This document is a model answer for the BTEC business level 3 unit 2. the exam question is the 2022 decreal gear exam question and is a distinction graded work. all key information or sections are in bold displaying what kind of information will get you the marks. This follows the pearson exam boar...
Decreal gear is a company that operates in the sportswear industry as they produce and sell their
own products through their website. The sportswear industry is a large developing industry that is
forecasted to grow by 21% to £6.7 billion in the UK. This means that there is large room for
expansion within the market.
Aims and objectives
Decreal gear’s main aim is to increase its revenue through brand awareness and customer loyalty.
Objective one: this objective is to increase brand awareness. This will be measured by the amount of
people who follow their social media pages and purchase their products. The objective is to reach
approximately 150,000-250,000 followers by the end of the marketing campaign in week number 30.
By having a larger number of followers on social media pages it allows for people and customers to
interact and know what Decreal is doing and are planning to do, it will also allow Decreal to promote
newly released products to a much larger audience more efficiently promoting more customers to
buy their products increasing their revenue
Objective two: This will be to diversify their product range and who they target. This means adding
larger and smaller sizes, more product options for women and more variety in existing products (i.e.
more colour options, sizes etc.) the new sizes and product options should be slowly implemented
throughout the 30 weeks and they should be introduced along with new products that get released
during this time. By diversifying their product range, they will be able to reach more customers, and
the customers will feel more included as there will now be something designed for them. By making
customers feel more included it will improve the relationship and increase brand loyalty which
means customers will shop more often at Decreal.
Market research
Primary Research
After conducting primary research on people aged 17-34 within London. We have found that many
36% work out 3-4 times a week and 61% prefer weight training over other types of training. We also
see that branded sportswear is preferred and the most purchased as 45% said they purchase from
multiple brands – this can lower customer retention or loyalty, however 34% said they buy form one
brand showing that customer loyalty is still very common. On multiple choice questions we asked
what betters a business’ relationship with customers and what entices you to buy a specific brand.
For the first question 99% answered discounts showing that discounts are an effective way to
improve customer relationships. The second question the most chosen answers were quality with
81% and fashionable with 71%. This primary research shows what people prefer in a product and
what they want from Decreal as a brand.
Secondary research
This secondary research gives profiles and information on the demographics of people who use
public transport. From this research we see that people ages 16-34 make up 29% of the groups who
use public transport and 20% use public transport weekly. This information tells us that adverts on
public transport would be effective such as bus stop ads. This information is taken from advert who
specialise in public transport adverts and are an agency that put adverts on public transport.
Another piece of secondary research from Kayla Marci showed that the average price of most
sportswear products had increased by £2-£10
, Trends
Overtime sportswear has become a more fashionable clothing item and people have begun wearing
it as a fashion statement. People have begun purchasing more sportswear that are fashionable these
usually are products that are collaborated with designers like Japanese designer NIGO. People have
also preferred more pastel colours and simple blacks and whites. Recently these trends show that
people are more focused on the design and how fashionable the products are.
Marketing concepts
Boston Matrix: By the using Boston matrix we are able to analyse where in the market is Decreal
and how it compares to competitors giving us an idea of Decreal’s competitiveness. JD sports would
be the cash cow, as they are the current leaders in the market and are making the most amount of
money, last year they produced 170.8 million pounds in the UK. Sports direct would be the current
dog as they are becoming old and obsolete as newer companies such as Foot asylum and JD take
over. The current stars would be Footasylum as they are currently really successful and they are very
popular amongst customers within the industry due to its good promotion. Decreal as they are fairly
new compared to the competitors, they would be the question mark as they sell their own products
on their website. This means that they are likely to have customers coming and going as they try
their products and compare them to other products within the market.
Market Mapping: By using market mapping we are able to analyse and compare Decreal gear’s
products to competitors’ products and to do this effectively we will be measuring by quality and
price. Sports direct would be placed in the low quality and low-price area as their products are
fairly cheap whilst JD would be placed near the middle leaning to the expensive side. A company
such as Foot asylum has similar quality to JD but are a little cheaper therefore go below JD in
terms of price but similar quality. After analysing this there are a few gaps in the market most
notably at high price and high quality, this means that Decreal gear offers something that other
companies don’t and therefore have an advantage as they can reach a demographic that other
companies may not.
Justification for rationale
Pestle Political – as they sell their product online there are a number of legislations they must follow
that restrict their terms and policies, one of them being the consumers rights act 2015, this ensures
that all online retailers must provide a 30-day return for a full refund on faulty products. This can be
bad as it means that they will become vulnerable to return scams where people purchase a product
say it is faulty then get a refund but don’t return the product. As they are selling high quality
expensive gear if they are to get scammed it would mean that they would lose a portion of their
revenue.
Economic – Due to covid-19 inflation has risen to 4.6 percent this means that Interest rates are also
likely to rise. As interest rates are expected to rise to 1.5 percent form 0.1 percent. This means that
costs for Decreal will rise and that their revenue will also decrease as they are paying more on loans.
This can negatively affect their goal on increasing revenue due to increased interest rates and
decreased purchasing power, however they will be better rewarded for saving money.
Social – Sportswear has now become a fashion choice as many people are wearing it for leisure.
Because sportswear has now become a fashion trend amongst customers, they are now looking for
sportswear that is fashionable. Primary research shows that 71% of people priorities fashion when
purchasing sportswear. They have begun purchasing sportswear that are Collab’s between
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