Non-price competition & marketing

Which of the following is a method of sales promotion?

Which of the following is an example of an ethical objective?

In the product life cycle shown, what is the name of stage 2?

Which of the following is likely to occur if a business does not follow employment laws?

Which of the following is a feature of price penetration?

Which of the following is included in the average rate of return (ARR) formula?

Identify two ways a business might solve its cash flow problems.

Explain one reason why a business would choose a newspaper as a method of advertisement.

Identify one extension strategy a business can use and explain how it can increase sales.

Explain one advantage of using retained profits as a source of business finance.

Use the break-even chart below to calculate the margin of safety if the actual number of units sold was 60.

Show all workings.

State and explain two factors that influence pricing decisions for a business.

Item A: Glam Camping Company

Explain one factor influencing the location of a business.

Interest rates in the UK have increased significantly in the past.

Analyse one impact that a change in interest rates could have on GCC.

The questionnaire produced by GCC will contain many questions asking for customers’ opinions.

Recommend whether GCC should use a questionnaire to find out what customers want.

Give reasons for your recommendation.

Item B: Glam Camping Company

guests in countryside locations. The summer season is June, July and August. These are the most popular months for people to get married.

GCC is considering running a sales promotion to promote this new part of the business. GCC plans to offer a 25% price discount for all bookings made outside of the summer season. The discount would be available through a coupon advertised on GCC’s social media. An alternative option is to run a competition where three couples would win free use of the tents as accommodation for their wedding guests.

Figure 1 Number of GCC tents hired from May to August 2023

Explain one reason why cash is important to a business.

Using the information in Item B and Figure 1, calculate the average number of tents that were hired each month in the summer season.

Show your workings.

GCC will receive £4000 from the sale of an old tent in September.

Using the information in Table 1, calculate the net cash flow for GCC for September taking into account the sale of the tent.

Show your workings.

GCC will offer the discount for 2 weeks after launching the sales promotion. Bookings made after this will not receive the discount.

Recommend whether GCC should go ahead with the sales promotion.

Which of the following is a method of secondary market research?

Which of the following describes dividing potential customers into groups based on different characteristics?

Which source of finance could be given to a business to create jobs in areas of high unemployment?

Which of the following is the correct formula to calculate the margin of safety from a break-even chart?

Which of the following types of business ownership has shareholders, but cannot advertise its shares to the general public?

Which of the following is an advantage of trade credit for a business?

Identify two factors a business will consider before deciding on the promotional mix for its product or service.

Shareholders have a key objective of profit.

Explain one reason why this might cause conflict with a different stakeholder group.

Explain one problem a business might face when producing an effective business plan.

Explain one benefit to a business of being more environmentally friendly.

Table 1 Extract from an income statement

Using Table 1, calculate the gross profit margin.

Show all workings.

State and explain two pricing methods that a business can use.

Item A: One Day Photography

Describe what is meant by the term ‘entrepreneur’.

Debbie previously worked full time from 10am to 6pm in a supermarket.

Analyse one benefit to Debbie of operating ODP as a sole trader.

Debbie is spending many hours a week updating the ODP social media account and responding to messages.

Recommend whether Debbie should continue to use social media to promote ODP.

Give reasons for your answer.

Item B: One Day Photography

Identify one current asset of a business.

Explain why a unique selling point (USP) is important to a business.

Debbie charges £180 for a family photography session. The cost to ODP for each session is £60.

Using the information in Table 2, calculate how many sessions Debbie would need each week to equal the profit from two weddings.

Show all workings.

Debbie is considering a bank loan to open a studio and upgrade her camera equipment, but she would have to use her home as security. This means that if she struggled to repay the loan the bank could force her to sell the house.

Recommend whether Debbie should use a bank loan.

Give reasons for your answer.

Item C: Emilios

Explain one way a business might measure its success, other than profit.

Explain one reason why Cornets Ltd decided to sell its ice cream cones through a wholesaler.

Emilios gives away free samples of its ‘flavour of the day’ to boost sales.

Analyse one drawback of Emilios offering free samples.

Item D: Emilios

Figure 1 Food preferences of the UK population – 2023 forecast

Emilios is introducing a range of vegan ice cream. To produce the new ice cream, it will need to purchase more equipment. The equipment will cost £12 000 and has an estimated life of eight years. Emilios predicts that using the equipment will lead to an additional profit of £28 800 over its lifetime.

Emilios currently pays a cleaning company a fixed amount to clean the ice cream shop every evening after closing time. The ice cream shop is quiet in the mornings and sometimes Emilios’ staff do not have much to do.

A low-cost supermarket chain has recently opened in a nearby town. The supermarket is known for its cheap ‘value’ range of foods. The supermarket sells all the ingredients Emilios uses to make its ice cream. Emilios has calculated that the cost of buying its ice cream ingredients from the wholesaler has increased by 25% over the last two years.

The UK population is forecasted to be 68.26m in 2023.

Using Figure 1, calculate the predicted number of vegans in the UK in 2023.

Show all workings.

Give your answer to two decimal places.

Using Item D, calculate the average rate of return for the new equipment if Emilios purchases it.

State the formula for the average rate of return and show your workings.

Emilios is looking to maintain standards at the ice cream shop while reducing costs.

Analyse one action Emilios could take to reduce its costs.

Item E: Emilios

Emilios wants to increase sales revenue during the winter months. It is considering two options to achieve this. Both options will cost the same to set up. The options are:

• develop a new product range of ice cream desserts to sell to the restaurant chain

• expand by opening an ice cream shop in the town centre.

Analyse the effect of each of these two options on Emilios.

Evaluate which of these two options will have the biggest impact on sales revenue for Emilios.

Free gifts are an example of which type of marketing activity?

An increase in interest rates would be which type of change?

Which term describes the sales of one business as a proportion of the total sales of the market?

Which section of a statement of financial position would include long-term loans?

Which of these is an example of a business in the secondary sector?

Which of the following is a definition of average rate of return?

Identify two channels of distribution used by businesses.

Explain one factor that would influence the selection of the promotional mix.

Explain one reason why it is important for a business to identify customer needs.

All businesses must follow the law. Explain one negative impact for a business if it fails to follow the law.

Table 1 Extract from a statement of financial position

Since the data in Table 1 was produced, the value of inventories has decreased by 20%. The value of all other assets has stayed the same.

Calculate the new total assets figure.

State and explain two categories of the Boston Matrix.

Identify two stakeholders of a business.

Using Item A, explain one disadvantage to Ellie of using money borrowed from her parents to set up Swiftly Services.

Using Table 2, calculate the closing balance for May on the cash flow forecast.

State the formula for the closing balance and show your workings.

Ellie is considering offering gardening services in June, July and August.

Recommend whether offering gardening services will improve the long-term future cash flow at Swiftly Services. Give reasons for your recommendation.

Item B: Swiftly Services

Ellie estimates that her weekly revenue from the gardening services will be £1320. Cost of goods sold, eg plants, will be £528. Other expenses are £396.

Calculate the gross profit margin for the gardening services.

Ellie is planning to segment her market and focus on families with children.

Analyse one benefit for Swiftly Services of using segmentation in a competitive market.

Ellie is considering using professionally printed leaflets to promote the new gardening services. It will cost 15p to print a colour leaflet. The minimum order is 2000 leaflets.

Recommend whether Ellie should use leaflets to promote the new gardening services. Give reasons for your recommendation.

Which element of the marketing mix involves selecting a channel of distribution?

Which source of finance is available to a limited company but not a sole trader?

Which pricing method involves calculating the costs of production and adding a percentage to make a profit?

What is the name for the category of products in the Boston Matrix labelled X below?

Which method of growth involves employing another business to produce products or provide services?

Which of the following would be on a statement of financial position?

Explain what is meant by the term ‘economies of scale’.

Identify two ways business activity can have an impact on the environment.

Way 1

Way 2

Explain one way a business can minimise risk.

Explain one way that promoting a good or service can increase sales.

Use the break-even chart below to calculate the margin of safety in units if the actual number of units sold was 700.

Show all workings.

State and explain two extension strategies that can extend the life cycle of a product.

Item C: Devine Jewellery (DJ) plc

Explain one way that shareholders can have an impact on a business.

Using Item C, explain one way that Devine Jewellery is able to compete successfully internationally.

Use the information in Item C to calculate the percentage decrease in the selling price of a bracelet if it is made from silver instead of gold.

Show all workings.

Analyse one potential impact of the new jewellery collection on Devine Jewellery.

Item D: Devine Jewellery (DJ) plc

Explain one way a business can use digital technology to communicate with customers.

Explain one way that Devine Jewellery will be affected if the exchange rate of the pound falls against other currencies.

Analyse one benefit to Devine Jewellery of using sponsorship of the fashion show to promote its jewellery.

Item E: Devine Jewellery (DJ) plc

Dev wants to improve the financial performance of Devine Jewellery. Dev is considering two options to achieve this. Recommend whether Devine Jewellery should:

• use the hotel chain as a channel of distribution to sell its jewellery

• remove the current credit scheme so that customers can no longer pay for jewellery in monthly instalments.

Analyse the effect of each of these two options on Devine Jewellery.

Evaluate which of these two options will have the biggest impact on the future success of Devine Jewellery.