State two types of above-the-line promotion.

Using Table 1, construct a product position map/perception map for all four hotels prior to the opening of GR.

Explain two ways in which GR is able to offer rooms at a lower price than IF.

Discuss possible changes to IF’s marketing mix to reduce the loss of customers to GR.

Appropriate types of above-the-line promotion include:

• newspapers
• magazines
• radio advertisements
• television advertisements.

Accept any other relevant answer, including “advertising on the Internet” or “the Internet.”

Award [1] for each appropriate type of above the line promotion up to [2].

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

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

The correct positioning is as shown above. Adjust appropriately if a candidate makes the price the vertical axis and quality the horizontal axis.

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

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

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

The position map has been scaled from $155–$245 for the horizontal axis and 3 stars to 5 stars for the vertical axis. If candidates scale the perception map differently (1 to 5 stars, for example), mark accordingly and per the explanation for [1], [2], [3] and [4] above.

The candidates were asked to position the four hotels prior to the opening of the GR. The four hotels represent the full range of the market (at the time, before GR opened) and, therefore, the positioning should be as shown above. However, candidates may consider a 3-star hotel to be “middle quality” rather than low quality because three is the mid-point between 1 star and 5 star. Thus, some candidates may position the four hotels more toward quadrant one than they should.

Nevertheless, examiners should have some forbearance: as long as the relative position of the hotels is accurate, award marks appropriately. For example, the position map below would earn [4].

N.B. If the relative position is correct but the candidate has compressed the positions of the four hotels into one quadrant (which would typically be quadrant 1), award a maximum of [3].

Three ways in which GR is able to have lower costs than traditional hotels include:

• more modest rooms, which include smaller room size and less elegant furniture
• lower personnel costs, as much of the traditional staff is replaced by kiosks and automated billing
• Fewer amenities, like a swimming pool and a high-quality restaurant.

Accept any other relevant example.

If a candidate refers to the airport versus city-centre location and assumes that the airport location is less expensive, award [1].

Mark as [2 + 2].

Award [1] for identification of a way to lower costs and an additional [1] for an explanation thereof.

Refer to Paper 2 markbands for 2016 forward, available under the "Your tests" tab > supplemental materials.

Main differences in the marketing mix of the two hotels are:

The question of place is tricky. At one level of argument, place is different than location. However, in the case of a hotel, place and location are virtually indistinguishable, as hotels are ontologically a venue where customers rent rooms for the night. Thus, in the case of hotels, place devolves to location.

Possible changes to the IF’s marketing mix include:

• Product: Cutting back on amenities and passing some of those savings on to customers via lower room rental rates. There are negatives to this tack. First, a reduction of amenities could be viewed as a deterioration of the high quality, which is currently IF’s USP.
• Price: Reducing the rates that it charges for rooms. If prices are lowered and changes are not made in quality of service or amenities, IF could experience lower profits. IF would certainly experience lower profits per room. Unclear is whether the lower prices would lead to higher occupancy.
• Promotion: Increasing its promotion. IF has three noteworthy features that GR does not have: elegance, five-star quality and a central city centre location. With greater promotion, IF may be able to attract customers back based upon the convenience of being in the city centre and the elegance of staying in an old palace.
• Place/Location: It is not very realistic to think that IF would or could change its location. Any discussion of location will probably occur under promotion, whereby candidates will discuss ways in which IF can, through promotion, make their location in the city centre a selling point.

Remember that at standard level, the candidates are not expected to know the extended marketing mix but rather just the four Ps: price, place, promotion, product. Candidates should not be penalized if they address the extended
marketing mix.

Marks should be allocated according to the paper 2 markbands for May 2016 forward with further guidance below.

N.B. The marks listed in the far right column are maximum awards. Candidates could technically have a response that addresses two Ps in a balanced way yet still lacks the depth, precision, or application for [4] (for example).