Question1Part(a):Barr’sproductmix(10marks)Awardonemarkforeachrelevantadvantageordisadvantageanduptothreeadditionalmarksperadvantageordisadvantagefordevelopment,reasonedreferencetorelevantconceptsand/orjustifiedillustrativeexamplesfromthecasestudy.Thisgivesamaximumoffourforeachadvantageordisadvantage(butseebelow).Answerswhichcoveronlydisadvantagesoradvantagesshouldgainamaximumoffivemarks.Relevantconcepts:productlines;productitems;productpositioning;productlifecycle.Possibleadvantagesinclude:coherentgroupingofproductswithinonemarket(drinks)—canhelptogaineconomiesofscaleinpromotionandoperations,buildmanagerialexpertiseetc;targetedatanumberofdifferentmarkets(egOrangina,Tizer);rangeofdifferentproductlinesanditems—somehaveaveryclearidentity(egIrn-Bru).Possibledisadvantagesinclude:manyareatthematurestageoftheproductlifecycle;softdrinksisarapidlychangingandnewbrandsmaybeimportant(Barr’smaybefindingithardtodevelopnewbrands—itsownbrandsarewell-establishedanditsfranchisesareinastaticmarket(Orangina),ornotwell-knownintheUK(LiptonIceTea).Part(b):Elasticity(5marks)Awardonemarkforanindicationthatthecandidateunderstandstheterm‘priceelastic’.Awardonemarkforeachrelevantpointplusuptothreeadditionalmarksfordevelopmentand/orexamplesfromthecasestudy.Relevantconcepts:priceelasticityofdemand;promotionalmethods;productlifecycle;marketresearch.PriceelasticitymayinfluenceBarr’sinthatitcanleadtoattemptstoenhancebrandloyaltysothatpriceelasticityisreducedwhich,inturn,curtailstheimpactonsalesofachangeinprice. Therearemanyexamplesinthecasestudyofattemptstodevelopbrandloyalty,egIrn-Bru,Tizer.Question2Barr’sexternalenvironment(12marks)Awardonemarkforeachrelevantpointanduptothreeadditionalmarksperadvantageordisadvantagefordevelopment,reasonedreferencetorelevantconceptsand/orjustifiedillustrativeexamplesfromthecasestudy.Thisgivesamaximumoffourforeachrelevantpoint.Relevantconcepts:systemsapproach;stakeholders;governmenteconomicpolicy;usersoffinancialinformation.AnswersshoulduseexamplestoshowhowBarr’shasreactedtofeedbackfromitsenvironmentandhowithastriedtoinfluenceit. AnswersshouldanalysetheprocessbywhichBarr’sinteractsineachcase. Possibleexamplesinclude:useofgovernmentassistancewhenenteringtheRussianmarket(anddiscussionofmarketfailure);threatstoOranginafranchise;changingpromotionalmethodstomakeuseoftheinternet;currencyfluctuationsandtheknock-oneffects;ASAandpossiblepublicreactiontoBarr’s.Answerswhichconsistofaseriesofexampleswithnoanalysisshouldgetamaximumofsevenmarks.Question3Part(a):Stakeholderinformation(10marks)Awardonemarkforeachrelevantpointplusuptothreeadditionalmarksfordevelopmentand/orexamplesfromthecasestudy. CandidateswhocovertwowellcanearnagradeAmark.Relevantconcepts:stakeholder;purposeoffinancialinformation;managementcontrol;organisationalgoals,objectivesandpolicy;demand.Fidelitybuyssharessothatthedividendsfromthemcanbedistributedtoholdersofitsunits. Theinformationwhichitneedswilldependonitsorganisationalgoals,egthedegreeofriskitiswillingtotake. Thesearenotgivensoitisnoteasytosaywhichinformationwillbevaluable. However,itmayinclude:franchiseagreements(egwhentheystartandendasthismayinfluenceBarr’searnings);ASAadjudicationswhichmayaffectthedemandforBarr’sproducts;investmentsinnewmachinery(influenceextenttowhichBarr’siscompetitive);promotionalcampaigns(influencedemandforproducts);dividends(becausethiswillinfluenceearningsthatitgetsandhowmuchitcanpayitsunitholders).GoodanswerswillprovideareasonedargumentwhichexplainsthelinkbetweentheinformationanditsvaluetoFidelity.Part(b):Useofinformation(8marks)Awardonemarkforeachrelevantpointanduptothreeadditionalmarksfordevelopment,reasonedreferencetorelevantconceptsand/orjustifiedillustrativeexamplesfromthecasestudy. Thisgivesamaximumoffourforeachadvantageordisadvantage(butseebelow).Answerswhichcoveronlyonecompanyshouldgainamaximumoffourmarks.Onewelldevelopedpointforeachcompanycouldsecurealleightmarks.Relevantconcepts:stakeholder;strategiesofcontrol;organisationalgoals,objectivesandpolicy;formalorganisation;usersoffinancialinformation;purposesofinformation;sourcesofrelevantinformation.Answersshouldmakeitclearwhichitemofinformationhasbeenchosen,egprofitaftertax. ForFidelity,thiscouldbeusedtomonitorwhetherithasinvestedintermsofitsobjectives(egthesemayrelatetocompanieswhichhavestableearnings),whetherithasasuitableshareprofileacrossseveralcompanies;whetherprevioussharepurchasingdecisionsshouldbereviewed. Barr’scoulduseittomonitortheyearonyearprogressofthecompany,tomonitortheachievementoflongtermobjectives;tomonitortheeffectivenessofitsprofitsharingschemes.Aswithpart(a),goodanswerswillprovideareasonedargumentwhichexplainsthelinkbetweentheiteminformationandcontrolinthetwocompanies.Question4Partnerships(12marks)Awardonemarkforeachrelevantadvantageordisadvantageanduptothreeadditionalmarksperadvantageordisadvantagefordevelopment,reasonedreferencetorelevantconceptsand/orjustifiedillustrativeexamplesfromthecasestudy.Thisgivesamaximumoffourforeachadvantageordisadvantage(butseebelow).Answerswhichcoveronlydisadvantagesoradvantagesshouldgainamaximumofsixmarks.Relevantconcepts: marketdemand;internalandexternalenvironment;goals;purposeandanalysisoffinancialstatements;sourcesoffinance;productmixmarketingmix;productlifecycle;promotion.Possibleadvantagesofconcludinganotherpartnershipagreementinclude:variationofproductportfolio;increaseinmarketpenetration(henceimprovedeconomiesofscale);reductionofuncertaintyaboutendingofcurrentagreements;developproductatstartoflifecycle(likeLiptonIceTea);updatingofbrands;chancesofimprovedprofitability;openingupnewmarkets(ifdevelopoverseasmarkets).Possibledisadvantagesofconcludinganotherpartnershipagreementinclude:needobtainfinancetosupportpromotionofnewproduct;Barr’sisarelativelysmallcompanyandcouldspreaditsresourcestoothinlysoitisoverstretched;thecompanymaydivertattentionfromeffortstobuilditsownnewbrandssuchasSimplyCitrus;maybeproblemsingettingastrongbrand(relativelysmallnumberofinternationallyknownsoftdrinksandBarr’smaybeunabletosecureadealwithabrandwithoutmeetingaconflictofinterest).Question5Organisationalstructure(8marks)Awardonemarkforeachrelevantpointanduptothreeadditionalmarksfordevelopment,reasonedreferencetorelevantconceptsand/orjustifiedillustrativeexamplesfromthecasestudy.TogainagradeAmark(six)candidatesmustcoveratleastoneargumentbothforandagainstthisformofstructure.Relevantconcepts:alternativeformsofstructure;purposeoffinancialstatements;marketingmix;formalorganisation;stakeholders.Reasonswhystructuremaybeeffectiveinclude:cleardifferentiationofresponsibility(egbetweenfinanceandmarketing)which,forBarr’s,arequitedistinct—financeismaintainingcontroloncostsetc,whilemarketingisaboutcreatinganimpact;financemaybeabletoadjudicatebetweencompetingspendingdemandsofoperationsandmarketing;Barr’sistraditionalcompanywithtraditionalvaluesandthismayfitwellwithatraditionalstructure(contingency);keepingmarketingseparatecanallowittodevelopnewapproachesasithasdone.Reasonswhystructuremaybelesseffectiveinclude:couldinhibitchange(thereisnotalotofevidenceofthisalthoughtheappointmentoftwonewyoungdirectorssuggeststhatthecompanymayneedtodevelopmorequicklythanithas);mayleadtoempirebuildingandconflictbetweentwofunctions,especiallyasmarketinginsoftdrinksisexpensive;analternativestructure(egbasedonbrandsorproductlines)mayhelpBarr’stosetprioritiesforfuturedevelopmentandmakesuretheorganisationofthecompanyreflectsitscommitmenttobrands;abrandbasedstructurecouldhelpensurefundsareallocatedinawaythatalignsmorecloselywiththerequirementsofmarketingeachbrand,whichmaybelesseasytodointhecurrentstructure.Question6Part(a):DemandforIrn-Bru(6marks)Awardonemarkforeachrelevantpointplusuptooneadditionalmarkfordevelopmentand/orexamplesfromthecasestudy.Candidateswhocoverthreepointswellcanearnallmarks.AnswerswhichareeffectivelyarepeatofgeneralpointsfromEconomicsshouldreceiveamaximumoftwomarks.Relevantconcepts:demand;promotion.Possiblefactorsinclude:price(thesoftdrinksmarketissensitivetopriceastheproblemwiththeEuroshows);tastesandfashion(forsomeproductslikeTizertheseseemveryimportantasithasbere-launchedseveraltimesinrecentyears);pricesofotherproducts(seetheEuroexample);weather(dipinprofitsin2002);advertisingandpromotion(thisisvitalininfluencingtastesandmakingpeopleawareofBarr’sproducts,egIrn-Brusponsorships).Part(b):InfluenceonBarr’sfinancialsituation(4marks)Awardonemarkforeachrelevantpointplusuptooneadditionalmarkfordevelopmentand/orexamplesfromthecasestudy. Candidateswhocovertwowellcanearnallmarks.Relevantconcepts:demand;analysisoffinancialstatements.WaysbywhichthesefactorsmayaffectBarr’sfinancialsituationinclude:promotionmayincreasedemandwhichcanfeedthroughintohighersalesandprofits;pricesofothergoodsmayleadtoreduceddemandorforceareductioninpricetomaintainsaleslevels—thiscanleadtoknock-oneffectsonsalesrevenueandcosts,bothofwhichmayaffectprofits;weatherconditionsmayaffectcashflowifsalesaremoreorlessthananticipated.Part(c):Predictingeffectofpromotionalactivity(5marks)Awardonemarkforeachrelevantpointplusuptooneadditionalmarkfordevelopmentand/orexamplesfromthecasestudy. Uptotwomarksmaybegivenacorrectsupplyanddemanddiagram. Ananswerwhichdoesnothaveadiagramshouldgetamaximumoffourmarks.IfBarr’sareawareofthefactorswhichinfluencethedemandforitsproducts,itcanlookatwhatmayhappenifanyonechanges. Thisisbecauseachangeinall,exceptprice,willleadtoashiftinthedemandcurve. Asimplesupplyanddemanddiagramcanillustratetheeffectofshiftinademandcurvetotheleft(afallindemand)ortotheright(ariseindemand).Question7Part(a):AdvantagesanddisadvantagesofBarr’s(12marks)Awardonemarkforeachrelevantadvantageordisadvantageanduptothreeadditionalmarksperadvantageordisadvantagefordevelopment,reasonedreferencetorelevantconceptsand/orjustifiedillustrativeexamplesfromthecasestudy.Thisgivesamaximumoffourforeachadvantageordisadvantage(butseebelow).Answerswhichcoveronlydisadvantagesoradvantagesshouldgainamaximumofsixmarks. Answerswhichconcentrateononlyoneaspectofthecompany(suchasmarketing)shouldgainamaximumofsixmarks.Relevantconcepts: marketdemand;internalandexternalenvironment;goals;purposeandanalysisoffinancialstatements;sourcesoffinance;productmixmarketingmix;productlifecycle;promotion.Possibleadvantagesinclude: companyhasaclearfocusonsoftdrinks;well-establishedcompanywithagoodreputationespeciallyinScotland;companyhasagoodprofitanddividendrecord;companyhasanetinflowofcashinthemostrecentfinancialyearandshouldhavemoneyforinvestment;companyhasarecordofinvestinginitsbrands,itsoperations;well-motivatedstaff;ithasbuiltareputationforinnovativeadvertising.Possibledisadvantagesinclude: companyisinahighlycompetitivemarketandisvulnerablebecauseitissmall;itsmostwell-knownbrandsareinthematurestageoftheproductlifecycle;itisheavilydependentoncarbonatedsoftdrinks—ithasawaterproductbutthisissmall;itsmainmarketisinScotlandandisfurthergrowthislikelytobehard—gettingestablishedinEnglandistakingalongtimeandthecompanyhasfewothermarkets;franchisingisaninherentlyriskyoperationandisshortterm.Answersshou