MARKETING MANAGEMENT REVISION QUESTIONS & ANSWERS
- 2. Q 1 Advise one of your clients on the information to be included in the sections of a typical marketing plan. Or ‘The marketing plan is one of the most important outputs of the marketing process.’ Discuss this statement and identify the main sections of a marketing plan. Or Describe the contents of the marketing plan and summarise the value of this document to marketing management
- 3. A 1 Executive summary & Table of contents: which gives a brief overview of what the plan contains this is not always given as it is really a matter of practice within an organization Current Marketing Situation: A summary of the current position in respect of products, pricing, competition, etc. This section may, or may not, be merged into the executive summary Opportunities and issue analysis: major aspects only – the SWOT analysis. Objectives: for each section of the plan (volume, share, profit, etc.)
- 4. A 1 Marketing Strategy: the broad marketing approach that will be used Action programmes: what will be done, who will do it, when it will be done, and how much it will cost Projected profit and loss statement forecasts of the expected outcomes Controls: the way the plan will be monitored and measured.
- 5. A 1 The value or importance will be : Greater understanding of customers will be achieved Decision-making will be improved Motivation levels will be higher because of involvement Less risk is attached to actions Diverse activities can be coordinated There is less likelihood of the need for crisis management Measurement and control will be improved Corrective actions can be taken very quickly
- 6. Q 2 You have been asked to explain the benefits of the Marketing Orientation to the directors of a sales- orientated organization. What information would you include in your presentation?
- 7. A 2 Competitive Advantage Efficiency Customer Satisfaction: Sales Effectiveness: Financial Performance Employee Satisfaction Better Marketing Programs: Increased Client Retention Stronger Strategic Relationships
- 8. Q 3 Prepare a report describing the main influences on consumer buying behaviour and provide examples to support your explanations Or Explain the main influences on consumer buying behaviour and provide examples to support your recommendations
- 9. A 3 Introduction : definition of consumer Buying Behaviour. Body: personal; Social; Psychological; and Cultural (Elaborate on each & give examples) Conclusion: why do you think the above factors really influence consumer behaviour
- 10. Q 4 Compare and Contrast Two Segmentation strategies and explain the condition for effective segmentation Or Explain the importance of effective market segmentation to the success of marketing campaigns in highly competitive markets and describe TWO segmentation strategies of your choice.
- 11. A 4 Psychographic segmentation: market segmentation strategy whereby the intended audience for a given product is divided according to social class, lifestyle, or personality characteristics Demographic segmentation: consists of dividing the market into groups based on variables such as age, gender family size, income, occupation, education, religion, race and nationality. Geographic Segmentation: Geographic segmentation calls for dividing the market into different geographical units such as nations, states, regions, counties, cities, or neighborhoods.
- 12. A 4 Behavioral Segmentation: In behavioral segmentation, buyers are divided into groups on the basis of their knowledge of, attitude toward, use of, or response to a product. Many marketers believe that behavioral variables occasions, benefits, user status, usage rate, loyalty status, buyer-readiness stage, and attitude are the best starting points for constructing market segments.
- 13. A 4 Conditions to effective segmentation are: The market should be Identifiable and Measurable. The market should be Sufficient and Substantial The market should be Accessible The market must be Responsive The market must be Stable The market should be Profitable
- 14. Q 5 Distinguish between demographic and psychographic segmentation and highlight the importance of segmentation to the success of marketing programmes.
- 15. A 5 Psychographic segmentation: market segmentation strategy whereby the intended audience for a given product is divided according to social class, lifestyle, or personality characteristics Demographic segmentation: consists of dividing the market into groups based on variables such as age, gender family size, income, occupation, education, religion, race and nationality.
- 16. A 5 Importance of segmentation include: Facilitates proper choice of target marketing Higher Profits Facilitates tapping of the market, adapting the offer to the target Stimulating Innovation Makes the marketing effort more efficient and economic
- 17. Q 6 Compare and contrast THREE market research techniques that can be used to determine the way consumers perceive the company’s products and services.
- 18. A 6 Primary Market Research. Primary market research is a kind of market research which is done by the business or company itself with the objective of gathering information that can be used to improve the products, services, and functions. Secondary market research. As opposed to primary market research, secondary market research is a research technique that does not aim to gather information from scratch but relies on already available information from multiple sources. This research focuses on data or information that was collected by other people and is available for either free or paid use for others. Qualitative research. Qualitative research or qualitative market research is a kind of a research method which mainly takes into account the opinions and feelings of a customer as far as a business’s products and services are concerned.
- 19. A 6 Quantitative research. Quantitative market research is a kind of market research work that is based on hard facts and statistical data rather than the feelings and opinions of the customers or consumers. This type of research can prove useful both in terms of primary market research and secondary market research.
- 20. Q 7 Explain what you understand by the following marketing strategies: a) Diversification strategy b) Product development strategy c) Market penetration strategy
- 21. A 7 Diversification Strategy - the firm grows by diversifying into new businesses by developing new products for new markets. It is the most risky of the four growth strategies since it requires both product and market development and may be outside the core competencies of the firm. In fact, this quadrant of the matrix has been referred to by some as the "suicide cell". However, diversification may be a reasonable choice if the high risk is compensated by the chance of a high rate of return. Other advantages of diversification include the potential to gain a foothold in an attractive industry and the reduction of overall business portfolio risk.
- 22. A 7 Product Development Strategy - the firms develops new products targeted to its existing market segments. It may be appropriate if the firm's strengths are related to its specific customers rather than to the specific product itself. In this situation, it can leverage its strengths by developing a new product targeted to its existing customers. Similar to the case of new market development, new product development carries more risk than simply attempting to increase market share.
- 23. A 7 Market Penetration - the firm seeks to achieve growth with existing products in their current market segments, aiming to increase its market share. It is the least risky since it leverages many of the firm's existing resources and capabilities. In a growing market, simply maintaining market share will result in growth, and there may exist opportunities to increase market share if competitors reach capacity limits. However, market penetration has limits, and once the market approaches saturation another strategy must be pursued if the firm is to continue to grow.
- 24. Q 8 Explain the importance of developing new products and describe the approach to be used for the development of a new product.
- 25. A 8 Developing a new product can: Gives advantages over the competition Increases customer loyalty Leads to increased sales/stability of profits Spread investment risks Increase the prestige of the company Utilizes production equipment.
- 26. A 8 The approach used include: Idea Generation Idea Screening Concept Development & Testing Market Strategy Development Business Analysis Product Development Test Marketing Commercialization
- 27. Q 9 Explain what you understand by the term ‘product hierarchy’ and examine the factors to be considered in order to carry out a product line analysis.
- 28. A 9 Each product is related to certain other products. The product hierarchy stretches from basic needs to particular items that satisfy those needs. There are 7 levels of the product hierarchy: Need family: The core need that underlines the existence of a product family. Let us consider computation as one of needs. Product family: All the product classes that can satisfy a core need with reasonable effectiveness. For example, all of the products like computer, calculator or abacus can do computation. Product class: A group of products within the product family recognised as having a certain functional coherence. For instance, personal computer (PC) is one product class.
- 29. A 9 Product line: A group of products within a product class that are closely related because they perform a similar function, are sold to the same customer groups, are marketed through the same channels or fall within given price range. Product type: A group of items within a product line that share one of several possible forms of the product. For instance, palm top is one product type. Brand: The name associated with one or more items in the product line that is used to identity the source or character of the items. For example, Palm Pilot is one brand of palmtop. Item/stock-keeping unit/product variant: A distinct unit within a brand or product line distinguishable by size, price, appearance or some other attributes. For instance, LCD, CD- ROM drive and joystick are various items under palm top product type.
- 30. Q 10 Critically appraise the value of Ansoff’s Product- Market Grid to strategic marketing planning and explain EACH strategy identified in the grid.
- 31. A 10 The Ansoff Growth matrix is a tool that helps businesses decide their product and market growth strategy. Ansoff’s product/market growth matrix suggests that a business’ attempts to grow depend on whether it markets new or existing products in new or existing markets. The output from the Ansoff product/market matrix is a series of suggested growth strategies that set the direction for the business strategy.
- 33. A 10 Market penetration: Market penetration is the name given to a growth strategy where the business focuses on selling existing products into existing markets. Market penetration is where an organization gains market share. Market development: Market development is the name given to a growth strategy where the business seeks to sell its existing products into new markets. There are many possible ways of approaching this strategy, including: New geographical markets; for example exporting the product to a new country New product dimensions or packaging: for example New distribution channels Different pricing policies to attract different customers or create new market segments
- 34. A 10 Product development: Product development is the name given to a growth strategy where a business aims to introduce new products into existing markets. This strategy may require the development of new competencies and requires the business to develop modified products which can appeal to existing markets. Diversification: Diversification is the name given to the growth strategy where a business markets new products in new markets. This is an inherently more risk strategy because the business is moving into markets in which it has little or no experience. For a business to adopt a diversification strategy, therefore, it must have a clear idea about what it expects to gain from the strategy and an honest assessment of the risks
- 35. A 10 Advantages/Benefits Ansoff’s Matrix can be used as part of a marketing audit It is a useful tool for management to help analyse the strategic position of the firm and set objectives for the way forward The Matrix sub-divides the options into four specific strategies that management could consider for long term growth It indicates the level of risk associated with each strategy thus encouraging management to focus carefully on the impact of any decision made
- 36. A 10 Limitations Ansoff’s Matrix is often criticised for being too simplistic as it doesn’t taken into consideration the external environment Its main focus tends to be market potential rather then the resources required by the firm to support its chosen strategy The Matrix outlines strategies for growth so its usefulness will be very limited to a firm whose objective is survival There is no guarantee of success even if a firm follows a particular strategy Any decision taken regarding a particular strategy is still subjective therefore increasing the risk of bias by management personnel Information relating to future growth will be based on forecasts regardless of which strategy the firm chooses and this is a further risk Ansoff’s Matrix only tells part of a story so it is necessary for other decision-making tools to be used in conjunction with it so an informed decision can be made by management
- 37. Q 11 Discuss the advantages and limitations of joint ventures and use of agents as methods of entering overseas markets.
- 38. A 11 Joint ventures have the following advantages and limitations: Advantages Sharing of risk and ability to combine the local in-depth knowledge with a foreign partner with know-how in technology or process Joint financial strength May be only means of entry and May be the source of supply for a third country. Disadvantages (Limitations) Partners do not have full control of management May be impossible to recover capital if need be Disagreement on third party markets to serve. Partners may have different views on expected benefits.
- 39. A 11 Agents have the following advantages and limitations Advantages You avoid the recruitment, training and payroll costs of using your own employees to enter an overseas market. An agent should be well placed to identify and exploit opportunities. Your agent should already have solid relationships with potential buyers - it might take you some time to build up your own contacts. Using an agent allows you to maintain more control over matters such as final price and brand image - compared with the other intermediary option of using a distributor.
- 40. A 11 Disadvantages (Limitations) You remain responsible for shipping and other trade-related logistics - although your agent should be able to help. You need to specify in an agent's contract if you need them to credit check your customers for you. Arrangements must be made to allow access to your sales ledger as part of the commission payments process. After-sales service can be difficult when selling through an intermediary. You may lose some control over marketing and brand image, compared with entering the market yourself.
- 41. Q 12 Distinguish between intensive distribution and selective distribution and explain the market conditions that would favour EACH distribution option.
- 42. A 12 Intensive distribution consists of the manufacturer placing the goods or services in as many outlets as possible. This strategy is generally used for items such as tobacco products, soap, snack foods, and gum, products for which the consumer requires a great deal of location convenience. Selective distribution involves the use of more than a few but less than all of the intermediaries who are willing to carry a particular product. In this way, the producer avoids dissipating its efforts over too many outlets, and it gains adequate market coverage with more control and less cost than intensive distribution.
- 43. Q 13 Introduce the Boston Consulting Group’s share growth matrix as a strategic planning tool available to marketing management and identify the key advantages and limitations you would associate with this model.
- 44. A 13 BCG matrix is often used to prioritize which products within company product mix get more funding and attention. The matrix is based on classification of products (and implicitly also company business units) into four categories based on combinations of market growth and market share relative to the largest competitor.