1 1 MTD manufactures specialist cleaning products including soap. Batch production is used. The business uses just-in-time inventory control. MTD took 18 months to develop its latest environmentally friendly cleaning product. The Marketing Manager has to decide on the packaging and method of promotion for this new product. She said: ‘All our stakeholders, including pressure groups, are important. MTD wants to contribute to sustainable development.’ Do you think using social media is the best way for a business to promote a new product? Justify your answer. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. [6] [Total: 6] 2 2 Pamela is a successful entrepreneur. She is the owner of a gift shop selling celebration cards, toys and candy (sweets). When Pamela started her business 30 years ago she had no help to manage the shop. She now has 5 employees. Pamela knows maintaining customer loyalty is important. She uses competitive pricing. Most of her marketing budget is spent on sales promotion. Pamela does not use e-commerce. Outline two possible threats to Pamela’s business of using e-commerce. Threat 1: .................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. Threat 2: .................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. [4] [Total: 4] 3 3 Pamela is a successful entrepreneur. She is the owner of a gift shop selling celebration cards, toys and candy (sweets). When Pamela started her business 30 years ago she had no help to manage the shop. She now has 5 employees. Pamela knows maintaining customer loyalty is important. She uses competitive pricing. Most of her marketing budget is spent on sales promotion. Pamela does not use e-commerce. Explain two methods Pamela’s business can use to maintain customer loyalty. Method 1: ................................................................................................................................................ .................................................................................................................................................................. Explanation: ............................................................................................................................................ .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. Method 2: ................................................................................................................................................ .................................................................................................................................................................. Explanation: ............................................................................................................................................ .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. [6] [Total: 6] 4 4 Nancy wants to be an entrepreneur. She has analysed market research data and decided to start up a book shop. Nancy has identified a suitable location and prepared a business plan. Nancy is calculating her total costs. She will use this information to help her complete a break-even chart as shown in the figure below. Nancy is also considering using e-commerce. Do you think the threats of e-commerce are greater than the opportunities for a new business? Justify your answer. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. [6] [Total: 6] 5 5 RJJ manufactures women’s shoes. It sells the shoes to a niche market using e-commerce. RJJ is a public limited company and its shareholders benefit from limited liability. The Managing Director is planning to expand the business. RJJ could take over a competitor. Last year profit decreased by $50 000. The Finance Director has to decide on a source of finance to fund the expansion. Outline two opportunities for consumers of using e-commerce when purchasing RJJ’s products. Opportunity 1: ......................................................................................................................................... .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. Opportunity 2: ......................................................................................................................................... .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. [4] [Total: 4] 6 Lola and Raul are in a business partnership. They make a range of hand-printed products including t-shirts, bags and posters using job production. Most of Lola and Raul’s customers are tourists. Lola designs and prints all the products at the back of a small shop. Raul is responsible for sales and finance. Production is slow and it is difficult for Lola to keep up with demand. Raul wants to increase output. One way of doing this is to introduce some machinery into the process. Raul also wants to develop a website. Outline two ways Lola and Raul’s business could use a website. Way 1: ...................................................................................................................................................... .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. Way 2: ...................................................................................................................................................... .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. [4] [Total: 4] 6 7 Kala always wanted to be an entrepreneur. She used to work for a business which downsized its workforce 5 years ago. She then decided to start up CHL. She produced a business plan which helped her obtain finance. Kala now designs customised sports clothes for women. Kala sells these products directly to customers using e-commerce. She has a loyal customer base of 25-40 year olds. However, Kala is worried about increased competition in this niche market. One idea she has is to target different market segments Explain one advantage and one disadvantage to Kala of using e-commerce to sell her products. Advantage:................................................................................................................................................ .................................................................................................................................................................. Explanation:............................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. Disadvantage:........................................................................................................................................... .................................................................................................................................................................. Explanation:............................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. [6] [Total: 6] 7 8 WFG is a private limited company in country X. It owns 120 supermarkets, of which 20 are operated as franchises. One of WFG’s objectives is to expand by opening 30 more shops in the next 18 months. The Managing Director said: ‘Market research shows that fewer people are going to the local markets every day to buy their food. It is important for us to set prices at the right level.’ The Managing Director is thinking about whether to introduce new technology into the business. Explain two factors WFG should consider when deciding whether to introduce new technology into its business. Factor 1:.................................................................................................................................................... .................................................................................................................................................................. Explanation:............................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. Factor 2:.................................................................................................................................................... .................................................................................................................................................................. Explanation:............................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. .................................................................................................................................................................. [6] [Total: 6]
