Marketing Management

BEM3041

UNIVERSITY OF EXETER

BUSINESS SCHOOL

May 2018

MARKETING MANAGEMENT AND STRATEGY

Module Convenor: Professor Philip Stern

Duration: ONE AND A HALF HOURS

Answer any TWO questions.

All questions are worth equal marks.

Approved calculators are permitted.

This is a closed note paper.

2 BEM3041 Turn over

Q1 Part 1 (50 marks)

Explain why a product (or service) contribution (selling price minus variable cost) is an important element in developing marketing strategy, please give examples to illustrate your answer.

Q1 Part 2 (30 marks)

Davina Allen the marketing manager for the haircare category of a consumer goods company is considering launching a new brand into the market. Her assistant Philip Bow has completed some background work and presented Davina with two options from which to choose (the company only had the capacity to launch one new brand):

A. Launch “APura” a brand focussing on natural ingredients B. Launch “BEtter” a brand focussing on superior results

Davina had a great deal of experience in launching new brands and felt confident that there was a 30% chance that the launch would do quite well and a 70% chance that it would be a great success, irrespective of which brand she chose to go with, but of course she couldn’t be certain.

If APura was launched and it only went ‘quite well’ then APura would generate a contribution of £100,000 and if the launch was a great success then APpura would generate £300,000.

If BEetter was launched and it went ‘quite well’ then this would result in £50,000 extra contribution and if the launch was a great success it would generate £600,000 in extra contribution.

Which brand should Davina launch? Explain your answer using the information provided.

Q1 Part 3 (20 marks)

Philip contacted a company which specialised in test marketing new brands and he was told that for a fee of £20,000 they could conduct a test to see which of the two brands would be preferred by consumers and so remove any doubts about which brand Davina should launch. Philip asked Davina if he should go ahead with the test market. How should Davina respond to Philip’s suggestion?

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Q2 Part 1 (20 marks) What is the role of market research in developing marketing plans?

Q2 Part 2 (20 marks) List and explain three situations where you should NOT conduct market research. Q2 Part 3 (60 marks) Describe the process you would use to research the market for a Masters in Digital Marketing at Exeter Business School. Be as specific as you can and describe the sources of information you would use, explaining the reasons for your choice.

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3 BEM3041 Turn over

Q3

The Strategist Simulation incorporates the Experience Curve concept which results in the decline of unit cost by around 7.8% each time cumulative production doubles. At the start of the simulation each unit costs £1000 to produce and by the time 5000 units have been produced the cost drops to £871 per unit.

Q3 Part 1 (50 marks)

How did the experience curve affect the strategy your company adopted? Explain the ways in which you utilised the concept during the 7 decision periods and how you decided whether or not to invest in cost reduction to further reduce unit costs.

Q3 Part 2 (50 marks)

Describe the key benefits and problems of pursuing a marketing strategy which based upon the experience curve.

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Q4

You have been asked by the marketing director of Kimberly Clark which owns the Kotex brand whether there is room for a second Kimberley Clark brand or whether the focus should be on improving the sales of the existing brand.

Your marketing director believes that the consumers in this category are very loyal to brands and so any sales gains would come from Own Label products which he thinks have much lower levels of loyalty than brands.

You have acquired some data from Kantar WorldPanel which represents purchases in the sanitary protection category by 31,124 households in the UK, who made a total of 80,120 purchases over a 12 month period.

There are six leading brands of which Kotex is the smallest and the table below shows the key data for these six brands along with All Other which groups together a number of small brands and Own Label, again all grouped together.

Column 1 identifies the brand; Column 2 indicates the number of households which purchased each brand; Column 3 shows the total number of purchases of the brand; Column 4 shows the number of category purchases made by the buyers of the brand – so there were 9271 households which purchased Always making 25374 purchases of Always. These households made a total of 66637 purchases from the category.

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Using this data you are required to:

Q4 Part 1 (40 marks) Compute the Market share, penetration, average purchase frequency and share of category requirements for each of the items in the table.

Present your findings in a way which communicates the patterns in the data effectively and comment on any patterns you see.

Q4 Part 2 (60 marks) What does this analysis tell you? - about:

1) The choice between launching a new Kimberly Clark brand or focussing on growing the Kotex brand

2) Your manager’s belief that brands have higher loyalty than own label products

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Q5 (100 marks)

The following is an explanation of the Product Life Cycle

“The product life cycle describes the period of time over which an item is developed, brought to market and eventually removed from the market. The cycle is broken into four stages: introduction, growth, maturity and decline. The product life cycle is used in marketing to decide when it is appropriate to advertise, reduce prices, explore new markets or create new packaging.”

Critically evaluate this explanation using examples to illustrate your answer.

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Q6 (100 marks)

Developing brand loyalty among customers is a key objective of many marketing organisations today. In the context of a manufacturer and marketer of breakfast cereals, explain why you think this objective is appropriate or not.

No of No of times No of times households brand category purchasing purchased purchased

Always 9271 25374 66637 Bodyform 5621 9803 50852 Carefree 3292 4550 33365 Kotex 718 864 7816 Lil-Lets 1975 2484 20805 Other brands 884 1112 10324 Own Label 10366 28784 70975 Tampax 4694 7149 42634 Grand Total 14587 80120 80120

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Q7

Product Portfolio Analysis is a widely used marketing strategy model.

Q7 Part 1 (50 marks)

(i) Describe the way in which the model developed by the Boston Consulting Group could be used to evaluate the portfolio of a business with multiple brands or business units.

Q7 Part 2 (50 marks)

(ii) Describe the implications of using such a model along with any limitations which you consider to be important.

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Q8

Q8 Part 1 (50 marks)

Why is branding important?

Q8 Part 2 (50 marks)

Analyse a brand of your choice showing how it differs from a close competitor. You should use a model such as the brand building blocks or other similar model to inform your analysis.