A2 – Business | Sample answer1: 20 marks | Nov 2021/32/Q3

Question: Recommend a possible marketing strategy for AC to enter the consumer fitness equipment
market. Justify your recommendation. [20]

Answer:

Paragraph 1: Definition or understanding of marketing mix

The marketing mix is a key tool used by companies to develop and implement their marketing
strategies. The four Ps of the marketing mix are product, price, promotion, and place.

Paragraph 2: Point + link with case + analysis + further analysis + consequence + “However” + issue

AerCore offers fitness equipment such as treadmills and rowing machines to fitness centres, hotels, and
large corporations. The company does not currently sell directly to consumers, but plans to enter the
consumer market in 2022. The USP of AerCore could be the quality and durability of its fitness
equipment, as quality control inspectors are employed to ensure conformity to the standards set by the
company. By positioning the quality and durability of its products as the key differentiating factor,
AerCore can appeal to fitness centers, hotels and corporations that prioritize quality in their equipment
purchases. This could potentially give AerCore an advantage over competitors that may not place as
much emphasis on quality. As a result of this, increased customer satisfaction, which could lead to
repeat business and positive word-of-mouth marketing. However, if the company fails to deliver on its
promise of quality, this could lead to negative consequences such as decreased customer satisfaction
and a tarnished reputation.

Paragraph 3: Point + link with case + analysis + further analysis + consequence + “However” + issue

The pricing strategy of AerCore's fitness equipment is crucial in establishing its market position and
reaching its target customers. One pricing method that the company could use is penetration pricing,
where the company sets a low price for its products to attract price-sensitive customers and gain market
share. This method is that AerCore could achieve rapid market penetration and establish itself as a
leading player in the fitness equipment market. The low price would also attract price-sensitive
customers who are looking for high-quality fitness equipment at an affordable price. As a result of this,
AerCore has established itself as a market leader, it could gradually increase its prices to reflect the
quality and durability of its products. This could lead to a shift in customer perception, from a low-price
provider to a premium brand. However, in the long-term, the company may have to rely on other
factors, such as product quality and branding, to justify higher prices and maintain its market position.
It's important for AerCore to consider the balance between attracting customers and maintaining
profitability in order to sustain its business in the long run.

Paragraph 4: Point + link with case + analysis + further analysis + consequence + “However” + issue

When it comes to the promotion aspect of the marketing mix for AerCore, a strategy that the company
could consider is sales promotion. Sales promotion refers to short-term incentives aimed at boosting
sales and increasing brand visibility. For AerCore, this could include offering discounts on its fitness
equipment, running limited-time deals, or including free gifts with purchases. This promotional method
would indicate that sales promotions can effectively increase sales and customer engagement,
particularly when timed well and targeted towards specific audiences. Sales promotions can also help
attract new customers, who may become repeat buyers in the future. In terms of consequences, a
successful implementation of sales promotions could lead to increased sales, brand recognition, and
customer loyalty for AerCore. However, if not executed carefully, sales promotions may harm the
perceived value of the brand and result in lower profits. It is crucial for AerCore to carefully consider the
potential impact of sales promotions on its overall marketing strategy.

Paragraph 5: Point + link with case + analysis + further analysis + consequence + “However” + issue

AerCore offers its fitness equipment to fitness centers, hotels, and large corporations. Currently, the
company does not sell directly to consumers but plans to enter the consumer market in 2022. In terms
of place in the marketing mix, the company could consider retailing as a method of distribution. This
means that AerCore's products would be sold in physical stores where customers can touch and try the
products before purchasing. This will allows customers to experience the products first hand, which can
result in higher sales. Physical stores also provide an opportunity for customers to ask questions and
receive support from knowledgeable sales associates. As a result of this, customers can make purchases
immediately, which can increase the convenience factor. However, operating physical stores can be
costly, as it involves rent, utilities, and staff expenses. Additionally, it may limit the company's reach to
customers who are not within driving distance of a physical store.

Paragraph 6: Other factors + analysis

Setting marketing objectives and a budget is crucial for the success of AerCore's marketing strategy. By
establishing clear marketing objectives, the company can determine the goals it wants to achieve and
allocate resources appropriately. A well-defined budget helps to ensure that the company stays within
its financial limits and maximizes the return on investment. Having a budget in place helps to measure
the success of the marketing campaigns and identify areas where improvements can be made. Without
a clear set of marketing objectives and a budget, AerCore may face difficulties in executing its marketing
strategies and achieving its desired results.

Paragraph 7: Conclusion

In conclusion, AerCore has the potential to expand its market share by carefully analyzing and
implementing its marketing mix. The company should focus on its USP, adopt flexible pricing strategies,
use a combination of promotional methods, and adopt a combination of retailing and online distribution
methods. Regular monitoring and evaluation of the marketing mix should be conducted to ensure that
the strategies are effective and relevant to the market.