Marketing Management Likely exams Questions and Answers

  Nassarawa State University, Keffi

                                                    Faculty of Administration 

                                            Department of Business Administration 

                                            Course:  Marketing Management   (Bus 814)

                                       Marketing Management  Likely exams Questions and Answers

Question 1

The idea behind strategic marketing management is to adapt to your market as things change around.

a. Discuss the advantages and disadvantages in implementing a strategic marketing strategy in a business organization 

b. Explain the place and role of segmentation, targeting and positioning and penetration in strategic marketing management 

Solution to a:

Advantage: Promotes Business to a Target Audience

Business can  sell their products or services without appealing to the people most likely to buy those products and services. That group is known as the target audience, and a marketing strategy is the most effective way to reach that all-important group. If business have targeted this group correctly, they know their habits, behaviors, wants, and needs, and they  also know where they like to hang out on social media. This information shapes the methods the business  will use to promote the products or services

Advantage: Helps Understand Customers

Marketers have to do market research before they develop a marketing strategy, and that research can provide marketers with reams of data that they can use over and over to help refine their product development and to keep up with trends and shifts in their target audience’s behavior. With the evolution of digital information, even small businesses have access to hyper-detailed information about prospective customers. This is known in the digital world as “big data,” large data sets that give you a deep analysis into customer behavior based on factors such as online activity, buying activity, mobile activity, and interactions at stores and shops.

Advantage: Helps Brand Business

Business marketing strategy isn’t just about boosting leads and converting them into buyers, it’s also about expressing the culture, values, and purpose of the business. The process of communicating that vision to your audience is the essence of branding. For example, Apple’s marketing strategy is all about simplicity, elegance, design, and function. Their products are sleek, simple, beautiful, and offer multiple functionalities. When people think of Apple, they think of a company whose products are always on the cutting-edge of technology, design, and physical attractiveness.

Disadvantage: Costs of Marketing

Although the digital revolution has somewhat evened the playing field, the truth is that small business is still at a disadvantage, when it comes to grabbing their share of eyeballs through their marketing efforts. Big data has great value, but accessing that data is expensive, and you have to keep analyzing that data to stay abreast of buyer trends. Launching a marketing campaign on a website can also be expensive, especially if you’re using a pay-per-click strategy to attract more prospects. 

Disadvantage: Time and Effort May Not Yield a Return

Big brands can afford to spend time and effort working on a marketing campaign that fails, because they have the resources to regroup and move on. As a small business owner, however, the return on investment on a marketing campaign may be low, and that means you have spent months crafting a strategy that did nothing to help your bottom line. Even the most well-planned marketing campaigns fail, and at the small business level, that can set you back for months.

Solution to b:

Market segmentation divides the market into subgroups of individuals who share similar needs, wants, and characteristics. It is the marketer's goal to identify the appropriate subgroups of consumers. There are four ways of segmenting consumers.

1. Age.

2. Sex.

3. Income.

4. Family size.

5. Occupation, etc.

Targeting: The second step includes deciding who to target. Targeting involves deciding which customer segment or market the firm should be aiming at. Once a firm identifies all market segments, it must determine which ones to target and how many. This strategy aims to identify small, well-defined target groups. For instance, Imagine you are working as a marketing manager for a clothing retailer. Instead of deciding to target all women, you would specify that you want to target women between the ages of 25-30 who purchase new clothes at least once every two weeks. To find the appropriate target market, you need to evaluate the market segment based on its attractiveness, and whether the firm has the resources and capabilities to do this effectively.

Positioning:  Finally, the company has to position its product in the market. Positioning involves determining where your brand or product stands affecting others in the market. Positioning is a vital part of marketing strategy, as it influences how customers perceive your product offering. It is directly related to your value proposition.

The STP model comes down to a marketer making two crucial decisions: which customers should we serve? And how should we serve those customers? Market positioning is the last step in the decision-making process. The business has to decide how customers will view its product and how it will compete in the chosen market segment.

Question 2:

Discuss the five main characteristics of intangibility and five types of customer variability common in services and explain how the challenges are being countered by marketing management 

Solution:

In marketing, intangibility most often is used to describe services with no tangible product that the customer can purchase. The inability to touch or see this product leaves the customer unable to assess the value using any tangible evidence. 

Five types of customers common in services are:

i. Arrival variability:  All customers do not want the service at the same time or at times convenient for the company. A simple solution is to require customers to take appointments, but in many circumstances customers themselves cannot foresee or delay their needs.

ii. Request variability: Customer’s requirements can vary widely and a service provider needs to have a flexible operation system, which essentially means having more variety of equipment’s and employees with diverse skills.

iii. Capability variability: Some customers perform tasks easily and others require hand-holding. Capability variability becomes important when customers are active participants in the production and delivery of a service.

iv. Effort variability: When customers perform a role in a service delivery process, they differ in terms of the effort they put in performing the role.

v. Subjective preference variability: Customers vary in their opinions about what it means to be treated well in a service environment. Companies treat customer-introduced variability in two ways (i) The company accommodates customer-introduced variability (ii) The company reduces customer-introduced variability.

Question 3:

a. Discuss the options open to a business  that wants to move its products to a new market (Internationally)

Solution to 3a:

There are five basic options available: (1) exporting, (2) creating a wholly owned subsidiary, (3) franchising, (4) licensing, and (5) creating a joint venture or strategic alliance (Figure 7.25 “Market entry options”).

Exporting:  Exporting involves creating goods within a firm’s home country and then shipping them to another country. Once the goods reach foreign shores, the exporter’s role is over. A local firm then sells the goods to local customers.

Licensing:  While franchising is an option within service industries, licensing is most frequently used in manufacturing industries. Licensing involves granting a foreign company the right to create a company’s product within a foreign country in exchange for a fee. These relationships often centre on patented technology. A firm that grants a license avoids absorbing a lot of startup costs, but typically loses some control over how its technology is used, including quality control. Profits are limited to the fees that it collects from the local firm and firms must be aware of the degree of risk to intellectual property loss.

Franchising:  Franchising has been used by many firms that compete in service industries to develop a worldwide presence. Subway, the UPS Store, and Hilton Hotels are just a few of the firms that have done so. Franchising involves an organization (called a franchisor) granting the right to use its brand name, products, and processes to other organizations (known as franchisees) in exchange for an upfront payment (a franchise fee) and a percentage of franchisees’ revenues (a royalty fee).

Joint Ventures and Strategic Alliances:  In a joint venture, two or more organizations each contribute to the creation of a new entity. In a strategic alliance, firms work together cooperatively, but no new organization is formed. In both cases, the firm and its local partner or partners share decision-making authority, control of the operation, and any profits that the relationship creates.

Creating a Wholly Owned Subsidiary:  A wholly owned subsidiary is a business operation in a foreign country that a firm fully owns. A firm can develop a wholly owned subsidiary through a greenfield venture, meaning that the firm creates the entire operation itself. Another possibility is purchasing an existing operation from a local company or another foreign operator. Regardless of whether a firm builds a wholly owned subsidiary “from scratch” or purchases an existing operation, having a wholly owned subsidiary can be attractive because the firm maintains complete control over the operation and gets to keep all of the profits (or losses) that the operation makes. A wholly owned subsidiary can be quite risky, however, because the firm must pay all of the expenses required to set it up and operate it. 

b. Explain the four distinct but overlapping phases of international marketing involvement of a businesses and discuss the three orientations open to businesses in international marketing management 

Solution to 3b:

Domestic marketing. This involves the company manipulating a series of controllable variables, such as price, advertising, distribution, and the product, in a largely uncontrollable external environment that is made up of different economic structures, competitors, cultural values, and legal infrastructure within specific political or geographic country boundaries.

International marketing. This involves the company operating across several markets in which not only do the uncontrollable variables differ significantly between one market and another, but the controllable factor in the form of cost and price structures, opportunities for advertising, and distributive infrastructure are also likely to differ significantly.

Export marketing. In this case the firm markets its goods and/or services across national/political boundaries. In general, exporting is a simple and low risk-approach to entering foreign markets. Firms may choose to export products for several reasons. First, products in the maturity stage of their domestic life cycle may find new growth opportunities overseas, as Perrier chose to do in the US. Second, some firms find it less risky and more profitable to expand by exporting current products instead of developing new products. Third, firms who face seasonal domestic demand may choose to sell their products to foreign markets when those products are “in season” there. Finally, some firms may elect to export products because there is less competition overseas.

Multinational marketing. Here the marketing activities of an organization include activities, interests, or operations in more than one country, and where there is some kind of influence or control of marketing activities from outside the country in which the goods or services will actually be sold. Each of these markets is typically perceived to be independent and a profit center in its own right.

Global marketing. The entire organization focuses on the selection and exploration of global marketing opportunities and marshals resources around the globe with the objective of achieving a global competitive advantage. The primary objective of the company is to achieve synergy in the overall operation, so that by taking advantage of different exchange rates, tax rates, labor rates, skill levels, and market opportunities, the organization as a whole will be greater than the sum of its parts.

Three orientations are  production orientations, sales orientation and marketing orientations. 

Production Orientations:  Production orientation was the major marketing approach by the late 1950s, until the late 20th century many firms were product-orientated. This approach is where the main focus is the product and not the market. 

Sales orientation:  Sales orientation as a business approach or philosophy concentrates on pushing sales of whatever the firms’ makes or supplies, through promotions and sales calls. The focus here is to make the product, and then try to sell it to the target market. Though, the problem could be that consumers do not like what is being sold to them. Many of the businesses was focused this marketing approach till the early 1970s, Economy watch (2010).

Marketing orientation:  Nowadays, a firm has known the finger of its target audience, unless they will hardly to be succeeded. Most organisations in the world invest a lot of time, effort and funds to manage the process of understanding their customers’ needs and wants while pursuing the objective of success. This approach is called marketing orientation. Cramman (2010)

Question 5:

Discuss the core marketing issues and challenges facing small business in Nigeria that are hampering their ability to optimize sales volume and recommend apposite measure and strategies for improving and sustaining increased sales for their products 

Solution to 5:

• Hostile Business Environment. ...

• Difficulty Finding Competent Staff. ...

• A poor state of Infrastructure. ...

• Lack of Market Information and Data. ...

• Red Tape, bureaucracy, and changing government policies. ...

• The high cost of business financing. ...

• Trust.

Question 6:

a. Highlight the drivers of New Product Development 

Solution 6a:

i. A successful new product idea is obviously one that delivers unique value and benefits to a customer. It should be strongly differentiated and with novel features that answer user needs not adequately addressed by other products on the market.

ii. The success of a new product is often a function of how accurately and perceptively user needs have been captured as part of the ideation process. 

iii. The due diligence around customer needs that you put in at the beginning of the process is worthless unless it actively informs the process as a whole.The ‘voice of the customer’ (VoC) should be built into the ideation stage and every part of product development thereafter.

iv. Clear, focused product and project definition early on, is a must. The precision and clarity with which user requirements and specifications are articulated in the documentation, the detail of the planning you do and the way these are made available to a team as a whole, will make a significant difference to the velocity you can achieve.

v. Avoiding scope creep and ever changing specifications mean higher success rates and faster times to market. Finding a formal process for turning user needs into agreed and documented requirements and specs - choosing and prioritising essentials, ‘nice to haves’ and items to include in future product iterations - is a clear way of defining what ‘done’ will look like and focusing a team on getting there quicker. 

b. Adduce reasons for the failure of new products and discuss measures for enhanced success of new products 

• Product Doesn't Solve the Right Problems.

• Picked the Wrong Market.

• Product is Too Expensive or Provides Poor Value to Customer.

• Business Case is Flawed.

• Product is Not Good Enough/Poor Execution.

• Delayed Market Entry.

• Poor Marketing Plan.

N.B The measures for enhanced success ensuing that the above is carried out.  For instance, Product must solve the right problem etc. 

Question 7:

Dine marketing, marketing management and discuss the role of marketing in businesses 

Solution to 7:

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. 

Marketing management is based on product, place, price, and promotion to attract consumers. Marketing management refers to the strategies, tools and analyses used in promoting a business.  The role of Marketing is to communicate with customers about products, explaining who is offering them and why they are desirable

Question 8:

Discuss the broad and specific functions of marketing 

Solution to 8:

The functions of marketing are promotion, selling, product/service management, marketing information management, pricing, financing and distribution

Question 9:

Identify the key concepts of marketing and explain when and how they are relevant to businesses of their various levels of development 

Solution to 9:

There are 5 marketing concepts that organizations adopt and execute. These are; (1) production concept, (2) product concept, (3) selling concept, (4) marketing concept, and (5) societal marketing concept.

Question 10:

How relevant is a market structure to the decision marketing managers can and should take 

Solution to 10:

The concept of market structure is central to both economics and marketing. Both disciplines are concerned with strategic decision making. Marketing structures include management and organizational structure as well as planning and information systems, and especially marketing channels. Marketing structures are created to facilitate marketing functions. Customer relationship management, supply chain management, and planning and information systems are discussed and illustrated, and marketing channels are discussed with an emphasis on the marketing channel as a social system.

Question 12:

Explain the three levels at which marketing environment can be discussed 

Solution to 12:

There are three key elements to the marketing environment which are the internal environment, the microenvironment and the macroenvironment. Why are they important? Well marketers build both internal and external relationships

Macroenvironment:  The macroenvironment is less controllable. The macro environment consists of much larger all-encompassing influences (which impact the microenvironment) from the broader global society. Here we would consider culture, political issues, technology, the natural environment, economic issues and demographic factors amongst others.

Microenvironment:  The microenvironment is made from individuals and organizations that are close to the company and directly impact the customer experience. Examples would include the company itself, its suppliers, other marketing input from agencies, the markets and segments in which your business trades, your competition and also those around you (which public relations would call publics) who are not paying customers but still have an interest in your business. The Micro environment is relatively controllable since the actions of the business may influence such stakeholders.

Internal Environment:  The internal environment has already been touched upon by other lessons on marketing teacher. For example, the lessons on internal marketing and also on the functions within an organization give a good starting point to look at our internal environment. 

Question 13:

Given that the general environment is outside the control of marketing managers and their organizations, should markets be keenly interested in it? 

Solution 13 :

By and large, managers can control the four Ps of the marketing mix: they can decide which products to offer, what prices to charge for them, how to distribute them, and how to reach target audiences. Unfortunately, there are other forces at work in the marketing world forces over which marketers have much less control. These forces make up a company’s external marketing environment, which, as you can see in , we can divide into five sets of factors:

i. Political and regulatory

ii. Economic

iii. Competitive

iv. Technological

v. Social and cultural

Question 16:

a. Discuss the strengths and weaknesses of price skimming and penetration pricing as strategies for pricing new products: Skimming pricing strategy and penetration pricing strategy are the most popular pricing strategy followed by companies for pricing a new product :  Price skimming is a pricing strategy where the price of goods or services is set high at the time of launch and then lowered as consumers become more familiar with it. This method targets early adopters and does not target the mass market. A variant of this strategy is called penetration pricing, which sets high launch prices to penetrate markets

Penetration pricing is when a product is priced lower than the competition to drive sales during the initial release period. This is a pricing strategy often used by brands for a product that has high competition or is a relatively new idea. Penetration pricing strategies can entice customers to make initial purchases or subscribe to services. The low price helps penetrate the market by getting the attention of more consumers than a higher price otherwise would, allowing the brand to establish a foothold against the competition in these early stages.

Disadvantages of Penetration Pricing

On the flip side, penetration pricing isn’t always the right strategy for brands. It comes with its own set of disadvantages, too.

Poor Customer Experiences

Cable providers using penetration pricing is a good example of when it can go wrong. That initial low price gets people in the door but increasing prices later can drive them away again. This is sometimes referred to as predatory pricing.

To avoid this, the value of the product needs to be authentic, along with good customer experiences. This is not something you hear frequently regarding cable providers.

Potential Price Wars

You drop prices and your competitors drop prices, then you drop prices, and they drop prices … and you’re in a price war. Penetration pricing can increase the likelihood of a price war because it invites the competition to undercut you on price.

Disadvantages of Price Skimming

1. It Only Works if Your Demand Curve is Inelastic

Price skimming might be a viable tactic for Apple, but that’s because the quantity demanded doesn’t rise and fall dramatically when the prices change. If the demand curve for your product is generally elastic, meaning price changes have a greater effect on product demand, then initial high prices could really hurt your sales volume. The goal of any company is to make a product as inelastic as possible, but not everyone is selling tech products or services that are ingenious enough to appear indispensable to consumers.

2. It’s Not a Great Strategy in a Crowded Market

In any industry, it is crucial to assess customer valuations and analyze the competition (and their market share) before setting your prices. If you already have a lot of competitors, then chances are your demand curve is fairly elastic, and high prices during your product launch will send customers running in the other direction. Price skimming is not a viable strategy in an already busy market. Unless your product includes amazing new features no one can match, it might be a good idea to avoid skimming if you want to maintain a competitive advantage

b. Describe the factors that determine price that organizations fix on their products

• (i) Cost of Production:

• (ii) Demand for Product:

• (iii) Price of Competing Firms:

• (iv) Purchasing Power of Customers:

• (v) Government Regulation:

• (vi) Objective:

• (vii) Marketing Method Used:

Question 17:

a. Discuss the place of marketing communication in marketing management:  Marketing communication helps move products, services, and ideas from manufacturers to end users and builds and maintains relationships with customers, prospects, and other important stakeholders in the company. Communication is vital to marketing because it brings everyone on the same page.

b. Explain the broad and specific objectives of promotion: Generally, the promotion objectives efforts are aimed at attracting new customers, increasing sales, creating awareness or widening market penetration. The scope of an initiative is usually based on the company's advertising financial budget

c. Discuss the ways in which greater effectiveness can be achieved in marketing communication: Effective communication has to be both creative and effective. New ideas which developed emotional touch point with consumer proved fruitful.

d. Discuss the concept of integrated marketing communication and explain its rationale and objectives: In the area of marketing communications, the concept of integrated marketing communications (or IMC) is well known. This concept was first introduced into the US academic curriculum in 1991 at Northwestern University with the support of the American Association of Advertising Agencies (or 4As), but it is now taught around the world. IMC is essentially a planning concept which emphasizes the importance of coordinating various communication disciplines (e.g., advertising, PR, sales promotions, direct marketing, and personal selling), so that a maximum impact can be achieved in a campaign. This concept gained popularity with the advent of the internet as new (and ever-growing) digital media options and platforms developed. As more audiences move online, the use of offline traditional media (e.g., television, print, radio, and cinema) is now but one option. Both organizations and advertising agencies have realized that a combination of offline and online media is now necessary to reach their target audience, and hence the importance of having a central planning system. 

e. Identify and describe the elements of marketing communication and stress when each is of greatest importance: The five elements of the Marketing Communication mix are Advertising, Direct marketing, and Personal selling, Public relations and Sales promotion.

Question 17:

a. Define packaging and explain its main features and characteristics:  Packaging means the wrapping or bottling of products to make them safe from damages during transportation and storage. It keeps a product safe and marketable and helps in identifying, describing, and promoting the product. “Packing is the preparation of product or commodity for proper storage and/or transportation.

b. List and discuss the types of packaging: 

• Primary packaging - The first level of packaging that protects individual products from damage.

• Secondary packaging - is used to transport commodities in primary packages.

• Tertiary packaging - is used by warehouses when shipping products in secondary packaging.

c. Discuss the functions of packaging:

Packaging plays a crucial role from the time a product is developed to the time a product is fully consumed. These functions of packaging include:

Contains the product: Most products need to be contained either during transportation, storage, or consumption. Packaging makes sure the product is contained as and when required.

Protects the product: Packaging protects the product and its quality, features, utility, etc. from being damaged or contaminated during transportation, storage, and consumption.

Aids product handling and usage: Proper packaging aids product handling and makes it easy to transport, ship, and even use the product.

Differentiates the product and makes it stand out: Packaging makes it easier for the customer to identify and differentiate it from other products. Moreover, attractive packages have a property to stand out and attract customers towards it.

Forms a part of product marketing strategy: An attractive and/or informative package makes the product stand out and have a promotional appeal. Packaging also acts as the final touchpoint that helps in product promotion and sale.

Provides customer convenience: Packaging is also a convenience tool that makes it convenient for the customer to carry, transport, and use the product.

Acts as a communication medium: Packaging along with labelling helps communicate the brand identity, brand message, and product and company information to the customer.

Adds to the aesthetic value: Packaging can make a simple product look attractive or a unique product look ordinary. It’s an important aesthetic touchpoint that can make or break a sale.

d. Identify and describe the attributes of packaging 

• Convenient. Good packaging should be convenient. ...

• Attractive. It is another essential feature of good packaging. ...

• Economical. The other feature of good packaging is to be economical. ...

• Protective. The purpose of packaging is to protect products from different risks. ...

• Communicative.

UNSOLVED QUESTIONS:

Question 18:

a. List the important factor in service marketing and discuss about 5 different marketing strategies apposite for service market 

b. Discuss the rationale for the extension of marketing mix from 4Ps to 7Ps and explain the role of each marketing mix element in service marketing 

c. Describe the major characteristics of services and discuss the challenges of service marketing arising from them 

Question 14:

a. Discuss some of the reasons why investors will want to do business in Nigeria

b. Identify the threats posed to businesses especially marketing manager by the Nigerian environment  

Question 15:

a. Highlight the specific distribution functions that must be performed before goods get to consumers.  Can these functions be avoided?

b. What factors must a manufacturer consider in choosing a distribution strategy?

c. Identify and discuss the four basis channel structure?

d. What qualifies a business as a retailing institution?  Discuss the important marketing functions that retailing institution perform 

e. What are the merits of direct distribution strategy? When should it be adopted?

f. Who is a wholesaler?  Discuss the major services that wholesaler provide

g. What channel structure would you recommend to a medium size shoe factory wishing to serve the Nigeria market? Why?