CIE IGCSE Topical Past Paper 1

3.3 Promotion

045/12/M/J/2024

GTB is a business which operates in the tertiary sector. It owns 5 cafés selling food and drinks. The business uses social media as its method of promotion. The Finance Manager, Moeen, is analysing GTB’s financial statements. An extract is shown in Table 2.1. He is considering ways to improve GTB’s profit margin. Moeen knows there are other users that are interested in the accounts of a business.

Extract from GTB’s financial statements 2023
Revenue	$600 000
Profit	$150 000
Capital employed	$750 000
Profit margin	25%

Table 2.1

(d) Explain two advantages to GTB of using social media as its method of promotion. [6]
Advantage 1:
Explanation:

Advantage 2:
Explanation:

0450/12/F/M/2024

Suliman owns a small business which sells t-shirts on its website. He operates as a sole trader. Suliman is analysing data for his existing business. An extract from this data is shown in Table 4.1. Suliman wants to open his first shop and needs to decide on a suitable location. He is considering which type of sales promotion to use for the new shop.

Extract from Suliman’s data for his existing business
Break-even output	500 t-shirts
Current sales	550 t-shirts
Selling price per t-shirt	$3.99
Variable cost per t-shirt	$1.99

Table 4.1