pre release

Question 1

give 3 reasons the confectionary market is likely to be oligopolistic

Answer 1

1. dominated by large firms - mars, mondelez
2. high brand loyalty + significant advertising
3. significant barriers to entry - e.o.s, brand recognition

Question 2

give reasons why the ped in the market varies

Answer 2

1. inelastic with addictiveness - chocolate, sugar
2. elastic with high substitutes

Question 3

how do rising cocoa prices impact firms?

Answer 3

1. rising costs of production = squeezed profit margins
2. brand loyalty may reduce loss of revenue

Question 4

Why is the confectionery industry vulnerable to supply shocks?

Answer 4

1. reliance on cocoa from limited regions - west africa
2. climate change - reduced yields

vertical integration + diversification reduces risk

Question 5

How do large confectionery firms benefit from economies of scale?

Answer 5

1. bulk buying cocoa
2. global marketing campaigns

Question 6

whys is branding crucial?

Answer 6

1. confectionary is a low differentiation product
2. branding creates perceived value

innovation e.g vegan chocolate

Question 7

How do health concerns impact demand?

Answer 7

rising awareness of demand - reduces demand

firms can adapt - low sugar, dark chocolate

Question 8

give 2 examples of government policies which can be used

Answer 8

1. sugar taxes
2. advertising restrictions

may encourage innovation, although, demand may be inelastic

Question 9

give 2 risks of international demand

Answer 9

1. cultural differences - uncertain demand
2. exchange rate risk

Question 10

why is innovation important?

Answer 10

1. keep brand relevant
2. respond to consumer trends (vegan, low sugar)

Question 11

give 2 responses of firms to rising inflation

Answer 11

1. shrinkflation - reduce size of products
2. raise prices (strong brands)

Question 12

what is the value of the uk confectionary market?

Answer 12

£16-17 billion

despite inflation demand hs remained stable - inelastic

Question 13

what is the value of the biscuit market in the uk?

Answer 13

£3 billion

more likely to be bought daily than confectionary

Question 14

what has been growing faster value sales or volume sales?

Answer 14

value sales

Question 15

what % of the confectionary markets value sales does chocolate account for in the uk?

Answer 15

50%

Question 16

what is trading up?

Answer 16

buyer fewer items but more premium ones

Question 17

what is a growing competitor in the uk with rising inflation?

Answer 17

own brand products

Question 18

by how much is the confectionary market growing annually?

Answer 18

3%

Question 19

give 3 limitations to growth of the uks confectionary market

Answer 19

1. intense competition
2. health concerns
3. large supermarket power

Question 20

how much was the global confectionary market worth in 2024?

Answer 20

$214 billion