Business 0450 · IGCSE · Marketing, competition and the customer
Marketing, competition and the customer — practice question
AirGo is a market-orientated business. It offers flights to 10 airports throughout Asia. 90% of its customers are holidaymakers. AirGo advertises only in national newspapers. The Marketing Director is concerned that demand for AirGo’s flights may be price elastic. Last year revenue decreased because competition increased. She would like to aim at a different market segment, such as business customers. She is unsure how new legal controls designed to protect the environment could affect AirGo.
(a)[2]
What is meant by the term ‘market-orientated’?
(b)[2]
What is meant by demand being ‘price elastic’?
(c)[4]
Identify and explain two ways in which new legal controls designed to protect the environment might affect AirGo.
(d)[6]
Identify and explain two disadvantages to AirGo of advertising in newspapers.
(e)[6]
Do you think AirGo should aim at a different market segment? Justify your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “A business carries out market research before it develops a product” …