Section A

Body and Mind is a health and sports club located in Sydney, Australia. After opening two years ago, the
club has performed well but now faces a recent increase in competition from two new gyms that have
opened in the neighborhood, Wellness and Glides.
Body and Mind have always realized the importance of the extended marketing mix for the services they
offer. All staff who interact with customers are fully trained in best-practice customer service. Care and
detail ensure that the physical environment is up to the standards executive, and corporate members
expect – the cleanliness of the gym, equipment, and change rooms is a focus, equipment is regularly
replaced and repairs are fast and efficient. Further, the management of Body and Mind conducted some
extensive market research to find out more information about their customers. They used a market
analysis and a series of focus groups to find out customers’ views on Body and Mind and a questionnaire
to provide them with more precise data about the way customers used their club. Body and Mind has
responded positively to its market research by adopting the following strategies:

 Introducing a family membership scheme

 Introducing women’s only classes to cater to Muslim women
 Introducing a range of family-based classes to encourage health and fitness
 Opening a coffee shop
The management of Body and Mind believes that this new customer-orientated approach, which targets
health and fitness for the whole family, will give the club a unique selling point and enable it to stand out
from the competition.

Define what is market research: Market Research is the process of collecting,

analyzing and reporting data related to a particular market. [2
(a)
marks]

Explain how people, processes, and physical evidence are vital elements in the [6
(b)
marketing mix for Body and Mind. marks]

Section D

Musically is an independent store selling new and used music compact discs (CDs), DVD films, and
music vinyl records. It is a sole trader business owned by André, who has 25 years of experience in the
retail and music business. Musically has loyal customers but its total revenue is falling. The store
currently has a low market share in DVDs and vinyl records.
André decided to conduct some primary and secondary market research, as the entertainment industry is
changing rapidly. He discovered that:
 The market for DVDs is in rapid decline
 CD sales are declining slowly but new releases still sell well
 Musically has had to stock computer games, which are selling out very quickly, and the sales of
new vinyl records are growing slowly.
André is accustomed to variations in sales but the current sales forecasts are, in his experience, the most
worrying. He has decided to create an e-commerce website to increase his sales of new and used vinyl
records and CDs. André is also aware that new free online music streaming and gaming sites are being
launched.
André has only limited internal sources of finance to set up the website. Two new tactics to ensure future
success for Musically being considered are:
 to stop selling DVDs
 to increase below-the-line promotional spending on vinyl records.

(a) Define the term secondary market research. [2 marks]

(b) Using the Boston Consulting Group (BCG) matrix, discuss the two new tactics André is
considering to ensure MM’s future success. [10
marks]