A-AS Level (CIE) Business Studies Paper-3: Specimen Questions with Answers 3 - 4 of 20
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Passage
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 3 (3 of 10 Based on Passage)
Explanation
Market segmentation is helpful for a firm to compete in a highly competitive market. To be able to overcome this threat from competition, successful marketers always segment their markets, position themselves in a segment, they perceive they will be able to defend against competitive attacks, and emerge as the segment leader. As Michael Porter puts it, the competitive advantage of a firm lies in being everything, to a select few.
- Identifies the opportunities for new product development
- Helps design marketing programs most effective for reaching homogeneous group of buyers.
- Improves allocation of marketing resources.
Question 4 (4 of 10 Based on Passage)
Explanation
Segments keep involving it is necessary that the marketer is sensitive to this process and considers options of sub segmentation. These bases can be broadly divided into three major groups:
Customer Based Segmentation
- Geographic location of the customers is generally the starting point of all market segmentation strategy. It helps in planning and marketing the offer.
- Demographic factors like age, sex, occupation, income, family size, and marital status are used in combination to segment the market.
- Buyer readiness or preparedness to buy the product. Buyers are at different stage of readiness. There are unaware buyers, people who are aware but not interested and are desirous to buy and lastly who will buy the product.
- Product related segmentation: The marketer may also use product related bases for segmenting his or her market. Different customers may use the product at different situation. A marketer aims to make the product versatile so that it can be used it different situations. Other bases are benefits segmentation, Consumption and Decision Criteria.
- Competition Based Segmentation: Customer loyalty is an important factor to determine the competitive position of the firm. This is also used as a basis of segmenting the market, evolving the marketing strategy for each segment.