EDEXCEL GCSE BUSINESS · PAPER 2
Exam Practice: Using the Marketing Mix
Using the marketing mix to make business decisions · Making marketing decisions · Lesson 5 of 5 · 18 marks · 25 minutes
Name Date
Answer all questions. Use the context of the business in the question where one is given.
Question 1 DEFINE [1 mark]
Define the term 'competitive advantage'.
Question 2 OUTLINE [2 marks]
Outline one way that a change in product could affect the price element of the marketing mix.
Question 3 EXPLAIN [3 marks]
Explain one way a business could use its marketing mix to gain a competitive advantage.
Question 4 EVALUATE [12 marks]
|
SOURCE Bloom Coffee PLC owns 120 coffee shops across the UK, charging slightly higher prices than its rivals. It promotes itself mainly through a loyalty app. Over the past year its sales have fallen by 8% as two large competitors have opened shops near many of its locations and started heavy TV advertising. |
Evaluate whether Bloom Coffee PLC should respond to the competition by cutting its prices.
Answers
Check your answer only once you have written one.
Question 1 [1 mark]
Something that makes a business more attractive to customers than its competitors.
▸ An advantage over competitors that attracts customers 1 mark
Question 2 [2 marks]
Improving the quality of the product increases its costs (1), so the business may need to raise the price - which customers may accept because the product is better (1).
▸ A way identified 1 mark
▸ Developed 1 mark
Question 3 [3 marks]
It could make its product different from competitors' through a unique feature (1). This gives customers a reason to choose it over rivals (1). As a result, the business can win market share and may be able to charge a higher price, increasing its profit (1).
▸ A way identified, linked to one or more Ps 1 mark
▸ First linked point of explanation 1 mark
▸ Second linked point of explanation 1 mark
Question 4 [12 marks]
Cutting prices could win back price-sensitive customers who have switched to the new competitors, and could stop the 8% fall in sales. Combined with offers on its loyalty app, lower prices might encourage customers to return regularly. However, Bloom already charges more than its rivals, which suggests customers see it as higher quality. Cutting prices could damage that image and start a price war with two large competitors who may be able to cut further, reducing Bloom's profit on every cup. Instead, Bloom could use its other Ps: improving its product, using its app to reward loyal customers, or promoting what makes it different. A price cut alone does not make its mix more competitive. Overall, Bloom should not rely on cutting prices across the board, because its competitive advantage is quality, not price. It depends on why customers are leaving: if research shows price is the main reason, targeted app discounts may be better than a general price cut.
▸ AO2 (Application, 4 marks): uses the context - 120 shops, higher prices, loyalty app, 8% fall, rivals' TV adverts Level 1-4
▸ AO3a (Analysis, 4 marks): chains of reasoning about price and the rest of the mix Level 1-4
▸ AO3b (Evaluation, 4 marks): a supported judgement, with "it depends on" Level 1-4