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1 RJJ manufactures women’s shoes. It sells the shoes to a niche market using e-commerce. RJJ is a public
limited company and its shareholders benefit from limited liability. The Managing Director is planning to
expand the business. RJJ could take over a competitor. Last year profit decreased by $50 000. The Finance
Director has to decide on a source of finance to fund the expansion.

Outline two opportunities for consumers of using e-commerce when purchasing RJJ’s products.

Opportunity 1: .........................................................................................................................................

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Opportunity 2: .........................................................................................................................................

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[Total: 4]

2 YMG is a private limited company. It is the largest manufacturer of soft drinks in country V. YMG produces
1 billion litres a year using flow production. The Managing Director wants YMG to expand. He said: ‘I plan
to increase production to 3 billion litres over the next 5 years. This will allow us to start selling our products
in new markets in other countries. I know import quotas and lack of local knowledge can cause problems
but there are ways we can overcome them.’ The Managing Director also plans to invest $60m in new
technology to improve efficiency.

Explain how each of the following problems might affect YMG when entering new markets in other countries.

Problem caused by lack of local knowledge: ..........................................................................................

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Explanation: ............................................................................................................................................

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Problem caused by import quotas: ..........................................................................................................

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Explanation: ............................................................................................................................................

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[Total: 6]

3 LXA is a private limited company based in country Z. It makes children’s clothing. LXA sells its products
in competitive markets in several countries. LXA’s directors are considering different ways for the business
to grow. The Finance Director has prepared some financial information before meeting with some of LXA’s
stakeholders. An extract is shown in the Table. The Marketing Director wants LXA to start producing clothing
for adults.

Table:

Do you think a business should use the same marketing mix to sell its products to different age groups?
Justify your answer.

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[Total: 6]
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4 State two distribution channels a business might use

Distribution channel 1:.............................................................................................................................

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Distribution channel 2:.............................................................................................................................

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[Total: 2]

5 SSG manufactures mobile (cell) phones using batch production. Quality control is important. SSG has 130
employees who all receive on-the-job training. The Marketing Manager is analysing cost and output data for
product X. An extract is shown in the table below. As product X is in the maturity stage of the product life
cycle SSG is considering possible extension strategies.

Extract from SSG’s cost and output data for product X

Rent and other expenses per month $300 000

Variable cost per unit $80

Output per month 12 000

Calculate total variable cost per month. Show your working.

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.................................................................................................................................................................. [2]

[Total: 2]
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6 SSG manufactures mobile (cell) phones using batch production. Quality control is important. SSG has 130
employees who all receive on-the-job training. The Marketing Manager is analysing cost and output data for
product X. An extract is shown in the table below. As product X is in the maturity stage of the product life
cycle SSG is considering possible extension strategies.

Extract from SSG’s cost and output data for product X

Rent and other expenses per month $300 000

Variable cost per unit $80

Output per month 12 000

Identify four factors a business should consider when deciding which method of production to use.

Factor 1: ...................................................................................................................................................

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Factor 2: ...................................................................................................................................................

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Factor 3: ...................................................................................................................................................

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Factor 4: ...................................................................................................................................................

.................................................................................................................................................................. [4]

[Total: 4]