$LAND sells a wide range of products from food to toys. It has 400 shops in country B. $LAND's marketing strategy is based on penetration pricing. $LAND does no advertising and buys all its products directly from manufacturers. Revenue and profit have increased despite the country being in recession. The Marketing Director wants to expand the business by opening shops in other countries. He believes $LAND will be successful in other countries.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2016). The mark or mark type is shown in brackets.

1. [2] Clear understanding: plan to combine the right combination of the 4 elements of the marketing mix to achieve a particular market objective OR Put together the right mix of the 4Ps to increase sales OR A plan for promoting goods to enter a new market
2. [1] Some understanding, e.g. how to combine the 4P's OR how to promote a product OR a plan for marketing OR how to increase sales
3. [2] Clear understanding: price is set lower than competitor's prices in order to be able to enter a new market/launch a new product
4. [1] Some understanding, e.g. set low prices
5. [2] Persuade/attract customers OR increase revenue/sales [k] to buy more food [app]
6. [2] Build brand loyalty/good image [k] so keep buying from its shops [app]
7. [2] Inform/raise awareness/become well known [k] for its toys [app]
8. [2] Maintain market share/remain competitive [k] as in recession [app]
9. [2] Remind existing customers [k] as sell such a wide range [app]
10. [1] Able to target different customers/new market segment [k]
11. [3] Purchasing economies of scale/discounts for bulk buying [k] as buy for all its shops [app] leading to lower average/unit costs [an]
12. [3] Quicker access to products [k] so can offer new products before rivals [an] leading to higher sales of toys [app] OR which is important for food [app] to reduce wastage/increase shelf life [an]
13. [3] Build relationship with supplier [k] may give preferential delivery times [an]
14. [1] Offer technical support [k]
15. [1] Develop products specifically for business [k]
16. [1] Cut out wholesaler profit [k]
17. [1] Manufacturer may pay for some of the advertising [k]
18. [3] More paperwork [k] as have a wide range of products [app] which takes more time to complete [an]
19. [1] Have to recruit more people [k]
20. [3] Extra storage space needed/must purchase minimum quantity [k] increasing storage costs [an]
21. [1] Risk of wastage [k]
22. [2] Different countries have different tastes [k] so might not like the toys [app] leading to fewer sales [an]
23. [2] High set up costs [k] as need to open shops [app]
24. [2] Competition/need to attract customers [k] as customers might be loyal to other companies [an]
25. [2] Legal/regulations [k] might not be able to sell some of its foods [app]
26. [2] Strategy has worked in country B [k] as profits increased [app]
27. [2] Different economic environment [k] as country B is in recession [app] so customers might not want cheaper products [an]
28. [1] Communication/language problems [k]