NSL is a business based in country $$$X$$$ ．It manufactures food products including bread and breakfast cereals．NSL uses lean production in its factory．Maintaining quality is important．NSL imports $$$15 \%$$$ of its raw materials．Changes in country X＇s exchange rate can affect businesses which import raw materials．NSL＇s Marketing Manager knows the business should respond to changes in consumer spending patterns．She is aware that market research can be used to help make business decisions．（b）Identify two reasons why consumer spending patterns might change． Reason 1： Reason 2： .......................................................................................................................................

Business

IGCSE&ALevel

CAIE

Exam No：0450_s25_qp_11 Year：2025 Question No：2(b)

Answer:

Award 1 mark for each reason (max 2).
Points might include changes in:
- Price of product
- Price of competitors products/increased competition
- Incomes/wages/unemployment/business cycle or examples
- Population size/structure/life stage of consumers
- Taste/fashion/preferences
- Advertising/promotion
- Technology
- Taxation
- Interest rates
- Exchange rates
- Weather/season

Other appropriate responses should be credited.

Knowledge points:

3.1.1.1. Identifying customer needs

3.1.1.2. Satisfying customer needs

3.1.1.3. Maintaining customer loyalty

3.1.1.4. Building customer relationships

3.1.2.1. Why customer/consumer spending patterns may change

3.1.2.2. The importance of changing customer needs

3.1.2.3. Why some markets have become more competitive

3.1.2.4. How businesses can respond to changing spending patterns and increased competition

3.1.3.1. Benefits and limitations of both approaches to marketing

3.1.4.1. How markets can be segmented, e.g. according to age, socio-economic grouping, location, gender

3.1.4.2. Potential benefits of segmentation to business

3.1.4.3. Recommend and justify an appropriate method of segmentation in given circumstances

Answer:

Knowledge points:

Solution:

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