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AS / Level – Business (9609) – [Essays] – PAPER 1 AATIK TASNEEM | AS / LEVEL: BUSINESS (9609) | 03041122845 1 SECTION 3 / [7 Essays] (O/N 2023, V2), Q6 (a) Analyse two reasons why there should be a close link between the marketing objectives of a business and its corporate objectives. [8] Marketing objectives are objectives set by a business and its marketing department to engage in marketing activities that will support corporate objectives. Specific marketing activities include increasing product awareness, strengthen customer relationships, and strengthen the business brand and activities that would normally be supportive of corporate goals. One reason for a close link between the marketing objectives of a business and its corporate objectives is to avoid conflicts that might arise between the two. For example, if a company's corporate objective is to strengthen its corporate social responsibility (CSR) approach, this might conflict with marketing initiatives aimed at increasing sales and revenue through more aggressive advertising and promotion. Therefore, without alignment, the marketing team might pursue strategies that focus solely on boosting sales like by offering lower prices and maybe using unethical ingredients, potentially compromising the company's CSR efforts leading to damaging its reputation. As a result, by ensuring that marketing objectives are closely tied to corporate objectives, the company can ensure that its marketing efforts are in harmony with its broader strategic goals, minimizing conflicts and maximizing overall effectiveness. This leads to a good brand name and helps the company achieve goals in real time like increased sales and long-term profits. Another reason is because it helps to provide context and disciple for marketing activities. For example, if a company has a corporate objective of expanding its market share in the sustainable products segment and does not align this strategy with its marketing objective, they might focus on promoting non-sustainable products, which would contradict with the company's broader strategic direction and can damage its own brand name and creating confusion in the minds of the customers. Therefore coordination of goals sures that their goals are not pursued in isolation but are part of a coherent strategic plan which reduces that risk of the marketing department operating independently and pursuing goals that are not in line with the overall direction of the business. This leads to increased efficiencies and higher customer experience as the right products and services will be delivered. This results in building a competitive advantage over rival firms which helps to boost sales and profits. As a result, the company can use these profits to support their future marketing and corporate objectives of increasing market share and growth respectively.
AS / Level – Business (9609) – [Essays] – PAPER 1 AATIK TASNEEM | AS / LEVEL: BUSINESS (9609) | 03041122845 2 (O/N 2023, V1), Q5 (a) Analyse two advantages to a business of mass marketing. [8] Mass marketing is regarded as selling the same products to the whole market with no attempt to target groups within it. These products usually include FMCGs (Fast Moving Consumer Goods) like coke, chips, biscuits. In mass, the producer has high turnover and there are not many variations of demand in the market. One benefit of mass marketing is the ability to achieve lower cost due to economies of scale. By producing goods or services in high volumes, companies can spread their fixed costs (such as manufacturing and marketing expenses) over a larger number of units, reducing the cost per unit. This cost reduction allows companies to offer their products at a more competitive price point, making them more accessible to a larger number of consumers. For example, companies like Toyota use mass marketing strategies to produce large quantities of vehicles, allowing them to benefit from economies of scale and offer affordable cars to consumers around the world. This not only helps attract more customers but also contributes to the company’s profitability through increased sales volume. One key benefit of mass marketing is that it can reduce the risk of product failure. By targeting a broad audience, companies can ensure a consistent demand for their product, which reduces the risk of market saturation or changing consumer preferences impacting sales. For example, basic household items like toothpaste or laundry detergent are products that are likely to remain necessary and popular over time. By employing mass marketing strategies, companies can reach a wide range of consumers and establish their product as a staple in the market which helps to boost their market share and reducing the risk of failure since demand for the product is less likely to change. This results in increasing the likelihood of long-term and consistent sales resulting in higher and stable profits.
AS / Level – Business (9609) – [Essays] – PAPER 1 AATIK TASNEEM | AS / LEVEL: BUSINESS (9609) | 03041122845 3 (M/J 2022, V3), Q7 (b) ‘A successful soft drinks business needs to continue to carry out market research’. Evaluate this view. [12] Market research is regarded as the process of collecting, recording and analyzing data from existing and potential customers, competitors and the markets regarding market condition for the products and services of a business. It helps a business in developing the 4Ps and have a market-oriented approach. Market research is crucial for a soft drink manufacturer as it can provide valuable insights into changing customer preferences and market behaviors, ultimately aiding in product development. For example, Coca-Cola, a leading soft drink manufacturer, regularly conducts market research to understand consumer preferences and develop new flavors and products that resonate with their target market which has helped the brand to maintain its position as a market leader in the soft drink industry. Therefore, by conducting market research, a soft drink manufacturer can identify emerging trends, understand consumer needs and preferences, and adjust their marketing mix accordingly. If in the winter season they are expecting a decline in sales they might start to launch promotions or if the trend is moving towards healthier alternatives, they might start to shift away from high sugar products to more organic drinks. This allows them to stay ahead of competitors by developing products that cater to these changing demands. This leads to building a competitive edge which can act as their USP allowing them to capture more customers and boost sales and profits. These profits can be reinvested to sustain these expensive primary and secondary research activities which ensures this competitive edge for the long-term. [EVAL] Therefore for a soft drink company market research is crucial to its success due to the benefit of providing a market-oriented approach which is useful to build a competitive advantage in a competitive market. However, the success depends on how skilled is the department collecting this data. Since the soft drink market is dynamic, offering a large variety of competitors and customers hence unless the primary and secondary research is not designed by experts and updated regularly the benefits would be limited and will only waste valuable resources with no significant advantage in the marketing strategy. On the other hand, market research does have its limitations. One drawback for a soft drink manufacturer conducting market research is the risk of the data being incorrect because of issues like outdated information or the data containing biases. This problem occurs because of the fast-paced and ever-changing nature of the beverage industry and shifting consumer demand. This analysis could skew the results, leading to misinterpretation of consumer behavior and preferences which can lead to inaccurate insights and potentially misguided business decisions in the form of launching wrong flavors of drinks or setting the price too high or low. This makes the product less desirable for the consumers which could result in loss of sales which would lead to lower revenue and profits making it difficult to invest in large scale advertisements and setting wide distribution channels which are necessary for a mass product brand like soft drinks. [EVAL] Therefore it is not always beneficial for the soft drink business carry out research because it can have incorrect information. However, this depends on the type of method of research being used. This issue is more likely with secondary research techniques because the data about income changes or population size in the past years won’t be specific to that brand or even the soft drink industry therefore trying to understand the impact would result in higher chances of incorrect results. FINAL EVAL (1) Overall market research should be used by every soft drink business because in competitive industries like the soft drink market, building a USP is crucial to success since the products are almost the same flavors and can be easily copied by rivals. In these industries understanding the trends and simply adjusting the flavors before the rivals and promotion according to the latest trends guarantees success. (2) However, the success of research depends on the size of the soft drink company and its financial resources. Only large soft drink brands can afford to conduct research and then launch large scale promotional campaigns or modify their drinks and launch new products based on that data. (3) For smaller brands they don’t have enough resources to do both and usually have a more product- oriented approach of developing the product and relying on lower prices and distribution to capture more market. (4) Therefore, research provides a good head start to a soft drink brand but it is more significant if the market trends are changing rapidly and the market is highly competitive. If the trends are stable then it should be conducted but not as often to avoid high cost associated with it.
AS / Level – Business (9609) – [Essays] – PAPER 1 AATIK TASNEEM | AS / LEVEL: BUSINESS (9609) | 03041122845 4 (O/N 2023, V1), Q5 (b) Evaluate whether primary sector businesses should use product differentiation to increase sales. [12] Product differentiation is making a product distinctive so that it stands out from competitors’ products in consumers’ perception. It could be achieved by branding, product design, ease of use, USP. One benefit of product differentiation would be the benefit to create a well-known brand. Since primary sector businesses primarily sell commodities that are a standardized product sold in mass markets such as coffee and wheat, they do not necessarily have any differentiation point which limits their ability to charge a premium or increases sales. By building product differentiation, they are able to distinguish their products from competitors. For example, in the farming industry, a small business that locally produces organic fruits and vegetables can differentiate itself from large-scale, conventional farming operations that offer standard produce. Similarly, in the mining industry, a company that demonstrates a commitment to human rights and ethical practices can differentiate its products from those of competitors. This helps these businesses to build a USP which is difficult for rivals to replicate and helps them to attract consumers who prioritize these values. This allows these businesses to build a brand and allow them charge a premium for these items. This high price increases the profit margins which are reinvested to sustain these activities and help to maintain these sales and maintain a niche markets that stand out in a crowded marketplace leading to customer loyalty which contributes to long-run survival and growth. [EVAL] Therefore product differentiation is important for a primary sector business because of the advantage of competitive edge. However, this depends on the strategy of rival brands. Example: In the case of a wheat farm if every farm starts to use ethical practices and produces organic produce then this no longer remains a tool to create a competitive edge, but will only help to sustain sales not increase it. On the other hand, a primary sector business using product differentiation to boost sales needs extensive market research and promotion budget which can be costly. For example, a farming business looking to differentiate its produce by offering organic options would need to conduct market research to understand consumer preferences, pricing sensitivity, and distribution channels for organic products and then using multiple promotion methods like advertising to communicate that value to their target market. This process can require significant time and resources, including surveys, focus groups, and analysis of market trends along with investment to produce these products to comply with organic standards, which adds to the cost of production. This high cost is passed on to the customers in the form of high prices and can lead to the product becoming less competitive against the non-organic rivals. As a result, customers might shift to the cheaper alternative which reduces sales and market share. This loss of revenue results in lower profits and can lead to difficulty to survive in the primary sector business where products are less value added and low price determines competitive edge. [EVAL] Therefore product differentiation is not always the best strategy for a primary sector business because of the high cost. However, it depends on type of market the primary sector businesses targets. To what extent are the customers attracted by cheap products? If they compete in a highly competitive market and the business with the lowest price will make the most sales then due to the trade-off of ethics and low prices the business will lose sales significantly.