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Marketing Solutions Paper 1

Marketing, Competition, and the Customer Solution ✍🏽

LIT Trendz is a public limited company. It makes a range of clothing products including T-shirts and jeans for the mass market.

Last year LIT Trendz’s revenue fell. The Marketing Director has been looking at some results from its primary market research.  10% more customers bought clothing products online this year. LIT Trendz currently has a large customer base. She believes maintaining customer loyalty is more important than attracting new customers.

(e) Do you think maintaining customer loyalty should be more important to a business than attracting new customers? Justify your answer. [6]

Yes, as customer loyalty means marketing through word-of-mouth, customers might recommend the product to others.

No because customer tastes changes, so it may be easier to find new customers than change existing products.

 Attracting new customers is more expensive than keeping existing customers, so maintaining loyalty may be more important, but business still have to always look for new customers to increase market share.

Market Research Solution ✍🏽

TLV is a social enterprise. It sells its high-quality fair-trade tea leaves to retailers in country P. Being ethical is important to TLV. It provides local people with information about micro-finance and skills so they can then start growing tea leaves for TLV to sell for them. TLV wants to export tea leaves as its market research shows increasing demand for tea in other countries.

(c) Identify and explain two factors that might affect the accuracy of TLV’s market research.

Factor 1:              Information may be out of date

Explanation:       so does not give accurate information on current consumer preferences for tea.

Factor 2:              Wrong people may have been asked

Explanation:       If the questions aren’t asked of tea consumers in the countries where TLV plans to export.

Marketing Mix Solution ✍🏽

LIT Trendz is a public limited company. It makes a range of clothing products including T-shirts and jeans for the mass market.

Last year LIT Trendz’s revenue fell. The Marketing Director has been looking at some results from its primary market research.  10% more customers bought clothing products online this year. LIT Trendz currently has a large customer base. She believes maintaining customer loyalty is more important than attracting new customers.

Explain two advantages to LIT Trendz of using shops as a channel of distribution.

Advantage:        Convenience for customers

Explanation:      In a LIT Trendz shop, customers can try on jeans to make sure they are a good fit, which is an additional service for customers.

Advantage 2:     Attract passing customers

Explanation:      so if they see a T-shirt in the shop window, it will bring more customers into the shop and sales will increase.

Marketing Strategy Solution ✍🏽

BMV makes cars in country Z. The Managing Director has been looking at BMZ’s financial accounts. He is worried about PBG’s liquidity position. The Managing Director said: ‘New legal controls mean that all cars sold in country Z will have to be electric by 2026. BMV has to find new markets for its existing cars while we develop new models.’ One option for BMV is to form a joint venture with a car manufacturer in another country.

(d) Identify and explain one advantage and one disadvantage to BMV of forming a joint venture.

Advantage:                      Access to local knowledge and expertise

Explanation:                    So they can get advice on what cars will be popular in another country and effective marketing strategies quickly increase market share.

Disadvantage:                 Any mistakes may damage reputation

Explanation:                    Mistakes by the partner car manufacturer can damage the brand image of BMV and reduce sales of cars in its country A and other new markets.

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