How does technology change the way a business sells, spends and markets?
Different types of technology used by business (e-commerce, social media, digital communication, payment systems) and how technology influences business activity in terms of sales, costs and the marketing mix; and how businesses respond to changes in technology.
A focused answer to Edexcel GCSE Business 1.5.2, covering the types of technology businesses use (e-commerce, social media, digital communication, payment systems) and how technology influences sales, costs and the marketing mix, and how businesses respond.
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What this dot point is asking
Edexcel wants you to identify the types of technology businesses use and explain how technology influences business activity, specifically its effects on sales, costs and the marketing mix, and how businesses respond to technological change.
Types of technology used by business
E-commerce lets a business sell to customers anywhere, at any time, without a physical shop. Social media is used both to promote products (cheaply and to targeted audiences) and to interact with customers, handle feedback and build a following. Digital communication speeds up contact with customers, suppliers and staff. Payment systems such as contactless and online payment make buying faster and more convenient, which can increase sales.
How technology influences sales
The biggest sales effect is reach and convenience. A business with a website and online payment can sell to far more customers than a single shop, at any hour, which can lift revenue significantly. Targeted online advertising means promotion reaches the people most likely to buy, improving its effectiveness.
How technology influences costs
Technology is not free. It often reduces some costs (cheaper promotion, less need for premises or staff) while adding others (websites, software, IT support, security and training). Whether technology saves money overall depends on the business, but the exam wants you to recognise both sides rather than assuming technology only cuts costs.
How technology influences the marketing mix
Technology has reshaped two elements of the marketing mix in particular. Place now includes e-commerce: products are sold online and delivered, not only through shops. Promotion now includes digital and social-media advertising, which is cheaper and more targeted than traditional methods. Technology can also affect the product (digital products and features) and price (online price comparison pushes prices down). Because technology keeps changing, businesses must keep responding, updating their website, adopting new payment methods, and using new platforms, or risk falling behind rivals who do.
Try this
Q1. State one way e-commerce can increase a business's sales. [1 mark]
- Cue. It reaches more customers (nationally or globally) and sells 24 hours a day.
Q2. Explain one cost a business might face when introducing new technology. [3 marks]
- Cue. Building and maintaining a website, buying IT or payment systems, or training staff to use them.
Exam-style practice questions
Practice questions written in the style of Pearson Edexcel exam questions on this dot point, with worked answer explainers. The year tag is the paper they imitate, not the source.
Edexcel 20202 marksState two types of technology used by businesses. (Paper 1, Section A)Show worked answer →
A 2-mark state question, one mark per correct type.
Any two of: e-commerce, social media, digital communication, payment systems.
Markers want two distinct types from the specification list. Choose two clearly different ones, for example "e-commerce" and "social media".
Edexcel 20226 marksDiscuss how the use of social media influences the activity of a small clothing business. (Paper 1, Section B)Show worked answer →
A 6-mark discuss question rewards developed analysis of the effect on sales, costs and the marketing mix, with a judgement.
Chain one (sales and marketing mix): social media lets the business promote products cheaply to a targeted audience and reach customers far beyond its local area, which can raise sales and changes the "promotion" element of the marketing mix towards digital methods.
Chain two (costs): it lowers promotion costs compared with traditional advertising, but it takes time and skill to run well, and negative comments or reviews spread quickly and can harm reputation, which is a cost and a risk.
A strong answer judges that for a small clothing business social media is usually a major benefit (cheap reach to the right customers), but only if managed well, because poor or neglected accounts and bad publicity can do more harm than good. Markers reward developed application, not a list of technologies.
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Sources & how we know this
- Pearson Edexcel GCSE (9-1) Business (1BS0) specification — Pearson Edexcel (2017)