Marketing

What Marketing covers

Marketing is examined in Component 01, Business activity, marketing and people. It covers the purpose of marketing and the unique selling point, market orientation and product orientation, why a business researches its market, primary research: questionnaires, focus groups and observation, secondary research sources and their reliability, random, stratified and systematic sampling, qualitative and quantitative research data, market size, market share and market growth, consumer markets and business markets, mass markets and niche markets, segmenting a market into customer groups, new product development, innovation and R&D, the product life cycle and extension strategies, the Boston Matrix and product portfolio analysis, skimming, penetration and cost-plus pricing, competitor, psychological, dynamic and freemium pricing, price and income elasticity of demand, advertising, sponsorship and public relations, sales promotion, direct mail and point of sale, branding and packaging, social media, influencers and content marketing, websites, search engine optimisation and pay-per-click advertising, distribution channels, e-commerce and intermediaries, why businesses forecast their sales, historical sales forecasting and the line of best fit, intuitive forecasting and forecasting for a new product, big data and artificial intelligence in marketing, gamification, virtual reality and augmented reality and complaints, reviews and the net promoter score.

The 29 subtopics

Each one has its own page.

• The purpose of marketing and the unique selling pointRecall questions on what marketing is and how it informs customers and raises sales, the unique selling point and why it is often short-lived, understanding customers, and the benefits and limits of marketing spending.Open →
• Market orientation and product orientationRecall questions on market orientation and product orientation, the advantages and drawbacks of each, which approach suits businesses such as pharmaceutical firms and fast fashion retailers, and how the two can be combined.Open →
• Why a business researches its marketRecall questions on what market research is and what it is for, the decisions it informs, how it reduces risk, and why a new region should be researched first.Open →
• Primary research: questionnaires, focus groups and observationRecall questions on primary market research, open, closed and leading questions in questionnaires, focus groups and one-to-one interviews, trialling and observation, and choosing the right method for a research problem.Open →
• Secondary research sources and their reliabilityRecall questions on secondary market research, sources such as the census, government statistics, internal data, competitor websites, online forums, newspapers, trade magazines and published reports, and judging a source's reliability.Open →
• Random, stratified and systematic samplingRecall questions on why businesses sample, random, stratified and systematic sampling with their advantages and drawbacks, calculating stratified and systematic samples, sample size and unrepresentative results.Open →
• Qualitative and quantitative research dataRecall questions on qualitative and quantitative research data, the advantages and limitations of each, interpreting survey percentages and conflicting evidence, and which type of data suits a particular marketing decision.Open →
• Market size, market share and market growthRecall questions on measuring market size, calculating market share and market growth, how market share changes as a market grows, and why share, growth and size matter to a business's decisions.Open →
• Consumer markets and business marketsRecall questions on business-to-consumer and business-to-business markets, how order sizes, buying decisions, promotion, relationships and price negotiation differ between them, and derived demand.Open →
• Mass markets and niche marketsRecall questions on the characteristics of mass and niche markets, the advantages and drawbacks of targeting each, how branding and market share differ, and moving from a niche into a mass market.Open →
• Segmenting a market into customer groupsRecall questions on market segmentation, demographic, geographic and psychographic segmentation with examples, the benefits and costs of segmenting, price discrimination and what makes a segment worth targeting.Open →
• New product development, innovation and R&DRecall questions on invention and innovation, research and development and its benefits and risks, sources of new product ideas, the role of design, prototype testing and why product matters in the marketing mix.Open →
• The product life cycle and extension strategiesRecall questions on the stages of the product life cycle, how sales, cash flow, pricing and promotion change across it, extension strategies and their risks, and the limits of the life cycle as a guide.Open →
• The Boston Matrix and product portfolio analysisRecall questions on product portfolio analysis, stars, cash cows, question marks and dogs in the Boston Matrix, the strategy and cash position of each, its use in setting budgets and its limitations.Open →
• Skimming, penetration and cost-plus pricingRecall questions on price skimming, penetration pricing and cost-plus pricing, when each suits, calculating mark-up and profit margin, and how the choice of method affects cash flow.Open →
• Competitor, psychological, dynamic and freemium pricingRecall questions on competitor-based, psychological, dynamic and freemium pricing, when each is used, their advantages and risks, and how a free tier can still earn revenue for a business.Open →
• Price and income elasticity of demandRecall questions on price and income elasticity of demand, their formulas and calculations, elastic and inelastic demand, effects on sales revenue, what makes demand price elastic, and the limitations of elasticity.Open →
• Advertising, sponsorship and public relationsRecall questions on promotion in the marketing mix, television, press and radio advertising, public relations and its risks, sponsorship and its benefits, and judging whether an advertising campaign was worthwhile.Open →
• Sales promotion, direct mail and point of saleRecall questions on sales promotion and its advantages and drawbacks, buy-one-get-one-free offers, loyalty schemes, direct mail, point-of-sale promotion and paying for shelf positions, and the effect of constant discounting.Open →
• Branding and packagingRecall questions on brands and brand loyalty, the benefits of a strong brand to a business and its customers, the risks of a single brand, and the functions of packaging in promotion, pricing and environmental concern.Open →
• Social media, influencers and content marketingRecall questions on promoting a business on social media, influencer marketing and its risks, content marketing, email marketing, and the benefits and limitations of chatbots in marketing and customer service.Open →
• Websites, search engine optimisation and pay-per-click advertisingRecall questions on the role of a business website, search engine optimisation and pay-per-click advertising, their advantages and drawbacks, cost per click and conversion rate, and advertising against a brand's own name.Open →
• Distribution channels, e-commerce and intermediariesRecall questions on place in the marketing mix, physical channels of distribution, e-commerce, multi-channel distribution, and the roles of intermediaries such as wholesalers, retailers and agents.Open →
• Why businesses forecast their salesRecall questions on sales forecasting, the decisions and cash flow planning it informs, the consequences of optimistic and pessimistic forecasts, factors that make forecasts wrong, and why they are revised during the year.Open →
• Historical sales forecasting and the line of best fitRecall questions on historical sales forecasting, scatter graphs and the line of best fit, extrapolating a trend, seasonal variation, the advantages and limitations of forecasting from past sales, and calculating index numbers.Open →
• Intuitive forecasting and forecasting for a new productRecall questions on intuitive sales forecasting and its advantages and drawbacks, reducing bias, forecasting for a new product, regional test launches, forecasts given as a range, and combining historical and intuitive methods.Open →
• Big data and artificial intelligence in marketingRecall questions on big data and its sources, how it improves targeting, pricing and prediction, its costs and the risk of mishandling customer data, and the uses and limitations of artificial intelligence in marketing.Open →
• Gamification, virtual reality and augmented realityRecall questions on gamification and how it improves customer retention and data, virtual reality and augmented reality in marketing, their costs and risks, and why a small business might choose augmented reality.Open →
• Complaints, reviews and the net promoter scoreRecall questions on measuring marketing performance, calculating and interpreting complaint rates, collecting customer feedback, online reviews and replying to them, and calculating and tracking the net promoter score.Open →

What you need to know

Answer each one before you reveal it.

Take Marketing further

The same content, four other ways.

Commonly confused

Pairs that lose marks when they are blurred together.

• Market size vs Market share

  Market size: the total sales of every business selling one kind of product over a period, measured by value or by volume. Market share: the proportion of all the sales in an industry that one business accounts for, expressed as a percentage.

• Mark-up vs Profit margin

  Mark-up: the amount added to the unit cost to arrive at the selling price, expressed as a percentage of that cost. Profit margin: the part of the selling price that is left once costs are covered, expressed as a percentage of that selling price.

• Price skimming vs Penetration pricing

  Price skimming: setting a high launch figure to earn large margins from the customers most willing to pay, then lowering it over time. Penetration pricing: setting a deliberately low launch figure to win customers quickly, then raising it once the product is established.

Questions from this topic

Each one with the model answer underneath.

1. 1

   What is marketing?

   Model answer

   Marketing is the process of identifying, anticipating and satisfying customer needs profitably, and communicating with those customers so that they buy from the business.

2. 2

   Define the term unique selling point.

   Model answer

   A unique selling point, or USP, is a feature of a product that competitors do not offer and that gives customers a distinct reason to buy it.

3. 3

   Give two ways a business can create a unique selling point.

   Model answer

   It can offer a feature, design or level of performance rivals lack, or build a reputation for service, ethics or brand image that others cannot match.

4. 4

   Why does a business need to identify its market before it designs a product?

   Model answer

   Identifying the market shows who the likely buyers are and what they value, so development money is spent on something people will actually buy.

5. 5

   How does marketing increase a business's sales revenue?

   Model answer

   Marketing raises awareness and persuades more customers to buy, and a stronger reputation lets the business sell more units or charge a higher price for each one.

6. 6

   State two things a business needs to understand about its customers.

   Model answer

   It needs to know what they need or want from the product, and how much they are willing and able to pay for it.

What is inside Levo

Six ways to work the same material.

Marketing revision questions

What does Marketing cover in OCR A-Level Business (H436)?

29 subtopics: the purpose of marketing and the unique selling point, market orientation and product orientation, why a business researches its market, primary research: questionnaires, focus groups and observation, secondary research sources and their reliability, random, stratified and systematic sampling, qualitative and quantitative research data, market size, market share and market growth, consumer markets and business markets, mass markets and niche markets, segmenting a market into customer groups, new product development, innovation and r&d, the product life cycle and extension strategies, the boston matrix and product portfolio analysis, skimming, penetration and cost-plus pricing, competitor, psychological, dynamic and freemium pricing, price and income elasticity of demand, advertising, sponsorship and public relations, sales promotion, direct mail and point of sale, branding and packaging, social media, influencers and content marketing, websites, search engine optimisation and pay-per-click advertising, distribution channels, e-commerce and intermediaries, why businesses forecast their sales, historical sales forecasting and the line of best fit, intuitive forecasting and forecasting for a new product, big data and artificial intelligence in marketing, gamification, virtual reality and augmented reality and complaints, reviews and the net promoter score. Each one has its own page with questions and model answers.

How is Marketing organised?

By the OCR H436 specification, subtopic by subtopic, so it matches the order you are taught it in.