IGCSE Business Studies

Y10 - EoT3 Assessment

S3 Practice

1. Operating as a sole trader, Aisha started her successful healthy catering business 20 years ago. She specializes
in catering for people who wants to lose weight and those with health issues like diabetes, hypertension or
heart disease. It is a niche market. Aisha uses cost-plus pricing as part of her marketing mix. Offering a high-
quality service is important to Susan and her 3 employees.

(a) Define ‘cost-plus pricing’.

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(b) Define ‘marketing mix’.

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(c) Outline two reasons why offering a high-quality service might be important for Aisha’s
business.

Reason 1: .........................................................................................................................

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Reason 2: .........................................................................................................................

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IGCSE Business Studies
Y10 - EoT3 Assessment
S3 Practice

(d) Do you think operating in a niche market will help a small business have a better chance of success
than operating in a mass market? Justify your answer.

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IGCSE Business Studies
Y10 - EoT3 Assessment
S3 Practice

2. Vrooms is the brand name for a chain of car repair shop. It has 15 repair shops, 10 of which are operated by
franchisees. The Managing Director is pleased with its fast rate of growth at a time when many businesses are
failing. She said: ‘Having a well-motivated workforce is important to our success. All new employees are
given on-the-job training.’ Vrooms plans to have 5 repair shops in the next year. The Managing Director has to
decide whether to sell additional franchises or open its own restaurants.

(a) What is meant by ‘brand name’?

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IGCSE Business Studies
Y10 - EoT3 Assessment
S3 Practice

3. GLOSSY manufactures face care products for the mass market. GLOSSY’s products have price elastic demand
as there is a high level of competition in this market. GLOSSY uses a competitive pricing strategy (method).
The marketing manager is thinking of changing this pricing strategy to increase sales. The head office of
GLOSSY is located in country P, but the factory is in country M. There have been complaints about
communication issues between the managers and workers. GLOSSY has continued to grow but the managers
still have a laissez-faire leadership style.

Table 2: Forecast effect of changing price

Forecast quantity
Current price Quantity demanded Planned new price
demanded
$2.00 100 000 per month $1.50 150 000 per month

(a) What is meant by ‘mass market’?

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(b) What is meant by ‘price elastic demand’?

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(c) Do you think GLOSSY should change its pricing strategy? Justify your answer.

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