Explanation:.............................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

Strategy 2:.................................................................................................................................................

..................................................................................................................................................................

Explanation:.............................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

.................................................................................................................................................................. [6]

[Total: 6]

25 Keypeople is a recruitment agency which only operates in one small town in country Z. Its owner, Rachel,
and her two employees know that good customer service is important. Rachel would like to expand her
business. Keypeople offers a variety of human resource services to other businesses, such as recruiting
employees and preparing employment contracts.

Identify two reasons why good customer service is important for Keypeople.

Reason 1:..................................................................................................................................................

..................................................................................................................................................................

Reason 2:..................................................................................................................................................

.................................................................................................................................................................. [2]

[Total: 2]