A Level Business: Marketing and People — Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs — examination boards hold copyright in their own papers. Use these alongside the official past papers available free from your board.

Related: Marketing and People revision notes

This specification publishes a fixed mark tariff for each of its eight command words: define (2), calculate (4), construct (4), explain (4), analyse (6), discuss (8), assess (10) and evaluate (20). Every question below uses one of these eight words at its published tariff.

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Case study

Verdo Ltd manufactures premium reusable water bottles, sold through independent retailers at £28 each. Revenue last year was £4.2m in a market worth £60m, which grew 8% over the year. Staff turnover is noticeably higher than similar local employers. A rival has just launched a similar bottle at £19.

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Questions

1. Calculate Verdo’s market share, and the increase in the total market’s value over the year. [4]

2. Explain one benefit to Verdo of primary rather than secondary market research. [4]

3. Analyse two possible reasons for Verdo’s high staff turnover. [6]

4. Verdo is considering cutting its price to £19 to match the rival. Assess whether it should. [10]

5. Evaluate whether a pay rise is the best way for Verdo to reduce staff turnover. [20]

6. Verdo currently has a tall organisational structure with six management levels. The board is considering delayering to become flatter.

(a) Explain one advantage and one disadvantage of delayering for Verdo. [4]

(b) Explain how delayering might affect Verdo’s ability to retain staff. [4]

(c) Explain how Verdo’s leadership style might need to change if it delayers. [4]

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Answers

1. Market share = (4.2 ÷ 60) × 100 [1] = 7% [1]. Increase in market value = 60m × 8% [1] = £4.8m [1].

2. Primary research is collected first-hand for Verdo’s own purpose [1], so it is directly relevant to its own premium customers [1]. Secondary data on the whole bottle market would include budget buyers and could mislead Verdo about its own segment [1], whereas primary research gathered specifically about Verdo’s own target customers gives more accurate, decision-useful information for pricing and product decisions [1].

3. Any two, each developed as a chain: Uncompetitive pay [1] — if Verdo pays below the local rate, staff can move easily [1], since manufacturing skills transfer readily between employers, making leaving low-risk [1]. Lack of motivators [1] — repetitive production work offers little achievement, recognition or responsibility [1], so even adequately paid staff have no positive reason to stay [1]. (Also creditable: poor management, no progression, better local employers.)

4. Indicative content:

For cutting price [up to 4]: prevents losing customers to the £19 rival; if demand proves price-elastic, revenue could rise; protects market share in a market growing at 8%.

Against [up to 4]: Verdo is positioned as premium, and a price cut undermines that positioning — customers may infer lower quality; it invites a price war Verdo may not win if the rival’s costs are lower; margin falls sharply, and at £19 Verdo may not cover unit costs; premium buyers are typically price-inelastic, so volume may not rise enough to compensate.

Judgement [2]: Verdo should not match. Its competitive advantage is differentiation, not cost — competing on price abandons the differentiation that justifies its £28 price. This depends on Verdo’s cost structure and on how loyal its existing customers prove to be.

5. This question is marked against a levels-based scheme, not discrete points, matching the real paper’s extended-writing questions:

• Level 1 (1–5 marks): isolated or generic points about pay or motivation, with little or no application to Verdo.
• Level 2 (6–10 marks): relevant knowledge is applied to Verdo, but the analysis of why a pay rise would or would not work is one-sided or underdeveloped.
• Level 3 (11–15 marks): developed, two-sided analysis – the case for a pay rise and against it (drawing on Herzberg’s distinction between hygiene factors and motivators), including at least one credible alternative to a pay rise.
• Level 4 (16–20 marks): a sustained, well-evidenced argument reaches a supported judgement on whether a pay rise is the best option for Verdo specifically, rather than motivation in general.

Indicative content – for a pay rise: turnover is well above the level of similar local employers, which suggests pay may be uncompetitive; pay is the most immediate and visible lever available to Verdo; if its pay is below what similar local employers offer, a rise tackles one likely reason staff leave directly. Against: Herzberg classifies pay as a hygiene factor – it removes dissatisfaction but does not motivate, so the improvement is likely to be short-lived; it raises fixed costs permanently, squeezing margins already threatened by the £19 rival; it does not address the cause if the real problem is repetitive work or weak management. Alternatives: job enrichment or rotation to add variety and responsibility; training and progression routes; improved line management. Judgement: a pay rise alone is unlikely to solve the problem on its own – Herzberg’s distinction predicts a temporary improvement before turnover returns to previous levels – so Verdo should first establish why staff are actually leaving (through exit interviews) and address the real cause, though a below-market wage would still need correcting as a necessary, if not sufficient, first step.

6. (a) Advantage: delayering cuts management costs and speeds up decision-making, since information travels through fewer levels between the shop floor and senior management [2]. Disadvantage: it increases the workload on remaining managers, who must now supervise a wider span of control, and can damage morale among staff who lose a clear route for promotion [2].

(b) Delayering removes a layer of management that some staff may have been aiming to be promoted into, so it can damage morale and, at a firm whose staff turnover is already higher than similar local employers’, give staff one more reason to leave [1] [1]. Against this, the wider span of control it creates for remaining managers often comes with more delegation and autonomy for the staff below them, which can improve retention if staff value greater responsibility [1] [1].

(c) A flatter structure gives each remaining manager a wider span of control, making close supervision of every individual impractical [1], so Verdo would likely need to shift toward a more democratic or delegative style [1], empowering experienced production staff to make routine decisions themselves [1]; this would reduce the burden on the smaller management team while giving staff more autonomy and responsibility [1].

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How the marks are awarded

• Knowledge — correct terms and theory.
• Application — uses Verdo’s actual figures and situation. Generic answers about “a business” cap at the lower bands.
• Analysis — a chain: because X, therefore Y, which means Z for Verdo.
• Evaluation — weighs both sides, judges, and states what the judgement depends on.

Where marks are usually lost

• Answering generically without using the case-study figures.
• Listing points instead of developing a chain of reasoning.
• Concluding “there are advantages and disadvantages” without judging.
• Saying pay always motivates, ignoring Herzberg.
• Ignoring Verdo’s premium positioning in the pricing question.
• Describing delayering as only cost-cutting, without also weighing the effect on remaining managers’ workload or on staff retention.
• Forgetting to state which leadership style suits a wider span of control.