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MARKING SCHEME

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ASIA PACIFIC MARKETING FEDERATION CERTIFIED PROFESSIONAL MARKETER QUALIFYING EXAMINATIONS MARKETING STRATEGY SEPTEMBER 2001 MARKING SCHEME Section A 1 b 2 d 3 b 4 c 5 b 6 d 7 d 8 d 9 b 10 d Section B Question 1 Discuss four major problems associated with forecasting tec..

    ASIA PACIFIC MARKETING FEDERATION

    CERTIFIED PROFESSIONAL MARKETER

    QUALIFYING EXAMINATIONS

    MARKETING STRATEGY

    SEPTEMBER 2001

    MARKING SCHEME

Section A

    1 b

    2 d

    3 b

    4 c

    5 b

    6 d

    7 d

    8 d

    9 b

    10 d

Section B

Question 1

    Discuss four major problems associated with forecasting techniques which rely on historical data.

    The key problem is that there is no rule that says things that occur in the past will occur in the future.

    New trends or unusual seasonal variations can occur and send the forecast off track.

    Changes in the environment can change historical data and experiences.

    For example, buyers or end users might change, new products or competitors may enter the market due to new technology, the economy can affect the demand for a product or service, government politics may regulate or deregulate the product or service, as well as countless other influential changes.

    Forecasting is particularly dangerous when involved with a new product or firm. As new products and competitors move into the product-market, different mixes occur and forecasts are likely to be affected, particularly if new variables become an important influence on sales.

Question 2

    Discuss five factors which can affect the length of a new product planning process.

    The following factors affect the length of the new product planning process: a. whether it is an industrial or consumer good

    b. corporate environment

    c. corporate risk factor

    d. number of new products to screen

    e. fit of the product with the company's objectives

    f. amount of time required for product development (Exhibit 11-9)

    g. amount of time for testing

    h. necessary revisions for successful testing

    i. amount of marketing research required (i.e. is it a new market?)

    j. time to produce a prototype

Question 3

    When facing a mature product, suggest five ways which you would do to revitalised the product.

    If objectives are not being met or management desires to change these objectives the first thing to consider is ways to restate the product's position or give it new life.

    Typically, advertising or new promotional methods are used. Many times the product is put in a new package, or given a "new" branding.

    Actual improvements to the product may be useful in stimulating sales. These strategies are very effective, and have helped many old products contribute profitability to a product line.

Additionally, new shell space designs can be added along with contest.

    Other way to expand an aging brand is to convert non users, enter new market segments, find new uses for the product, obtain competitor's customers as they leave the market, and increase usage.

    If competition is the reason for a lack of products performance one fast way to restore sales is by lowering the price, or offering two-for-one type deals. But, one must be careful not to destroy the quality image of the product if price is dropped.

Section C

Question 1.

    Explain the significance of the phrase ‘think globally, act locally’ to the marketers at McDonald’s designing international promotion campaigns. Support your answer with country specific examples and references.

    This represents the compromise position in the standardize/localize debate. The proponents of this position recognize the cost savings from standardization, the communication benefits of the ‘brand speaking with one voice’, the increased amount of control over host country promotions

    and that there may be a convergence of tastes (the article ‘Global Teens’ and the thesis of Levitt) which would justify standardized marketing communications. They would concur that, where possible, advertising and promotional campaigns should be standardized - think globally. However, they also realize the impact of the external environments - PESTs. Often these external environments require that advertising and promotional campaigns be adapted - localized. At minimum, external environmental factors must be carefully analysed for each host market before advertising and promotional decisions are made and campaigns implemented - act locally.

Students should be able to provide relevant McDonald’s examples as they were used throughout

    the course.

Question 2.

    A strong brand image is very important for ensuring a successful product. The brand name differentiates a product from competitors’ product. A powerful brand identity creates a major competitive advantage. Discuss the various brand strategy options and their features.

Students are expected to discuss 4 of the following 6 brand strategies:

    1. No Brand Identity

    2. Private Branding

    3. Corporate Branding

    4. Product-Line Branding

    5. Specific Product Branding

    6. Combination Branding

Question 3.

    Marketers often face a dilemma whether they should adopt standardization or adaptation strategy. There is no right answer to this question. Acer can choose different product/communication strategies to penetrate the ASEAN markets. Discuss briefly five strategies and their advantages and disadvantages

Students are expected to discuss the following strategies:

    1. Product and communication extension--dual extension

    2. Product extension --communication adaptation

    3. Product adaptation--communication extension

    4. Product and communication adaptation--dual adaptation

    3. Product invention

Question 4.

    Facing with the current economic environment, as an operator of a small fast food chain, how would you analyse the key strategic factors which would affect your marketing strategy.

    The first factor that affects the marketing strategy situation is the organizational situation. The fast food chain is probably the core business; to prevent possible shakeout, the chain may wish to consider expansion into new products and/or markets or even diversification into another line of business. The chain should also identify corporate development stage (entrepreneurial, growth, maturity, diversification, or divestment) and the various marketing strategy implications of each stage. Corporate culture should be examined to identify its link with performance.

    Secondly, the fast food chain should examine the product-market situation. Fast food generally seems to be in the maturity stage, meaning that demand is leveling off and competition is intense. To ward off decline, the chain should intensify marketing efforts and identify other influencing environmental factors that may affect the shape and length of the product life cycle curve. The product-market structure shows competition in various levels: geographic competition in the area that the fast food chain serves, market segment competition for the specific market the chain is serving, and product-market competition within the fast food industry.

    Thirdly, the fast food chain should analyze the structure of competition in terms of the number and size of competing firs, and the degree of differentiation between competitors based on positioning strategy and markets served. In the fast food industry, there are many competitors of varying sizes, while there is some differentiation. In terms of competitive forces, the fast food chain may see a great threat of new entrants, rivalry among existing firms, and increasing bargaining power of suppliers and large competing fast food chains. Channel of distribution structure should be examined in terms of horizontal or vertical control.

    The last thing to affect the marketing strategy situation of the chain is environmental influences. Company specific influences may require short term strategy alterations, while industry-wide influences may require a permanent alteration in marketing strategy.

Question 5.

    No organisational structure is applicable to all companies. Discuss the advantages and disadvantages of global product structure and geographic structure. Which one will be more appropriate for Coca-Cola? Your answer should be justified with reason(s)

    Global product structure assigns worldwide responsibility for specific products or product groups to separate operating divisions within a firm and works best when the firm has diverse product lines or when its product lines are sold in diverse markets.

    Advantages:

    ; mangers can gain expertise in all aspects of the product or products, better enabling them to

    compete globally.

    ; allows better coordination in production with different facilities; shifting output from factory

    to factory as global demand or cost conditions fluctuate.

    ; mangers are more able to incorporate new technologies into their product (s) and respond

    quickly and flexibly to technological changes that affect their market.

    ; facilitates global marketing of the product. The firm gains flexibility in how it introduces,

    promotes, and distributes each product or product group. Rather than being tied to one

    marketing plan that encompasses the whole firm, individual product-line managers may

    purse their own plans.

    Disadvantages:

    ; encourages expensive duplication, since each product group needs its own functional-area

    skills such as marketing, finance, and information management and sometimes even its own

    physical facilities for production, distribution, and R&D.

     each product group must develop its own knowledge about the cultural, legal, and political ;

    environments of the various regional and national markets in which it operates. ; makes coordination and corporate learning across product groups more difficult.

    Global geographic structure organizes the firm's activities around specific areas or regions of the world and is most likely to be used by a firm whose products are not readily transferable across regions.

    Advantages

    ; useful for firms adopting a marketing-driven strategy rather than those based on

    manufacturing efficiencies or technological innovation or a firm whose competitive strength

    lies in the reputation of its brand-name products.

    Disadvantages:

    ; firms may sacrifice cost efficiencies that might be gained through global production. ; Diffusion of technology is slowed and thus, may not be suitable for product lines undergoing

    rapid technological change.

    ; results in duplication of resources because each are division must have its own functional

    specialists, product experts, and, in many cases, production facilities.

    ; makes coordination across areas expensive and discourages global product planning.

    Student should recommend the appropriate structure for Coca-Cola based on the above analysis.

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