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Questions and answers
Unit-1-
1. Four Marketing Management philosophies can be identified. Explain each of these philosophies. How would they impact marketing activities? See pages 4- Four competing philosophies strongly influence an organization’s marketing processes. These philosophies are commonly referred to as production, sales, market, and societal marketing orientations. Production orientation philosophy focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace. Sales orientation is the belief that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits. Market orientation philosophy that assumes that a sale does not depend on an aggressive sales force but rather on a customer’s decision to purchase a product; it is synonymous with the marketing concept. Societal marketing orientation philosophy is the idea that an organization exists not only to satisfy customer wants and needs and to meet organizational objectives but also **to preserve or enhance individuals’ and society’s long-term best interest
- Differentiate between sales-orientated and market-orientated** organisations. In what ways would they differ? See pages 7- - First, the sales-orientation firms focus on what the firm makes, and it is always inward looking ; marketing orientation firms focus on what the market wants, and it is outward looking. Second, sales orientation firms focus on the product and services they offer while a marketing orientation is focused on the benefits for the customers. Third, sales orientated organisation is aimed at “the average consumer ” while a marketing orientation is aimed at a specific group of consumers. Fourth, sales orientated organisation seek to achieve profitability through sales volume, marketing orientation make a profit by creating customer value ,
providing customer satisfaction, and building long-term relationships with customers Fifth, sales orientated organisation seek to generate sales volume through intensive promotional activities, marketing orientation recognize that promotion decisions are only one of four basic marketing mix decisions that must be made. 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. It is implemented in the development of a marketing strategy (4Ps + Target Market). Customer value is the relationship between benefits and the sacrifice necessary to obtain those benefits. Customer satisfaction is the customers’ evaluation of a good or service in terms of whether it has met their needs and expectations. Relationship marketing is a strategy that focuses on keeping and improving relationships with current customers. Empowerment is a delegation of authority to solve customers’ problems quickly—usually by the first person the customer notifies regarding a problem. Customer management (CRM) is a company-wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer groups. On-demand marketing is delivering relevant experiences, integrated across both physical and virtual environments, throughout the consumer’s decision and buying process.
Unit 2
3. What is meant by the term “marketing strategy”? what would be the components of the marketing strategy for IKEA? Definition of marketing strateghy: p26+ Components: 4Ps (or 7Ps in the case of a service) – see detail on class slides Marketing strategy : selecting a target market (or markets) and developing an appropriate marketing mix i.e. Target Market + Marketing mix
- Product/service differentiation competitive advantage is the provision of something that is unique and valuable to buyers beyond simply offering a lower price than that of the competition. Some examples could be: - Convenience - Dealer network - Accessibility Niche competitive advantage is the advantage achieved when a firm seeks to target and effectively serve a small segment of the market. Eg. Could be linked to a geographical area. Sustainable competitive advantage an advantage that cannot be copied by the competition.
Unit-4-
5. The marketing environment at IKEA influences the profits of the business but it is important that that they do environmental scanning.This would require more discussion than in question 5 above. 5.1. What is meant by the term “environmental scanning”? Environmental scanning is the process of collecting and evaluating environmental information by a team of specialists. The goal is to identify future market opportunities and threats. Understanding the External Environment involves: - Understanding current customers - Understanding how customers make decisions - Identifying the most valuable customers and understanding their needs - Understanding the competition 5.2. Explain four (4) environmental influences, showing clearly how they would affect IKEA’s profits. (4 points) a. Social change is the most difficult external variable for marketing managers to forecast, influence, or integrate into marketing plans
Social change influence s: products people buy , price paid , effectiveness of specific promotions. How, where, and when people expect to purchase products. b. Demographic factors: this can be
- Different generational cohorts (Tweens; Generation Y, Baby Boomers) - Changing family structures - Geographic shifts in the population (rural/urban) - A better-educated, more white-collar and more professional population **c. Growing Ethnic market – due to immigration d. Economic factors:
- Consumer’s incomes
- Purchasing power :
- Inflation
- Recession e. Technology and Innovation f. Political and Legal** Basic research is a pure research that aims to confirm an existing theory or to learn more about a concept or phenomenon Applied research is a research that attempts to develop new or improved products.
Unit- 6
6. Sven is thinking about buying new furniture from IKEA. Explain how he would move through the consumer decision- making process. (Hint: explain each step and give an example as it relates to him wanting to buy furniture. See pages 100- When buying products, particularly new or expensive items, consumers generally follow **the consumer decision-making process
- Need recognition** involves Stimulus , any unit of input affecting one or more of the five senses. Sight, smell, taste, touch, and hearing 2. Information search , can be Internal information search : Recalling past information stored in the memory External information search : Seeking information in the outside environment
What are the factors determining the level of consumer behaviour ? Consumer behaviour is the processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased goods or services; also includes factors that influence purchase decisions and product use. Value is a personal assessment of the net worth one obtains from making a purchase, or the enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct. Decision Need recognition Information search Type of search Internal search External search Marketing sources Nonmarketing- controlled sources Evaluation of alternatives Purchase Post-purchase behaviour
Previous experience
Interest
Financial risk
Social risk
Psychological risk
Perceived risk of negative consequences
Social visibility
Perceived value is the value a consumer expects to obtain from a purchase. Utilitarian value is a value derived from a product or service that helps the consumer solve problems and accomplish tasks. Hedonic value a value that acts as an end in itself rather than as a means to an end
7. Culture influences whether we buy, what we buy, where we buy and how often we buy. This is also true for Sven, a Swede who lives in Jönköping. Explain three cultural factors could influence his purchasing decisions. See pages 112- 2 NOTE: the same question can be posed for the other influences (social, individual and psychological) that are discussed. Reference groups : a group to which an individual or another group is compared i.e. “in” (cool) people Opinion leaders : Individuals who influence the opinions of others Perception is the process by which people select, organize, and interpret stimuli into a meaningful and coherent picture. Motive is the driving force that causes a person to take action to satisfy specific needs Culture and values are the set of values , norms , attitudes , and other meaningful symbols that shape human behaviour and the products of that behaviour as they are transmitted from one generation to the next
Marketers segment markets for three important reasons. First, segmentation enables marketers to identify groups of customers with similar needs and to analyse the characteristics and buying behaviour of these groups. Second, segmentation provides marketers with information to help them design marketing mixes specifically matched with the characteristics and desires of one or more segments. Third, segmentation is consistent with the marketing concept of satisfying customer wants and needs while meeting the organization’s objectives. Market is people or organizations with needs or wants and the ability and willingness to buy. Market segment is a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs. Market Segmentation is a process of dividing a market into meaningful, relatively similar, and identifiable segments or groups 10.1. Explain four variables (bases) that can be used to segment a market a. Substantiality : A segment must be large enough to warrant developing and maintaining a special marketing mix. b. Identifiability and measurability : Segments must be identifiable and their size measurable. c. Accessibility : the firm must be able to reach members of targeted segments with customized marketing mixes. d. Responsiveness : markets can be segmented using any criteria that seem logical. Unless one market segment responds to a marketing mix differently than other seg-ments, however, that seg-ment need not be treated separately.
11. Explain four characteristics of a market segment that would make it useful for IKEA. See pages 145-
Consumer goods marketers commonly use one or more of the following characteristics to segment markets: geography, demographics, psychographics, benefits sought, and usage rate. a. Geographic segmentation refers to segmenting markets by region of a country or the world, market size, market density, or climate. b. Demographic segmentation is segmenting markets by age, gender, income, ethnic background, and family life cycle. c. Psychographic segmentation is segmenting markets on the basis of personality, motives, lifestyles, and geodemographic.
- Geodemographic segmentation is segmenting potential customers into neighbourhood lifestyle categories d. Benefit segmentation is the process of grouping customers into market segments according to the benefits they seek from the product. e. Usage-rate segmentation is dividing a market by the amount of product bought or consumed. - 80/20 principle is a principle holding that 20 percent of all customers generate 80 percent of the demand. 12. IKEA wants to research customer satisfaction among their Jönköping customers, and this is defined as their research problem. 12.1. Discuss the research design you would recommend they use to answer this research problem. Research design specifies which research questions must be answered, how and when the data will be gathered, and how the data will be analysed. All forms of survey research require a questionnaire. Questionnaires ensure that all respondents will be asked the same series of questions. Questionnaires include three basic types of questions: open-ended, closed-ended, and scaled-response Open-ended question is an interview question that encourages an answer phrased in the respondent’s own words. Closed-ended question is an interview question that asks the respondent to make a selection from a limited list of responses Scaled-response question is a closed-ended question designed to measure the intensity of a respondent’s answer.
products. This approach classifies products according to how much effort is normally used to shop for them a. Convenience product a relatively inexpensive item that merits little shopping effort. That is, a consumer is unwilling to shop extensively for such an item. Ex. candy, soft drinks, aspirin, small hardware items, dry clean-ing, and car washes fall into the convenience product category. b. Shopping product is a product that requires comparison shopping because it is usually more expensive than a convenience product and is found in fewer stores. c. Specialty product is a particular item for which consumers search extensively and are very reluctant to accept substitutes. Omega watches, Rolls-Royce automobiles, Bose speakers, Ruth’s Chris Steak House, and highly specialized forms of medical care are generally considered specialty products. d. Unsought product a product unknown to the potential buyer or a known product that the buyer does not actively seek. New products fall into this category until advertising and distribution increase con-sumer awareness of them.
15. It could be suggested that Head and Shoulders are using family branding. 15.1. What is meant by this term? Family branding is marketing several different products under the same brand name. 15.2. Explain two benefits that could be associated from having a strong brand for an organisation like Head and Shoulders. (4) See pages 188- Branding has three main purposes : product identification , repeat sales, and new-product sales. The most important purpose is product identification. Branding allows marketers to distinguish their products from all others. Many brand names are familiar to consumers and indicate quality. 16. There are different brand strategies that an organisation takes when managing their brands. A company that produces skincare products for women, has decided to launch a new range of products for men.
16.1. Explain each brand strategy in connection to this new product. Give examples to illustrate your answer. See pages 188-193 Answer: Firms must decide among a policy of a. Individual branding (different brands names for different products), many companies use different brand names for different products, a practice referred to as individual branding. Companies use individual brands when their products vary greatly in use or performance. For instance, it would not make sense to use the same brand name for a pair of dress socks and a baseball bat. b. Family branding (common names for different products), EX. Jack Daniel’s family brand includes whiskey, coffee, barbeque sauce, heat-and-serve meat products like brisket and pulled pork, mustard, playing cards, and clothing lines c. A combination of individual branding and family branding. Co-branding entails placing two or more brand names on a product or its package. Three common types of co- branding are ingredient branding, cooperative branding, and complementary branding. 16.2. Decide between manufacturer’s brand or private brand, explain why. Decide if having an individual brand or family brand, explain why. Explain if you will use cobranding. Examples of these must be related to the case in mention.
- The brand name of a manufacturer—such as Coca-Cola, La- Z-Boy, and Fruit of the Loom—is called a manufacturer’s brand. Sometimes “national brand” is used as a synonym for “manufacturer’s brand.” This term is not always accurate, however, because many manufacturers serve only regional markets. Using “manufacturer’s brand” precisely defines the brand’s owner. - A private brand , also known as a private label or store brand , is a brand name owned by a wholesaler or a retailer. Private labels tend to be more successful in markets where product differentiation is low.
1 New-product strategy : this is a plan that links the new-product development process with the objectives of the marketing department, the business unit, and the corporation. 2 Idea generation : new-product ideas come from many source s, including customers, employees, distributors, competitors, R&D, consultants, and other experts. 3 Idea screening : is the first filter in the product development process, which eliminates ideas that are inconsistent with the organization’s new-product strategy or are obviously inappropriate for some other reason. A concept test evaluates a new-product idea, usually before any prototype has been created. 4 Business analysis: is the second stage of the screening process where preliminary figures for demand, cost, sales, and profitability are calculated. 5 Development : is the stage in the product development process in which a prototype is developed and a marketing strategy is outlined. The development process works best when all the involved areas (R&D, marketing, engineering, production, and even suppliers) work together rather than sequentially, a process called simultaneous product development. 6 Test marketing is the limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation. 7 Commercialization is the decision to market a product
19. 1 What is meant the “product life cycle”? (1) 20. Explain the 4 phases of the PLC for the new range of IKEA glasses. (4) (5) See pages 210- The product life cycle(PLC) is one of the most familiar concepts in marketing. Product life cycle (PLC) is a concept that provides a way to trace the stages of a product’s acceptance, from its introduction (birth) to its decline (death). 1 Introductory stage : the full-scale launch of a new product into the marketplace. 2 Growth stage: the second stage of the product life cycle, when sales typically grow at an increasing rate; many competitors enter the market; large companies may start to acquire small pioneering firms; and profits are healthy.
3 Maturity stage: a period during which sales increase at a decreasing rate. 4 Decline stage is a long-run drop in sales
Unit -12-
20. Services are critically important for any economy. What is meant by the term “service”? (1) A service is the result of applying human or mechanical efforts to people or objects. Services involve a deed, a performance, or an effort that cannot be physically possessed. 20.1. What are the unique characteristics of a service? (4) (5) See pages Services have four unique characteristics that distinguish them from goods. Services are intangible , inseparable , heterogeneous , and perishable. a. Intangibility : is the inability of services to be touched, seen, tasted, heard, or felt in the same manner that goods can be sensed. b. Inseparability is the inability of the production and consumption of a service to be separated; consumers must be present during the production. c. Heterogeneous is variability of the inputs and outputs of services, which causes services to tend to be less standardized and uniform than goods. d. Perishability is the inability of services to be stored, warehoused, or inventoried. 21. Any service, such as a bank anticipates delivering service quality to their clients. Research suggests that there are five (5) dimensions of service quality. Explain each of these dimensions for Swedbank. (5) Answer: RATER – see pages 216-217. Marks are allocated for the theory as well as the practical application to Swedbank. Research has shown that customers evaluate service quality by the following five components: a. Reliability : the ability to perform the service dependably, accurately, and consistently. Reliability is performing the service
e. Gap 5: the gap between the service that customers receive and the service they want. This gap can be positive or negative. For example, if a patient expects to wait 20 minutes in the physician’s office before seeing the physician but actually waits only 10 minutes, the patient’s evaluation of service quality will be high.
Unit-13-
23. What is meant by an “integrated supply chain”? (1) This integration can be internal or external, or both. Explain what is meant by these, and how an organisation like IKEA can implement them to their advantage. (4) See pages 230- Supply chain the connected chain of all of the business entities, both internal and external to the company, that perform or support the logistics function. Supply chain management is a management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption, resulting in enhanced customer and economic value. Supply chain agility is an operational strategy focused on creating inventory velocity and operational flexibility simultaneously in the supply chain. 23.1. What is meant by an “integrated supply chain”? Supply chain integration is when multiple firms or business functions in a supply chain coordinate, their activities and processes so that they are seamlessly linked to one another in an effort to satisfy the customer. 23.2. Explain what internal or external integration is, and what is meant by these, and how an organisation like IKEA can implement them to their advantage. In the modern supply chain, integration can be either internal or external to a specific company or, ideally, both. From an internal perspective, the very best companies develop a managerial orientation toward demand-supply integration (DSI).
- Demand-supply integration (DSI) is a supply chain operational philosophy focused on integrating the supply-management and demand-generating functions of an organization. This means the
organisational functions need to work together e.g. logistics, procurement. It means that the organisation is better as all the functions have the same focus. External Integration The group of connected organizations in a world-class supply chain behave as though they have a common mission and leadership. This means that all Supply Chain partners need to share a common mission and leadership. e.g. Swissport, Air Chefs, Swedavia, Immigration services. 5 types
- Relationship integration : how the organisations work together e.g. collaboration.
- Measurement integration: performance assessment to show how well the chain is working
- Technology and planning integration : i.e. information systems and technology to manage information **- Material and service supplier system
- Customer integration
- You have been appointed as a supply chain manager at IKEA. The task requires you to implement a number of business processes to increase customer satisfaction and profitability? What is meant by a “business process” within the context of supply chain management? Business processes** are composed of bundles of interconnected activities that stretch across firms in the supply chain; they represent key areas that some or all of the involved firms are constantly working on to reduce costs and/or generate revenues for everyone throughout supply chain management. 24.1. Explain two processes that you will focus on in your task. (4) (5) See pages 232- There are eight critical business processes on which supply chain managers must focus:
