A Level Business: Marketing and People — Revision Notes

Condensed for the final weeks. For the full explanation, use the Marketing and People study guide.

Market research

Primary — collected first-hand for this purpose: surveys, interviews, focus groups, observation, test marketing. Relevant and current, but expensive and slow.

Secondary — already exists: government statistics, competitor reports, trade publications, internal sales data. Cheap and immediate, but may be out of date or gathered for a different purpose.

Quantitative data measures how many; qualitative explains why. Most decisions need both — quantitative sizes the opportunity, qualitative explains the behaviour behind it.

Sampling: random, stratified, quota, cluster, convenience. A larger sample is more reliable but costs more, so the real question in any case study is whether the sample was representative, not whether it was large.

Market positioning

• Market share = firm’s sales ÷ total market sales × 100.
• Market growth = change in market size ÷ original size × 100.
• Mass marketing targets the whole market with one offer; niche marketing targets a small, specific segment — lower volume but often higher margins and less competition.

Segmentation: demographic, geographic, psychographic (lifestyle and values), behavioural (usage, loyalty, occasion).

Positioning maps plot two attributes — typically price against quality — to reveal gaps in the market. But a gap may exist because there is no demand for it, which is the evaluation point most answers miss.

The marketing mix

Product — the product life cycle runs introduction → growth → maturity → decline. Extension strategies (new packaging, new markets, product updates, price changes) delay decline. The Boston Matrix classifies a portfolio into stars, cash cows, question marks and dogs; cash cows fund the question marks.

Price:

Strategy	Use
Skimming	High launch price for innovative products, lowered later
Penetration	Low launch price to gain share quickly
Cost-plus	Simple, but ignores the market
Competitive	Matching rivals
Psychological	£9.99
Loss leader	Below cost, to draw customers in

The right strategy depends on PED: where demand is inelastic, price can rise without much lost volume; where it is elastic, competing on price destroys revenue.

Promotion — advertising, sales promotion, PR, personal selling, direct marketing, digital and social. Place — distribution channels, retail, e-commerce, direct.

The mix must be internally consistent. Premium pricing with discount-channel distribution sends contradictory signals, and noticing that in a case study is worth more than listing the four Ps.

Motivation theory

Theory	Core claim
Taylor	Money is the main motivator; specialise and pay by piece rate
Mayo	Social factors and attention matter — the Hawthorne effect
Maslow	Needs are hierarchical: physiological → safety → social → esteem → self-actualisation
Herzberg	Hygiene factors (pay, conditions) prevent dissatisfaction; motivators (achievement, recognition, responsibility) create satisfaction

Herzberg’s distinction is the one that pays. Pay is a hygiene factor — poor pay demotivates, but improving it beyond the acceptable level does not motivate. That explains why a pay rise produces a short-lived improvement and why job enrichment produces a lasting one.

Financial methods: salary, piece rate, commission, bonus, profit share, share ownership. Non-financial: job enrichment, job rotation, job enlargement, empowerment, teamworking, flexible working.

Organisational structure

• Tall structure — many levels, narrow span of control. Close supervision and clear promotion paths, but slow communication and higher cost.
• Flat structure — few levels, wide span of control. Faster communication and greater empowerment, but managers may be overstretched.

Delayering removes management levels: it cuts costs and speeds decisions, but increases workload and can damage morale and lose expertise.

Centralisation keeps decisions at the top — consistent and fast at the centre, but ignores local knowledge. Decentralisation pushes them down — responsive and motivating, but risks inconsistency.

Labour turnover = leavers ÷ average number employed × 100. High turnover raises recruitment and training costs and loses knowledge, though some turnover brings in fresh ideas.

Answering the questions

A Level Business is marked on application, analysis and evaluation, not knowledge.

• Application — use the actual figures, names and context of the case study.
• Analysis — build a chain: because X, therefore Y, which means Z for this business.
• Evaluation — weigh both sides, then judge, and state what the judgement depends on (the size of the firm, the market, the time frame, the state of the economy).

Exam traps

• Generic answers with no reference to the case study.
• Listing the four Ps without considering whether they are consistent.
• Saying pay always motivates — Herzberg says otherwise.
• Confusing span of control with chain of command.
• Assuming a gap on a positioning map is automatically an opportunity.
• Concluding without a criterion for the judgement.

Self-test

1. Distinguish primary from secondary research, with one drawback of each.
2. Why is a gap on a positioning map not necessarily an opportunity?
3. Explain Herzberg’s distinction and its practical consequence.
4. Compare tall and flat structures.
5. What three things does a top-band evaluation contain?

Answers: 1. Primary is collected first-hand for the specific purpose but is costly and slow; secondary already exists so is cheap and immediate but may be outdated or collected for a different purpose. 2. The gap may exist because there is no demand at that combination of attributes, or because serving it is not profitable. 3. Hygiene factors such as pay prevent dissatisfaction but do not motivate; motivators such as achievement and responsibility create satisfaction — so a pay rise gives a short-lived lift while job enrichment gives a lasting one. 4. Tall structures have many levels and narrow spans, giving close supervision but slow communication; flat structures have few levels and wide spans, giving fast communication and empowerment but potentially overstretched managers. 5. Both sides of the argument, a clear judgement, and a statement of what that judgement depends on.