Teacher: Danyah Barqouni

Business management Higher Level /Paper 2

1 hour

Third Quarterly Summative Assessment

2020-2021
Student Name: Y( ) /Section: A, B, C

Instructions to candidates

Do not open this examination paper until instructed to do so.

Answer all questions.

The maximum mark for this examination paper is [30 marks].

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 Teacher: Danyah Barqouni

Aroma Corporation (AC)

Aroma Corporation (AC) is a mass-market cosmetics company that produces soaps. Concerned about falling
market share and profit, AC conducted new market research.
The senior management team is considering two strategic options.
• Option 1: research and develop new environmentally friendly soaps
• Option 2: buy new machinery to produce more of the current products
The probabilities, forecast costs and revenues of each option are given below:

a. List two methods (sources) of secondary market research that AC could have used. (2 marks)

Level Descriptor Mark

Award [1] for each method (source) of
secondary market research stated
Award an additional [1] for a description up to
a maximum of [2].

b. Construct a fully labelled decision tree, calculate the predicted outcome for each option and
identify the best option for AC (show all your working). (6 marks)

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 Teacher: Danyah Barqouni

Level Descriptor Mark

[0]
The decision tree does not reach a standard
described below.
[1–2]
The decision tree is not accurately constructed,
and / or the calculations of each option are not
presented or accurate. However, there is some
evidence of a general understanding of the
model.
[3–4]
The principal elements of the decision tree are
constructed, but may not be entirely accurate.
The calculations of each option are largely
correct. Allow up to two mistakes in calculations
and / or presentation for [3]. Allow for either
one error in calculation or one error in
presentation [4]. 
For an accurately constructed decision tree with
incorrect calculations, award up to a maximum
of [3].
For an accurately constructed decision tree with
EMV calculations, but no working [4].
[5–6]
The decision tree is accurately constructed. The
calculations of each option are correct and well
presented. A key is provided. Workings are
shown. As well as the rejected options [6]. Full
marks can be awarded even if the headings of
expected return/forecast revenue and
probabilities are not explicitly written.

N.B. for only correct calculations of all options without a decision tree award a
maximum of  [2].

c.Explain one limitation of using a decision tree as a planning tool for AC. (2 marks)

Level Descriptor Mark

Award [1] for a relevant generic limitation identified or
described and [1] for any

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 Teacher: Danyah Barqouni

additional explanation in context.

[2] cannot be awarded for the limitation if the response
lacks either explanation and / or application.

For example:
For an identification or a description of the limitation  with or without  application  [1].
For explanation of the limitation with no application [1].
For explanation of the limitation and application [2].

Mashrek International School 2020-2021

Tel: +962 79 9577771, Fax: +962 6 5411143, P.O.Box 1412 Amman 11118 Jordan

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 Teacher: Danyah Barqouni

JVS

JVS is a successful manufacturer of designer clothing. A marketing expert described JVS’s brand name,
Izzys, as one of the business’s major strengths. Because of its market orientation approach, JVS spends
significantly more on market research than its competitors.

JVS’s products are:

• Izzys, a range of high-quality fashion jeans, which contributes 70 % towards JVS’s revenue and profit.
The market for this range is not growing.
• IzzDen, a range of denim jackets, which is near the end of the product life cycle. Manufacturing of this
product will cease later this year.

Izzys and IzzDen are sold through high-end independent retailers throughout countries in
Europe. JVS uses a price leadership strategy for these two products. Consumers perceive JVS as
fashionable. They also believe that JVS’s products are worth the premium price.
JVS is considering launching a new product, a range of fashionable shorts – Izzless – aimed at the 15–19
age group. With this product, JVS would reach a different, but highly competitive, market. Focus groups
revealed that many low-income young consumers want to purchase fashion shorts. JVS would sell the
new shorts to mass market discount retail stores. Consumers would also be able to order online for
next-day delivery.

a. Define the term market research. (2 marks)

Level Descriptor Mark

Award 1 mark for a basic definition that
conveys partial knowledge and
understanding.
Award 2 marks for a full, clear definition
that conveys knowledge and
understanding.

b. Describe one benefit and one cost impact of JVS being a market-oriented company. (4 marks)

Level Descriptor Mark

Award 1-2 marks for a basic response that
indicates some understanding of market
orientation (explanation but no
application to the stimulus).
Award 3-4 marks for a full clear
description of each benefit/cost impact of
JVS using market orientation approach
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 Teacher: Danyah Barqouni

(explanation with application to the

stimulus).

c. Explain one advantage and one disadvantage for JVS of using focus groups for its market
research. (4 marks)

Level Descriptor (Mark as 2 +2) Mark

Award [1] for each correct advantage/disadvantage identified
or described and [1] for a relevant explanation with application
to JVS.
Award up to a maximum of [2].
Candidates should not be awarded [2] per
advantage/disadvantage if the response lacks either explanation
or application.

For an identification or a description of an advantage /

disadvantage with or without application [1].
For explanation of an advantage / disadvantage with no
application [1].
For explanation of an advantage / disadvantage and
application [2].

d. Recommend whether JVS should launch the new product, Izzless. (10 marks)
Level Descriptor:
A balanced response is one that provides at least two arguments for and two arguments against the option of
launching the new range of shorts, Izzless.
For one relevant issue that is one-sided, award up to  [3]. For more than one relevant issue that is one-sided,
award up to a maximum of [4].
Award a maximum of  [6]  if the answer is of a standard that shows balanced analysis and understanding
throughout the response with reference to the stimulus material but there is no judgment/conclusion.
Candidates cannot reach the  [7–8]  markband if they give judgment/conclusions that are not based on
analysis/explanation already given in their answer.

Mashrek International School 2020-2021

Tel: +962 79 9577771, Fax: +962 6 5411143, P.O.Box 1412 Amman 11118 Jordan

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 Teacher: Danyah Barqouni

 Little understanding of the demands of the question.

 Few business management tools (where applicable), techniques and theories are explained or
1–2 applied, and business management terminology is lacking.
 Little reference to the stimulus material.

 Some understanding of the demands of the question.

 Some relevant business management tools (where applicable), techniques and theories are
explained or applied, and some appropriate terminology is used.
3–4
 Some reference to the stimulus material but often not going beyond the name of a person(s) and/or
the name of the org.

 Understanding of most of the demands of the question.

 Relevant business management tools (where applicable), techniques and theories are explained
and applied, and appropriate terminology is used most of the time.
 Some reference to the stimulus material that goes beyond the name of a person(s) and/or the
5–6
name of the organization.
 Some evidence of a balanced response.
 Some judgments are relevant but not substantiated.

 Good understanding of the demands of the question.

 Relevant business management tools (where applicable), techniques and theories are explained and
applied well, and appropriate terminology is used.
7–8  Good reference to the stimulus material.
 Good evidence of a balanced response.
 The judgments are relevant but not always well substantiated.

 Good understanding of the demands of the question, including implications, where relevant.
 Relevant business management tools (where applicable), techniques and theories are explained
clearly and applied purposefully, and appropriate terminology is used throughout the response.
9–10  Effective use of the stimulus material in a way that significantly strengthens the response.
 Evidence of balance is consistent throughout the response.
 The judgments are relevant and well substantiated.

Mashrek International School 2020-2021

Tel: +962 79 9577771, Fax: +962 6 5411143, P.O.Box 1412 Amman 11118 Jordan

www.mashrek.edu.jo administration@mashrek.edu.jo