CAIE A-Level Business AS 3.3.5 Promotion Methods

[Maximum number: 12]

Post Scent (PS)

PS is a private limited company operating in country H . It sells perfume for men and women using its own website. PS purchases the perfume in large quantities from various manufacturers and then sells it in smaller quantities to its customers. Most of the perfumes are sold in glass bottles.

PS has two main ways in which it sells perfume:
- A website where customers can purchase a range of perfumes. The perfumes are priced to be lower than high street competitors.
- A subscription service where customers pay a monthly fee for a mystery perfume to be delivered each month.

All of PS's products are delivered to customers' homes using the postal service. The packages can be left in a mailbox or in a safe place outside of the home. PS has an aim to improve the sustainability of its operations.

PS uses incremental budgeting. Table 1.1 shows the budgeted and actual cost and revenue data for 2023.

$Table 1.1 Budgeted and actual cost and revenue data for 2023 (\$000)$

Table 1.1 Budgeted and actual cost and revenue data for 2023 (\$000)

The directors of PS have decided that the business needs a Marketing Manager. The role

The directors have shortlisted five suitable applicants and plan to invite them all to an assessment centre as part of the recruitment process.

Evaluate the role of effective packaging for PS .

1(d)

Indicative content

AO1 Knowledge and understanding

Knowledge of the role of packaging □ (max 2 marks), including:

- information to customers

- protection for the product

- to attract potential customers

- to promote a brand / branding

- to enable efficient distribution/portability

- to add value

- to meet legal requirements (labelling, weight, ingredients etc.)

AO2 Application

Context applied to the role of packaging for PS (max 2 marks), including

- website purchases

- subscription purchases

- Most perfumes sold in glass bottles (fragility)

- all products delivered to homes by post

- can be left in mailbox

- can be left in safe place outside of the home (weatherproof)

- PS aim to improve sustainability of operations

- use of Table 1.1

1(d)

AO3 Analysis

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

Developed analysis - candidate shows two or more links in the chain of analysis.

- Information to customers;
to increase sales of both product lines for PS - increase profits and enable growth of SS.

- Protection for the product;

- Glass bottles will break if not packaged correctly - PS needs to replace products increasing costs

- Packages need to be able to be left outdoors - otherwise poor customer satisfaction and lower repeat sales.

- To attract potential customers;
good packaging may encourage increased sales from customers - however as the products are sold through the website this may not have a large effect on sales.

- To enable efficient distribution/portability;
products left in mailbox so packaging needs to be small enough to post and increase speed of delivery - reduces costs of delivering the product.

- To add value - sales have been 20% higher than budgeted so poor packaging might discourage customers from repurchasing products - increases sales/profit.

- The packaging is not the main product and so may not add much value in a customer's perception - increased costs without an increase in sales.

- Balance between importance of packaging and sustainability - more packaging likely to protect the product but also less sustainability.

AO4 Evaluation

Limited evaluation - unsupported judgement and/or a weak attempt at evaluative comment

Developed evaluation - supported judgement and/or reasonable evaluative comment Developed evaluation in context ${ }^{\text {" }}$ - supported judgement in context and/or reasonable evaluative comment in context.

- A judgement over role of effective packaging.

- Evaluation of the relative importance of different factors.

- Elements that the evaluation/judgement might depend upon - cost of the packaging as a proportion of the total costs of the product, packaging that the perfume is purchased with (from manufacturers), likelihood of products being left outside, likelihood of moving into retail shops in the future, the new Marketing Manager's strategy.

Accept all valid responses.

1(d)

Exemplars for awarding evaluation

L1 □ (limited
supporting
evidence)

L2 ± (developed supporting
evidence)

L3 ${ }^{\text {EE }}$ (developed supporting evidence
with context)

Effective packaging is essential for PS.

There are many more things that are more important to PS than packaging.

Effective packaging is essential for PS,
so that their products are delivered safely
to customers.

Effective packaging is essential for PS, so
that the glass bottles are delivered
unbroken to customers.

There are many more things that are
more important to PS than packaging. If
the price is wrong, then no matter how
good the packaging is, no-one will want
it.

There are many more things that are more
important to PS than packaging. If the
price is wrong, then no matter how good
the packaging is, no-one will want it, that is
why PS sells its perfume cheaper than
high street stores.

The role of packaging
depends upon the
cost of the packaging.

The role of packaging depends upon the
cost of the packaging. If the packaging
increases PS direct costs, then it may be
better to spend the money on more
promotion.

The role of packaging depends upon the
cost of the packaging. If the packaging
increases PS direct costs beyond $350
000, then it may be better to spend the
money on more promotion.

In the short term,
effective packaging
may cost too much.

In the short term, effective packaging
may cost too much, however in the long
term it will make the PS brand
memorable.

In the short term, effective packaging may
cost too much, however in the long term it
will make the PS brand memorable, which
is vital to keep customers paying for their
subscription.

CAIE A-Level Business AS 3.3.5 Promotion Methods Questions

Exam points

CAIE A-Level Business AS 3.3.5 Promotion Methods Questions question 1