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Download MAY 2010 FI NAL - Institute of Bankers in Malawi
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ANSWERS AND MARKING SCRIPT QUESTION 1 Cost-related term Total Cost Average Cost Fixed Cost Marginal Cost Variable Cost Scale Economies Contribution Breakeven analysis Explanation The sum of all fixed and variable costs multiplied by the quantity produced Total cost divided by number of units produced Cost that do not vary with the number of units produced The addition to total cost of producing one additional unit of output Costs that vary directly according to the number of units produced The potential reduction in average costs as a result of increasing output/ sales Selling price minus variable costs Is a level of output at any given price where total revenue is exactly equal to the total costs of production and marketing Scheme/ Script: Three [3] marks for each correct answer. (Total 15 Marks) QUESTION 2 The 4Ps Approach Product The 4Cs Customer Solutions Price Customer Cost Value Place Convenience Access Promotion Communication Information Shift in emphasis Products must provide answers/value to felt or actual customer problems/needs Price be sensitive to a customers limited budgets, discretionary incomes and life cost of the product Place must support speed [immediacy] with which a customer can access her solution to a felt problem/need. Customer must know who to ask if she has difficulties A Draft qualification exam for the Institute of Bankers in Malawi 1 with an organization’s “solution” [two-way communication] to her problem before, during and after purchase. Scheme/ Script: Three [3] marks for knowing/listing the 4Ps Five [8] marks for knowing/ listing the 4Cs Four [4] marks for providing the rational for the shift in marketing emphasis (Total 15 Marks) QUESTION 3 a] Marketing Research ....is a set of techniques and principles for systematically collecting, recording, analyzing and interpreting data that aid decision-makers who are involved with the marketing of goods, services and ideas. b] Market Research ….focuses research on is a narrower research method considering only facets of a particular market under investigation. c] ADVANTAGES OF CONTINUOUS MARKETING RESEARCH i.] Improves a marketer’s ability to make decisions ii.] Helps marketers to constantly monitor the changing values and behavior of customers iii.] Identifies competitors’ development and shift in strategies iv.] Assist in continuously evaluating current effectiveness of an organization’s marketing mix strategies and tactics. v.] Enables environmental scanning as part of an organization’s strategic planning process. Scheme/ Script: Three [3] marks for definition of Marketing Research Two [2] marks for definition of market research Ten [10] marks [two for each correct response] for section [c] (Total 15 Marks) QUESTION 4 (a) Brand are the attributes in the form of name, sign, decision etc of a product that customers identify and this strongly influence the decision by customer to buy that product. (3 marks) A Draft qualification exam for the Institute of Bankers in Malawi 2 (b) (c) Branding Strategy There are four main categories of branding strategy: (i) Company brand Is the parent brand name featuring prominally on all products e.g. National Bank. (2 marks) (ii) Umbrella brand Involves a company brand combined with an individual brand and the company brand is used to legitimatize the individual brand e.g National Bank. (iii) Range brand Is a range of product under different brands. (iv) Individual name Each product may have its own unique name. Benefits of branding: To Customer Makes it easy to choose between competing products Helps customers cope with information overload. Supports customer aspirations to self image. Confers customer membership to a reference group. To Markets Adds value to a product Create an impression in customers mind leading to increased reproduction. Differentiates competing products Encourages a full strategy Easy for other products to piffy back or exploit brand image. To Stakeholders An intangible asset High profits A Draft qualification exam for the Institute of Bankers in Malawi 3 SECTION B Question 5 1 Idea generation Good ideas drawn from both internal and external sources in order to develop new products 2 Idea Screening From a list of new ideas a few are evaluated to determine which ones warrants further study. 3 Concept Development and Testing Further study should yield concrete proposals that management looks at in terms of: i.] Product features ii.] Demand estimates, competition and profitability tests iii.] Development of a program to develop the product iv.] Assign responsibilities [to champions] for product feasibility studies 4 Marketing Strategy Development Define the manner the product will be marketed. 5 Business Analysis Determine if the proposed product will fit in with the business plans, financial costs etc. 6 Product Development The idea on paper is converted into a physical product for pilot testing, laboratory evaluations to determine compatibility with existing marketing ability, production ability and adequate demand. 7 Test Marketing [market test] In use and commercial experimentation in limited geographical areas to ascertain the feasibility of a full scale marketing program 8 Commercialization Full scale product and marketing programs are planned and the product is launched A Draft qualification exam for the Institute of Bankers in Malawi 4 Scheme/ Script: Two point five [2.5] marks for each correct answer [Total 20 Marks] A Draft qualification exam for the Institute of Bankers in Malawi 5 QUESTION 6 ‘Physical evidence’ or ‘Physicality’ ….is the element of marketing that a client or customer see or feel when [s]he purchases an actual product or service. There are two major types of evidence i.] Essential evidence: Cannot be possessed by customers but is used to obtain a core service element. ii.] Peripheral evidence: This evidence that the customer possesses alongside the purchase of goods/ services and used to confirm the service received. In banking physicality includes: 1 Aisles, Sections and Queues The way these are arranged must ensure they maximize the opportunity to ‘see’ and thus access/ purchase a banking service/ product. Problems of crowding should be dealt with through ‘express service’ counters and additional tellers during ‘peak’ times. 2 Ease of access Ease of access and good display—reflecting the bank services— encourage customers to get involved. 3 Relationship between products Customers expect to find related bank services close at hand and close to each other. 4 Colors Color has a fashion and image connotation thus must be carefully chosen. 5 Lighting Lights be must be good for clear vision and highlighting of colors. 6 Seating Important in encouraging customers to feel comfortable while they wait to be served. 7 Background music Care should be taken to control volume levels as well as choosing the right type of music. 8 Signage and corporate identity A Draft qualification exam for the Institute of Bankers in Malawi 6 People hate asking around when they can read and if they have to ask staff must wear uniforms with corporate identities. A Draft qualification exam for the Institute of Bankers in Malawi 7 9 Security Essential in providing customer confidence but not intrusive to deter people. Scheme/ Script: Three [4] marks for definition of ‘physical evidence, physicality Two [2] marks each for the two types of physical evidence Three [3] marks each for any four areas of physicality applied to a banking environment [Total 20 Marks] A Draft qualification exam for the Institute of Bankers in Malawi 8 QUESTION 7 1 Gatekeepers These access and control the flow of information about products or services to others. E.g. a teller who sees a bill-counter in a catalogue. 2 Initiators/ Indicators These first draw attention to a particular product/ service or suggest ideas of buying it—influenced by a form of trigger [event or information]. A team leader who suggests a certain type of counter to simplify tellers’ work on the counters. 3 Influencers These stimulate, inform or persuade others to purchase a product or service. A floor manager recommends the counter to management 4 Deciders These are the people who make the decisions to buy a product. Management authorizes purchase a model for testing in the bank room. 5 Buyers These are the people who implement purchase decision by ordering or purchasing the product/ service. The Purchasing Manager orders the model and ensures it is delivered. 6 Financiers These set the budget and authorize funds for the purchase. Bank accountants authorizes—after successful pilot test—to procurement of bill counters. 7 Users These people use, consume or benefit from the product or service. Bill counters are placed at the tellers’ counters and tellers and customers enjoy error free banking. Scheme/ Script: Two [2] marks for each numbered item Six [6] marks for bank-related examples [Total 20 Marks] A Draft qualification exam for the Institute of Bankers in Malawi 9 QUESTION 8 1 Vertical Marketing system This is a distribution system with a core center organizing marketing throughout the channel 2 Corporate marketing systems This is a distribution system wherein stages in production and distribution are owned by a single corporation allowing integration along a distribution chain 3 Contractual Marketing systems This is a distribution system involves agreement over aspects of distribution marketing e.g. franchising. 4 Administered Marketing systems This is a distribution system wherein a plan is drawn up between channel members to help reduce conflict. 5 Just-in-Time [JIT] This is a competitive distribution/ inventory control tool/system delivering inputs to production points at a rate and time they are needed. Scheme/ Script: Four [4] marks for each numbered item [Total 20 Marks] A Draft qualification exam for the Institute of Bankers in Malawi 10