Business 9609/43 May/June 2023: question paper and mark scheme

Mark scheme

1 Evaluate RHR’s marketing strategy between 1995 and 2021. 20 Level AO1 Knowledge AO2 Application AO3 Analysis AO4 Evaluation and understanding 2 marks 8 marks 7 marks 3 marks Description Description Description Description 3 7–8 marks 6–7 marks Developed analysis of Effective evaluation the overall strategy that A developed judgement/conclusion identifies connections is made in the business context between causes, impacts that draws together developed and/or consequences. evaluative comments which balance some key arguments in the business context. 2 2–3 marks 2 marks 4–6 marks 3–5 marks Developed Developed Developed analysis of Developed evaluation knowledge of application of individual strategic A developed relevant key term(s) relevant point(s) element(s) that identifies judgement/conclusion is and/or factor(s) is to the business connections between made. used to answer the context. causes, impacts and/or Developed evaluative question. consequences. comments which balance some key arguments. 1 1 mark 1 mark 1–3 marks 1–2 marks Limited knowledge Limited Limited analysis that Limited evaluation of relevant key application of identifies connections A judgement/conclusion is term(s) and/or relevant point(s) between causes, impacts made with limited supporting factor(s) is used to to the business and/or consequences. comment/evidence. answer the question. context. An attempt is made to balance the arguments. 0 0 marks 0 marks 0 marks 0 marks No creditable No creditable No creditable response. No creditable response. response. response. 1 Indicative content Responses may include: AO1 Knowledge and understanding Knowledge can be awarded for any relevant marketing knowledge, (do not reward repetition of the contents of Appendices, but further knowledge of the elements is rewardable) Marketing Strategy Marketing – elements within Marketing incl. 4 Ps and market research Pan-global strategy – international marketing AO2 Application Application can be awarded for use of RHR’s context, including any elements of RHR’s marketing strategy between 1995 and 2021: Target market – Luxury holiday market for adults Clear objectives of a pan-global strategy and market share increase Collaboration with global travel agent to help marketing Develop own website to help book holidays directly App development to help customers access holidays and extras Market research strategy for Asian markets Holding a central budget for the companies own marketing for brand development Use of direct selling and promotion after the buy back from the travel agent. Post global recession will need to see a change in strategy. AO3 Analysis ( and and ): Analysis is likely to be based on the different marketing activities and how successful/unsuccessful they are. RHR operates in 20 countries so has customers from around the globe. It would be important to have a coherent marketing message to build the brand of RHR. Pan-global strategy will help with this. Marketing can be shared across locations (20 countries) which should be able to keep marketing costs down in a pan- global strategy. Pan-global strategy allows the brand identity to be maintained leading to repeat custom and trust in the RHR locations. 1 Collaboration with the travel agent opens up another distribution and marketing channel for RHR, saving on some costs, possible marketing economies of scale, helping to keep profit margins healthy. The expansion in 4 key areas – Europe, Asia, USA and South America – allows marketing to be tailored to those markets if needed, to target the RHR customer and increase sales. Central budget can be used to help establish this. Development of the app has standardised the experience of the customer while still being able to target them with marketing for the treatments, restaurants etc. while on holiday though the app. App will have cost less than a large scale global campaign. Global use of the app and the loyalty scheme allows pan-global marketing to be used for this feature, saving money on producing different, regional strategies. Collaboration with the travel agent may have helped them market the business through those agents more effectively on a local scale, but this came at a cost of 49% of the business. AO4 Evaluation ( and and ): Evaluation will depend upon which element/s of marketing that have been discussed previously. Collaboration has meant that 49% of the company was owned by the travel agent until 2021. However, the travel agent is a global business and opens up distribution of the holidays to a wider market, leading to increased sales and profits. RHR maintain a marketing budget that will cost them a considerable amount of money alongside its marketing by the travel agent. [Is that still going ahead?] Is this necessary? Could money be spent elsewhere? How important is it to have their own marketing plan? If the aim is to be pan-global what is this budget for? After the global recession (2008–12), how much business did they lose? No investment is made in new locations so are they having to sell a lot of their existing holidays as people come out of the recession? RHR could have adopted to use a pan-global strategy to help maintain a brand image and cut the costs of having to develop local strategies in the increasing markets it operates in. While this saves money, should they be targeting individual countries/markets to appeal to the wants of those customers? RHR sells holidays across the globe thanks to the internet booking so needs a strategy that projects a global image, making it easier to use a pan-global approach. RHR may need to develop local strategies to target the segments who want all-inclusive holidays which could push up their marketing costs. The development of the app has made it easier to target customers regardless of which country they are based in, helping them to grow customer engagement and ultimately sales across its resorts. However how much did this cost and is it generating the desired return? Is it something customers want? What is the uptake of this app? 1 Buyout of the travel agent may make it harder to market on a local scale and may increase the marketing costs of RHR, they will have to increase marketing spend now they do not have exclusivity with the travel agent. Are the distribution channels they have developed through their own website and app enough to offset this? Accept all valid responses.

Mark scheme

2 Advise Carmen on whether the use of a core competence framework is sufficient to develop a successful new 20 business strategy for RHR. Level AO1 Knowledge AO2 Application AO3 Analysis AO4 Evaluation and understanding 2 marks 8 marks 7 marks 3 marks Description Description Description Description 3 7–8 marks 6–7 marks Developed analysis of Effective evaluation the overall strategy that A developed judgement/conclusion identifies connections is made in the business context between causes, impacts that draws together developed and/or consequences. evaluative comments which balance some key arguments in the business context. 2 2–3 marks 2 marks 4–6 marks 3–5 marks Developed Developed Developed analysis of Developed evaluation knowledge of application of individual strategic A developed relevant key term(s) relevant point(s) element(s) that identifies judgement/conclusion is and/or factor(s) is to the business connections between made. used to answer the context. causes, impacts and/or Developed evaluative question. consequences. comments which balance some key arguments. 1 1 mark 1 mark 1–3 marks 1–2 marks Limited knowledge Limited Limited analysis that Limited evaluation of relevant key application of identifies connections A judgement/conclusion is term(s) and/or relevant point(s) between causes, impacts made with limited supporting factor(s) is used to to the business and/or consequences. comment/evidence. answer the question. context. An attempt is made to balance the arguments. 0 0 marks 0 marks 0 marks 0 marks No creditable No creditable No creditable response. No creditable response. response. response. 2 Indicative content Responses may include: AO1 Knowledge and understanding Knowledge can be awarded for any relevant business strategy knowledge. The purpose of business strategy. The meaning and purpose of strategic management. What a core competence framework is Alternative approaches to develop business strategy, including: – blue ocean strategy – scenario planning – SWOT analysis – PEST analysis – Porter’s five forces – Ansoff matrix – force field analysis – Decision trees AO2 Application Lack of growth in the current market Growth in city/business hotels The three competences identified Human resources – strong leadership and communication Marketing – customer loyalty Operations – delivering exceptional customer service Any element of the timeline Any element of the appendices AO3 Analysis Analysis for core competence framework ideally and then up to two alternatives but award for analysis of ANY models up to three ( and for a one-sided argument and for a two-sided argument or contrast): RHR operate all-inclusive holiday hotels – how much of this can be transferred to the running of a city hotel? 2 Core competencies around running the hotel and delivering a good customer experience may be transferable but how will their marketing need to change for the new strategy? There seems to be just 3 areas for the framework – is this sufficient to ensure the success of the city hotels? What other information is needed? Is the development of the new strategy at the expense of the Asian expansion? – which would be more aligned with the core competencies than city hotels. How does Juan feel about the change of direction after his work on the Asian market and potential for growth (appendix 3)? Candidates may offer up alternative approaches: May want to use the Blue Ocean Strategy to help with move to city hotels as they redefine what the company delivers across a number of new locations. Scenario planning could help map what may happen in city locations and how they differ/are similar to what they know from running resort hotels. SWOT analysis may help identify strengths that can be transferred to city hotels whilst highlighting the problems they may face in a different model to how they currently operate. PEST analysis could help if they are operating in countries where there is no RHR for example in the UK or Northern Europe and they need an understanding of how those countries work. Five forces would help understand the rivalry they face in a very crowded city hotel market. Ansoff’s matrix may be useful in weighing up whether they should focus on market or product development moving forward – or if there are other possibilities for growth. Force field analysis could help Carmen to understand the constraining and driving forces in developing the new strategy. This may help her to identify actions that need to be taken to reduce constraining forces. Decision trees could be used to help make a quantitative led decision between Asia or urban hotels expansion. AO4 Evaluation ( and and ): Evaluation will largely depend on the points raised in the analysis of the approaches needed to develop the new strategy other than the core competency framework. Candidates should state that the Core Competency Framework is/isn’t sufficient for L1 Eval. RHR clearly have a set of core competencies that will help them set up hotels but is this enough for the new city hotels format? Should Carmen be using a combination of the strategic approaches? How quickly does Carmen expect this to happen? Is there time to test the waters with the city hotel strategy? 2 Has Carmen over-simplified what they do? Without using other models she may take too much of a risk while the Asian growth would be easier to implement given their current business model. Many of the approaches rely heavily on the accuracy of forecast data – Does Carmen have the data? Core Competence Framework is enough as it gives managers the direction they need as they implement the strategies related to it throughout the new hotels. This is an established business that should be able to deliver a hotel experience wherever they set up. Advice to Carmen should make clear whether the core competence framework is sufficient or whether it should be supported by other models, and if so, which? Accept all valid responses.