Practise Marketing through demand, markets, research, the marketing mix, strategy and international decisions, using data and case evidence to support commercial judgements.
Analyse two benefits to a business of having a product with a unique selling point (USP).
Analyse two benefits to a business of having a product with a unique selling point (USP).
2
Level &
AO1 Knowledge and
understanding
\end{tabular} 2 marks
AO2 Application 2 marks
AO3 Analysis 4 marks
3-4 marks
Developed analysis
- Developed analysis that identifies connections between causes, impacts and/or consequences of two points.
- Developed analysis that identifies connections between causes, impacts and/or consequences of one point.
1
1-2 marks
- Knowledge of two relevant points is used to answer the question.
- Knowledge of one relevant point is used to answer the question.
1-2 marks
- Application of two relevant points to a business context.
- Application of one relevant point to a business context.
1-2 marks
Limited analysis
- Limited analysis that identifies connections between causes, impacts and/or consequences of two points.
- Limited analysis that identifies connections between causes, impacts and/or consequences of one point.
0
0 marks
No creditable response.
0 marks
No creditable response.
0 marks
No creditable response.
2 marks for
2 marks for □
4 marks for
6(a)
Indicative content
Responses may include:
AO1 Knowledge and understanding
- Clear differentiation
- Defeat competition
- Consumers attracted
- Command premium prices
- Brand loyalty
- Increased sales
- One benefit of USP is that it gives a product a distinctive position in a marketplace (1 mark ± 1)
- Another benefit is that a USP allows a business to command premium prices in the marketplace. (1 mark □ × 1 )
AO2 Application
The benefits include:
- Clear differentiation - separates the product from the competition
- Consumers attracted - value the unique proposition
- Customers - will likely resist alternative offers
- May command premium prices, charging more than competitors
- Easier to market and sell due to customer loyalty.
- A USP presents a unique proposition to the customer in the marketplace superior to the competition. (1 mark □×1 )
- It can give a product added value in the eyes of the customer. (1 mark -- × 1)
AO3 Analysis
- A USP product - customers compelled to give the product attention - the differentiating factor(s) may move competitors to compete with lower price
- Consumers value the USP product - unique product features quality, style, service - convince customers to select the product
- Consumers - view the USP as evidence of quality and reputation of the business and become repeat loyal customers.
- Consumers convinced by the USP - may be willing to pay a premium price - increases business profits
- USP products - easier to market and may enrich the brand and support other products in the business.
6(a)
There are 4 marks for Analysis in this question. Possible 2 analysis marks for an identified and applied first benefit and 2 marks for 2 possible analysis marks for an identified and applied second benefit. The examples below indicate how the 2 analysis marks should be allocated to each benefit.
Benefit 1 - assuming that this benefit is 'A USP presents a unique proposition to the customer.'
The application might be 'It gives a product a distinctive position in a marketplace. □.
Then the 2 analysis marks should be allocated in the following way:
If the analysis of this benefit is developed analysis, e.g. - 'The USP offers something special that attracts customers and consequently boosts sales, □ which may lead to the business increasing its market share and likely increasing its level of profitability.' then 2 analysis marks should be awarded.
If the analysis of this benefit is limited analysis, - "The USP offers something special that attracts customers and consequently boosts sales. ' then 1 analysis mark should be awarded.
Benefit 2 - assuming that this benefit is 'A USP allows a business to command premium prices in the marketplace. □. The application might be 'It can give a product added value in the eyes of the customer,' □.
Then the 2 analysis marks should be allocated in the following way:
If the analysis of this benefit is developed analysis - 'therefore the customer will be prepared to pay more for this USP product than a similar one provided by the competition,' 'and this willingness to pay a premium price is likely to increase the profitability of the business.' then 2 analysis marks should be awarded.
If the analysis of this benefit is limited analysis - 'therefore the customer will be prepared to pay more for this USP product than a similar one provided by the competition,' □ then 1 analysis mark should be awarded.
Accept all valid responses.
'Marketing is the most important factor that will affect the success of a new coffee shop.'
Evaluate this view.
'Marketing is the most important factor that will affect the success of a new coffee shop'. Evaluate this view.
6(b)
2 marks for
2 marks for
2 marks for □
6 marks for
Indicative content
Responses may include:
AO1 Knowledge and understanding
- Marketing is the management task that links a business to its customers by identifying and meeting the needs of customers through a range of activities such as the 4Ps-product, price, promotion, place.
- Business success is considered to be determined by a number of factors such as quality of business management, degree of effective financial management, effectiveness of marketing and sales, employee experience and system and process effectiveness.
- New business characteristics may include - small number of owners and employees, small footfall, limited product range, small investment required, potential high profit margin, vulnerable to all the challenges of a small business.
- Developed knowledge why marketing is a factor affecting business success - marketing identifies and meets the needs of customers operating through the 4Ps and sets appropriate prices, determines effective advertising and sales targets - other factors include quality of management, adequacy of finance. (2 marks L2)
- Limited knowledge why marketing is a factor affecting business success - marketing is responsible for the efficiency of the sales campaign. (1 mark L1)
AO2 Application
- New coffee shops pop up regularly - could be run from a van or small stall selling drinks.
- New coffee shops could offer a range of different types of coffee e.g. latte, flavoured coffee.
- New coffee shops may offer other products e.g. other beverages, cakes, small savoury snacks.
- Developed application - how marketing might be applied to the development of a new coffee shop - social media campaign informing customers of the different variety of coffee beans they use in their drinks e.g. ethical sourcing. ( 2 marks L2)
- Limited application - how marketing might be applied to the development of a new coffee shop - advertising the types of beverages and food sold in the shop. (1 mark L1)
6(b)
AO3 Analysis
- Marketing activities - can support and underpin the success of small businesses - carry out effective sales and promotion strategies
- Marketing activities - can create awareness of a product/service - establish and strengthen customer relationships
- Marketing activities - cost money and early activity for a new small business may require substantial expenditure
- Cost management needs to be effective - new small businesses may have little cash after set-up costs - working capital needs to be carefully managed
- Entrepreneurial and management skills - success may require more than enthusiasm - regular review of the business model may be required
- Product quality - continuous attention to customer perceptions of quality needed - variations and product additions may be needed
- Customer satisfaction - the product/service offer will succeed if a USP (for the product or attractiveness of the premises) is established.
- Developed analysis - marketing ensures that sales campaigns are effective and promotion strategies are implemented for a business - this ensures that a market presence is established as customers are made aware of the offer, leading to healthy initial sales and revenue. (2 marks □
- Limited analysis - the use of the 4Ps (especially promotion) stimulates the sales of a new business. (1 mark □2)
AO4 Evaluation
- Eval 6 - developed judgement/conclusion is made in context (new coffee shop) (6 marks )
- Eval 5 - developed evaluative comments given in context (new coffee shop) (5 marks
- Eval 4 - developed judgement/conclusion is made, not in the context of a new coffee shop. (4 marks)
- Eval 3 - developed evaluative comments made, not in the context of a new coffee shop. (3 marks)
- Eval 2 - judgement/conclusion is made but with little supporting evidence, again not in context. ( 2 marks )
- Eval 1 - an attempt is made to balance arguments. (1 marks )
- Eval 0 - no evaluation is attempted (0 marks)
- A judgement/conclusion is made as to whether marketing is the most important factor affecting the success of a new coffee shop.
- Such judgements/conclusions may be made at any point in the essay, not just in a concluding section.
- Judgement is made that marketing activities can be important to the success of a small coffee shop.
6(b)
- The question is however asked do some businesses have specific limitations in terms of how much is available to spend on marketing and might that apply to a small coffee shop?
- The question is also asked ˋare some marketing activities more important than others'? - is market research for new businesses more important than advertising and promotion?
- Could other factors be as important or more important than marketing - e.g. liquidity/cash control, effective business planning, degree of competition, the volatility of the economy.
- Is the quality of the beverages and associated food and the ambience of the shop, more important than marketing?
- Would an appropriate level of working capital be more important than marketing and would finance limit the extent and kind of marketing employed?
Accept all valid responses.
Direct News (DN)
Shila and Lucy own and manage DN, an online publishing business. DN produces a daily online local newspaper called QNews. Readers pay a subscription to access QNews. DN's mission statement is: 'to be a daily community newspaper for local people, about local people'.
DN recently tested a monthly online magazine aimed at the 18-30 age group called QLine. DN's plan is to stop publishing QNews and produce only QLine. Secondary market research suggests QLine will be popular with national businesses wanting to promote their products.
Shila is aware that revenue from online newspapers is decreasing. However, she has found national market research data about online monthly magazines (see Table 2.1).
Table 2.1 National revenue for online monthly magazines
Shila thinks that before the business decides to produce QLine, more market research data will be needed. Shila and Lucy will have to decide on new objectives for DN.
To ensure a quality product that meets customer expectations, Lucy thinks it is important to have careful management of the supply chain, from content creation to customer delivery.
Explain the term secondary market research (lines 6-7).
Explain the term secondary market research.
Indicative content
AO1 Knowledge and understanding of secondary □ may include:
- Uses data that already exists
- Collected by someone else
- Can be from another organisation
No further marks can be gained without knowledge and understanding
AO2 Application to market research
Limited application Δ=P applies knowledge of secondary market research including:
- Cheaper than primary research / outdated / not tailored to business
OR
- Example or some other way of showing good understanding of secondary market research.
Developed application ΔΔρF+ΔρF applies knowledge of secondary market research including
- Cheaper than primary research / outdated / not tailored to business
AND
- Example or some other way of showing good understanding of secondary market research.
Application can be made to DN or any other scenario/context/business/product.
2(a)(ii)
Accept all valid responses.
Refer to Table 2.1. Calculate the percentage increase in total revenue of online monthly magazines from 2020 to 2022.
Indicative content - Responses may include:
Revenue 2020 = 50 Revenue 2022 = 150
Change =150-50=100 (1)
Formula: Can be implied
Change / original ×100 (1)
(150−50)/50×100(1)=100/50×100=200%(3)
Accept all valid responses.
Exemplars and annotations
Explain one additional piece of market research data DN would find useful before making the decision to produce QLine.
Indicative content
AO1 Knowledge and understanding
Knowledge of additional market research □ may include:
- Customer data
- Customer feedback
- What are forecast trends
- What subscription level are customers prepared to pay
- Information about competitors
- Potential size of the market
No further marks can be gained without knowledge and understanding.
AO2 Application
Limited application Δ se , applies knowledge to DN once.
- What potential readers want in a magazine
- Aimed at 18-30 market, so characteristics / requirements of this market
- Other online magazines available, do they charge a subscription fee?
- Plans to stop publishing QNews.
2(b)(ii)
Accept all valid responses.
Analyse two elements of the marketing mix that PS should consider when launching the new packaging.
Indicative content
Knowledge of elements of the marketing mix (max 2□ks ), may include:
AO1 Knowledge and understanding
- Product
- Price
- Promotion
- Place (distribution channels)
1(c)
No further marks can be gained without knowledge and understanding.
AO2 Application
Max one NF application for the first element and a second AFB, application for the second element
- Product environmentally friendly
- Higher cost of production
- Used for packaging food
- Premium product
AO3 Analysis
Limited analysis - candidate shows one link in the chain of analysis.
Developed analysis - candidate shows two or more links in the chain.
- Product is environmentally friendly - could use in marketing and may allow a premium price
- Costlier to produce - likely to be higher priced than competitors
- Quality is an issue particularly as product is used with food
- May have an impact on sales of existing products and therefore their Marketing
Accept all valid responses.
Exemplars and annotations
Fizzy Drinks (FD)
FD is a private sector business that manufactures an international brand of carbonated drinks. Its slogan was 'A premium drink for premium customers'. The market for FD's drinks is very competitive, with 7 national and 12 international brands all competing in the same market. Recently FD lost the title of market leader to TR, one of its largest competitors. TR is a multinational public limited company.
Table 2.1 FD financial data 2023
Employee morale has dropped as a result of the negative feedback. Key employees have left to work for FD's competitors. The lack of experienced employees has led to a drop in the productivity of the production process.
Explain the term demand.
Explain the term demand.
AO2 Application 2 marks
2 marks
Developed application of one relevant point to a business context.
Limited application of one relevant point to a business context.
Indicative content Responses may include:
AO1 Knowledge and understanding
- A consumer's desire to buy
- Willingness to pay a specific price
- Popularity of a product amongst customers
- The quantity/number of customers looking to buy goods and services at a specific price
- Demand varies with price - the relationship varies depending on the type of good, e.g. normal or inferior
- Demand is at a specific point in time
2(a)(ii)
AO2 Application
Explanation of demand
- APP can be awarded for a second AO1 point
- Factors affecting demand
- High brand awareness and customer loyalty which increases/maintains demand
- Affected by costs and inputs e.g. reducing the quality of ingredients/raising the selling price/reducing the marketing budget reduces demand
- Consumer incomes
- Price of substitute goods and complementary goods
- Population size and structure
- Fashion and taste
- Quality of the product
- Advertising and promotion changes
Application to a business context
- Demand for the drinks has changed since altering ingredients
- People buy more drinks when the weather is warmer
- FD's products taste similar to competitors after the change in ingredients
- Cost of raw materials increased
Application can be made to FD or any other scenario/context/business/person.
Allow application to demand.
Accept all valid responses.
Guidance in awarding marks
Knowledge & understanding & Knowledge of demand & 1 mark
Explanation & Explanation of demand & 1 mark
Context &
Applied to a business context / business
environment
1 mark
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\end{tabular}
Explain one intangible attribute of FD's products.
Explain one intangible attribute of FD's products
Indicative content
Responses may include:
AO1 Knowledge and understanding
- Types of intangible attribute, e.g. brand name, customer loyalty, quality, satisfies thirst, taste, reliability, image
2(b)(ii)
AO2 Application
Explanation of the identified intangible attribute
- Brand name; because it can't be touched
- Brand name; which contributes to the reputation of the business
- Quality; how the customer perceives the drink
Context applied to FD of an intangible attribute
- 'A premium drink for premium customers' reputation/helps become market leader
- Marketing budget reduced/erodes brand awareness
- 'High customer loyalty' ensures market leader status
Application must be made to FD and not generic.
Accept all valid responses.
Guidance in awarding marks
Knowledge & understanding & Knowledge of an intangible attribute & 1 mark
Explanation & Explanation of an intangible attribute & 1 mark
Context &
Applied to a business context/ business
environment
1 mark
\end{tabular}
\end{tabular}
Evaluate the usefulness to FD of market research methods to inform future marketing decisions.
2(d)
Indicative content
Responses may include:
AO1 Knowledge and understanding
Knowledge of the features of marketing research methods to inform future marketing decisions (max 2 marks), including:
- Market research is the process of collecting, recording and analysing data about customers, competitors and the market
- Market research can be primary and/or secondary
- Market research data can be quantitative and/or qualitative
- Purposes of market research - understand the market, reduce risk, understand customers, predict trends
- Primary market research methods or examples
- Secondary market research methods or examples
AO2 Application
Context applied to features of market research methods to inform future marketing decisions (max 2 marks), including:
- International brand of carbonated drinks
- Research focused on customer preferences
- Slogan was 'A premium drink for premium customers'.
- 7 national and 12 international brands
- FD lost the title of market leader to TR
- Reduced its marketing budget.
- Evidence of high customer loyalty
- Change in ingredients led to FD's products tasting similar to their competitors
- Feedback highlighting a 'flavourless drink' and demand fell rapidly
- Brand name and customer loyalty was lost
2(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.
- Primary research data; understand customer needs - so can increase sales
- Can help decide whether new business ideas are suitable/relevant; reduces long term costs of a failed product/brand
- Identify products customers find appealing; reduces marketing budgets
- Make packaging and branding decisions; attract customer interest
- May not provide much unknown data; data may already exist so not increase sales
- Is there marketing budget suitable; may not have enough finance
AO4 Evaluation
Limited evaluation - unsupported judgement and/or a weak attempt at evaluative comment
Developed evaluation E - supported judgement and/or reasonable evaluative comment Developed evaluation in context [EE ] - supported judgement in context and/or reasonable evaluative comment in context.
- A judgement about the likely usefulness to FD of market research methods to inform future marketing decisions.
- Elements that the judgement could depend upon, available finance, brand reputation, competitor branding, taste, trust.
- Weighing up of the impacts on external factors to the proposed of market research methods to inform future marketing decisions.
2(d)
Accept all valid responses.
Exemplars for awarding evaluation
□
L1 (limited supporting evidence)
L2 □ (developed supporting
evidence)
L3 [EE] (developed supporting evidence
with context)
Market research methods
are useful to FD.
Market research methods are useful to
FD because it can help the business
make decisions to better meet customer
needs.
Market research methods are useful to FD
because it can help the business make
decisions to better meet customer needs
and therefore regain its position as market
leader.
FD should not use market
research methods to
support future marketing
decisions.
FD should not use market research
methods to support future marketing
decisions in case the data is misleading.
FD should not use market research
methods to support future marketing
decisions, such as reducing the quality of
ingredients in its drinks, in case the data is
misleading.
In the short-term market
research methods are a
good way to inform future
marketing decisions.
In the short-term market research
methods are a good way to inform future
marketing decisions, but in the long-term
changes in the external environment may
reduce the value of the market research
data.
In the short-term market research methods
are a good way to inform future marketing
decisions, but in the long-term changes in
the external environment may reduce the
value of the market research data,
especially as the market is competitive
with 7 national and 12 international
brands.