2.2 Making Marketing Decisions Practice Questions

Question 1

5 marks

(a)

Figure 1 shows the product life cycle of a product.

What is Phase 3 called?

Select one answer.

A Decline
B Growth
C Introduction
D Maturity

/ 1

(b)

Which two of the following are elements of the design mix?

Select two answers.

A Aesthetics
B Function
C Packaging
D Price
E Quality

/ 2

(c)

Table 1 shows the number of units of a product sold by a business.

Year	Units sold
Year 1	48,000
Year 4	36,000

Using the information in Table 1, calculate the percentage change in the number of units sold between Year 1 and Year 4. You are advised to show your workings.

Answer ......................... %

/ 2

Question 2

5 marks

Extract A

Zafran Foods makes cooking sauces and spice pastes. It was founded in 2011 by Ravi Marchetti and its products are sold in supermarkets in nine countries. The business employs 540 people at two factories.

In 2023 Zafran Foods launched a new range of sauces called Hawker Lane. Zafran Foods sells each jar for £3.20. Before the launch, Ravi paid a design agency £90,000 to redesign the jar and the label. The new jar is taller than those used by rival sauces and the label uses bright colours and a hand-drawn picture of the dish the sauce is used for. Supermarket buyers told Ravi that shoppers spend only a few seconds choosing a sauce from a shelf holding more than 40 similar products.

Sales of the Hawker Lane range fell in Quarter 3 when a rival launched a competing range. Ravi is now reviewing the marketing of the range.

Table 1: Jars of Hawker Lane sauce sold by Zafran Foods

Quarter	Jars sold
Quarter 1	210,000
Quarter 2	340,000
Quarter 3	295,000
Quarter 4	455,000

(a)

Using the information in Table 1, identify the quarter in which Zafran Foods had the largest increase in jars sold compared with the previous quarter.

/ 1

(b)

Using the information in Extract A and Table 1, calculate the sales revenue from the jars of Hawker Lane sauce sold in Quarter 3. You are advised to show your workings.

Answer £ .........................

/ 2

(c)

Outline one benefit to Zafran Foods of improving the aesthetics of its jars and labels.

/ 2

Question 3

5 marks

(a)

Which one of the following is a method of promotion?

Select one answer.

A Premium pricing
B Flow production
C Market mapping
D Sponsorship

/ 1

(b)

Which two of the following are ways a business can use technology to promote a product?

Select two answers.

A Bulk buying from suppliers
B E-newsletters
C Just in time stock control
D Targeted advertising online
E Quality control checks

/ 2

(c)

Table 1 shows how a business spent its promotional budget in one year.

Method of promotion	Spending (£)
Social media advertising	45,000
Television advertising	120,000
Sponsorship	60,000
Product trials	25,000

Using the information in Table 1, calculate the percentage of the total promotional budget that was spent on social media advertising. You are advised to show your workings.

Answer ......................... %

/ 2

Question 4

3 marks

(a)

Figure 1 shows the product life cycle. The phases are numbered 1 to 4.

What is Phase 2 called?

Select one answer.

A Decline
B Growth
C Introduction
D Maturity

/ 1

(b)

Which two of the following are methods of promotion?

Select two answers.

A Product trials
B Competitor pricing
C Market mapping
D Sponsorship
E Just in time (JIT)

/ 2

Question 5

5 marks

Extract A: Brightline Audio plc

Brightline Audio plc designs and sells wireless headphones. The business was started in Manchester in 2012 and now sells in 14 countries, employing 600 people. Its best known product is the Brightline X3, launched in 2019 at a price of £129. The X3 was the first set of headphones in its market to offer 40 hours of battery life.

Sales of the X3 grew quickly for three years. Since then, several rival manufacturers have launched headphones with a similar battery life at prices of around £70. Brightline has not changed the price of the X3.

Brightline spends £4 million a year on promotion, most of it on targeted online advertising aimed at 16–30 year olds. The headphones are also sold through large electrical retailers, who take a share of the selling price.

The marketing director has been asked to review the X3 before Brightline launches a new model.

Table 1: Unit sales of the Brightline X3

Year	Unit sales
2021	420,000
2022	560,000
2023	480,000
2024	360,000

(a)

Using the information in Table 1, identify the year in which unit sales of the Brightline X3 were highest.

/ 1

(b)

Using the information in Table 1, calculate the percentage change in unit sales of the Brightline X3 between 2023 and 2024.

You are advised to show your workings.

/ 2

(c)

Outline one influence on the pricing strategy Brightline could use for the X3.

/ 2

Question 6

3 marks

(a)

Which one of the following is an influence on the pricing strategy a business chooses?

Select one answer.

A Competitive pricing
B Premium pricing
C Market segments
D Volume strategy

/ 1

(b)

Table 1 shows the annual sales revenue of the four businesses that sell in a market.

Table 1

Business	Annual sales revenue (£m)
A	1.2
B	3.6
C	2.4
D	0.8

Using the information in Table 1, calculate the market share of Business A.

You are advised to show your workings.

/ 2

Question 7

3 marks

Table 1 shows the price of a product sold by a business before and after a price increase.

Table 1

	Price per unit
Price before the increase	£8.00
Price after the increase	£9.60

(a)

Which one of the following is a pricing strategy?

Select one answer.

A Branding
B Competitor pricing
C Product trials
D Sponsorship

/ 1

(b)

Using the information in Table 1, calculate the percentage change in the price of the product.

You are advised to show your workings.

/ 2

Question 8

3 marks

Brightwave plc

Brightwave plc makes insulated reusable drinks bottles. It was founded in 2012 by Rosa Hartley and now sells in 14 countries, employing 420 people. Its most popular bottle sells for £22 and is sold through sports shops, supermarkets and Brightwave's own website.

Brightwave promotes its bottles in three main ways. It sponsors the Coastal Run Series, a set of six road races held each summer. It pays for advertising on social media aimed at 18–30 year olds. It also sends a monthly e-newsletter to the 400,000 customers who have bought a bottle from its website, telling them about new colours and special offers.

Rosa is now planning the launch of a smaller children's bottle, priced at £14, and is deciding how this new product should be promoted.

(a)

State one method of promotion used by Brightwave plc.

/ 1

(b)

Outline one benefit to Brightwave plc of sending a monthly e-newsletter to its customers.

/ 2

Question 0

10 marks

(a)

Which one of the following is an influence on the price a business charges for a product?

Select one answer.

A Premium pricing
B Competitor pricing
C Volume strategy
D The stage of the product life cycle

/ 1

(b)

Explain one drawback to a business of using a premium pricing strategy.

/ 3

(c)

Discuss the impact on a business of lowering the price of one of its products.

/ 6

Question 0

5 marks

(a)

Table 1 shows information about a product sold by a business during a special offer.


Normal selling price per unit	£24
Discount given during the special offer	25%
Units sold during the special offer	9,000

Using the information in Table 1, calculate the sales revenue received from the units sold during the special offer. You are advised to show your workings.

Answer £ .........................

/ 2

(b)

Explain one way a business could use technology to promote a product.

/ 3

Question 0

10 marks

Extract A

Kestrel Audio plc designs headphones and portable speakers. It was founded in 2009 by Dev Ramsay and now employs 1,400 people. Its products are on sale in 23 countries.

Until 2022, Kestrel sold all of its products through electrical retailers. These retailers buy the headphones from Kestrel at £65 per pair, display them in their stores, let customers listen to them, and sell them at around £109 per pair.

In 2022 Kestrel launched its own website. Customers in every country Kestrel supplies can order the same headphones directly for £99 per pair, with delivery in four days. Kestrel now rents two warehouses to hold its own stock and employs 60 people to deal with returns and customer questions.

Sales through the website have grown quickly. However, several electrical retailers have told Dev that they will give Kestrel products less shelf space because the website sells the headphones for £10 less than they do. Dev is reviewing how Kestrel should distribute its products in future.

Table 1: Kestrel Audio plc sales for the year ended 2024

Distribution channel	Pairs of headphones sold	Price received by Kestrel per pair (£)
Electrical retailers	420,000	65
Kestrel website	180,000	99

(a)

Outline one benefit to Kestrel Audio plc of selling its headphones through electrical retailers.

/ 2

(b)

Using the information in Table 1, calculate the sales revenue Kestrel Audio plc received from the headphones sold through its own website. You are advised to show your workings.

Answer £ .........................

/ 2

(c)

Analyse the impact on Kestrel Audio plc of selling its headphones directly to consumers through its own website.

/ 6

Question 0

9 marks

Extract A

Harvest Box delivers weekly recipe boxes to customers' homes. Each box contains the ingredients and recipe cards for three evening meals and costs £38. The business was founded in 2015 by Lina Carver and now delivers in the United Kingdom, Ireland and the Netherlands, employing 480 people.

Four other businesses deliver recipe boxes in the same three markets and most of them charge a similar weekly price. Harvest Box tries to stand out from these rivals. Every month its recipes are designed by a guest chef, its packaging is made entirely from recycled card that customers can recycle again, and customers can choose any delivery day of the week and pause their deliveries for up to eight weeks.

Harvest Box spends £1.6 million a year advertising on social media. Customers can cancel at any time and about one in five subscribers leaves within six months of joining. Lina is reviewing how Harvest Box can keep its boxes different from those of its rivals.

Table 1: Number of Harvest Box subscribers

Quarter	Subscribers
Quarter 1	36,400
Quarter 2	38,000
Quarter 3	41,200
Quarter 4	44,400

(a)

State one way in which Harvest Box differentiates its recipe boxes from those of its rivals.

/ 1

(b)

Using the information in Table 1, calculate the average number of subscribers per quarter. You are advised to show your workings.

Answer ......................... subscribers

/ 2

(c)

Analyse the importance to Harvest Box of differentiating its recipe boxes from those of its rivals.

/ 6

Question 0

5 marks

(a)

Which two of the following are extension strategies?

Select two answers.

A Reducing the price of the product
B Targeting a new market segment
C Withdrawing the product from sale
D Carrying out quality control checks
E Ordering stock using just in time

/ 2

(b)

Explain one benefit to a business of using an extension strategy on a product.

/ 3

Question 0

5 marks

(a)

Which two of the following are ways a business can use technology to promote its products?

Select two answers.

A Viral advertising via social media
B Targeted advertising online
C E-commerce
D Computer aided design (CAD)
E Digital stock control

/ 2

(b)

Explain one benefit to a business of using e-newsletters to promote its products.

/ 3

Question 0

9 marks

(a)

Explain one reason why a business may use product trials to promote a new product.

/ 3

(b)

Discuss the impact on a business of selling its products through its own e-commerce website.

/ 6

Question 0

8 marks

Extract A: Copperleaf plc

Copperleaf plc designs and sells cookware. It was founded in Sheffield in 2004 and now sells in 22 countries, employing 1,400 people.

Its best-selling product is the Copperleaf Pro frying pan, which sells for £68. The pan is made from recycled aluminium with a hard ceramic non-stick coating. It is sold in six colours and carries a 25-year guarantee. Rival manufacturers sell frying pans of a similar size for around £30, but most of these are guaranteed for only two years.

Copperleaf promotes the Pro pan using short cooking videos posted on social media by well-known chefs. In customer research carried out last year, 71% of buyers said the main reason they chose Copperleaf was that the pan "looks good enough to leave on the hob".

Copperleaf is now developing a new range of saucepans. The design team has been told that the range must be cheap enough to manufacture in the company's own factory, but must still be recognisable as a Copperleaf product. The finance director has warned that a thicker base and a longer guarantee would add £9 to the cost of making each saucepan.

(a)

Outline one benefit to Copperleaf of charging a higher price than its rivals for the Pro frying pan.

/ 2

(b)

Analyse the importance to Copperleaf of the design mix when developing its new range of saucepans.

/ 6

Question 0

9 marks

Extract A: Velora plc

Velora plc designs and sells activewear such as leggings and running tops. It was started in Leeds in 2015 and now sells in 30 countries. A pair of Velora leggings sells for £54 on the company's own website.

Velora also supplies department stores, which sell the same leggings for £60 and keep 40% of that price. The department stores decide which colours they stock and when to put the leggings into their sales.

Most of Velora's promotion takes place online. It pays fitness instructors to post training videos wearing Velora clothing, and it sends an e-newsletter to the 900,000 customers who have bought from its website.

The directors are reviewing how Velora sells its products.

Table 2: Velora's sales revenue by sales channel

Sales channel	2023 (£m)	2024 (£m)
Velora's own website	48.0	63.0
Department stores	26.0	21.0
Total	74.0	84.0

(a)

Using the information in Table 2, identify the sales channel whose revenue fell between 2023 and 2024.

/ 1

(b)

Using the information in Table 2, calculate the percentage of Velora's total sales revenue in 2024 that came from its own website.

You are advised to show your workings.

/ 2

(c)

Analyse the benefit to Velora of selling directly to customers through its own website.

/ 6

Question 0

5 marks

(a)

Which two of the following are elements of the design mix?

Select two answers.

A Cost
B Function
C Price
D Promotion
E Quality

/ 2

(b)

Explain one disadvantage to a business of launching a new product at a low price.

/ 3

Question 0

7 marks

Figure 1 shows a product life cycle.

Figure 1

(a)

Using Figure 1, what is Phase 3 called?

Select one answer.

A Decline
B Growth
C Introduction
D Maturity

/ 1

(b)

Discuss the impact on a business of using extension strategies to extend the product life cycle of one of its products.

/ 6

Question 0

10 marks

Kolva Foods plc

Kolva Foods plc makes frozen plant-based ready meals. It was founded in 2009 by Anya Gill and now employs 740 people at factories in England and the Netherlands. Its meals are sold in supermarkets in the UK, Ireland and Germany, and directly to consumers through Kolva's own website, where a box of six meals costs £27.

The frozen ready meal market is crowded. Supermarket own-brand plant-based meals sell for as little as £2.20 each, compared with £4.50 for a Kolva meal. Kolva differentiates its meals by using recipes developed with a well-known chef, packaging made entirely from recycled card, and printing the carbon footprint of each meal on the front of the pack.

In 2023 Kolva redesigned its packaging and increased its range from 12 recipes to 20. Anya must now decide whether to spend more on differentiating the range further.

Table 2: Kolva Foods plc sales revenue by distribution channel

Distribution channel	2022 (£m)	2023 (£m)
Supermarkets	31.4	34.2
Kolva's own website	4.8	7.2

(a)

Using the information in Table 2, calculate the percentage change in Kolva Foods plc's sales revenue from its own website between 2022 and 2023.

You are advised to show your workings.

/ 2

(b)

Outline one benefit to Kolva Foods plc of selling its meals through its own website.

/ 2

(c)

Analyse the importance to Kolva Foods plc of differentiating its meals from supermarket own-brand plant-based meals.

/ 6

Question 0

12 marks

Extract A

Vantor plc designs robot vacuum cleaners. It was founded in 2012 by Grace Khatri and now employs 600 people, selling its products in 18 countries through electrical retailers and its own website.

Vantor has spent £4 million developing a new model, the Vantor One. The Vantor One uses mapping technology that no rival model offers, runs at only 42 decibels so it is quieter than any competing machine, and comes with a five-year guarantee. It costs Vantor £85 to make each one.

The two best-selling rival models sell for £199 and £229. In the last two years, three new businesses have entered the market selling basic robot vacuum cleaners for under £120. Grace expects rivals to copy the mapping technology within about a year.

Grace must decide on a pricing strategy for the launch of the Vantor One.

Option 1: Launch the Vantor One at a high price of £349 and reduce the price after nine months.

Option 2: Launch the Vantor One at a low price of £179, below the price of both best-selling rival models.

(a)

State one feature of the Vantor One that could be used to differentiate it from rival products.

/ 1

(b)

Outline one way in which technology could influence the price Vantor plc charges for the Vantor One.

/ 2

(c)

Justify which one of these two options Vantor plc should choose.

/ 9

Question 0

15 marks

Extract A

Nordvik Outdoor plc makes waterproof jackets and fleeces for walkers and climbers. It was founded in 1998 and now employs 2,100 people, selling through 60 of its own stores in 15 countries and through its website.

A Nordvik waterproof jacket sells for £180 and a fleece for £65. Every jacket is guaranteed for five years and Nordvik will repair a damaged jacket free of charge. Several newer businesses now sell similar-looking waterproof jackets for around £90, and Nordvik's total sales fell by 6% last year.

Nordvik spends heavily on promotion. It sponsors a series of mountain running races watched by millions online, pays outdoor influencers to use its jackets on social media, and sends a monthly e-newsletter to 900,000 registered customers, each containing a link to its online shop.

The marketing director, Jonas Lindqvist, wants to increase spending on promotion again next year. Other directors disagree. One argues that customers only pay £180 because of the five-year guarantee and the quality of the material, and that money would be better spent improving the jackets. Another says that Nordvik should cut its prices or open shops in more countries.

(a)

Give one method of promotion.

/ 1

(b)

Outline one benefit to Nordvik Outdoor plc of selling its jackets through its website as well as through its own stores.

/ 2

(c)

Evaluate the importance of promotion to the success of Nordvik Outdoor plc's marketing mix.

You should use the information provided as well as your knowledge of business.

/ 12

Question 0

15 marks

Extract B: Fenwood Beverages plc

Fenwood Beverages plc makes soft drinks. It employs 2,100 people and sells in 18 countries. Its standard cans of lemonade and cola sell in supermarkets for £1.10 and are stocked in almost every large store.

Fenwood is launching a new range called Fenwood Botanics: sparkling drinks flavoured with herbs and real fruit, in recycled cans with a matt finish. Each can will sell for £2.40. Fenwood's research found that 64% of 25–40 year olds said they would pay more for a soft drink made with natural ingredients. The same research found that two rival premium drinks already on sale cost £2.00 a can.

It costs Fenwood 86p to make and deliver each can of Botanics, compared with 34p for a standard can.

Fenwood has set aside £6 million to launch Botanics. Most of this will be spent on targeted online advertising and on videos made by social media personalities. Supermarkets have agreed to stock Botanics in 400 of their largest stores for a six-month trial. If sales are poor during the trial, the supermarkets will remove the range.

The marketing director believes the price of £2.40 is the decision that will make or break the launch.

(a)

Give one element of the design mix.

/ 1

(b)

Outline one benefit to Fenwood of using videos made by social media personalities to promote Botanics.

/ 2

(c)

Evaluate the importance of price to the success of the Fenwood Botanics range.

You should use the information provided as well as your knowledge of business.

/ 12

Question 0

12 marks

Extract B: Marwood Coffee plc

Marwood Coffee plc runs 310 coffee shops in the UK and Ireland and sells bags of its own roasted beans through its website. A large latte costs £3.40, which is 30p more than the price charged by the two largest chains.

Marwood's cafés are in city centres and railway stations. The business has built its reputation on serving coffee roasted in its own factory in Bristol, and its dark green cups are easily recognised.

Marwood's share of the market has fallen from 14% to 11% in three years as rival chains have opened new branches and as supermarkets have begun selling cheaper takeaway coffee. The directors want to win market share back and have set aside £800,000 for promotion over the next year. Two options are being considered.

Option 1: Sponsor a national music festival tour, with Marwood coffee sold at every event.

Option 2: Spend the money on targeted online advertising, sending offers to people who use the Marwood app or who search for coffee shops nearby.

Table 3: Share of the UK coffee shop market

Business	Market share (%)
Beanhouse	28
Café Noto	19
Marwood Coffee	11
All other businesses	42

(a)

Using the information in Table 3, identify the business with the largest share of the UK coffee shop market.

/ 1

(b)

Outline one benefit to Marwood of having a strong brand.

/ 2

(c)

Marwood is considering two options for spending its £800,000 promotion budget.

Option 1: Sponsor a national music festival tour.

Option 2: Spend the money on targeted online advertising.

Justify which one of these two options Marwood should choose.

/ 9

Question 0

12 marks

Luminate Audio plc

Luminate Audio plc designs wireless headphones. It was founded in Manchester in 2011 by Devi Raman and now sells in 22 countries, employing 1,300 people. Its best-selling model, the Luminate Air, sells for £129, which is around £40 more than most rival headphones. The Luminate brand is built on long battery life and a five-year repair guarantee.

Most of Luminate's customers used to be 16–24 year olds. However, its share of sales to this segment has fallen from 18% to 11% in three years as cheaper rivals have launched. Market research carried out for Luminate found that only 29% of 16–24 year olds recognise the Luminate brand.

At present Luminate promotes its headphones through adverts in music magazines and through displays in the electrical retailers that stock them. Devi wants to increase Luminate's market share among 16–24 year olds. She is considering two options:

Option 1: Pay for targeted online advertising aimed at 16–24 year olds on social media.
Option 2: Sponsor a touring summer music festival for three years.

(a)

State one market segment that Luminate Audio plc targets.

/ 1

(b)

Outline one benefit to Luminate Audio plc of having a strong brand.

/ 2

(c)

Justify which one of these two options Luminate Audio plc should choose in order to increase its market share among 16–24 year olds.

/ 9

Paper 1: Investigating Small Business

Paper 2: Building a Business

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