AS Level Answer Guide: Marketing - 4Cs, Packaging and E-Commerce

1.  'The 4Cs marketing model is more useful for a retail business than the 4Ps marketing model.'  Do you agree with this statement? Justify your view. (20 marks) [9609/12/M/J/16]

Suggested is an outline of what you can write for this question.

1. Explain what do the 4Ps and 4Cs cover Also, state which model represents the company-centric view and another the customer-centric view.
2. Explain how the customer solution view is more superior than the product view. Give examples to illustrate your understanding. You should explain the problem using the product concept in 4Ps as it may carry the risk of product creation that result in the disconnect between what the company wants to design and produce and what the customers are looking for.  This can have the potential to result in marketing failure.  With the concept of customer solution, company will always put themselves in the position of identifying what problems the consumers are currently facing in their life and introduce a product that can specifically address that problem.  You can a (brief) example to illustrate your understanding of the application product and customer solution concept.
3. Explain how the customer costs concept is more comprehensive in its scope as it does not look at the amount of monetary costs paid to acquire and consume a product but include time costs, energy (physical effort)costs, and psychological costs.
4. Marketing communication concept will force the business enterprise to look at purpose of communication initiated towards the target audience rather than merely consider the various media to be used.
5. Convenience will often have companies to think about how well can they use the various platform of distribution, ordering, and delivery to make their products more available and accessible to the target market without having them to incur too much costs in ordering and acquiring those products.
6. You can argue that the use of 4Cs in general is better model than the traditional 4Ps regardless the business is in the retail or manufacturing sector.
7. However, you can then mention that even the 4Cs model have its limitation as it did not include certain additional marketing element which are presented in the 7Ps model that are specifically designed for service business.  Then you should go about how retail business as service business will find the concepts People, Process, and Physical Evidence to be highly important consideration in the marketing mix when compared against manufacturing business.
8. Conclude how the 4Cs model is more comprehensive when compared to the 4Ps model.

2. (a) Analyse, using examples, why packaging could be important in marketing mix. (8 marks)[9609/12/O/N/16]

1. To answer this well, you need to explain how packaging is useful and therefore important.
2. Packaging enable business to easily transport the product for easy distribution and delivery.
3. Packaging is important to protect the product being sold as to prevent it becoming damaging or spoiled which will eventually leads to the dissatisfaction of the customers.
4. Packaging can provide some functional benefits to add value to the products purchased.  Think about Starbuck's cover and holder for the hot coffee.  You can use other ideas.
5. Packaging can help distinguish one brand over the another providing competitive differentiation and even unique selling point.  Enable customer to easily identify the brand through the shape, colours, and design of the packaging.
6. Good packaging have the potential to provide emotional fulfillment (through delivering hedonic value).
7. Packaging designed and introduced in certain ways can provide opportunity for business to establish a position of high quality and therefore allow it to charge their products at premium price.
8. Packaging is a significant element that help build brand personality by conveying certain values through its design, colours, and to some extent even shape.

Note: Some students can even look at the concept of packaging in broader terms which can include the retail environment and consider how the retail service is 'packaged' in certain manner to provide some specific value and build a brand personality.  This idea must be supported with the use of an example. 

Since the question only asks to analyse, students are not required to discuss to what extent packaging is important to the marketing mix which may force them to compare with the other marketing mix elements.

It is recommended that students should focus on 3 or 4 of the above ideas, giving each of the idea at least an example to support in order to illustrate your understanding.


2. (b) Discuss factors that could determine the success of a business that has decided to set up an online shop to sell beauty products. (12 mark) [9609/12/O/N/16]

Following are some ideas in which students can use and elaborate.  As this question contains the key action word, 'Discuss', students have to look at both sides of the identified factors by evaluating how on one side, the factors can be supportive of the business and have potential to bring it to success, and on other side, give argument how some of the factors can be difficulty to adopt due to certain limitations and may carry risks that will bring detriments to the company.

1. Promotion/Marketing Communication - there is no point having the 'best' product in the world if people don't know about it or cannot see what the benefits are and how they are superior as compared to the competitors.
2. Mobile platform - businesses nowadays cannot just operate electronically via Internet, they need to consider to complement their channel activities with the use of mobile technology.
3. Social media - there are growing number of people using social media, you need to consider how social media can be used by the beauty product company, to communicate, converse, and build customer relationship with its target market.  You may want to relate to the concept of 'customer engagement'.  However, use of social media can result in business to lose control over how their brand can be projected.  Also, there is a great risk if whenever a negative comment is posted up and the company is slow to respond or fail to respond tactfully.  Note: In terms of responding to customers, its customer-contact staff may need to have some degree of emotional intelligence to be have empathy and can determine the most appropriate manner to communicate.
4. Tactfulness and responsiveness of the back-end people in responding to the inquiries, complaints and comments on the electronic platform (particularly Facebook).
5. Logistic consideration - how fast and safe can the product be delivered?
6. Price - could the products be sold at cheaper price since it is being marketed on the online platform where there is less overheads to deal with as the business is purely online.
7. Variety - how many varieties of different beautfy products are made available? Should having a very wide variety of products be beneficial.
8. Channel conflict - assess how this can negatively impact a business in the future if they wish to later sell it to physical retails.
9. Design of the website - is it easy-to-navigate and pleasing to the eyes to see?
10. Other value added features - what other value added features you suggest? You may want to explore the application of augmented reality, wishlist, video tutorial on teaching consumers how to (properly) use the product, community forum to encourage sharing  and fulfill some emotional needs within the consumers (such as social, ego, and self-actualization), easy pay system, notification on the status of the product, etc.  Consider the costs to adopt some of the features mentioned above.

You are not required to answer all the above ideas listed above.  Just choose some like 5 or 6 and then be able to elaborate on them.  Always choose those ideas in which you can elaborate well. REMEMBER TO DISCUSS.

A2 Business Studies Revision: Elasticity of Demand - Lemonfizz

Discuss whether LF should reduce price or increase promotional expenditure in order to increase sales of Lemonfizz. Refer to your results from (a) and any other relevant information. (14 marks) [9707/33/M/J/2015]

As I mark some of the answers for this question for those who sat for the mock exam, I realise that many students were not able to give a good answer to the essay part of the question after doing the calculation of both AED (advertising elasticity of demand) and PED (price elasticity of demand),  Many presented a simple but (unfortunately) superficial comment that LF should stop spending more money on promotion when they find that result of AED is highly inelastic.

Many students are found to have calculated wrongly the AED (can be referred to as promotional elasticity of demand).  They did not notice that the statement given in the is "Increase promotional spending by $1m to $11m" and not "Increase promotional spending from $1m to $11m".  There is a big difference on how you should calculate if word used is "by" or "from".  So it is imperative that students more attention to the data given in the case.

However, students must take note that promotion is still essential to LF.  The loss of potential revenue in absolute term can still be considered as significant to the business.

There are few answers which perplexed me as students mention that LF should engage in promotion tactic of offering BOGOF (Buy One Get One Free) in order to encourage the target market to buy more of LF drink.  There is a failure to assess how such approach can significantly hurt LF's financial bottomline because for each drink its give for me, it will be a cost to LF.  So the question is how will LF improve its profit performance.  In addition, there is a danger the the use of BOGOF may undermine the brand image of LF as the consumers may see that the drinks are 'cheap'. It must be understood that the margin for fizzy drinks are not very high.

Some students recommended due to the inelasticity of the AED, LF should not further pump in money for promotion and even went to the extent that LF should reduce its promotional expenditure.  Their justification is that LF should rely on its brand since it has been around 20 years already.  This unfortunately is not a sound argument.  Students have to consider the pressure of competition.  And even if LF has been operating for a long while does not mean they should 'slack' on its promotional effort.  Think about how Coca-cola having to battle against its industrial rival, Pepsi. Despite being very well-known and having operated for so many years, Coca-cola still continue to invest a substantial amount of money for promotional purpose and allocate budget to find innovative ways in which they can engage its target market. 

Furthermore, students some have a narrow view with regards to the information they can use for discussion in their answer and could not see the potential of looking at other information which can help them provide a better analysis and arguments.  For example, despite the PED having high elasticity, it does not guarantee that LF will make a profit.  And to be able to determine whether profit may actually fall, students should look into the variable cost of production. 

So please take note, that if a question ask students "... and any other relevant information," they should attempt to look for information in the other parts of the cases and also to ascertain any other information which is not presented in the case that can still be relevant for discussion such as competitors' future actions or their reactions in response to LF's tactical marketing approach and the effectiveness of the current promotional approach use.  For the latter, students must take note that the inelasticity in AED must be due to unattractive advertisement and poor promotional campaign.  As such, students should make recommendations to LF to explore methods of promotion such as utilising social media and mobile marketing since they are targeting at the younger generation.  

In addition, students can give suggestions to LF in introducing a creative promotion campaign that can engage the target audience.  Students can make reference to the previous practices of other well-known canned drinks producers such as Coca-Cola (please watch the below videos) to give specific details on how such campaign can be made.  Students can just mention how LF can explore the use augmented reality, social media, and QR code to engage the customers in order to introduce a more impactful marketing that can help increase the sales which will possibly even change the elasticity of AED for the better.  

Video: 'Share A Coke' campaign ...Coca Cola, a marketing genius!!!

Video: Coca cola Creates First Ever Drinkable Advertising Campaign

In past I did mention not to bring in other companies for discussion and focus at the company stated in the case.  Because make reference to other companies beyond the case study often divert the students' answer making it not or less relevant.  However, in this case, students can just mention how LF can follow the approach that has been made by other well-established fizzy drinks manufacturers and look at their customer engagement promotional practices as a benchmark to design its own.
For those who do not know what I am saying here.  Please look at the answer guide provided by Cambridge for this question.

Cambridge's Answer Guide:

Although AED is less than 1 (+0.5) this does not mean that advertising is a waste of money.  An increase in sales of 5% if maintained over the course of a year would be 13.5 million litres extra – potentially $8.1m. [90% of 300 m = 270m litres. 5% of this = 13.5m × $0.60 = $8.1m] However, production costs of $4.745m ($0.35 × 13.5m) must be taken into account. PED may be elastic (5 / – 3.33 = – 1.5) and there would be an increase in revenue [270m ×$0.60 = $162m but 283.5m × $0.58 = $164.43]. However, that does not necessarily mean an increase in profits. Again, production costs must be accounted for.  [270m × $0.35 = $94.5m but 283.5m × $0.35 = $99.25m so profit will actually fall.] Other considerations: • How does a change in price or advertising fit in with other elements of the marketing mix? • The actions of competitors may be important. If they are increasing advertising can LF afford not to respond? What sort of advertising would be most effective? LF has made good use of new forms of communication in the past. Is it necessary to increase advertising spending? • How were the PED and AED estimates arrived at? • Are they reliable? Much depends on the reaction of competitors to either decision – and these reactions could change the elasticity estimates. Evaluation: • Does LF want to enter into a price war with competitors – this could be damaging? Is competing on price the most effective approach for the market leader? Could social media be used more extensively – to the young consumers of LF – and would this achieve an increase in sales without a substantial increase in promotion spending?

Though not relevant for A-Level study, here is an additional video to look into the execution of "Share A Coke" for your further knowledge.

Video: How Coca-Cola cans are printed with names

A2 Business Studies Answer Guide: Managing Change - Lemonfizz

Evaluate the importance of effective management of change for the future success of LF. (20 marks) [9707/33/M/J/2015]

Following is the comments given by the external examiner over the performance of students who sat for this paper and attempted this question.

"Candidates approached this question in two ways: the role that change management plays for LF or how LF might deal with changes it is planning to make in marketing, location or personnel (dealt with by a small minority). Both approaches were credited, although very few responses gained high marks. Candidates clearly were prepared for questions on strategy and many answers set out a strategic planning model, often setting out SWOT or PEST, with little relation to the question. Most answers described the role that effective management plays and failed to address the question of change and this made it difficult for Analysis marks to be awarded. These answers often quoted sections from the text with little or no comment. Better responses on change management considered various models or techniques for managing change such as Kotter’s 8 steps, project champions or involving the employees in various ways. These candidates gave reasons for using these methods (analysis) and attempted a consideration of the possible effects (evaluation). Better answers on planned change considered issues facing LF (e.g. replacing Tony Brown, entering country Z, introducing CSR, a new production line) and suggested methods to achieve these changes successfully."

From my observation of your answer, I find that many students fail to notice this question focus on "effective management of change" and not just "effective management".  As such, many who attempted to answer this questions failed to make any reference to the issue of change as they focus on writing about strategic analysis and the use of the environmental analytical tool without making any connection to the the issue of managing change.

Although the question ask about the effective management of change, if we look at the context of the question, it somewhat implicitly require students to discuss the various ways in which change can be effectively implemented.

Here are few ideas students can consider whenever they encounter issues on managing change.

• Set a clear objective to be achieved from the implementation of the change and communicate that objective it to the relevant members of the organisational responsible to bring the change to fruition.
• Be transparent.  Do not keep the organisational members of LF in the dark.  Uncertainty often leads to unnecessary speculation which will leads to the feeling of insecurity that can adversely affect the motivation of the employees within LF. This can subsequently hurt business performance and most likely result in resistance to change.
• Indicate what benefits that each member of LF can individually derive from the change instead of merely informing those affected how the change can bring benefit to the organisation.
• Engage the employees and allow them to provide input as to how the change can be effectively implemented.  Through this practice of employee participation, it will create ownership of the decision made and thereby allow the management to gain cooperation and commitment from the employees to support the change and implement it without or with little resistance.
• Nevertheless, change can be implemented forcefully and Tony as the CEO can threaten those managerial and non-managerial employees who cannot embrace his idea of change to remove themselves from the organisation or be removed by him.  However, this may not always produce a positive result as some out of resentment may purposely sabotage the effort of LF to undertake the change. However, if take a look at line 23, it is unlikely that Tony will take such a ruthless approach to force the employees within LF to accept the proposed change as this will most likely go against his value.

Following are some specific ideas that relate to the context of the case.

• Students should take note that in the context of the question, there is a plan to convert LF into public limited.  As such, Tony the CEO must find ways to convince the current shareholders to accept his proposal to change the legal structure by telling them the potential benefits in terms of higher economic return they can get if the business is to change to become public limited companies.  This will enable LF greater potential to pursuit its plan for business growth and increase its capability to make more sales to (hopefully) bring in greater profit.  Furthermore, Tony needs to highlight the fact that country Y has become more challenging for LF to operate in and thereby may yield profit if the business do not plan to engage the oversea market.
• With regards to the process of finding replacement, Tony should quickly find successor to avoid too much speculation among people within and outside the organisation.  He should consult the relevant people especially those among the Board of Directors and senior managers to determine who will be the most capable candidate as by getting their input can help the newly appointed CEO to be accepted among the relevant members of the organisation.
• The consideration of increasing marketing effort may be viewed as increase workload by the current members of the marketing department.  Tony must look into how he can possibly alleviate their concerns.  Perhaps, he can considered hiring more marketing personnel to support the increase marketing activities although this will mean increase in recruitment and labour costs.
• Effective management of change is essential to ensure undisrupted operation.  With regards to the change in the production lines, the affected production workers need to be told on what will be happening.  It is good that in the case itself that training is provided to alleviate fear of these workers of not being able to perform their job well. Yet, training by itself may not entirely solve resistance to change as some workers does not wish to learn something new as they are accustomed to the current way of working.  As such, the production managers will either have to talk to them and purpose even issue an ultimatum that after the change in the production process, if there is failure of anyone of these production workers to perform to a desirable standard, they may be dismissed from the organisation.  Nevertheless, a 'softer' approach can be made by promising these workers some attractive rewards perhaps in the form of financial incentives if they as an individual or a group are able to produce efficiently, with quality, and achieve the desired quota.

For those unfamiliar with Kotter's 8-Step Change Model can watch the video below.

Video: Kotter's 8 Step Change Management Model

It is not necessary for students to state and discuss each of the 8 Step of Change Management Model introduced by Kotter if they understand the essence of the those steps.

Create urgency, create a vision for change, and communicate the vision - all these will often relates to the issue of business communication which involves being transparency and indicating the importance of the change to them such as highlighting the rewards that those who will be affected will received.  Remember effective communication is essential.  Without such communication, the employees will be in the dark and they tend to speculate which will be unhealthy to their psyche if they speculate on the negative.

Form a Powerful Coalition - this step can relate to the issue of engaging those members of the organisation involved in the implementation of the change or that will be affected by the change to participate in decision-making process or a process of getting inputs of their reactions; by having such employee participation process enable the management build positive rapport with those people and win their support that is necessary to ensure that the change can be implemented effectively the the commitment and cooperation the relevant organisation members

Remove Obstacles - basically this requires students to give recommendations on what kind of support the management can give to allow them to cope the change and adjust themselves appropriately such as providing them training and the necessary resources in order to respond to the changed process 

A2 Business Studies Answer Guide: Corporate Social Responsibility - Lemonfizz

Corporate social responsibility (CSR) is one of the frequently tested topic in A2.  If students encounter a question asking for a discussion on CSR, they should first give a definition of it in their introduction paragraph.

Discuss the extent to which LF should consider corporate social responsibility in its decision-making. (16 marks)

CSR refers to the strategic pursuit of business enterprises in satisfying the interests of the other stakeholders such as the customers, the community and also the environment (Mother Nature can be a stakeholder of business) in order to achieve sustainable business operation rather than to merely work towards the objective of profit-making and profit-maximisation to bring in desirable economic return to the shareholders’ investment.  CSR are often practiced with the goal of achieving the triple bottom line - i.e. satisfying the interest of financial, social, and environment objective of the business.  Often this calls for business enterprises to work towards the objective of profit-satisficing.  In addition, CSR can include the ethical labour practice as employees are considered to be the stakeholders of the business and part of the community.

Other definition from various sources:

Financial Times Lexicon	“....a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders.” “...CSR is a very broad concept that addresses many and various topics such as human rights, corporate governance, health and safety, environmental effects, working conditions and contribution to economic development. Whatever the definition is, the purpose of CSR is to drive change towards sustainability.” Source: http://lexicon.ft.com/Term?term=corporate-social-responsibility--(CSR)
Investopedia	“...a corporation's  initiatives to assess and take responsibility for the company's effects on environmental and social wellbeing. The term generally applies to efforts that go beyond what may be required by regulators or environmental protection groups.” Source: http://www.investopedia.com/terms/c/corp-social-responsibility.asp
The Business News Daily	“Corporate social responsibility (CSR) refers to business practices involving initiatives that benefit society.” Often CSR initiatives fall into four broad categories of activities - environment effort, philanthropy, ethical labour practice, and volunteerism. Source: http://www.businessnewsdaily.com/4679-corporate-social-responsibility.html

Students attempting the above question should do the following.

• Discuss the need for LF to engage in some charity campaign or volunteerism activities that can benefit the community in order to improve the reputation of the company which are getting hit with negative publicity.
• Explain the general benefits that can be brought by LF engaging in CSR initiatives.
• Go beyond identifying the health issues currently being faced by LF in the production and marketing of its product but asking yourself whether clearly indicating the amount of sugar content will pacify the concerns of the health-conscious consumer market and the worried community.
• In addition, students should argue despite offering an alternative product with lower sugar content in the form of Diet, this does not resolve the controversy of LF’s product having sugar content which holds no nutritional benefits when consumed.
• Students should go further to discuss whether it is worthwhile to engage in CSR.  It is possible for  students to argue that the importance of CSR will often depend on whether the management of the business is facing significant backlash that can hurt the company’s financial bottomline and which can subsequently threaten its sustainability.  If the management see that the reaction of the affected stakeholders are not severe to hurt the business operation, then LF can possibly choose not to consider CSR in its decision-making.
• Furthermore, with regards to use of advertisement that display anti-social behaviour, from a practical marketing standpoints, the utility of creating a controversy in the marketing communication can effectively gain the attention of the target audience and this may become a “necessary evil” especially when LF is operating in a highly competitive market where several competitors are vying to capture the market attention.  LF can thus put aside CSR consideration especially if only a small group of people that assertively voice their disapproval of its marketing communication practice which may not be substantial to hurt the company’s financial performance.  Even though a ban can be imposed by the Organisation of Advertising Standard (OSA) as indicated in line 14-16, LF can still adhere to the ban instruction but allow the controversial ad to create a buzz within the target audience.  It is possible that LF can forego CSR in its marketing communication decision, continue to roll out controversial ad with anti-social behaviour, feign ignorance, and withdraw it when instructed by some relevant authority.
• Students will need to recognise that in business as in life, LF cannot please everyone.  Inherently the products that LF produced are considered to be unhealthy but it must maintain its operation to produce as LF also has responsibility to the employees working within its organisation and the shareholders.  It will be difficult for LF to simply overhaul its product portfolio to produce something which are considered to be healthy.  Even if LF choose to add a new line of products that will provide health benefits, critics will still make complaints as LF continue to make its core products of sugar-laden drinks.

Some weaknesses I found in students’ answer.

• I read that a few suggested that LF should look into using better quality ingredient to make their drinks but my question what better quality ingredient can LF use as sugar remained as an integral element in the making of its beverage.
• Some mentioned that by engaging in CSR will allow LF to charge its product at premium price but did not explain how this may occur.  They should make reference to how by through CSR activities can help build the value of goodwill in the brand and thus enable LF to leverage on charging at higher price.  Yet, students must recognise the products that LF is selling as there merely fizzy drink where the markets are highly competitive unless we can assume that LF is a strong incumbent in the market.
• A significant number of students were able to indicate the general benefits of CSR. However, many did not include any evaluation in their answer to look at how CSR may not be considered to be important/significant for decision-making or that it can be ignored/put aside. You should look at your script and determine whether if there is any of these words evident in your writing - "But,..." "However,..." "Nevertheless,..." "Although ..." or any of their equivalent. If you have none, this often show that evaluation is missing in your answer which result in students getting a low credit or less.

To understand deeper on how to write your answer better, please read the following comments given by the external examiner.

"Many candidates started well with a definition or explanation of corporate social responsibility and went on to give examples of this. However, many responses quoted passages from the case study without adding to them. Many answers wrongly conflated CSR with observing legal or regulatory constraints. Most answers contained a general assumption that LF should consider CSR, but only the better ones gave detailed reasons why. These answers stated that LF should consider CSR without giving supporting reasons. Many answers assumed that because there was an issue with high sugar drinks LF should reduce the sugar and reformulate their product, i.e. that LF had some kind of moral responsibility to consumers that overrode any other considerations. And that this would automatically result in higher sales and profit. The better responses gave commercial reasons for this; for example, in terms of avoiding future legislation, appealing to the increasingly health aware consumer, repositioning as an ethical brand. These answers often referred to the possible cost of introducing more CSR and concluded by weighing up the advantages and disadvantages with a recommendation."

So as we can see in the examiner's comments, what they expect to see is for students to be able to give reasons why LF should consider corporate social responsibility in its decision making. However, the discussion with regards to reducing the sugar or reformulating the products does not seem practical as this is the core operation of LF business which will use sugar in making its products. It is also wrong to think that the LF must be morally responsible to the consumers at the expense of gaining profit. Better students can nonetheless provide evaluation that whether CSR is significant to be considered in decision is very much dependent on the weighing of negative reaction of the consumers and community and the primary obligation of the business to make profit to survive in the market. It can still be considered to be socially irresponsible if LF fails to sustain the business as it may result in the retrenchment of their workers as it is forced to shut down some or all of its operation.

Sample Answer: Factors Determining the Success of Online Shop

Discuss factors that could determine the success of a business that has decided to set up an online shop to sell beauty products. (12 mark) [9609/12/O/N/16]

To ensure that the online shop is successful, the business must have the right marketing mix.  The business must offer the products that can meet customers' needs and wants'.  Failure to do so will result in not getting sales and subsequently it will have to close shop.  Therefore, it is important that the business find the right target segments and offer the right product.  Also beauty products are considered to be luxury.  So in times of recession, people will have less money and must spend on necessity goods and service.  They will have less disposable income and therefore they will not choose to buy beauty products.  As such, the business will fail.

The price must be made affordable.  If the products are too expensive, then the customers cannot afford to buy because there is high inflation.  If the products are too cheap, then the customers may view the products as having low quality and refuse to purchase.  The business must also decide the right pricing strategy and determine whether to use penetrative pricing or skimming pricing.  Penetrative pricing is where the business sell the products at low price and then later increase it when the demand grows.  This is often applies when businesses want to encourage trial purchase and when the brand of the products are not so well-known.  Skimming pricing is where the price is firstly price high and then be reduced when the demand becomes stagnated.  This is highly important to business that manufactures technology-based products as they need to recover the cost of R&D fast.  Also, technology product have very short product life-cycle and can quickly become obsolete when more sophisticated products are produced and introduced by the competitors.

For the business to be successful, the business must have good promotion.  The online shop must consider using 'above-the-line' promotion and 'below-the-line' promotion. It must advertise on many different platforms so customer will be aware.  Therefore, the online shop must use both traditional and contemporary media of advertisement like newspapers, magazines, television, billboards, Internet, social media, and mobile marketing.  It needs to shows sexy women using the beauty product so the users can see the benefit.  For 'below-the-line' promotions, the online shop needs to offer discounts or rebates.  This will make it attractive for the customers to buy.  Also, the online shop can have contest and use celebrity to promote its products.

For place because the shop is online, there will be no physical retail.  This means the business is selling directly to the customers.  Direct selling can eliminate intermediary costs and this means the business can reduce the price of the products when selling online as costs will be reduced.

After reading the above answer, how many marks you will award the above answer.  Give your justification.  Analyse whether there are any weaknesses in the above writing.  Do you think the ideas presented above are relevant to the context of the question?  Do you think that the scope of discussion is adequate. Identify also if you think there are any ideas which may be relevant (but perhaps not appropriately written).

After evaluating the above answer, ask yourself can your provide a better one.  For those who are my students, you may want to show to me your draft answer for the above question.  You are recommended to submit a handwritten answer directly to me. Or (if you don't have time) just discuss with me about your evaluation of the above answer on this blog.

IMPORTANT NOTE: THE ABOVE IS NOT CONSIDERED AN IDEAL ANSWER BUT A SAMPLE TO SHOW TO YOU HOW A LOWER GRADE ANSWER IS WRITTEN AND FOR YOU TO THINK FOR YOURSELF HOW THIS ANSWER CAN POSSIBLY BE IMPROVED.

AS Business Studies Revision: Marketing Past Year Essay (2015-2016) and Definition Questions

Following are some concepts that can appear in the questions asking for definition in the exam.  Please make effort to look for the definitions of these following concepts.   It is highly recommended that you do not look at a single source of reference to find the definition but to make reference to at least two so you can do a comparison and appreciate how the definition of a single concept can be expressed differently. 

As additional, it is good to know how you can define the below concepts as sometimes you can give definition as an introduction to certain essay question involved those concepts.

Market segmentation
Unique selling point
4Cs
Niche market
Portfolio analysis
Customer-orientated marketing
Product-orientated marketing

Secondary market research
Primary market research
Focus group

Above-the-line promotion
Below-the-line promotion
Point-of-sales promotion
Rebate

Demographic segmentation
Geographic segmentation
Psychographic segmentation
Behavioural segmentation

Target market
Market positioning

Brand

Skimming pricing
Penetrative pricing
Cost-based pricing
Psychological pricing
Dynamic pricing
Discriminatory pricing
Elasticity of demand

Probability sampling
Non-probability sampling
Random sampling
Stratified sampling
Quota sampling

Customer loyalty
Customer retention

For your further knowledge: To know the difference between target market and target audience, click here.  In A-Level exam, often these two terms are used interchangeably and examiners are not very particular on which you despite the small difference.

PAPER 1 MARKETING ESSAY QUESTIONS

Comment: From my analysis of the 2015 and 2016 past year papers, almost each seating have a marketing essay question with the exception of 1 (i.e 9609/13/M/J/16).  As you look through the questions, it appears that all of them will require students to exhibit their understand of their marketing learning to apply the concepts and theories into certain specific contexts. As often, questions that are 12 and 20 marks will call for EVALUATION which require students to be able to look at the advantages and disadvantages or the usefulness and limitations certain marketing practice or application of theories and concepts.

Those with 20 marks are often quite challenging but it will be rewarding if students can answer them well.  Usually, questions of 20 marks will often reward students with some creative answer who are able to look at the issue(s) stated in the questions from various perspectives.

1. (a) a Analyse the benefits to a business of product portfolio analysis. (8 marks) [9609/11/O/N/16]

1. (b) Discuss the importance of branding in he promotion of a soft drinks product. (12 marks) [9609/11/O/N/16]

2. (a) Analyse, using examples, why packaging could be important in marketing mix. (8 marks)[9609/12/O/N/16]

2. (b) Discuss factors that could determine the success of a business that has decided to set up an online shop to sell beauty products. (12 mark) [9609/12/O/N/16] Click here for a sample answer.

3. Discuss how a large national fast food retailer could develop effective marketing during a period of economic recession. (20 marks) [9609/13/O/N/16]

4. (a) Analyse how a business might use price elasticity of demand of demand for pricing decisions. (8 marks) [9609/11/M/J/16]

4. (b) Discuss the best ways a car manufacturer could use the marketing mix to increase its share o for the market. (12 marks) [9609/11/M/J/16]

5. 'The 4Cs marketing model is more useful for a retail business than the 4Ps marketing model.'  Do you agree with this statement? Justify your view. (20 marks) [9609/12/M/J/16]

6. (a) Explain the importance of primary market research to a new business. (8 marks) [9609/11/O/N/15]

6. (b) Discuss how a business could make sure that its market research expenditure is cost effective. (12 marks) [9609/11/O/N/15]

7. Discuss the view that while market research can be very beneficial for a business it can also have serious limitations. (20 marks) [9609/12/O/N/15]

8. (a) Explain the importance of a USP (unique selling point) to the marketing of a product or service. (8 marks) [9609/13/O/N/15]

8. (b) Discuss ways in which poor customer relations could be improved in a large retail business. (12 marks) [9609/13/O/N/15]

9. (a) Explain the differences between niche marketing and mass marketing. (8 marks) [9609/11/M/J/15]

9. (b) Discuss the view that marketing is only about the advertising and selling of products and services. (12 marks) [9609/11/M/J/15]

10. Discuss the view that product differentiation is the most important activity of the marketing department of a motor car manufacturer. (20 marks) [9609/12/O/N/15]

11. (a) Explain, with examples, the difference between 'above the line' and 'below the line' methods of promotion. (8 marks) [9609/13/O/N/15]

11. (b) Discuss the importance of branding for effective product promotion. (12 marks) [9609/13/O/N/15]

Shoe Style International: Guide to Answer Change Management Question

For students who are studying about change management, consider this question.
Discuss the factors that will determine whether the CEO is successful in changing the corporate. (Shoe Style International, 9707/31/O/N/13)

You can obtain the past year paper from this website.

Students could first discuss the ineffectiveness Jacque's communication approach by merely sending videos of himself announcing his vision and mission in making SSI an social responsible and ethical company.

Then, students can give suggestion how should Jacques communicate to make his proposed be accepted and win the support the the managers.   To do this, students should look at the idea of advising Jacques to first meet some of the key managers personally and communicate with them in an informal manner in order to build relationship and establish a positive rapport; this is essential in the attempt to win support and elicit commitment from those how are required to implement change.

Students can also give suggestions that Jacque, instead of pushing his message through a video which is considered to be one-way communication, should engage in employee participation in getting the relevant managers in some discussion and have Jacques listen to their concerns and opinions.  Such approach will provide opportunity for the managers to express themselves and allow them to gain some attention from Jacques which can help to satisfy their ego needs and thus motivate them to cooperate.

In addition, Jacque should not just communicate how the change can benefit the business organisation but to indicate how the change when it can help the company build a better reputation and thereby gain higher acceptance of the consumer to result in higher sales can subsequent bring greater profit to SSI which later can used as reward to the employees in terms of higher bonus. Note: Students must realize that the management should not merely announce how the organisation can benefit from the change but must also indicate how employees can specifically derived benefit from it as an individual.

It must be noted that despite having a code of ethics, this does not always ensure that the subordinates will follow.  To effectively ensure the ethical code is adhered to, Jacques need to implement measure to enforce it and that a monitoring mechanism is put in place to detect any employees who may engage in bribe and use harmful materials in production of the shoes.

Students need to realize that not all employees will give their commitment towards the proposed change.  As such, Jacques may need to be ruthless  by giving an ultimatum those who continue to resist to in join him to realize the change or to get out of the company.

Nevertheless, a more tactful approach can be made which is to offer a voluntary separation scheme (VSS) to act as incentive in encouraging those employees who resist to resign on their own accord rather than to be forcefully dismissed or systematically retrenched.  It must noted that it can be adverse to SSI as organisation if those employee who resist are kept working in the company as they can act as cancer that hinder the smooth operation of the the enterprise as they may instigate others to resist or their low commitment to the company result in poor business performance.

Then you can conclude that without following any of the above suggestion, it is unlikely that Jacque's proposed change will be successful as you final paragraph.

Market Revision A2 Level Business Studies: Part 1

So it is near the time for students to prepare for the upcoming exam going to be held this May and June 2017.   Do you know what you should study for Unit 3 to prepare yourself for the A2 exam (i.e. Business Studies Paper 3)? Following are the topics I would recommend students to focus on based on my analysis of the past year exam papers from 2012 to 2016?

INTERNATIONAL MARKETING

Students need to read on and understand the advantages and disadvantages of standardisation versus localisation approach for a business enterprise to enter into the foreign markets.

Standardisation - when evaluating the use of standardisation approach, you as the student must mentioned about the benefits of economies of scale that can be gained and cost efficiency; however, students should write as part of their evaluation the risk of the marketing mix failing to address the specific conditions of the foreign market environment especially with regards to (a) taste and preference of the target consumers, (b) cultural differences affecting motivation, purchasing decision, and buying behaviour, and (c) opportunities and restriction to the use of the relevant promotion media which can be influenced by the technological infrastructure available in the target foreign market.

Localisation - here students can discuss about the imperative of customising/adapting the marketing mix to suit the local environment of the foreign market in order to make the products they are selling more appealing; consideration on the change on product design and even packaging can be made; use of language and also local models and celebrities may be required to make the brands and products easily relatable to the target audience of the foreign market 

Foreign modes of market entry - students may be asked to evaluate the different choices which a business can choose to engage the foreign market such as through export, joint venture, or using own capital to establish its own retail or manufacturing facilities (see Le Blanc Kitchen Equipment) .  If such questions come about, students need to consider (a) the level of risk involved especially when certain mode demand high level of capital investment (b) the amount of control a business will have which correlate to the amount of capital invested i.e. high cost, more control but low cost, low control, (c) opportunity to find the right partner to work with, (d) risk of conflict of objective which can result in joint venture, (e) level of commitment given by the agents and business partner to push your product to the market as they may have other brands which they manage, (f) intermediary cost which is a relevant discussion when talking about the use of external distributors which covers third party retailers and wholesalers that may reduce the margin of your business and increase the price of the products sold to the end consumers, and (g) level of knowledge a business have with regards to the target market audience in the foreign country and also the distribution network - the less knowledge, the more a business will need to use intermediary or collaborate with a business partner.

Influence of foreign exchange rate - it is important for students to recognise that the fluctuation of currency will affect pricing and the attractiveness of selling the product into the overseas market

INTERNET MARKETING

There will be occasions that the exam questions will test students on what are the factors they can contribute to the effectiveness of a business in engaging the Internet as an additional channel of marketing. Students need to be aware that the term 'channel of marketing' does not necessary confine itself to the scope of Place.  Internet as a channel can be used as a channel for communication where businesses merely use it to provide its target audience with information about their products, location, phone, email, and operation hours (for example this website of Levain Boungerie Patisserie Malaysia) but does not necessary means there are available option for making purchases.  Some websites will function a channel of commerce where customers can buy the product directly online.  For some products sold can be delivered directly to the customers via the Internet.  These are often digital products which can be downloaded on the customers' electronic devices or be streamed directly like many of the music, movies and television entertainment programmes.  As such, the internet will be acting as a channel of delivery.

However, students must be aware that despite having establishing an Internet channel to do marketing, it is highly essential for businesses to do some promotion in order to create awareness that such channel exists to give the customers option to find information and make purchases.

A good question on this for students to work on will be Leo Fantastic Flower Q5 (9707/33/O/N/12).

MOBILE MARKETING

Although not very stressed in the syllabus, it would be impressive if students do make recommendation on using mobile technology to market a product in addition to the use of Internet.  As such, the business can engage an additional channel to reach out to its customers.  Furthermore, students can justify the use of mobile marketing in their answer by stating how nowadays, many individuals are having smartphone and these people have adopted behaviour to make purchases through their mobile devices as it is more convenient since their mobile phone can be easily carried around and utilised as compared to gaining access to a desktop or even to carry a laptop.

The important issues when considering the use of mobile technology for marketing is to determine which platform to us as the apps (e.g. Apple OS, Android and Windows) must be developed to the specific technological mobile platform. Which platform to develop the app on will be highly determined to which platform that are commonly used by the target market.  

Another issue to discuss will be the cost of developing the app.  However, most of the time, such cost is minimal when compared with the potential return it can gain if the app can give more added value to customers to encourage them to buy your business products.

SOCIAL MEDIA MARKETING

Another consideration that students can make when making recommendation on how to market a product is the use of social media.  Students can focus on discussing about using Facebook but must realize that Facebook can act not only as a channel to provide information but also as a platform to promote customer engagement and build customer relationship.

Students can state that many people in today's population are using social media to connect to and converse with other people and even organisation.  As such, from this technologically influenced behaviour, many social media users have started to look for information about a company, its brand, and its products through social media particularly Facebook.  As such, it become highly essential for business to build a Facebook presence.

Moreover, in Facebook, there are review and rating feature where customers can provide comments about their experience in using the products or in visiting the physical retail facilities.  These additional information can easily help user to make their decision and customers will be more likely to visit a retail place or buy certain products where more information are provided.

Nevertheless, students must also recognise the potential pitfalls of using Facebook.  One of them is that the business will not have control over the negative comments in which the Facebook user will be posting up.  Deleting those derogatory remarks is not a good practice to build positive relationship with the customers and to salvage the company reputation as this can leads to greater increase the grievances felt by the customers as the problems are not purposely ignore and removed from the Facebook platform.  Worst is where users create a separate Facebook page or online platform to complain about the company.  As such companies must be wary in deleting posts as it can escalate matters and further jeopardize the reputation of the firm.

Another consideration if Facebook is used is the possible requirement to assign a dedicated personnel or team of people attending to the message who can respond to them promptly and with tact.  If message is replied after 2 days is often considered to be significantly slow and can affect the service satisfaction of the customers when making inquiry or posting a complaint.  Giving tactful response is also very important and require a person who would have some significant level of emotional intelligence to be have self-control and empathy.   If not, an undesirable outcomes can occur as exhibited in this case of Les Deux Garcons Social Media Failure.  More examples on social media failure, do click here "Worst Social Media Disasters in Malaysia 2012-213".

INFLUENCE OF EXTERNAL ENVIRONMENT ON THE MARKETING DECISION

There are few instances where students were presented with a table (or tables) containing data on the economic, social, and competitive environment of specific country (often given some generic labels) and are asked to give recommendations of marketing strategy or make a marketing decision whether to enter or not.  

To some extent, those data will show the challenges or opportunities which exist in the competitive environment of a specific region or country indicated in the case which may required students to make reference to Porter 5 Forces.

Furthermore, it must be noted that in some cases, the rate of unemployment can affect  marketing decision on whether a business should enter into another country.  If the business plans to establish a manufacturing facilities to produce its products for its target foreign market, high unemployment can be desirable in terms of the business having greater bargaining position in employing workers by offering them lower wages and thus save on labour costs.  However, in terms of sales, it may not be a favorable condition as when more people are unemployed means more people will have less income to spend.  Nevertheless, to properly write an answer students must identify and understand what kind of products are in question and the marketing positioning the business is operating in.

Examples of questions with such nature are:

• LeBlanc Kitchen Equipment (9707/31/O/N/13, Q5) - consider the average family of a country population will affect the product design and packaging of kitchen equipment product, how the number of retailers that exist will influence the strategic choice to enter into the market using agents or through joint venture, and level of pricing to suit the level of income of the target consumer groups.
• Cloud Catering (9707/31/M/J/13, Q3)
• Xiang Mobile (9609/33/M/J/16, Q4)
• Kaldi and Akbar (9609/31/O/N/16, Q5)

ANSOFF'S MATRIX

This particular topic is covered in Unit 6 but is considered to be a marketing topic nonetheless.  Students need to recognise the different set of marketing approaches for the each of the specific strategy identified in the matrix.

Market Penetration (Existing Product; Existing Market) - objective is often to increase market share; reduce price to encourage more sales (getting more customers from the existing market to buy) but this may lower profit margin per sale; provide discount and rebates; engage in promotion using contest and competition; launch a creative marketing campaign to engage the customers from the existing market; establish additional channel for commercial transaction to allow the existing customers the convenience to order the product and make purchases especially through the use of Internet and mobile technology

Market Development (Existing Product; New Market) - expand the market by selling existing products to new market segments; going into the market of foreign country; find new uses to an existing product to it can be targeted at a new segment; for current physical retailers - engage the Internet channel by establishing an online stores to sell the products to segment of consumers who how no and inconvenient access to the physical retail outlets.

New Product Development (New Product, Existing Market) - It is sometimes difficult to determine when is a product considered to be new.  If a business simply includes some incremental improvement to a current product it is producing, will it fall into the category of new?  Does the introduction of the various hair formula for different scalps by shampoo manufacturer such as Sunsilk consider to be as 'new product'?  Also, can we consider that despite tailoring certain specific shampoos to deal with particular scalp conditions experience by the user as targeting at new market segment or can we simply just group them into a general category as shampoo user and therefore see them as the 'existing market'?  Will producing an additional variety of a product within the same product line be considered as a 'new product'?

Variety of Sunsilk Shampoos

Click here to see more varieties of Cornetto in Malaysia

Cornetto Mini

Do all these debates matter for your preparation for your A2 exam.  It matters when you are required to evaluate the use of Ansoff's matrix because the evaluation on which particular quadrant does a business fall into in order to determine which strategy to use is highly subjective to the view of the management.  But here is my view (which can still be arguable), a new product will be characterized as offering a product with a significant features that differentiate itself from its predecessor more than a small incremental manner such giving another color option.

Diversification (New Product; New Market) - for this strategy, I advise students to see diversification in two perspectives - (a) introduce a new line of product within the same category of product of a business is producing but target at a different market segment line Brand introducing Inner Shine in addition to its current Brand's essence of Chicken product or (b) introduce a new product that is radically different from what has been produced by the business before such as Apple introducing iPod, iPhone, and iPad which are significantly different from the line of computers it produces and all these non-computer products are targeted at different market segments. 

A good question to test your knowledge and understanding of Ansoff's Matrix in marketing context will be Shoe Style International Q5.

My apology if you see any grammatical errors or spelling mistakes as I wish to push this article out quickly due the urgency of students in getting supportive guide to do their revision early before I can do a proper proofread.  If you do see any particular errors in my writing, please email me so I can do the necessary correction.