QUIZ1MASTERSOLUTIONSET

SET1

Question1(6marks)

ReadtheMinicaseintheboxandanswerthefivequestionsunderneaththebox.

MinicaseOneveryMondaymorningfivefriendsdiscusstheirbusinessesoveracupofmorningcoffee.
ArabellaistheplantmanageratDressRightandbelievedherconstantimprovementsinclothing
qualitycreatedvalue.CordeliaisplantmanageratAllTechandbelievedthattheefficiencyofhis
operationcreatedvalueforhiscustomers.EmmaiscampaignmanagerforaLabourcandidateand
pushedhardtogetpeopletovote.SarahisamanagerwithToysTownandadvocatedan"outsidein"
approachtomeetingcustomerneeds.Tanyahasearnedareputationinmanagingagovernment
sponsoreddrugrehabilitationcentrethattriestoseekabalancebetweenadrugaddictsshortrun
wantsandhis/herlongrunbenefit.

i)

Emma'smarketingmanagementphilosophyismostcloselyalignedwithwhichofthefollowing?
Sellingconcept

ii) Cordeliaismostcloselyalignedwithwhichmarketingmanagementphilosophy?
Productionconcept.

iii) Arabellasperspectivefitsbestwithwhichmarketingmanagementphilosophy?
TheProductconcept

iv) Sarah'sperspectiveismostcloselyalignedwithwhichmarketingmanagementphilosophy?
Themarketingconcept.

v) Tanyasmanagementphilosophyismostcloselyalignedwithwhichconcept
Thesocietalmarketingconcept.

vi) Anonprofitorganisationhasapproachedoneofthepeoplelistedintheboxtobecometheir
chiefmarketingofficer.Whocouldbethatlikelyperson?TanyaorSarah

Question2(6marks)
WhatarethebasiccharacteristicsofQuestionMarks?Whattypeofstrategyshouldacompanyuse
tomanageitsQuestionMarks?WhatshouldmanagementdowiththeirSBUsidentifiedas
QuestionMarks?

Answer:

Question marks refer to SBUs that have low relative market share in high-growth
markets. They require a lot of cash to hold their position.
The company can invest to build its share. Each SBU has a life cycle. As time passes,
SBUs change their positions in the growth-share matrix. If proper and timely Investment
is made, Question marks may become Stars; if not, they may become Dogs.

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Question3(6marks)
Themarketingmanagerwantstofindoutsalesofeachofthecompanysproductforthepastmonth
and12monthperiodandwantstocomparethesesalestothesameperiodsoverthepastfiveyears.
Howcouldamarketinginformationsystemassist?

Answer:

A marketing information system is a process that first determines what information

marketingmanagersneedandthengathers,sorts,analyses,stores,anddistributesrelevant
andtimelymarketinginformation.

One major source of data in an MIS is internal company data such as sales data. The
companys marketing information system would be able to access sales data, sort for the
particular time periods required and prepare a report addressing the specific information
needsofthemarketingmanager.

Question4(6marks)

Usingthefoodindustryasanexample,brieflyexplainthepotentialinfluenceofcultureonconsumer
behaviour.

Answer:

Cultureisthevalue,beliefscustoms,andtastesvaluedorpracticedbyagroupofpeople.Itis
whatidentifiesthegroupasaseparateentity.Cultureshavetheirownritualsandholidays
which have specific activities and products associated with them e.g. Christmas and the
Westerntraditionofgivingpresents.

Culturalvaluesaredeeplyheldbeliefsaboutrightandwrongwaystolive.Foodrepresentsa
significantexpressionofculturee.g.kiwipavlovafordessert;MuslimsnoteatingnonHalal
food,Jewishpeoplenoteatingnonkosherfood.

Question5(12marks:Thisquestioniscompulsory)

Alice Saunders; managing director of an adventure tourism company plans to

develop specific tour packages for senior citizens, families with more than three
children, all under 2, and women over 50. What criteria should she use to evaluate
each segment?

Answer:

Eachsegmentwouldneedtobeevaluatedastowhethertherewererealdifferencesinits
needsorwantsforexample,nonEnglishspeakerswouldneedatourguidewhocould
explainsafetyproceduresandattractionsinalanguagetheycouldunderstand.
Thecompanywouldneedtobeabletomeasurethesizeandpurchasingpowerofeach
segmentandthenwhetherthesegmentwouldbeprofitableenoughnowandinthefuture
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forexample,thenumberoffamilieswiththreechildrenallundertheageoftwowouldlikely
bequitesmallandpotentiallyunprofitable.
Thecompanywouldneedtodetermineiftherewereappropriateformsofmarketing
communicationtoreacheachsegmentforexample,aretherespecificmagazinesor
websitesaimedatwomenover50.
Finally,thecompanywouldneedtoensurethattheyhadtheresourcesandexpertisetoserve
eachsegmentbetterthancompetitorsforexample,havingstaffthatspeakarangeof
languages.

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SET

Question1(6marks)

TravelWorldisconsideringbuyingabanneradtoberunatthetopofaWebsitefeaturingdiscounts
onairflightsandcarrentals.TheWebsiteisrunbyacompanycalledCarryAll.Isthereexchange
potentialinthisexample?

Answer:

Therearetwopartieshere,andbothseemtohavesomethingtheotherwants.TravelWorld
wantsawaytogetitsnameandproductinfrontofpeoplewhoarecontemplatingtravelling.
CarryAllwantstheadvertisingdollars.EitherCarryAllorTravelWorldcanrejectthedeal.

Theexchangepotentialinthisinstanceiscontrolledbywhetherbothpartiesareableto
deliverthedesiredproduct,andwhethereachpartybelievesitisdesirabletodobusiness
withtheother.Theimageofonemaybecounterproductivetotheimagecultivatedbythe
other.

Question2(6marks)

WhatdoSWOTandPESTstandfor?WouldyourecommendthatfastfoodcompanySubwayconduct
aSWOToraPESTanalysis?Explainyouranswer.

Answer:
Marketersneedtoundertakethoroughanalysisofthemarketanditsenvironmenttounderstand
them.ThemostpopularanalysisisknownasSWOTwhichisusedtoevaluatethecompanys
strengths(S),weaknesses(W),opportunities(O),andthreats(T).

Strengthsincludecapabilities,resources,andpositivesituationalfactors.

Weaknessesincludenegativeinternalfactorsandnegativesituationalfactors.

Opportunitiesarefavourableexternalfactors.

Threatsareunfavourableexternalfactors.

Foranalysingthemacroenvironmentalfactorsaffectingstrategydevelopment,marketersgenerally
undertakePESTanalysis(Political,Economic,SocialandTechnologicalanalysis)orPESTLEanalysis
(Political,Economic,SocialandTechnological,legalandenvironmentalanalysis).

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Question 3 (6 marks)

Listthedifferenttypesofbusinessbuyingsituations.Explainthebuyingtypeillustratedinthe
followingscenario:

Alpha Inc., a large multinational employing about 200 people, has been regularly buying printers,
copiers and papers from Xerox. Alpha now decides to buy a multitasking machine offered by Xerox
thatprints,copies,emails,scans,andfaxes.
Whois(are)responsibleformakingthisdecision

Answer:
ThethreeB2Bbuyingsituationsarestraightrebuys,modifiedrebuys,andnewtaskbuys.Astraight
rebuy is a routine purchase of items that a B2B customer regularly needs e.g. pens and paper. The
buyerhaspurchasedthesameitemsmanytimesbeforeandroutinelyreordersthemwhensupplies
arelow.Amodifiedrebuyoccurswhenafirmwantstoshoparoundforsupplierswithbetterprices,
quality,ordeliverytimese.g.cleaningservices.Thissituationalsocanoccurwhentheorganisation
hasnewneedsforproductsitalreadybuys.Anewtaskbuyrequiresthebuyertostartfromscratchto
gatherinformationonpurchasespecificationse.g.rawmaterialsforanewproductline.

TheB2BsituationregardingafirmpurchasinganewXeroxmachinewouldbeamodifiedrebuy.The
firm has already purchased photocopiers. This purchase now involves a machine with different
featuresthanonepreviouslypurchased.

Foralargemultinationalcompany,thebuyingismostlikelydonebythecompanysBuyingCentre.

Question4(6marks)
ReadtheMinicaseintheboxandanswerthesixquestionsunderneaththebox.

Minicase:Mr.Mirza,anentrepreneurwantstoopenarestaurantinCampbelltown,Sydneythatfeatures
thefinestinIndianandmiddleeasterndelicacies.Todeterminethefeasibilityofhisrestaurant,hehireda
marketingresearchconsultingfirm.Theconsultantsstudiedallthemarketinformationavailableand
determinedthatconsumersaged3045wholovespicycuisineweremostinterestedintheproposed
restaurant.Inexaminingtherestaurantenvironment,theconsultantsfoundthewestsideofthesuburb
offeredthebestoptionsforopeningtherestaurant.Mr.Mirzawastoldthebiggestobstacleinopeningthe
restaurantrelatedtoobtainingthenecessarypermitsfromthecityandstate.

i)

Thegroupofconsumersidentifiedbytheconsultantsasmostlikelytovisitthenew
restaurantiscalleda:targetmarket

ii)

Mr.Mirzaisdevelopingamarketingplanthatmustcoverthefirstfiveyearsofthe
restaurant'sbusiness.Hemustbesuretoconsiderwhichoftheuncontrollablefactorsinhis
plan?Demographicfactors

iii)

DescribingthemarketforMirza'snewrestaurantintermsofagesofthemembersofits
targetmarket,isreferringto_____characteristics.Demographicfactors

iv)

Mr.Mirzaknowstheconceptofhisrestaurantislikelytobesuccessful,mainlybecauseof:
thegrowingimportanceofmulticulturalismintheSydneysuburb

v)

TheuncontrollableenvironmentalfactorsMr.Mirzafacesintermsofobtainingpermitsfor
thenewrestaurantrepresent:politicalandlegalfactors

vi)

WhatfunctionthemarketingresearchconsultingfirmhiredbyMr.Mirzaisperformingfor
him?facilitatingfunction.
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Question 5 (12 marks This Question is compulsory)

On the recommendation of a renowned consulting firm in the hospitality industry, a family

friendly vacation resort decided to adopt a family life cycle (FLC) based segmentation
approach. They launched a series of new commercials showing a variety of activities and
facilities such as different swimming pools for babies and adult swimmers/divers, one
restaurant specialising in fast food and another restaurant catering to individuals
preferring a gourmet menu and small gymnasium for the young.

What is FLC based segmentation? What could be the major reason prompting the consultant
to recommend this approach to the resort? Explain your answer.



Answer:

Thefamilylifecycleisaseriesofstagesdeterminedbyacombinationofage,maritalstatus,andthe
presenceorabsenceofchildren.TheFLCisavaluablebasisforsegmentingmarkets,becausefamilies'
needs,income,resources,andexpendituresaredifferentineachlifecyclestage.Marketerstarget
peopleindifferentstagesofthefamilylifecyclebynotingspendingneeds.
Youngsinglesandmarriedsbuymorecars,furniture,appliances,andvacations.Tothemlifeisfun;
theylikegourmetfoodandgym.
Marriedswithchildrenbuymoretoys,babyproducts,andappliancesandvacations.However,when
theybuyvacations,theywanttogetthemostoutofthemoneyspent.toattractsuchcustomers,
hospitalityindustrymustprovidefacilitiesthesecustomerswillexpect.
Middleagedsbuymoreluxuryitems;homeimprovementsandvacationspreferringgourmetmenue
andtranquillity.Thesearethemainreasonsthathavepromptedtheconsultanttocomeupwithhis
recommendations.

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SET

Question 1: (6 marks)
What are the basic characteristics of Cash Cows? What type of strategy should a company use to
manage its cash cows? What could happen to Cash Cows if the strategy fails?

Answer:

Cashcowsrefertolowgrowth,highsharebusinessesorproducts.Theyproducealotofcashfor
thecompany.ThecompanycanmilkitsCashCowsshorttermcashflow,orharvest.
EachSBUhasalifecycle;withthepassageoftimeanSBUspositionsinthegrowthsharematrix
maychange.ManagersmustrememberthatCashcowscanbecomeStarsaswellasDogs
dependingonthesituationofmarketgrowthrateaswellasrelativemarketingshare.Assuch
theyshoudhandletheseSBUscarefully.

Question2:(6marks)

RedRoosterisconsideringwheretolocateanewoutletinanew,butfastgrowingsuburbofSydney.
WhattypeofresearchwouldbeappropriateforRedRooster?Why?

Answer:

Inselectingasiteforanewoutlet,RedRoosterneedsinformationonpopulationdensityin
differentareas,incomes,ages,ethniccharacteristics,familysizes,locationsofcompeting
fastfoodrestaurants,andtrafficpatternsatdifferenttimesofday.Inafastgrowing
suburb,censusdatamightbetoooutdatedtobeuseful,butmostoftheinformationRed
Roosterneedscouldstillbeobtainedfromsecondarysources,suchasthelocalchamberof
commerceorutilitycompanies.RedRoostermightneedtocommissiontrafficstudiesin
differentpartsofthesuburbtohelplocateaspecificworthwhilesite.

Question3(6marks)

Whichoftheavailablesegmentationapproachesdoyouthinkismostcompatiblewiththespiritof
themarketingconcept?Defendyourchoice.

Answer:

(1) Certainly,allsegmentationvariablesofferadvantagesanddemographicvariableswilltypicallybe
usedinconjunctionwithanytypeofsegmentationvariablechosen.
(2) Benefitssoughtwould,however,bephilosophicallyMOSTconsistentwiththemarketingconcept.
(3) Accordingtothemarketingconcept,allthefirmhastosellissatisfactionorbenefits.
(4) Theuseofbenefitsdesiredtosegmentthemarketwouldbealogicalmeansofoperationalising
themarketingconcept.

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Question4:(6.marks)

ReadtheMinicaseintheboxandanswerthesixquestionsunderneaththebox.

MiniCase:Jillisconsideringadaycarefacilityforherfiveweekoldson,Jonathon.Shehasbeen
visitingdaycarecentresforthepasttwoweeksandhasinterviewedthecaregiversateightdifferent
centres.ItisextremelyimportanttoJillthatJonathonbestimulatedintellectuallyandprovided
nutritionaldiets.Afterconsideringallthecentresshevisited,JillchoosesPerfectCare.Whilesheis
quitepleasedwithherchoice,shedoeshavesecondthoughtsandcontinuestowonderwhethershe
madethecorrectdecision.

i)

WhatdoesthedaycarefacilityoffersthatJillisinterestedin?Service

ii)

Jill'svisitstothedaycarecentresandinterviewswiththecaregiversrepresentwhichstepof
theconsumerdecisionprocess:evaluationofalternatives

iii)

Jill'suncertaintyaboutwhethershemadethecorrectdecisionandthefeelingsthatgoalong
withthisuncertaintyarecalled:cognitivedissonance

iv)

Jill'sselectionofadaycarefacilityrepresentswhichtypeofconsumerbuyingdecision:
extensivedecisionmaking

v)

Jillspentasignificantamountoftimeandeffortinselectingthedaycarecentrefor
Jonathon.Thissuggeststhecentreisa_____productforJill.Highinvolvement

vi)

Shannon,Jill'sbestfriend,recommendedPerfectCarebecauseshetakesherdaughterthere.
Shannonisactingasa(n):opinionleader

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Question5(12marksThisquestioniscompulsory)
=

Explain with suitable marketplace examples the concept of value from the
perspective of marketers, buyers, sellers and the society.

Answer:

Valuereferstothetangibleandintangiblebenefitsconsumersreceivefrompurchasingand
using products e.g. particular product features or social benefits. These benefits are
communicatedbymarketersthroughthevalueproposition.

Thechallengetomarketersistocreatevaluepropositionsthataremoreattractivethantheir
competitors, remembering that value is in the eye of the beholder in other words, the
consumerdecideswhetherwhatisofferedisofvaluetothem.

From the buyers perspective, products have to provide sufficient value for what must be
exchangede.g.timeandmoney.

From the sellers perspective, exchanges must be profitable. Other types of value include
prestige amongst competitors, returns to shareholders, creation of competitive advantage
anddevelopmentoflongtermcustomerrelationships.

Fromasocietalperspective,marketingactivitieseitheraddortakeawayvaluee.g.adding
valuethroughsustainablemarketingactivitiesortakingawayvaluebymarketingproducts
thathaveanegativeimpactonsocietye.g.tobacco.

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SET

Question 1 (6 marks)

Why must marketers be aware of changes in the economic and technological environments?
Illustrate using the mobile phone industry.

Answer:
The state of the economy (recession, inflation, etc.) in which marketers operate is vital to the
success of the business. When marketers assess the economic environment they evaluate the
factors that influence consumer and business buying patterns, including confidence in the
economy. Marketers need to respond to various states of economy differently. Similarly,
technology has great impact on marketing activities; changes in technology can radically
transform industries and affect consumers ability to purchase
In recessionary or inflationary times, consumers will likely not purchase the latest mobile
phone or mobile services, content to remain with what they currently have and can afford.
The mobile phone industry relies on advances in technology to create new products and
services e.g. 3G phones, Bluetooth etc.

Question2(6marks)

Kelloggwantstoinvestigatethedegreeofinfluenceyoungchildrenhaveonparent'sdecisionstobuy
breakfastfoods.Whattypeofresearchwouldbeappropriateinthissituation?Why?

Answer

Ininvestigatingtheeffectthatyoungchildrenhaveonparentspurchasedecisions,Kellogg
mightusefocusgroups,surveys,observation,andexperiments.Experimentsandobservation
wouldgivetheclearestresults,becauseparentsmaynotrealise(ornotwanttoadmit)how
muchtheirpurchasesareinfluencedbytheirchildren.Questioningparentsandchildrencould
bequickerandcheaper,revealchildrensinfluenceinawiderrangeofpurchasesituations,
andexplainwhyparentsrespondastheydo.

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Question3(6marks)

Demandformostbusinessgoods,whichlargelydependonconsumergoods,arelessaffectedby
pricefluctuationsthanconsumermarkets.Whyisthisusuallythecase?Giveexamples.

Answer:

Businesstobusinessdemandisderiveddemandbecauseabusinesssdemandforgoodsandservices
comeseitherdirectlyorindirectlyfromtheconsumersdemand.Thedemandinbusinesstobusiness
marketsismostlyinelasticbecausewhatisbeingsoldisoftenjustoneofthemanypartsormaterials
that go into producing the consumer product. If companies do not purchase these products/inputs
they will not be able to produce the consumer products. It is not unusual for a large increase in a
businessproductspricetohavelittleeffectonthefinalconsumerproductsprice.

Examples:DemandforPublictransportBusesdependsonthenumberofcommuters;demandfor
tyresdependsondemandforcars.

Question4(6marks)

ReadtheMinicaseintheboxandanswerthesixquestionsunderneaththebox.

MiniCase:Aroundthebeginningoffalleachyear,about2.7millionturkeyhuntersallovertheU.S.start
lookingatcatalogsfortheperfectitemtoguaranteetheywillkillawildturkeythisyear.Thedevoted
turkeystalkercanstockuponeverythingfromcamouflagedturkeyhuntingsocks,turkeylicenseplate
holders,vestswithhugepocketsfortotingdeadbirds,andhuntingvideostoturkeydecoys,turkey
earrings,andturkeycallers.NeilCostisconsideredthebestmanufacturerofturkeycallersintheworld.
Thatishisonlyproduct,andeachishighlyprizedbyturkeyhunters.Itisnotunusualforaturkeyhunterto
pay$5,000foroneofCost'scallers.

PrimosHuntingCalls,acompetingcompanythatmanufactureswildturkeycallers,claimsthateachofits
callersisabletocluck,shriek,andkeekee(threesoundsthathavebeenknowntoattractthewild
turkey).

i) AccordingtotheMinicase,wildturkeyhunterswouldbedefinedasa:market
segment
ii) Giventhatthewildturkeyhuntersnumberapproximately2.7million,itmeetsthe
segmentationcriterionof:substantiality
iii) Segmentingamarketbasedonthefactthatpeoplewhoenjoyhuntingtypically
exhibitaparticularlifestyleisanexampleof:psychographicsegmentation.
iv) AccordingtotheMinicase,NeilCoststargetmarketisessentiallya:nichemarket
v) AccordingtotheMinicase,PrimosoffersahuntermoresoundalternativesthanNeil
Costandthus,hasimplementeda(n):productdifferentiationstrategy.

vi) It will not be wrong to infer that by creating the desired image of the firm's product with
respect to its competition, Neil Cost has ______________ itself as the best manufacturer of
turkey callers in the world. differentiated

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Question5(12marksthisquestioniscompulsory)

Explain how exchange relationships occur in marketing. Use the example of illegal online film
downloadingtoillustrate.

Answer:

An exchange occurs when something is obtained for something else in return. The buyer
receives an object, service, or idea that satisfies a need, and the seller receives something
s/he feels is of equivalent value. For an exchange to occur, at least two people or
organisations must be willing to make a trade, and each must have something the other
wants.Bothpartiesmustagreeonthevalueoftheexchangeandhowitwillbecarriedout.
Eachpartyalsomustbefreetoacceptorrejecttheotherstermsfortheexchange.

In the case of illegal film downloading, there is no agreement on the terms of exchange.
Thosedownloadingfilmsforfreemayargueitisafairexchangeastheyaregettingamovie
(andafterall,themovieindustrymakesmillionsofdollarsayear)butthisopinionwouldnot
besharedbythefilmindustry.Thefilmindustrywouldarguethattheyaregettingnothingin
returnastherearenoroyaltiesorticketsales.

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SET

Question 1 (6 marks)

Whencommercialadssaydiamondsareagirlsbestfriend,dotheyimplythateveryfemaleshould
or will purchase a diamond? Explain your answer based on your understanding of need, want and
demand.

Answer:

Needisdefinedasastateoffeltdeprivationforsomebasicsatisfactionnotinfluencedby
marketers or society; wants are desires for specific satisfies of these deeper needs and
demandsarewantsforspecificproductsthatarebackedbyanabilityandwillingnesstobuy
them.Whilediamondsmaybeagirlsbestfriendthisdoesnotmeanthateveryfemalefeels
the need for a diamond (difference between actual and desired state) or want a diamond
(e.g.preferenceforemeraldsorsapphires).Eventhosewhoneedandwantadiamondmay
not have the necessary purchasing power or resources to satisfy their wants (demand). As
such,noteveryfemalewouldbewithinthemarketfordiamonds.

Question2(6marks)

Acompanymanufacturingmenshairtonicwantstofindandinterviewthemenwhousethe
companysproducts.Suggestthreecreativewaysthatthecompanymayuse.Whichofthese
approachesyouconsidertobethebest?Why?

Answer:

1. Mencanbestoppedonthestreetandaskediftheywouldanswerafewquestionsabout
hairtonics.
2. Retailersmaybeaskedtorecordandsupplythenamesandaddressesofthebuyersof
thehairtonic.
3. Asmallquestionnairemaybeincludedinthepacketwithanincentivetofillitoutand
returnit.
4. Questionnairesmaybemailedtomenonmailinglistsobtainedfromvarioussources.
5. Conductinginterviewsoffriends,neighboursetc.
6. Usingamailpanel.
7. Mensnamescanbedrawnfromthepagesofatelephonedirectory.

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Question 3 (6 marks)

Who are opinion leaders? Using the iPhone as an example, briefly explain the potential influence
of opinion leaders on consumer behaviour.

Answer:

Marketers seek to identify the reference groups of particular significance to their target
consumers. One such group is the opinion leaders who are able to influence others
attitudesorbehavioursandproductpurchasedecisionsbecauseotherpeopleperceivethem
aspossessingexpertiseaboutaproduct.Opinionleadersusuallyexhibitlevelsofinterestin
the product/subject category and may continuously update their knowledge by reading,
talking with salespeople or others in the field of study, and so on. Because of this
involvement,opinionleadersarevaluableinformationsources,passingonbothpositiveand
negativeinformationabouttheparticularproductorsubject.

Marketersoftensimulateopinionleadersbygettingcelebritiesorotherrespectedindividuals
tobeseenwearingorusingtheirproducts.Forthedifferentversionsoftheirpopularproduct
iPhone,Applehaveusedcelebritiesintheiradvertisementsorendorsetheirproducts.

Question 4 (6 marks)

ReadtheMinicaseintheboxandanswerthesixquestionsunderneaththebox.

Minicase:Arabella,Emma,Sarah,CordeliaandPeterwereallmembersofamarketinggroupworking
onamarketingplantermprojectfortheirmarketingprinciplesclass.Arabellawasdoingtheprofit
andlossstatements.Emmatookonthebroadmarketingapproachtheyused.Sarahwasresearching
thebackgroundtheywouldneed.Cordeliawrotetheoverviewtotheplan,whilePeterspecifiedhow
theprogressoftheplanwouldbemeasured.

Answer:

i)

AccordingtotheMinicase,whoisworkingontheexecutivesummary?
Answer:Cordelia

ii) AccordingtotheMinicase,whoisresponsibleforthecurrentmarketingsituation?
Answer:Sarah

iii) AccordingtotheMinicase,whoisworkingonthemarketingstrategy?
Answer:Emma

iv) AccordingtotheMinicase,whoisworkingonbudgets?
Answer:Arabella

v) AccordingtotheMinicase,whoisresponsibleforcontrols?
Answer:Peter

vi) Theprocessofmatchinganorganisationsgoalsandcapabilitieswithchangingmarket
opportunitiesisknownas
Answer: Strategic fit

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Question5(12marks:Thisquestioniscompulsory)

Youworkforacompanythatmanufacturessurfboards.Howwouldtheproductsitoffers,pricesit
charges,distributionstrategyitpursuesandpromotionalcampaignsitusesdifferifitchoosesan
undifferentiatedordifferentiatedmarkettargeting(coverage)strategy?

Answer:

Withanundifferentiatedtargetingstrategy,thecompanyseekstoappealtoabroad
spectrumofconsumers.Itwouldproduceonebasicstyleofsurfboard,likelypricedatthe
lowertomiddlerangeofcompetitorsprices.Itwoulddistributethesethroughsports
retailersthatcarriedsurfboardsaspartoftheirrangeandengageinpromotionusingmedia
thatwouldappealtoabroadrangeofconsumers(e.g.adsduringsportsshows)withthemes
suchastheboardforeveryone.

Withadifferentiatedstrategy,thecompanywoulddeveloponeormoresurfboardsforeach
distinctcustomersegmentforexample,surfboardsdesignedspecificallyforprofessional
surfersandsurfboardsdesignedforbeginningorcasualsurfers.Thecompanywouldpicka
price,distributionstrategyandpromotionalcampaignthatwasappropriateforeach
segmentforexample,fortheprofessionalsurfers,pricesmightbehighergiventhe
specialisedfeatureswithsurfboardspromotedinsurfspecificmediasuchasSurfersMonthly
magazineandsoldthroughspecialistsurfsportsretailers.

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SET

Question1(6marks)

Asconsumers,wepurchasegoodsorservicestosatisfycertainneedsandwantsrelatingtoeither
physicalorpsychologicalfunctions.HowdoesLeviStrauss&Co.satisfybothofcustomersneeds
withtheirjeans?Wouldyouranswertothisquestionbesameiftheproductinquestionis(i)abottle
ofdrinkingwater?(ii)aperfume?

Answer:

Levi Strauss & Co. jeans meets physical needs in that people need to wear clothes for warmth,
protectionfromtheelementsandsocialconformity/modesty.Psychologicalneedsarefulfilledinthe
waypeoplemayfeelorthinktheylook,ortheimagetheyportraywhenwearingthesejeans.

Theanswerwillbeverysimilarforthedrinkingwater;however,theperfumesatisfiesthe
psychologicalneedratherthanthephysicalneed.Notethatanswertothispartwillvaryforeach
student.However,theyshouldpointoutthattheiranswerwillchangeasabottleofdrinkingwater
(physiological,psychological,egoneeds)andaperfume(loveandegoneeds)aresatisfyingsome
wantsratherthansomebasicneeds.

Question 2 (6 marks)
An upmarket accommodation hotel that has been in business for just six months wants to gain
some basic customer insights about the level of service being offered to its current customers.
Suggest two ways how the hotel can collect the required information.
What could be a likely reason to collect this data?

Answer:

Thehotelmayusetwoelementsofthemarketinginformationsystem[MIS]forthispurpose.MISisa
process that first determines what information marketing managers need and then gathers, sorts,
analyses,stores,anddistributesrelevantandtimelymarketinginformation.

1. OnemajorsourceofdatainanMISisinternalcompanydatasuchascustomercomplaints
reportthatmosthotelsmaintain.Manyhotelsandrestaurantsinvitecustomerstovoluntarily
completecustomerreportcardsonacontinuousbasis.Customerreportcardsaretypically
veryshortquestionnairesleftinhighlyvisiblelocationssuchasdiningroomtables,hotel
guestroomsoratexitpointssuchascashier'sdesk.
Customerreportcardsprovidehotelsandrestaurantswithaninexpensivemeansofdata
collection.However,onedisadvantageisthatittendstoattractcustomerswithextreme
views(eitherverysatisfiedorverydissatisfied)whichmaynotbearepresentativesample.
The hotels marketing information system can access the data, sort for the particular time
periods required and prepare a report addressing the specific information needs of the
marketing manager.

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2. ConductMarketingResearch:
Thehotelmayalsoconductasmallresearch(survey,telephoneinterviewetc.)bywritingto
their guests who stayed in the hotel during the period of interest. Customer surveys are

similartoreportcardsandsharemanyoftheiradvantagesanddisadvantages.The
main difference between customer report cards and more formal surveys is that in
theformer,customers'selfselect',whileformalsurveydesignrequirestheresearcher
to select the number and type of respondents using careful sampling protocols
designed to ensure the sample is representative of the population of interest. This
methodissomewhatmoreexpensiveanditmaytakeweeksormonthsbeforedata
canbecollected,analysedandavailableformanagement.

3. Simplemanagerialobservationofemployeecustomerinteractionsacrossavariety

ofshifts,mayprovidesomeinsightsintotheemployees'skills,attitudetowards
serviceandoverallservicelevels.Whilethisisarelativelyinexpensivemethodofdata
collectionandresultsareimmediatelyaccessible,itcanbedifficulttoquantifyand
storeresultsforfuturecomparisons.

Therecouldbeseveralreasonsforsuchknowledge,suchasimprovingthelevelofservice;adding
additionalfacilities;promotingthehoteletc.

Question3(6marks)

Explainhowmarketerscoulduseperceptualmapsindevelopingtheirpositioningstrategies.

Answer:

Positioninginvolvesdevelopingamarketingstrategyaimedatinfluencinghowaparticular
marketsegmentperceivesagoodorserviceincomparisontothecompetition.Aperceptual
mapconstructsapictureofwhereproductsandbrandsarelocatedinconsumersminds.

Marketerscanusetheperceptualmaptoidentifygapsinthemarketplaceorareaswhere
thereisintensecompetition,helpingthemdeterminewheretocompete.Perceptualmaps
canalsoshowmarketerswhetherthereisaneedtorepositioninresponsetomarketplace
changessuchaschangingperceptionstowardsthecompanysbrandorcompetitoractions.

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Question4(6marks)

ReadtheMinicaseintheboxandanswerthefivequestionsunderneaththebox.

Minicase:ThosewhoworkedinbusinessbuyingatFamiliaDiversifiedwerefromdifferent
backgroundsandweresubjecttomanyinfluences.Louis,whotrackedthelevelofprimarydemandin
keyindustries,ownedausedcaryardinDarwinbeforejoiningFamilia.Johnupdatedpoliciesand
proceduresonprocurement.Evelyn,whowasatrainerinherpreviousjob,hadthestatusof
experiencetoinfluenceothers.Soniahadtherighteducationtohelpmakegoodpurchasedecisions.
Boristrackedchangesinpoliticalandregulatorydevelopments.

i)

Louis'sworkatFamiliainvolvesdetermininginfluencesof___________onbusinessbuying
behaviour?Environmentalfactors

ii) John'sworkatFamiliaisaffectedbytheinfluencesof_____________onbusinessbuying
behaviour?Organisationalfactors
iii) Evelynisdescribedassomeonewhoseworkstemsfromtheinfluencesof________onbusiness
buyingbehaviour.Interpersonalfactors
iv) Sonia'scontributiontothebusinessbuyingbehaviourprocessatFamiliastemsfromthe
influencesof___________onthebusinessbuyingbehaviour.Individualfactors
v) BorisscontributiontothebusinessbuyingbehaviourprocessatFamiliastemsfromthe
influencesof___________onthebusinessbuyingbehaviour.Politicalandlegalfactors

Question5(12marks:Thisquestioniscompulsory)

Whatismeantbymarketpenetration,marketdevelopmentandproductdevelopmentstrategies?
ExplainhowacompanysuchasApplecouldengageineachofthesestrategies.

Answer:

Theseareallstrategiesdesignedtogenerategrowthforthecompany.

Withmarketpenetrationstrategies,thecompanyseekstoincreasesalesofexistingproducts
toexistingmarkets.ApplemightrunapromotionalcampaignforitsiPodstoattractcurrent
nonusersorthoseusingcompetingproductsorreducepricesorpricebundlee.g.addina
caseorchargeratnoextracost.

Marketdevelopmentstrategiesintroduceexistingproductstonewmarkets.Thiscanmean
reaching new customer segments within an existing geographic market, or it may mean
expanding into new geographic areas. For Apple, they might expand into previously
untappedmarketssuchasAfricaorexpandtheirpresenceinexistingmarketssuchasChina.

Product development strategies create growthby selling new products in existingmarkets.

Product development may mean that the firm improves a products performance
significantly,oritmaymeanextendingthefirmsproductlinebydevelopingnewvariations
oftheitem.Applehasmadeextensiveuseofproductdevelopmentstrategiesforexample,
theyoffertheiPodshuffle,Nanoandtouch,allwithdifferentstoragecapacities,functionality
andpriceranges.

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