UNIVERSITY OF EAST ANGLIA Norwich Business School UG Examination 2014-15 PRINCIPLES OF MARKETING MAIN EXAMINATION Time allowed: 2 hours Answer TWO questions Each question is worth 100 marks The TOTAL number of marks available for this paper is 100 Notes are not permitted in this examination Do not turn over until you are told to do so by the Invigilator
Page 2 1. Explain and discuss using suitable examples where appropriate: a. The term marketing mix, both a typical and an extended one (40 b. The importance of the marketing mix in formulating an effective marketing programme (60 i. A good answer will typically list the 4Ps of the marketing mix product, price, place, and promotion, provide a brief explanation of each of these terms. Product should include new product, quality, features, branding, and packaging. Price should include costs, profitability, value, and competition. Place should include access, distribution and logistics, channel structures and retailing while promotions should include advertising, sales, PR, and direct marketing. A more definitive answer will also include the extended marketing mix by adding People customer service; Processes standardisation, business process; and Physical Evidence tangible symbols of marketing ii. An effective marketing programme blends all of the marketing mix elements into a coordinated programme designed to achieve the company s marketing objectives by delivering value to the customer. The marketing mix constitutes the company s tactical tool for establishing strong positioning in the firm s target markets. However, due to the firm s limited resources, a clear and defined marketing mix will allow the firm to target their markets from an array of strategies arising from the marketing mix. For example, in the age of new customers that are increasingly being more informed, we find that more organisations are moving towards customer relationship management. Therefore, a good marketing mix is important as a good product with bad promotional message will not work and neither will a good product with a good promotional message but bad pricing strategy. 2. Market Segmentation, Targeting, and Positioning is an important tool for marketers to understand and identify patterns of customer behaviour and plan for appropriate marketing strategies. As the marketing manager for a company that is planning to launch a new range of branded frozen desserts to be marketed through supermarkets: a. Identify and discuss the various methods of segmentation normally used by firms that account for the various types of influences on consumer behaviour and discuss its application to your product (50 b. Using the segmentation methods above suggest some ideas for targeting appropriate consumer markets and suggest some positioning strategies for your product (50 i. The student needs to explain the various methods of market segmentation (geographic, demographic, behavioural / psychographic) that can determine marketing strategy. A good answer will go on to apply these methods in the context of the frozen dessert market. It will take into consideration things such
Page 3 as geographic (access to supermarket and other grocery stores, chilled food ranges), socio-demographic (age, income categories, gender, occupational status, home ownership), and personality / behavioural (self-indulgence, home entertainment) factors and characteristics that consumers may display in their choice of frozen desserts. ii. The student needs to explain some common targeting strategies followed by firms such as differentiated, concentrated, and undifferentiated and go on to discuss how firms position their products against those of their competitors using tools such as perceptual maps. A good answer will build on the answer developed in the previous section and use the segmentation methods to identify the appropriate target marketing strategy and discuss how the product can be positioned against those of similar products in the market. 3. Consumer Behaviour is one of the most important areas in marketing. a. Discuss the slight differences in the stages of the buying decision process in individual and organisational consumer behaviour (25 b. Compare and contrast individual and organisational consumers (35 c. Using baked beans as an example, discuss how these differences would apply if an individual consumer were to be buying a can or pack of baked beans as opposed to a large industrial caterer who supplies baked beans as part of the daily lunch menu to cafeterias and canteens in hospitals, factories, and university campuses. (40 i. A typical individual consumer decision making process will include the stages of problem recognition, information search, evaluation of alternatives, purchase decision, consumption, and post-purchase behaviour. An organisational buying decision making process will include in addition, a detailed description of the product specification, a supplier search and call for proposals or tenders, and perhaps a trial period before use, and a long-term relationship with a trusted supplier. A brief description of what each stage means would be expected ii. Organisational customers purchase to meet specific business needs and emphasise economic benefits whereas individual customers emphasise experiential and psychological benefits. The decision making process among organisational customers would involve lengthy decision making time, large numbers of decision makers in the decision making unit (DMU), extended price negotiations, and purchasing directly from the suppliers whereas individual customers would decide quickly, with minimal processes, pay the stated retail price, and buy from intermediaries such as shops and supermarkets. Organisational customers would want customised packages and products but would find difficulties in switching suppliers quickly if there were to be a supplier failure whereas individual customers will buy the
Page 4 standardised product but would find switching easy. A tabulated listing of these characteristics in two columns should be a sufficient answer iii. Students can build on the answers to the previous sections and identify some differences in decision making and purchase processes between individual consumers who would buy either branded or supermarket own brand baked beans as individual or six pack cans as opposed to industrial caterers who will buy unbranded packages of the same item in large volumes 4. Marketing distribution channels are essential for firms to bring their goods and services into the marketplace to ensure they reach the widest possible audience a. Discuss the functions of the various distribution channels using appropriate examples (50 b. You are the marketing manager for a firm tasked with launching an exclusive range of organic cosmetic products that carries the brand name and endorsement of a world-famous supermodel. Discuss your choice of the range of distribution intermediaries you will choose for your product and justify your reasons (50 i. Most manufacturers use intermediaries to bring their goods to the market for multiple reasons. They would try to forge a marketing channel or distribution channel, a set of interdependent organisations involved in the process of making a product or service available for use or consumption by the consumer or the business user primarily because intermediaries usually offer the firm more than it can achieve on its own. This eventually benefits the firm from a cost perspective, efficiency and makes available resources to channel into other marketing activities. Marketing channels perform many key functions. Some help complete transactions by gathering and distributing information needed for planning and aiding the exchange of goods and services. Intermediaries develop and spread persuasive communications about an offer by performing contact work; i.e. finding and communicating with prospective buyers (such as big small or large retailers), or by matching ; shaping and fitting the offer to the buyer s needs and by entering into negotiation to reach an agreement on price and other terms of the offer so that ownership can be transferred. Intermediaries also help to fulfil the complete transactions by offering physical transportation and storing of goods. On the intangible side, they may also assist with financing i.e. acquiring and using funds to cover the costs of channel work and risk by assuming the risks of carrying out the channel work. Students should be able to name different types of distribution channels and intermediaries from retailers to vending machines ii. Using the answers developed from the previous section students should be able to identify a common sense approach in selecting a range of intermediaries from the exclusive price
Page 5 range outlets of high street cosmetics shops like Superdrug and Boots to various supermarkets to high end beauty clinics and even home selling such as those used by Avon. They can provide brief explanations and justifications for their choice of distribution intermediaries END OF PAPER