Download Question Paper Marketing Management (MB221) : July 2003

Question Paper
Marketing Management (MB221) : July 2003
Part A : Basic Concepts (30 Points)
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•
•
•
1.
Which of the following is the best example of an organizational buyer?
a.
b.
c.
d.
e.
2.
The result of the growth of dual-income families
An example of the changing attitudes of women
A reflection of the consumer demand for value consciousness
Designed as a tool that will creatively make Reebok recession-proof
In response to the growing number of single-parent households.
When Adidas sets up a web site so that consumers can design the shoes they want to purchase
(including putting their own name or nickname on the back of the shoe), this is an example of
a.
b.
c.
d.
e.
6.
Penetration pricing
Prestige pricing
Bundle pricing
Odd-even pricing
Standard mark-up pricing.
WomenDefy.com is a website owned and operated by the manufacturers of Reebok sporting
equipment. The site sells products designed especially for women. It also has stories about
ordinary women performing extraordinary feats. The website is:
a.
b.
c.
d.
e.
5.
Private branding
Generic branding
Co-branding
Mixed branding
Multiproduct branding.
A bottle of shampoo, shrink-wrapped with a bottle of conditioner, for Rs.30 more than the
regular price of the shampoo is an example of:
a.
b.
c.
d.
e.
4.
A mother buying milk for her young son
A computer programmer buying the latest game for his Playstation
A store owner buying hand-painted slate signs to sell in her store
A botanist buying a rose bush for his home garden
A baseball player buying a t-ball set for his daughter.
Lay's potato chips flavored with KC Masterpiece barbecue sauce is an example of:
a.
b.
c.
d.
e.
3.
This part consists of questions with serial number 1 - 30.
Answer all questions.
Each question carries one point.
Maximum time for answering Part A is 30 Minutes.
Undifferentiated marketing
Mass customization
Mass marketing
Geodemography
Accountable marketing.
Reebok was the first store manufacturer to introduce a soft leather aerobic dance shoe in
many colours. Which of the following strategies is being implemented by Reebok?
a.
b.
c.
d.
e.
Repositioning
Harvesting
Market aggregation
Product differentiation
Targeted differentiation.
1
7.
The Coca-Cola Company (CCC), the world’s largest soft-drink bottler voluntarily recalled
7,362 Coke Classic 8-packs in France because of possible small glass particles in the product.
No glass was found in the bottles, but a CCC representative said that it would rather recall the
product than risk one of its customers being injured. This sentiment is most closely related to
which moral philosophy?
a.
b.
c.
d.
e.
8.
There is a school of thought in which firms use its resources and engage in activities designed
to increase its profits so long as it stays within the rules of the game, which is to say, engaged
in open and free competition without deception or fraud. The above statement is most closely
associated with:
a.
b.
c.
d.
e.
9.
Hedonism
Utilitarianism
Existentialism
Moral idealism
Socialism.
Cause-related marketing
Profit responsibility
Caveat emptor
Market aggregation
Stakeholder responsibility.
When Marty attended his first statistics class, he realized he ought to buy a calculator or else
he would be unable to do his assignments. In which stage of the consumer purchase decision
process was Marty when he made this realization?
a.
b.
c.
d.
e.
Information search
Problem recognition
Purchase behavior
Alternative evaluation
Pre-purchase cognition.
10. In Consumer Behavior, Cognitive dissonance
a.
b.
c.
d.
e.
Occurs with all products
Cannot be alleviated once it has occurred
Typically occurs during the information search stage of the purchase decision process
Is defined as postpurchase psychological tension
Happens more with low-involvement products than with high-involvement products.
11. Which marketing strategy would most likely offer the greatest economies of scale in research
and development and production expenses?
a.
b.
c.
d.
e.
Market-product concentration
Market specialization
Product specialization
Selective specialization
Market specialization and Market product concentration.
12. Saint Gobain Desjonqueres is a company that manufactures perfume bottles for perfume
makers. The manufacturer’s perfume bottles are a good example of _____ demand because
demand for its bottles is so closely related to consumer demand for perfume.
a.
b.
c.
d.
e.
Contiguous
Pooled
Conjoint
Congruent
Derived.
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13. The safety engineer for a manufacturer of pesticides submitted a request to the company’s
purchasing agent to restock the company’s supply of personal protection badges, which
monitor individual exposure to carbon monoxide, a chemical that is a by-product of the
company’s manufacturing process. This purchase would most likely be an example of a:
a.
b.
c.
d.
e.
New buy
Straight rebuy
Conditional rebuy
Modified rebuy
None of the above.
14. Consumers in Japan have access to cell phones with digital cameras to send snapshots by
e-mail, built-in players for music downloads, global satellite positioning technology to tell
them exactly where they are, and the ability to stream pictures of the caller. This high level of
sophistication has led to the creation of a cutting-edge industry that develops increasingly
more advanced handheld gadgetry. According to Michael Porter, situation in Japan are
examples of:
a.
b.
c.
d.
e.
Demand conditions
Country structure and strategy
Factor conditions
Synergy
Market aggregation.
15. Retailers often conduct research to identify areas of a city with residents that fit a similar
lifestyle profile. This is an example of __________ segmentation.
a.
b.
c.
d.
e.
Psychographic
Demographic
Socioeconomic
Benefits sought
Behavior.
16. An ESPN.com-commissioned study by Copernicus Marketing Consulting and Research
wanted to know if sports-centered males are spending as much time on the computer
digesting sports information as they are spending in front of their televisions. This is an
example of a:
a.
b.
c.
d.
e.
Hypothesis
Constraint
Measure of success
Extrapolation
Decision.
17. When automakers first added airbags to the passenger side of the automobile it was an
example of what is called a _____ because no new consumer behaviors must be learnt.
a.
b.
c.
d.
e.
Continuous innovation
Continuous destruction
Discontinuous innovation
Insignificant innovation
Interruptive innovation.
18. A retail chain hires a company to design and install a computer network that would allow
each store in the chain to check the inventory of others in the chain for customer-requested
items. The retail chain would have purchased a
a.
b.
c.
d.
e.
Support good
Production good
Convenience good
Fabricating part
C2C good.
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19. Which of the following is the last checkpoint in the new product development process before
significant capital is invested in creating a government sponsored product prototype?
a.
b.
c.
d.
e.
Business analysis
Test market
Social audit
Situational analysis
Trend extrapolation.
20. The Clorox Company manufactures and markets bleaches, bathroom cleaners, disinfecting
wipes, and stain removers under the Clorox brand. This is an example of
a.
b.
c.
d.
e.
Umbrella branding
Co-branding
Family branding
Subbranding
Branding duality.
21. A nutritional counselor has a morning, in which she has no scheduled appointments but
during which she plans on being available in her office. Which unique element of service best
describes what is happening in this service example?
a.
b.
c.
d.
e.
Idle production capacity
The tangible nature of service
The separability of service provider and consumer
An equipment-based service
The incongruous relationship between service provider and service receiver.
22. Creative marketers engage in _____, the practice of simultaneously increasing product and
service benefits and maintaining or decreasing price.
a.
b.
c.
d.
e.
Revenue sharing
Diminishing returns
Quantitative analysis
Value-pricing
Cost-plusing.
23. Customix.com is a retail website that allows customers to visit its website and design a
sneaker to their own personal specifications. This website would particularly appeal to people
who exercise regularly and are very aware of what shoe styles fit comfortably on their feet.
Customix.com best represents how retailers create _____ utility.
a.
b.
c.
d.
e.
Price
Form
Place
Time
Promotion.
24. Which of the following statements best describes the term depth of product line?
a.
b.
c.
d.
e.
Every unique item in the store has its own SKU
Every stage of the product life cycle is represented by specific products in the store
The retailer carries a large variety of different products
The retail establishment carries enough merchandise so it never has to worry about a
stock out
The retailer carries a large assortment of each item.
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25. When Procter & Gamble introduced Swiffer, a new product to make it easier to clean
increasingly popular hardwood floors, it knew it had to achieve high brand awareness among
its potential consumers because the product was low-tech and fairly easily imitated. Which
promotional element did P & G emphasize?
a.
b.
c.
d.
e.
Advertising
Personal selling
Sales promotion
Public relations
All of the above equally.
26. The wheel of retailing:
a.
b.
c.
d.
e.
Describes how new forms of retail outlets enter the market
Explains how to position retail outlets on the retail positioning matrix
Relates the development of the marketing mix to the development of the retailing mix
Explains why online retailing will not lead to disintermediation
None of the above.
27. _____ involves adjusting the presentation to the selling situation, such as knowing when to
offer solutions and when to ask for more information.
a. Suggestive selling
b. Relationship selling
c. Adaptive selling
d. Consultative selling
e. Proactive selling.
28. Biopure Corporation is the only company which has developed an artificial hemoglobin that
can be used in place of blood transfusions and holds the patent on its process. Therefore,
Biopure has a(n)
a. Distinctive parity
b. Sustainable dominance
c. Synergistic edge
d. Market dominance
e. Competitive advantage.
29. A manufacturer of exercise equipment has set as its strategic goal to increase its market share
by 5 percent during the next three years. During which of the phases of the strategic
marketing process, the company will learn whether it achieved this goal?
a. Planning
b. Implementation
c. Control
d. Evaluation
e. Organizing.
30. Ritz-Carlton hotel chain is famous for the level of high-quality service offered by the staff of
the hotel chain. It targets the top five percent of corporate and leisure travelers. In terms of
Michael Porter's generic business strategy, which of the foll
owing strategies is being used by
Ritz-Carlton?
a. Differentiation
b. Focus
c. Cost leadership
d. All of the above
e. None of the above.
END OF PART A
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Part B : Caselets (50 Points)
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This part consists of questions with serial number 1 - 7
Answer all questions.
Points are indicated against each question.
Detailed workings should form part of your answer.
Do not spend more than 110 - 120 minutes on Part B.
Caselet 1
Read the following caselet carefully and answer the following questions:
1.
FedEx promises sophisticated real time tracking information, free packaging, on-time delivery or money
back in select territories. Discuss how the above services would give a headstart vis-à-vis its competitors?
(7 points)
2.
Explain the convenience FedEx provided to its customers?
3.
(8 points)
Explain how a small cargo company operating in around three states in India will get benefited if it would
adopt the shipment tracking system?
(7 points)
FedEx
FedEx Ground is the second largest small package ground carried in North America, with a network of 370
facilities including 27 fully automated distribution hubs and local pick-up and delivery terminals. FedEx Ground
offered guaranteed delivery service to 100 percent of business throughout America, supported by a team of
3,50,000 employees and contractors. With an operating company of FedEx corporation and FedEx Express.
FedEx ground reported revenue of $2billion for fiscal year 2000.
FedEx had pioneered the concept of express distribution. It delivered documents, packages and freight. Fed Ex
did not just ship goods on behalf of its clients but also streamlined supply chain logistic practices using the
Internet. FedEx had entered e-business with the launch of its website www.FedEx.com in 1994. Customers were
allowed to complete all the tasks from the website, rather than calling a person. FedEx included several software
that enabled them to reduce the time they spend on shipping, thereby increasing efficiency through these tools.
It introduced a world tracking software in 1998 to install, menu-driven and easy to use. The multi-lingual stand
alone and self-installable windows software allowed customers to get real-time tracking information on their
shipment anywhere in the world, from pick-up to delivery. Tracking was made possible through a unique airway
bill number. As soon as a customer entered the tracking number and clicked on the track button, the location of
the package was displayed.
FedEx discovered that providing “on-call” services, that is, picking up customers’ packages from them was
significantly more costly than servicing customers who dropped off their own packages. FedEx wanted to
understand why customers were making “on-calls” and what it would take to convert them to “drop-off”
customers.
FedEx home delivery takes into account all the aspects of the customer such as his availability, flexibility in
fixing time etc. The customer could prefer any of the premium services like FedEx signature home delivery,
FedEx date certain home delivery, FedEx evening home delivery and FedEx appointment home delivery. Under
signature home delivery, it ensures that the package will not be delivered without the recipients signature. Date
certain home delivery allows recipients to choose a specific day for delivery, the evening home delivery
guarantees a package will be delivered between 5 P.M and 8 P.M. Appointed home delivery guarantees that
delivery within an hour of a specified time, which is given by the recipient when contacted by the local FedEx
home delivery terminal.
FedEx had money back guaranteed approach too. FedEx home delivery uses technology to provide better service
to shipper and their residential customer. Shippers transit all package data electronically, via electronic date
interchange, which allowed FedEx home delivery,as FedEx was receiving all its shipping data electronically
from shippers that can tailor its delivery services specifically for the residential customer.
For example, Federal Express the first service company to win the Balridge Quality award, is built on a
commitment to reliable and fast delivery service. The company makes an explicit promise to its customers.
“When it absolutely, positively has to be there overnight”. Keeping that promise is essential to the relationship
FedEx has established with its customers because FedEx – like a travel agent, stockbroker, or realtor- acts on
6 is a major strategy practiced by FedEx.
behalf of a customer. For this reason, relationship marketing
FedEx has established with its customers because FedEx – like a travel agent, stockbroker, or realtor- acts on
behalf of a customer. For this reason, relationship marketing is a major strategy practiced by FedEx.
To strengthen its customer relationships in 1993 FedEx introduced the Power-ship program. Regular FedEx
customers are given a computer loaded with special software; the customer only has to pay for a phone line to
connect the computer to the local FedEx office. Using this computer, a customer can check on the status of all its
FedEx shipments-whether they have left the local FedEx office, arrived in the destination city, or been received
at their final destinations (including the name of the person who actually received the item and at what time).
This ability to check a shipment’s progress and easily confirm its arrival provides customers with peace of mind,
a definite added value. With its added-value service, FedEx is building stronger customer relationships. Some
experts speculate that this concept of relationship marketing is as important in the 1990s as the basic marketing
concept was thirty years ago.
Caselet 2
Read the following caselet carefully and answer the following questions:
4.
Discuss Lacoste’s approach for segmentation of their market?
(8 points)
LACOSTE
“Lacoste does not use price as an excluding factor”. That is, the target wearer is described in pyschographic, not
demographic terms, it is a brand for the arrived, for the early adopter “who runs a successful business, is
respected in his field, has two children and no plans of having any more” according to SLA. The consumer,
“works ha rder and plays hard,” and appreciates the value of finer, non -fashioned-led leisurewear. Tenny-boppers
are persona non grata. Puneet Malhotra, an employee of Junach Pvt. Ltd. (an SLA franchisee which runs seven
+
outlets), says, that most customers are “30 ” .
Lacoste’s perceived value stays high because its wearers form a club of like -minded folk, snooty to the extent
that all club members are. As the brand’s wearers are walking –talking advertisements on the desired social
circuitry, the prospective buyer charmed by the kind of people he see wearing the crocodile.
The quintessential Lacoste wearer is a mobile phone-equipped, leisure-loving globetrotting yuppie in his 30s and
40s, bent on staying fit, and a keen golfer or weekend tennis buff, he’s a great spe nder of self-earned money,
casual at the right times, global in his thinking and with little time for wooly “intellectuals” who refuse to admit
that clothes are a personality statement or think that getting mournful about Indian poverty is achieving more
than what he does with his time (adding to GDP growth).
Of course, the audience is only a subset of India’ wealthy. Casualness and leisure are not well -in-grained concepts
here, shown by the weak response to Club Med’s activity packed foreign holidays. “Peo ple come with an “I am
sorry” look when forwarding their leave application, “says Kochar, lamenting the stigma attached to splurging.
Thanks to the Gandhi-Nehru legacy, “the belief is, if he’s so rich he must have had a hand in some scam. We are
not comfortable with wealth, with success.”
Change has begun, back in 1993, Lactoste came with the understanding that there were about half-a-million
potential buyers. In four years, the tribe is said to have doubled. “Of these, about a lakh are buying Lacoste,”
believes Kochar. He predicts that the group should swell by half in the next five years. By then, much of the
current segment of 20s, fashionable professions, with good degrees from premier institutes, “in the words of
Darlie O. Koshy, professor and chairman, apparel marketing and merchandising, National Institute of Fashion
Technology (NIFT). “Their purchasing power is rising, aspirations are high and they can afford to buy on
impulse as they pay by plastic”.
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Caselet 3
Read the following caselet carefully and answer the following questions:
5.
Fast food industries are highly competitive, in this scenario what is the unique strategy that was adopted by
Domino’s?
6.
(7 points)
To survive in the cutthroat competitive fast food industry Domino’s has to implement various strategies to
offer better services. Identify various categories of service delivery.
7.
Explain how Domino’s differentiated its service from its competitors?
(6 points)
(7 points)
Today Pizza account for 5 percent of the quick service (food), but the market is projected to grow to 40 percent
over the next five years.
To sink its teeth into the Indian market, Domino’s had reinvented two important mark et factors. One, retailingby bringing into the Indian market the new concept of integrated home delivery system from a network of
company stores within 30 minutes of the order being placed. Two, localizing the taste to suit consumers’ palates.
Domino’s wa s efficient in delivering the Pizza on time. It worked its way into the Indian mindset was the
promised 30-minute delivery. The chain offered compensation of Rs.30 off the price tag if there was a delay. In
the United States where time management was clearly not the issue and the 30 minute delivery time was taken
for granted, the total satisfaction guarantee is what it emphasized. If the customer was not satisfied with the
pizza, the company either re-makes it or gives the customer the refund. But overall, the 30-minute delivery time
is the common template for Domino’s globally.
Domino’s has the largest retail network in the fast -food segment in India with 101 outlets across 40 cities. For its
promised delivery to work, Domino’s emphasis on logistics, princ ipally the distances orbit from a retail outlet.
The radius decided was the international parameter within 3 to 4 km. But the crucial difference was the delivery
mode. In most of the 67 other countries, in which the US chain has a presence, the Domino’s p izzas are
delivered in vans; in India, the delivery is taken care of in a scooter or a moped. The reason, India’s chronically
congested roads and the unpredictable traffic system made van delivery a risky proposition. Instead Domino’s
used Heat wave a hot bag using patented technology that kept pizza oven hot till customer’s doorstep.
Domino’s schedule was unique in pizza -making process. There is an 11(eleven) minute schedule followed; one
minute for taking down the order, one for pizza making (rolling out the dough and placing the toppings) six
minutes oven-time and three minutes for packing, sealing and exit. The sale personnel was trained to work
within the 11-minute time frames, which is the international Domino’s standard.
According to Domino’s officia ls the retailing success was due to empowerment of staff who will emphasis on
‘safe delivery person (SDP)’. Sales personnel are trained to take collective responsibility, which was the reason selling concept clicked. Even they are allowed to take decision on special discounts and offer of free pizzas to
regular and valued customers. The team also takes decision on inventory levels, indenting administration and
hygienic requirements, cost management, top-line and bottom line accountability and so on. These are followed
by systematic consumer redressel system. Most of the personnel are between 18 to 20 age group, and expect to a
point to empower them to take critical decisions, as there an off-chance that a lapse occur. In certain
circumstances the salespersons make it point to call up the customers and personally apologize, even if it
involves making STD calls. This is to ensure that Domino’s goodwill persists.
END OF PART B
8
Part C: Applied Theory (20 Points)
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8.
9.
This part consists of questions with serial number 8 - 9.
Answer all questions.
Points are indicated against each question.
Do not spend more than 25 -30 minutes on Part C.
A marketing department’s effectiveness is based on the level of coordination it maintaineds with other
departments. Explain the problems faced by the marketing departments in the implementation of a
marketing strategy?
(8 points)
A Consumer plays different set/variety of roles in the buying process like Initiator, Influencer, Decider,
Buyer and User. Explain each of these roles and name of role of different situations when the mother is
buying
a. vegetables in the market
b. a sari and
c. a new Video Cassette Recorder (VCR).
(4 + 4 + 4 = 12 points)
END OF PART C
END OF QUESTION PAPER
9
Suggested Answers
Marketing Management (MB221) : July 2003
Part A : Basic Concepts
1.
2.
3.
4.
5.
6.
Answer : (c)
Reason : A store owner buying hand-painted slate signs to sell in her store is an ideal example of
organisational buying patterns. Alternative (a) , (b), (d) and (e) is will come under regular
consumer purchases.
Answer : (c)
Reason : Co-branding is the action to join together several generally complementary marks in the same
product or the same action of communication.
Answer : (c)
Reason : In penetration pricing, firms set the lowest price, assuming that the market is price sensitive,
hence option (a) is incorrect. Sellers often bundle products and features. Firms offer products as
a bundle and priced them on the same grounds.
Answer : (b)
Reason : Alternative (b) is the only option which depicts the changing attitudes of women in the given
situation.
Answer : (b)
Reason : Alternative (a) is incorrect as in Undifferentiated marketing, the firm ignores segment
differences and goes after the whole market with one offer. Mass Customization is the ability of
a company to prepare on a mass basis individually designed products, hence alternative (b) is the
correct answer. Alternatives (c), (d), & (e) are incorrect.
Answer : (d)
Reason : Reebok, in the given situation has implemented Product differentiation strategy; hence options
(a), (b), (c) and (e) are incorrect.
7.
Answer : (d)
Reason : Alternative (a) is incorrect because Hedonism refers to the doctrine that the pleasure is the chief
good in life. Alternative (b) is incorrect as Utilitarianism refers to the theory that the greatest
good for the greatest number should be the main consideration in making a choice of actions.
Option (c) is incorrect because it is the philosophy centered on individual existence and personal
responsibility for acts of free will in the absence of certain knowledge of what is right or wrong.
Alternative (e) is incorrect because Socialism refers to any of the social systems based on shared
on government ownership and administration of the means of production and distribution of
goods.
8.
Answer : (b)
Reason : Cause related marketing is defined in which a company with an image, product, or service to
market builds a relationship or partnership with a “ Cause”, or a number of “Causes”, for
mutual benefit, hence option (a) is incorrect. Alternative (c) is incorrect because Caveat Emptor
is making buyer beware of the specific product candidly. Alternative (d) & (e) are incorrect and
the same are self-explanatory.
9.
Answer : (b)
Reason : It is clearly understood in the given situation that Marty has recognized the need for a Calculator
while working on assignments. Hence option (b) is the correct answer.
10. Answer :
Reason :
11. Answer :
Reason :
(d)
Alternative (d) fits with the given term “ Cognitive Dissonance”.
(c)
Product specialization will offer the greatest economies of scale in R& D and production
expenses.
10
12. Answer : (e)
Reason : Saint Gobain Desjonqueres, manufactures perfume bottles for perfume makers. As the given
example is ideal for derived demand; hence option (e) is the correct answer.
13. Answer : (b)
Reason : A new task/new buy is a buying situation in which a purchaser buys a product or service for the
first time, hence option (a) is incorrect. Alternative (c) is incorrect because Conditional rebuy is
not real-time term used in organisational purchases. The modified rebuy is a situation in which
the buyer wants to modify product specifications, prices, delivery requirements, or other terms,
so the same is incorrect.
14. Answer : (a)
Reason : In the given situation demand conditions is the ideal example.
15. Answer : (a)
Reason : Psychographics seeks to describe the human characteristics of consumers that may have bearing
on their response to products, packaging, advertising and public relations efforts. Such variables
may span a spectrum from self-concept and lifestyle to attitudes, interests and opinions, as well
as perceptions of product attributes.
16. Answer : (a)
Reason : An assumption or guess the researcher or manager has about some characteristic of the
population being sampled is referred as Hypothesis.
17. Answer : (a)
Reason : Continuous innovation is happening in the given example; hence continuous destruction,
discontinuous innovation, insignificant innovation, interruptive innovation are not correct.
18. Answer : (a)
Reason : The retail chain, in the given example had purchased a support good.
19. Answer : (c)
Reason : Social audit is considered as the last checkpoint in the new product development process
particularly in creating a government sponsored product prototype.
20. Answer : (c)
Reason : A brand name that is used for more than one product, i.e., a family of products. Clorox
company’s bleaches, bathroom cleaners, disinfecting wips and stain removers are considered as
a Family brand.
21. Answer : (a)
Reason : Idle production capacity is best example which suits in the given situation.
22. Answer : (d)
Reason : In Value-pricing companies win loyal customers by charging a fairly low price for a high quality
offering.
23. Answer : (b)
Reason : Form utility:production of the good, driven by the marketing function. Baskin Robbins turns
cream, sugar and milk into icecream.
24. Answer : (e)
Reason : The retailer carries a large assortment of each item is the best example of depth of the product
line in the given alternatives.
25. Answer : (a)
Reason : Adverting would be the prime choice P& G prefer to promote the new offering.
Personal selling is the face-to-facd interaction with one or more prospective purchasers for the
purpose of making presentations, answering questions and procuring orders, hence opion (b) is
incorrect. Sales promotion is the variety of short-tem incentives to encourae trial or purchase of a
product or service. Public relations are variety of programs designed to promote or protect a
company’s image or its individual products, hence option (d) is incorrect.
11
26. Answer : (a)
Reason : The wheel of retailing describes how new retail outlets enter the market as low-status, lowmargin stores and gradually add more services to increase their attractiveness to consumers.
27. Answer : (c)
Reason : In adaptive selling marketers identify characteristics and needs of each profile type and react
accordingly.
28. Answer : ( b)
Reason : As Biopure holds the patent for the process of developing artificial hemoglobin. The firms
enjoys sustainable dominance over its competitors.
29. Answer : (c)
Reason : The answer is alternative ( c) and the same is self-explanatory.
30. Answer : (a)
Reason : The business concentrates on achieving superior performance in an important customer benefit
area valued by a large part of the market, hence alternative (a) is the correct answer. Options (b),
(c), (d) and (e) are not the real terms coined by Michael Porter.
12
Part B : Problems
1.
As a delivery service company, FedEx face with tough competition in a competitive market. In order to
stay with or ahead of this competition, they must meet the growing needs and demands of customers. In the
delivery service industry, most of the top companies (USPS, UPS etc) use the same technology. Because of
that, improved customer service through the use of improved customer service through the use of improved
technology that take advantage of location factors in an area where one company can separate itself from
the competition. FedEx seems to recognize this, and it has shown a strong desire to help large corporations
solve some of their delivery problems by upgrading certain aspects of their business that help them to make
the best and most efficient use of distribution center locations. The company recognized that new
technology could help ease the transition towards other “ delivery methods” that best met the needs of the
customers. FedEx delivered documents, packages and freight. It introduced world-tracking software in
1998 to install, menu driven and easy to use. Tracking was made possible through a unique airway bill
number. When a customer entered the tracking number and clicked on the tracking button the location of
the package was displayed.
FedEx had money back guaranteed approach also. It received its shipping data electronically from shipper
that could tailor its delivery service specifically for the resident customer. The logistics unit for FedEx was
built up so that accommodations could be made to companies looking for a delivery service provider to
move the company’s goods from the beginning, raw material phase to the final phase which is delivery to a
customer. Other upgrades were made to foreign airline distribution centers to handle the growing number
of express deliveries.
All of these improvements to the procedures, tracking systems and airlines have helped put UPS in a better
position to serve the needs of large companies who can be a major source of revenue for any package
delivery company, not just FedEx.
The service that FedEx provides ends at the distribution center locations where the goods that have been
shipped are loaded onto their carrier and delivered to the customer. However, with the technology available
now, the company had been able to effectively link these locations in a more efficient manner. Be
establishing improved, continuous communication between the centers and the goods being shipped, the
ability to make the best use of available transportation (thus reducing transport costs) and quickly choose
particular distribution center locations that may be able to better handle certain types of goods has been
improved.
2.
FedEx provided convenience in several ways:
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3.
FedEx introduced a world tracking software that allowed customers to get real-time tracking
information of their shipment anywhere in the world, from pick-up to delivery. As soon as a customer
entered the tracking number and clicked on the track button, the location of the package was
displayed.
FedEx home delivery takes into account all the aspects of the customer such as his availability,
flexibility in fixing time etc.
The customer could prefer any of the premium services like FedEx signature home delivery, FedEx
date certain home delivery, FedEx evening home delivery and FedEx appointment home delivery.
Regular FedEx customers are given a computer loaded with special software; the customer only has to
pay for a phone line to connect the compute to the local FedEx office.
FedEx, which was probably the first large company to do something truly useful with its website, continues
to empower customers to serve themselves at their convenience. The new FedEx intranet ship sits on a
customer’s intranet and let its employees quickly create address books and generate shipping documents
without ever linking to the FedEx website. FedEx also is working on the capability to push tracking
information onto customer’s intranet.
A core FedEx telnet is that the information it provides customers about its services is more important than
the services themselves. By meeting customer needs whatever they are –faster and better than your
competitors, you create a competitive advantage. FedEx uses Internet technology to force its competitors to
constantly play catch up.
Customers want everything cheaper. Since customers also want things cheaper, you must cut costs.
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4.
Market segmentation is the process of dividing a total market into market groups consisting of people who
have relatively similar product needs, there are clusters of needs. Segmentation variables should be related
to consumer needs for, and uses of, or behavior toward the product. Segmentation variable must be
measurable. Selecting inappropriate variable limits the chances of success.Variables for segmenting
Consumer Markets include
Demographic - age, sex, fertility rates, migration patterns, and mortality rates, ethnicity, income, education,
occupation, family life cycle, family size, religion and social class.
Geographic -Climate, terrain, natural resources, population density, subcultural values, different population
growths in different areas.
Psychographic - personality characteristics, motives and lifestyles.
Lacoste may any of the above variable or multi variables to segment the market.
5.
The key to start-up success is a unique product of service. Uniqueness may be embedded in the product
itself, as with a new technology or invention, or it may be some thing as simple offering better and more
personal service than competitors. The strategy behind Domino’s’s was to safely deliver a freshly made
quality pizza within 30 minutes from the time of order. Domino’s’s promotes its unique selling proposition
of a pizza at your doorstep within 30 minutes from the time the order is accepted through its Hunger help
lines. If the delivery taken more than 30 minutes, the pizza would be free.
6.
Three are various categories of strategies to match the service promises with delivery. By promising 30
minutes delivery, Domino’s’s is trying to achieve it through its realistic promise of delivering it free o f cost
if it is delayed after 30 minutes.
7.
Domino’s’s pizza differentiated itself from its competitors through its Unique selling proposition – Hot
fresh and fast delivery. Domino’s’s challenge in the new millennium is to differentiate itself from its many
competitors. To this end, the chain has begun offering “Italian Original” specialty pizzas such as the
Chicken Grill, which features
Part C: Applied Theory
8.
Several problems when implementing a marketing strategy. The result of implementation always turn out
different than the planned strategy. Thus the realized strategt is different from the intended strategy. Ofen
the realized strategy is worse than the intended strategy. The reason for this is the problems encountered
during implementation. The problems in implementation arise due to some common misconceptions. These
are disucssed hereunder:
Production-Marketing Interface: There should be perfect coordination between the production and
marketing departments. If this is not so, the sales force may make undeliverable promises to the customers
about the dates of delivery, or the production department may produce a product whose demand is
low at the moment and pile up inventory. Problems with the quality of product can affect the marketing
department seriously. Similarly, problems with the production program may affect the delivery schedules.
Purchasing-Marketing Interface : This interface is similar to the production-marketing one, if the
marketing department does not inform the purchase department about a reduced demand, it may lead to
holding of excess raw material inventory; similarly, failure to inform about the increase in demand will
lead to materials shortage.
Personnel-Marketing Interface: The human resources department need to directly coordinate with the
marketing department to recruit, train and induct sales team. The personnel department must clearly
identify the skills required for the job so as to recruit the right people. Since people in this department tend
to be more creative and fiercely individualistic, handling is more difficult than handling people from other
functions.
The above mentioned are some of the hinderances faced by the other departments and marketing
department as well. The marketing department’s interdependence on other functions affects its
performance. The output of marketing effort cannot be measured precisely are not exactly measurable.
9.
The student is expected to discuss in detail the three different situations. Answers may vary..
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