IGCSE Business Studies: Marketing — Practice Questions (Cambridge 0450)

These are original questions written for Marlbridge, in the style and at the standard of the examination. They are not reproduced past-paper questions — Cambridge International holds copyright in its own papers. Use these alongside the official past papers available free from your board.

Related: Marketing study guide and revision notes

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Section A

1. State one benefit and one limitation of niche marketing. [2]

2. Name the four stages of the product life cycle, in order. [2]

3. Give one example of primary research and one example of secondary research. [2]

Section B

4. A small business makes handmade, luxury leather bags and sells them at a high price to a specific group of wealthy customers.

(a) State whether this business is using niche or mass marketing, and justify your answer using detail from the scenario. [3] (b) Explain one benefit and one limitation of this approach for the business. [4]

5. A well-established snack food, which has been on the market for many years with slowing sales growth, is approaching the maturity stage of its product life cycle.

(a) Suggest one extension strategy the business could use, and explain how it might work. [3] (b) Explain how the product’s position in its life cycle might influence its pricing strategy at this stage. [3]

6. A business wants to expand into a foreign market for the first time.

(a) Identify two problems the business might face when entering this new market. [2] (b) Suggest and justify one method the business could use to overcome these problems. [3]

7. A supermarket segments its customers by age group, offering different promotions to teenagers, young families and retired customers. Explain one advantage this segmentation approach offers the supermarket. [3]

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Answers

1. Benefit: niche marketing can allow a business to charge premium prices and face less direct competition, since it targets a specific, well-understood customer group [1]. Limitation: it limits the size of the potential customer base compared with targeting the whole market [1].

2. Introduction, growth, maturity, decline [2].

3. Primary research: for example, an online survey or interview carried out directly by or for the business [1]. Secondary research: for example, government statistics or a paid commercial market research report [1].

4. (a) This business is using niche marketing [1], because it targets a specific, narrow customer group (wealthy customers seeking luxury products) rather than the whole market, and sets a high price that matches this focused strategy rather than trying to appeal broadly [2]. (b) Benefit: the business can charge a premium price and faces less direct competition, since few other businesses target exactly this specific, high-value customer group [2]. Limitation: the potential customer base is small, which limits how much the business can grow in sales volume compared with a mass-market competitor [2].

5. (a) The business could relaunch the product with new packaging or a modified recipe to stimulate renewed interest [1–2]; this could work by giving existing and lapsed customers a reason to try the product again, extending the maturity stage before sales begin to decline [1]. (Advertising campaigns or new product variants, correctly explained, would also gain credit.) (b) At the maturity stage, sales growth has slowed and competition is likely to be well established, so the business may use competitive pricing to defend its market share against rivals [1–2], rather than the higher introductory or skimming prices that might have been possible when the product was newer and had fewer direct competitors [1].

6. (a) Any two of: cultural differences between the home and foreign market, lack of local knowledge about customer preferences or regulations, language barriers, or exchange rate risk [2]. (b) A joint venture with a local business could help overcome these problems [1], because the local partner already has knowledge of the market, customer preferences, and relevant regulations, reducing the risk and cost of entering the foreign market compared with attempting to enter alone [2]. (Licensing, correctly justified in the same way, would also gain full marks.)

7. Segmenting by age allows the supermarket to design more targeted promotions and product ranges for each group’s specific needs and spending habits — for example, promoting different products to young families than to retired customers [1–2] — which is likely to be more effective at generating sales than a single, generic promotion aimed at the whole customer base regardless of age [1].

A note on exam technique for this topic

Both papers in this specification build questions around a specific business scenario, so every answer above deliberately connects a marketing concept back to the detail given — the type of customer targeted, the product’s stage in its life cycle, or the specific challenge of entering a named foreign market — rather than offering a general definition. The study guide identifies this scenario-linking skill as what earns Analysis and Evaluation marks (AO3 and AO4) on this topic, which are not available from definitions alone, however accurate. When practising further scenario questions from past papers, check each draft answer for a specific detail borrowed directly from the stimulus material or case study – a missing link back to that detail is the most common reason an otherwise accurate answer scores lower than expected. This applies equally across all four sub-topics of Marketing, from segmentation through to marketing strategy, since the case study paper specifically rewards candidates who read the business context carefully before answering rather than reaching for a memorised definition first.