CIE IGCSE Topical Past Paper 1

3.32 Marketing mix – Price

0450/12/F/M/2025

Rachel’s business produces and sells chocolate bars. Quality is important. Rachel is a sole trader who received government support when she started up her business. The business operates in a competitive market. Rachel is considering ways to increase sales of her best-selling product. She is also planning to introduce a new chocolate bar. Rachel knows deciding which pricing method to use for a new product is important.

(e) Do you think price skimming is the best pricing method for a business to use when introducing a new product? Justify your answer. [6]

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

(e) Do you think increasing prices is the best way for a business to increase its profit? Justify your answer. [6]

045/11/M/J/2024

CFG is a social enterprise. It buys cocoa beans from local farmers and then uses the beans to make chocolate. Being ethical is important to the business. CFG has developed a new chocolate bar. The Marketing Manager plans to use skimming as its pricing method, and retailers as its distribution channel for the new product. He knows there are many legal controls over marketing that might affect a business.

(c) Outline one advantage and one disadvantage to CFG of using skimming as its pricing method. [4]
Advantage:
Disadvantage:

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.

(a) Define ‘competitive pricing’. [2]