simple notes for AS 4 p's Marketing mix

1. AS BUSINESS TOPIC: 4Ps
Product: the end result of the production process sold on the market to satisfy a customer need.
One time selling of product does not ensure loyalty and good customer relationships if the
Product fails to provide quality, durability, performance and appearance.
Branding
Branding is the strategy of differentiating products from those of competitors by creating an
identifiable image and clear expectations about a product.
Importance of Branding: creates powerful image, creates powerful perception(clearly differentiates)
in the minds of the consumers, give product a unique identity, assists promotion (advertise, inform,
persuade), way of effective communication with the customers, connect product with the customer
with trust, motivates customers to buy and repeat buying, establishes creditability, reduce price
elasticity of demand for the product, new product under the same name (needs less efforts.)
Consumer products: Purchased and used by individuals /
citizens for use within their homes and these products fall into
3 categories:
Manufacturers Products Purchased
by businesses and are either used in
the production of other products, or in
the running of the business.
 Convenience products. Fast-moving consumer goods (fmcgs)
sold in supermarkets, such as soap, chocolate, bread, toilet
paper, etc. These often carry a low profit-margin.
 Shopping products. These are durable products which are
only purchased occasionally, such as dishwashers, televisions
and furniture. They often carry a very high profit-margin.
 Speciality products. These are very expensive items that
consumers often spend a large amount of time deliberating
over, due to the large investment requires to purchase the
product. Examples include cars and houses. The profit-margins
are, again, very high.
Like:
raw materials (timber, steel),
machinery, delivery vehicles, and
components used to make larger
products (e.g. tyres and headlights for
vehicles).
 Intangible attributes of a product: subjective opinions of customers about a product that
cannot be measured or compared easily.
 Tangible attributes of a product: measureable featured of a product that can be easily
compared with other products.
 Unique Selling Point:
 A unique selling proposition (USP, also seen as unique selling point) is a factor that
differentiates a product from its competitors, such as the lowest cost, the highest quality or
the first-ever product of its kind. A USP could be thought of as “what you have that
competitors don't.”
 It makes a business stand out from the rest in a market.
 Benefits of effective USP:
o It Can Attract More Clients.
o It Can Make Prospects Easier To Convert Into Sales
o It Provides You With An “Angle” To Market Yourself.
o In Some Cases You Can Charge More--
o It Creates A Powerful “Elevator Speech” when Networking--
4 Ps [Marketing Mix]

2. AS BUSINESS TOPIC: 4Ps
o It Helps Retain Website Visitors Longer
o It Facilitates Powerful Word-Of-Mouth--
o It Helps Retain Existing Client—[CRM: customer relationship management].
 The difference between products and brands:
The product is the general term used to describe the nature of what is being sold
The brand:an identifying symbol, name image or trademark that distinguishes a roduct from
its competitors.
Product Positioning:the consumer perception of a product or sevice as compared to its
competitors.
Below is an illustrated example of a market map. The map below shows one possible way in
which the chocolate bar market could be mapped against two dimensions – quality and price.
 New product development (NPD)
o is crucial for fast changing products like: Computer games,mobiles,etc.
o For some products its enough just to adjust and adapt it slightly to meet changing
tastes and enter new segments likesoft drinks.
o It is based on ideas identified through research. It is expensive and not always
successful.
o Input from the marketing department is vital to ensure that the new idea is developed
into product (based on buyers’ preferences)
New products normally pass through the following stages
1. Ides generation / Idea Screening
2. Marketing research / Business analysis
3. Product research, development and design
4. Pilot production / Product testing / Prototype
5. Test marketing (if fails reasons are found for this and changes are made)
5. Large – Scale production
6. Commercialization and launch

3. AS BUSINESS TOPIC: 4Ps
Causes of new Product Failure
1. Inadequate market research
2. Misleading market research
findings
3. Defects in the product
4. Activities of competitors
5. Insufficient or inappropriate
marketing efforts
6. Distribution problems
7. Unexpected economic problems or high costs
8. Inadequate sales force – not sufficient
a. Sales managers or workforce is not
enough or proper
b. Lack of proper distribution---
Need to recruit more workers
4Cs and CRM
The 4Cs has been proposed as an alternative view of the key elements of successful marketing.
Ps Cs Explanation
Product Customer
Solution
You can't develop products and then try to sell them to a mass market. You
have to study consumer wants and needs and then attract consumers one by
one with something each one wants.
Price Cost to customer You have to realize that price - measured in dollars - is one part of the cost
to satisfy. If you sell chicken burgers, for example, you have to consider the
cost of driving to your restaurant, the cost of conscience of eating meat, etc.
One of the most difficult places to be in the business world is the retailer
selling at the lowest price. If you rely strictly on price to compete you are
vulnerable to competition - in the long term.
Promotion Communication
with customer
You have to consider the communication instead of promotion.
Communication requires a give and take between the buyer and seller. Be
creative and you can make any advertising "interactive". Use phone
numbers, your web site address, etc. to help here. And listen to your
customers when they are "with" you.
Place Convenience to
customer
You must think of convenience to buy instead of place. You have to know
how each subset of the market prefers to buy - on the Internet, from a
catalogue, on the phone, using credit cards, or over the Internet.
Developing a brand takes into account these considerations. Developing a brand is developing a promise.
When you take into consideration the "4 C’s" noted above you begin the process of developing a brand!
The 4Cs are important as they are the key features of
Customer Relationship Management:[CRM]using marketing activities to establish successful customer
relationships so that existing customer loyalty can be maintained.
The key aim of CRM is not necessarily to win new customers but to keep existing ones.
CRM is at the heart of customer-focus concept.
At the root of CRM is customer information(collecting as much information as possible).
Developing effective long-term relationships can be acheived by:
 Target Marketing
 Customer service and support
 Providing as much information to customer as possible
 Using social media

4. Product Life Cycle
is pattern of sales recorded by a product from launch to withdrawal from the market. It helps in product portfolio analysis. The length
of each stage will vary from product to product.
Phase
Product Price Objective/
Promotion
Place
(Distribution
Outlet)
Sales/Profits Cashflow
Introduction Basic Penetration/
Skimming/
Competitor
based
Awareness and trials
Heavy Informative
advertising
Limited /
selective
distribution
Low Development costs ends here
However,
Extensive promotional costs,
unused factory capacity at this
stage.
Cash flow starts to improve
when sales increase.
Growth Planning of
product
improvements
Extension.
Service,
warranty
Penetration Brand identification
Maximize market share
(growing
number of
outlets)
Rapidly
rising/Rising
Extensive promotional costs,
unused factory capacity at this
stage.
Cash flow starts to improve
when sales increase
Maturity Diversify
brand and
models
competitive
Match out
best
competitor
Maximise profits while
defending market share
Increased promotions to
encourage brand switching
(Extension strategies)
Intensive
distribution
(build more
number of
outlets)
Peak/low cost
per
customer/High
profits
Most positive cash flows
Because of high sales,limited
promotional costs and low
spare factory capacity.
Decline Phase out
weak items
Low/cut
prices
Loss leaders
Reduce expenditures
Reduce promotions to
minimal level , ‘reminders’
Keep a few
profitable
ones
Very low/
very low
Price reductions and falling
sales reduces the cash flow.

5. Product life cycle: Evaluation
 The product life cycle is an important tool for assessing the performance of the firm’s current product range.
 The product life cycle is based on past or current data – it cannot be used to predict the future.
 To be really useful, a product life-cycle analysis needs to be used together with sales forecasts and management experience to
assist with effective product planning. (other relevant points)
Product life cycle: Uses
 Assisting with planning marketing mix decisions
 Identifying how cash flow might depend on the cycle
 Recognizing the need for a balanced product portfolio (other relevant points)
Product Portfolio
Businesses often have more than one product. The collection of a business’s products is called product portfolio. It is the range of
items sold by a business.
Also known as product Mix of the company ---- different collection of product lines that a business produces (eg the same business
may also produce video recorders, camcorders and computers, as well as televisions).
Product Portfolio Analysis:a process of analyzing the range of products of existing products of a business to help allocate resources
effectively between them.
Examining the current portfolio (collection) of products to see whether it works well and whether additional products should be added
or any of the existing product needs to be dropped.
Importance of product portfolio analysis and Balanced product portfolio.
 Effective management of product portfolio helps business acheive its marketing objectives. As a well managed product portfolio
that offers customer real and distinctive benefits, marketing objectives are unlikely ever to be acheived
 Products cannot be launched and forgotten but needs to be developed, marketed and managed to help increase sales profitably.
In a balanced portfolio:
 As one product declines, other products are being developed and introduced to take its place.
 Positive cash flows of the successful ones can be used to finance the cash deficit of others.
 Declining output of some goods is replaced by increasing demand for the recently introduced products. Therefore, factory capacity
can be kept at roughly constant level.

6. Price
Price is the amount paid by customers for a product. Price can have a great impact on the consumer demand for the product.
The pricing level for a product will also: Determine the degree of value added, by the business, to bought-in components, Influence
the revenue and profit made by a business due to the impact on demand; It can help establish the psychological image and identity of a
product.
Price Elasticity of Demand: It is the degree of responsiveness of quantity demanded to a change in price. It can be calculated by the
following formula:
PED = Percentage change in Quantity Demanded
Percentage change in price
Inelastic demand Elastic Demand
Between 0 and 1 Between 1 and Infinity
Percentage change in demand is less than percentage
change in price.
petrol, water, electricity, and telephone service
Necessities
Firm can raise prices, not much demand will be loss and
sales revenue will increase.
Percentage change in demand is greater than percentage change
in price
coffee, airline tickets and shares/stocks
Luxury goods
Firm can lower the prices, pick up a lot more demand and then
increase the sales revenue.
Factors influencing Pricing Decisions
 Costs of production
 Demand/Supply in the market
 Price elasticity of demand
 Competitors’ prices
 Stage of product lifecycle
 Whether it is a new or existing product
 Product positioning
 Business and marketing objectives: [eg Profit
maximization might lead to setting of high price]
 Type of the market (consumers) niche market or mass
market elite class or middle class OTHER
 Competition -----degree of competition. Cut throat
competition means low price or in line with
competitors. If less than high price may be charged
 Resources or capital available------economies of scale –
bigger business – more capital resources so lower prices

7. Pricing Strategies
Cost-based pricing
This is where the cost
of producing each unit
is calculated, and then a
percentage profit is
added to this unit cost
to arrive at the selling
price.
Mark-up pricing is adding a fixed
mark-up for profit to the unit price of
a product.
Method is often used by retailers.
eg: cost + 20% markup= Total price
Method is often used by retailers.
Full-cost pricing: is setting a price by
calculating a unit cost for the product
(allocated fixed and variable costs) and
then adding a fixed profit margin.
Varies from Mark-up: method to allocate
fixed cost among various product has to be
found.
However, it’s not possible to calculate
FC for each unit.
Marginal Cost Pricing:
Setting prices based on the
variable costs of making a
product in order to make a
contribution towards fixed
cost and profit.
Competition-based
pricing
Competition-based pricing occurs when a form will base its price upon the price set by its competitors.
Avoids price war.
Price discrimination: Takes place in markets where it is possible to charge different groups of consumer’s
different prices for the same product. [students’ discounts, age discounts, bulk buying, airlines, cinema tickets,
bus fares, gender based, coupons,
Benefits: keep separate segments, Maximize revenue, Boost sales.
Conditions: Different groups of consumers are available, they cannot re-sell among each other, different PED
required.
Dynamic Pricing: is a type of price discrimination where business set flexible prices for products/services based
on current market demands. Prices fluctuate over time to adjust to changes in market. (eg : time of the day, online
retailers, airline—lower first, near to the time of flight the prices are increased.) New : sanitizers, toilet papers,
seasonal airline pricing, seasonal hotel booking pricing.
New product pricing
Strategies
Penetration pricing is setting a relatively low price often supported by strong promotion in order to build up a
large market share and a high degree of brand loyalty eg: pharmaceutical firms.
For general products with highly competitive market.
Conditions: mass marketing, homogenous products, severe competition, price elastic demand, economies of scale
can be achieved.
Market skimming is setting a high price for a new product, to create an up-market, expensive image when a firm
has a unique or highly differentiated product with low price elasticity of demand or innovative, technologically
advanced products.
It helps business to recover initial cost of R&D.
Conditions: niche marketing, brand image / unique or new idea, inelastic price, less or low competition,

8. economies of scale can’t be achieved.
(iii) Going-rate pricing: set price of the product at the level of its competitors It avoids price war.
However, consumer initially might not switch for the same price.
Other Strategies:
High low pricing:
In a supermarket, where few things are priced above competitors’ price while others are lower than competitors e.g. sale on a few
items to attract customers to a market.
Everyday low pricing
Utility stores – grocery items – always low prices

9. Psychological pricing
E.g. $199 i.e. you don’t round of the price which portrays that price is lower.
Loss leaders: those products that are sold at a loss. They are to attract customers who may buy more profitable goods alongside them.
Single Pricing
Like buffets, usually on food though on other goods it could be like 60 rupees everything.

10. AS BUSINESS TOPIC: 4Ps
Promotion
Promotion is about communicating with actual or potential customers.
Promotion is: To inform to raise customer awareness of a product or brand, persuade them to
buygenerating sales, and creating brand loyalty.
Promotion methods above the line and below the line promotion
Above the line promotion: a form of communication
where business pay for communication with
consumers.
 ATL is done through independent media such as
advertising through television, newspapers,
magazines, radio, and internet.
 Organizations have no direct control over these
media and their audience.
Also known as
Pull Promotional Strategies:A “pull” selling strategy
is one that requires high spending on advertising and
consumer promotion to build up consumer demand for
a product.
Below the line promotion: that is not a directly paid
for means of communication but based on short term
incentives to purchase.
BTL refers to those promotional methods that do not
depend upon advertising, like, direct mail campaigns,
trade shows, catalogs, demos and samplings, road
shows, moving hoardings with the ad of the product,
vehicles with promotional staff interacting with people
demonstrating the product and
distributing information on the product.
 Businesses have some degree of direct control
over these promotional methods and their
audience.
Also known as
Push Promotional Strategies:A “push” promotional
strategy makes use of a company's sales force and
trade promotion activities to create consumer demand
for a product.
 Paid for communication
 Conventional (Impersonal)
 Mass media methods
 Focus is on Large audience
 Aims: to inform, raise awareness and build brand
positioning.
 High cost
 Difficult to measure its impact and effectiveness
 Not paid for
 Less conventional
 Memorable activity (Tailored)
 Focus is on only targeted group
 Aims: develop a brand through awareness and
brand profile.
 More cost effective
 More measureable in terms of impact and
effectiveness [Specific]
Types of Advertising:
 Informative advertising
 Persuasive advertising
 Other types may include:
o Competitive advertising,
o Cooperative or collaborative
advertising, where companies jointly
promote an issue.
Types of advertising media:
1.Print media: [newspapers, magazines,
pamphlets]
2.Electronic media: [television, radio, internet]
3. Interactive media: [Billboards, Posters,
Methods:
Sales promotion is incentives such as special offers or
special deals directed at consumers or retailers to achieve
short-term sales increases and repeat purchases by
consumers; eg , discounts ,buy 1 get 1 free.
Personal selling is when a member of the sales staff
communicates with one consumer with the aim of selling the
product and establishing a long-term relationship between
company and consumer.
Personal selling needs a large sales force. It is the most
action oriented promotion technique e.g. door to door selling.
However, if it is done on a large scale it could prove to be
very expensive so much so that its cost could exceed that of

11. AS BUSINESS TOPIC: 4Ps
Outdoor media, Cinema]
The choice of media for Advertising requires
consideration of the following factors:
 Cost
 Size of audience
 The profile of the target audience in
terms of age, income levels, interests
and so on
 The message to be communicated
 The law and other constraints
advertising on T.V. (most exp. method of adverts).
Direct mail This directs information to potential customers,
identified by market research, who has a potential interest in
this type of product
Trade fairs and exhibitions These are used to sell products
to the ‘trade’, i.e. retailers and wholesalers.
Companies seldom sell much directly at trader fairs, but
contacts are made and awareness of products is increased.
Sponsorship is payment by a company to the organisers of
an event so that the company name becomes associated with
the event.
Public relations (PR)is the deliberate use of free publicity
provided by newspapers, TV and other media to
communicate with and achieve understanding by the public.
Packaging : The 5th
P?
A product’s packaging is important in its overall marketing. Consumers often link the quality and design of a
product’s packaging with the quality and image of the product itself. Unsuitable packaging can negatively affect
sales.
Packaging should be: Convenient, Attractive, Economical, Protective, Communicative (informative)
Marketing or promotion expenditure budgets:
 The marketing or promotion budget is the financial amount made available by a business for
spending on marketing/promotion during a certain time period.
 New techniques and technology have enabled the effectiveness of all promotion campaigns to
be assessed with some accuracy. How can this be done?
• Sales performance before and after the promotion
campaign.
• Consumer awareness data.
 Consumer panels/focus group.
 Response rates to advertisements.
Promotional Elasticity of demand: A degree of responsiveness of quantity demanded (PED > 1) to a
change in promotional expenditure, otherwise (PED < 1) there is no any obvious need to bring about any
change in promotional spending. Formula:

12. AS BUSINESS TOPIC: 4Ps
PLACE
Place’ decisions are concerned with how products should pass from manufacturer to the final consumer and where will it be available.
Placement/Distribution: Distribution is making the product available to the target market. A business must get the product to the right place at the
right time. Place or distribution decisions are significant elements of the marketing mix.
Channel of Distribution:
 Channels of distribution refers to the chain of intermediaries a product passes through from original producer to final/ultimate consumer.
 How to move products from the point of creation to points of consumption in an efficient and low-cost manner so that it is convenient for the
consumer to buy.
 The ‘supply chain’is referring to all the businesses involved in getting products on to the shelf – the producer and manufacturer, wholesalers,
transporters and retailers.
Wholesalers A wholesaler is an intermediary entity in the distribution channel that buys in bulk and sells in smaller bulks to resellers
(retailers)rather than to consumers. Use and provide bulk buying EOS to the retailers.
Distributors In its simplest form, a distributor performs a similar role but often provides more complex services. Distributors and
wholesalers often work together as channel partners.
Retailers A retailer, or merchant, is an entity that sells goods or commodities in small quantities directly to consumers.
Channels of Distribution
No Intermediaries
Manufacturer
Consumer
Examples
Bakery
Farmers
Air line tickets directly being
sold
Advantages:
No markup
Quicker
Direct contact with consumers
Disadvantages:
Storage/stock costs
may not be convinient can be expensive
to deliver
Flucuating demand (workers too busy or
too free)
1 Intermediary
Manufacturer
Retailer
Consumer
Examples:
Holiday companies selling
holidays via travel agents,
large supermarkets
Advantages:
stock holding cost is borne by the
retailer, Retailers offer product displays,
After sales services, offer location
Disadvantages:
mark-up for the retailers
delivery cost to retailer will be borne by
producer
sells competitors products too.
1 Intermediary
Manufacturer
Wholsaler
Consumer
shopping at some of the
warehouse clubs, the
customer may have to buy a
membership in order to buy
directly from the wholesaler.
Consumer’s can buy directly from the
wholesaler. The wholesaler breaks down
bulk packages for resale to the
consumer..
No convenient location
2 Intermediaries Examples: Advantages: wholesalers holds goods Disadvantages:

13. AS BUSINESS TOPIC: 4Ps
ManufacturerWholsaler
RetailerConsumer
Soft drinks,
electrical goods, books
and buys in bulk, reduce stock holding
costs of producer.
mark-up for the 2 intermediaries slows
down the distribution channels

14. AS BUSINESS TOPIC: 4Ps

15. AS BUSINESS TOPIC: 4Ps
Using the Internet for the 4Ps/4Cs/CRM
Internet marketing is the marketing of products over the internet
Internet marketing can involve several different marketing functions:
Online advertising and
catalogues
Advertising by using the company’s own website or by placing a banner
advert or ‘pop-up’ on another firm’s website.
Online sales Direct selling of consumer and industrial products
Dynamic pricing Offering goods at a price that changes according to the level of demand and
the customer’s ability to paythe practice of pricing items at a level determined
by a particular customer's perceived ability to pay.
It is a pricing strategy in which businesses set flexible prices for products or
services based on current market demand.
Examples:
Airlines change prices often depending on the day of the week, time of day,
and number of days before the flight.
Sports that are outdoors have to factor weather into pricing strategy, in
addition to date of the game, date of purchase, and opponent. Tickets for a
game during inclement weather will sell better at a lower price; conversely,
when a team is on a winning streak, fans will be willing to pay more.
Retailers, and online retailers in particular, adjust the price of their products
according to competitors, time, traffic, conversion rates, and sales goals. The
aim of dynamic pricing is to increase revenue and profit.
The Amazon marketplace is very crowded with sellers. There, dynamic
pricing means retailers can change the price of products immediately,
intensifying competition.
Online distribution download of digital products
Viral Marketing The use of social media sites or text messages to increase brand awareness or
sell products.
Research Sales leads are established by visitors to a site leaving their details--Collecting
market research data

16. AS BUSINESS TOPIC: 4Ps
E-commerce
(electronic commerce or EC) is the buying and selling of goods and services, or
the transmitting of funds or data, over an electronic network, primarily the Internet. These
business transactions occur either business-to-business, business-to-consumer, consumer-to-
consumer or consumer-to-business.
Benefits of selling online Drawbacks
 Making savings in set-up and operational costs.
 Reaching a global audience, thereby increasing sales
opportunities.
 Competing with larger businesses by being able to open 24
hours a day, seven days a week.
 Being able to receive payment more quickly from online
transactions.
 Attracting customers who would not normally have
investigated your type of high street outlet.
 Improving your offerings using the data gathered by tracking
customer purchases.

Using your online shop as a catalogue for existing customers.
 Creating a business from scratch and testing the market can
be quicker and easier to do online, and certainly more
affordable.
 With an online store you can offer an even wider choice of
goods, and provide more information to the customer.
 Your customer can shop directly from home without further
cost to them.i.e. no travelling cost involved to your customer
(or yourself if working from home).
 You have more responsibility in
the running of your business. This
is particularly relevant if you’re
operating a small business by
yourself.
 Easy to run the business for you,
so that when you need to take a
break, or take a holiday, you’re
not constrained by the
responsibility of running your
business 24/7.
 From the customer’s point of
view, the main disadvantage of
buying online is that they don’t
get to see and feel the goods
before they buy.
 The customer also does not get
the same kind of personalized
service that they might receive
when they walk into their favorite
local stores.
 Problem of fraudulent
transactions. This can be a major
problem for ecommerce website.
Online selling will work best if you have:
 Well-defined products or services that can be sold without human involvement in the sales process
 Products or services that can be delivered within a predictable lead time
 Many businesses can run pilot e-commerce sites without significant investment. However, creating
a fully automated online shop tailored to meet your precise requirements could be expensive.
 Whatever form of online shop you choose, it's important to take a strategic view. If you launch a
website that disappoints your customers or is overwhelmed by traffic, you risk damaging your
reputation and losing sales.
 If the choice is between opening a bricks and mortar store or setting up a website, the start up cost can be
much lower if you decide to sell online. You can do both of course. If you have an existing business, then
you could easily expand to the online marketplace and fund and your website from your business profits.

17. AS BUSINESS TOPIC: 4Ps
Integrated Marketing Mix:
Integrated Marketing Mix:the key marketing decisions are consistent, complement each other
and work together to give customers a consistent message about the product.
Integrated marketing is the holistic approach to communication in marketing.
Examples:
 If an expensive, well-known brand of perfume was for sale on a market stall, would you
be suspicious?
 If the most exclusive shop in your town sold expensive gifts and wrapped them in
newspaper, would you be surprised?
 If a cheap range of children’s clothing was advertised in a glossy colour magazine
aimed at professional women, would this advert lead to many sales?
Confused?
Confused customers are lost customers.!
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Ch# 18-19: Sample Questions
PAPER 1
1) Analyse the importance of a Unique Selling Point (USP) to a mobile (cell) phone
manufacturer.[8]MAR/2017/12
2) Analyse, using examples, why packaging could be important in the marketing mix. [8]
NOV/2016/12
3) Define ‘product differentiation’. [2] (b) Briefly explain two marketing benefits of product differentiation.
[3]MAR/2016/12
4) Explain why a luxury car manufacturer should consider both the tangible and intangibleattributes of its
products. [8]
5) Discuss the advantages and disadvantages of using extension strategies to lengthen the life of a product. [12]
JUN 2013 12
6) Explain the usefulness of the ‘product life cycle’ for a marketing manager. [8] NOV 2011 12
7) Discuss how a business might use a product life cycle to plan the marketing of a product.[12]JUN 2011 12
8) Define the term ‘price discrimination’. [2] Explain the benefit to an airline of using price discrimination for
ticket sales. [8] JUN 2012 12
9) Discuss the importance of ‘branding’ for product promotion. [12] JUN 2012 12
10) Discuss the advantages and disadvantages for a cinema of setting up a website to market its services.
[12]NOV 2011 12

18. AS BUSINESS TOPIC: 4Ps
PAPER 2
School Sports Shop (SSS)
Business Studies students at the local secondary school are planning to set up a new business, called SSS. They
have asked the Principal (Head Teacher) if they can set up a social enterprise selling the school sports uniform.
Parents and students will be the target market. Currently, parents have to buy the uniform from an expensive
local supplier. Any profit made by SSS will be invested back into improving the facilities for the students; for
example, buying table tennis equipment.
The Principal is keen to encourage students to think about becoming entrepreneurs and has agreed to the
proposal. The students have found a suitable location for the shop within the school. They have spent time
painting it and fitting shelves. They have also decided to widen their product range to include school bags and
stationery items such as notepads and folders.
There are twelve students involved in SSS and Jane has been voted as the Managing Director. Jane is organising
job roles for the other students. She has asked Diwan to be the Marketing Director and to think of ideas to
promote the new shop. Jane is worried that the promotional budget will be very limited. SSS was started with a
loan of $500 from the school.
Paula will be the student in charge of buying the products that will be sold in the shop. Paula has prepared the
information shown in Table 3. This is the unit cost that SSS will have to pay the suppliers for each of their
products. Paula knows that these costs are high because she is not ordering in large enough quantities to gain
discounts.
Paula has suggested that SSS uses cost-based pricing but Jane is unsure because she worries that this may make
the prices too high.(d) Discuss suitable methods that Diwan could use to promote SSS. [10] NOV/22/2013