MK187: Principles of Marketing
Outline Solutions (May/June 2016)
Part A – Written Answer. This part is worth 60% of the marks.
Answer only TWO from the following four questions.
- Using examples to underpin your thinking, explain how Ryanair and Easyjet apply the strategies of product and market development as outlined in Ansoff’s matrix.
- Applying the AIDA or DRIP framework and using examples to underpin your thinking, outline how Ryanair and Easyjet use different channels and messages to communicate with their target segments.
- Using examples to underpin your thinking, examine how low cost airlines such as Easyjet and Ryanair can utilise the marketing mix to respond to changes in the external (PESTL) marketing environment.
- Using examples to underpin your thinking, evaluate how the product life cycle can be used as part of the marketing planning process of either Ryanair and Easyjet.
Marking Scheme
Understanding of key marketing principles20%
Application of marketing models and theories30%
Use of examples to underpin and support answers30%
Clear and rational answers20%
Whilst it is not expected that answers will be fully supported by a reference list, any inclusion of references / sources will be considered positively as part of the marking of this exam and included within the mark for ‘application of models and theories’.
Part B – Multiple Choice Exam. This part carries 40% of the marks.
1. Which one is not part of the purchasing role?
agatekeeper
bdecider
cmanipulator
duser
2. Accoridng to Rogers (1962) omeone who is among the very first to buy a new product is called :
aan inventor
ba laggard
can innovator
dan early adopter
3. The increasing move towards selling direct to customers rather than through intermediaries is known as:
adisinformation
bchannel proliferation
cdisintermediation
dchannel convergence
4. According to Drucker, businesses only have which two central functions?
amarketing and finance
bmarketing and human resources
cmarketing and operations management
dmarketing and innovation
5. According to Ansoff’s matrix, the strategy of selling more existing products to existing customers is the strategy of :
amarket penetration
bdiversification
cmarket development
ddifferentiation
6. The way in which products reach target markets is known as a :
apromotional route
bmarketing source
cdistribution channel
dmarketing channel
7. Businesses sometimes set different prices for different customers for the same product. This pricing policy is known as:
aloss leading
bprice discrimination
crip-off pricing
dprice taking
8. Full nest “1” is one of the stages of:
asegmenting a market
bthe family lifecycle
cbehavioural segmentation
dMaslow’s hierarchy
9. Which of these is an advantage of using market segmentation?
ait saves the business money by avoiding the need for TV advertising
bit allows the business to charge higher prices
cit allows the business to target its communications strategies more effectively
dit lets a business invest more in its production operations
10. Which of the following is an example of an external constraint upon a businesses marketing objectives?
athe business does not have the cash resources to fund a major new adverting campaign
bthe exchange rate is making the organisations products too expensive in target export markets
c the production department cannot increase capacity to meet higher sales targets
dthe human resources department are finding it hard to recruit suitability skilled employees
11. Pricing high when a product is first launched is called:
afundamental pricing
bprice skimming
coriginal pricing
dmovement pricing
12. The product life cycle has five stages. Which one of the following is not a term used in the standard product life cycle?
aIntroduction
bDecay
cMaturity
dDecline
13. Which of the following is not an element of the promotional mix?
asales promotions
bdirect marketing
cpersonal selling
dcustomer care
14. Which of the following can used to measure marketing success?
a profitability
b sales volume
c sales value
d all of the above
15. According to Fill, the DRIP process of communications is
adifferentiate, remind, inform, persuade
bdifferentiate, remind, interest, purchase
cdiversify, realign, inform, persuade
ddevelop, reassure, inform, persuade
16. A business that is trying to increase its market share to become the market leader is often referred to as a :
acash cow
bme too business
crising star
dchallenger
17. Products can be analysed at different levels. Which of the following are the original three levels of product as identified by Levitt in his 1969 ‘Anatomy of a Product’ model :
aCore, tangible, augmented
bCore, primary, tangible
cPrimary. secondary, tangible
dEffective, augmented, primary
18. The main purpose of marketing is thought to be which of the following?
aSelling
bMaking people buy things
cAnticipating and satisfying needs and wants
dPromotion
19. According to the Boston Matrix, what category refers to products that are in a growing market and potentially very profitable, but which need investment in elements of the marketing mix?
a cash cows
b stars
c dogs
d problem children
20. The range of products sold by a business is known as the:
aproduct group
bproduct plan
cbrand mix
dproduct portfolio
21. Which of the following is not included in Booms and Bitners (1981) extended marketing mix?
apeople
bprocess
cpackaging
dphysical evidence
22. Porters 5 Forces model considers the dynamics between
apotential entrants, suppliers, buyers, substitutes, existing competitive rivalry
bpotential entrants, wholesalers, customers, international alternatives, the company
cmarket structure, suppliers, buyers, substitutes, government policy makers
dsubstitutes, customers, economic factors, existing competitive rivalry, suppliers
23. The way in which firms try to create differences between their products and those of competitors is known as:
aproduct branding
bproduct promotion
cproduct mixing
dproduct differentiation
24. Businesses used to divided up groups of customers using terms like ‘working class’, ‘middle class’ and ‘professionals’. What market segmentation term would they now use?
ademographic segmentation
bsocio-economic segmentation
creligious segmentation
dlifestyle segmentation
25. Ending a price with 99p is an example of:
apsychological pricing
bdemand pricing
ccustomary pricing
dvalue pricing
26. Which of the following methods of market research is not an example of primary research?
aquestionnaires
bconsumer panels
ca company’s own sales statistics and records
dtest marketing
27. Which of the following are considered key benefits of digital marketing?
aincreased customer dialogue
bpersonalised communications
cdevelopment of customer communities
dall of the above
28. Which of the following descriptions provides the best definition of the “marketing mix” ?
athe way products are priced and packaged
bthe way a business distributes its products through retailers and wholesalers
cthe way products are arranged in a retail store to maximise sales
dthe way a business combines the main marketing elements to ensure products and services meet the needs and wants of customers
29. Which of the following is not a consideration of the macro environment
aenvironmental
bcompetitors
cpolitical
deconomic
30. Which of Ansoff’s four marketing strategies represents the highest risk option for a business?
amarket development
bmarket penetration
cproduct development
ddiversification
31. When planning advertising and communication formats, a common structure to follow is AIDA. What does it stand for :
aattention, interest, desire, action
bawareness, interest, demand, achieve
cattention, information, decision, action
dappeal, interest, design, amuse
32. An organisation that believes personal selling and advertising are the best way to generate profits is known as:
aProduct-oriented
bSales-oriented
cCustomer focused
dRelationship-focused
Refer to the scenarios below to answer the following questions:
Scenario 1
Jake is the Head of Market Research at PTB Banking Group, a global financial services organisation. Jake has just read a general report about the standards of service within a range of service sector organisations. The report was produced a year ago by the central government's Office for National Statistics and was based on research from customers of several banks. Jake's immediate task is to commission further research to ascertain more precisely how PTB's customers feel about the service they receive and to get their opinions about potential service improvements. Jake has invited two groups of eight participants to attend facilitated discussion sessions next week.
In addition, Jake wants to understand more clearly the changes inside and outside the organisation and the impact these are having on PTB’s marketing plans. Ultimately, the objective of Jake's research is to ensure that PTB develops a more co- ordinated approach in delivering products and communications to customers.
33. For PTB the report produced by the government department is an example of which of the following?
aDelphi research
bInternal research
cPrimary research
dSecondary research
34. The further research commissioned by Jake is an example of which of the following?
aCompetitor research
bQualitative research
cQuantitative research
dService research
35. The research technique used by Jake to undertake the further research is known as which of the following?
aExperiment
bFocus group
cMystery shopping
dObservation
36. Which of the following would help Jake to get a better understanding of the changes inside and outside the organisation?
aACORN
bAnsoff matrix
cEnvironmental scanning
dSOSTAC
Scenario 2
Claire is a marketing manager at ChocoLite, a manufacturer of low sugar confectionary primarily aimed at consumers who have diabetes. The majority of customers order the products directly from ChocoLite via their website although some items are available at selected heath food stockists such as Holland and Barrett. Over the next six months, ChocoLite are looking to expand their distribution channels, offering their products through a broader range of retailers and supermarkets. In addition, they are also planning on offering their products to a new consumer group - those who don't have diabetes but prefer low sugar products e.g. targeting the gym and fitness market. As part of this strategy, Claire is considering a short term price reduction to increase new consumer trial in the products.
37. ChocoLite’s current product strategy could be considered to be which of the following:
afocused
bselective
cdiversified
dbroad
38. ChocoLite’s decision to distribute through a boarder range of retailers and supermarkets is an example of which strategy?
adisintermediation
bdesparation
creintermediation
ddirect distribition
39. Which of the following pricing strategies is Claire considering implementing?
acost plus pricing
bpenetration pricing
cgoing rate pricing
dpromotional pricing
40. The move into the gym and fitness market is an example of which marketing strategy?
amarket development
bmarket penetration
cinternational marketing
ddiversification
Page 1 of 12
MK187: Outline Solutions
(May/June 2016)