SproutSip is a small business that sells bottled vegetable smoothies through independent cafés. The founder, Mira, wants to redesign the smoothies so that they appeal to office workers who buy lunch quickly. She is considering smaller bottles, clearer nutritional information and more secure packaging to prevent leaks in bags.
Define the term product.
Explain one way in which packaging could support SproutSip’s marketing mix.
GlowTrail makes battery-powered lights for cyclists. Its original safety light is now sold in many bicycle shops and online stores, but sales growth has slowed. GlowTrail has recently launched a new helmet light that is only available through its own website. The finance director is concerned that too many of GlowTrail’s products could reach decline at the same time.
Outline one feature of the maturity stage of the product life cycle.
Explain one relationship between GlowTrail’s product portfolio and its marketing mix.
Harbour Clay is a family business that makes handmade mugs and plates. It sells at local markets and through a small website. Many tourists recognise its blue wave logo, but most only buy once. The owners want to increase repeat purchases and possibly charge higher prices than mass-produced competitors.
Describe the term brand loyalty.
Explain one importance of branding to Harbour Clay.
NorthPier Smoothies (NS) operates three juice bars near a waterfront. NS has used the same logo and packaging for eight years. To develop its brand, NS introduced a refreshed logo, reusable cups and a loyalty app.
Monthly customer data are shown below.
Item | Before brand development | After brand development |
|---|---|---|
Loyalty app/card members | 2000 | 2600 |
Members making repeat purchases in the month | 900 | 1430 |
Average monthly spend per repeat customer | $24 | $27 |
Brand development campaign cost | $0 | $12000 |
Calculate the change in NS’s brand loyalty rate after the brand development campaign. Show all your working.
Comment on the importance of branding to NS.
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Mira Candles (MC) makes scented candles for local gift shops. MC currently has low brand awareness but receives excellent online reviews from existing customers. MC is considering its pricing strategy for a new candle range.
Market and cost data are shown below.
Item | Data |
|---|---|
Total unit cost per candle | $5.50 |
Proposed mark-up for cost-plus pricing | 40% |
Forecast monthly sales at the cost-plus price | 1200 candles |
Average competitor price | $6.20 |
Premium price considered by MC | $9.00 |
Penetration price considered by MC | $4.80 |
Surveyed customers saying price is important | 68% |
Surveyed customers recognizing the MC brand | 12% |
Calculate MC’s cost-plus price and the forecast monthly profit at this price. Show all your working.
Comment on the appropriateness of premium pricing for MC’s new candle range.
BentoBite operates a chain of lunch kiosks in railway stations. Its original rice bowl has been popular for several years but sales have stopped growing as more competitors have opened nearby. The operations manager suggests changing the packaging to a reusable container. The marketing manager suggests repositioning the rice bowl as a healthier premium lunch.
Explain two extension strategies that BentoBite could use for its original rice bowl.
PixelNest sells desk lamps aimed at students. Its new lamp includes a wireless phone charger and recycled aluminium casing. PixelNest’s variable and fixed costs are higher than for ordinary lamps. The marketing director is considering either cost-plus pricing or premium pricing for the launch.
Explain the appropriateness of cost-plus pricing and premium pricing for PixelNest’s new desk lamp.
QuietPods operates small study spaces that customers book by the hour. It has opened in two university towns but wants to attract more students before examination periods. The marketing manager is considering a campaign using posters at bus stops, short videos on social media and personalised discount codes sent to previous customers.
Distinguish between above the line promotion and below the line promotion.
Explain one benefit to QuietPods of using through the line promotion.
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LumaLunch (LL) produces vegan snack boxes for office workers. LL launched its main product in 2023 and changed several elements of its marketing mix in 2024, including improved packaging, wider distribution through office vending machines and more social media promotion.
LL’s marketing manager has collected the following data.
Item | 2023 | 2024 |
|---|---|---|
Units sold | 30000 | 42000 |
Average selling price per unit / $ | 4.00 | 4.20 |
Variable cost per unit / $ | 1.60 | 1.70 |
Fixed production costs / $ | 45000 | 50000 |
Marketing expenditure / $ | 28000 | 40000 |
Calculate LL’s profit in 2024. Show all your working.
Comment on the relationship between LL’s product life cycle stage, investment and profit.
CleanCup (CC) manufactures stainless steel water bottles. Sales of CC’s original bottle are no longer growing, so CC is considering an extension strategy: new sustainable packaging and a redesigned label aimed at gift buyers.
Forecast annual data are shown below.
Item | Current packaging | New sustainable packaging |
|---|---|---|
Forecast units sold | 8500 | 10500 |
Selling price per unit ($) | 18.00 | 18.00 |
Variable cost per unit, including packaging ($) | 9.20 | 10.80 |
Annual marketing and design costs ($) | 12000 | 26000 |
Calculate the forecast change in CC’s annual profit if it uses the new sustainable packaging. Show all your working.
Comment on whether the new packaging is an appropriate extension strategy for CC.
BrightWave Soap (BS) is launching a new range of handmade soaps. BS is choosing between different promotional methods. The contribution per soap sold is expected to be $5.
The marketing manager has prepared the following forecasts.
Assume that each successful conversion results in one soap sold, so the conversion rate can be used to estimate the number of soaps sold.
Promotional method | Type of promotion | Campaign cost | Estimated reach | Expected conversion rate |
|---|---|---|---|---|
Regional radio adverts | Above the line | $18000 | 120000 people | 2% |
Loyalty emails and in-store displays | Below the line | $6000 | 20000 people | 8% |
Radio adverts with personalized online discount codes | Through the line | $22000 | 100000 people | 3.5% |
Calculate the expected net contribution from the regional radio adverts and from the loyalty emails and in-store displays. Show all your working.
Comment on whether BS should use through the line promotion for the launch.
MeadowMelt produces artisan ice cream using milk from local farms. It currently sells only through its own shop, which gives customers the chance to taste new flavours and meet staff. A national supermarket chain has offered to stock MeadowMelt in 80 stores, but it would require lower wholesale prices and standardized packaging.
Analyse the importance to MeadowMelt of choosing an appropriate distribution channel.
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LumaCare is a private eye clinic that offers appointments to local residents and international patients. Patient reviews praise the medical staff but complain about confusing online booking, long waits at reception and a cold-looking waiting area. LumaCare wants its marketing mix to communicate reassurance and professional care.
Analyse the importance of people, processes and physical evidence to LumaCare’s marketing mix.
AeroFit (AF) operates fitness studios. AF introduced dynamic pricing for yoga classes because some classes were full while others had spare capacity. Before the change, all classes had the same price.
Monthly data are shown below.
Class type | Price before dynamic pricing (US$) | Bookings before dynamic pricing | Price after dynamic pricing (US$) | Bookings after dynamic pricing |
|---|---|---|---|---|
Peak evening classes | 20 | 450 | 24 | 480 |
Off-peak afternoon classes | 20 | 450 | 14 | 620 |
Calculate the price elasticity of demand for AF’s off-peak afternoon classes following the price reduction. Show all your working.
Comment on the appropriateness of dynamic pricing for AF.
HarborHall (HH) is a small theatre that also rents space for corporate events. It has spare capacity on weekdays. A conference organizer has offered to buy a block of tickets for a weekday performance at a lower price than HH’s normal ticket price.
Data for the proposed special order are shown below.
Item | Value |
|---|---|
Normal ticket price | $30 per ticket |
Special order price per ticket | $18 per ticket |
Variable cost per guest | $7 per guest |
Number of tickets requested | 300 tickets |
Spare weekday capacity | 350 seats |
Extra cleaning and staffing cost for the order | $600 |
Weekly fixed costs, unaffected by the order | $5,200 |
Calculate the net contribution from accepting the special order. Show all your working.
Comment on the appropriateness of contribution pricing for HH’s special order.
HarbourPaws (HP) is a privately owned dog day-care and grooming service in a large city. HP targets busy professionals who are prepared to pay above-average prices if they trust that their dogs are safe and well cared for. HP has high brand awareness locally because of its colourful vans and active social media posts. However, recent online reviews mention that some front-line employees are excellent while others seem nervous when dealing with anxious dogs and worried owners. Customers also complain that HP’s app-based booking process is confusing and that the reception area looks crowded and smells unpleasant at peak times. A new low-cost competitor has opened nearby. HP’s owner has a limited marketing budget and is considering whether to focus on improving people, processes and physical evidence rather than reducing prices.
Discuss whether HP should focus its marketing mix on people, processes and physical evidence rather than reducing prices.
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MapleModo (MMo) manufactures modular wooden toys for children. Its flagship product, BuildTown, has been sold for nine years and is well known among parents who value durable, screen-free toys. BuildTown has high repeat purchases from families buying extra pieces, but sales growth has slowed and some retailers say the product looks old-fashioned. MMo earns a steady positive cash flow from BuildTown. The marketing manager proposes an extension strategy: new recyclable packaging, additional themed pieces, social media demonstrations and distribution through museum gift shops. The operations director argues that MMo should instead use its limited finance to launch a new STEM robot toy. The robot may attract older children, but it would require new production equipment, employee training, online tutorials and heavy launch promotion.
Recommend whether MMo should use extension strategies for BuildTown or invest in launching the new STEM robot toy.
QuickKit (QK) sells meal kits through an online subscription service. Competitors have recently reduced prices. QK is considering competitive pricing, but customer complaints also show that its delivery process and packaging may need improvement.
Weekly data for three pricing options are shown below.
Pricing option | Price per meal kit (US$) | Variable cost per meal kit (US$) | Forecast weekly orders | Additional weekly packaging and delivery process cost (US$) | Market research note |
|---|---|---|---|---|---|
Match main competitors | 11.00 | 6.80 | 2200 | 0 | Average competitor price is 11.20 |
Maintain a premium price | 13.00 | 6.80 | 1600 | 2500 | 61% of customers want improved packaging |
Discount below competitors | 9.50 | 6.80 | 2800 | 0 | Current failed delivery rate is 8%, compared with 3% for competitors |
Calculate the forecast weekly contribution after additional packaging and delivery process costs for each pricing option. Show all your working.
Comment on the appropriateness of QK using competitive pricing as part of its marketing mix.
Aroma Atlas (AA) is a medium-sized coffee roaster that sells packaged coffee beans through independent grocery stores and its own website. AA’s best-known product, Heritage Blend, has been sold for eight years. It still has high brand awareness among older customers, but sales growth has stopped and grocery retailers are requesting more discounts. AA has recently launched a ready-to-drink cold brew coffee, which is popular with younger customers but requires high marketing investment and refrigerated distribution.
AA is considering an extension strategy for Heritage Blend. The proposed strategy would include new compostable packaging, a repositioning campaign focused on ethical sourcing, social media videos, and a loyalty subscription through AA’s website. Table 1 shows selected actual and forecast data for AA.
Measure | Continue current mix | Heritage extension | Cold brew focus |
|---|---|---|---|
Annual units sold ('000) | 500 | 530 | 650 |
Average selling price ($) | 10.00 | 10.00 | 12.00 |
Gross profit margin (%) | 40 | 43 | 30 |
Marketing expenditure ($'000) | 200 | 280 | 700 |
Distribution costs ($'000) | 150 | 140 | 350 |
Forecast net profit ($'000) | 1,650 | 1,859 | 1,290 |
Forecast net cash flow impact ($'000) | 1,650 | 1,759 | 790 |
Using the data in Table 1 and relevant marketing theory, evaluate whether AA should use the proposed extension strategy for Heritage Blend.
CityRest (CR) operates six budget hostels in major European cities. CR targets young travellers who usually book online and compare prices carefully. In the last year, occupancy has fallen and online reviews have criticized slow check-in, poorly trained reception staff and basic communal areas. However, CR’s central locations remain popular.
CR’s directors are considering changing the marketing mix to reposition CR as a higher-priced “social boutique hostel”. The proposed changes include staff training, redesigned reception areas, improved online booking and check-in processes, partnerships with local tour guides, and more social media promotion. Table 1 shows selected current data and forecasts for CR if the repositioning is introduced.
Measure | Current | Forecast |
|---|---|---|
Average bed price (€ per night) | 28 | 41 |
Occupancy rate (%) | 82 | 75 |
Average customer rating (/10) | 6.2 | 8.1 |
Staff training cost (€000) | 0 | 75 |
Refurbishment cost (€000) | 0 | 350 |
Average check-in time (min) | 13 | 5 |
Social media promotional expenditure (€000) | 20 | 85 |
Annual revenue (€000) | 4320 | 5680 |
Annual profit (€000) | 480 | 710 |
Using the data in Table 1 and relevant marketing theory, discuss whether CR should reposition itself as a higher-priced social boutique hostel.
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CityWeave (CW) is a social enterprise that offers guided walking tours and craft workshops in a multicultural city. CW’s mission is to support local artists and provide visitors with authentic cultural experiences. Its current customers are mainly domestic tourists and university groups. CW has a strong ethical brand image but low brand awareness among international visitors who compare tour providers online before arriving. The marketing manager proposes a new marketing mix: premium prices, direct booking through CW’s own website, social media videos featuring artists, multilingual guides, a standardized booking and workshop process, and improved physical evidence such as branded aprons, professional signage and certificates for participants. The finance manager prefers a cheaper mass-market approach sold through travel agents, with frequent discounts and larger tour groups.
Evaluate the appropriateness of CW’s proposed marketing mix for its tours and workshops.
GlideGo (GG) operates an app-based electric scooter rental service in three large cities. Customers pay an unlocking fee plus a price per minute. GG’s scooters have spare capacity on weekday mornings but are often unavailable on Friday evenings and weekends. Competitors have recently advertised lower flat prices per minute.
GG’s marketing director is considering two pricing options. Option A is dynamic pricing, with higher prices during peak demand and lower prices during off-peak periods. Option B is competitive pricing, using one flat price per minute similar to the main competitor. GG’s operations director is concerned that customers may see dynamic pricing as unfair and that the app must clearly explain any price changes. Table 1 shows selected current data and forecasts for both options.
Metric | Current | A peak | A off-peak | A total | B flat |
|---|---|---|---|---|---|
Unlocking fee / $ per ride | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 |
Price per minute / $ per minute | $0.40 | $0.58 | $0.28 | varies | $0.36 |
Forecast weekly rides / rides | 10,000 | 4,100 | 9,600 | 13,700 | 10,900 |
Average ride duration / min | 11.0 | 12.0 | 9.0 | 9.9 | 11.0 |
Variable cost per ride / $ per ride | $2.20 | $2.20 | $2.20 | $2.20 | $2.20 |
Contribution per ride / $ per ride | $3.20 | $5.76 | $1.32 | $2.65 | $2.76 |
Forecast weekly revenue / $ | $54,000 | $32,636 | $33,792 | $66,428 | $54,064 |
Forecast weekly contribution / $ | $32,000 | $23,616 | $12,672 | $36,288 | $30,084 |
Estimated price elasticity of demand | — | -0.6 | -1.4 | — | -0.8 |
Forecast customer complaint rate / % | 8% | 16% | 6% | 9% | 5% |
App development cost (one-off) / $ | $0 | — | — | $3,000 | $0 |
Using the data in Table 1 and relevant marketing theory, recommend whether GG should choose Option A dynamic pricing or Option B competitive pricing.
Read the resources and answer the questions that follow.
GreenSteps Mobility (GSM) is a social enterprise in a large city. It repairs donated bicycles and offers low-cost cycle repair workshops. Surpluses fund free cycling lessons for unemployed adults. GSM has also launched an e-bike leasing pilot for low-income delivery riders. The pilot aims to reduce transport costs for riders and reduce traffic pollution. GSM’s marketing manager believes that the seven Ps of the marketing mix are not yet consistent: the low price supports the social mission, but some riders say the service feels unreliable.
| Service | Product life cycle stage | Monthly users | Average user fee | Monthly marketing spending | Monthly operating result | Customer feedback |
|---|---|---|---|---|---|---|
| Repair workshops | Maturity/saturation | 900 | USD 8 | USD 1200 | USD 3500 surplus | High satisfaction; some users want evening workshops |
| E-bike leasing pilot | Introduction | 110 | USD 42 per month | USD 4500 | USD 2200 deficit | Waiting list of 180 riders; complaints about booking and maintenance |
Short repair videos made by GSM volunteers have received 1.8 million views in six months and GSM has 42 000 followers. However, only 3% of viewers click through to GSM’s booking page.
“The monthly lease is affordable and I like GSM’s mission, but maintenance appointments change at short notice. Some bikes look scratched, so customers think I am using a second-hand service rather than a professional one.”
Describe one extension strategy that GSM could use for its repair workshops.
Explain two ways in which the seven Ps create marketing challenges for GSM’s e-bike leasing pilot.
Using all the resources provided and your knowledge of business management tools and theories, recommend a possible marketing mix plan for GSM over the next two years.
Read the resources and answer the questions that follow.
Mosaic Meals (MM) is a social enterprise founded by refugees who prepare culturally diverse meals. MM operates a small community café and uses its surplus to fund food safety training for newly arrived migrants. It wants to launch a school lunch subscription service for primary schools and sell chilled meal packs through selected local food shops. MM’s mission is to improve children’s access to nutritious food while creating paid work for migrant cooks.
| Item | Community café | Proposed school lunch subscription | Proposed chilled meal packs |
|---|---|---|---|
| Current or forecast monthly meals / meals | 4200 | 9500 | 7000 |
| Average contribution per meal / USD | 2.40 | 1.25 | 0.90 |
| Brand awareness in target market / % | 38 | 12 | 8 |
| Main marketing issue | Limited seating | Need trust and reliability | Need packaging and shelf visibility |
MM has 26 000 Instagram followers. Posts showing the personal stories of refugee cooks have an average engagement rate of 14%, but paid adverts for chilled meal packs have an engagement rate of only 2%.
“Parents like the idea of authentic food and social impact. However, schools need consistent delivery times, clear allergen labelling, simple invoices and staff who can explain the meals to children.”
Describe one importance of branding to MM.
Explain one benefit and one limitation to MM of using social media marketing as a promotional strategy.
Using all the resources provided and your knowledge of business management tools and theories, recommend a possible marketing mix plan for MM’s expansion into school lunch subscriptions and chilled meal packs.
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Read the resources and answer the questions that follow.
Harbour Warmth (HW) is a social enterprise that provides home energy audits and low-cost insulation installation for households at risk of fuel poverty. HW trains unemployed people as energy advisers. The service is seasonal: demand is high in winter but many advisers have spare capacity in summer. HW is considering changing its pricing and service delivery processes. The marketing director is concerned that any pricing change must not damage HW’s ethical brand.
| Service | Current price / USD | Variable cost per appointment / USD | Capacity utilization / % | Estimated price elasticity of demand / no unit | Main issue |
|---|---|---|---|---|---|
| Winter energy audit | USD 65 | USD 28 | 95% | -0.4 | Long waiting times |
| Summer energy audit | USD 65 | USD 28 | 40% | -1.8 | Low awareness and unused adviser time |
| Installation follow-up visit | No charge | USD 18 | 70% | Not available | Some clients miss appointments |
A local community group post praising HW’s advisers was shared 1200 times. One negative post about a missed appointment was shared 600 times within 24 hours.
“The adviser was kind and explained how to stay warm. But the van had no logo, the report looked like a photocopy, and I was confused about when the installer would come back.”
Describe one reason why physical evidence is important in marketing HW’s service.
Analyse the appropriateness of dynamic pricing for HW’s home energy audits.
Using all the resources provided and your knowledge of business management tools and theories, recommend a possible marketing mix plan for HW for the next 12 months.