STC produces toothpaste for the mass market. Because competition in this market is intense, STC’s products have price elastic demand. STC follows a competitive pricing strategy (method). The marketing manager is considering replacing this pricing strategy in order to raise sales (see Table 2). STC’s head office is based in country X, while the factory is located in country Y. Complaints have been made about communication difficulties between managers and workers. Although STC has kept expanding, the managers still adopt a laissez-faire leadership style.
(a)[2]
What is meant by ‘mass market’?
(b)[2]
What is meant by ‘price elastic demand’?
(c)[4]
Identify and explain two disadvantages to STC of business growth.
(d)[6]
Identify and explain two ways STC could improve communication between managers and workers.
(e)[6]
Do you think STC should change its pricing strategy? 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: “Offering the same product to the whole market” …