Overview
This exam paper covers advanced business concepts focusing on marketing, people, and global businesses, using case studies and data analysis questions about Deliveroo and the computer games industry.
Marketing and Demand (Deliveroo)
- Income elasticity of demand measures how changes in income affect demand for a product.
- Deliveroo saw a 99.73% increase in orders despite a slight fall in UK average income (Extract A).
- Higher income elasticity means demand for online food delivery is more sensitive to income changes.
Employment Practices and Motivation
- Deliveroo riders are mainly paid per delivery and may receive commission or introduction bonuses (Extract B).
- Commission incentivizes workers to complete more deliveries, boosting productivity for the business.
- Job flexibility is a benefit, but insecurity and customer-dependent ratings can lower motivation.
- Taylor’s motivation theory focuses on pay as a motivator; Herzberg’s theory emphasizes job satisfaction and hygiene factors.
Emotional Branding and Marketing Strategy
- Emotional branding creates a positive emotional connection between the brand and consumers (Extract C).
- Deliveroo’s emotional branding focuses on moments of joy, trust, and reliability to increase customer loyalty.
- The rebranding campaign raised awareness but lagged in quality and satisfaction compared to competitors.
Market Research
- Secondary market research uses existing data to inform marketing decisions and save time and resources.
- It helps Deliveroo understand consumer trends, competition, and market opportunities but may not be fully tailored or up-to-date.
Motivation Theories (Taylor vs. Herzberg for Riders)
- Taylor’s approach: pay and efficiency-based rewards improve motivation for repetitive tasks.
- Herzberg’s approach: improving job satisfaction through recognition, responsibility, and job enrichment may better retain delivery riders.
- Recommendation should assess which method aligns with the nature of gig work and Deliveroo’s needs.
Game Console Market Analysis
- Price elasticity of demand (PED) measures responsiveness of quantity demanded to price changes.
- PED calculation using % change in price and quantity for PlayStation 2 and Xbox is required.
- Global niche markets allow developers like Sukeban Games to target specific consumer segments worldwide.
Location Decision and Globalisation (Sony & Games)
- Factors like innovation ranking, wages, and competitiveness affect manufacturing location decisions (Extract F).
- Manufacturing the PlayStation 5 in Japan may leverage technology, skilled labor, and low unemployment.
- Transport and communication improvements have driven globalisation by connecting markets and enabling digital distribution.
Standardisation vs. Adaptation (Sony’s Controller Decision)
- Standardisation means using the same controller design globally for efficiencies and brand consistency.
- Adaptation involves changing the controller to suit local cultures and preferences (Extract G).
- Recommendation should weigh cost savings against consumer acceptance in different markets.
Key Terms & Definitions
- Income Elasticity of Demand — the responsiveness of demand to changes in consumer income.
- Commission — a payment to workers based on their output or sales.
- Emotional Branding — marketing strategies that create emotional connections with consumers.
- Secondary Market Research — analysis of existing research data collected by others.
- Price Elasticity of Demand (PED) — measures how much demand changes with a change in price.
- Global Niche Market — a distinct, specialized segment of the global market.
- Standardisation — offering the same product in all markets.
- Adaptation — modifying products to meet local market needs.
Action Items / Next Steps
- Review Extracts A–G thoroughly before answering related exam questions.
- Practice PED calculations using provided data.
- Compare motivation theories and prepare arguments for application in gig economy contexts.
- Consider the pros and cons of standardisation vs. adaptation for global product launches.