OxfordAQA A-Level Business: The marketing mix (9625/9725) – 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.

This set practises section 3.1.2.4, The marketing mix, from the OxfordAQA International AS and A-level Business specification (main text: 9725 Version 1.1, four Ps). The current 9625 text (Version 3.1) uses seven Ps, adds the Boston Matrix, product life cycle, price discrimination and exhibitions, and does not print cross-price elasticity or the NPD stages in this section, so questions 3 and 5 follow 9725 only; see the study guide for 9625. It mixes short answers, calculations and short case studies. Every business is invented. Teaching: study guide · Recall: revision notes · Course page · Checklist · Free diagnostics

Questions

1. Redmayne Bakery makes several changes. State which element of the marketing mix each change affects.

(a) It signs a contract for a supermarket chain to stock its bread. [1] (b) It runs a “buy one, get one free” week. [1] (c) It launches a gluten-free loaf. [1]

2. Define the term “own label brand”. [2]

3. Stainforth Audio gives a working prototype headset to 150 testers and records faults.

(a) Identify the stage of new product development shown. [1] (b) State the stage that follows. [1]

4. Ullesthorpe Garden Tools raised the price of a strimmer from £50 to £56. Monthly sales fell from 6,000 to 5,100.

(a) Calculate the price elasticity of demand. [3] (b) Calculate the change in monthly revenue. [2] (c) Recommend whether Ullesthorpe should keep the price at £56, using your answers. [3]

5. Welbourne Digital sells streaming sticks. A rival raised its price by 10% and Welbourne’s sales rose from 8,000 to 8,600 a month.

(a) Calculate the cross-price elasticity of demand. [2] (b) State what the sign of your answer shows. [1] (c) Welbourne cut the price of its games console by 8% and sales of its console accessories rose by 12%. Calculate the cross-price elasticity and state the relationship. [2]

6. Explain two influences on the price a business sets for a product. [4]

7. Cawthorne Software has developed a payroll package for small firms. It has few rivals, the package is distinctive and development was costly. Analyse why price skimming might suit the launch. [6]

8. Elmstone Joinery makes a chair at a unit cost of £84 and uses cost-plus pricing with a 45% mark-up.

(a) Calculate the selling price. [2] (b) Explain one disadvantage of cost based pricing. [2]

9. Linthwaite Bikes is a small firm with a limited budget that wants to reach 16 to 25 year olds. Analyse the advantages and disadvantages of using social media to promote its bikes. [6]

10. Kelderwick Dairy sells its cheese only to a wholesaler, who supplies shops. It is considering also selling online direct to customers. Analyse the advantages and disadvantages of adding this second channel. [6]

11. Redmayne Bakery plans a national promotion. Explain one way the plan affects its operations function and one way it affects its finance function. [4]

12. Stainforth Audio’s Model R headset is in maturity. Sales were 40,000, 36,000 and 31,000 over the last three years. The price is £60 and unit cost is £38. Management considers two extension strategies. Option A is to cut the price by 10%, where research estimates PED at −1.4. Option B is a £200,000 advertising campaign at the current price. Evaluate which option Stainforth should choose. [9]

Answers

1. (a) Place (distribution) [1]. (b) Promotion (a sales promotion) [1]. (c) Product [1]. [3] Examiner insight: Name the element of the mix, not just the action; a method such as sales promotion is more precise when the stem points to it.

2. A product sold under a retailer’s own name [1], rather than the manufacturer’s brand, often made for it by another producer [1]. [2] Examiner insight: A definition earns credit for the key idea and for a distinguishing detail; repeating the words “own label” without explaining them does not.

3. (a) Product testing [1]. (b) Launch [1]. [2] Examiner insight: Match the stage to the evidence in the stem; a working prototype signals product testing, not concept testing.

4. (a) %ΔP = 6 ÷ 50 = +12% [1]; %ΔQ = −900 ÷ 6,000 = −15% [1]; PED = −15 ÷ 12 = −1.25 [1]. (b) Before 50 × 6,000 = £300,000; after 56 × 5,100 = £285,600 [1]; revenue falls by £14,400 [1]. (c) Demand is elastic (size above 1), so the rise cut revenue [1]. Returning to £50 should lift revenue if elasticity holds [1]. However, 900 fewer units also cut costs and PED is only an estimate, so Ullesthorpe should compare profit before deciding; on revenue grounds, reverse the rise [1]. [8] Examiner insight: Show the percentage changes and the formula. A bare number gives less to reward, and a recommendation needs the revenue evidence to be used, not just the elasticity label.

5. (a) %ΔQ = 600 ÷ 8,000 = +7.5% [1]; XED = 7.5 ÷ 10 = +0.75 [1]. (b) Positive: substitutes [1]. (c) XED = +12 ÷ −8 = −1.5 [1]; complements [1]. [5] Examiner insight: The sign carries the meaning. Answers that drop the minus sign cannot show which relationship applies.

6. Any two, each with explanation. Level of demand: strong demand allows a higher price [1] because customers will still buy, whereas weak demand may force a lower one [1]. Competitors’ prices: rivals’ prices set a reference point [1], so a higher price risks losing sales unless the product is clearly different [1]. (Also acceptable: costs, marketing objectives, target market, PED, other mix elements.) [4] Examiner insight: Naming an influence earns little on its own. The second mark comes from saying what it does to the price.

7. Few rivals and a distinctive package mean buyers have little choice, so a high price is less likely to push them away [1]; this allows early adopters among small firms to pay a premium [1]. High development costs can be recovered quickly from early sales [1], which reduces financial risk [1]. The price can later be lowered as rivals enter or to reach firms that were not willing to pay the high price [1], widening the market [1]. [6] Examiner insight: Analysis means developing a chain of reasoning for each point, using the facts given (few rivals, costly development) rather than describing skimming in general.

8. (a) 84 × 1.45 [1] = £121.80 [1]. (b) It ignores demand and rivals’ prices [1], so the price could deter buyers, or be lower than customers would have paid [1]. [4] Examiner insight: For a calculation show the mark-up step. For the disadvantage, add the consequence for the business.

9. Advantages (up to 4): social media can target age groups precisely [1], so spend reaches 16 to 25 year olds rather than a wide audience [1]; it is cheaper than much traditional advertising, which suits a small budget [1], and posts can be measured and adjusted [1]. Disadvantages (up to 4): negative comments spread quickly and the firm has little control [1]; posts need staff time and constant updates [1]. Reward a clear balance between sides. [6] Examiner insight: Tie each point to the case (small budget, young target market). Generic advantages that would fit any firm limit the marks available.

10. Advantages: selling direct keeps the margin otherwise taken by the wholesaler [1] and reaches customers beyond the wholesaler’s shops [1]. Disadvantages: the dairy must handle delivery, cold storage and customer service, raising costs [1] and requiring new skills [1]. The wholesaler may feel threatened and cut orders [1], though spreading sales across channels reduces reliance on one customer [1]. [6] Examiner insight: Show both sides of multi-channel distribution; a one-sided list of benefits does not answer an “advantages and disadvantages” question.

11. Operations: a national promotion could increase orders beyond current capacity [1], so the bakery needs more output or stock to avoid late deliveries [1]. Finance: the promotion needs a budget and may reduce margins on discounted sales [1], so cash must be available to pay for ingredients and advertising before extra revenue arrives [1]. [4] Examiner insight: Link the marketing decision to the other function and give the consequence. Naming “operations” alone does not show an interrelationship.

12. Current revenue is 60 × 31,000 = £1,860,000 and contribution is (60 − 38) × 31,000 = £682,000 [1]. Option A: price £54, quantity up 14% to 35,340 [1]; revenue £1,908,360, a rise of £48,360 [1]. Unit contribution falls to £16, so total contribution is £565,440, down £116,560 [1]. Revenue rises, but profit falls, which weakens Option A [1]. Option B: a £200,000 cost needs about 9,091 extra units at £22 contribution (29% more than 31,000) to pay back [1], and advertising effects fade [1]. Sales have fallen about 14% in the last year, so a 29% rise looks hard [1]. Judgement: neither is clearly good. Option A is rejected because profit falls, while Option B is risky; the choice depends on whether advertising can lift sales by more than 29%, and Stainforth should test it on a small scale first or consider adapting the product [1]. [9] Examiner insight: Use the numbers in the stem. Evaluation needs a judgement that says what it depends on, not only a list of pros and cons.

Where marks are usually lost

• Calculating PED but not saying what it means for revenue.
• Using the new figure instead of the original as the base for a percentage change.
• Losing the sign on XED.
• Confusing concept testing with product testing.
• Treating revenue rises as profit rises.
• Writing about pricing methods without using the case facts.
• Ignoring B2B or B2C context when the stem gives it.
• Giving only advantages when the command word asks for both sides.

Frequently asked questions

Is a rise in revenue the same as a rise in profit? No. Revenue can rise while profit falls if costs rise too, so treating a revenue rise as a profit rise is a common error in pricing questions.

How do you use the case in a pricing question? Link the pricing method or influence to facts in the case, such as the number of rivals, how distinctive the product is or the target market. Writing about pricing methods in general earns fewer marks.

Which OxfordAQA section do these questions cover? They cover section 3.1.2.4, The marketing mix, of OxfordAQA International AS and A-level Business. Some content, such as the six NPD stages and cross-price elasticity, is not printed in this section of the 9625 text, so check with your teacher if you sit 9625.

Next steps

• Review the revision notes and study guide.
• Check coverage on the checklist and the course page.
• Take the free 10-minute diagnostics to find weak topics.
• Book a free trial class.

Official syllabus

OxfordAQA International AS and A-level Business specification, section 3.1.2.4 The marketing mix. Text read: 9725 Version 1.1 (4Ps) and 9625 Version 3.1 (7Ps); the two differ. Published by OxfordAQA.