MXB is a successful public limited company with many stakeholders. It has been trading for 15 years. It makes a range of bicycles and is currently the market leader for mountain bikes in country J. MXB's high-quality mountain bikes are sold at a high price to high-income leisure users. They are sold in a limited number of specialist bicycle shops. Fig. 2.1 shows the annual revenue of mountain bike manufacturers in country J for 2022. [Figure 2.1] To grow the business and improve the sustainability of operations, MXB expanded its product portfolio by launching a range of electric scooters. This is a new and expanding market in country J, targeting the urban youth market. MXB's business objectives are reviewed regularly by Rani, the Managing Director. Rani is concerned that MXB's sales of mountain bikes have declined by 12% over the past year. Demand for mountain bikes in country J has remained static. She has asked the Marketing Director to recommend extension strategies to increase MXB's market share.

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 stakeholder may include: • Employees • Managers/directors • Customers • Shareholders • Lenders, e.g. banks • Local community (not public) • Government • Suppliers. Accept all valid responses.
2. [1] Knowledge of sustainability (e.g., maintaining operations/production at the current level / ability to maintain environmental balance now and in the future / to conserve natural resources / to support wellbeing of current and future generations).
3. [2] Developed application of sustainability to current operations/production AND future operations/production (e.g., in context of MXB or any other scenario/context/business/person).
4. [1] Formula to calculate market share: (Sales revenue for MXB / Total sales revenue for the market) × 100
5. [1] Correct calculation of total market sales revenue: 265 + 85 + 178 + 230 + 185 + 95 + 115 + 50 = $1203 (000)
6. [1] Correct final answer: (265 / 1203) × 100 = 22.028% or 22.03% or 22% (Allow 0.22:1 or similar ratio).
7. [1] Knowledge of a reason why objectives might change (e.g., changing internal factors like a new Managing Director / changing external factors like new competitors or technological changes / achievement of previous objectives).
8. [2] Developed application of the reason to MXB twice (e.g., MXB traded for 15 years, public limited company, market leader for mountain bikes, target high-income leisure users, sold in specialist shops, use of Fig 2.1, sales revenue fell by 12% for mountain bikes, launching electric scooters).
9. [AO1 Knowledge] Advantages of launching new product/growth (e.g., Increase revenue/sales / New target market / Strengthen brand image / Spread risk / Reduce average costs).
10. [AO1 Knowledge] Disadvantages of launching new product/growth (e.g., Increase costs / Risk of new/unknown market / Risk of damaging brand image / Lack of market research / unknown market).
11. [AO2 Application] Application to MXB context for advantage (e.g., MXB's current market is high quality mountain bikes, high-income leisure users / New target market is urban youth market / Market for e-scooters expanding in country J / Use of Fig 2.1 / MXB traded for 15 years / $265 000 sales revenue / Static demand for mountain bikes / Mountain bikes sold in specialist shops / Public limited company / Sales revenue fell by 12% for mountain bikes).
12. [AO2 Application] Application to MXB context for disadvantage (Same points as above).
13. [AO3 Analysis] Developed analysis of advantages (e.g., enter expanding electric scooter market / develop new skills and knowledge / economies of scale / less expensive internal growth / spread risk to different market segments).
14. [AO3 Analysis] Developed analysis of disadvantages (e.g., urban youth market may not be attracted to MXB brand / market dominated by competitors / need expensive new equipment and staff training / lack of knowledge/experience / high R&D costs / slower internal growth).
15. [AO1 Knowledge] Knowledge of changing elements of the marketing mix (four Ps) (e.g., Product: new/adapt, product portfolio analysis / Price: maintain, increase, reduce / Place: new channels, distribution methods / Promotion: advertising, digital, direct).
16. [AO2 Application] Application of marketing mix to MXB's product life cycle of mountain bikes (e.g., Market leader for mountain bikes / Sales revenue fell by 12% / Traded for 15 years / Public limited company / Use of Fig 2.1 / Market/demand for mountain bikes static / Sold in specialist bicycle shops).
17. [AO3 Analysis] Analysis of how marketing mix changes extend PLC (e.g., Increased promotion for short-term boost, brand recognition / New models, updating range, stimulate sales (R&D costs vs. expenditure) / New brands to reposition products / Change pricing strategy (skimming, lower price, discount for demand boost, market share, profitability) / New markets (segments, geographic areas) / Additional distribution channels (online, other shops)).
18. [AO4 Evaluation] Evaluative judgements/comments (e.g., Most appropriate strategy depends on budget (scooters may limit finance) / Will demand fall further? Static demand means maturity? / Focus resources on expanding electric scooters market? / Market share vs. profitability/risk spreading / Short-term boost vs. long-term sustainability / Does MXB brand extend to scooters? / Competitor actions).