Business (AS & A Level) · May / June 2026 · Paper 21 · Question 1

Chilled Cola (CC) CC manufactures a range of cola drinks aimed at the mass market. The company is the market leader for cola drinks in country N. CC produces four variants of its cola drink: • Original cola • Sugar‑free cola • Caffeine‑free cola • Cherry cola The company uses market segmentation to plan the marketing of each of the four variants. CC uses cost‑based pricing by adding 80% to the cost when calculating the price of all products. CC sells 50 000 bottles of Sugar‑free cola each month. Table 1.1 shows the cost information for one bottle of Sugar‑free cola. Table 1.1 Cost information for one bottle of Sugar‑free cola share of fixed costs $0.20 ingredients $0.35 packaging $0.10 CC’s sales of Cherry cola have decreased by 12% over the past year. The marketing manager is planning to carry out market research to investigate the reason for this decrease. The research will collect qualitative data. The marketing manager will use this data to make decisions about a marketing campaign to increase sales. CC has 4 factories in country N and employs 1750 employees. All employees are paid using a time‑based payment method and the work is repetitive. Operations are capital intensive. The human resource manager is concerned that employees lack motivation, leading to high labour turnover. Labour turnover has increased by 8% over the past year. The human resource manager is considering changing the employee payment method from time‑based to piece rate. 5 10 15 20 25

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