Refer to lines 9–11. Calculate, for 2024, IPA's market share.

Mark scheme

Marking points from the official mark scheme (Feb/Mar 2025). The mark or mark type is shown in brackets.

1. [1] (a) Market share = Sales / Market sales X 100 (1 mark if no rewardable calculation)
2. [1] (a) 0.104 / 12 X 100
3. [2] (a) = 0.87% (% required)
4. [1] (b) Change in sales = 14.2m – 12m = 2.2m
5. [2] (b) Market growth = 2.2m / 12m X 100 = 18.3% OR 18% (% required)
6. [1] (b) Note: (14.2 – 12) / 14.2 X 100 = 15.49%
7. [1] (c) Knowledge: Marketing mix includes the 4 Ps and is part of the marketing strategy.
8. [1] (c) Knowledge: Reducing price makes smartphones more affordable.
9. [1] (c) Knowledge: Increasing promotion spending should increase awareness of IPA's product.
10. [1] (c) Application: Marketing objective is to increase sales volume by 60% in 18 months.
11. [1] (c) Application: Demand is thought to be price elastic i.e. responsive to price reductions.
12. [1] (c) Application: PrEd = 0.7. Demand is not expected to be responsive to an increase in promotional spending.
13. [1] (c) Application: Margins are low on smartphone sales.
14. [1] (c) Application: Prices were competitive and reduction will undercut competitors.
15. [1] (c) Application: There are many competitors in the market – no business has more than one percent of the market.
16. [1] (c) Application: IPA sells B2B and B2C. (likely to have different price elasticities)
17. [1] (c) Application: Move toward out of home advertising rather than digital advertising and the problem of internet access in rural areas.
18. [1] (c) Analysis: A reduction in price will make IPA smartphones relatively cheaper than competitors therefore increasing demand and if demand is price sensitive that will increase revenue.
19. [1] (c) Analysis: Rural communities have limited internet connectivity therefore advertising on digital platforms will not reach potential customers so a change to out of house advertising will increase awareness of IPA's products resulting in an increase in demand.
20. [1] (c) Analysis: An increase in non-digital promotion spending should increase awareness leading to an increase in sales. This will result in higher revenue and therefore profit may also increase.
21. [1] (c) Analysis: A reduction in price will make IPA smartphones relatively cheaper than competitors therefore increasing demand. This could lead to higher profit.
22. [1] (c) Evaluation: Supported judgement as to whether change(s) will achieve the marketing objective.
23. [1] (c) Evaluation: Response of competitors to price change. As no competitor has more than 1% market share it is unlikely that individual competitors will be significantly impacted by price reduction, so will they react by reducing price?
24. [1] (c) Evaluation: Low promotional elasticity of demand does not mean that promotional spending is necessarily ineffective. Impact depends on cost of additional promotion relative to increase in sales which result.
25. [1] (c) Evaluation: Market is growing rapidly anyway so sales likely to increase without changing marketing.
26. [1] (c) Evaluation: Connectivity in rural areas to mobile networks will impact usefulness of smartphones to customers and therefore demand.
27. [1] (c) Evaluation: Will IPA have sufficient capacity to meet an increase in demand of 60% within 18 months?
28. [1] (c) Evaluation: An increase in non-digital promotion spending should increase awareness leading to an increase in sales. This will result in higher revenue and therefore profit may also increase. However, as PrED is inelastic the impact may be relatively limited.
29. [1] (c) Evaluation: A reduction in price will make IPA smartphones relatively cheaper than competitors therefore increasing demand and therefore higher profit. However, as profit margins are very low this may reduce total profit.