Edexcel International A Level Business: Marketing mix and strategy (YBS11) – 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 1.3.3, Marketing mix and strategy, in Unit 1 (Marketing and people) of the Pearson Edexcel International Advanced Subsidiary/Advanced Level in Business specification, Issue 1, September 2017. All businesses and figures are invented. Revise first with the study guide and revision notes. The course hub is at /boards/edexcel/a-level/business/ and the printable checklist is at /checklists/edexcel/a-level/business/. The free diagnostics show which topics to practise.

Questions

1. (a) Define the term marketing mix. [2] (b) State two marketing objectives. [2]

2. Hollinbrook Juices had sales of £1.2m last year in a market worth £8.0m. Next year the market is forecast at £8.5m and the target is an 18% market share.

(a) Calculate last year’s market share. [2] (b) Calculate the sales needed to reach the target. [2] (c) Calculate the percentage increase in sales this requires. [1]

3. Brightholme Pet Foods uses the Boston Matrix, with a growth cut-off of 10% and a relative market share cut-off of 1.0.

Product	Share	Largest rival	Growth
Adult kibble	28%	14%	2%
Puppy mousse	9%	22%	15%
Senior diet	20%	16%	13%
Dried treats	3%	18%	1%

(a) Calculate the relative market share of puppy mousse and dried treats. [2] (b) Classify all four products. [2] (c) Explain one decision Brightholme could make using the matrix. [3]

4. Lumisk Headsets sold the following units (thousands) in years 1 to 6: 5, 22, 60, 95, 98, 97.

(a) State which product life cycle stage Lumisk had reached by year 6 and give evidence from the data. [2] (b) Analyse two extension strategies Lumisk could use. [4]

5. Larchwood Lighting makes aluminium desk lamps.

(a) Define the term cost/economic manufacture. [2] (b) Analyse how concern over resource depletion could change Larchwood’s design mix. [4]

6. Pendarvis Stationers prices a planner with a 40% mark-up on a unit cost of £12.50.

(a) Calculate the selling price. [2] (b) Unit cost rises by 8% and the mark-up stays at 40%. Calculate the new price. [2] (c) At the new price, monthly sales fall from 2,500 to 2,300. Calculate the price elasticity of demand. [2]

7. Tessmoor Tablets will launch a tablet with features no rival has. Rivals are expected in about nine months. Tessmoor is a new brand. Development cost is £4.2m and unit cost is £60. It is choosing between a launch price of £220 (skimming) and £120 (penetration). Evaluate which strategy Tessmoor should use. [9]

8. Alderwyn Skincare sells every cream under the Alderwyn name and runs buy-one-get-one-free offers.

(a) Identify one type of promotion and one type of branding Alderwyn uses. [2] (b) State two benefits of strong branding. [2] (c) Explain two ways Alderwyn could build its brand, one of which reflects a social trend in promotion. [4]

9. Dovecott Software sells payroll software to small firms and a budgeting app to households.

(a) Explain one difference between marketing to the small firms and to households. [3] (b) Explain one advantage of a niche strategy for the payroll software. [2] (c) Explain one way Dovecott could develop customer loyalty. [3]

10. Kilverton Furniture sells a sofa through a four-stage channel at £240 to a wholesaler, who adds 20%. The retailer then adds 50%. Kilverton could instead sell online at £400, paying £60 a sofa for delivery and handling itself.

(a) Calculate the wholesaler’s selling price and the consumer price. [3] (b) Calculate the extra income per sofa Kilverton would keep by selling online. [2] (c) Analyse one effect of this change in distribution. [3]

Answers

1. (a) The combination of marketing decisions (product, promotion, price, place) [1] a business uses together to meet its objectives [1]. (b) Any two of: increase market share [1], increase revenue, build a brand [1]. [4] Examiner insight: Credit tends to come from saying the elements work together towards objectives, not merely listing the four Ps.

2. (a) 1.2 ÷ 8.0 × 100 [1] = 15% [1]. (b) 0.18 × 8.5 [1] = £1.53m [1]. (c) (1.53 − 1.2) ÷ 1.2 × 100 = 27.5% [1]. [5] Examiner insight: Writing the formula line keeps your method visible, which helps if a slip occurs in an early part.

3. (a) Puppy mousse 9 ÷ 22 = 0.41 [1]; dried treats 3 ÷ 18 = 0.17 [1]. (b) Adult kibble (2.0, growth 2%) is a cash cow and senior diet (1.25, growth 13%) a star [1]; puppy mousse is a question mark and dried treats a dog [1]. (c) Brightholme could use cash from adult kibble [1] to fund marketing of puppy mousse, which is in a market growing at 15% [1] and could become a star if share rises. The risk is that the spending fails to win share [1]. [7] Examiner insight: Answers gain credit when each classification quotes both numbers against the cut-offs given in the question.

4. (a) Maturity [1], because sales growth has slowed to about 3% in year 5 (98 against 95) and then fallen by 1% in year 6 [1]. (b) New variant, such as a wireless model [1], which gives existing buyers a reason to upgrade and slows decline [1]. New market, such as exporting [1], which adds customers who have not yet bought, though it needs distribution and adaptation costs [1]. [6] Examiner insight: Evidence from the data table, such as the growth rate, usually supports the stage better than naming the stage alone.

5. (a) Designing a product so it can be made at a cost [1] that allows a profit at a price customers will pay [1]. (b) Waste minimisation, using less aluminium and plastic packaging [1], lowers material costs over time [1]. Designing for recycling or repair, such as parts that separate easily [1], may need redesign cost and may change the lamp’s look, so Larchwood must balance cost, function and aesthetics [1]. [6] Examiner insight: Each point tends to gain credit when it names the design mix element it affects.

6. (a) 12.50 × 1.4 [1] = £17.50 [1]. (b) 12.50 × 1.08 = £13.50 [1]; 13.50 × 1.4 = £18.90 [1]. (c) Price change = 1.40 ÷ 17.50 = +8%, quantity change = −200 ÷ 2,500 = −8% [1]; PED = −8 ÷ 8 = −1.0 [1]. [6] Examiner insight: The mark-up applies to cost, not to the selling price, and showing the percentage changes before dividing makes the elasticity clear.

7. Contribution per unit is £160 on skimming and £60 on penetration, so £4.2m is covered after 26,250 units [1] against 70,000 [1]. The case for skimming: the unique features are a USP [1] and early buyers may be less price sensitive, so demand may be inelastic [1]. The case for penetration: Tessmoor is a new brand with no loyalty, so a low price could build share and awareness before rivals arrive in nine months [1], and volume helps spread development cost [1]. Limits: skimming risks few sales if buyers do not know the brand, and penetration leaves little margin to cover the development cost [1]. Judgement: skimming is the better choice if the features are hard to copy and early demand is inelastic, because the launch price covers costs quickly [1], and Tessmoor can lower the price when rivals appear [1]. Penetration would be better if research showed elastic demand. [9] Examiner insight: Evaluation answers usually do better when the judgement is tied to a stated factor, such as elasticity or competition, rather than a general preference.

8. (a) Sales promotion [1]; corporate (family) branding [1]. (b) Any two of added value [1], ability to charge premium prices [1], reduced price elasticity of demand. (c) Social media: regular posts and replies to customers [1] build a community and, with shareable content that spreads virally, raise awareness cheaply [1]. A USP, such as a unique ingredient [1], differentiates the cream so customers see it as different from rivals [1]. [8] Examiner insight: Each way needs a short explanation of how it builds the brand, as a bare list of methods is likely to earn little.

9. (a) Small firms are B2B, so the buyer is a business with few customers and larger orders [1]. Dovecott could use personal selling and demonstrations [1], whereas households are many individuals reached by social media and app stores, with the decision more influenced by price and brand [1]. (b) A niche, such as small dental practices, is a small segment with specific needs [1], so Dovecott can add tailored features and charge a higher price than for mass-market software [1]. (c) After-sales support, such as quick help with payroll problems [1], builds trust and reduces switching [1], so customers renew each year, which lowers the cost of winning sales [1]. [8] Examiner insight: A B2B and B2C comparison is clearer when it contrasts the same feature in both, such as the number of buyers.

10. (a) 240 × 1.2 = £288 [1]; 288 × 1.5 [1] = £432 [1]. (b) 400 − 60 = £340 [1]; 340 − 240 = £100 [1]. (c) Kilverton keeps £100 more per sofa [1] and consumers pay £32 less, which could raise sales [1], but it must run delivery, returns and storage and may upset retailers [1]. [8] Examiner insight: A change in distribution is best analysed with its effect on both the producer’s income and its extra tasks.

Where marks are usually lost

• Defining the Boston Matrix categories but not classifying the products with the figures.
• Dividing by total market share instead of the largest rival’s share for relative market share.
• Applying mark-up to price rather than to unit cost.
• Giving an elasticity value without a sign, working or meaning.
• Naming a pricing strategy without linking it to elasticity, competition, brand strength or life cycle stage.
• Listing ways to build a brand without explaining how each builds it.
• Ending an evaluation with no decision, or a decision that ignores the facts of the case.
• Treating a shorter channel as only a benefit and forgetting the extra tasks.

Next steps

• Re-read the revision notes and the study guide.
• Tick off the topic on the checklist and return to the course hub.
• Try the free diagnostics to find the next weak spot.
• Book a free trial class for help with the weak topics.

Frequently asked questions

What do these marketing mix and strategy questions cover? They cover section 1.3.3 of Unit 1 in Pearson Edexcel International A Level Business (YBS11): marketing objectives, the product life cycle and Boston Matrix, design, promotion and branding, pricing strategies and distribution.

How is Unit 1 of Edexcel IAL Business assessed? Unit 1 is a 2-hour written paper of 80 marks. Sections A and B each carry 30 marks of short and extended responses tied to sources, and Section C is a single 20-mark essay.

What are common mistakes with mark-up and relative market share? Applying mark-up to the selling price instead of the unit cost, and dividing by total market share instead of the largest rival’s share when finding relative market share.

How should you give a price elasticity answer? Show your working, give the value with its sign, and say what it means, for example whether demand is price elastic or inelastic and what that means for revenue.

Official syllabus

Pearson Edexcel International Advanced Subsidiary/Advanced Level in Business, Specification, Issue 1, September 2017, Pearson Education Limited, section 1.3.3.