Describe one feature of a private limited company.

Construct a position/perception map for all four brands of scooter.

Explain the relationship between Rasen’s product life cycle and FC’s marketing mix.

Discuss the importance of branding for FC and for Rasen.

Features of a private limited company may include:

• the company is incorporated. There is a separate legal entity between the shareholders and the company itself.
• the shareholders have limited liability. Their private assets will not be affected in the event of any financial problems.
• accept any other relevant feature.

Award [1] for identifying an appropriate feature and [1] for an appropriate description (application not required), up to a maximum of [2].

Award [1] for the overall layout of the map with both axes correctly labelled (price: high or low; Quality: high or low).

N.B. It does not matter which one is horizontal / vertical.

Correct positioning:

1. Zoom in the quadrant “Low and Low”. The placement should be very low and very low.
2. Elegante in the quadrant “low and low”. N.B. Elegante is described as “low quality” and its price should put it near the x-axis, which needs to be graphically or textually indicated. It should not be considered correct if this aspect is not clear.
3. Electrico on the axis of price (thus medium quality), at the very high end of price.
4. Rasen in the low price, high quality quadrant. Quality should be very high and price fairly close to the x-axis but lower than Elegante.

Award [2] for a correctly labelled position map with two of the brands properly placed.

Award [3] for a correctly labelled position map with three of the brands properly placed.

Award [4] for a correctly labelled position map with all four brands properly placed.

If a candidate orients the perception map differently (that is, has price as the x-axis, use the map below and follow the same scoring mark-award scheme:

A – Zoom
B – Elegante
C – Electrico
D – Rasen

Also, if a candidate uses “consumer opinion” rather than quality, accept.

Based upon the evidence from the stimulus, the place of Rasen on the product life cycle curve is at the beginning of the decline phase. The perception of Rasen in the market place no longer matches the needs and wants of consumers, despite the fact that it is an excellent product (high quality product at a middle-low price). This
situation puts FC in a difficult position. FC has an excellent location, so changing place will probably not impact on sales. The product is out of FC’s hands in that it sells Rasen scooters but has meaningful voice in the changes to the product (like all dealers, it can suggest and Rasen probably asks its dealers their opinion). Finally, FC probably would not want to change price, as Rasen scooters are very reasonably priced as it is. Given the quality of the product, the price appears to be excellent. The main area where FC can try to change the situation is by new forms
of promotion. However, brand perception is determined largely by above the line promotion, which is probably too expensive for a little business like FC. Perhaps FC can try new forms of below the line promotion than the ones it currently uses, or try to influence Rasen to alter the product and/or the brand perception. Given that people want scooters that are fashionable and “cool,” perhaps FC can with other dealers try to persuade Rasen to modify the design of the product slightly and launch a new promotion campaign aimed at changing the perception of Rasen.

If a candidate says that Rasen is in the decline phase rather than the beginning of the decline phase, accept if the explanation reasonably justifies.

Accept any other relevant explanation.

Mark as 2 + 2.

Award [1] for some understanding of the product life cycle and [2] if the candidate both demonstrated an understanding and makes the assertion that Rasen appears to be at the end of the maturity phase or the beginning of the decline phase.

With respect to the marketing mix, award [1] for each P of the marketing mix that the candidate addresses up to [2].

Branding creates a perception of Rasen in the marketplace. Once brand perception exists, it influences consumers, who come to associate certain characteristics with the product. Branding can create customer perception and loyalty, but brand perception can also lead consumers to misunderstand a product as well. The power of the old branded identity endured. Rasen seems to benefit significantly from the power of its branded identity. Even though consumer tastes have changed, FC was still able to sell 1200 scooter sales per annum, which represents 20 scooters per week. The impression from the stimulus is that, though market share is declining, it is not doing so too rapidly. Rasen and FC probably have time to make changes.

Branding, or in this case rebranding, would be important to both Rasen and FC but arguably more important to FC. Rasen has more control over the situation: more financial resources, more power over product, price, and promotion. Rasen also has control over the markets where the product is sold. Well off young Germans may be more interested in fashionability and coolness than their parents’ and grandparents’ generation, but perhaps Rasen needs to look to new markets – in eastern and southern Europe, South America, Africa, or Asia – where quality and
reasonable price may be more valued (though Rasen may also have to sell scooters at lower prices in these markets). FC, as noted in the response to marketing mix above, has relatively little control over than the marketing mix, unless it were to drop Rasen altogether and start selling a different brand. Thus, to FC, Rasen’s branded identity is exceptionally important.

Accept any other relevant discussion.

Marks should be allocated according to the paper 2 markbands for May 2016 forward.