IB Business Management SL 4.2 Marketing Planning

[Maximum number: 4]

Other operating cost savings were made. However, Adriana decided to maintain PU’s aggressive marketing strategies in contrast to most other universities, which were cutting marketing budgets because of the economic recession. Adriana saw marketing expenditure as a worthwhile investment. The promotion emphasized PU’s achievements both in research and teaching, its services for students, its high levels of student satisfaction and its competitive fees.

Ethical issues PU’s mission statement is based on inclusivity, social responsibility, excellence, perseverance, commitment, resilience, ambition and creativity. The articles governing the university include transparency, freedom of speech and tolerance. Failure to achieve some of these articles has recently been alleged in social media and is now appearing in national newspapers: y A recent appointment as a trustee of the university, Di Jones, is causing controversy. Di is a director of a multinational computer company that is funding some of PU’s IT research. Political activists have discovered that Di is descended from a family that used slaves on their sugar plantation in the 19th century. The activists want her removed from her role. y The student Politics Society has invited a guest speaker who, in the past, has been accused of expressing antisemitic views in one of his books. The society is arguing that freedom of speech should be upheld, while other groups, including students and lecturers, say that the university should not be a platform for intolerant views. y One of the companies funding medical research at the university has been accused of exploiting least developed countries (LDCs) by over-pricing medicine in those countries and selling medicines that have not been approved in the European Union or the United States.

Describe two long-term benefits for P U of its marketing strategies.

Background given in the case study: P U's marketing strategies are "aggressive" (line 60) and P U, unlike its competitors, keeps investing a lot in its marketing ("Adriana saw marketing expenditure as a worthwhile investment", (lines 62-63)), especially in terms of promotion (communicating actively on PU's "achievements both in research and teaching" (line 63) and on its "competitive fees" (line 64)).

Long-term benefits include:
The main anticipated long-term benefit (ie the strategic aim that justifies these marketing strategies) is to get more students (as they are the 'customers' of P U ), both local students (as "many local students have decided to postpone their studies for a year", (lines 52-53)) and international students (as they "pay higher fees to the university than the fees that the university receives from local student" (lines 54-55)). For P U, more students mean more revenue (more income), which improves the cash-flow situation (very important, as PU has "cash-flow problems", as repeated several times, lines 57, 69 and 85).

Other long-term benefits of P U 's marketing strategies include:
- other external stakeholders will be aware of P U's success - stakeholders from the private sector (eg Di Jones who is "director of a multinational computer company that is funding some of $P \cup$ 's IT research", (line 108)), or in the public sector (local and regional politicians, so that they remember P U and keep supporting it);
- attracting new staff to P U, as its intensive promotion indirectly showcases it as a potential employer of choice.
N.B. The question is not about the marketing mix ( 4 Ps , or even 7Ps). If the answer is just an outline of P U 's marketing mix (describing P U 's Product (high quality courses), Price (competitive fees) etc);
award up to [2], as it shows some understanding of marketing, but not of the topic of strategy, nor of the notion of long

term benefits. Likewise, answers about ATL and BTL forms of promotion and answers that use the Ansoff matrix (eg product development: PU offering new courses) may also be partially credited, as they display knowledge of marketing.

Accept any other relevant long-term benefit.
If a candidate provides context that provides a benefit, but the benefit is not explicitly stated, the "second" mark can be awarded i.e. [0] + [1].

Mark as a [2] + [2].
Award [1] for each appropriate benefit identified and [1] for some description and application. Award a maximum of [2] for each benefit. Maximum [4] for two benefits.

[Maximum number: 2]

Les Amis PLC (LA)
Les Amis PLC (LA) is a public limited company that sells casual clothes for men. Its target market is high-income professionals who value a personalized sales service. LA has developed brand awareness and operates 42 shops around the country. It owns 10 of these shops and leases the remaining 32 . LA employs 950 people, who receive a higher wage than the industry average. LA also pays commission to sales staff working in the shops. LA's organizational culture values the wellbeing and needs of its employees. Labour turnover is very low.
Recently, LA launched an online shop. Since then, online sales have increased considerably, while sales in LA's physical shops have fallen. Shareholders want LA to close all its physical shops and sell online only. However, many of the employees will be made redundant if the physical shops are closed.
LA's current chief executive officer (CEO), Marie Brossard, has a democratic leadership style, and she regularly meets with employees and encourages feedback. LA's managers and employee representatives have never had a conflict. Marie plans to discuss the shareholders' desire to close LA's physical shops with all the shop managers.
Customer returns of clothing orders at LA have increased substantially. Most returns are from online customers unfamiliar with LA's clothing sizes. Marie has consulted the e-commerce department on how to reduce the increasing cost of returns, and they have suggested investing in expensive software that will enable online customers to find their correct clothing size.

Define the term target market.

[Maximum number: 2]

Musical Musings (MM) manufactures musical keyboards, using batch production to produce a limited range. MM’s products are designed for use in schools and homes. MM sells directly to schools, and, for the home market, sells through shops specializing in technology. MM’s costs are kept low by:
• limiting its product range
• focusing on a small target market, which enables MM to limit the features on its keyboards and keep the appearance functional. MM provides free online “Teach yourself to play the keyboard” training courses for all customers.

In 2021, MM’s sales declined. MM is now considering targeting the niche market of professional musicians. MM would change its product design by adding a range of different sound features and improving the appearance of its keyboards. To achieve this change, MM would eventually stop supplying its existing market. Professional musicians would pay a higher negotiated price for improved keyboards made to their individual specifications. Changing its production process to job/customized production would be expensive for MM, however, and it would have to invest in a new marketing strategy.

Musical Musings (MM)

Musical Musings (MM) manufactures musical keyboards, using batch production to produce a limited range.
MM's products are designed for use in schools and homes. MM sells directly to schools, and, for the home market, sells through shops specializing in technology. MM's costs are kept low by:
- limiting its product range

Figure for Question 3 — IB Business Management SL

- focusing on a small target market, which enables MM to limit the features on its keyboards and keep the appearance functional.
MM provides free online "Teach yourself to play the keyboard" training courses for all customers.
In 2021, MM employed an average of 50 people. During that year, however, 12 people left the company. Their reasons for leaving are shown in Table 5.

$Table 5: Stated reasons for employees leaving \(\boldsymbol{M$

Table 5: Stated reasons for employees leaving \(\boldsymbol{M

MM's labour turnover rate for 2021 was 24 %. The manufacturing industry average was 15 %.
In 2021, MM's sales declined. MM is now considering targeting the niche market of professional musicians. MM would change its product design by adding a range of different sound features and improving the appearance of its keyboards. To achieve this change, MM would eventually stop supplying its existing market. Professional musicians would pay a higher negotiated price for improved keyboards made to their individual specifications. Changing its production process to job/customized production would be expensive for MM, however, and it would have to invest in a new marketing strategy.

State two characteristics of a niche market.

[Maximum number: 4]

EkoLogiczne Ltd. (EL)
EkoLogiczne Ltd. (EL) is a packaging company owned 60 % by Marek Kowalski and 40 % by his father. EL is a private limited company. Marek founded the company when he realized that the rise in e-commerce would mean the demand for packaging would always increase.
Originally, Marek imagined that EL's unique selling point/proposition (USP) would be to offer recyclable packaging. However, the eco-friendly market was dominated by one large company, Big Boxes (BB), which enjoyed economies of scale. Marek reimagined his USP: EL would have small factories that enabled customized orders to be fulfilled quickly.
Over time, EL opened four factories across Poland and the Czech Republic. Its customers, which included online retailers and small manufacturing companies, placed orders online; if the factory nearest the customer was too busy with other orders, the order would be shifted to another factory. Many customers chose EL rather than BB for this reason. With growth, however, EL began to experience diseconomies of scale and increasingly failed to fulfil orders on time.
Marek is now considering bidding on a large five-year contract for all the packaging solutions for WszystkoMart (WM), a huge traditional retailer trying to expand its e-commerce presence. The contract would require building a huge factory and focusing almost exclusively on keeping costs low. In terms of scale, EL would be almost as big as BB, the large company dominating the eco-friendly packaging market.
To finance the new factory, Marek would either have to sell many shares and reduce his and his father's combined ownership to 40 % or take a 30 -year loan from a bank.

Explain one advantage and one disadvantage for EL of having a unique selling point/ proposition (USP).

[Maximum number: 6]

Stuart Sporting Goods Ltd. (SSG)

Stuart Sporting Goods Ltd. (SSG) is a private limited company in Uisge, Scotland. The Stuart family has owned the store since 1937. SSG sells sporting equipment and clothes. It has strong brand awareness and loyalty based on excellent customer service. In 2021, the company had GBP 2.5 million in assets and GBP 2.1 million in equity.
Uisge is near Glasgow, Scotland's largest city. Young families from Glasgow are moving to Uisge, where housing is cheaper and the pace of life is slower. These new residents' employers, usually in Glasgow, allow them to telework two days per week. Uisge's population has grown only slightly, as these new residents are largely replacing an ageing population.
Recently, MuraMerk ( MM), a retailer, opened a superstore in Uisge, MM's first in Scotland. This superstore sells groceries, clothing, hardware, electronics and sporting equipment. MM also sells online. Because of the economies of scale, MM offers lower prices and more choices than other businesses in Uisge, including SSG. For several years before MM's arrival, SSG's sales revenue did not grow and, after MM arrived, sales revenue started to decline.
Aware of MM's impact on small businesses in the United States (US), Douglas Stuart, who is 59 years old and the Chief Executive Officer (CEO) of SSG, is considering two options:
- Option 1: Lower prices, reduce employee levels, and cut costs in the hope that MM will be unsuccessful in Scotland (as it has been in several other countries).
- Option 2: Accept a takeover offer of GBP 1.1 million from a large chain of sporting goods.

Explain three possible reasons for the decline of sales at SSG.

IB Business Management SL 4.2 Marketing Planning Topic Practice

Covered syllabus points

IB Business Management SL 4.2 Marketing Planning Topic Practice

Covered syllabus points

Question 1

Question 2

Question 3

Question 4

Question 5