Page 180 - Cambridge IGCSE Business Studies

Section 3 Marketing
Cambridge IGCSE Business Studies S S e c t
Revision checklist Exam practice questions
● The marketing mix is the four key decisions
related to product, price, promotion and
place that a business must take in order to
market products effectively (the Four Ps).
● Successful businesses need to develop
customer relationships to build customer
loyalty and develop brand image.
● The product life cycle has four main stages:
introduction, growth, maturity and decline
and each of these influences marketing
decisions.
● Pricing is an important influence on
consumer demand and businesses have
a number of pricing strategies they could
use to maximise the marketing potential of
their products.
● The price elasticity of demand measures
the response of consumer demand for
a product as a result of a change in the
product’s price.
178
2 Carmel makes fashion jewellery, which she sells at a local
1 Debbie is a clothing designer. She designs one-off dresses
for people to wear on special occasions. The average cost of
making one of her dresses is $80. Debbie makes a profi t of
300% on every dress she makes and sells.
Debbie is considering making clothing for babies and young
children. She will design the clothing, but will have several of
each design produced by a local factory. Debbie has not yet
decided how to price this new range of clothing.
a What is meant by ‘profi t’? [2]
b Calculate the price Debbie charges for her designer
dresses. [2]
c Identify and explain two factors that infl uence
the demand for Debbie’s designer dresses. [4]
d Identify and explain two methods of pricing Debbie
might consider using for the new baby and young
children’s clothing. [6]
e Do you think Debbie is right to develop these new
products for her business? Justify your answer. [6]
market. Most of her items have a short product life cycle so
she is always looking for new ideas for her jewellery items.
The market is very competitive and the demand for her
products is price elastic. She prices all of her products
by adding a 50% mark-up on cost. Carmel is considering
setting up her own website.
a What is meant by ‘price elastic’? [2]
b Identify two stages of a product’s life cycle. [2]
c Identify and explain one benefi t and one limitation
to Carmel of selling her jewellery at the local market. [4]
d Identify and explain one advantage and one
disadvantage to Carmel of having her own website. [6]
e Do you think it is a good idea for Carmel to price
her products by adding a 50% mark-up on cost?
Justify your answer. [6]
Total available marks 40