Edexcel IAL Business 1.3.1 Meeting Customer Needs

Knowledge 2
Up to 2 marks for defining the term 'niche market' e.g.
- The subset of a large/mass market (1) that focusses
on a segment of the population (1)

Indicative content guidance
Answers must be credited by using the level descriptors (below) in line
with the general marking guidance. The indicative content below
exemplifies some of the points that candidates may make but this does
not imply that any of these must be included. Other relevant points must
also be credited.
Knowledge, Application, Analysis, Evaluation - indicative
content
- Product differentiation is the process of distinguishing a product or
service from others, to make it more attractive to a target market
- Oppo has created an ice cream with 60% fewer calories and less
sugar than standard ice cream. Oppo claims that one portion of its
ice cream contains fewer calories than an apple - this may
differentiate them from competition and increase revenue
- It is important that Oppo differentiates its products because the
market is competitive with dominant brands and market leaders
such as Unilever and Nestlé
- The sales of low-quality ice cream have been declining, due to the
increased preference for premium ice cream. To build its brand it
is important that Oppo makes its ice cream different to stand out
in the market
- There is also an increase in demand for organic and naturally
sweet desserts due to changing social trends. Oppo uses
ingredients such as coconut oil and stevia leaf which may help
create a USP and attract new customers
- However, there are many other factors that will contribute to the
success of Oppo
- Oppo is competing with well established brands and are unlikely to
have the marketing budget and distribution channels of the major
brands. These factors are necessary to ensure Oppo succeeds and
is able to compete in the market
- It is also important that the ice cream tastes good to encourage
repeat purchase and brand loyalty. Oppo must ensure it meets the
needs of consumers by offering innovative flavours to appeal to
new segments such as the over 50's


Level

Mark

Descriptor

0

No rewardable material.

Level 1

1-2


Isolated elements of knowledge and understanding - recall based.

Weak or no relevant application to business examples.

Generic assertions may be presented.


Level 2

3-5


Accurate knowledge and understanding.

Applied accurately to the business and its context.

Chains of reasoning are presented, showing cause(s) and/or effect(s) but may be assertions or incomplete.

An attempt at an assessment is presented that is unbalanced and unlikely to show the significance of competing arguments.


Level 3

6-8


Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context.

Logical chains of reasoning, showing cause(s) and/or effect(s).

Assessment is balanced, well contextualised, using quantitative and/or qualitative information, and shows an awareness of competing arguments/factors.



Question

Indicative content

Indicative content guidance
Answers must be credited by using the level descriptors (below) in line
with the general marking guidance. The indicative content below
exemplifies some of the points that candidates may make but this does
not imply that any of these must be included. Other relevant points
must also be credited.
Knowledge, Application, Analysis, Evaluation - indicative
content
Primary market research is new data collected, which is specific to the
needs of the business. It is referred to as field research.
- Interviews with ice cream professionals such as Gary
Martin who had worked on the Häagen-Dazs product
range may have helped give Oppo an insight into the
ice cream market. This advice may have helped the
brothers avoid pitfalls in the industry
- Product trials have allowed Oppo to assess the products to
determine the potential success of the ice cream. Oppo was
able to gather feedback and make changes to the ice cream
before launching on a larger scale and so preventing costly
mistakes
- Selling in a few supermarkets enabled them to gather sales
data to assist with production planning for potential future
demand.
- However, using interviews may result in biased results. Many
experts told the brothers that they would not succeed in the
industry. If they had listened to this advice, they may not have
produced their winning recipe
- A disadvantage of product trials is the cost which can be
expensive and time consuming
- Selling in only a limited number of supermarkets may have
delayed the launch of new products which may mean losing
first-mover advantages
- During product trials Oppo may have run the risk of
competitors learning about their products which may be copied
and brought to the market earlier
- Results from test marketing may not be conclusive and
do not always predict success. Products that sell locally
may not sell well in other geographical areas, as
findings from the trials may not be representative of
other groups of customers


Level

Mark

Descriptor

0

A completely inaccurate response.

Level 1

1-2


Isolated elements of knowledge and understanding - recall based.

Weak or no relevant application to business examples.

Generic assertions may be presented.


Level 2

3-4


Elements of knowledge and understanding, which are applied to the business example.

Chains of reasoning are presented,but may be assertions or incomplete.

A generic or superficial assessment is presented.


Level 3

5-7


Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context.

Analytical perspectives are presented, with developed chains of reasoning, showing cause(s) and/or effect(s).

An attempt at an assessment is presented, using quantitative and/or qualitative information, though unlikely to show the significance of competing arguments.


Level 4

8-10


Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context.

A coherent and logical chain of reasoning, showing cause(s) and/or effect(s).

Assessment is balanced, wide ranging and well contextualised, using quantitative and/or qualitative information and shows an awareness of competing arguments/factors, leading to a supported judgement.



Questio
n

Answer

Mark

Knowledge 2

Up to 2 marks for defining the term ‘uncertainty’ e.g.
• The inability to predict/a lack of knowledge (1) about future
events and outcomes/reasons for uncertainty (1)

Indicative content guidance

Answers must be credited by using the level descriptors (below) in line with
the general marking guidance. The indicative content below exemplifies
some of the points that candidates may make but this does not imply that
any of these must be included. Other relevant points must also be credited.

Knowledge, Application, Analysis, Evaluation – indicative content

• Online retailing is the sale of goods and services using the
internet.
• Farmhopping is an example of an online retailing service which
allows farmers in Bulgaria to sell farm produce directly to
customers using a website.
• The advantage to a business is that because they are not selling
to supermarkets or wholesalers, they may be able to increase
their profit margins.
• Selling directly to consumers may help them receive a fair price
for their products and help them survive in business.
• Small businesses may not require a physical shop to sell their
products which reduces operational costs.
• Farmers can provide fresh produce directly to homes and small
businesses. They may build up a good reputation with these
customers and encourage customer loyalty and repeat purchase
to enable them to compete against the larger farms.
• However, the farmers have to pay a fee to Farmhoppers which
increases the business costs and reduces profit margins.
• If the website is not reliable and/or connectivity is poor this will
impact the service and discourage customers from using it.
• The costs of distribution may be higher for a small business due
to the need to manage a high volume of smaller orders rather
than larger orders direct to supermarkets and wholesalers.







Level

Descriptor

0
No rewardable material.
Level 1
1–2
Isolated elements of knowledge and understanding – recall based.
Weak or no relevant application to business examples.
Generic assertions may be presented.
Level 2
3–5
Accurate knowledge and understanding.

Applied accurately to the business and its context.
Chains of reasoning are presented, showing cause(s) and/or effect(s)
but may be assertions or incomplete.
An attempt at an assessment is presented that is unbalanced and
unlikely to show the significance of competing arguments.
Level 3
6–8
Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Logical chains of reasoning, showing cause(s) and/or effect(s).
Assessment is balanced, well contextualised, using quantitative and/or
qualitative information, and shows an awareness of competing
arguments/factors.

Indicative content guidance

Answers must be credited by using the level descriptors (below) in line with the
general marking guidance. The indicative content below exemplifies some of
the points that candidates may make but this does not imply that any of these
must be included. Other relevant points must also be credited.

Quantitative skills assessed:
QS9 Interpret, apply and analyse information in written, graphical and
numerical forms
Knowledge, Application, Analysis, Evaluation – indicative content
•
Competition is the rivalry among sellers trying to achieve goals such as
increasing profits, market share, and sales volume.
•
Competitors include Etihad Airways and Qatar Airways as well as low-
cost airlines, such as Norwegian Air Shuttle and
Singapore-based Scoot.
•
Emirates, Etihad and Qatar Airways have all increased the number of
passengers since 2006 so consumers benefit from more flight
destinations and a choice of carriers.
•
Competition also encourages businesses to improve the quality of
goods and services they sell – to attract more customers and expand
market share. Emirates offer good quality food and inflight
entertainment and have improved their first-class service.
•
When firms compete with each other consumers often get the best
possible prices. There is competition from Norwegian Air Shuttle and
Scoot, which are attracting customers with low priced fares. This may
lead to larger airlines reducing their prices in order to compete.
•
However, the low budget airlines are competing mainly on price. If
price of airline tickets becomes a key factor then the larger airlines
may also have to reduce prices. This may impact the quality of the
service provided in order to reduce costs of the business.
•
The increase in the number of airlines may cause congestion in and
around airports and long queuing times for services such as airport
security for all customers.
•
The costs associated with airlines are high. It may be that, in the long
term, smaller airlines such as Norwegian Air Shuttle find it difficult to
compete with larger airlines. The smaller airlines may be forced out of
the market leaving larger airlines the option of increasing prices.

Level

Descriptor

0
No rewardable material.
Level 1
1–2
Isolated elements of knowledge and understanding – recall based.
Weak or no relevant application to business examples.
Generic assertions may be presented.
Level 2
3–5
Accurate knowledge and understanding.
Applied accurately to the business and its context.
Chains of reasoning are presented, showing cause(s) and/or effect(s)
but may be assertions or incomplete.
An attempt at an assessment is presented that is unbalanced, and
unlikely to show the significance of competing arguments.
Level 3
6–8
Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Logical chains of reasoning, showing cause(s) and/or effect(s).
Assessment is balanced, well contextualised, using quantitative and/or
qualitative information and shows an awareness of competing
arguments/factors.

Indicative content guidance

Answers must be credited by using the level descriptors (below) in line with the
general marking guidance. The indicative content below exemplifies some of
the points that candidates may make but this does not imply that any of these
must be included. Other relevant points must also be credited.
Knowledge, Application, Analysis, Evaluation – indicative content
•
Market mapping is a form of market positioning. It is the use
of a 2-dimensional diagram that plots products or services in
a market using two key variables.
•
Mapping is a simple, visual tool that can utilise a variety of
variables, and may have helped Emirates understand its
position in the airline market relative to competition.
•
It may have helped Emirates spot gaps in the market. It may
have seen an opportunity to provide better inflight
entertainment.
•
It is a useful method for analysing competition. Emirates may
have used a market map to compare prices and destinations
that competitors fly to. This may have led to new flights such
as to Phnom Penh being offered to extend its flight
destinations.
•
Mapping also identifies where the market is saturated due to
a high level of competition. Emirates may have avoided these
areas/destinations and focussed on ones that were more
viable/profitable.
•
However, market mapping has its limitations. A map might
identify a gap in the market, for example destinations not
flown to, but there may be a valid reason for the gap such as
low demand or flight restrictions.
•
The market map does not guarantee success; it is a simplistic
method to help visualise the market, but needs more in-
depth research on consumer preferences and tastes before
important decisions are made.
•
Mapping shows a snapshot in time and Emirates must also
consider the strategy of its competitors, such as Etihad, in
order to compete successfully.
•
There are many other factors which may have contributed to
the growth of Emirates such as effective management and
leadership, good financial control, good advertising and
favourable economic factors.




Level

Descriptor

0
No rewardable material.
Level 1
1–2
Isolated elements of knowledge and understanding – recall based.
Weak or no relevant application to business examples.
Generic assertions may be presented.
Level 2
3–4
Elements of knowledge and understanding, which are applied to the
business example.
Chains of reasoning are presented but may be assertions or
incomplete.
A generic or superficial assessment is presented.
Level 3
5–7
Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Analytical perspectives are presented, with developed chains of
reasoning, showing cause(s) and/or effect(s).
An attempt at an assessment is presented, using quantitative and/or
qualitative information, though unlikely to show the significance of
competing arguments.
Level 4
8–10
Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
A coherent and logical chain of reasoning, showing cause(s) and/or
effect(s).
Assessment is balanced, wide ranging and well contextualised, using
quantitative and/or qualitative information, and shows an awareness
of competing arguments/factors, leading to a supported judgement.