A-AS Level (CIE) Business Studies Paper-3: Specimen Questions with Answers 2 - 3 of 20

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Case Study -1

Music and youth go hand in hand. It was this generalization, based on observations, that made Akio Morita, the legendary chairman of Sony Corporation, launch the Walkman. Television channels and Internet thus dedicated channels to music for the young in keeping with the times. Television channels (V) , MTV, and Napster Country Music on the Net and Planet M — the music store for the youth are the symbols of today՚s youth. Channel [V] was launched as a young western music channel. Soon it was overtaken by MTV which reflected the Indian Youth՚s performances in a better way, MTV brought in the language that young people used in common conversation. A combination of English and Hindi, nicknamed- Hinglish is the lingua franca of MTV. It introduced Hindi music and reveled in making fun of itself. Today՚s youth are more casual and willing to take shots at themselves. In 1999, Channel [V] decided to fight back by positioning itself as a youth channel and dumping its previous music channel image. The channel announced 21 new pro grammes, 19 of which were non-music. The new programmes were targeted at the Indian youth, who believed in substance rather than style alone. According to the in house research of Channel [V] , the youth of India was less swayed by music than their Parents feared. The youth think about relationships, career, sex, AIDS, and politics. This market was looking for information which no channel provided the youth had matured in terms of tastes. These findings made Channel [V] reduce its music component to 50 to 60 percent. The balance were programmes dedicated to information on career, fashion, gadgets, and so forth. With this revamp, [V] aims to keep the wandering young surfer hooked. Accordingly, it reoriented its programming to three main segments-teen, main stream, and the young adult. This classification was based on prime time for these three sub-segments of the youth market. The rationale for determining prime time for these segments was: The youth had no control over what the family watched during the family prime time (7: 00 pm to 10: 00 pm)

  • The 13 - 19-year-old watched TV either prior to school timing or immediately after that (i.e.. 7 - 10 am and 4 - 7 pm)
  • The young adult watched TV after 10: 00 pm Backed with this research, [V] decided to market itself on air, on ground, and online. On ground, it decided to organize events, enter tie ups with other brands and music stores like Planet M (the music store with a youth image promoted by the Times of India group) , and with Catcher with the youth merchandise.

Thus, the challenge in marketing for youth goes beyond a simple product development. It involves continuously researching and customizing the marketing mix on an ongoing basis.

Question 2 (2 of 10 Based on Passage)


Describe in Detail


There are numerous challenges in marketing beyond developing the product. What are the requirements a marketer looks for effective segmentation?


Requirements for Effective Segmentation In order to be effective, a segment should be attractive enough. Specifically, here the marketer looks for the following:

  • Accessibility The segment should be accessible, otherwise no penetration can be made. A large part of the Northeast remains inaccessible either because of weather conditions, hostile geographical terrain, or problems of insurgency.
  • Measurable The segment should be measurable. It should be possible to quantify the segment it would help in estimating its size.
  • Viable It should be cost effective and profitable for the marketer.
  • Intensity in Competition Another parameter determining the segment՚s attractiveness is the intensity in inter firm rivalry. The higher the intensity or more the competition, the more unattractive substantive the segment will be for the marketer.

Question 3 (3 of 10 Based on Passage)


Describe in Detail


In segmenting the youth market what are the stages of market segmentation.


Market Segmentation

Survey Stage

This is divided into two parts:

  • focus group discussions and in-depth interviews with a view to getting an insight into consumer motivation, attitudes, and behavior and
  • developing a questionnaire. The objective of this questionnaire is to collect data on:
    • attributes sought in a product and their priority ratings
    • brand awareness and rating of different brands
    • product usage patterns
    • customer attitudes towards the generic product or product category itself demographics, psychographics, and media habits of sample respondents

Analysis Stage

After collecting the data, it is analyzed using factor analysis. This is used to identify factors that differentiate customer groups. Cluster analysis is now used to cluster customers into maximally different groups each cluster is profiled.

Profiling Stage

In this stage, each cluster is profiled in terms of demographics, psychographics, media habits, attitudes, behavior, and consumption habits. The marketer can give each segment a name based on a dominant distinguishing characteristic.

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