IB Business Management Topic 4.1 Introduction to…

PureGlow Ltd.

PureGlow Ltd. is a skincare company that sells natural, plant-based beauty products. To support the launch of a new product line, the business used a mix of internal and external sources of finance. It relied on retained profit from previous years and also secured funding from a venture capital firm interested in ethical consumer brands.

The new product range was supported by a marketing plan focused on the premium segment. As part of the plan, PureGlow adjusted elements of its marketing mix, including packaging design and pricing. The company aims to increase market share and improve profit margins in a highly competitive industry.

Table 1 shows selected financial data for the first month after the launch.

Table 1: Financial data for PureGlow Ltd. (Month 1)

(a) two sources of finance used by PureGlow Ltd.

(b) the net profit for the month. Show all your working.

(e) on how Solveta’s cost and revenue structure may affect its profitability.

(e) one internal and one external source of finance mentioned in the case.

(e) one element of the marketing plan mentioned in the case and its purpose.

(d) one element of the marketing mix that was changed and its potential impact.

(e) one reason why creating a marketing plan is useful when launching a new product.

Solveta Ltd.

Solveta Ltd. is a private limited company that manufactures eco-friendly packaging materials for global e-commerce businesses. The company recently launched a major marketing campaign to enter three new export markets. This campaign involved substantial investment in promotion, pricing adjustments, and changes to distribution (place) to align with regional consumer expectations.

To fund this expansion, Solveta used a mix of retained profit, a medium-term loan, and newly issued share capital. While sales revenue has increased, rising logistics and distribution costs have impacted short-term liquidity. The finance department has released Solveta’s statement of financial position and asked the marketing and finance teams to assess its implications for profitability and cash flow.

Figure 1. Solveta Ltd. Statement of financial position as at 30 June 2024

Item	$
Assets
Non-current assets
Property, plant and equipment	600,000
Less: Accumulated depreciation	(150,000)
Net non-current assets	450,000
Current assets
Cash	60,000
Debtors	85,000
Stock	105,000
Total current assets	250,000
Total assets	700,000

Liabilities
Current liabilities
Bank overdraft	12,000
Trade creditors	48,000
Short-term loan	40,000

(a) one reason Solveta Ltd. may have chosen to use more than one source of finance for its international marketing campaign.

(b) one element of the marketing mix Solveta adjusted to support its international expansion.

(d) what these liquidity ratios suggest about Solveta’s short-term financial position.

Global Solar Solutions (GSS)

(a) With reference to business management motivation theory, one need that GSS satisfies for rural households requiring solar lighting.

(b) one human resource challenge and one operations challenge GSS may face if it accepts the DRD expansion contract.

(c) Using all the resources provided and your knowledge of business management tools and theories, recommend a possible plan of action for GSS over the next five years.

GlowBar

GlowBar is a newly opened skincare business run by two friends. The business offers handmade soaps and facial products using natural ingredients. Before launching, the owners conducted primary market research by interviewing potential customers at local health food stores.

GlowBar’s co-founders use a democratic leadership style, encouraging their small team to participate in decisions. To keep staff motivated, they offer flexible working hours and recognition for good performance.

To finance the launch, the owners used their own savings and borrowed money from a microfinance provider.

Table 1 shows GlowBar’s financial data for its first month.

Table 1: Financial data for GlowBar (Month 1)

Item	Amount ($)
Fixed costs	4,000
Variable costs	3,000
Revenue	12,000

(a) two features of a democratic leadership style.

(b) two non-financial methods of motivation used at GlowBar.

(d) two elements of the marketing mix and how GlowBar used each.

CycleSpark Ltd.

CycleSpark Ltd. is a company that designs and sells electric bicycles. The business recently launched a new model and created a marketing plan focused on urban commuters. The plan includes promotional discounts, partnerships with eco-friendly organisations, and a pricing strategy to remain competitive.

To support the launch, CycleSpark obtained a medium-term loan and used retained profit from the previous year. Although sales increased, the company experienced cash flow difficulties due to a delay in customer payments.

Table 1 shows selected financial data from the month following the product launch.

Table 1: Financial data for CycleSpark Ltd. (Month 1)

Item	Amount ($)
Revenue	180,000
Cost of sales	110,000
Expenses	50,000
Opening balance	8,000
Cash inflows	70,000
Cash outflows	95,000

(a) two sources of finance used by CycleSpark Ltd.

(b) the net profit for the month. Show all your working.

(d) one reason why a business with strong sales might still face cash flow problems.

IB Business Management 4.1 Introduction to Marketing Questionbank

IB Business Management 4.1 Introduction to Marketing Questionbank

IB Business Management 4.1 Introduction to Marketing Questionbank

IB Business Management 4.1 Introduction to Marketing Questionbank

IB Business Management Topic 4.1 Introduction to Marketing Questionbank