The Elements of the Marketing Mix (AQA GCSE Business)

Apple is one of the world’s largest information technology businesses. They sell a range of products such as the iPhone and Apple Watch.

Apple’s newest product, the Apple Watch, is a smartwatch. The most expensive Apple Watch costs US$17,000 and is aimed at the luxury segment of the smartwatch market. Apple have spent millions of dollars on television advertising and colour advertisements in expensive magazines to promote the Apple Watch. Sales are expected to increase over the next few years.

Devine Jewellery (DJ) plc is an international business that sells a range of luxury jewellery items, such as bracelets, necklaces and rings. The business was started by British jewellery designer Dev Anand, who developed a unique selling point (USP) of jewellery that can be personalised with a message or initials. This USP has attracted customers from all over the world. All DJ products are crafted from high quality gold and gemstones. This has enabled DJ to create an exclusive brand image that has attracted wealthy customers.

As a profitable business, DJ’s shareholders receive dividend payments each year. Dev understands that his business must be willing to respond to current trends to maintain sales levels. Silver jewellery is very common, as it is much more affordable than gold. Reputable brands already sell jewellery in a range of precious metals, including silver.

Dev is keen to produce a new jewellery collection using silver instead of gold. The new collection would not be personalised or include gemstones. The current selling price of DJ’s best-selling gold bracelet is £4700. A silver version of this bracelet would be sold for £1175.

Nadia Aslam is a wealthy entrepreneur. Two years ago, she bought a struggling airline and changed the name to Skyline plc. The airline offers low-price flights from the UK to popular European destinations. There are high levels of competition in this market.

Nadia has found out that Sibiu, a city in Romania, is becoming popular for city breaks, but no UK airlines currently fly there. Nadia is planning to buy an additional plane and start flying there. Fees and taxes at Sibiu International Airport are much higher than at other destinations. Nadia will need to consider how to cover these additional costs.

Nadia has rebranded the planes with the new Skyline plc logo and colours. To raise the finance needed she used a share issue which reduced her ownership of the business from 90% to 70%. Although her shareholders do not have a say in the day-to-day running of the business, they are able to vote on major decisions such as whether to expand. Nadia has worked hard for the past two years to make Skyline plc a profitable business. She would like to reinvest all the profits back into the business but whatever she does she must also keep her shareholders happy.

Sonya has been working for a large business selling party products.

She recently organised a party for her daughter. Sonya’s friends were so impressed they have asked her to organise parties for their children.

Sonya visited a local play group to carry out primary market research. She asked 40 parents there to complete a survey. Sonya wanted to find out if these parents would pay her to organise a party for their children. The results of two questions are below.

Question 1 – On average how much do you spend on your child’s party

Question 2 – Would you use a party planner?

Sonya believes she has identified a gap in the market for organising children’s parties and is planning to start her own business.

Apple is in a very competitive market. It makes improvements to the products to give them a unique selling point providing the latest technology that customers demand.

Apple’s most successful product has been the iPhone. Since it was introduced in 2007, Apple have updated the phone each year and brought out a new version. New releases have seen huge sales with customers queuing outside shops to get one. Prices are high until the next version is released. The latest version is the iPhone 6s plus. It has 3D touch technology that is not used on any competitors’ smartphones. An iPhone is needed for Apple’s newest product, the Apple Watch, to work.

Once the market leader, Apple has lost market share to a competitor. At the same time global sales of smartphones are slowing down.

Apple Inc – Sales by Product: 2014–2015

Apple is in a very competitive market. It makes improvements to the products to give them a unique selling point providing the latest technology that customers demand.

Apple’s most successful product has been the iPhone. Since it was introduced in 2007, Apple have updated the phone each year and brought out a new version. New releases have seen huge sales with customers queuing outside shops to get one. Prices are high until the next version is released. The latest version is the iPhone 6s plus. It has 3D touch technology that is not used on any competitors’ smartphones. An iPhone is needed for Apple’s newest product, the Apple Watch, to work.

Once the market leader, Apple has lost market share to a competitor. At the same time global sales of smartphones are slowing down.

Apple Inc – Sales by Product: 2014–2015

Swim to Success (STS) is a programme that teaches young children how to swim through weekly lessons. It was developed by Jade Jackson, an ex-Olympic swimmer. Jade employs swimming instructors who deliver the programme using the pool facilities at gyms across the North East of England.

To help bring in extra revenue and cover her costs Jade is developing a new business plan to launch a range of branded swimming products. Jade gave questionnaires to parents to find out which products would be the most popular and what prices people would pay. The results of one of Jade’s questions is below:

Jade was also planning to sell her products through the STS website where parents currently book lessons. To develop the e-commerce part of the website more investment is needed, particularly to make sure payment information is secure. Once the website has been developed Jade thinks she will be able to manage it herself. However, she would be unable to package and post orders every day as she thinks that she has more important priorities. For example, responding to customer queries, organising employee timetables and checking cashflow.

Another option for Jade is to sell her products at the gyms where STS lessons take place. Most of the gyms already have a small area with goods for sale such as water bottles, gym bags and towels, however Jade would have to negotiate a monthly rental fee.

HelloFresh is the world’s leading meal-kit delivery company. Each meal-kit contains all the ingredients and a recipe to cook a meal from scratch. HelloFresh deliver the kits to customers. The company was set up by two entrepreneurs in 2011 when they spotted a gap in the market to help busy people cook high quality meals at home. HelloFresh offer meal-kits to suit the needs of young families and couples who are prepared to pay a premium for its service.

HelloFresh are proud to be environmentally responsible and advertise that it is the ‘greener way to shop for groceries’. It uses recycled packaging and carefully plans delivery routes to make sure that vehicles travel the shortest possible distance.

Meal-kits are becoming very popular in the UK and HelloFresh is operating in an increasingly competitive market. HelloFresh tries to keep its customers interested by developing exciting new recipes each week that are different to the recipes that competitors are offering. This process is expensive and time consuming. HelloFresh is now looking for opportunities to reduce costs. It uses customer reviews to find out which foods customers like and dislike, but not all customers give regular feedback. Once HelloFresh has developed a new recipe the Finance and Production departments must work together to make sure the ingredients are available within the budget.

Devine Jewellery (DJ) plc is an international business that sells a range of luxury jewellery items such as bracelets, necklaces and rings. The business was started by British jewellery designer Dev Anand who developed a unique selling point (USP) of jewellery that can be personalised with a message or initials. This USP has attracted customers from all over the world. All DJ products are crafted from high quality gold and gemstones. This has enabled DJ to create an exclusive brand image that has attracted wealthy customers.

As a profitable business, DJ’s shareholders receive dividend payments each year. Dev understands that his business must be willing to respond to current trends to maintain sales levels. Silver jewellery is very common as it is much more affordable than gold. Reputable brands already sell jewellery in a range of precious metals, including silver.

Dev is keen to produce a new jewellery collection using silver instead of gold. The new collection would not be personalised or include gemstones. The current selling price of DJ’s best-selling gold bracelet is £4700. A silver version of this bracelet would be sold for £1175.

DJ imports and exports goods to and from the UK where it is based. One of its most successful export markets is the USA, where it has 14 stores. It also imports diamonds to the UK from India as they are much cheaper to buy from here than other countries. This means DJ can make a larger profit on each item sold. DJ only has stores in large cities, so customers mainly use the website to find information on jewellery items.

DJ has always advertised in fashion magazines read by its wealthy target market but wants to raise its profile further. Other jewellery businesses are promoting their brands by sponsoring big events such as sports competitions, festivals and awards ceremonies. DJ would like to sponsor a fashion show in London for a world-famous British designer with an expensive clothing range. The designer has agreed that if the sponsorship goes ahead, the models will all wear jewellery from the DJ collection. As well as attracting reporters and photographers from around the world, the fashion show will be streamed live on the Internet and shown on television.

Ellie has decided to offer gardening services. There are already a lot of businesses offering home and gardening services in Ellie’s local area. Many of these businesses have loyal customers. Ellie has decided to segment her market and will focus on the family market. She has a lot of friends with children and understands what type of garden families want. To attract families with children, Ellie’s gardening services will include creating play areas for children, vegetable patches and BBQ patio areas.

Ellie would like to use leaflets to advertise her gardening services. Ellie has designed a leaflet herself that has a bright, fun design and includes images of play areas and vegetable patches to show families how their gardens could look. Ellie will offer a special discount to anyone who books using a code on the leaflet. Ellie’s parents think it would be better if she put an advert in the local newspaper which is read by around 8000 people every day. The newspaper has a ‘Family Fun’ section each week where local businesses targeting families often advertise. It would cost £150 each week for a minimum of four weeks to place a black-and-white advert in the local newspaper.

Reusable drinks bottles are becoming more popular. Jake Webb is a product designer. A couple of years ago, Jake noticed that young people wanted to drink cold water on the go without having to buy single-use plastic bottles. He thought there was a gap in the market for lightweight, stylish bottles.

The development of the BEco Bottle was very expensive so Jake used a price skimming strategy to recover his costs. However, competitors have recently launched very similar bottles and are selling these at a lower price. Jake has found out that 90% of people identify price as the most important factor when making a purchase.

Recently, sales of skateboards have fallen. To widen its product portfolio, bespoke skateboard manufacturer Skate4U Ltd is considering entering a new market by developing a range of low-price scooters (non-motorised). The scooter market has grown rapidly in the last three years and is dominated by four businesses that receive 80% of the sales revenue in the market.

Skate4U Ltd currently sells high-price skateboards using high-quality materials. There are concerns about the possible negative impact on Skate4U Ltd’s brand image if it begins selling low-price scooters. Skate4U Ltd will need to set clear sales targets to make sure the business will make a profit from the sale of scooters. The business can produce 10 000 scooters a year.

The market leader has recently run a successful sales promotion offering a signed scooter as a prize to the customer who creates the best new scooter design. This promotional activity resulted in an increase in its sales of 10%. Skate4U Ltd is considering which methods of promotion would be best to help gain brand awareness when entering the scooter market. Skate4U Ltd will promote the new scooters to its current market of skateboard users.

Recently, sales of skateboards have fallen. To widen its product portfolio, skateboard manufacturer Skate4U Ltd is considering entering a new market by developing a range of low-price scooters (non-motorised). The scooter market has grown rapidly in the last three years and is dominated by four businesses that receive 80% of the sales revenue in the market.

Skate4U Ltd currently sells high-price skateboards using high-quality materials. There are concerns about the possible negative impact on Skate4U Ltd’s brand image if it begins selling low-price scooters. Skate4U Ltd will need to set clear sales targets to make sure the business will make a profit from the sale of scooters. The business can produce 10 000 scooters a year.

The market leader has recently run a successful sales promotion offering a signed scooter as a prize to the customer who creates the best new scooter design. This promotional activity resulted in an increase in its sales of 10%. Skate4U Ltd is considering which methods of promotion would be best to help gain brand awareness when entering the scooter market. Skate4U Ltd will promote the new scooters to its current market of skateboard users.

Budget airline Skyline plc is going to add a new route to the city of Sibiu in Romania. An additional plane will require extra investment of £72 million. Based on the age of the plane being considered for purchase, it is estimated that it has 12 years of service left. The plane will increase Skyline plc’s profit by £108 million over its lifetime.

Skyline plc has a large database of customers. It would like to set up a telesales team to call all past and present customers individually to tell them about the new route. Not all customers have indicated that they would be happy to be contacted by telephone.

Each member of the telesales team will:

• Inform customers about the city of Sibiu and then encourage them to book flights

• Be provided with some information about Sibiu, but not a formal script to use

• Be expected to contact at least 12 customers per hour.