The Marketing Mix (Edexcel IGCSE Business): Exam Questions

Exam code: 4BS1

4 hours58 questions
1
1 mark

Which one of the following represents a star product on the Boston matrix?

Select one answer.

  • High market growth, high market share

  • High market growth, low market share

  • Low market growth, high market share

  • Low market growth, low market share

2
1 mark

Case Study

Posh Pets Spain (PPS) is a pet hotel in the village of Alhaurin el Grande, Spain. It is run by Rachel Goutorbe, an animal enthusiast, and her team of four pet specialists. PPS offers overnight accommodation with room for seven dogs or cats, a pet grooming service and a shop selling pet products, such as dog coats and dog leads. Pet grooming involves washing, cutting and combing a pet’s coat.

PPS has seen lower sales of its pet accessories.

State one extension strategy PPS could use to extend the life cycle of the pet accessories.

3
1 mark

Case Study

Saha is a small business in Türkiye (formerly known as Turkey) that opened in 2020 with 15 employees. It designs and manufactures robots which are used in hospitals, hotels and restaurants. In hospitals its robots are used to move medical supplies between departments. In hotels and restaurants, the robots are used to welcome customers as they arrive and deliver food and drinks to hotel rooms and restaurant tables. Saha provides a seven day a week customer service for all businesses buying its robots.

Many new businesses are entering the global robot market and are competing for market share. Competitors in Türkiye include NIO, Zoox and Vention.

Saha has ambitious growth plans and has started to design robots that will be used in the home to help people with cleaning, shopping, security and entertainment. It aims to become a multinational business within five years to manufacture robots in all continents of the world.

State one reason why branding is important to Saha.

4
1 mark

Which one of the following functions is responsible for public relations?

Select one answer.

  • Human resources

  • Finance

  • Marketing

  • Production

5
1 mark

Which one of the following is an example of a good?

Select one answer.

  • Motor vehicle

  • Financial advice

  • Car washing

  • Gardening

6
1 mark

Case Study

Irsi Chocolatier is a chocolate shop in Brussels, the capital city of Belgium. There are many other chocolate shops nearby. Opened in 1989 by the Corne family the business now has four directors and three employees. Florent Corne is the Managing Director with three other family members as Directors. Irsi Chocolatier opens from Tuesday till Saturday. The shop sells a variety of handmade chocolates and jelly fruit sweets. It delivers locally and has a website for information purposes only.

State one way Irsi Chocolatier could use the Boston matrix.

7
1 mark

Case Study

Irsi Chocolatier is a chocolate shop in Brussels, the capital city of Belgium. There are many other chocolate shops nearby. Opened in 1989 by the Corne family the business now has four directors and three employees. Florent Corne is the Managing Director with three other family members as Directors. Irsi Chocolatier opens from Tuesday till Saturday. The shop sells a variety of handmade chocolates and jelly fruit sweets. It delivers locally and has a website for information purposes only.

State one way Irsi Chocolatier might extend the life cycle of one of its products.

8
2 marks

Case Study

Irsi Chocolatier is a chocolate shop in Brussels, the capital city of Belgium. There are many other chocolate shops nearby. Opened in 1989 by the Corne family the business now has four directors and three employees. Florent Corne is the Managing Director with three other family members as Directors. Irsi Chocolatier opens from Tuesday till Saturday. The shop sells a variety of handmade chocolates and jelly fruit sweets. It delivers locally and has a website for information purposes only.

Outline one way Irsi Chocolatier could keep customer loyalty.

9
1 mark

Figure 1 is a diagram of a product life cycle.

Graph showing sales growth over time in four phases: rising, steady, peaking, and declining. Labeled axes with sales on the vertical and time on the horizontal.

Which one of the following is Phase 3 of the product life cycle?

Select one answer.

  • Decline

  • Growth

  • Introduction

  • Maturity

10
1 mark

Which one of the following is an element of the marketing mix?

Select one answer.

  • Price

  • Partnership

  • Production

  • Profit

11
1 mark

Case Study

Most people recognise Heinz for the phrase ‘57 varieties’ even though it now produces many more than the original 57 varieties. H J Heinz, the founder of the Heinz business, believed the phrase sounded lucky.

Kraft Heinz is a world-wide producer of food products. It was formed from the merger of Kraft Foods and Heinz in 2015. This created the third largest food and drinks business in the USA and the fifth largest food and drinks business in the world.

Kraft Heinz has over 24 different brands, including Greenseas in Australia and Nutri+Plus in New Zealand. America has the largest number of brands from Maxwell House to Cool Whip. Kraft Heinz produces many different products including tomato sauce, ‘Mac&Cheese’, pasta and its famous baked beans that are used and eaten by many people.

Kraft Heinz uses many methods to advertise its products. These include posters, billboards and leaflets in supermarkets.

Kraft Heinz uses price promotions to encourage customers to purchase more of its products. The price of a tin of baked beans in the US is $0.54. If 12 tins are purchased the price is reduced by 12.5%.

Which one of the following is the price of 12 tins of baked beans with the 12.5% promotional price discount?

Select one answer.

  • $5.67

  • $6.48

  • $56.25

  • $81.00

12
1 mark

Which one of the following is the name of a pricing strategy where a business sets a high price for a new product in the market?

Select one answer.

  • Penetration

  • Skimming

  • Competition

  • Promotional

13
1 mark

Case Study

Nantgwynfaen Organic Farm (NOF) is a farm growing a range of fruit and vegetables. It has a farm shop and offers accommodation with breakfast. It was set up by Amanda and Ken Edwards in West Wales, UK.

NOF supports farmers by selling local organic produce in its farm shop. The produce from the farm shop is served to the visitors staying overnight at the farm.

NOF is committed to being environmentally friendly by recycling, avoiding the use of packaging and reducing the use of electricity.

State one reason NOF might use other retailers to sell its products.

14
1 mark

Case Study

NEXT is a well-known clothing retailer that operates in 70 countries and employs over 43,000 employees. Since NEXT commenced trading it has introduced many other products to its range such as home interiors, flowers and a wedding list service.

In 1999 NEXT launched its own online shopping platform, enabling customers to purchase its products where ever they live. It continues to improve its customer service by introducing new initiatives such as next day delivery.

NEXT mainly uses its own factories for production. However, it does purchase some clothes such as ladies dresses from Turkish factories.

State one reason why NEXT might use cost plus pricing.

15
2 marks

Case Study

NEXT is a well-known clothing retailer that operates in 70 countries and employs over 43,000 employees. Since NEXT commenced trading it has introduced many other products to its range such as home interiors, flowers and a wedding list service.

In 1999 NEXT launched its own online shopping platform, enabling customers to purchase its products where ever they live. It continues to improve its customer service by introducing new initiatives such as next day delivery.

NEXT mainly uses its own factories for production. However, it does purchase some clothes such as ladies dresses from Turkish factories.

NEXT works hard to remain competitive with other retailers of similar products.

Outline one reason why NEXT uses special offers.

16
1 mark

Define the term price skimming.

17
Sme Calculator
1 mark

Case Study

Huawei is a leading global provider of information and communications technology, infrastructure and smart devices. In March 2011, over one million of its C8500 smartphones were sold in China following its launch.

It now manufactures a wide variety of different products including Huawei smartphones, watches and tablets. In recent years Huawei has won many awards. In 2018 it was named the 68th most valuable brand by Best Global Brands. In 2019 it introduced a smartphone which had new photographic technology.

Huawei’s brand value for 2018 was $7.6 billion. Huawei plans to increase its brand value by 14% in 2019.

What would be the brand value in 2019?

Select one answer.

  • $6.20 billion

  • $7.74 billion

  • $8.66 billion

  • $10.64 billion

18
1 mark

Case Study

Huawei is a leading global provider of information and communications technology, infrastructure and smart devices. In March 2011, over one million of its C8500 smartphones were sold in China following its launch.

It now manufactures a wide variety of different products including Huawei smartphones, watches and tablets. In recent years Huawei has won many awards. In 2018 it was named the 68th most valuable brand by Best Global Brands. In 2019 it introduced a smartphone which had new photographic technology.

State one possible reason why Huawei would want to keep its customers loyal to its brand.

19
1 mark

Case Study

In 1985 Emirates started its airline business with just two aircraft. It is now a well‑known airline with over 265 aircraft flying to over 180 destinations around the world.

Emirates has won many awards for service and reliability. Until 2016 passengers rated Emirates the leading airline to travel with. However, in 2017 its rating dropped from first to fourth.

State one reason why Emirates uses competition pricing.

20
1 mark

Case Study

In 1985 Emirates started its airline business with just two aircraft. It is now a well‑known airline with over 265 aircraft flying to over 180 destinations around the world.

Emirates has won many awards for service and reliability. Until 2016 passengers rated Emirates the leading airline to travel with. However, in 2017 its rating dropped from first to fourth.

Emirates wants to encourage its employees to remain with the company and offers them incentives to do so. It offers all of its passengers a loyalty programme.

State one reason why Emirates has a loyalty programme for its passengers.

1
Sme Calculator
2 marks

Case Study

TUI is a holiday business that has over 100 years of experience. It offers customers a variety of holidays including staying in hotels, and river and ocean-going cruises. There are many extras that it offers to holiday makers including: car hire, extensions to the holiday and arranging day trips at all its holiday destinations.

The business is well known and flies its customers to over 180 destinations around the world, including Greece, Turkey and Spain. It has 1,600 travel agencies and 27 million customers. Holidays can be booked by visiting a travel agency or online.

TUI has holidays to meet the needs of all its customers: families, children, couples and those with disabilities.

TUI is charging an adult £725.92 for a week in Cyprus. If booked online, there is a discount of 12.5%.

Calculate the total price of a holiday for two adults with a 12.5% promotional discount for booking online.

2
6 marks

Case Study

TUI is a holiday business that has over 100 years of experience. It offers customers a variety of holidays including staying in hotels, and river and ocean-going cruises. There are many extras that it offers to holiday makers including: car hire, extensions to the holiday and arranging day trips at all its holiday destinations.

The business is well known and flies its customers to over 180 destinations around the world, including Greece, Turkey and Spain. It has 1,600 travel agencies and 27 million customers. Holidays can be booked by visiting a travel agency or online.

TUI has holidays to meet the needs of all its customers: families, children, couples and those with disabilities.

Analyse how TUI could make use of the Boston Matrix to review all the different types of holidays it offers.

3
3 marks

Explain one method of above the line promotion a business may use to increase its sales revenue.

4
Sme Calculator
2 marks

Case Study

The first Premier Inn hotel was opened in 1987. Premier Inn now has over 820 hotels in the UK, United Arab Emirates (UAE) and India with over 83,000 rooms. It has recently expanded by opening the first Premier Inn in Germany and has plans to open more in other countries.

The majority of the hotels have restaurants with facilities for guests to buy meals and drinks.

To encourage people to stay at a new German hotel, Premier Inn offers a 12.5% discount on a room for the first night only.

The price for one night is €89.25.

Calculate, to two decimal places, the price for the first night after the discount has been applied. You are advised to show your working.

5
3 marks

Explain one reason why a business might use sponsorship.

6
Sme Calculator
2 marks

Case Study

Irsi Chocolatier is a chocolate shop in Brussels, the capital city of Belgium. There are many other chocolate shops nearby. Opened in 1989 by the Corne family the business now has four directors and three employees. Florent Corne is the Managing Director with three other family members as Directors. Irsi Chocolatier opens from Tuesday till Saturday. The shop sells a variety of handmade chocolates and jelly fruit sweets. It delivers locally and has a website for information purposes only.

A customer buying five boxes of chocolates for a total of €75.50 is given a 6% discount.

Calculate, to two decimal places, the cost of these chocolates after the discount has been applied. You are advised to show your working.

7
3 marks

Explain one benefit for a business that uses test marketing.

8
6 marks

Case Study

Irsi Chocolatier is a chocolate shop in Brussels, the capital city of Belgium. There are many other chocolate shops nearby. Opened in 1989 by the Corne family the business now has four directors and three employees. Florent Corne is the Managing Director with three other family members as Directors. Irsi Chocolatier opens from Tuesday till Saturday. The shop sells a variety of handmade chocolates and jelly fruit sweets. It delivers locally and has a website for information purposes only.

Analyse the importance of branding for Irsi Chocolatier.

9
3 marks

Explain one way a business could use e-newsletters.

10
6 marks

Case Study

Irsi Chocolatier is a chocolate shop in Brussels, the capital city of Belgium. There are many other chocolate shops nearby. Opened in 1989 by the Corne family the business now has four directors and three employees. Florent Corne is the Managing Director with three other family members as Directors. Irsi Chocolatier opens from Tuesday till Saturday. The shop sells a variety of handmade chocolates and jelly fruit sweets. It delivers locally and has a website for information purposes only.

Analyse the importance of place to Irsi Chocolatier.

11
3 marks

Explain one reason why businesses continually design new products.

12
Sme Calculator
2 marks

Case Study

As We Grow (AWG) is a clothing business in Iceland. The social objective of the business is to use natural materials, such as wool, and produce environmentally friendly products. It aims to design clothes that will last a long time, to encourage families to buy fewer clothes and reduce waste in society.

AWG’s increasing product range now includes jumpers, dresses, shirts and baby clothes. These are produced in small workshops that employ family and friends. Waste is kept to a minimum and any leftover material is used to make scarves and hats. The business has one store in Iceland. It uses its website to advertise and sell its clothing online to customers in other countries. The business has received the Icelandic Design Award for its contribution to the environment.

AWG sells a woman’s jumper on its international website for $329. AWG had a promotional sale and offered a discount of 25% on the price of jumpers.

Calculate, to two decimal places, the new price of the jumper in the promotional sale. You are advised to show your working.

13
6 marks

Case Study

As We Grow (AWG) is a clothing business in Iceland. The social objective of the business is to use natural materials, such as wool, and produce environmentally friendly products. It aims to design clothes that will last a long time, to encourage families to buy fewer clothes and reduce waste in society.

AWG’s increasing product range now includes jumpers, dresses, shirts and baby clothes. These are produced in small workshops that employ family and friends. Waste is kept to a minimum and any leftover material is used to make scarves and hats. The business has one store in Iceland. It uses its website to advertise and sell its clothing online to customers in other countries. The business has received the Icelandic Design Award for its contribution to the environment.

Analyse the advantages to AWG of using e-commerce to sell its products.

14
3 marks

Explain one method of below-the-line promotion a business may use to retain its customers.

15
3 marks

Explain one benefit to a business of using the Boston Matrix.

16
Sme Calculator
2 marks

Case Study

The Better Toy Store (TBTS) is a children’s toy shop. TBTS has three shops in Singapore. Two of the shops are located in busy shopping malls and the third is located at the Jewel Changi Airport. TBTS has a website for customers looking to buy toys online.

TBTS selects toys to sell that are excellent for play, value, design and quality. All TBTS toys are environmentally friendly.

TBTS lets customers sign up for a Very Important Person (VIP) membership on its website. The website gives VIP members special rates and exclusive offers.

TBTS sells dinosaur toys for 22.80 SGD. VIP members get a discount of 15%.

Calculate the total cost to a VIP member of buying 17 dinosaur toys. You are advised to show your working.

17
3 marks

Explain one reason why product trials are important to a business.

18
3 marks

Explain one strategy a small business might use to extend the product life cycle of one of its products.

19
Sme Calculator
2 marks

Case Study

Artify Studio was set up in 2015 by Tay Hui Jae in the busy Kampong Glam area of Singapore. Artify Studio’s aim is to have ‘a communal art space where people can come together and paint, where people would be given as much creative freedom as they would have if they were in their own spaces.’

Artify Studio provides many services including its popular Liberty Art Jam where customers can paint as well as listen to music. The studio offers a Corporate Art Jam and Regular Kids Classes. Customers can purchase art materials after attending the studio.

Artify Studio is a profit-making organisation with a social element. It employs seven part-time people, all of whom are art enthusiasts.

Artify Studio offers a 12% discount to parents if they book the ‘Duo Parent and Child Art Camp’ and the ‘Children’s Illustration Workshop’ at the same time. The combined price for both courses before being discounted is S$285.

Calculate the discounted cost of booking both courses at the same time.

You are advised to show your working.

20
3 marks

Explain one way social media can be used by a business.

21
3 marks

Explain one advantage for a business of using sponsorship.

22
3 marks

Explain one reason why having good public relations is important to a business.

23
6 marks

Case Study

The Alternative Drum School (TADS) was set up in the wealthy area of Cricklade, England in 2008 by Ollie Tanner who had a passion for and enjoyed drumming. Ollie invested all of his savings into the drumming school. He saw the potential of being located away from other drumming schools.

Ollie promotes his business by writing columns in local papers, performing at local music festivals and by word of mouth recommendations. He has invested heavily in computer technology to allow students to produce the music they enjoy playing. Ollie finds it difficult to maintain a good work-life balance.

Ollie currently works 60 hours a week in a business that does not have reliable profits.

Analyse the benefits for TADS of using below-the-line promotion.

1
9 marks

Case Study

Posh Pets Spain (PPS) is a pet hotel in the village of Alhaurin el Grande, Spain. It is run by Rachel Goutorbe, an animal enthusiast, and her team of four pet specialists. PPS offers overnight accommodation with room for seven dogs or cats, a pet grooming service and a shop selling pet products, such as dog coats and dog leads. Pet grooming involves washing, cutting and combing a pet’s coat.

PPS is looking to improve its revenue and is considering two options:

  • Option 1: trial a new brand of dog food in the shop

  • Option 2: sponsor a local dog show.

Justify which one of these two options PPS should choose.

2
9 marks

Case Study

TUI is a holiday business that has over 100 years of experience. It offers customers a variety of holidays including staying in hotels, and river and ocean-going cruises. There are many extras that it offers to holiday makers including: car hire, extensions to the holiday and arranging day trips at all its holiday destinations.

The business is well known and flies its customers to over 180 destinations around the world, including Greece, Turkey and Spain. It has 1,600 travel agencies and 27 million customers. Holidays can be booked by visiting a travel agency or online.

TUI has holidays to meet the needs of all its customers: families, children, couples and those with disabilities.

The travel market that TUI operates in is very competitive, with many different businesses offering the same holidays at the same venues. When TUI introduces a new holiday or experience it has to consider the pricing strategy it will use. For its new holiday destination in Sri Lanka it is considering two options:

  • Option 1: competition pricing

  • Option 2: promotional pricing.

Justify which one of these two options TUI should choose.

3
9 marks

Case Study

Saha is a small business in Türkiye (formerly known as Turkey) that opened in 2020 with 15 employees. It designs and manufactures robots which are used in hospitals, hotels and restaurants. In hospitals its robots are used to move medical supplies between departments. In hotels and restaurants, the robots are used to welcome customers as they arrive and deliver food and drinks to hotel rooms and restaurant tables. Saha provides a seven day a week customer service for all businesses buying its robots.

Many new businesses are entering the global robot market and are competing for market share. Competitors in Türkiye include NIO, Zoox and Vention.

Saha has ambitious growth plans and has started to design robots that will be used in the home to help people with cleaning, shopping, security and entertainment. It aims to become a multinational business within five years to manufacture robots in all continents of the world.

Saha is planning to develop a new range of robots aimed at helping people in the home with cleaning, shopping, security and entertainment.

It is considering two pricing methods for these robots:

  • Option 1: price skimming

  • Option 2: cost plus pricing.

Justify which one of these two options Saha should choose.

4
9 marks

Case Study

The first Premier Inn hotel was opened in 1987. Premier Inn now has over 820 hotels in the UK, United Arab Emirates (UAE) and India with over 83,000 rooms. It has recently expanded by opening the first Premier Inn in Germany and has plans to open more in other countries.

The majority of the hotels have restaurants with facilities for guests to buy meals and drinks.

To be competitive in India, Premier Inn must make sure that it uses the correct pricing strategy. It is considering the following two options:

  • Option 1: competition pricing

  • Option 2: promotional pricing.

Justify which one of these two options Premier Inn should choose.

5
9 marks

Case Study

IKEA is a well-known home furniture retailer with stores throughout the world. It was started in 1943 by Ingvar Kamprad when he was given some money by his father for doing well at school. He wanted to produce furniture at a price that people could afford to buy. He realised that transporting furniture to customers was difficult as goods were often damaged. He developed flat packs to avoid damage. A flat pack contained all the materials needed to self-assemble a table, a chair or a bed. All IKEA stores are run as franchises.

IKEA constantly aims to improve the way it promotes its furniture. To do this IKEA is considering using the following techniques.

  • Option 1: above the line promotion

  • Option 2: below the line promotion.

Justify which one of these two options IKEA should use.

6
9 marks

Case Study

As We Grow (AWG) is a clothing business in Iceland. The social objective of the business is to use natural materials, such as wool, and produce environmentally friendly products. It aims to design clothes that will last a long time, to encourage families to buy fewer clothes and reduce waste in society.

AWG’s increasing product range now includes jumpers, dresses, shirts and baby clothes. These are produced in small workshops that employ family and friends. Waste is kept to a minimum and any leftover material is used to make scarves and hats. The business has one store in Iceland. It uses its website to advertise and sell its clothing online to customers in other countries. The business has received the Icelandic Design Award for its contribution to the environment.

AWG is planning to launch a new range of clothing aimed at teenagers and younger adults. It is considering two pricing methods:

  • Option 1: competition pricing

  • Option 2: cost plus pricing.

Justify which one of these two options AWG should choose.

7
9 marks

Case Study

Most people recognise Heinz for the phrase ‘57 varieties’ even though it now produces many more than the original 57 varieties. H J Heinz, the founder of the Heinz business, believed the phrase sounded lucky.

Kraft Heinz is a world-wide producer of food products. It was formed from the merger of Kraft Foods and Heinz in 2015. This created the third largest food and drinks business in the USA and the fifth largest food and drinks business in the world.

Kraft Heinz has over 24 different brands, including Greenseas in Australia and Nutri+Plus in New Zealand. America has the largest number of brands from Maxwell House to Cool Whip. Kraft Heinz produces many different products including tomato sauce, ‘Mac&Cheese’, pasta and its famous baked beans that are used and eaten by many people.

Kraft Heinz uses many methods to advertise its products. These include posters, billboards and leaflets in supermarkets.

Kraft Heinz constantly aims to promote its products to encourage people to increase sales. To do this Kraft Heinz is considering using the following techniques:

  • Option 1: sponsorship of a local charity

  • Option 2: increasing the number of special offers.

Justify which one of these two options Kraft Heinz should choose.

8
12 marks

Case Study

Most people recognise Heinz for the phrase ‘57 varieties’ even though it now produces many more than the original 57 varieties. H J Heinz, the founder of the Heinz business, believed the phrase sounded lucky.

Kraft Heinz is a world-wide producer of food products. It was formed from the merger of Kraft Foods and Heinz in 2015. This created the third largest food and drinks business in the USA and the fifth largest food and drinks business in the world.

Kraft Heinz has over 24 different brands, including Greenseas in Australia and Nutri+Plus in New Zealand. America has the largest number of brands from Maxwell House to Cool Whip. Kraft Heinz produces many different products including tomato sauce, ‘Mac&Cheese’, pasta and its famous baked beans that are used and eaten by many people.

Kraft Heinz uses many methods to advertise its products. These include posters, billboards and leaflets in supermarkets.

Kraft Heinz has factories in over 29 countries. Countries include Japan, The Netherlands, New Zealand and America.

Kraft Heinz advertises on a regular basis using different methods such as television and posters. Its products are purchased by the young and old. In 2019, it used a television advertisement with Ed Sheeran, the pop star, demonstrating his taste for Heinz tomato sauce.

Evaluate the importance to Kraft Heinz of using a variety of different methods to advertise to its target customers. You should use the information provided as well as your own knowledge of business.

9
9 marks

Case Study

The LEGO Group is a privately-owned business in Denmark. The business was founded in 1932 by the Kristiansen family. The family still owns it. The name LEGO is an abbreviation of two Danish words, ‘leg godt’ which means ‘play well’. It is now one of the world’s largest manufacturers of toys with 15 factories and over 18,000 employees around the world.

LEGO manufactures toys, games and art materials for boys and girls of all ages, and products from films such as Star Wars and Harry Potter. It believes that children are the role models of the future and playing with LEGO can support children in a developing and complex world.

LEGO is constantly introducing new toys to the market to keep its customers buying. It is planning to introduce a new Star Wars Princess Leia toy. It is considering the following two pricing strategies to launch the toy.

  • Option 1: cost plus

  • Option 2: skimming.

Justify which one of these two options LEGO should choose.

10
9 marks

Case Study

Nantgwynfaen Organic Farm (NOF) is a farm growing a range of fruit and vegetables. It has a farm shop and offers accommodation with breakfast. It was set up by Amanda and Ken Edwards in West Wales, UK.

NOF supports farmers by selling local organic produce in its farm shop. The produce from the farm shop is served to the visitors staying overnight at the farm.

NOF is committed to being environmentally friendly by recycling, avoiding the use of packaging and reducing the use of electricity.

NOF has recently harvested its corn crop. It intends to turn the corn into popcorn called ‘NOF pop’ to sell in the farm shop and through local retailers.

NOF is considering two options to introduce the product into the market:

  • Option 1: offering a low introductory price for three months

  • Option 2: selling at the same price as competitors.

Justify which one of these two options NOF should choose.

11
9 marks

Case Study

NEXT is a well-known clothing retailer that operates in 70 countries and employs over 43,000 employees. Since NEXT commenced trading it has introduced many other products to its range such as home interiors, flowers and a wedding list service.

In 1999 NEXT launched its own online shopping platform, enabling customers to purchase its products where ever they live. It continues to improve its customer service by introducing new initiatives such as next day delivery.

NEXT mainly uses its own factories for production. However, it does purchase some clothes such as ladies dresses from Turkish factories.

NEXT already uses a range of promotional methods to encourage customers to buy its products. It is now considering the following two methods as a way of increasing customer awareness of its brand and products:

  • Option 1: targeted advertising online

  • Option 2: e-newsletters.

Justify which one of these two options NEXT should choose.

12
9 marks

Case Study

Artify Studio was set up in 2015 by Tay Hui Jae in the busy Kampong Glam area of Singapore. Artify Studio’s aim is to have ‘a communal art space where people can come together and paint, where people would be given as much creative freedom as they would have if they were in their own spaces.’

Artify Studio provides many services including its popular Liberty Art Jam where customers can paint as well as listen to music. The studio offers a Corporate Art Jam and Regular Kids Classes. Customers can purchase art materials after attending the studio.

Artify Studio is a profit-making organisation with a social element. It employs seven part-time people, all of whom are art enthusiasts.

Artify Studio has decided to use public relations to improve its image. It is considering two options:

  • Option 1: sponsoring a local art show in the Kampong Glam area

  • Option 2: having a stand at a national art exhibition in Singapore’s capital.

Justify which one of these two options Artify Studio should choose.

13
9 marks

Case Study

Huawei is a leading global provider of information and communications technology, infrastructure and smart devices. In March 2011, over one million of its C8500 smartphones were sold in China following its launch.

It now manufactures a wide variety of different products including Huawei smartphones, watches and tablets. In recent years Huawei has won many awards. In 2018 it was named the 68th most valuable brand by Best Global Brands. In 2019 it introduced a smartphone which had new photographic technology.

Huawei operates in a very competitive market. For any new smartphone it has to decide which pricing strategy it will use. For its next smartphone Huawei is considering two options:

  • Option 1: competition pricing

  • Option 2: promotional pricing

Justify which one of these two options Huawei should use when launching its new smartphone.

14
9 marks

Case Study

The Alternative Drum School (TADS) was set up in the wealthy area of Cricklade, England in 2008 by Ollie Tanner who had a passion for and enjoyed drumming. Ollie invested all of his savings into the drumming school. He saw the potential of being located away from other drumming schools.

Ollie promotes his business by writing columns in local papers, performing at local music festivals and by word of mouth recommendations. He has invested heavily in computer technology to allow students to produce the music they enjoy playing. Ollie finds it difficult to maintain a good work-life balance.

Ollie currently works 60 hours a week in a business that does not have reliable profits.

TADS is looking to increase its revenue.

TADS is considering the following two options:

  • Option 1: teach other musical instruments

  • Option 2: increase the number of online drum lessons.

Justify which one of these two options TADS should choose.

15
9 marks

Case Study

In 1985 Emirates started its airline business with just two aircraft. It is now a well‑known airline with over 265 aircraft flying to over 180 destinations around the world.

Emirates has won many awards for service and reliability. Until 2016 passengers rated Emirates the leading airline to travel with. However, in 2017 its rating dropped from first to fourth.

Emirates wants to improve its market share to regain its number one position with passengers. It needs to improve its promotional activities. It is considering two options:

  • Option 1: increase the number of special offers

  • Option 2: increase advertising via social media.

Justify which one of these two options Emirates should use.