Download Final Exam SP12 UG

College of Administrative Sciences and Economics
MKTG 402 – Marketing Strategy
Spring 2014 – Exam
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There are seven essay questions worth 100 points total in this exam.
GOOD LUCK!
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I. Analysis Questions:
1. Ink & Paper, a small independent bookseller in the Washington, D.C., is owned by the
Page family. To reverse a declining sales trend, the Pages feel they must redesign its
bookstores and product offerings to appeal to a specific target segment. Hence, they hired
a market research firm, Beltway Research, to undertake a benefit segmentation study of
book consumers in the D.C. metropolitan area.
Beltway Research surveyed 1000 consumers by mail. One part of the survey asked
consumers to rate how important each of the following bookstore attributes is to them,
using a scale where 1 = not at all important and 10 = very important. Beltway Research
has taken the results of this survey and grouped the consumers to form three benefit
segments: I, II, and III. The mean importance ratings of consumers in each of these
segments are (the higher the importance rating, the higher the segment’s expectation
regarding the bookstore attribute):
Attractive stores
Can quickly special order books not in stock
Events where authors read from their books and poetry
Low prices
Staff knowledgeable about books
Lots of books on sale
Lots of chairs and tables to read in
Free gift wrapping
A good coffee and snack bar
i.
I
4.6
3.5
2.6
8.2
5.7
8.4
5.2
7.5
4.7
II
4.5
7.9
7.8
3.3
8.5
4.3
6.7
2.8
2.6
III
7.2
4.8
7.2
5.7
5.2
4.8
8.3
6.1
8.1
Using these study results, identify and profile the market segments in the
Washington, D.C. bookstore market based on their importance ratings (6 points).
(HINT: For example, a profile for the pet food market would be “pet lover”).
Segment I:
Segment II:
Segment III:
ii.
Based on the results of the analysis, identify the specific value priorities the Page
family should focus in serving these three segments. Provide them with (onesentence) recommendations on strategies for gaining sustainable competitive
advantage in these markets (12 points).
Segment I:
Segment II:
Segment III:
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2. A manufacturer of electrical components for industrial applications has four strategic
business units (SBUs), shown in the following table.
i.
Using the Boston Consulting Group model, evaluate the strength of the company's
current condition by placing each SBU onto the portfolio matrix (16 points).
Sales ($m)
1
1.0
1.5
1.5
1.0
15
2
4.8
3.2
3.2
2.0
20
3
6.5
3.2
1.6
1.4
4
4
0.75
3.0
2.5
2.0
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ii.
Sales of top three competitors ($m)
According to the BCG portfolio model, what strategies should it consider to
improve its future position? (8 points)
Dimension:
Dimension:
Market growth
rate (%)
SBU #
SBU #:
SBU #:
BCG Label:
BCG Label:
Strategy:
Strategy:
SBU #:
SBU #:
BCG Label:
BCG Label:
Strategy:
Strategy:
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II. Read the case below and answer the following questions:
THE ENERGY BAR INDUSTRY
In 1986, PowerBar, a firm in Berkeley, California, single-handedly created the energy-bar
category. Positioned as an athletic energy food, it was distributed at bike shops and events
that usually involved running or biking. The target segment was the athlete who needed an
efficient, effective energy source. Six years later, seeking to provide an alternative to the
sticky, dry nature of the PowerBar, a competitor, also located in Berkeley, developed an
energy bar with superior taste and texture and branded it the Clif bar. About the same time,
another competitor introduced the Balance bar, which offered a blend of protein, fat, and
carbohydrates based on the nutrition formula associated with the "Zone diet." Faced with
these challengers, PowerBar responded with Harvest (a bar with a much more accessible taste
and texture) and ProteinPlus (an entry into the high-protein subcategory closely related to that
defined by Balance).
The makers of the Clif bar observed that many women were athletes and many more were
involved in fitness. They further observed that this half of the population had unique needs in
terms of vitamins and supplements, and that the energy bar industry had yet to recognize or
fill them-a classic case of unmet needs. As a result, they introduced Luna as the first
nutritional (not energy) bar for women, using media and promotions targeting active females.
The bar had a light crunchy texture, came in flavors like "lemon zest" and chai tea, and
contained nearly two dozen vitamins, minerals, and nutrients. The target market consisted of
time-strapped women who wanted both taste and nutrition and would appreciate a bar
tailored to their needs.
Both in reaction to Luna's success and to expand the segments for which the category was
relevant, PowerBar studied why women did not buy its products. One answer was that the
calorie hit from any member of the PowerBar family was simply too great. In response, the
firm created the almost-indulgent, Pria. With only 110 calories, Pria was designed to respond
to Luna while attracting new users into the category.
In addition to the major brands, challengers from a variety of small and large firms advanced
subcategories by positioning themselves around such factors as age (bars for seniors and
kids) and health (products to fit dairy-free, diabetic, and heart-conscious diets). Over a tenyear period, some 450 products were introduced. New products in the category are going in
several directions. The popularity of low-carbohydrate diets has prompted a host of food bar
entries, including Atkins Advantage, which gained a substantial market share that peaked in
2003 and fell off sharply thereafter. A trend toward indulgent icings, coatings, and coverings
has led some to morph toward candy bars. Others went the opposite way: The makers of the
Clif bar also have introduced a Mojo line of salty snack bars to provide alternatives to sweettasting bars and the Clif Nectar bar, an entirely organic nut and fruit bar. Power Bar
introduced Nut Naturals, a low glycemic index bar. Currently, there are market positioning
opportunities involving natural, sugar-free, and organic bars, those containing no
preservatives and no genetically altered ingredients.
The energy bar category has gone mainstream, moving from the bike shops to the grocery
stores and exploding from just over $100 million revenue in 1996 to an estimated $2 billion
or more a decade later. Along the way, the market became large enough to attract the
attention of major packaged goods firms. In 2000, Nestle purchased PowerBar, which has
remained the leading player.
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3. Write a value proposition for PowerBar linking it to customer motivations. (9 points)
Follow the form: To (target group & need), our (Brand) is (concept) that (differentiation
point)
4. Identify PowerBar’s competitors. Indicate two direct and two indirect competitors (8
points).
Direct Competitors:
Indirect Competitors:
5. What product developed by PowerBar would support a new market entry (i.e.,
innovation)? Explain what type of an innovation it would correspond to (10 points).
Innovation:
Type:
Why:
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6. At what stage is the energy bar market relative to the product-life cycle in 2000? Identify
and explain the strategies should be used by PowerBar given the life cycle stage and
PowerBar’s position in the market? (16 points)
Stage of the energy bar market:
Position of Power Bar:
Market objective of Power Bar:
Pick one strategic approach Power Bar should implement, and briefly explain:
7. Develop a positioning (brand or perceptual) map (using attributes/ dimensions illustrated in
the case). Place Power Bar and its direct competitors on the map. Based on your map, note if
there are any obvious customer needs that are currently not being met. HINT: In the case it is
stated that: “Currently, there are market positioning opportunities for natural, sugar-free, and
organic bars, those containing no preservatives and no genetically altered ingredients” (15
points).
Attribute / Perceptual dimension
Attribute / Perceptual dimension
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