A Level Business: Marketing analysis (Cambridge 9609) – 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 from your board or school.

These questions cover section 8.1 (Marketing analysis) of the Cambridge International AS & A Level Business 9609 syllabus for examination in 2026, 2027 and 2028. All businesses and figures are invented. Read the study guide and revision notes first. The wider topic 8 practice set is also useful. Course pages: hub and checklist.

Questions

1. Define promotional elasticity of demand. [2]

2. Embercroft Bakery cuts the price of a sourdough loaf from £5.00 to £4.50. Weekly sales rise from 2 000 to 2 500 loaves.

(a) Calculate the price elasticity of demand and say whether demand is price elastic or price inelastic. [3] (b) Calculate the change in weekly sales revenue and explain how it relates to your answer to (a). [2]

3. Rowanbrook Fashion finds that when average incomes rise by 4%, demand for its designer coats rises by 10% and demand for its own-label basics falls by 2%.

(a) Calculate the income elasticity of demand for each range. [2] (b) Classify each range and explain what the classification shows. [2] (c) Incomes are forecast to fall by 6%. Calculate the expected change in demand for designer coats. [2]

4. A kitchenware company wants ideas for a new product. Identify two sources it could use. [2]

5. State four stages in the process of product development, in a sensible order. [4]

6. A small drinks company is considering investing in research and development (R&D). Explain one benefit and one drawback. [4]

7. Thistlemere Toys records quarterly sales (thousand units): Year 1: Quarter 1 40, Quarter 2 28, Quarter 3 33, Quarter 4 59; Year 2: Quarter 1 44, Quarter 2 31, Quarter 3 36. Calculate the four period centred moving average and the seasonal variation for Year 1 Quarter 4 and for Year 2 Quarter 1. [6]

8. Thistlemere Toys finds that its average seasonal variation for Quarter 4 is +18.0 thousand units. Its trend for Year 3 Quarter 4 is projected at 48.0 thousand units.

(a) Calculate the forecast for Year 3 Quarter 4. [2] (b) Explain one reason why the forecast may be inaccurate. [2]

9. Orrinfield Games is about to launch a new board game with no sales history. Explain one qualitative forecasting method it could use and one weakness of that method. [4]

10. Orrinfield Games raised promotional spending on a card game from £20 000 to £30 000 a year. Annual sales rose from 12 000 to 13 800 units. The selling price is £25 and the variable cost is £17 per unit.

(a) Calculate the promotional elasticity of demand. [3] (b) Analyse whether the extra promotional spending was financially worthwhile. [4]

11. Hollinrake Coffee Roasters sells 20 000 bags a month at £12.00 a bag. The variable cost is £7.00 a bag. A past study put price elasticity of demand at −0.6. The owner proposes an 8% price rise. Evaluate whether the owner should go ahead. [10]

12. Thistlemere Toys is planning stock for a new robot-toy line that has no sales history, and for its long-running building-block line that shows a stable seasonal pattern. Justify the forecasting method you would recommend for each line. [8]

Answers

1. It shows how strongly the quantity demanded reacts when a business alters its promotional spending [1]. It is the percentage change in quantity demanded divided by the percentage change in promotional spending [1]. Examiner insight: definitions tend to earn credit when both of the variables being compared are named. Saying only that it is “how much promotion changes sales” gives the idea but not the ratio.

2. (a) % change in price = (4.50 − 5.00) ÷ 5.00 × 100 = −10% [1]. % change in quantity = (2 500 − 2 000) ÷ 2 000 × 100 = +25% [1]. PED = +25 ÷ −10 = −2.5, so demand is price elastic (size above 1) [1]. (b) Revenue before = £5.00 × 2 000 = £10 000; after = £4.50 × 2 500 = £11 250, a rise of £1 250 [1]. When demand is elastic a price cut raises revenue, because quantity rises by a bigger percentage than price falls [1]. Examiner insight: answers tend to do best when the sign is kept and “elastic” is tied to the number. Part (b) links back to (a).

3. (a) Designer coats: +10 ÷ +4 = +2.5 [1]. Own-label basics: −2 ÷ +4 = −0.5 [1]. (b) Designer coats are a normal good, and because the value is above 1 demand grows faster than income [1]. Own-label basics are an inferior good, because demand falls as incomes rise [1]. (c) Change in demand = 2.5 × −6% [1] = −15% [1]. Examiner insight: the sign drives the classification, so dropping the minus sign on the basics prevents a correct classification. In (c), state the direction.

4. Any two from: customers (surveys, reviews or complaints); employees such as sales staff; competitors’ products; suppliers or distributors; the firm’s own R&D team; market research. One mark for each valid source [1][1]. Examiner insight: for an “identify” question, a short named source is enough; explaining it adds nothing.

5. Any four, in a sensible order, from: idea generation; screening of ideas; concept or business analysis; development of a prototype; testing or test marketing; launch. One mark for each valid stage [1][1][1][1]. Examiner insight: the syllabus does not fix the stages, so a logical sequence (screening after generation, launch last) is what answers tend to be credited for.

6. Benefit: R&D can produce a new or improved product that gives the firm an advantage over rivals [1], for example a recipe that competitors cannot copy for some time, which can support sales and a higher price [1]. Drawback: R&D is costly and its results are uncertain [1], so a small firm could spend heavily and launch nothing, leaving it short of cash [1]. Examiner insight: to earn the second mark of each pair, add a consequence or an example drawn from the context. A bare “it is expensive” is a statement, not a developed point.

7. Year 1 Quarter 4: the two four-quarter totals are 28 + 33 + 59 + 44 = 164 and 33 + 59 + 44 + 31 = 167 [1]. CMA = (164 + 167) ÷ 8 = 331 ÷ 8 = 41.375, about 41.4 [1]. Seasonal variation = 59 − 41.375 = +17.6 (17.625) [1]. Year 2 Quarter 1: the totals are 167 and 59 + 44 + 31 + 36 = 170 [1]. CMA = 337 ÷ 8 = 42.125, about 42.1 [1]. Seasonal variation = 44 − 42.125 = +1.9 (1.875) [1]. Examiner insight: showing each four-quarter total makes an arithmetic slip easy to locate, so partial credit is more likely. Seasonal variation is actual minus trend; reversing it flips the sign.

8. (a) Forecast = trend + average seasonal variation [1] = 48.0 + 18.0 = 66.0 thousand units [1]. (b) The method assumes past seasonal patterns will repeat [1]. A new rival or a change in fashion could change demand, so actual sales may differ [1]. Examiner insight: a reason specific to the case (for example a rival toy launch) is usually stronger than “forecasts can be wrong”.

9. Method: test marketing, where the game is sold in one region or to a sample of customers and the results are used to estimate national sales [1]. This works with no sales history because it uses real buyer behaviour [1]. Weakness: the test region may not represent the whole market, or rivals may react to the test, so the estimate could be too high or too low [1]. It also takes time and costs money before the full launch [1]. Other methods, with their own weakness, are acceptable. Examiner insight: choose one method and develop it; one method with a reason it suits a new product tends to beat two named briefly.

10. (a) % change in spending = 10 000 ÷ 20 000 × 100 = +50% [1]. % change in quantity = 1 800 ÷ 12 000 × 100 = +15% [1]. PromED = +15 ÷ +50 = +0.3 [1]. (b) Extra units = 1 800 [1]. Contribution per unit = £25 − £17 = £8, so extra contribution = 1 800 × £8 = £14 400 [1]. This exceeds the extra spending of £10 000, a net gain of £4 400 [1]. So the spending was worthwhile in money terms despite the weak response (below 1), if the promotion caused the extra sales [1]. Examiner insight: analysis tends to earn more when the elasticity figure is turned into money and compared with the cost.

11. Calculation: a price rise of 8% with PED of −0.6 gives a change in quantity of −0.6 × 8 = −4.8% [1]. The new price is £12.96 and sales fall to 19 040 bags. Revenue rises from £240 000 to about £246 758, up 2.8% [1]. Analysis: demand is inelastic, so revenue rises with price [1]. Contribution rises from £5.00 × 20 000 = £100 000 to £5.96 × 19 040 = about £113 478, up about 13.5%, as fewer bags are also produced [1]. The higher price may also suit a premium image. Evaluation: the −0.6 figure comes from a past study, and tastes or rivals’ prices may have changed [1]. Other factors, such as a rival price cut, may have been mixed into it [1]. Even if the true PED were −1.4, revenue would fall by about 4.1% to roughly £230 170 but contribution would still rise by about 5.8%, so the profit case is fairly robust [1]. A further risk is long-run loss of customers to rivals [1]. Judgement: going ahead looks sensible, as a modest rise raises revenue and contribution, ideally with sales monitored to check the elasticity estimate [1], and the conclusion should weigh the gain against the data limits [1]. Examiner insight: in “evaluate” questions, a final judgement tied to stated conditions, such as the reliability of the estimate, tends to be worth more than a bare “yes”.

12. New robot-toy line: use qualitative forecasting, for example test marketing or expert and sales force opinion [1], because there is no sales history for a moving average to use [1]. Its weakness is subjectivity, so the firm should order cautiously and review after launch [1]. Building-block line: use the four period centred moving average with seasonal variation [1], because a stable seasonal pattern in past data suggests the trend and seasonal effect will continue [1]. Its weakness is that it assumes the past repeats, so it should be checked against current news such as a new rival [1]. Overall: the best choice depends on whether history exists and how stable the market is [1], and checking each forecast against the other gives a more reliable plan [1]. Examiner insight: “justify” answers tend to gain credit when each recommendation is tied to a feature of the case (no history, stable seasons) and a limit of the chosen method is acknowledged.

Where marks are usually lost

• Reversing seasonal variation to trend minus actual.
• Dividing the sum of two four-quarter totals by 4 instead of 8.
• Dropping the minus sign on PED or YED and then classifying the result wrongly.
• Quoting an elasticity value with no statement of elastic or inelastic and no effect on revenue or profit.
• Judging a promotion by sales alone, ignoring contribution.
• Listing R&D benefits with no cost, risk or payback time.
• Naming forecasting methods with no link to the case, or evaluating with no conclusion.

Next steps

• Read the revision notes and the study guide.
• Go to the course hub and the checklist.
• Try all free 10-minute diagnostics.
• Book a free trial class.

Frequently asked questions

Which section of Cambridge AS and A Level Business 9609 do these questions cover? Section 8.1 Marketing analysis, A Level content including elasticity of demand, product development, R&D and sales forecasting.

Why does the minus sign matter in elasticity answers? The sign drives the classification, especially for income elasticity, so dropping it can lead to the wrong conclusion. Always state whether demand is elastic or inelastic and what that means for revenue.

How do you judge whether a promotion was worthwhile? Look at contribution, not just sales. Turn the elasticity figure into extra units and extra contribution, then compare that with the extra promotional spending.

What are the common mistakes in moving average forecasting? Reversing the seasonal variation (it is actual minus trend), and dividing the sum of two four-quarter totals by 4 instead of 8 when centring.

Official syllabus

Cambridge International AS & A Level Business 9609 syllabus for examination in 2026, 2027 and 2028 (Cambridge University Press & Assessment), section 8.1 Marketing analysis.