Practice IB Business Management Topic Unit 4: Marketing Management - the 7 P's, Strategies and Forecasting with authentic exam-style questions for both SL and HL students. This question bank focuses on the exact syllabus content for Unit 4: Marketing Management - the 7 P's, Strategies and Forecasting and mirrors Paper 1, 2, 3 style where relevant.
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LuminaCare
(a) With reference to Resource 3, one HR issue that may be impacting LuminaCare’s ability to scale sustainably.
(b) one financial challenge and one marketing challenge LuminaCare may face if it accepts the concessional loan.
(e) one problem that may arise from poor internal communication between departments.
(e) one reason why creating a marketing plan is useful when launching a new product.
(e) Using the data provided, the profit FrostFuel Ltd. would earn if it sells 10,000 units. Show all your working.
(e) on how Solveta’s cost and revenue structure may affect its profitability.
BeanBar Ltd.
BeanBar Ltd. is a medium-sized company that sells gourmet coffee beans online and in retail stores. The business recently launched a new premium coffee blend and carried out primary market research to better understand customer preferences before the launch. The findings helped inform the company's updated marketing plan, which included promotional discounts and revised packaging.
Although initial sales were strong, the marketing manager is concerned that poor internal communication between the finance and sales teams may be affecting financial performance. The finance team has noted rising costs, while the operations team wants to reinvest in product development.
Table 1 shows selected financial data for the past two months.
Table 1: Selected financial data for BeanBar Ltd. for 2024
| Item | Month 1 ($) | Month 2 ($) |
|---|---|---|
| Revenue | 100,000 | 90,000 |
| Cost of sales | 40,000 | 42,000 |
| Expenses | 30,000 | 35,000 |
| Net profit | ? | ? |
| Current assets | 60,000 | 50,000 |
| Current liabilities | 30,000 | 40,000 |
(a) the net profit for Month 1 and Month 2. Show all your working.
(b) the current ratio for Month 2. Show all your working.
(c) one reason why a fall in net profit might concern the finance team.
(d) one method of primary market research.
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)
| Item | Amount ($) |
|---|---|
| Revenue | 140,000 |
| Cost of sales | 60,000 |
| Expenses | 50,000 |
| Net profit | ? |
(a) two sources of finance used by PureGlow Ltd.
(b) the net profit for the month. Show all your working.
(c) one reason why profit is important for a business like PureGlow Ltd.
(d) one element of the marketing mix that was changed and its potential impact.
FrostFuel Ltd.
FrostFuel Ltd. is a company that produces natural, energy-boosting frozen fruit smoothies. As part of its launch strategy for a new tropical flavour line, the marketing team conducted primary market research using focus groups and in-store product sampling. Based on the results, they developed a marketing plan targeting university students and young professionals in urban areas.
The operations team is choosing between two potential factory sites:
To assess the product's financial viability, the finance team produced the following break-even data based on estimated sales and production costs.
Table 1: Break-even data for FrostFuel Ltd.'s new tropical smoothie
| Item | Value |
|---|---|
| Selling price (SP) | $22.72 per unit |
| Variable cost (VC) | $9.09 per unit |
| Fixed costs (FC) | $30,000 per period |
Output is measured in units per period; costs/revenue are measured in $ per period.
(b) one reason why market research was important before launching the new product.
(c) one factor from the information given that FrostFuel Ltd. should consider when choosing between Location A and Location B.
(d) one way a marketing plan supports a successful product launch.
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.
(c) the current ratio and acid-test ratio for Solveta Ltd., showing your working.
(d) what these liquidity ratios suggest about Solveta’s short-term financial position.
(c) Using the resources and relevant business management tools and theories, recommend a plan of action for LuminaCare over the next five years. Your plan must make a clear recommendation on financing (choose Series A now, choose the concessional loan now, or propose a staged sequence using both at different times) and your choice.
(a) Using the break-even data in Table 1, the break-even level of output and what it represents.
| Total current liabilities | 100,000 |
| Non-current liabilities |
| Borrowings—medium term | 180,000 |
| Total liabilities | 280,000 |
| Net assets | 420,000 |
| Equity |
| Share capital | 300,000 |
| Retained earnings | 120,000 |
| Total equity | 420,000 |
