CIE IGCSE Topical Past Paper 1

3.1 Marketing, competition and the customer

0450/13/O/N/2024

LRL makes skincare products including face cream. It is a private sector business in country X. One of LRL’s objectives is to contribute to sustainable development. Maintaining customer loyalty is important and the Marketing Director knows a business must have an appropriate marketing mix. He is analysing data to calculate the value of LRL’s market share. An extract is shown in Fig. 3.1. The total value of sales of skincare products in country X for 2023 was $120 million.

(b) Calculate the value of LRL’s market share in 2023. [2]
Working:
Final answer:

(d) Explain two advantages to LRL of maintaining customer loyalty. [6]
Advantage 1:
Explanation:

Advantage 2:
Explanation:

0450/11/O/N/2024

JTA is a public limited company. It sells holidays in a mass market. The business has 44 shops and 200 employees. The Finance Director is considering ways a business can increase its profit. She has been asked to analyse JTA’s financial performance using ratio analysis. An extract from JTA’s financial statements is shown in Table 3.1.

Extract from JTA’s financial statements for 2023 ($ million)
Revenue	900
Profit	100
Capital employed	800

Table 3.1

045/13/M/J/2023

TDG is a bicycle retailer. It has 3 employees. TDG needs to maintain customer loyalty as the business sells in a mass market. Simon, the manager, knows managing cash flow is important. He is analysing TDG’s cash-flow forecast. An extract is shown in Table 1.1. Simon is considering ways for TDG to overcome its short-term cash-flow problem in September.

Extract from TDG’s cash-flow forecast 2023 ($000)
	July	August	September
Cash inflow	X	50	40
Cash outflow	50	50	(Y)
Net cash flow	10	0	(40)
Opening balance	20	30	30
Closing balance	30	30	(10)

Table 2.1

(a) Define ‘mass market’. [2]

045/12/M/J/2024

Nicky wants to be a successful entrepreneur. She plans to start up a travel business specialising in walking holidays. Nicky will be operating in a niche market. She is preparing a business plan to help with her decision-making. Nicky has been told government support is available for business start-ups. She knows building customer relationships will be important.

(b) Identify two ways a business can build customer relationships. [2]
Way 1:
Way 2:

(c) Outline one benefit and one limitation to Nicky’s business of operating in a niche market. [4]
Benefit:
Limitation:

045/12/M/J/2024

IDT manufactures clothes for the mass market. It is a multinational company with factories in 4 countries. IDT has short-term and long-term financial needs. The Finance Director is analysing IDT’s statement of financial position. An extract is shown in Table 3.1. He has been asked to calculate working capital and to explain how an increase in non-current liabilities might affect IDT.

Extract from IDT’s statement of financial position ($ million)
	2022	2023
Current assets	380	420
Current liabilities	250	280
Non-current liabilities	300	400

Table 3.1

(a) Define ‘mass market’. [2]

045/12/F/M/2024

WFH produces hats and sells them to a mass market. It holds a high level of inventory. The Managing Director is concerned about the liquidity of the business and has been analysing WFH’s financial statements. An extract is shown in Table 2.1. The Managing Director thinks that the business might fail. Other stakeholder groups might also be interested in WFH’s financial statements.

Extract from WFH’s financial statements ($000)
	2021	2022
Current assets	60	50
Inventory	20	30
Trade receivables	25	10
Cash	15	10
Current liabilities	20	40
Profit / loss	15	(10)

Table 2.1

(e) Do you think it is always better for a business to sell to a mass market? Justify your answer. [6]

045/13/M/J/2023

Meena wants to leave her job as a teacher to become a successful entrepreneur. Her business will produce handmade jewellery. Meena knows that there is government support for business start-ups. She plans to use market research to help identify a market segment for her jewellery. Meena’s brother has offered to become her business partner but she cannot decide whether it would be better to operate as a sole trader

(b) Identify two ways a market can be segmented. [2]
Way 1:
Way 2:

045/11/M/J/2022

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.

(d) Explain two methods Pamela’s business can use to maintain customer loyalty. [4]
Method 1:
Explanation:

Method 2:
Explanation: