CIPS. Marketing for Purchasers

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1 CIPS Level 5 PRACTICE QUESTIONS Marketing for Purchasers

2 Practice Questions This is a collection of exam-standard questions to help you practise what you have learned. Each question or small group of questions is prefaced by an indication of the chapter in your reference text that it mostly relates to. However, bear in mind that exam questions may range across more than one syllabus area; to prepare a full answer you may need to draw on material from more than one chapter. See Chapter 2 of your reference text Relationships Discuss the ways in which the marketing function must interrelate with other functions in an organisation, such as purchasing, production, engineering and design, and finance. What conflicts may arise in these interrelationships, and how can an organisation be structured so as to minimise such conflict? Sticks Limited Sticks Limited supplies office furniture to UK customers. Most of the company s manufacturing is outsourced. Sales are generated by a team of 15 sales representatives, organised by geographical region. Within his own region, each sales representative is responsible for prospecting, order-taking, account maintenance and development. As a result of declining sales, the sales representatives recently carried out some research during customer visits. Among their findings were the following. Buyers are not influenced by advertising, but editorial articles about supplier companies did influence them. About 50 per cent of buyers visited exhibitions and trade shows when making important buying decisions. Buyers valued relationships and personal service from supplying companies. Buyers were happy to recommend suppliers to colleagues if they were satisfied with the products and the levels of service provided. Explain how the sales team at Sticks Limited could contribute to a relationship marketing programme. Not for profit Identify and discuss the main differences between marketing in the not-for-profit sector and marketing in a commercial environment. 1

3 Marketing for Purchasers See Chapter 3 of your reference text Environment It is common to classify the external factors relevant to marketing under such headings as societal, legal, political, economic and technological factors. Identify and discuss the major influences falling under each of these headings. See Chapter 4 of your reference text Marketing research Define marketing research and distinguish it from market research. The four Ps of marketing have been identified as product, price, promotion and place. What specific activities could take place in the research of each of these areas? Primary Evaluate the various techniques used in primary market research. Primary and secondary What is meant by primary and secondary research data for marketing research? Evaluate the relative merits of each. What is the impact of IT on the assembly and evaluation of primary and secondary research data? See Chapter 6 of your reference text Objectives and bases What are the objectives of market segmentation? Describe the different bases that might be used for segmenting a consumer market and an industrial market. See Chapter 7 of your reference text Brand management The company you work for has an expressed objective of becoming an international food and drinks business. How can effective brand management and marketing contribute to this objective? Services From the marketer s point of view, what are the main differences between a tangible product and a service? Define productivity ratios by which an educational institution, such as a college, could measure the effectiveness of its service quality. 2

4 Practice Questions See Chapter 8 of your reference text Screening What is meant by screening of new products? What criteria might a firm adopt in its screening process? Portfolio Describe the advantages of systematic management of a firm s product portfolio. What role can Ansoff s market/product matrix play in this area? See Chapter 9 of your reference text Approaches to pricing Describe what is meant by penetration pricing and market skimming. Describe the factors that determine the choice of product price. Invitation to tender Describe the main procedures a seller will go through when responding to an invitation to tender. Price competition In the context of Professor Michael Porter s three generic strategies, explain the role of pricing in securing competitive advantage. What functions does pricing policy serve other than obtaining competitive advantage? See Chapter 10 of your reference text Middlemen Describe the reasons why manufacturers use middlemen such as wholesalers and retailers, rather than selling direct to end-consumers. See Chapter 11 of your reference text Types of promotion Explain what is meant by the terms trade promotion and consumer promotion. How can these techniques be used to increase market share? Fandango Fandango plc, a manufacturer of food products, is launching a new range of instant meals, and is considering an introductory sales promotion plan. What objectives could such a plan serve? 3

5 Marketing for Purchasers One of Fandango s customers, a retailer of frozen food products, is assessing his current balance of spending on sales promotion and media advertising. What factors should influence the amounts spent on each of these areas? Promotional mix How can advertising and sales promotion assist the work of the personal sales force? Internet The finance director of a small cleaning company has asked you to suggest ways in which the staff might use the internet to promote and sell the cleaning services. Outline the opportunities available to the organisation for using the internet to increase business turnover. See Chapter 13 of your reference text Trends What are the major changes that have taken place in the international trading and marketing environment over the last decade, and what effects have these had on the marketing strategies of international companies? Differences Describe the main differences in social, legal, economic, political and technological terms between marketing internationally and marketing in domestic markets. See Chapter 14 of your reference text Beresford Beresford Limited is one of the major UK manufacturers of gentlemen s shoes. The particular selling point that makes their products attractive is the use of the finest leathers; rival manufacturers typically use synthetic materials or lower-quality leathers to achieve lower production costs. Recently the UK market for Beresford s products has shown signs of growth after a period of stagnation, and the increased volumes have encouraged the company to invest in expensive new manufacturing equipment. However, the growth in business has also led to some problems in that most of Beresford s raw materials are imported and stock levels have risen in line with production volumes. Although this is considered necessary to avoid production delays it does put a strain on the company s finances. Beresford sells mainly through wholesalers and agents, but also has to market its products to the retailers who form the final link in the chain of distribution. 4

6 Practice Questions Despite some optimistic signs in the market, Beresford is facing increasing competition from cheaper imported shoes, especially from Italy and the Far East. Top management believe that a possible solution would be to expand by means of developing export markets. However, there is no export experience within the company and you have been approached as a marketing consultant to advise on the following matters. Required (c) Describe in detail the procedures to be followed by Beresford in screening overseas markets so as to eliminate unlikely prospects as early as possible. What external sources of secondary data could Beresford use to assess possible overseas markets? Discuss the various methods of overseas distribution potentially available to Beresford and recommend (with reasons) the method or methods you think most suitable. Trade-off There is a well known trade-off between standards of customer service and levels of spending: the higher the service level, the higher the cost. What particular factors exacerbate this trade-off in the context of international marketing? See Chapter 15 of your reference text Steps in marketing planning Identify the steps involved in the marketing planning process and discuss the models that the marketer might use at each stage of the process. See Chapter 16 of your reference text Planning How does marketing planning link in with overall corporate planning? Explain the contribution that marketing planning can make to achieving corporate objectives. CRM Describe the benefits likely to be achieved by an organisation from introducing a customer relationship management programme. 5

7 Marketing for Purchasers Case Study questions Beckton Beckton Limited is a manufacturer of industrial chemicals with a wide customer base among other manufacturing companies. Despite this, profits recently have been unsatisfactory and the company has reacted by developing a new product, the Tino, which is aimed at consumer markets. This is a wholly new approach for Beckton. The Tino is a skin care preparation which offers both protection from the sun and a skin moistening agent for keeping skin soft and supple. Having developed the product the company has recently commissioned limited market research to assess its appeal to customers. The research agency conducted a number of interviews in selected major cities and produced a report containing the following main findings. Sun lotions are subject to extreme seasonal variations in sales demand. Skin moisteners are increasingly popular and brand image is overwhelmingly the most important factor in the purchase decision. Consumers are increasingly aware of the dangers of too much exposure to the sun. Enthusiasm for the new product was most marked among mothers with young children. Some 85 per cent of the sample expressed interest in the Tino, and approximately 62 per cent said that they would be likely to try it. A minority of the sample (about 11 per cent) thought that the product s smell was a negative factor. You have now been appointed as a marketing consultant by Beckton Limited to advise on aspects of the marketing of the new product. Required Describe in detail the stages that should be followed in developing new products. To what extent has Beckton fallen short of the process you describe? Prepare a report addressed to the managing director of Beckton Limited, analysing the market research information, suggesting the further information that might be needed, and advising on whether the Tino should now be marketed in its existing form. 6

8 Practice Questions Gillespie You are the newly appointed marketing manager of Gillespie Bank plc, a large UK provider of retail banking and other financial services. In recent years the bank s market share and profitability have fallen. Managers of Gillespie believe that the main reasons for this state of affairs are as follows. Changes in the regulatory framework have meant that new competitors, such as building societies, have entered the market providing services that previously only banks could offer. The range of services demanded by customers has expanded rapidly and Gillespie has found it difficult to respond appropriately. In particular, it has not been able to increase its range of services sufficiently rapidly and has been ineffective in cross-selling services to existing customers. Technological changes have also had an impact. Service provision is increasingly through media other than the traditional high street branches: telephone banking and automated teller machines are now the only contact points for many customers. Demands from shareholders create pressure for growth, increased market share and higher levels of profitability. Required (c) (d) In your capacity as marketing manager prepare an external environmental analysis for Gillespie. Prepare a list of marketing objectives for Gillespie. Prepare a detailed promotional plan to help achieve these objectives. Describe the methods Gillespie could use to segment its markets. 7

CIPS. Improving Supply Chain Performance

CIPS. Improving Supply Chain Performance CIPS Level 5 PRACTICE QUESTIONS Improving Supply Chain Performance 2 Practice Questions This is a collection of exam-standard questions to help you practise what you have learned. Each question or small