Unit 3 Exam questions by Topic. This is ONLY a guide it may NOT cover everything so this should be used with your learning objectives and notes

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1 This is ONLY a guide it may NOT cover everything so this should be used with your learning objectives and notes Marketing: the meaning of the term marketing What is meant by the term marketing? (2) Market research: how to collect and Identify one method of collecting quantitative market research data. (1) interpret Explain how quantitative data might help a business to improve its marketing mix. (3) quantitative and qualitative research Identify one method of collecting qualitative market research. (1) data to help decide Explain how qualitative market research might allow Apple to improve its marketing mix. (3) on issues such as the appropriate State two methods of collecting quantitative market research data that Nintendo could use. (2) marketing mix Identify one method of collecting market research. (1) Explain one benefit to a business of collecting market research data. (3) Which one of the following is an example of quantitative market research? (1) Product trial and repeat purchase: Which one of the following is most likely to lead to a repeat purchase of a Shakeaway milkshake? (1) the concept of breaking down sales into product trial and repeat purchase and how to maximise repeat purchase through customer loyalty Product life cycle: the four phases of the life cycle, Explain one method Shakeaway could use to encourage customers to give the Millionaire s Milkshake a product trial. (3) Outline one way that Tyrells could increase repeat purchases of its crisps. (2) KFC s decision to launch its new breakfast menu in 18 of its outlets is an example of. (1) The product life cycle in Figure 1 shows sales of a new chocolate bar over a period of time. Look at Figure 1. What is phase 3 called? (1)

2 Identify two possible extension strategies a chocolate manufacturer might use. (2) Explain how one of the strategies you identified in (b)(i) would extend the product life cycle of the new chocolate bar. (3 marks) extension strategies, cash flow and the life cycle, and product portfolio analysis through the Boston Matrix Branding & differentiation: the importance of brands as an aid to product trial and repeat purchase and the need to differentiate a product/service from others, given the level of competition Building a successful marketing mix: the importance of managing a brand through the key Identify one element of the Boston Matrix. (1) Describe how the use of the Boston Matrix can benefit a business. (3) In which stage of the product lifecycle the Nintendo DS was at in March (1) At which stage of the product lifecycle were Harry Potter themed lego sets most likely to be at the end of 2012? (1) Describe how Tyrells cash flow is likely to change as Tyrells Furrows move from the introduction to the maturity stage of the product life cycle. (4) On the Boston Matrix grid below identify the element of the Boston Matrix in which KFC s breakfast products were positioned when launched. (1) Explain one benefit to KFC of managing its product portfolio effectively. (3) Identify two methods Amazon might use to differentiate its service from its rivals. (2) Describe why developing a well-known brand is important to the success of a business such as Amazon. (3 marks) Explain one reason why a strong brand might be important to Apple. (3) Describe how Easyjet could differentiate its service from that provided by other airlines. (3) Explain one advantage of branding for a business. (3) Explain one reason why branding is important to Tyrells. (3 marks) Identify two methods that KFC might use to differentiate itself from rival fast food chains. (2) Amazon is an online retailer. Which one of the following elements of the marketing mix does this represent? (1) Identify two elements of the marketing mix which Apple might change to improve its competitiveness. (2)

3 Increasing advertising and designing new features, such as allowing users to play games in 3D, are two methods Nintendo can use to increase sales of its consoles. Which method do you think is likely to be more effective in improving sales of Nintendo consoles and why? (6) variables that make up the mix: Product, Price, Promotion and Place Meeting Customer Needs: Using your knowledge of business, assess the importance of giving celebrities free bags in building a successful marketing mix. (10) Explain one benefit to Dell of selling computers direct to customers through its website. (3) Discuss the benefits to Primark of selling clothes at very low prices. (6) Design and research development: Product design is most likely to help a business: select one answer. (1) design as a key approach to product differentiation, be Marks and Spencer carries out research and development. One product which resulted from this research was a machine washable wool suit which did not need to be dry cleaned. Explain one benefit of research and development such as this to Marks and Spencer. (3) able to appreciate the design mix and Identify two benefits to a business resulting from high quality design of its products. (2) show the need for scientific research to provide the basis for development Improving the design mix is most likely to lead to: (select one answer). (1) Managing stock and quality: to interpret bar gate stock graphs to see how stock control should work in theory and understand the Identify two reasons why a business such as McDonald s might decide to hold buffer stocks. (2) Explain one way in which a Just In Time (JIT) method of stock control might benefit a business such as McDonald s. (3) Improving the quality of a product and improving productivity are two ways in which a business like McDonald s might become more competitive. Which of these two methods do you think would be most effective in improving the competitiveness of a business such as McDonald s and why? (6) June 2011

4 Explain one advantage to The Range of de-stocking its summer products. (3) What is meant by the term stock? (1) Using the diagram, identify the number of Go-Go Hamsters the Saltash Toy Box holds as a buffer stock. (1) need for the use of Just In Time (JIT) stock control the advantages and drawbacks of different stock control methods quality control versus a culture of quality assurance Cost-effective operations and competitiveness: keeping productivity up and costs down to ensure low costs and allow for competitive prices Use the diagram to calculate how many weeks it will take for stock of Go-Go Hamsters to arrive at the Saltash Toy Box after re-ordering. (2) Describe one possible disadvantage to the Saltash Toy Box of holding a large stock of toys. (3) As a result of the decision to close its store, the Saltash Toy Box changed the way it held stock. It now uses a Just In Time (JIT) method of stock control. State one advantage and one disadvantage to the Saltash Toy Box of adopting a Just in Time (JIT) method of stock control. For each, explain one likely effect on the business. (8) Before the launch of the Nintendo 3DS, Nintendo built up large stocks of the console to meet expected demand. Explain one drawback to Nintendo of holding large stocks of 3DS consoles. (3) Explain one benefit to lego of selling a quality product. (3) What is meant by the term just in time (JIT)? (2) Explain one advantage and one disadvantage of holding higher levels of buffer stock. For each explain the likely impact on the business. (8) Explain one drawback to Portakabin Ltd of using a Just in Time method of stock control. (3) Explain one possible benefit of improved productivity to the Saltash Toy Box. (3) Closing down its retail store and focusing on selling through catalogues and its website has reduced costs at the Saltash Toy Box by 25%. Assess the effect of the change of focus on the competitiveness of the Saltash Toy Box. (8) Explain one benefit to Easyjet of improved productivity. (3) Explain one reason improving productivity would be important to Shakeaway. (3) The Lego Group wants to improve its competitiveness and is considering two options: -Option 1: Link more of its sets to newly released movies -Option 2: Increase its advertising

5 Which of these two options do you think would be more effective in helping The Lego Group to be more competitive and why? (6) Explain one reason why it might be difficult for KFC to increase its sales in the breakfast market. (3) Improving the quality of a product and reducing costs are two ways in which a business like Portakabin Ltd might become more competitive. Which of these two methods do you thing would be more effective in allowing Portakabin Effective customer service: providing customers with the service level they want, when they want it, and to see the link with repeat purchase levels the disadvantages of poor customer service Meeting consumer protection laws: a brief introduction to the purpose of Trade Descriptions and Sale of Goods legislation and the effects of this legislation on business Effective Financial Management: Ltd to improve its competitiveness. Justify your answer. (6) Which of the following is the most likely result of good customer service at Marks and Spencer? (1) Budget airlines of often criticised for delays and cancellations. Explain one disadvantage to Easyjet of providing poor customer service. (3) Explain one disadvantage of poor customer service to Dell. (3) Outline one consumer protection law that Marks and Spencer must follow. (2)

6 How to improve cash flow: Which of the following is a cash inflow? (1) key aspects of Identify two reasons why The Range might want to establish more favourable credit terms with suppliers. (2) financial management such as how to establish more favourable What is meant by the term cash flow? (2) Identify two outflows for a business such as Shifyjelly. (2) Outline one method Shifyjelly could use to improve its cash flow. (2) credit terms with customers and Discuss the extent to which the sale of Kodak s assets is the most suitable method to improve their cash flow. (6) suppliers and the Using your knowledge of business, assess the extent to which improving cash flow will be important to Kodak. (10) practice of destocking Which of the following will improve Portakabin Ltd s cash flow? (1) how to analyse the difference between increasing cash inflows and reducing cash outflows How to improve profit: cutting costs and increasing revenues, and the impact of price changes on profit Outline one method a business might use to increase its profit. (3) In 2009 Marks and Spencer faced falling sales. It wanted to maintain its profits and looked at either cutting prices or increasing advertising. Which of these two methods do you think would be more effective in allowing Marks and Spencer to maintain its profits and why? (6) What is meant by the term profit? (2) Identify one method the Saltash Toy Box could use to increase profit. (1) Which of the following is most likely to increase Easyjet s profits? (1) Calculate Shifyjelly s profit / loss if it sells 3,000 apps. Show your workings and the formula used. (3) Which one of the following is the most likely reason for the increase in Ryanair s profits? (1)

7 In 2011, Dell increased the price of their range of computers and laptops. Assess the impact of this price rise on Dell s ability to improve its profits. (8) What is meant by the term revenue? (2 marks) Outline one method Kodak could use to decrease the size of its losses. (3) What is meant by the term profit? Break-even charts and break-even analysis: A business breaks even at the level of output where: (1) how to draw and interpret breakeven charts; calculate the breakeven point and margin of safety What is meant by the term break-even point? (2) Using the break even chart, state the number of apps Shiftjelly must sell in order to break even. (1) Shiftyjelly is expecting to sell 3,000 apps. Calculate the margin of safety for this product. Show your workings. (2) Assess the extent to which break even analysis is a valuable tool in allowing Shiftyjelly to plan a successful launch of its new weather app. (8) how changes to price and costs Ecovation s monthly fixed costs are 930, variable costs are 1.80 per birdfeeder. Calculate the break-even point when affect the break- each birdfeeder is priced at 8. Show your workings and the formula used. (3) even point the value to a business of using break-even analysis Financing growth: how to finance a business from both internal sources (profit, asset sales) and external sources (share capital, debt), including stock market flotation Calculate the profit or loss that Ecovation will make if it sells its entire stock of 400 birdfeeders in one month. Show your workings and the formula used. (3) Business finance can come from either internal or external sources. Which of the following is an internal source of finance? (1) Give one advantage of using retained profit as a way of financing business growth. (1) A business needs to raise to expand. It is considering borrowing the money from its bank. Explain one disadvantage to the business of borrowing money from a bank. (3) Identify one internal source of finance which The Range might use to expand its business. (1) Explain one benefit to The Range of using internal sources of finance for growth. (3)

8 Discuss the benefits to Mulberry of using internal sources of finance to fund its expansion. (6) State two external sources of finance that Ryanair could use to fund their growth. (2) What is meant by the term share capital? (2) Identify one internal source of finance a business could use to fund its growth. (1) Explain one drawback to Ecovation of using debt as a way of financing its growth. (3) Effective People Management: Organisational structure: the importance of divisional structure, levels of hierarchy, chains of command, and centralised versus decentralised systems Motivation theory: the significance of motivation in the workplace, with specific focus on Maslow s Hierarchy of Needs and its potential in organisations Discuss two benefits to Affinity of improved motivation of its employees. (6) Explain the benefit to a business of improved worker motivation. (3) Discuss the importance of increasing wages as a method of motivating workers employed in low-skilled industries. (6) Other than increasing pay, identify 3 ways in which Sainsbury s could increase the motivation of checkout staff. (3) Describe how an increase in pay might motivate Sainsbury s checkout staff. (3)

9 the idea that Shakeaway states that it only employs energetic and fun people in its stores. Each employee is called a Shakette. motivation comes Describe how Shakeaway could motivate its Shakettes. (3) from within In your opinion will freelance sales teams be more motivated than sales teams employed by Ecovation? Justify your answer. (8) Communication: the impact of insufficient or excessive communication on efficiency, the impact on staff and their motivation and the barriers to effective communication Remuneration: the impact on staff of various payment strategies, including time, piece rate, commission; fulltime salary versus freelance or temporary work; fringe benefits the impact on business of different payment systems Using your knowledge of business, assess the importance of good communication to a company such as Affinity. (10 marks) Which of the following is most likely to be a barrier to effective communication between workers? (1) Identify one benefit to a business of improved communication. (1) Explain one problem a business might face as a result of excessive communication. (3) What is meant by the term salary? (2) Identify two other methods of remuneration, apart from salary and payment by the hour, that Affinity might use to reward employees. (2) Other than wages, identify two methods of remunerating workers. (2) State one advantage and one disadvantage to Shifyjelly of paying its app developers a salary, rather than any other form of remuneration. For each advantage / disadvantage explain the effect on the business. (8) Piece rates are paid according to how many. (1) What is meant by the term salary? Identify two examples of fringe benefits. (2) Explain one possible effect on a business of providing fringe benefits for workers. (3)

10 The Wider World Affecting Business Ethics in business: the meaning of the term ethics in business and the complexity of moral issues affecting organisations What is meant by the term ethics in business? (2) Explain one benefit to the Co-op of being an ethical business. (3) Give two disadvantages to the Co-op of being an ethical business. For each disadvantage explain the effect on the business. (8) possible trade-off between ethics and profit the importance of the potential effects of pressure group activity Environmental issues: how businesses affect the environment the importance of short term environmental effects (impact on traffic congestion; air, noise and water pollution; recycling) and longterm environmental What is meant by the term pressure group? (2) Identify one method a pressure group, such as Tescopoly, could use to persuade Tesco to act more responsibly. (1) Explain one way in which a business, such as Tesco, might be affected by a successful pressure group campaign. (3) Identify two possible ways in which a business might become more ethical. (2) Outline one benefit to a business if it improves its ethical behaviour. (2) Explain one drawback a business could face as a result of pressure group activity. (3) Describe the possible effects a pressure group such as Plane Stupid could have on Ryanair. (4) What is meant by the term ethics in business? (2) Using your knowledge of business assess the importance of a strict ethical policy in helping Primark to increase its profits. (10) Tesco has taken steps to reduce the effect of its operations on the environment. Assess two possible benefits to Tesco from doing this. (8) Which of the following is an environmental problem arising from the activities of a business? (1) Explain one impact that Ryanair s expansion plans might have on the environment. (3) Identify two reasons why Portakabin Limited might want to focus on recycling? (2) State one advantage and one disadvantage to Ecovation of trying to minimise its impact on the environment. (2) For each advantage / disadvantage explain the effect on the business. (6)

11 effects (global warming and resource depletion) Economic issues affecting international trade: the extremes of income distribution internationally the effect of import protection and export subsidy on businesses Some of the products the Co-op buys from countries outside the EU are subject to import protection, such as tariffs. Describe one effect import protection might have on the Co-op. (3) What is meant by the term export subsidy? (2) Describe the impact of import protection on computer manufacturers based in Thailand. (4) Identify two methods of import protection that could be used by the EU. (2) The impact of government and the EU: the impact of regulation and taxation and the benefits and drawbacks of minimum wage, maternity/paternity rights and health and safety regulations on businesses What is meant by the term minimum wage? (2) Using your knowledge of business, assess whether it was right for the government to increase the national minimum wage to 5.80 per hour. (10) Which of the following best describes the term the minimum wage. (1) Sainsbury s employs large numbers of women in its stores. All female workers have maternity rights which Sainsbury s have to provide by law. Explain one effect the provision of maternity rights might have on Sainsbury s. (3) Outline one impact that stricter EU regulations on toy safety could have on The Lego Group. (3)