HL Business Management 12

Exam 1
Answer two of the following.
1. BVC 
BVC manufactures canned energy drinks. It produces the market-leading energy drink, Beta+,
which is sold directly to, and exclusively in, sports clubs. BVC encourages intrapreneurship and
innovation within its organization. 



To purchase Beta+ legally, the consumer has to be over the age of 18. However, many younger
teenagers illegally purchase these drinks. Sales of Beta+ have grown dramatically. 



To have legal sales to teenagers aged 17 and below, BVC created Beta Lite, which has a much
lower caffeine and sugar content than that of Beta+. Beta Lite will be sold using long distribution
channels and to a range of retail outlets. 



Initial sales of Beta Lite were disappointing. The marketing manager argues that Beta Lite is not
innovative and is only adaptively creative. According to market research, consumers were
confused between Beta+ and Beta Lite because the packaging is so similar. Many younger
consumers were frustrated because they thought they were purchasing Beta+ when buying Beta
Lite. Using social media, they launched a “Ban Beta Lite” campaign. 



BVC’s management was unprepared for this consumer reaction. To overcome this criticism and
to boost sales of Beta Lite, two proposals are being considered: 
• Proposal 1: launch a guerrilla promotional marketing campaign for Beta Lite. 
• Proposal 2: completely redesign the packaging of Beta Lite. 



1.  Define the term social marketing.

Social marketing is the marketing process of advertising the given product as having a significant
benefit to the general public or society in general that create social change. This process adds the
objective of making a positive change to the previous list of just make stakeholders happy. Most
often these social campaigns of a product result in the investment of areas like environmental
sustainability, and physical/mental health awareness for people. This type of marketing
incentivizes people to buy the product because they feel they are making a positive impact on
society by buying the companies product.
(b) Explain one advantage and one disadvantage for BVC to adopt Proposal 1.
Using Guerrilla marketing is the solution that proposal 1 gives. Guerrilla marketing is the use of
untraditional marketing methods in order to reach the target audience in a different way than
traditional marketing could. The main benefit of this marketing strategy is that it is easy to
implement and simple to change. As a result of this, the quick implementation of the strategy
would allow the marketing to have any immediate impact and allow the quickest results. If it
turns out the marketing strategy doesn’t work the nature of guerrilla marketing will allow a quick
and easy restructure of the marketing approach that will also be able to be implemented quickly.
The primary risk of guerrilla marketing is that, because it is a newer form of marketing it is less
perfected and has higher chances of not working, as a result of this the marketing may lead to
negative effects on the brand image. This is because if teens receive guerrilla marketing like
messaging as pestering they will not like the brand and not buy the beta light product.



(c) Explain one advantage and one disadvantage for BVC to adopt Proposal 2. [4 marks] 




Proposal two is to entirely redo the packaging of the Beta Lite. This has the opportunity to be
effective because “According to market research, consumers were confused between Beta+ and
Beta Lite because the packaging is so similar” this created confusion unhappiness with the
customers. So changing the packaging to something notably differentiable would increase
customer satisfaction. Because the customers would feel like their voice is being heard in the
company if the packaging changes, it is also likely brand loyalty would increase. However, the
negative effect of remodeling the packaging of beta light would be that the sales of beta lite
would decrease. This is because “Many younger consumers were frustrated because they thought
they were purchasing Beta+ when buying Beta Lite” as a result of the packaging being similar. If
teens can tell the difference between the drinks then they will only buy the original causing the
lite product to struggling.



1. Creative Technology 
Founded in Singapore in 1981, Creative Technology is the worldwide leader in digital
entertainment products for various market segments in the personal computer industry. Creative
Technology is particularly involved in the personal digital entertainment market, which is one of
these market segments. In recent years Creative Technology has expanded in this market by
offering a product range, which includes portable media centers (offering music and video),
multimedia speakers, and digital and web cameras. 
Creative Technology is most famous for its Zen and MuVo lines of portable MP3 digital audio
players. The Zen stores thousands of music tracks and, although portable, is quite bulky. The
MuVo weighs one ounce, can be used as a portable computer hard drive, and stores around 130
music tracks. The target markets for the MuVo include teenagers, commuters, and
joggers. Creative Technology’s Zen faces significant competition in this market from companies
like Apple who produce the iPod. The iPod is the market leader in MP3 players and is perceived
by consumers as being cool and trendy. Compared to the iPod, the Zen has received favorable
reports from independent industry journals. They have reported that the Zen is better than the
iPod for sound quality and battery life. 
 


 
1. Describe what is meant by a target market. [2 marks]
A target market is a group of consumers who share common characteristics and needs that the
producer intends to sell their product. The target market is created in order to allow a company to
individualize their marketing to allow it to appeal to the market they are targeting. This allows a
company to minimize marketing expenses and maximize marketing efficiency. 
1. Explain two primary market research methods that Creative Technology could use to help
them identify additional target markets for the MuVo. [4 marks]
One method of primary research creative technology could use to identify their target market is
by giving out online surveys to a variety of people. Primary surveys are effective because they
allow for a specified question for Creative Technology that secondary research would not allow.
By asking for ages, occupations, and hobbies of the survey of participants the company would be
able to divide the participants of these factors and determine trends and desires of these different
demographical groups to find their target market. This method also allows for a large number of
people to be polled. Secondly, a focus group would be beneficial in addition to the online survey
done. This is because surveys allow for more direct and adaptive questioning that will allow for
my genuine, specific, and detailed responses that no other means of research would allow.
Although a focus group is limited in the number of people who can be interviewed this will be
compensated for by the polls, creating great synergy between the research methods.



1. Explain two ways market segmentation could help Creative Technology achieve a greater

market share in the personal digital entertainment market. [4 marks]
Market segmentation is the process of dividing consumers into groups with each other based on
similar demographical factors. One of the ways market segmentation could increase the market
share of creative technology is by allowing the company to design products for specific groups of
the consumer. This process would be done by creating a segment and analyzing their needs and
desires. This would allow the creation of a product that the company knows will be bought by
the segment. As a result of the direct appeal the company can charge large prices for a product in
digital entertainment, and as a result increase market share. Another way segmentation would
allow for increased market share is by allowing a decrease in marketing costs. When
segmentation happens a company can identify groups they specifically want to market to and as a
result, will save money by not pushing marketing to groups they are not interested in as a result
of them being less likely to purchase. This money save will allow ventures into the expansion of
the company in the digital entertainment market and likely increase its market share.