4im_1212_sa

8/11/2019 4IM_1212_SA

1/13

The Association of Business Executives

QCF

Introduction to MarketingSuggested Answers

Unit Title: Introduction to Marketing

Unit Code: 4IM

QCF Level: 4

Session: December 2012

STRUCTURE OF PAPER: Answer ALL FOUR sections

SECTION A:AnswerANY TWO questions fromQ1Q3 13 marks each

Maximum for Section A: 26 marks

SECTION B:AnswerANY TWO questions fromQ4Q6 13 marks each

Maximum for Section B: 26 marks

SECTION C:AnswerANY TWO questions fromQ7Q9 12 marks each

Maximum for Section C: 24 marks

SECTION D:AnswerANY TWO questions fromQ10Q12 12 marks each

Maximum for Section D: 24 marks

TOTAL MARKS AVAILABLE FOR THE PAPER 100 marks

8/11/2019 4IM_1212_SA

2/13

SECTION A

Candidates must answer ANY TWO questions in this section.

Each question carries 13 marks

Section A is worth 26% of the total marks available for the paper.

Question 1

Q1 Identify and explain fourmacro-environmental factors that influence the marketingenvironment, giving an example of eachone.

Some factors:

Factor Could include:

Political e.g. international trade, taxation policy, Government policies, funds orincentives

Economic e.g. wage rates, interest rates, national income, inflation,unemployment, stock market

Social e.g. number of people in work, demographics, number of children,population declines

Technological e.g. use of computers, internet habits, new equipment, latest technologyin an area

Environmental e.g. packaging, recycling, using less energy, environmentally friendlybehaviour

Legal e.g. any specific laws or regulations, health and safety, employment law

Maximum Marks for Q1 13 marks

8/11/2019 4IM_1212_SA

3/13

Question 2

Q2 Using an industry of your choice, explain how each of Porters Five Forces couldinfluence the decision whether to launch a new business in a competitive market.

The following example applies Porters five forces to a supermarket business.

Threat of new competitionSupermarkets can be profitable and yield high returns depending on the goods sold andtheir profit margin. However, barriers to entry can be high in terms of capital to build anew shop or deals to gain distribution of goods. It can also be expensive to attractcustomers and get them to switch from another supermarket e.g. advertising costs mayneed to be high to create awareness.

Threat of substitute products or servicesThere are normally many supermarkets in a capital city and getting customers to switchcould involve lots of promotional deals which could cut profit margins. Customers oftengo to the supermarket which offers the best price deals or the widest range of goods.

Bargaining power of customers (buyers)The bargaining power of customers is relatively low generally and is about the ability ofcustomers to put the firm under pressure, which also affects the customer's sensitivity toprice changes. Their power is dependent on things such as the volume of customers inthe area, the number of other supermarkets, price sensitivity etc.

Bargaining power of suppliersThe bargaining power of suppliers is concerned with supply of food, number of peopleavailable for work. The bargaining power in this area will be quite low.Example: If you are selling biscuits and there is only one person who makes them, youhave no alternative but to buy from him and this makes the supplier powerful.

Intensity of competitive rivalryFor most industries, the intensity of competitive rivalry is the major determinant of thecompetitiveness of the industry.

Maximum Marks for Q2 13 marks

8/11/2019 4IM_1212_SA

4/13

Question 3

Q3

(a)

Explain what is meant by market segmentationand give threereasons to show why itis important in the marketing of brands.

Definition:

Market segmentation involves splitting customers, or potential customers, in a marketinto different groups, or segments, within which customers share a similar level ofinterest in the same or comparable set of needs satisfied by a distinct marketingproposition.

Importance of segmentation can include such factors as:

- meeting customer needs more closely by offering more targeted marketing mix- using an organisations resources more effectively and wasting less money by

targeting people more likely to respond/buy rather than wasting money on massmarketing

- helps organisation to retain customers in the face of stiff competition- helps with positioning of the brand, i.e. customers will more readily respond to a

targeted brand proposition

Maximum Marks for (a) 6 marks

Q3

(b)

Identify sevenelements of demographic segmentation.

Elements include:

Gender, age, ethnicity, religion, status, education, occupation, income, family life cycle.

Maximum Marks for (b) 7 marks

Total Maximum Marks for Q3 13 marks

8/11/2019 4IM_1212_SA

5/13

SECTION B


Each question carries 13 marks

Section B is worth 26% of the total marks available for the paper.

Question 4

Q4

(a)

Identify and describe threedifferent product decisions marketers could make so thatproducts are more attractive to buy.

There is much scope for different answers to this question.

For example:

Decisions could involve any aspect of design, adding features or benefits,packaging, size, colour, range, branding

It could involve improving performance or inventing new products

It could involve any aspect of improving the product life cycle or improving anyaspect of a service

Maximum Marks for 4 (a) 7 marks

Q4

(b)

Identify one possible benefit and one possible disadvantage of eachof the threedecisions mentioned in (a)above.

There is again much scope for different answers to this question and it depends on theanswers given in (a) as to the particular advantages and disadvantages.

For exampleassuming that a product decision had involved new packaging thenadvantages could include:

Attracts new attention/interest to the product when it is on the shelf/in the shop

Improved security for the product when it is being moved about

Disadvantages of new packaging could include:

Increased costs for the product

Customers do not like the new packaging and regard it as wasteful

Maximum Marks for 4(b) 6 marks


8/11/2019 4IM_1212_SA

6/13

Question 5

Q5

(a)

Describe the stages of the product life cycle.

The classic product life cycle has four stages: introduction; growth; maturity and decline.

At the Introduction (or development) stage market size and growth is slight and possiblysubstantial research and development costs have been incurred in getting the product tothis stage. Marketing costs may be high e.g. spend on launch etc. It is unlikely thatcompanies will make profits at this stage.

The Growth Stage features rapid growth in sales and profits. Significant promotionalresources are traditionally invested in products that are firmly in the Growth Stage.

The Maturity Stage is, perhaps, the most competitive stage. Here, both marketing andfinance become key activities. Marketing spend has to be monitored carefully, since anysignificant moves are likely to be copied by competitors.

In the Decline Stage, the market is shrinking, reducing the overall amount of profit thatcan be shared amongst the remaining competitors. At this stage, great care has to betaken to manage the product carefully.


Q5

(b)

For a brand of your choice, describe how the product life cycle can be useful tomarketers.

Using a car as an example, the possible usefulness of the product life cycle couldinclude:

- Monitoring sales over time and comparing your sales to a similar car

- Helps plan strategies if new cars are introduced into the market and see whichareas of marketing mix could be changed

- Helps to see visually if you are keeping on target with sales

- Helps to decide when additional promotional support is useful e.g. if car sales aredeclining



8/11/2019 4IM_1212_SA

7/13

Question 6

Q6

(a)

Identify and describethree PEST factors that could influence buyer behaviour.

There are many ways of tackling this question:

Political/legal - Government policies and lawsEconomicinflation, recession, tariffs and encouraging trade, disposable income etc.

E can also cover Ecological (protecting the natural environment)/Environmental (greenpolicies such as pollution, recycling etc.)

Socialbirth rates, death rates, family lifestyles etc.

Technologicalcan cover anything based on technology e.g. internet-based factors,new equipment etc.


Q6

(b)

Outline Maslows hierarchy of needs, showing how this theory can be used in themotivation of buyers.

It is important to motivate buyers for many reasons including attracting attention to yourproduct, increasing the chance of people buying or trying your product, to create a needfor your product among potential customers etc.

Explain the hierarchy of needs and the stages:

Everyone is motivated by needs. The most basic needs are inborn, having evolved overthousands of years. Abraham Maslow's Hierarchy of Needs helps to explain how theseneeds motivate people.

Maslow's Hierarchy of Needs states that we must satisfy each need in turn, starting withthe first, which deals with the most obvious needs for survival itself.

Only when the lower order needs of physical and emotional well-being are satisfied arepeople concerned with the higher order needs of influence and personal development.Marketing leads people through this hierarchy, so people are motivated to try or buyproducts that meet various levels of need.

Conversely, if the things that satisfy our lower order needs are swept away, we are nolonger concerned about the maintenance of our higher order needs.



8/11/2019 4IM_1212_SA

8/13

SECTION C


Each question carries 12 marks.

Section C is worth 24% of the total marks available for the paper.

Question 7

Q7 Identify fourpossible objectives for an advertising campaign and explain how you mightmeasure the success of the campaign in meeting eachof these objectives.

It is difficult accurately to measure the effectiveness of a particular advertisement,because it is affected by such things as the amount and type of prior advertising,consumer brand awareness, the availability of cost-effective evaluation measures, theplacement of the advertising and a range of things about the product itself, such as priceand even the ability of the target audience to remember.

Methods for evaluating effectiveness include:

Reach or impact statistics

Research on peoples recall of the advertisement (unprompted/prompted)

Measuring changes in attitude

Measuring changes in behaviour (e.g. higher response rates, increased sales,increased enquiries)

Share of voice

Advertising objective How success can be measuredAn increase in sales - Number of enquiries from advert- Number of enquiries converted into sales

Remind customers of theproduct

- Test customer awareness both before and afterthe advertising campaignNumber of enquiries

Inform customers - Test customer awarenessNumber of requests for further information

Build a brand image - SalesTest customer awareness of brand recognitionand perceived values

Build customer loyalty and

relationship

- Levels of repeat purchase

Levels of customer retentionChange customer attitudes - Measure demographic profile of purchases

Measure type of goods ordered by newpurchasersCompare with previous data


8/11/2019 4IM_1212_SA

9/13

Question 8

Q8

(a)

Define the concepts of above-the-line and below-the-line communications.

Above-the-lineAbove-the-line promotion involves the use of advertising to reach a mass audience. It is

mainly used to reach consumers but it can be used in business-to-business markets.Advertising creates general brand awareness. It uses media such as TV, cinema, radio,print, banners and search engines to promote brands.

Below-the-lineBelow the line sales promotions are short-term incentives, largely aimed at consumers.These may include activities such as direct mail, public relations and sales promotions.


Q8

(b)

Explain why it is important to measure the effectiveness of marketing communications,and describetwo possible difficulties with measuring this effectiveness.

It is important to measure communications for many reasons including:- To help you evaluate your budget effectiveness i.e. has it been spent appropriately- To ensure communications objectives are being achieved- To prove an organisation is delivering value for money- To benchmark against competitors- To help with planning of future campaigns

Difficulties with measurement can include:

- Difficulties in deciding what exactly to measure to prove effectiveness e.g. numberof news releases issued or number of news stories published?

- Gathering accurate data and primary research can be expensive



8/11/2019 4IM_1212_SA

10/13

Question 9

Q9

(a)

Explain the AIDA (Attention, Interest, Desire, Action) model of buyer behaviour.

The AIDA model consists of 4 different phases that lead people to the purchase of aproduct/service. Using a model like this gives a general understanding of how to target a

market effectively and create and hold a customers interest. The relevance of this isthat it helps to persuade a customer to buy a product/./service.

AttentionAttention is the first phase that will attract the interest of a consumer e.g. unique design,pricing, and marketing.

InterestInterest is the second phase that can create a desire for the product/service. Aconsumer will want to know more about the product/service, its functions and features.

Desire

Desire is the third phase that stimulates an action to buy. After comparing theadvantages and disadvantages of the product/service and checking with a lot of othersources, desire may grow which will lead to the purchase of the product/service.

ActionAction is the fourth phase and the last of the AIDA. The consumer will purchase theproduct/service after completing the three phases. Desire triggers action, and theconsumer will buy it when the product/service can fulfil his/her desire.

Maximum Marks for 9 (a) 4 marks

Q9

(b)

Using an example of your choice, show how eachof the fourphases of the AIDA model

can lead to a consumer buying a product or service.

Example using a local restaurant:

First, you have to get attentione.g. the restaurant advertises online and offline and usescoupons to generate an invitation to try out its food.

Second you have to get the interest. You tell people your food is cheap and tasty and isserved quickly in your advert or poster.

Desireis the third step. It's lunchtime. The customer is hungry and now knows therestaurant has cheap, delicious food served quickly.

Finally, if you've done the first three steps well, you get action. You sell some food toyour customer.



8/11/2019 4IM_1212_SA

11/13

SECTION D


Each question carries 12 marks.

Section D is worth 24% of the total marks available for the paper.

Question 10

Q10 Define the term body language, and explain why body language is important whenmeeting a customer for the first time. Give examples of particular aspects of bodylanguage to support your answer.

Body languageis a form of non-verbal communications e.g. signs and gestures,posture etc. It is very relevant to management and leadership, and to all aspects of workand business where communications can be seen and physically observed amongpeople. Body language is also very relevant to relationships outside of work, for examplein families and parenting. Your own body language reveals your feelings and meanings

to others. The sending and receiving of body language signals happens on consciousand unconscious levels.

There are many aspects of importancesuch as eye contact, facial expressions suchas smiling, a welcoming and relaxed appearance, keeping mannerisms such as fidgetingunder control, degree of formality, closeness to other people, appearing relaxed and incontrol, breathing etc.

Elaborate on some examples of body language.

Maintaining a relaxed posture while walking or during a meeting indicates you'recomfortable in your surroundings and not under stress. Even if you experience stress,

when you reduce the appearance of stress, people around you will feel morecomfortable and will have more faith in your abilities to lead, delegate responsibility andmanage the project.

Mannerisms such as fidgeting, moving around a room while talking, breaking eyecontact with others frequently and other bodily quirks you have can be seen as adistraction to those around you. These mannerisms can make you appear anxious,unprepared, unorganized, and stressed even if you're not.

Facial expressions can help you become more successful in the workplace eg peoplewho smile are often considered very approachable and friendly and attract positivecomments and other people find their behaviour appealing.


8/11/2019 4IM_1212_SA

12/13

Question 11

Q11 Identify six barriers to communication and explain how eachbarrier may be overcome.

There are many examples of communications barriers and equally a lot of ways ofovercoming them, these include:

Physical communications barriers (e.g. noise)distractions from noise around youwhen working can be overcome by wearing headphones for answering calls

Psychological barriers i.e. your views, beliefs, attitudes, past experiencesome ofthese can be overcome by suitable messages in adverts which highlight benefits ofproducts which overcome negative attitudes. For example, if you think that fizzydrinks cause you to be obese, then drinking a diet drink such as Diet Coke could alteryour beliefs. The advertisers use such messages in adverts to change your beliefs bytelling you it is low in calories yet still tastes very nice.

Languagefor instance, in some countries, different parts of the population speakdifferent languages. Some advertisers choose to present their adverts in more than

one language so that they can be readily understood by a greater proportion of thepopulation.

Culturethere are many different ways in which culture can become a barrier tocommunication. For instance, body language is understood differently in differentculturesa friendly gesture in one culture might cause offensive in another; differentcultures have different norms with regard to how close together it is acceptable tostand, whether eye contact or physical contact should be made etc. It is important tounderstand the norms of communication in the groups with whom you are planning tocommunicate and to adjust your communication accordingly if you wish to overcomethis potential barrier.

Jargone.g. this can cause people not to understand what your message is. The

way of overcoming this is to write posters and adverts in the style understood by yourcustomer and do not use technical language or jargon as this may make the customerfeel inferior or confused.


8/11/2019 4IM_1212_SA

13/13

Question 12

Q12

(a)

Explain what is meant by personal selling and identify threetactics used by personalsellers.

Definition:persuading customers to purchase a product or service through personal

communication. It is persuasive personal communications to develop relationships andhopefully attempt to close a sale. It is a push strategy and can involve prospecting,selling, servicing, order taking etc.

Tactics:cold calling, referrals, demonstrations, presentations


Q12

(b)

Identify and briefly explain threereasons why a business might use this form ofcommunication.

There are many reasons why a firm may use personal selling - select three suitablereasons e.g.:

Personal selling is a face-to-face activity; customers therefore obtain a relatively highdegree of personal attention

The sales message can be customised to meet the needs of the customer

The two-way nature of the sales process allows the sales team to respond directlyand promptly to customer questions and concerns

Personal selling is a good way of getting across large amounts of technical or othercomplex product information

The face-to-face sales meeting gives the sales force a chance to demonstrate theproduct

Frequent meetings between the sales force and the customer provide an opportunityto build good long-term relationships



4im_1212_sa

Documents