Walt owns a company which has developed a new computer game for adults. A focus group report shows customers like it. Walt has been considering the marketing mix, including the packaging for this product which is likely to be sold in many countries. ‘I don't want to use a wholesaler as it would affect my profit margin' he said.

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 e.g. selection of people who have similar characteristics to target market [1] who give their opinions on a product/service [1]
2. [1] Some understanding e.g. some idea that they provide comments/opinions about product OR get market research information/find out consumer wants or needs
3. Do not reward answers which just explain what a group is OR refers to secondary market research.
4. Application [2 × 1] – award 1 mark for each relevant reason
5. Points could include:
6. (Method of) advertising/attract customer attention
7. (Promote or reinforce) brand image/recognition/differentiation
8. Legal requirement
9. Information about the product
10. Protection/storage
11. Ease of display
12. Ease of transport
13. Knowledge [2] – award up to 2 marks for each relevant point/knowledge of importance of profit margin (do not credit definitions or formulae) [max 2]
14. Application [2] – award up to 2 marks for each relevant explanation in context of this business
15. Relevant points might include:
16. Profit as a proportion of sales revenue, a higher margin would mean more profit [k] is made for each game sold [app]
17. Influence price charged [k] if he sells to wholesaler [app] it could mean he needs more adults to buy product [app]
18. Indicates efficiency [k]
19. Measure of success/performance/comparison with other years [k]
20. Comparison with other real world businesses specified by the candidate [k]
21. Do not award answers that explain reasons why profit rather than profit margins matter.
22. Application might include: wholesaler, adults, many countries, game, computer or other related terms e.g. software.
23. Knowledge [2 × 1] – award 1 mark for identification of relevant advantage [max 2]
24. Application [2 × 1] – award 1 mark for each way if relevant reference made to this business
25. Analysis [2 × 1] – award 1 mark for each relevant explanation
26. Relevant points might include:
27. Access to many retailers/markets [k] as wholesaler might have links in many countries [app] leading to more sales [an]
28. Hold less inventory [k] so improve his working capital [an] as does not need to store games [app]
29. Wholesaler provides distribution/transportation [k] so lower costs for Walt [an] which helps his profit margin [app]
30. Able to focus on other tasks/no need to deal with lots of retailers [k] saving Walt time [an]
31. Wholesalers buy in bulk [k]
32. Help advertising [k] as packaging important [app] so more people aware of the product [an]
33. Lower administration costs/no additional employees [k] as fewer invoices to send/chase [an]
34. Wholesaler gives feedback from customers/identify trends [k]
35. May receive cash more quickly [k] improving cash flow [an]
36. Do not credit answers which simply state 'saves time' or 'saves cost' on own unless explained.
37. Do not accept 'wholesaler breaks bulk' as this is a benefit to retailers.
38. Application might include: profit margin, packaging (important), adults, many countries, computer game or related terms.
39. Knowledge [1] – award 1 mark for identification of relevant method(s) [max 1]
40. Application [1] – award 1 mark if relevant reference made to this business
41. Analysis [2] – award up to 2 marks for relevant development of point(s)
42. Evaluation [2] – justified decision as to which method of promotion is best option to use
43. NOTE: For 6 marks must explain why chosen method is better than the other option
44. Relevant points might include:
45. Advertising/use of social media (accept only once) [k] in computer magazines [app] which can attract customers' attention [an]
46. Public relations/sponsorship/celebrity tie-in with/endorsements [k]
47. Promotional pricing (short-term discounts/vouchers) [k] as product becomes more affordable [an] but this will lower profit margin [app]
48. Special offers e.g. bonus content [k] such as additional levels/software [app]
49. Competitions [k] aimed at adults [app]
50. Free trials/test/demonstrations [k] have limited access to some levels [app] which generate consumer interest/raise awareness [an]
51. Trade fairs [k] so wholesalers find out what it is [app]
52. Free gifts/merchandise [k]
53. Application might include: (impact on) profit margin, packaging important, wholesaler, adults, many countries, computer or software or other related terms.
54. Do not accept 'new' or 'game' as application because stated in question.
55. Do not accept methods which are not appropriate for this type of product e.g. after sales service, BOGOF.