2 Market Solution (MS) MS is a public limited company in the tertiary sector. MS advises businesses on elements of the marketing mix. Most of its customers are small businesses who cannot afford their own marketing department. MS designs marketing materials for these businesses to use. Although MS uses computer aided design (CAD), the business is labour intensive. MS employs specialist marketing workers as well as administrative support workers. Table 2.1 shows some data about employees of MS. [Table 2.1: MS employee data] Table 2.1 shows: Specialist marketing workers (Average number of workers in 2019: 40, Payment method: Salary plus bonus, Number of workers who left in 2019: 2, Average pay: High, Main need of the workers: Achievement, Main hygiene factors: Pay, Flexible hours of work, Is a bonus expected in 2020?: Yes) and Administrative support workers (Average number of workers in 2019: 88, Payment method: Performance related pay plus bonus, Number of workers who left in 2019: 11, Average pay: Low, Main need of the workers: Affiliation, Main hygiene factors: Staff restaurant, Holidays, Is a bonus expected in 2020?: No). MS has recently employed Hetti as the new Human Resources Manager. Hetti thinks that the ideas of the motivational theorists are important when managing employees. She is particularly worried about the labour turnover of the administrative support workers. MS has recently taken on a new customer, named Books Outlet (BO). BO has an objective to increase its revenue by targeting a younger market segment. BO has provided MS with the following information about its current marketing mix (see Table 2.2). [Table 2.2: Current marketing mix for BO] Table 2.2 shows: Product (Books aimed at customers who are 30 years and older, Specialist books on many topics – BO is often the only seller in the area), Price (Price skimming), Promotion (Window display, Local newspaper advertising), Place (A retail shop on the main street, Postal sales from a brochure).

Mark scheme

Marking points from the official mark scheme (May/June 2020). The mark or mark type is shown in brackets.

1. [2] A correct definition
2. [1] A partial, vague or unfocused definition
3. [0] No creditable content
4. Businesses that sell services (intangible goods) instead of end products.
5. [1] Example or some other way of showing good understanding
6. [1] Understanding of performance related
7. [1] Understanding of a pay
8. Pay is the reward given to workers for their labour.
9. Performance related means that this is linked to the output that the worker produces, or by meeting a required target.
10. [4] Correct answer with or without correct working or %
11. [3] Correct calculation of LT for both groups
12. [2] Correct calculation of LT for one group
13. [1] Formula
14. [0] No creditable content
15. Answer = 7.5%
16. Marketing specialists: 2/40 × 100 = 5%
17. Administrative workers: 11/88 × 100 = 12.5%
18. Difference: 12.5% - 5% = 7.5%
19. Formula: Number of workers who left / Average number of workers × 100
20. [4] Shows understanding of two motivation theories context
21. [4] Good analysis of two motivation theories to improve the labour turnover for the administrative support workers
22. [3] Shows understanding one motivation theory in context
23. [3] Good analysis of one motivation theory to improve the labour turnover for the administrative support workers
24. [2] Shows knowledge of two motivation theories
25. [2] Limited analysis of two motivation theories
26. [1] Shows knowledge of one motivation theory
27. [1] Limited analysis of one motivation theory
28. [0] No creditable content
29. McClelland (Three Needs Theory) – Workers have a need for affiliation so may be motivated by social events, opportunities to work with colleagues etc.
30. Herzberg (Two Factor Theory) – The factors in the table are unlikely to motivate (i.e. hygiene factors). Do workers have enough holidays and, for example, a staff restaurant? Otherwise this could be a reason for their demotivation and labour turnover.
31. Vroom (Expectancy Theory) – although the bonus is part of the payment system for the admin workers it is not expected so is unlikely to motivate them and keep them in the business – are targets too high? Should the bonus be paid more often to reduce labour turnover?
32. Taylor (Scientific Management) – is the pay high enough to motivate – low compared to national average.
33. Mayo (Hawthorne Effect) – is there enough supervision – PRP suggests monitoring but is it effective?
34. Maslow (Hierarchy of Needs) – Table suggests that social needs are most important for the workers – are these needs being met?
35. [2] Explanation of an advantage to MS of being labour intensive
36. [1] Explanation of an advantage of being labour intensive
37. [0] No creditable content
38. Can be more flexible – particularly important for MS as each business is unique)
39. Workforce can be flexible and respond to times of high peak need
40. No maintenance issues (compared to being capital intensive)
41. May be perceived as being better quality – some businesses may feel that the customer service is better
42. Can employ experts who can adapt to each customer's needs
43. [7] Justified recommendation based on argument in context
44. [6] Developed recommendation based on argument in context
45. [5] An evaluative statement/recommendation based on argument in context
46. [3-4] Shows understanding of changing the marketing mix in context
47. [3-4] Argument based on changing BO's marketing mix to achieve their objectives
48. [1-2] Shows knowledge of the marketing mix
49. [1-2] Limited analysis of changes to the marketing mix
50. [0] No creditable content
51. Note: There are many possible changes that could be made and context is likely to come from the combination of the elements of the mix to meet the needs of the new target market.
52. Product - need to stock books aimed at a younger audience (under 30 years) - perhaps books that are not so targeted on specific areas, or make the topics more suitable for younger readers.
53. Could start to sell e-books.
54. Price - younger target market are unlikely to have such high incomes, so skimming is unlikely to be successful. May need to be more competitive in their pricing strategy or use it to penetrate the market as they will be new to this target market.
55. Promotion - the current below the line promotion may still be suitable. However they may need to target social media and methods more suitable for a younger audience.
56. Place - the retail shop may still be appropriate but it may be necessary to develop an online presence or to have distribution that suits the younger audience - postal sales are unlikely to be suitable.