(a) (i) Using the data in Table 1.2, calculate the average seasonal variation for Quarter 4. (ii) Jon has calculated the trend for 2025 Quarter 4 as $21.41 million. Using your answer to (a)(i), calculate forecast sales for 2025 Quarter 4. (b) Evaluate whether time series analysis is sufficient to allow WS to make decisions to achieve its marketing objective.

Mark scheme

Marking points from the official mark scheme (May/June 2025). The mark or mark type is shown in brackets.

1. [2] (a)(i) Average seasonal variation = Total seasonal variation for Quarter 4 2022–3 / 2.
2. [1] (a)(i) OR 1.02 + 0.32 = 1.34
3. [2] (a)(i) 1.34 / 2 = ($)0.67 (million)
4. [2] (a)(ii) Forecast revenue = forecast trend plus average seasonal variation for that quarter
5. [1] (a)(ii) OR 21.41 + 0.67
6. [2] (a)(ii) 21.41 + 0.67 = ($)22.08 (million)
7. [OFR] (a)(ii) OFR based on 4(a)(i)
8. [K1] (b) Understanding of Time Series Analysis including its advantages (quantitative, based on actual data, factors in seasonality) and disadvantages (circumstances may change making prediction inaccurate, false sense of accuracy, relies on accurate data).
9. [K1] (b) Knowledge of qualitative sales forecasting.
10. [K1] (b) Knowledge of marketing planning and its elements: objectives, resources, research, marketing mix.
11. [K1] (b) Role of market research and market analysis in setting marketing objectives and making decisions.
12. [APP1] (b) Application to WS by making use of relevant case information once (e.g., WS three markets: fashion, leisure, work, use of information in Table 1.3, WS products high price, value for money, Jon's objective is to increase annual sales by 5% p.a., WS sells to major retailers and independents, increasing demand for non-leather/sustainable shoes, Jon recommended preparing an environmental audit).
13. [AN1] (b) Sales forecasting enables minimum cost distribution.
14. [AN1] (b) Sales forecasting enables objective to be set and planned for.
15. [AN1] (b) Sales forecasting may ignore changes e.g. new product lines, new marketing mix and therefore be inaccurate.
16. [AN1] (b) Objective of increasing sales requires account to be taken of costs, not just sales.
17. [AN1] (b) Changing nature of markets requires accurate forecasting (qualitative and quantitative) for sales targets to be met.
18. [AN1] (b) TSA data in Table 1.2 is for all products. Table 1.3 indicates there are differences in each product/market making the data inaccurate for each.
19. [AN1] (b) Table 1.3 gives important information which marketing planning can use.
20. [EVAL1] (b) Considered judgement based on argument.
21. [EVAL1] (b) Short term v long term.
22. [EVAL1] (b) Sales forecasting important but other elements need to be considered for objectives to be met e.g. production capacity, appropriate quality of product, appropriate marketing mix.
23. [EVAL1] (b) Objective of increasing sales is imprecise.
24. [EVAL1] (b) Accuracy of forecasting relies on accurate methods and data generated.
25. [EVAL1] (b) Objective is confused – 'increase sale without entering new markets' but Jon wants research into non-leather products. Are these a 'new market'? or not? This needs clarifying before setting a marketing plan.
26. [EVAL1] (b) Any new products will significantly alter sales forecasts, and in a constantly changing market forecasts on their own may not be accurate.
27. [EVAL1] (b) Information on % sales revenue from different products, forecast market growth and strength of competition must be taken into account when forecasting sales, not just rely on TSA.
28. [EVAL1] (b) Forecasting sales must apply to the three different markets, not just overall sales.