A-Level Business: Marketing and the Market

Marketing looks like the soft half of A-Level Business and is not: it contains a calculation that is failed more often than any other on the paper, and a set of terms that lose marks the moment they are used loosely.

The calculation is elasticity, and it is failed for one reason. Elasticity is the percentage change in quantity over the percentage change in price, and a great many candidates write it the other way up. A bakery puts its sourdough from ten pounds to twelve and loses sixty loaves off five hundred: minus twelve over twenty is minus zero point six, demand is inelastic, and the till takes two hundred and eighty pounds more. Written upside down the same figures give minus one point six seven, which is offered here as an option — once with the wrong conclusion attached and once with the right one, so that recognising the word "inelastic" is not enough to pass the question.

Income elasticity is done with a genuine inferior good rather than a necessity, because that is the distinction students actually lose. A retailer's silk scarves fall sharply in a downturn and its multipack socks rise; the socks are not badly made, they are a good people move towards when money is short, and the two lines between them steady the firm across a cycle.

Three questions are about not overreading a finding. Twenty enthusiastic long-standing customers say they would pay eight pounds a month, and the firm announces the public will too — where the answer has to hold two things at once: the finding is real about the people asked, and it is worthless about everyone else, because enthusiasm was the selection criterion. A start-up with three weeks and very little money has to choose between primary and secondary research and say what it is giving up. And a digital campaign that can attribute every sale to a click still cannot show the advertisement caused the sale.

The rest are the distinctions the mark scheme rewards for being used precisely. Choosing which of three identified groups to pursue is targeting, not segmentation. A board game whose sales have plateaued and dipped is in maturity, and a travel edition is an extension strategy, not the liquidation of a failing product. A luxury watchmaker selling through discount supermarkets has broken the place element of its own mix, and the cost is the position it spent years buying. And two identical lattes at prices two pounds apart is branding expressed as an economic fact — the brand has made demand less elastic, which is what pricing power is.

Every firm and product described is invented. No real company is named, and no market figure is attributed to any real business or organisation. Nothing is reproduced from any exam board specification, past paper or mark scheme.

Zestly is an independent study tool. It is not affiliated with any exam board and it is not an exam centre.

• Calculate price elasticity of demand the right way up, and read the revenue consequence from it
• Identify an inferior good by the sign of its income elasticity, not by its quality
• Use segmentation, targeting and positioning as three separate decisions
• Name the specific flaw in a self-selected sample, and say what such a sample still shows
• Choose between primary and secondary research under a stated constraint and state the cost
• Tell maturity from decline, and say what an extension strategy is doing
• Explain branding as a change in price elasticity rather than as customer affection

Ten invented cases: a sourdough price rise with the inverted elasticity fraction offered twice over, silk scarves against multipack socks across a downturn, three groups of athletes and the decision to pursue one, twenty enthusiasts mistaken for the public, three weeks and five hundred pounds to size a market, a board game in maturity, a luxury watch in a discount aisle, a gadget sold direct or through a retailer, two identical lattes two pounds apart, and a campaign that can attribute every sale to a click. Twelve flashcards carry the vocabulary — the two elasticities, segmentation, targeting, positioning, sampling bias, extension strategy, the mix, brand loyalty.