CAIE A-Level Business 8.2 Marketing strategy Question Bank

Evaluate PV's marketing strategy between 2012 and 2021.

Level

AO1 Knowledge and understanding 3 marks

AO2 Application

2 marks

AO3 Analysis

8 marks

AO4 Evaluation

7 marks

3

7-8 marks
Developed analysis of the overall strategy that identifies
connections between
causes, impacts and/or
consequences.

6-7 marks

Effective evaluation

A developed judgement/conclusion is made in the business context that draws together developed evaluative comments which balance some key arguments in the business context.

2

2-3 marks

Developed knowledge of relevant key term(s) and/or factor(s) is used to answer the question.

2 marks
Developed application of relevant point(s) to the business context.

4-6 marks
Developed analysis of
individual strategic element(s) that
identifies connections between causes,
impacts and/or
consequences.

3-5 marks

Developed evaluation

- A developed judgement/conclusion is made.

- Developed evaluative comments which balance some key arguments.

1

1 mark

Limited knowledge of relevant key term(s) and/or factor(s) is used to answer the question.

1 mark

Limited application of relevant point(s) to the business context.

1-3 marks

Limited analysis that identifies connections between causes, impacts and/or consequences.

1-2 marks

Limited evaluation

- A judgement/conclusion is made with limited supporting comment/evidence.

- An attempt is made to balance the arguments.

0

0 marks

No creditable response.

0 marks

No creditable response.

0 marks

No creditable response.

0 marks

No creditable response.

1

Indicative content:

AO1 Knowledge and understanding

No other AO2, AO3 or AO4 marks can be awarded without AO1.

Candidates must show knowledge and understanding, they cannot just mention a key term.

- Strategy - A plan of action to achieve a long term aim.

- Marketing - the act of promoting and selling products and services.

- The contents of a marketing plan: objectives, resources, research, marketing mix (price, product, place, promotion).

AO2 Application

Candidates must apply their answers to marketing and marketing strategy.

- Strong brand identity begins in 2012 with rare old cars.

- Promotion in specialist magazines is used which changes objective to profit maximisation.

- Pricing method later changes to skimming.

- Use of TV restoration programme to raise brand awareness in 2015-16 leading to increased brand awareness worldwide.

- Use of website and social media to gain customers, brand awareness and sales.

- Sponsorship of Formula 2 team to raise brand awareness 2018-2021.

AO3 Analysis

Candidates need to identify an element of the marketing strategy and provide developed analysis to get to A2, this then needs to be counterbalanced to get to A3. If a candidate does this twice, they will gain 8 marks.

- A strategy to sell rare old cars in the niche market led to increased brand awareness. [A2] This brand awareness must have been high to attract the interest of a TV company which further developed the brand image. However, this will require specialist marketing to reach the niche. [A3]

- The marketing focus changes again to increasing brand awareness with the TV programme. This shows that PV is responsive to marketing opportunities and objectives can be fluid. [A2] But relies on product placement rather than direct advertising which may take longer to improve sales. [A3]

1

- The sponsorship of FAST continues to focus on brand awareness through an international platform. [A2] However, the sponsorship may not fit with the branding strategy as although costs are increasing by $\$ 2 \mathrm{~m}$ per year, the sponsored team is not providing the success necessary to increase or strengthen the brand image which leads to the marketing being abandoned. [A3]

AO4 Evaluation

Candidates MUST answer the question - a judgement on the strategy between 2012 and 2021. The development and support of this judgement will help them to move through N2 and N3.

To award N 3 the answer must be in context and draw upon the previous analysis.

Evaluation will largely depend on the points raised in the analysis of the marketing strategy of PV.

- Overall judgement required on the balance between strengths and weaknesses of PV's approach to its marketing strategy. [N1]

- The lack of a formal marketing plan suggests that PV is opportunist, and the approach is based on opportunity rather than a considered marketing strategy. Sales had stalled in 2017 and seemed to struggle to increase indicating the strategy had not worked.

- The TV programme was an effective and low-cost advertising method as the programme paid for filming, editing and managing the tv schedule which met the marketing strategy and objectives at the time. This also led to alternative revenue streams which suggests that the strategy to allow filming was successful.

- The sponsorship deal, while it could have been lucrative, was reliant on the FAST team who did not perform by 2020-21 - possibly impacting sales while the costs grew to $4m.

Accept all valid responses.

Evaluate which method CP should use to enter the market in country D.

5

Indicative content

Responses may include:

AO1 Knowledge and understanding

Limited knowledge K will be demonstrated through knowledge of international expansion methods, such as joint ventures or direct investment or advantages and disadvantages of methods.

Developed knowledge K+K+ will be demonstrated through knowledge of international expansion methods, such as joint ventures or direct investment and advantages and disadvantages of methods.

- Understanding of methods of entry.

- Exporting directly to retailers - promoting and distributing products to retailers who take responsibility for the marketing.

- Joint venture - alliance with another business, two companies agree to act as one for a particular project.

Direct exporting advantages:

- Quick to set up and discontinue.

- Little investment needed.

- Low initial cost, retailer bears risk.

- Retailer uses local knowledge of markets and promotion methods.

- CP retains control over marketing.

Direct exporting disadvantages:

- May face trade barriers.

- Transport costs.

- CP relies on retailer to implement desired marketing strategy.

- Retailers may prioritise sale of other companies' products.

- CP may have cash flow and credit risks.

- CP unlikely to gain market information.

Joint venture advantages:

- Shared risk.

- Shared cost of investment.

- Access to local market knowledge, distribution arrangements.

- More control over marketing.

5

Joint venture disadvantages:

- Higher costs, especially management and communication, and slower, more expensive to set up.

- Possible conflicts over contractual arrangements and possibility that partner may become a competitor.

- Loss of control as shared venture.

- Reliance on another business.

AO2 Application

Limited application, APP applies knowledge to CP once.

Developed application, ${ }^{\text {APP }}+{ }_{\text {APP }}$ applies knowledge to CP twice.

Max one APP for application for the first impact of technological change and max one APP for application for the second impact of technological change.

- Nature of CP's paint products - good quality, value for money, strong brand name, priced above similar brands.

- Not supplied for own brand products.

- Identified market gap is for CP's existing products.

- Joint venture with wholesaler versus direct exporting to retailers.

- Different countries may have different cultures in terms of domestic use of paints inside and outside of homes, maybe due to style of houses or weather.

AO3 Analysis

Limited analysis AN - candidate shows one link in the chain of analysis.

Developed analysis L2AN - candidate shows two or more links in the chain of analysis or offers a two-sided analysis

- Development of knowledge and application points in terms of the advantages and disadvantages of the two stated methods.

- Direct exporting may be less costly and more flexible as it can be set up quickly and the retailer takes the risk. AN However, there is no guarantee that retailers will give CP paints a high profile, so sales may not increase very fast. L2/AN

- A joint venture allows CP to share the risk and gain expertise of a local company, this could increase sales. AN However, there may be some loss of control to the joint venture partner and if the company is a competitor, sales may not increase as fast as expected. L2 AN

5

AO4 Evaluation

Limited evaluation ${ }^{\text {EvaL }}$ - limited supported judgement and/or a weak attempt at evaluative comment.

Developed evaluation ${ }^{\text {L2 }}$ [EVAL] - supported judgement and/or reasonable evaluative comment.

Developed evaluation in context ${ }^{\lfloor\mathcal{L} 3 \mid E \text { val } \text { - }}$ - supported judgement in context and/or reasonable evaluative comment in context.

- Other options exist and could be researched: use of an agent, direct investment in a paints factory, etc. Is CP sure that the two put forward are the only realistic options?

- These options rely on accurate and reliable choice of paint retailer or wholesaler.

- Direct exporting may be suitable for CP as there are cost advantages for home paint production, assuming low trade barriers.

- Joint ventures may be suitable if the partner has good local knowledge and contacts. In the case of CP this may be very important in the specialist paints for the aircraft industry.

- Difficult to decide on these factors alone.

- Time scale and finance are important factors. Direct exporting is much quicker and cheaper to set up than a joint venture. CP have limited finance, so direct exporting may be the only possible option.

- Important to clarify objectives before deciding.

- More information needed regarding market in country D - e.g. the market research carried out, quantitative data on forecast costs of the options, revenues and finding suitable partners.

- Need to know the policy of the government in country D on foreign firms and any relevant laws or regulations covering trade, international marketing or paint products.

- A justified conclusion and/or recommendation e.g. recommendation of one option, or that both options are suitable, final choice depends on other factors above.

Accept all valid responses.