Recommend a possible marketing strategy for AC to enter the consumer fitness equipment market. Justify your recommendation.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2021). The mark or mark type is shown in brackets.

1. [Level 2 Knowledge 2 marks] 2 marks Two relevant points
2. [Level 2 Application 2 marks] 2 marks Two points applied
3. [Level 2 Analysis 6 marks] 4-6 marks Good use of theory and/or reasoned argument to explain need for a change to marketing strategy
4. [Level 2 Evaluation 6 marks] 4-6 marks Good judgement shown
5. [Knowledge] Marketing strategy includes marketing objectives, budget and a coordinated marketing mix.
6. [Knowledge] Understanding of the marketing mix: price, promotion, product and place.
7. [Knowledge] Differences between industrial and consumer market. Industrial market is buying to sell on to make profit whereas the consumer market is buying to use the product.
8. [Application] Research showing that increasing number of people who are overweight as driving factor for growth of market.
9. [Application] Importance of price to consumers according to Khalil.
10. [Application] Meeting consumer expectations in terms of quality does not require equipment to be as durable.
11. [Application] Commenting on appropriateness of current marketing mix for industrial market: Advertising in industry magazines – do consumers read industry magazines?
12. [Application] Commenting on appropriateness of current marketing mix for industrial market: Promotion at trade fairs – unlikely to be relevant to consumers
13. [Application] Commenting on appropriateness of current marketing mix for industrial market: Direct selling to gyms and hotels – wrong target market
14. [Application] Interpretation of information from Table 2: Degree of competition – 50 other firms
15. [Application] Interpretation of information from Table 2: 60% market share of leading three firms
16. [Application] Interpretation of information from Table 2: Price linked to average spend of $550
17. [Application] Interpretation of information from Table 2: Impact of advertising expenditure by the market leader
18. [Application] Interpretation of information from Table 2: 75% of consumers using the internet to purchase fitness equipment
19. [Application] Interpretation of information from Table 2: 5% market share target within two years
20. [Analysis] Chains of reasoning highlighting links between strategy and factors: Advertising of leading brand may influence AC to set appropriate marketing budget in order to be able to compete and gain consumer recognition.
21. [Analysis] Chains of reasoning highlighting links between strategy and factors: Advertising in industry magazines and attending trade fairs may not reach the target market. Changing to social media may increase awareness and sales. Marketing in gyms and sport venues could attract the likely target market.
22. [Analysis] Chains of reasoning highlighting links between strategy and factors: As there is significant competition, AC may have to set prices competitively to attract customers in the consumer market.
23. [Analysis] Chains of reasoning highlighting links between strategy and factors: As new to the market, AC may choose penetration pricing to gain traction in the market.
24. [Analysis] Chains of reasoning highlighting links between strategy and factors: Distribution through internet important as consumers purchase over the internet.
25. [Evaluation] Elements that the evaluation/judgement might depend on: Will AC's reputation in the industrial market transfer to the consumer market? Could this give AC room to make decisions independently of competition?
26. [Evaluation] Elements that the evaluation/judgement might depend on: Extent to which AC products are differentiated from the competition will determine the extent to which competition impacts pricing and promotion.
27. [Evaluation] Elements that the evaluation/judgement might depend on: Should AC use distribution channels other than the internet?
28. [Evaluation] Elements that the evaluation/judgement might depend on: Size of the budget available – AC has other expansion plans to finance as well as entering the consumer fitness market.
29. [Evaluation] Elements that the evaluation/judgement might depend on: Importance of the marketing mix remaining consistent.
30. [Evaluation] ARA