Business Studies · Oct / Nov 2016 · Paper 22 · Question 4
7115
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4(a)[8]
Identify and explain two reasons why market research is important to GJ before starting the new service. [8]
Knowledge [2 × 1] – award one mark for each relevant reason Analysis [2 × 1] – award one mark for a relevant explanation for each reason Application [2 × 2] – award two application marks for each reason Relevant points might include:
To find out customer wantsTo find out about competitorsTo find out the price customers are willing to payTo find out if there is a market/demand for the new serviceTo find if there have been any changes in customer preferences Award a maximum of three additional marks for each explanation – 2 of which must be applied to this context – of the reason why market research is important before starting the new service. To find out what the customer wants (k) so that GJ can provide the kind of service for elderly people that the adult children want (ap). If needs are met then there should be an increase in demand thus increasing sales revenue and profit (an) so then Ghaziz and Jasmin will be able to either reinvest this back into the partnership or take out the money to pay themselves (ap). Possible application marks: gardening services;house cleaning services;
workers punctual with appointments;
50 part-time workers;
2 office workers;
honest, reliable and hard-working employees;
elderly people;
old people;
adult children;
financial information from Appendix 1;
information from the graph in Appendix 3. There may be other examples in context which have not been included here.
4(b)[12]
Explain the following two elements of the marketing mix for the new service Jasmin is introducing. Which element do you think is more important when the service is in the introduction phase of the product life cycle? Justify your answer. (12) Relevant points might include: Price
Promotional pricing as in introduction phasePenetration pricing as trying to enter a new marketCompetitive pricing as need to price at a similar level to other businesses to increase sales of new service PromotionAdvertise in local newspapers or leaflets through doors or posters in local shopsImportant to increase awareness of the service as it is new Knowledge/Analysis/Evaluation – award up to 10 marks using the levels-based mark scheme below. Knowledge/Analysis/ Evaluation Level 3 At least 2 × Level 2 + 9–10 marks for well justified conclusion as to which element is the most important in the introduction phase of the product life cycle. 7–8 marks for some limited judgement shown in the conclusion as to which element is the most important in the introduction phase of the product life cycle. Level 2 4–6 marks Detailed discussion of price and/or promotion for the new service. Pricing strategies should be discussed. Method of promotion identified and explained how it should be used to attract new customers. Level 1 1–3 marks Outline of price and/or promotion for the new service. Level 1 – 1 mark for each L1 statement (max of 3 marks) e.g. Promotional pricing Level 2 – 1 × L2 explanation can gain 4 marks and a further mark can be awarded for each additional L2 explanation (max 6 marks) e.g. Promotional pricing as the new service needs to become more well known in the market and let customers know about the service that is being introduced to look after elderly parents while the adult children are at work. It encourages the growth of sales in the market with the lower price of this new service. (4 marks for L2 answer plus 1 application mark for making reference to elderly parents and their adult children being customers). Level 3 – For L3 to be awarded there needs to be at least two L2 marks awarded and then a conclusion as to which element is the most important in the introduction phase of the product life cycle. Award up to 2 additional marks for relevant application. Possible application marks: gardening services;house cleaning services;
country X;
advertising in local newspaper;
income in country X is increasing;
elderly people;
adult children;
old people;
financial information from Appendix 1;
information from the graph in Appendix 3 e.g. number of people aged 61 and over is increasing. There may be other examples in context which have not been included here.
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