Grimshaw manufactures mobile (cell) phones for the mass market. Last year its market share increased by 3%. The Managing Director is planning to set up a new factory in country T to supply the mobile phone market in that country for the first time. Grimshaw plans to sell a new model of mobile phone. The Managing Director has asked for market research to be done. He said: 'As a multinational, we can set up a new factory anywhere; I want to know whether the Government of country T will offer us any help to build our factory there.'

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2015). The mark or mark type is shown in brackets.

1. [2] Clear understanding where there are a large number of (potential) customers willing to buy product(s). Allow: a large number of sales of a product
2. [1] Some understanding lots of customers/sales/buyers/people, shown by comparison to niche
3. [2] Clear understanding e.g. percentage of the total market sales [1] held by one brand or business [+1] OR business sales/total market sales × 100
4. [1] Some understanding e.g. share of all sales made/percentage of customers a business has
5. [2 × 1] Knowledge – award 1 mark per advantage.
6. [2 × 1] Application – award 1 mark for each relevant explanation (i.e. show how it is an advantage to Grimshaw)
7. Advantages could include:
8. • greater awareness of consumer needs [k] so can adapt its phone/features to match what customers want [app]
9. • able to forecast likely future trends [k] so can improve focus of new product development [app]
10. • appreciate the strength of competitors [k] so can change marketing strategy to compete
11. • knowledge of consumers' views of company products/image [k] as first time entering country T [app]
12. • reduces risks/products launched with more confidence [k] as know what features customers want [app]
13. • help gain competitive advantage [k] as can set effective pricing/promotion strategy to suit country T's customers [app]
14. • produce the correct amount of product [k] to avoid wastage of expensive parts [app]
15. • helps set price [k]
16. Note: knowledge points must relate to purpose of market research.
17. Application marks may be awarded for appropriate use of the following: mobile phones, market share increased (by 3%), mass market, factory, new model, multinational, technology, country T
18. [2 × 1] Knowledge - identification of relevant point [max 2]
19. [2 × 1] Application - award 1 mark for each way if relevant reference made to Grimshaw's business
20. [2 × 1] Analysis - award 1 mark for each relevant explanation
21. Relevant points might include:
22. • gain competitive advantage [k] to target other phone users [app] so increasing their sales [an]
23. • Keep customers [k] in a competitive market [an]
24. • spread risk [k] so if demand for one model falls [app] they have new ones to rely on [an]
25. • expanding into new markets/market segments [k] so able to increase market share [app] as targeting more customers [an]
26. • can charge a higher price [k]
27. Note: economies of scale alone is too vague unless it is appropriately explained
28. Application marks may be awarded for appropriate use of the following: mobile phones, market share, mass market, factory, new model, multinational, technology.
29. [1] Knowledge – award 1 mark for identification of relevant point(s) [max 1]
30. [1] Application – award 1 mark if relevant reference made to the benefit of the country
31. [2] Analysis – award up to 2 marks for relevant development of point(s)
32. [2] Evaluation – justified decision as to whether the Government of country T should help businesses such as Grimshaw to set up in its country
33. Points might include:
34. • jobs created [k] as build factory there [app] so reduces unemployment [an]
35. • investment in infrastructure [k] to transport parts to/from factory [app] so locals benefit from new roads [an]
36. • new ideas [k] which could improve local business practices [an]
37. • taxes paid [k] which Government could use to pay for public services [an]
38. • more choice for consumers [k] as will have access to new model [app]
39. • more competition [k] so consumers could benefit from lower prices/force local businesses to close [an]
40. • exploitation of resources [k]
41. • lack of respect for local customs and cultures [k]
42. • flow of profits out of a country [k]
43. Application marks may be awarded for appropriate use of the following: mobile phones, mass market, factory, new model, can build anywhere, multinational.
44. Note: Candidate's final decision can be either for or against the statement.