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.