O Level Business: Marketing — Practice Questions (Cambridge 7115)

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 — Cambridge International holds copyright in its own papers. Use these alongside the official past papers available from your board.

Each question practises a skill tested in the June 2024 Paper 12. After each answer there is an examiner insight or a tip and, where one matches, the real question to try next.

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Questions

1. Identify two ways a small bicycle repair shop could build relationships with its customers. [2]

2. Priya runs a new bakery that sells only gluten-free cakes and bread. Explain one advantage and one drawback for Priya’s bakery of targeting such a small, specialised market. [4]

3. A mobile phone case company sold $396 000 of cases last year. Total sales of phone cases in its country were $2 200 000. Calculate the company’s market share. Show your working. [2]

4. Before opening, a new juice bar collects data about the market in its town. Explain one way this data could help the owner decide what prices to charge. [3]

5. A florist with three shops promotes its business only through social media. Explain one way the florist gains from promoting itself on social media. [3]

6. A new streaming service is entering a market with several well-known competitors. (a) State what is meant by penetration pricing. (b) Explain one reason why the streaming service might use penetration pricing. [4]

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Answers

1. Any two different ways, 1 mark each: offer a loyalty scheme or discounts for regular customers [1]; ask customers for feedback after each repair [1]; provide good after-sales service, such as a free safety check a month later [1]; send newsletters or reminders about servicing [1]; deal quickly with complaints [1].

Examiner insight (Cambridge 7115 June 2024 examiner report, Paper 12, Question 1(b)): Two versions of the same idea only earn one mark, and ways of simply increasing sales, such as cutting prices, do not answer a question about building customer relationships.

Source for the examiner insights on this page: Cambridge O Level Business Studies 7115 June 2024 Principal Examiner Report for Teachers, Paper 7115/12 section, paraphrased.

Try the real question next: Cambridge O Level Business Studies 7115, June 2024, Paper 12, Question 1(b).

2. Benefit: there is likely to be less competition [1] because few bakeries specialise only in gluten-free products, so Priya’s new bakery can attract customers with coeliac disease who struggle to find suitable cakes elsewhere [1]. Limitation: the target market is small, so sales and revenue are limited [1], since only a small share of people in the area need or want gluten-free bread and cakes [1].

Examiner insight (Cambridge 7115 June 2024 examiner report, Paper 12, Question 1(c)): Many answers showed sound knowledge of niche markets but lost the application marks by never linking points to the business described. Each point needs its own reference to the case, such as this being a new business or the type of product sold.

Try the real question next: Cambridge O Level Business Studies 7115, June 2024, Paper 12, Question 1(c).

3. Market share = (company’s sales ÷ total market sales) × 100 = (396 000 ÷ 2 200 000) × 100 [1] = 18% [1].

Tip: Always finish with the % sign, and check your answer makes sense: a single firm’s share must be less than 100%.

4. The data can show the prices competitors charge [1], so the owner can set prices at a similar level or slightly lower to win customers from other juice bars [1], which should help the new business gain sales and revenue when it opens [1]. (Also credit: data on how much customers are willing to pay or level of demand, so prices are not set so high that customers go elsewhere.)

Examiner insight (Cambridge 7115 June 2024 examiner report, Paper 12, Question 1(d)): The stronger answers showed how understanding customer demand or the level of competition helps pricing decisions or increases revenue. A common weakness was restating the knowledge point instead of developing it.

Try the real question next: Cambridge O Level Business Studies 7115, June 2024, Paper 12, Question 1(d).

5. Social media is low cost compared with television or newspaper adverts [1], so the florist has lower promotion expenses and fewer cash outflows [1], which could help raise profit across its three shops [1]. (Also credit: it reaches a wide audience quickly, so more people see seasonal offers such as Mother’s Day bouquets, increasing sales; or it can be targeted at local customers near each shop.)

Examiner insight (Cambridge 7115 June 2024 examiner report, Paper 12, Question 2(d)): Saying social media is “quicker” or “easier” is too vague unless you explain why, for example that posts can be updated in minutes. The advantage must be to the business, not to its customers.

Try the real question next: Cambridge O Level Business Studies 7115, June 2024, Paper 12, Question 2(d).

6. (a) Setting a low price when a product is first launched [1] in order to gain market share quickly [1]. (b) Customers already use well-known competitors, so a low introductory price encourages them to try the new service [1], helping it build up a customer base and market share quickly, after which the price can be raised [1].

Tip: Do not confuse penetration pricing (low price at launch) with price skimming (high price at launch for a new or unique product).

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Where marks are usually lost

• Giving two versions of the same point in an “identify two” question — only one mark is earned.
• Answering a different question, such as giving ways to increase sales when asked about customer relationships.
• Making no reference to the business described, so application marks are missed.
• Writing vague advantages like “quicker” or “easier” without saying why.
• Leaving out the % sign or dividing the wrong way round in market share calculations.