Question
Refer to the Multi Marketing (MM) case study (SL/HL paper 1 May 2021).
MM ’s growth has been helped by its unique selling point/proposition (USP) of rapid response to customer needs and by its high-quality customer service. New employees undergo detailed training to become skilled in:
finding out what a customer’s objectives are
helping the customer work towards a marketing plan
working closely with the customer as MM develops a marketing strategy for them
maintaining links with the customer to provide an effective after-sales service.
The business takes a multicultural approach to its customers, employees and other stakeholders. MM ’s approach to diversity is one of the features that stakeholders say they like about the business. The company also ensures that it accommodates many cultural differences.
According to a business service that provides measures of social behaviour for every country, in British businesses:
employees are accustomed to working in a competitive, individualistic society
employees often take individual responsibility for their own actions and decisions
competition is high between both employees and customers
customers are accustomed to changing contracts when service is bad or competitors offer a better deal.
In comparison, Indian businesses:
are based on power structures with a greater focus on teamwork than individuality
are more likely to be hierarchical
have greater loyalty from their customers
have greater formality with their customers
place importance on building business relationships
are subject to greater variety in culture between businesses and regions.
Maintaining high levels of customer service is expensive. MM has increasing costs (line 107). Rachel is concerned about MM ’s finances and is examining the latest accounts for the company for 2019 and 2020 (Table 1) to identify problems.
Table 1: Selected financial information for MM for 2019 and 2020
a. Define the term unique selling point/proposition (USP).
b.i. Calculate the debtor days for MM at the end 2020 (show all your working).[2]
b.ii.Explain one method $M M$ could use to improve its liquidity.[2]
c. Explain how the people element of the extended marketing mix has influenced $M M$ ‘s marketing strategy.$[4]$
d. Discuss how cultural differences within $M M$ may influence employer-employee relationships.$[10]$
▶️Answer/Explanation
Ans:
a. USP (unique selling point/proposition), the feature or features that make a product or service different (or is differentiated) from other similar products of competitors.
It is the product/service that has the USP, not the business.
Candidates are not required to use the context of MM but should not be penalized if they do.
Award [1] for some understanding.
Award [2] for clear understanding. Candidates do not have to word exactly as above.
$
\begin{aligned}
\text { b.i.Debtor days ratio } & =\frac{\text { debtors }}{\text { sales revenue }} \times 365=\frac{16}{146} \times 365 \\
& =40 \text { days (or just } 40 \text { ) }
\end{aligned}
$
Award [2] for correct answer (allow rounding).
Award [1] for an attempt or if correct answer has \$m or million.
As 2020 is a leap year you can allow $16 / 146 \times 366=40.11$ days. If candidates correctly use some or all data from 2019 , they can be awarded one mark (e.g. $18 / 175 \times 365=37.54$ days) .
Do not reward formula only.
b. Reduce some of the expenditure (planned pay increases, payments to directors, marketing)
Replace overdraft with longer term loan
Decrease credit terms to customers
Change credit terms with suppliers
Improve stock control e.g. reduce stock levels
Increase sales
Sell unused assets, but unlikely
Methods that change the balance between current assets and current liabilities in the right direction should be rewarded. Methods suggested must improve liquidity for MM.
Some methods, such as debt factoring and using cash to reduce overdraft, may improve cash flow but do not improve liquidity so should not be rewarded.
Award [1] for identifying a method and [1] for explaining in context.
Accept any other reasonable reason.
c.Influences could include:
training
aspects of personal selling
high levels of customer service
helping customers
working closely with customers
after-sales service.
Accept any other relevant reason.
Candidates need to show the impact on the marketing strategy of MM. e.g. enhanced training may lead to better customer service which would aid marketing leading to the possibility of charging higher prices. e.g. improved after-sales service can lead to a stronger reputation leading to higher sales/increased market share etc.
Candidates do not need to specifically define the people element of the extended marketing mix but should show understanding.
Award [1] for some understanding of the people element of the extended marketing mix. [1] for a relevant influence and [2] for application/context. Maximum award overall: [4].
d.
PLEASE NOTE: This content is not included in the syllabus for 2024 exams onward. Related parts of this multi-part question may be used.
Refer to Paper 1 markbands for May 2016 forward, available under the “Your tests” tab > supplemental materials.
The key factor is that there are offices in the UK and India and customers around the world.
In the UK employers might:
set up competitive environments
give employees responsibility
expect competition
be more flexible with contracts including employment contracts
this might mean short term contracts, relying on money as a motivator as well as rewarding initiative and taking on responsibility
this would allow for flexible structures and informality
could impact on leadership style which is less likely to be autocratic than other styles
could impact on employer/employee negotiations – more difficult.
In India employers might:
have to manage people from a wide range of regional cultures
emphasize teamwork
set up hierarchical structures
expect formality
this might mean formal structures and clear divisions of responsibility. Money likely to be less of a motivator. Individual initiative will be less strong
could impact on leadership styles, more likely to be autocratic.
Candidates are expected to largely make use of the evidence in Section B but can take evidence from the wider case evidence.
Candidates may focus some of their answer on possible cultural differences between the owners, however marks may be limited by the lack of context used.
Candidate may make reference to the work of Charles Handy on different types of culture (power; task etc.). Whilst not required it is a valid line of discussion.
Candidates need to show the impact on employer/employee relations at MM.
Accept any other relevant discussion.
Marks should be allocated according to the paper 1 markbands for May 2016 forward section B.
For an answer with no effective use of context (theoretical answer) award maximum [3].
For an answer that does not focus on the impact on employer/employee relations award a maximum [4].
Award [4] if comparisons are presented as an undeveloped list.
For an answer that is lacking balance e.g. only looks at one country; only looks at advantages etc. award a maximum [6].
Both sides of discussion considered but descriptively max [6].
Both countries considered, good use of evidence, particularly from section B, but with no/limited effective comparison/evaluation award a maximum of [8].
For [10] marks a fully supported comparison/evaluation with good use of evidence, particularly from section B.