Great Resources (GR) GR is a business partnership that creates educational resources. It sells direct to schools and teachers via its own website. Sanjay, Rukmal and Boris are entrepreneurial teachers who formed the GR partnership. One year ago, they identified a gap in the market to supply interactive, digital resources. GR's website is subscription only. An online marketing campaign, which used penetration pricing, attracted 250 subscribers in the first six months of operation. The start-up costs were financed with a $5000 bank overdraft, which is GR's only debt. Reviews for GR's products in teaching journals are positive but cash flow is poor. Many customers have taken advantage of a recent sales promotion for one month's free membership and posted positive reviews. Unfortunately, few have then taken out a regular subscription. As revenue has not increased as much as the entrepreneurs had hoped, they must now consider alternative promotion methods. They have researched possible promotion methods and decided to advertise in an educational newspaper. The newspaper has a readership of half a million people. Expert Materials (EM) is a large national company that also advertises in the newspaper. EM is GR's closest competitor. The EM brand is well-known and trusted in the educational resources market. [Table 1.1] shows some marketing data. Table 1.1 Marketing data GR | EM | Total market Revenue ($000) | 15 | 300 | 500 Number of customers | 300 | 5000 | 7000 Annual advertising spend ($000) | 7.5 | 45 | 60

Mark scheme

Marking points from the official mark scheme (May/June 2023). The mark or mark type is shown in brackets.

1. [1] Identification of a barrier may include: Lack of finances; lack of a strategic plan; fear of failure; strong rules and regulations; lack of capacity. Accept all valid responses.
2. [1] Knowledge of one relevant point is used to answer the question.
3. [2] Developed application of one relevant point to a business context.
4. [1] Limited application of one relevant point to a business context.
5. [1] Formula: Total sales of business / Total market sales × 100
6. [1] Identification/use of correct figures: 15000 / 500000 × 100
7. [1] Correct answer: 3% (no % or working needed for final mark if correct).
8. [3] Final answer for MS = 3 (%). OFR applies.
9. [1] Knowledge of a factor that may influence the supply of products (e.g., lack of factors of production, price, sales platform, marketing media, cost of production, government taxes/subsidies, technology, return on investment, feasibility of market share).
10. [2] Developed application of one relevant point to a business context (e.g., GR is a partnership with 3 owners, 3% market share vs 60% EM, cost of developing digital materials, lack of conversion to subscriptions reducing ROI, direct sales via website, $5000 debt, poor cashflow, free membership, revenue not increasing).
11. [1] Limited application of one relevant point to a business context.
12. [1] Knowledge of bank overdraft definition (credit bank agrees up to a limit).
13. [1] Knowledge of an advantage (e.g., flexibility, variable amount, allows overdrawing, covers larger payments, financial planning, short-term cashflow).
14. [1] Knowledge of a disadvantage (e.g., high interest, can be withdrawn, limited amounts, only short-term).
15. [2] Developed application of advantage(s) and disadvantage(s) to GR (e.g., GR is a partnership, sells via website, entrepreneurial teachers, digital resources, subscription only, penetration pricing, 250 subscribers, $5000 overdraft as only debt, poor cash flow, sales promotion one month free, few regular subscriptions, alternative promotion, advertising in newspaper, EM competitor, Table 1.1 data).
16. [1] Limited application of advantage(s) and disadvantage(s) to GR.
17. [3-4] Developed analysis (identifies connections between causes, impacts, consequences) of two points (one adv, one disadv).
18. [1-2] Limited analysis (identifies connections) of one or two points.
19. [1] Knowledge of marketing mix (price OR promotion).
20. [2] Knowledge of marketing mix (price AND promotion).
21. [1] Knowledge of price aspects (e.g., strategies, elasticity).
22. [1] Knowledge of promotion aspects (e.g., digital, direct, sales, advertising, above/below the line).
23. [2] Developed application of price AND promotion to GR (e.g., educational resources, sells direct, interactive, subscription only, penetration pricing, 250 subscribers, positive reviews, sales promotion one month free, few regular subscriptions, alternative promotion, advertising in newspaper, EM competitor, Table 1.1 data).
24. [1] Limited application of price OR promotion to GR.
25. [2] Developed analysis (identifies connections between causes, impacts, consequences) for price AND promotion.
26. [1] Limited analysis for price OR promotion.
27. [5-6] Developed evaluation in context (developed judgement/conclusion, balanced evaluative comments, considers priorities/finances, future demand, triple bottom line impact, importance of earnings, raw material supply, recommendation).
28. [3-4] Developed evaluation (developed judgement/conclusion, balanced evaluative comments).
29. [1-2] Limited evaluation (judgement/conclusion, attempt to balance).