Cambridge A Level Business (for first examination in 2016) 9609 — 2025 Oct/Nov Paper 4 · Variant 1

1 Evaluate FM’s marketing strategy between 2021 and 2024. [20]

Mark scheme: Question Answer Marks 1 Evaluate FM’s marketing strategy between 2021 and 2024. 20 Indicative content Responses may include: AO1 Knowledge and understanding The elements of a marketing strategy • objectives • resources/budget • research • marketing mix • product – product life cycle, Ansoff matrix • price • promotions • place, use of international distribution channels • marketing planning • need for co-ordinated planning of marketing strategy • international marketing, including developing an international market through pan-global marketing or maintaining local differences • the changing role of Information Technology (IT) and Artificial Intelligence (AI) in marketing Award for any explanation of an element of marketing strategy, up to a max of 2 marks Product Identification of an element of marketing strategy, so only K. Product , involves the design, quality and uses of 1 K for identification and 1 DEV for a point of explanation. a product that is sold, . Product , involves the design, quality and uses of 1 K for identification and 2 DEVs for two points of a product that is sold, . Product can also involve explanation after-sales service, so customers can return faulty goods . 1 Note – candidates can gain full marks for AO1 from one term that is explained ( + + ) or from two terms partially explained ( + and + ). No other AO2, AO3 OR AO4 marks can be awarded without AO1. AO2 Application Application (max 2 marks) can be awarded for applying knowledge, analysis or evaluation of FM marketing strategy including: Candidates must apply their answers to marketing and marketing strategy. • traditional word of mouth advertising • low investment in advertising pre-2020 • sustainable clothing range marketing investment almost double (App2) • PR spend up in 2022 – overall marketing increases by $70K - use of annual figures (App4) • social media usage is changing approach • digital in-store displays • digital promotion campaign • use of new website • marketing spend is starting to fall but more than three times bigger than 2021 • elements of #fashionmania strategy – social media/sponsorship of TV programme • retailer of low-priced clothing • fast changeover of clothing designs • use of market research into potential new international locations for stores – cost $10 • to open 25 stores across 7 high income countries Note: this list is not exhaustive, any marketing context used from the appendices can be rewarded if used correctly AO3 Analysis Candidates need to identify an element of the marketing strategy and provide developed analysis to get to L2, this then needs to be counterbalanced to get to L3. If a candidate does this twice, they will gain 8 marks. ( and and ) • Low pricing is part of their unique selling point and has been their ‘Blue Ocean Strategy’ from the start and served them and their market well • PR costs have tripled – not really part of the advertising but is part of media image that has been managed by the expose of FM to unethical suppliers. This increase in costs may have contributed to 25% increase in price. This could lead to customers no longer seeing FM as good value either because prices have risen or because of unethical suppliers. 1 • #fashionmania driven by customers and still allows FM to gain free advertising • Above the line spend is still low but the #fashinmania strategy requires advertising materials in store which costs money. • Product has essentially stayed the same throughout, with low price point as driving factor. Keeps market share of existing customers who are now sharing their finds on social media. Note – analysis can only be awarded for the marketing strategy between 2021 and 2024 and not what they should/can do in the future. AO4 Evaluation Candidates MUST answer the question – a judgement on the strategy between 2021 and 2024. The development and support of this judgement will help them to move through L2 and L3. Evaluation ( and and ) including: To award L3 the answer must be in context and draw upon the previous analysis. Evaluation will depend on what points have been made about the marketing strategy FM have used. • A judgement over how much of the word of mouth is still being used? They were spending £27m in 2021 so must be undertaking more than word of mouth advertising. Is this marketing responsible for recent success? • A judgement over how launch of any programme would require more marketing/PR to ensure that new direction of the business is clear to all stakeholders so there should be an increase in marketing spend. • A judgement over how marketing has been successful as while sales dropped – potentially from ethical exposure – they have soon recovered, and customers seem to have forgiven them for the 25% increase in price. • A judgement over how marketing has been successful in recovery of the programme, but it also exposed them in the first place – has the sustainability program helped the company improve its market share? Has it caused more bad publicity for FM than they brought in revenue? • A judgement over how #fashionmania strategy still costs money in store – how much compared to advertising? Is this more cost effective? TV sponsorship is first real entry into big above the line promotion, will this add to cost and ultimately price? What effect will this have on demand? 1 • A judgement over how CEO’s decisions have caused the increase in marketing– could FM refocus on their core values and approach for their future expansion and abandon – fast cheap fashion? • A judgement over how success may be dependent on how much they have recovered from the ethical scandals including the recovery in revenue. • Accept all valid responses. No Credit L1 including: (limited L2 including: (developed L3 (developed supporting supporting evidence) supporting evidence) evidence with context) FM FM marketing strategy was FM marketing strategy was FM marketing strategy was marketing successful between 2021 and successful between 2021 and successful between 2021 and strategy 2024 because it has regained its 2024 because it has regained its 2024 because it has regained its was market share market share. This demonstrates market share where it dropped to successful their marketing strategy have 5.9% in 2023 and regained to supported them in recovering 6.8% in 2024. This demonstrates from the ethical scandal their more recent marketing strategy has supported them in recovering from the ethical scandal in 2022. FM FM marketing strategy was not FM marketing strategy was not FM marketing strategy was not Marketing successful because the increased successful because the increased successful because the increased strategy marketing expenditure was not marketing expenditure was not marketing expenditure $27m to was not reflected in increase revenue reflected in increase revenue. $95.04m was not reflected in successful This shows that they have not increase revenue (decreased recovered well from their ethical from$2297.540m to $2189.54m. scandal and have been unable to This shows that they have not meet their objectives set in 2022. recovered well from their ethical scandal and have been unable to meet their objectives set in 2022.

More questions on Marketing strategy

2 Advise FM’s directors whether blue ocean strategy is the best approach to develop a future business strategy. [20]

Mark scheme: 2 Advise FM’s directors whether blue ocean strategy is the best approach to develop a future business strategy. 20 Indicative content Responses may include: AO1 Knowledge and understanding Candidates must show knowledge and understanding, they cannot just mention a key term. • The purpose of business strategy. • The meaning and purpose of strategic management. • What Blue Ocean Strategy is – approach focused on creating markets where competition is absent • Alternative approaches to develop business strategy, including: – scenario planning – SWOT analysis – PEST analysis – porter’s five forces – core competence framework – ansoff matrix – force field analysis – decision trees. – red ocean strategy To be awarded it MUST be for an explanation of Blue Ocean Strategy 2 marks Blue Ocean Strategy focuses on creating markets where Identification of what Blue Ocean Strategy is, so only K. competition is absent Blue Ocean Strategy focuses on creating markets where 1 K for identification and 1 DEV for a point of explanation. competition is absent, , to achieve this a business needs to differentiate their product while keeping low cost Blue Ocean Strategy focuses on creating markets where 1 K for identification and 2 DEVs for two points of competition is absent, , to achieve this a business explanation needs to differentiate their product while keeping low costs , this allows a business to create demand rather than compete for it from competitors 2 Note – candidates can gain full marks for AO1 from only using the term Blue Ocean Strategy and that is explained ( + + ). Use of any other strategy remains No other AO2, AO3 OR AO4 marks can be awarded without AO1. AO2 Application Application (max 2 marks) can be awarded for applying knowledge, analysis or evaluation of FM marketing strategy including: Candidates MUST apply this to FM business and the external environment – a lot of this will come from the appendices • Low price, fast fashion • Lack of expensive marketing to keep loyal customers • 150 stores in country X, 25 abroad, 175 stores in total based on low price clothing model • Pursuing international expansion • Any element of the case study • Any element of the appendices Note this list is not exhaustive, any business or external environment context used from the appendices can be rewarded if used correctly AO3 Analysis Candidates need to identify an approach and provide developed analysis to get to L2, this then needs to be counterbalanced to get to L3. If a candidate does this twice, they will gain 8 marks. . ( and and ) Analysis should primarily focus on Blue Ocean Strategy but then go on to suggest other strategies FM could use to develop the new strategy of expansion. • Blue Ocean Strategy (BOS) worked well for FM – they were market leader in cheap, fast fashion and built-up good market share. This has helped them to expand to 150 stores over 46 years • BOS has helped them stay focused on what makes them different on the high street from other fashion retailers and allowed them to grow the business in this sector. • May help FM discover an unknown/untapped marketplace. • FM can increase their growth potential by identifying new opportunities. • BOS can create new demand and customers, increasing market share and size. 2 • It promotes innovation. • Identifying the right blue ocean strategy can be challenging and costly for FM. • FM’s marketing costs are likely to significantly increase to attract a new market. • No guarantee that the BOS will work/ be effective. • Time and patience may be needed to be successful in the market. Is this compatible with the fashion market? • High risk strategy for FM. However some candidates could dismiss BOS but would need to discuss two other valid approaches to gain 8 marks. • The next move is into high income countries so mirroring the model that worked in the first 25–30 years of building the business would make sense, FM will have a reputation that those countries may know about and if it is not cheap fast fashion could they lose out in those markets and have to pull out? • FM could use scenario planning to consider how expansion may end up but not very useful for developing the whole strategy. • A SWOT analysis could help FM identify what opportunities/threats are globally and how they could handle these to ensure success of the expansion. • A PEST analysis would support an analysis of the external environment but may not help develop the strategy to tackle this as the PEST factors are out of their control. • Porter’s five forces would help them understand the external environment, but FM is a large business and holds a lot of the power. This provides little help in developing a new strategy. • The core competence framework would be like BOS in that it identifies what FM does well and then allows them to replicate this in their new stores. Given the model is staying the same this would be easy to apply once the core competencies have been identified. • Ansoff matrix could help them consider other possibilities to help the business grow • Force field analysis could help FM identify the driving and restraining forces to help them come out of CEO’s management and back to the low-price model that made them a success. • Decision trees could help make the decision, but FM would need to have lots of information gathered on alternatives to make sure that this model really helps decide on what to do next – plus this would be a very quantitative way of doing this – what about qualitative factors? 2 AO4 Evaluation Candidates MUST answer the question – a judgement on the whether Blue Ocean Strategy is the right approach. The development and support of this judgement will help them to move through L2 and L3. Evaluation ( and and ) including: To award L3 the answer must be in context and draw upon the previous analysis. Candidate will have to make a judgement on Blue Ocean Strategy in the first instance, not just suggest alternatives without evaluating the BOS concept. • Candidates may state that Blue Ocean Strategy is/isn’t sufficient • The use of BOS (or any other approach) may depend upon; FM’s objectives, the objectives of FM’s stakeholders, the external environment (especially economic and social), the competitors in the market, the success of the international expansion etc. • FM know the BOS was working so possibly re-focusing after sustainability programmes allows them to get back the customers and possible drop prices after the recent 25% increases. • BOS is no longer useful to them as they have moved too far away from this model with recent sustainability programmes and price rises/new factories. They are now more mainstream and have moved into red ocean territory and now need to adapt to this way of competing. • Advice to FM should make clear whether BOS is sufficient or whether it should be supported by other models, and if so which? • BOS is Ok but needs other strategies to support it with external factors. Accept all valid responses. 2 No Credit L1 including: (limited L2 including: (developed L3 (developed supporting supporting evidence) supporting evidence) evidence with context) Blue Blue Ocean strategy is not the Blue Ocean strategy is not the Blue Ocean strategy is not the Ocean best approach because recently best approach because recently best approach because recently strategy is they have moved away from this they have moved away from this they have moved away from this not the type of approach. type of approach. They have type of approach. They have best become more mainstream and become more mainstream with approach have moved to more Red Ocean their recent sustainability Strategy so need alternative ways programmes and average 25% to compete. price rises and have moved to more Red Ocean Strategy so need alternative ways to compete. Blue Blue Ocean strategy is the best Blue Ocean strategy is the best Blue Ocean strategy is the best Ocean approach because it allows FM to approach because it allows FM to approach because it allows FM to strategy is meet its objectives meet its objectives that the meet its objectives that the the best shareholders want and mirroring shareholders want and mirroring approach its current model has worked its current model has worked before. FM know the BOS was before. FM know the BOS was working so it will allow them to get working so it will allow them to back the customers and possible refocus after the sustainability drop prices programme get back the customers and possible drop prices after the recent 25% increase.

More questions on Business strategy