CAIE A-Level Business AS 3 Marketing Questions

Indicative content
Responses may include:
AO1 Knowledge and understanding
Marketing objectives are objectives set by a business and its marketing
department to engage in marketing activities that will support corporate
objectives.
Specific marketing activities include increasing product awareness, strengthen
customer relationships, and strengthen the business brand - activities that
would normally be supportive of corporate goals
- To stop any conflict that might arise between corporate and marketing
objectives
- Ensure that there are appropriate strategies and tactics for the business
- Will ensure that corporate objectives are more likely to be achieved
- Marketing objectives and activities can make a significant contribution
only if they are closely linked to the corporate objectives.
- Harder to achieve corporate objectives without marketing objectives.
- Would waste resources
AO2 Application
- Conflict might arise when the marketing department decides to follow its
own objectives, e.g., lower prices when dynamic pricing is needed
- Corporate objectives require all departments, particularly marketing
department, to pursue supportive objectives. To increase market share
the marketing department could increase sales through a social media
advertising campaign
- If marketing objective is domestic growth and corporate objective is
expanding into overseas markets
- Increased spending on irrelevant/unnecessary marketing activities -spending money on market research when corporate objective is
minimising costs

AO3 Analysis
Reasons for close links between marketing and corporate objectives
- If marketing plans for new products - involves research and development
expenditure - must have approval of corporate management and support
the corporate objective on the product portfolio
- If marketing decides that market share of some products should be
increased - using product life cycle approach - should not conflict with
stated corporate intent as stated in the latest corporate plan
- A focus on the existing brand by marketing - should align with latest
mission statement of the business
- Targeting new overseas customers - could conflict with corporate goals
to expand the business which may seek to concentrate on the domestic
market
- Marketing proposals to strengthen/change the customer relationship -
may conflict with corporate plans to explore a new customer relationship
model
- Marketing initiatives to increase sales and revenue - with more
aggressive advertising and promotion may conflict with a new corporate
proposal to strengthen the existing corporate social responsibility
approach
- More use of online marketing activities may not be in the objectives and
plans of corporate management
- These marketing objectives need to support the corporate
objectives/priorities - marketing is a functional division of the total
business
- Corporate objectives set the context and discipline for marketing activities
- there should be close links and effective communication
- The impact on a business of an independent marketing department -business could drift and become dysfunctional
- Corporate objectives focus on the desired performance and results of the
total business and marketing is just one component part of the business -this implies close links and corporate responsibility and accountability
Accept all valid responses.

'This new airline will only succeed if it offers the lowest prices in the market'. Evaluate this view.

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Responses may include:

AO1 Knowledge and understanding

- New businessˋs face many challenges as they aim to survive and reach the point of profitability - the need for an effective cash flow plan - attract customers and build the brand.

- New airlines may face similar challenges but also additional challenges relating to external factors such as lockdowns in many countries during the pandemic and the pressures to reduce carbon emissions from an increasingly powerful green lobby, and fierce competition in a reducing market - it is in a high-risk industry

- Success can be measured in different ways and at different times but is usually concerned with such issues as profitability, and sustainability of the business model

AO2 Application

The key factors affecting the success of a new airline include the following:

- Business passengers or tourists

- Flight/route options

- First class/second class

- Meals provided

- Flight attendant service

- Tickets for the airline

AO3 Analysis
- The launch time of a new airline is important - the airline industry is a
very competitive one -market research should inform -is there ever a
good time to enter a very depressed industry
- A new airline must do a lot of things well to survive and succeed - a
competitive strength assessment is vital
- An appropriate business model is chosen - options include low-cost and
premium service - a hybrid model might offer possibilities
- Price traditionally a critical success factor - new airline will see fare as a
key way to attract customers - may consider low pricing strategy -penetration pricing but many competitors doing the same will limit the
effectiveness of this approach
- Compete on level and type of service - informality, fun atmosphere could
be adopted as a differentiating approach to attract customers
- Dynamic pricing and the pricing of on-board ancillary services - charges
for baggage, food, premium seat selection, extra leg room - on board
retailing a significant revenue stream may be used to create financial
stability
- A new airline will seek to effectively manage its fleet of planes-efficiency
of turn around will be a priority as will be policies to achieve low
maintenance costs - may lease planes rather than purchase
- Effective financial management - new airline will need to focus on
appropriate control methods to ensure liquidity and ability to continue to
invest, for the future - will need to convince investors that the airline has
a long- term future - performance in the first year of operations will need
to be convincing
- Employee management - a new airline may seek to compete on the
professionalism and distinctive relationship of onboard staff to customers
- effective training programmes may be used to generate a team/family
atmosphere environment

AO4 Evaluation

Judgement/conclusion as to the significant of charging low prices to a new airline

Such judgements/conclusions may be made at any point in the essay, not just in a concluding section

- Judgement is presented that argues that price has always been the deciding factor affecting the success of airlines and it remains so for a new airline.

- A judgement is made that the revenue from on-board revenue streams, such as charges for food, luggage, and differentiated seating, is as important or possibly more important for profitability and success than the price set for the airline fare

- Given the high capital outlay for new planes will low prices be possible in order to pay back and make a profit?

- Is marketing strategy - use of internet - as important as the actual fare/price charged?

- How important are the available routes and journey schedules?

- Could external factors such as world-wide economic recession determine the fate of a new airline irrespective of any other business decisions

Accept all valid responses.

4 marks for each of the two limitations of sampling for a business:

1 mark for

2 marks for ${ }^{\triangle N}$

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Responses may include:

AO1 Knowledge and understanding - 1 mark 埗 for identifying one limitation of sampling for a business.

AO2 Application - 1 mark $\sqrt{\text { ARP }^{\text {® }}}$ for application/explanation of one limitation of sampling for a business.

- produces unreliable and inaccurate results if not representative of the whole target market

- can involve biased selection of entire market when choice is not scientific

- biased responses due to dishonesty/ignorance/biased questions/lack of understanding by respondents

- not all sampling techniques are truly random

- requires adequate subject specific knowledge of sampling techniques

- involves statistical analysis and calculation of probable error

- complexity of selecting samples

- pay researchers

AO3 Analysis - up to 2 marks ${ }^{\triangle \mathrm{N}}$ for analysis of one limitation. 2 marks for developed analysis of one limitation of sampling for a business L2 ${ }^{\Delta \Delta}$ or 1 mark for limited analysis of one limitation of sampling for a business L1 ${ }^{\Delta N}$

- cannot have total confidence in results and can lead to making incorrect conclusions which affect choices made by business

- there are several types of sampling methods and choosing the incorrect type will cause errors in results obtained and lead to wrong decisions being made

- results from sampling need analysing correctly to apply results to the whole target market, which may involve using a marketing agency if the skills don't already exist in the business

- if the sample size is too small it may save money in the short term but in the long term may be a waste of money

- time taken to carry out the market research process slows decision making

- opportunity cost of using the money elsewhere in the business

Accept all valid responses.

2 marks for □

2 marks for □

2 marks for □

6 marks for □

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Responses may include:

AO1 Knowledge and understanding - 2 marks for developed knowledge and understanding L2 . 1 mark for limited knowledge and understanding L1 ${ }^{\kappa}$

- elements of the marketing mix

- specific understanding of promotion

AO2 Application - 2 marks for developed application L2 1 mark for limited application L1

- role/activities of parcel delivery business e.g. delivering on time

- named business e.g. Amazon, DHL, DPD, Parcelforce, may be a small business

AO3 Analysis - 2 marks for developed analysis L2 ${ }^{\text{\#}}$ 1 mark for limited analysis L1 1 №

- could be B2B or B2C, which affects type of promotion chosen to create more awareness of the business and more sales

- could be B2B or B2C, which affects which element(s) of MM are most effective

- could look at the benefits and limitations of all elements of MM which could lead to success of the business

- may choose to compare those elements of the MM considered to be more applicable to this type of business e.g. price or promotion but can discuss product and place

- different types of promotion (or any element of the MM ) can be carried out at different stages of the product life cycle

- this is a service rather than a good therefore this could affect the choice of promotion type or element of MM

- this may be an international business and size may play a role in achieving success

- candidates may focus on the different types of promotion rather than other parts of the MM , which is a valid response

AO4 Evaluation - 6 marks for EVAL

A judgment/conclusion is made as to whether promotion is the most important element of the marketing mix for the success of a parcel delivery business.

These judgements/conclusions may be made at any point in the essay, not only in a concluding section.

- what would be classed as success for this type of business?

- would success be increasing number of sales, value of sales, market share?

- how important is promotion for this type of business? Would it matter whether the delivery is B2B or B2C?

- is the delivery business irrelevant to the product that is contained within the parcel?

- what is most important regarding delivery to the customer? Speed, cost, quality of service, security, protection?

- which elements of the MM can effectively be used? Candidates may find it difficult to apply all aspects of the MM but it can be done. This could be a differentiating factor in this evaluation.

- the choice of the type of promotion or element of the MM may depend on how well known the business already is and what its objectives are.

Accept all valid responses.