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INTERNATIONAL GCSE
BUSINESS
Paper 2
Influences of Marketing and Finance on Business Activity
Friday 19 May 2023
07:00 GMT
Time allowed: 2 hours
Materials
For this paper you must have:
• a calculator, which you are expected to use where appropriate.
For Examiner’s Use
Question
Mark
1–9
Instructions
• Use black ink or black ball-point pen.
• Fill in the boxes at the top of this page.
• Answer all questions.
• You must answer the questions in the spaces provided. Do not write outside
the box around each page or on blank pages.
• If you need extra space for your answer(s), use the lined pages at the end of
this book. Write the question number against your answer(s).
• All calculations must be shown.
• Do all rough work in this book. Cross through any work you do not want to be
marked.
10
11
TOTAL
Information
• The marks for questions are shown in brackets.
• The maximum mark for this paper is 90.
Advice
You may use a bilingual dictionary.
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Section A
Answer all questions in the spaces provided.
Only one answer per question is allowed.
For each answer completely fill in the circle alongside the appropriate answer.
CORRECT METHOD
WRONG METHODS
If you want to change your answer you must cross out your original answer as shown.
If you wish to return to an answer previously crossed out, ring the answer you now wish to select
as shown.
0 1
Which one of the following best describes a purchasing economy of scale?
[1 mark]
A Advertising on a large scale
B Buying goods in bulk
C Buying specialist equipment
D Employing specialist managers
0 2
A business wants to achieve a total sales turnover of $700 000. How many units
would the business need to sell, if it charges a price of $35 per unit?
[1 mark]
A 20 000
B 699 965
C 700 035
D 24 500 000
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0 3
A business using video conferencing for a meeting of shareholders is an example of:
[1 mark]
A digital communication.
B digital marketing.
C digital storage.
D digital selling.
0 4
A business will carry out market research in order to:
[1 mark]
A calculate the actual sales of the business.
B encourage the use of new technology.
C find out the likely demand for a product.
D help the business attract investors.
0 5
Which one of the following is the most common reason for someone deciding to start
their own business?
[1 mark]
A To be able to travel
B To be their own boss
C To buy new products
D To minimise risk
0 6
Explain one way in which a not-for-profit organisation differs from other businesses.
[2 marks]
Turn over ►
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4
0 7
Explain one reason why a business may decide to move from one location to another.
[2 marks]
0 8
Identify and explain two ways that a business may benefit from globalisation.
[4 marks]
0 9
Explain what is meant by “marketing mix”.
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[2 marks]
15
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Turn over for the next section
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ANSWER IN THE SPACES PROVIDED
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Section B
Answer all questions in the spaces provided.
1 0
Item A – Planet Plant Foods
Planet Plant Foods (PPF) is a business based in the USA (United States of
America). It produces meat alternatives that are made from plants. PPF’s unique
selling point (USP), is that its products look like real meat. It sells its products
through supermarkets and some small fast food outlets.
The demand for meat alternatives is increasing amongst health-conscious
consumers across the world.
PPF has recently developed successful partnerships with well-known fast food
outlets such as KFC, McDonald’s, and Subway; they all now offer PPF’s products.
1 0 . 1
*06*
Identify and explain one benefit to PPF of having a unique selling point (USP).
[3 marks]
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1 0 . 2
Explain two benefits to PPF of selling its products through established fast-food
outlets.
[6 marks]
Question 10 continues on the next page
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8
1 0 . 3
Analyse the possible impact for one stakeholder of PPF operating in the rapidly
growing market for plant-based, meat alternatives.
[6 marks]
1 0 . 4
Sales from plant-based food products were $800 million in 2019 and are expected to
be $1.5 billion by 2023.
Calculate the percentage change in the expected sales from 2019 to 2023.
*08*
[3 marks]
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9
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ANSWER IN THE SPACES PROVIDED
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Item B
PPF has grown rapidly. Its products are now available throughout the USA and in
50 countries worldwide. It plans further international expansion starting in 2021.
PPF is concerned that continuing to expand so quickly will require more staff. This
could cause a fall in quality as well as put pressure on their finances.
The table below shows some financial information for PPF from 2017-2019. The
figures are in USA dollars.
Table 1 – Sales revenue and costs (all figures are in thousands of dollars)
2017
$000
2018
$000
2019
$000
Sales revenue
16 182
32 581
87 934
Cost of goods sold
22 494
34 772
70 360
Gross profit
(6 312)
(2 191)
17 574
Figures in brackets indicate a loss.
1 0 . 5
From 2019, sales revenue was expected to treble by 2023 and cost of goods sold was
expected to double.
Calculate PPF’s expected gross profit in 2023. Show your working.
*10*
[3 marks]
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1 0 . 6
Analyse the problems that PPF might face due to its rapid expansion.
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[6 marks]
Question 10 continues on the next page
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Item C
PPF current marketing strategy is to target supermarkets and fast-food outlets. The
Directors of the company recognise that the current strategy is working well. They
also believe, however, that PPF could increase its sales and market share by
directly targeting meat-eaters; they make up 95% of the market. This will cost
$200 million over 3 years.
1 0 . 7
The Directors believe that targeting meat-eaters, as part of a new marketing strategy
could be very profitable.
Using information from Items A, B and C:
• analyse the benefits and drawbacks to PPF of targeting meat-eating consumers
directly
• recommend whether PPF should target meat-eating consumers directly.
[12 marks]
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Section C
Answer all questions in the spaces provided.
1 1
Item D
Wahid Wajid is the owner of Just Furniture.com (JFC), an online business that links
customers to furniture makers in China. Wahid set the business up when he was a
student in Singapore looking to buy cheap furniture for his accommodation.
JFC’s website sells furniture directly to the public. Customers from anywhere in the
world can choose the furniture they want from JFC’s website. They then pay in
advance and Wahid places the order with manufacturers. The furniture is then
shipped from abroad and delivered directly to the customers’ homes. This means
that Wahid’s costs and prices are low.
1 1 . 1
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Explain one possible effect on JFC’s profit of an increase in the value of the Chinese
currency.
[3 marks]
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1 1 . 2
Identify and explain one advantage and one disadvantage to JFC of asking
customers to pay for the furniture before their orders are placed.
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[6 marks]
Question 11 continues on the next page
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1 1 . 3
*16*
Analyse the advantages to JFC of being an online business.
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[6 marks]
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Item E
Wahid set up JFC as a sole trader in order to have complete control of the
business. Due to the success of the business, Wahid is considering changing the
legal structure of the business to a limited company.
1 1 . 4
Analyse possible consequences of JFC becoming a limited company.
[6 marks]
Question 11 continues on the next page
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Item F
JFC has grown rapidly with the website receiving over 600 000 visits per month.
Table 2 below shows some financial information for JFC’s worldwide sales revenue
and costs. The figures are in Singapore dollars (SGD).
Table 2 – Extract of sales revenue and costs
2020
SGD
millions
2021
SGD
millions
2022
SGD
millions
Europe
3.0
3.5
5.8
Africa
2.5
3.0
3.8
Asia
2.4
1.8
1.2
Total sales revenue
9.7
10.4
13.0
Cost of sales
3.2
3.5
4.2
JFC are concerned about the decline in sales in Asia. JFC is considering opening
showrooms in five major cities in Asia. Each showroom will display the full range of
furniture from the website selection. They will also have a team of sales staff.
Wahid has estimated that it will cost Singapore dollars (SGD) 6 000 000 to set up
each showroom. The costs include buying the land, building the showroom, staffing
and stock. Wahid estimates that JFC’s sales revenue from each showroom will be
(SGD) 12 000 000 a year. Wahid will have to use external finance to fund the
project. Interest rates are low, so Wahid thinks this is a good time to borrow the
money.
1 1 . 5
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Calculate the gross profit margin for JFC in 2022.
[3 marks]
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1 1 . 6
JFC is concerned about the lack of sales growth in Asia and is considering opening
showrooms in five major Asian cities to increase sales.
Using information from Items D, E and F:
• analyse the arguments for and against opening five showrooms in Asia
• recommend whether JFC should open the showrooms.
[12 marks]
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END OF QUESTIONS
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