AQA AS-Level Business: Marketing management (7137)

This guide covers section 3.1.3 Marketing management of the AQA AS and A-level Business specification (7137 and 7138, version 1.1, November 2025, for teaching from September 2026). In that specification Paper 1 is standalone on Unit 3.1, so this section is examined there. Two rows in 3.1.3, international marketing and ethical issues in marketing, are marked “(A-level only)” and are not covered here. Specification formulas are used as given; others are labelled “standard form”.

Related: revision notes, practice questions, course structure, the AQA AS Business hub, the checklist and free diagnostics.

The sections below follow the specification’s own headings for 3.1.3: customer needs, markets and marketing data, demand, target market, marketing objectives and planning, the mix (product, price, place, promotional mix) and digital technology.

Customer needs

Market research means gathering and studying evidence on customers, rivals and the market. It reduces risk.

• Primary research is gathered first-hand for the question in hand (surveys, interviews, focus groups, test sales). It is specific but slower and costlier.
• Secondary research uses existing data (published reports, government statistics, the firm’s own sales records). It is cheap and quick but may be old or not quite the right question.
• Quantitative data is numerical (percentages, sales, ratings) and easy to compare. Qualitative data is about opinions and reasons and explains why customers behave as they do, but is harder to generalise.
• Confidence levels and intervals. A sample gives an estimate. A confidence interval is a range likely to contain the true figure for the whole market, and the confidence level (for example 95%) says how sure the researcher is that the range does so. If a survey finds 40% would buy and the interval is 35% to 45% at a 95% confidence level, the true figure probably lies in that range. A larger sample usually narrows the interval. A decision that only pays off at the top of the interval is risky.
• Market mapping plots brands on a chart using two features customers care about, such as price and quality. It shows where rivals cluster and where there may be a gap, though a gap may mean nobody wants that combination.
• Influences on how research is conducted: risk (a costly launch justifies more research), cost (budget limits sample size), time (a fast-moving market may rule out slow methods) and the need for reliability (a high-stakes decision needs results that would repeat).

Markets and marketing data

Types of market. Business to business (B2B) buyers are few, buy large quantities, want specification and reliability, and often deal through account managers. Business to consumer (B2C) has many buyers, with branding and promotion more prominent. Consumer to consumer (C2C) is trade between individuals, usually through an online platform. Goods can be stored and examined; services are intangible, so people, process and the environment matter more.

Market conditions. More competitors, or aggressive behaviour such as price cutting, squeezes prices and share, so a firm needs a point of difference. A growing market lets firms gain sales without taking share but draws in entrants; in a stagnant market gains come at rivals’ expense.

Calculations. The specification expects you to calculate, interpret and analyse these.

Measure	Form
Market share (%)	sales of one product, brand or business ÷ total sales in the market × 100
Market growth (%)	change in the size of the market ÷ original size × 100
Sales growth (%)	change in sales ÷ original sales × 100 (standard form)
Return on marketing spend (%)	profit from marketing activities ÷ marketing spend × 100 (standard form)

Market size is total sales in the market, by value or volume; a segment’s size is its part of that total. Sales data may be split by region, product or store.

Worked example. The cold-brew coffee market was worth £120m in 2025 and £138m in 2026. Tarnhollow Coffee sold £18m in 2025 and £22.08m in 2026.

• Market growth = (138 − 120) ÷ 120 × 100 = 15.0%
• Sales growth = (22.08 − 18) ÷ 18 × 100 = 22.7% (1 d.p.)
• Share 2025 = 18 ÷ 120 × 100 = 15.0%; share 2026 = 22.08 ÷ 138 × 100 = 16.0%
• Customers under 30 buy 40% of the 2026 market, so that segment is worth 138 × 0.4 = £55.2m.

Tarnhollow grew faster than its market, so share rose one percentage point: it is winning customers, though one year is a thin base.

Return on marketing spend. A campaign cost £24,000 and the profit from marketing activities was £6,000: 6,000 ÷ 24,000 × 100 = 25%.

Index numbers. Set a base period at 100. If a region sold £50,000 in the base year and £57,500 later, the index is 57,500 ÷ 50,000 × 100 = 115, a 15% rise on the base. An index of 97 would be a 3% fall.

Volume and value. Volume is units sold; value is revenue. If units rise from 10,000 to 11,000 (+10%) while the price falls from £5.00 to £4.50, value moves from £50,000 to £49,500, a fall of 1%.

Correlation. Positive: both rise together. Negative: one rises as the other falls. Strong: points close to a line. Weak: widely scattered. Correlation shows association, not cause: a third factor such as weather may drive both.

Demand and elasticity

Influences on demand include price, incomes, tastes, substitutes and complements, advertising and the number of buyers. The specification gives these formulas.

• PED (price elasticity of demand) = the % rise or fall in quantity demanded, divided by the % rise or fall in price
• YED (income elasticity of demand) = the same numerator divided by the % rise or fall in income

PED. Disregarding the sign, above 1 is elastic (quantity moves proportionately more than price) and below 1 inelastic. Brackenmere Cycles cuts a price from £400 to £360 (−10%) and sales rise from 500 to 575 (+15%). PED = 15 ÷ −10 = −1.5, elastic. Revenue moves from £200,000 to 360 × 575 = £207,000, up 3.5%. If PED were −0.5, an 8% price rise cuts quantity by 4% and revenue becomes 1.08 × 0.96 = 1.0368 of the original, up 3.7%. So with elastic demand a price cut raises revenue; with inelastic demand a price rise does.

YED. Positive means a normal good: if incomes rise 4% and quantity rises 6%, YED = +1.5 and demand grows faster than income. Negative means an inferior good: incomes up 5% and quantity down 2% gives −0.4, so demand falls as people can afford alternatives.

Target market

Segmentation divides a market into groups with similar needs. The specification names four bases: demographic (age, gender, income, family), geographic (region, urban or rural, climate), psychographic (lifestyle, values, attitudes) and behavioural (usage rate, loyalty, occasion of purchase).

Choosing and entering a target market is influenced by segment size and growth, competition, the firm’s resources and brand, the marketing objectives, and entry cost. A niche market is small and specialised: less competition and scope for higher prices, but limited sales and vulnerability if the segment shrinks. A mass market offers bigger volumes but more rivals and less tailored products. The mix must then be adapted to the target market: a premium segment suggests higher quality, price and service together.

Objectives and planning

Marketing objectives named in the specification: lead generation (collecting details of potential buyers), sales, market share, brand awareness, customer retention, engagement (interaction with content) and conversion (turning enquiries or visitors into buyers). They support the corporate objectives and give a way to judge success. Influences include business objectives, finance, capacity and rivals’ actions.

The marketing budget is influenced by revenue, profit, objectives, competitors’ spending and cash available. Its significance: objectives need funding, and poor spending wastes cash needed elsewhere.

Changes in demand and the mix.

• Rising demand: capacity and stock must keep pace; price may rise, but rivals may enter.
• Falling demand: promotion, price cuts or product changes may be needed.
• Cyclical demand follows the economic cycle: value ranges for slumps, capacity for booms.
• Seasonal demand recurs in the year: promote ahead of the peak, discount off-peak, manage staffing and stock.

Links and competitiveness. A sales target needs operations to deliver, finance to fund the budget and people with the skills. Marketing decisions improve competitiveness when they make the product more attractive or the price more competitive, or build loyalty, relative to rivals.

The marketing mix

Product

The product life cycle has development, introduction, growth, maturity and decline. Its significance: early stages need heavy spending, so finance must supply cash and operations must plan capacity; maturity yields profit but invites extension strategies (advertising, rebranding, lowering the price, adapting the product); decline forces a withdraw-or-revive decision.

Product portfolio analysis examines the whole range. The Boston Matrix classifies products by market growth and market share (standard form: relative share, the firm’s share compared with its largest rival). Stars have high share in a fast-growing market and need investment. Cash cows have high share in a slow market and fund others. Question marks have low share in a fast market: invest or withdraw. Dogs have low share in a slow market and may be dropped. Limit: two measures only.

New product development renews the range and can gain advantage and new revenue. Challenges: high cost, long lead times and the risk of failure.

Price

Influences on price: marketing objectives, target market, level of demand, PED, costs, competitors’ actions and the rest of the mix. The impact of price is on volume, revenue and profit margins; a cut lifts volume but lowers the margin per unit, so profit can fall even when revenue rises.

• Cost-based pricing adds a margin to cost: simple but ignores demand.
• Demand-based pricing includes penetration (low launch price for fast share), price skimming (high launch price for early adopters, then lower) and dynamic pricing (prices adjusted rapidly with demand, often by algorithm).
• Competition-based pricing includes premium (above rivals, justified by quality or brand), going rate (in line with rivals) and discount (below rivals).

Place

A distribution channel is the route products take to the customer. Direct distribution, including e-commerce, gives control, data and the full margin but the firm bears delivery and marketing costs. Intermediaries (wholesalers and retailers) give reach, storage and local presence but take a margin and reduce control. Multi-channel distribution reaches more customers but adds complexity and the risk of conflict between channels.

Promotional mix

Promotion informs, persuades and reminds.

• Advertising reaches many people but is costly.
• Social media and influencers are targeted and interactive; the risk is loss of control.
• Sales promotions (discounts, offers) boost short-run sales but can train customers to wait for deals.
• Sponsorship builds awareness and association with an event.
• Personal selling, including account managers and sales teams managing client relationships, suits high-value B2B sales but is expensive per contact.
• Branding builds recognition and brand loyalty, supporting higher prices; own-label brands are owned by retailers and give them higher margins and control but are limited to their own outlets.

The mix depends on budget, target market, product, objectives and rivals.

Digital technology

Digital technology, including artificial intelligence (AI), supports social media campaigns, content marketing (useful content that draws and retains audiences), search engine optimisation (SEO, improving unpaid search ranking), pay per click (PPC, paying for each click on an advert) and website cookies (small files that track visitors, raising privacy issues).

Measures of success should include search performance, click-through rates, time spent on a site, conversion rates, number of users or subscribers and advertising revenue. In a digital example, 5,000 clicks from 200,000 advert views gives a click-through rate of 2.5%, and 400 purchases from those clicks gives a conversion rate of 8% (standard forms).

Customer relationship management (CRM) supports customer acquisition, retention, lead generation and pipeline management (tracking prospects through stages to a sale). Data analytics supports segmentation, campaign performance tracking, personalisation, predictions and dynamic pricing. Digital tools can improve competitiveness (lower cost per customer, faster response) but cost, poor data and privacy concerns limit them.

Frequently asked questions

Are international marketing and ethical marketing in AQA AS-Level Business (7137)? No. In section 3.1.3 of the AQA 7137/7138 specification, international marketing and ethical issues in marketing are marked “(A-level only)”, so AS students do not need them.

What is the difference between primary and secondary market research? Primary research is gathered first-hand for the question in hand, such as surveys, interviews or test sales, so it is specific but slower and costlier. Secondary research uses data that already exists, such as published reports or the firm’s own sales records, so it is cheaper and quicker but may be out of date.

How do you calculate market share and market growth? Market share is the sales of one product, brand or business divided by total sales in the market, multiplied by 100. Market growth is the change in the size of the market divided by its original size, multiplied by 100.

Does cutting the price always increase revenue? No. A price cut raises revenue only when demand is price elastic (PED above 1, ignoring the sign); when demand is inelastic, a price rise is what increases revenue.

What is the difference between click-through rate and conversion rate? Click-through rate is the number of clicks divided by the number of times an advert was viewed. Conversion rate is the number of purchases divided by the number of clicks, so it measures how well visitors are turned into buyers.

Official syllabus

AQA AS and A-level Business (7137, 7138) specification, version 1.1, November 2025: section 3.1.3 Marketing management, the assessment overview and the Annex on quantitative skills and formulae.