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With Reference to Dev Patel and his business, explain the purpose of marketing
Marketing is needed for Dev to establish a competitive advantage over existing competitors such as Tesco,
idl and Marks and !pencer"s, so that customers choose to bu# his products rather than his competitors.
$lso marketing is needed to attract ne% customers to Dev"s business so his business can continue to gro%
and be successful.
b. $nal#se the factors that Dev Patel should consider %hen devising a promotional
strateg# for his extended range of D&Ds
$ promotional strateg# is the %a#s in %hich a business can communicate %ith its potential and existing
customers %ith the aim of increasing sales. 't can be done through the use of advertising, branding, direct
selling and sales promotions.
(ne factor Dev should consider %hen choosing %hich strateg# to use is the costs. This is because his
business is relativel# small and therefore his budget for promotion is also likel# to be small %hich means he
%ill be unable to choose strategies such as television advertising and expensive competition pri)es. $lso he
needs to keep his promotions locals as it %ill keep the costs lo% but also regional or national promotions
%on"t be of an# use to Dev and his business as people aren"t going to travel long distances for a small,
independent business.
Dev should also take into account his target market for the extended range of D&Ds %hich include *oll#%ood
+lms %hich sho%s that he should choose promotional strategies %hich %ill attract the $sian market in the
area. $lso he is the onl# business in the to%n that stocks *oll#%ood +lms therefore he ma# not need to do as
much promotion for this range of D&Ds as if someone is interested in bu#ing a *oll#%ood +lm, Dev"s
supermarket is the onl# place other than the internet that the# can get them from.
(verall Dev should consider the costs involved %ith the promotional strategies and the target market he is
aiming the D&Ds at. This is because his business is relativel# small and therefore he doesn"t have a large
budget to spend on expensive advertising and also if he keeps his promotions local it %ill also keep the costs
as lo% as possible. ,urthermore most of his target market %ill be $sian as he is the onl# place in the to%n
that sells *oll#%ood +lms so Dev should concentrate on attracting as man# $sian customers as possible in
order to maximise his sales.
c. -valuate the use of product portfolio anal#sis to Dev Patel and his business
The promotional portfolio anal#sis is a techni.ue used to anal#se the existing product mix to help develop a
balanced range of goods and services.
The use of the *oston Matrix as the product portfolio anal#sis %ould be useful to Dev and his business as it
%ill allo% Dev to see %hether he has too man# or not enough products in the four di/erent categories0 the
cash co%, the rising star, the dog and the .uestion mark. This is important because the cash co%s provide
the capital to invest into the .uestion mark and the rising star therefore if there aren"t enough products in
this categor# then Dev ma# su/er from +nancial problems. $lso the dog are products that have a small
market share and a declining market gro%th and if Dev"s business has to man# dogs then his business ma#
be at risk of losing customers and becoming bankrupt.
The *oston Matrix is also useful to Dev as it %ill allo% him to see if he needs to spend more mone# on
promotion to attract more customers to his business and %hich products he needs to promote so that the#
don"t come to the end of their life c#cle, or %hether he doesn"t need to spend as much mone# on promoting
certain products as the# have an increasing market share and as a result saving mone# %hich he could use
on other aspects of his business.
1o%ever using product portfolio anal#sis techni.ues isn"t useful for Dev as customer needs and %ants are
constantl# changing therefore one of Dev"s products could be a rising star %hen he anal#ses his business but
%ithin a short period it could have changed to a dog and unless Dev notices he %ill still be investing large
amounts of mone# into a certain product %hich no longer has a target market.
(verall, the use of the *oston Matrix as a product portfolio anal#sis %ould be useful to Dev and his business
as it %ill allo% him to see %hat his potential mone# makers are and %hat products Dev should be cautious of
as the# are posing a threat to the +nancial stabilit# of his business. $lso it %ill allo% Dev to see %hich of his
products need more promotion to attract customers and %hich products don"t need as much promotion as
the# are in a gro%ing market. *ut the *oston Matrix needs to be constantl# revie%ed as customer needs and
%ants are constantl# changing %hich means that his products ma# keep changing %hich categor# the#
belong to, so as a result Dev shouldn"t rel# too much on the use of a product portfolio anal#sis.
d. Man# commentators %ould agree that price is the most important factor in the
marketing mix of a supermarket. With reference to the case stud# material, to %hat extent
do #ou agree %ith this vie%2
Price is the amount of mone# a business chooses to charge a customer for a product or service. The
marketing mix is the integration of product, place, promotion and pricing designed to achieve the marketing
ob3ectives of the business.
(n one hand ' %ould agree that pricing is the most important factor in the marketing mix for a supermarket
such as Dev"s business. This is because setting a price too high and the business %ill loose customers as
the# are able to +nd the same or a similar product in another supermarket such as idl for a lo%er price. *ut
also setting a price too lo% %ill cause cash 4o% problems because Dev %ill be attracting large amounts of
customers but he %on"t be generating enough mone# to cover his costs. ,urthermore setting the price
signi+cantl# lo%er than his competitors in the long term, Dev ma# also loose his customers as the# ma#
think that his products aren"t as good .ualit# as Tesco"s and other rivals. This sho%s that the price of all
Dev"s products needs to be 3ust right in order to generate large amounts of sales and a su5cient amount of
mone# to cover costs.
(n the other hand, place could be seen as the most important factor of the marketing mix as the prices of
Dev"s products cannot be set %ithout the in4uence of place, as long distribution channels %ill cause the
price to increase and be higher than products sold directl# to the customer. $nd as a result Dev"s customers
ma# choose to bu# their products straight from the suppliers rather than going to the supermarkets,
therefore this means that Dev customer base %ill decrease as %ell as his pro+ts.
,urthermore product could be the most important factors as a good .ualit# product tends to be priced higher
than lo% .ualit# products. This sho%s that the prices of products is based upon the .ualit# of the products
and usuall# in supermarkets there is both high and lo% .ualit# products %hich means that both high and lo%
income customers can shop in the supermarkets. $nd as a result Dev %on"t loose an# customers as he %ill
be suppl#ing something for ever#one.
(verall ' think that price is the most important factor in the marketing mix because setting a price too high
or too lo% %ill loose Dev and other supermarkets their customers as the# can either +nd the same or similar
product some%here else for a lo%er price or the# believe the lo% price re4ects the lo% .ualit# of the product.
$lso lo% pricing ma# cause Dev cash 4o% problems as his business %on"t be generating enough mone# to
cover his costs. 1o%ever pricing is also in4uenced b# place and product as the longer the distribution
channel, the higher the price in order for Dev to cover costs and if the .ualit# of a product is high, the price
of the product also needs to be high in order to re4ect its .ualit#.
6ai. 7sing data from the case stud#, explain %hat is meant b# price elasticit# of demand
Price elasticit# of demand is the responsiveness of demand for a product to a change in its price. This is
sho%n through the car industr# as the mass marketing companies such as ,ord and Renault price their cars
bet%een 89,::: and 86;,::: and are able to sell large amounts of cars %orld%ide, ho%ever the luxur# and
specialist car manufactures such as $ston Martin and Rolls Ro#ce price their cars over 81::,::: but are onl#
able to sell a small amount of cars, %hich sho%s that as the price of a car increases, the demand decreases.
ii. 7sing data in the case stud# relating to -asthampton Motors td, explain the impact on
sales revenue of the price reduction on the &ectra car
81<,::: x 6: = 8>6:,::: per month
81?,::: x 66 = 8>:9,::: per month
8>6:,::: @ 8>:9,::: = 816,::: per month %orst o/
The reduction in price has left -asthampton Motors td 816,::: %orst o/ per month than if the# had left the
price of the car at 81<,:::.
b. $nal#se t%o bene+ts to the car manufacturers of selling their cars through retail outlets
as opposed to direct to consumers
Distribution channels are methods of selling a product to the customer and it can either be direct distribution
Adirect to consumerB or traditional distribution Aretail outletsB.
7sing retail outlets as opposed to direct to consumer means that the cars are able to reach a larger target
audience especiall# if %ell kno% retailer is used. Therefore this means that there is more potential sales and
pro+t unlike using direct to consumer as there is a limited amount of people able to see the cars available
and as a result fe%er sales are likel# to be made.
$lso the retailer has more experience about the cars and in selling than the manufacture and as a result
more sales are likel# to be made as the retailer is able to +nd the car suitable for the customer, %hereas
manufacturers selling directl# to the consumer ma# onl# o/er one car and if the consumer doesn"t like it
then there isn"t going to be an# sales.
(verall, using retailers allo%s a manufacturer to bene+t from larger sales and pro+ts as the retailer is able to
reach a %ider target audience and therefore can make more sales. ,urthermore the retailer has kno%ledge
about the cars and experience in selling to consumers so the# can +nd suitable cars for customers %hich is
more likel# going to achieve sales rather than 3ust o/ering a limited amount of cars %ith no experience of
c. With reference to the car market, discuss the case for and against engaging in niche
marketing as distinct from mass marketing
Ciche marketing is meeting the needs of a relativel# small number of potential customers %hereas mass
marketing is meeting the needs of a ver# large number of potential customers.
d. 7sing examples from the motor vehicle market, evaluate the factors that in4uence the
development of ne% goods and services
Product development is changing the aspects of goods and services to create ne% products that meet the
changing needs of existing customers or to target a ne% market.
(ne factor that in4uences the development of ne% products is advances in technolog#. This is because
technolog# such as robots has allo%ed the car industr# to build more advanced cars and vehicles. $lso ne%
technolog# lets manufacturers design and produce the cars in a shorter time than if there %ere 3ust humans
on the production line. ,urthermore the advances in communication technolog# has created opportunities to
enter ne% markets and therefore manufacturers are able to develop ne% cars and vehicles to suit ne%
customer needs.
$nother factor is the actions of competitors as it ma# threaten the market share of the manufacturer if the#
begin to develop ne% cars or move into ne% markets0 therefore the development of ne% cars is necessar# in
order to maintain a high market share and also move into ne% markets.
,inall# the entrepreneurial skill of the manufacturers in4uences the development of ne% products as their
creative thinking allo%s them to develop ne% cars in their existing or a ne% market. $lso being able to take
risks allo%s the manufacturer to develop ne% ideas rather than 3ust adding to existing cars %hich means
that the manufacturer %ill end up %ith a diverse range of cars and vehicles %hich aren"t 3ust an update of
the car before.
(verall, the development of ne% products is in4uenced b# advances in technolog#, actions of competitors
and the entrepreneurial skill of the manufacturer. Technolog# allo%s ne% ideas to be designed that are
modern and di/erent, but also the advances in communication technolog# allo%s ne% cars to be created
speci+c to customer needs. Dompetitors threaten the market share of businesses therefore if competitors
move into ne% markets, the manufacturer should also tr# to develop ne% cars that %ill allo% them to move
into a ne% market in order to maintain a high market share. ,urthermore the entrepreneurial skill of the
manufacturer in4uences the development of ne% products because the# abilit# to take risks and think of
ne% ideas %ill allo% ne% and innovate cars to be developed %hich %ill also allo% the business to maintain a
high market share.