1、Question 1Part (a): Barrs product mix (10 marks)Award one mark for each relevant advantage or disadvantage and up to three additional marks per advantage or disadvantage for development, reasoned reference to relevant concepts and/or justified illustrative examples from the case study. This gives a
2、maximum of four for each advantage or disadvantage (but see below).Answers which cover only disadvantages or advantages should gain a maximum of five marks.Relevant concepts: product lines; product items; product positioning; product life cycle. Possible advantages include: coherent grouping of prod
3、ucts within one market (drinks) can help to gain economies of scale in promotion and operations, build managerialexpertise etc; targeted at a number of different markets (eg Orangina, Tizer); range of different product lines and items some have a very clear identity (eg Irn-Bru).Possible disadvantag
4、es include: many are at the mature stage of the product life cycle; soft drinks is a rapidly changing market and new brands may be important (Barrs may be finding it hard to develop new brands its own brands are well-established and its franchises are in a static market (Orangina), or not well-known
5、 in the UK (Lipton Ice Tea).Part (b): Elasticity (5 marks)Award one mark for an indication that the candidate understands the term price elastic.Award one mark for each relevant point plus up to three additional marks for development and/or examples from the case study.Relevant concepts: price elast
6、icity of demand; promotional methods; product life cycle; market research.Price elasticity may influence Barrs in that it can lead to attempts to enhance brand loyalty so that price elasticity is reduced which, in turn, curtails the impact on sales of a change in price.There are many examples in the
7、 case study of attempts to develop brand loyalty, eg Irn-Bru, Tizer.Question 2Barrs external environment (12 marks)Award one mark for each relevant point and up to three additional marks per advantage or disadvantage for development, reasoned reference to relevant concepts and/or justified illustrat
8、ive examples from the case study. This gives a maximum of four for each relevant point.Relevant concepts: systems approach; stakeholders; government economic policy; users of financial information.Answers should use examples to show how Barrs has reacted to feedback from its environment and how it h
9、as tried to influence it.Answers should analyse the process by which Barrs interacts in each case.Possible examples include: use of government assistance when entering the Russian market (and discussion of market failure); threats to Orangina franchise; changing promotional methods to make use of th
10、e internet; currency fluctuations and the knock-on effects; ASA and possible public reaction to Barrs.Answers which consist of a series of examples with no analysis should get a maximum of seven marks.Question 3Part (a): Stakeholder information (10 marks)Award one mark for each relevant point plus u
11、p to three additional marks for development and/or examples from the case study.Candidates who cover two points well can earn a grade A mark.Relevant concepts: stakeholder; purpose of financial information; management control; organisational goals, objectives and policy; demand.Fidelity buys shares
12、so that the dividends from them can be distributed to holders of its units.The information which it needs will depend on its organisational goals, eg the degree of risk it is willing to take.These are not given so it is not easy to say which information will be valuable.However, it may include: fran
13、chise agreements (eg when they start and end as this may influence Barrs earnings); ASA adjudications which may affect the demand for Barrs products; investments in new machinery (influence extent to which Barrs is competitive); promotional campaigns (influence demand for products); dividends (becau
14、se this will influence earnings that it gets and how much it can pay its unit holders).Good answers will provide a reasoned argument which explains the link between the information and its value to Fidelity.Part (b): Use of information (8 marks)Award one mark for each relevant point and up to three
15、additional marks for development, reasoned reference to relevant concepts and/or justified illustrative examples from the case study.This gives a maximum of four for each advantage or disadvantage (but see below).Answers which cover only one company should gain a maximum of four marks. One well deve
16、loped point for each company could secure all eight marks.Relevant concepts: stakeholder; strategies of control; organisational goals, objectives and policy; formal organisation; users of financial information; purposes of information; sources of relevant information.Answers should make it clear whi
17、ch item of information has been chosen, eg profit after tax.For Fidelity, this could be used to monitor whether it has invested in terms of its objectives (eg these may relate to companies which have stable earnings), whether it has a suitable share profile across several companies; whether previous
18、 share purchasing decisions should be reviewed.Barrs could use it to monitor the year on year progress of the company, to monitor the achievement of long term objectives; to monitor the effectiveness of its profit sharing schemes.As with part (a), good answers will provide a reasoned argument which
19、explains the link between the item information and control in the two companies.Question 4Partnerships (12 marks)Award one mark for each relevant advantage or disadvantage and up to three additional marks per advantage or disadvantage for development, reasoned reference to relevant concepts and/or j
20、ustified illustrative examples from the case study. This gives a maximum of four for each advantage or disadvantage (but see below).Answers which cover only disadvantages or advantages should gain a maximum of six marks.Relevant concepts:market demand; internal and external environment; goals; purpo
21、se and analysis of financial statements; sources of finance; product mix marketing mix; product life cycle; promotion.Possible advantages of concluding another partnership agreement include: variation of product portfolio; increase in market penetration (hence improved economies of scale);reduction
22、of uncertainty about ending of current agreements; develop product at start of life cycle (like Lipton Ice Tea); updating of brands; chances of improved profitability; opening up new markets (if develop overseas markets).Possible disadvantages of concluding another partnership agreement include: nee
23、d to obtain finance to support promotion of new product; Barrs is a relatively small company and could spread its resources too thinly so it is overstretched; the company may divert attention from efforts to build its own new brands such as Simply Citrus; may be problems in getting a strong brand (r
24、elatively small number of internationally known soft drinks and Barrs may be unable to secure a deal with a brand without meeting a conflict of interest).Question 5Organisational structure (8 marks)Award one mark for each relevant point and up to three additional marks for development, reasoned refe
25、rence to relevant concepts and/or justified illustrative examples from the case study.To gain a grade A mark (six) candidates must cover at least one argument both for and against this form of structure.Relevant concepts: alternative forms of structure; purpose of financial statements; marketing mix
26、; formal organisation; stakeholders.Reasons why structure may be effective include: clear differentiation of responsibility (eg between finance and marketing) which, for Barrs, are quite distinct finance is maintaining control on costs etc, while marketing is about creating an impact; finance may be
27、 able to adjudicate between competing spending demands of operations and marketing; Barrs is traditional company with traditional values and this may fit well with a traditional structure (contingency); keeping marketing separate can allow it to develop new approaches as it has done.Reasons why stru
28、cture may be less effective include: could inhibit change (there is not a lot of evidence of this although the appointment of two new young directors suggests that the company may need to develop more quickly than it has); may lead to empire building and conflict between two functions, especially as
29、 marketing in soft drinks is expensive; an alternative structure (eg based on brands or product lines) may help Barrs to set priorities for future development and make sure the organisation of the company reflects its commitment to brands; a brand based structure could help ensure funds are allocate
30、d in a way that aligns more closely with the requirements of marketing each brand, which may be less easy to do in the current structure.Question 6Part (a): Demand for Irn-Bru (6 marks)Award one mark for each relevant point plus up to one additional mark for development and/or examples from the case
31、 study. Candidates who cover three points well can earn all marks.Answers which are effectively a repeat of general points from Economics should receive a maximum of two marks.Relevant concepts: demand; promotion.Possible factors include: price (the soft drinks market is sensitive to price as the pr
32、oblem with the Euro shows); tastes and fashion (for some products like Tizer these seem very important as it has be re-launched several times in recent years); prices of other products (see the Euro example); weather (dip in profits in 2002); advertising and promotion (this is vital in influencing t
33、astes and making people aware of Barrs products, eg Irn-Bru sponsorships).Part (b): Influence on Barrs financial situation (4 marks)Award one mark for each relevant point plus up to one additional mark for development and/or examples from the case study.Candidates who cover two points well can earn
34、all marks.Relevant concepts: demand; analysis of financial statements.Ways by which these factors may affect Barrs financial situation include: promotion may increase demand which can feed through into higher sales and profits; prices of other goods may lead to reduced demand or force a reduction in
35、 price to maintain sales levels this can lead to knock-on effects on sales revenue and costs, both of which may affect profits; weather conditions may affect cash flow if sales are more or less than anticipated.Part (c): Predicting effect of promotional activity (5 marks)Award one mark for each rele
36、vant point plus up to one additional mark for development and/or examples from the case study.Up to two marks may be given for a correct supply and demand diagram.An answer which does not have a diagram should get a maximum of four marks.If Barrs are aware of the factors which influence the demand f
37、or its products, it can look at what may happen if any one changes.This is because a change in all, except price, will lead to a shift in the demand curve.A simple supply and demand diagram can illustrate the effect of shift in a demand curve to the left (a fall in demand) or to the right (a rise in
38、 demand).Question 7Part (a): Advantages and disadvantages of Barrs (12 marks)Award one mark for each relevant advantage or disadvantage and up to three additional marks per advantage or disadvantage for development, reasoned reference to relevant concepts and/or justified illustrative examples from
39、the case study. This gives a maximum of four for each advantage or disadvantage (but see below).Answers which cover only disadvantages or advantages should gain a maximum of six marks.Answers which concentrate on only one aspect of the company (such as marketing) should gain a maximum of six marks.R
40、elevant concepts:market demand; internal and external environment; goals; purpose and analysis of financial statements; sources of finance; product mix marketing mix; product life cycle; promotion.Possible advantages include:company has a clear focus on soft drinks;well-established company with a go
41、od reputation especially in Scotland; company has a good profit and dividend record; company has a net inflow of cash in the most recent financial year and should have money for investment; company has a record of investing in its brands, its operations; well-motivated staff; it has built a reputati
42、on for innovative advertising.Possible disadvantages include:company is in a highly competitive market and is vulnerable because it is small; its most well-known brands are in the mature stage of the product life cycle; it is heavily dependent on carbonated soft drinks it has a water product but thi
43、s is small; its main market is in Scotland and is further growth is likely to be hard getting established in England is taking a long time and the company has few other markets; franchising is an inherently risky operation and is short term.Answers should give reasons to explain exactly why a partic
44、ular factor could be an advantage or a disadvantage.Candidates who explicitly recognise, and explain, that a factor like the string Scottish base is both an advantage and a disadvantage should be given credit.Part (b): Key future success (8 marks)Award one mark for each relevant advantage or disadva
45、ntage and up to two additional marks for development, reasoned reference to relevant concepts and/or justified illustrative examples from the case study.This gives a maximum of three for each point.Marks for this should be awarded on the basis of the justification given rather than the actual key th
46、ings which are identified.Relevant concepts: market demand; internal and external environment; goals; purpose and analysis of financial statements; sources of finance; product mix marketing mix; product life cycle; promotion.Some possible actions include: finding ways to re-invigorate the product mi
47、x of the company (which relies heavily on Irn-Bru); the company does seem very traditional but this may be part of its success, so Roger White may have to find ways to retain the benefits of the old style family business but make sure it can continue to compete; prepare for the ending of the Orangina franchise in 2007 (this product appeals to adults and is good for this reason but its market is static); develop new markets for Irn-Bru (progress in England is forward but slow so other markets like Russia may be worth developing).
