Evaluate marketing strategies for mass, niche, B2B and B2C markets by comparing target customers, pricing, promotion, products, relationships and costs.
Sources for use with Extract E Niche brands are increasing their mass market appeal In the last 10 years there has been an increase in the number of health and well-being brands moving from a niche to a mass market. Many health products are benefitting from increased revenue, due to growing consumer desires to live healthier lives. These brands are no longer viewed as exclusive products and are now purchased by more customers each year. One of these brands is Pukka, which sells premium priced speciality tea. The global speciality tea market is predicted to grow by $50bn between 2021 and 2026. Extract F About Pukka Pukka sells a range of speciality teas including herbal, organic and fruit teas. Entrepreneurs Sebastian Pole and Tim Westwell launched Pukka in 2001. Sebastian had been interested in plants and conservation for many years. He was determined to follow his dream to start a business selling a healthy product. Sebastian saw an advertisement of Tim’s which offered to help start up an ethical business. They agreed to meet to discuss their ideas and Pukka was formed shortly afterwards. From the first moment Tim and Sebastian met, they were the perfect match. Although they had completely different personal skills, they shared a common marketing objective, to create a business that would benefit the health of people. Tim had 10 years’ experience as a business management consultant. They spent many hours in Tim’s house planning their future strategy. They worked evenings and weekends to turn their ideas into a successful business.
Assess the challenges that a business, such as Pukka, may have faced when
moving from a niche to a mass marketing strategy.
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
- A niche marketing strategy appeals to a smaller segment of a
larger market where consumers have specific needs and wants.
Mass marketing aims to target the highest number of potential
customers
- One challenge is the change in promotional costs. It is likely the promotional strategy would have changed from lower cost/below the line advertising to more expensive/above the line advertising.
This may affect the cash flow for Pukka
- Changing to a mass marketing strategy would require changes to the distribution networks. In order to reach a global audience, it is
likely that Pukka extended its distribution globally involving more retailers and wholesalers
- Pukka is likely to have faced more competition. This may have
led Pukka to reduce the price of its tea to compete with established businesses
- However, the volume sold by Pukka is likely to be much higher.
This may lead to lower unit costs/economies of scale and
increased profitability
- Mass marketing may create less of a risk to Pukka. It may be less
vulnerable to the economic change of individual economies
- The speciality tea market is set to grow by $50bn by 2027
providing Pukka with an opportunity to increase its revenue and profits
- There are both risks and rewards for businesses using a mass
market strategy, and success depends on effectively managing the change to benefit from economies of scale
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
3-4
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.
Question
Evaluate whether on-the-job training is likely to be the most effective type of training used by Walt Disney.
Indicative content