HKDSE Marketing Management Past Paper PDF

## Marketing Management ### Chapter 5 Marketing Strategies for Goods and Services (I) #### 1. HKDSE 2012 Q6 **(a) Use a restaurant as an example to illustrate the meaning of marketing concept (3 marks)** A company should analyze the needs of its customers and take appropriate measures to satisf...

## Marketing Management ### Chapter 5 Marketing Strategies for Goods and Services (I) #### 1. HKDSE 2012 Q6 **(a) Use a restaurant as an example to illustrate the meaning of marketing concept (3 marks)** A company should analyze the needs of its customers and take appropriate measures to satisfy those needs in order to make profit. * **E.g. Product:** The restaurant should investigate the taste and preference of its customers and offer a menu (products) that meet their needs. **(b) What is marketing mix? (2 marks)** Marketing mix is the set of controllable marketing variables (i.e. 4Ps) which the firm uses to produce the responses it wants from its target market. **(c) Other than product, there are three other elements of the marketing mix. Suggest one way in which a restaurant can use each of these other elements to enhance its competitiveness. (6 marks)** | Element | Suggestion | |---|---| | **Price:** | A company can set the price which is a little bit lower or similar to its competitors. | | **Promotion:** | A company can put advertisement on the Internet and in the magazine. It can also ask its waiters to recommend some dishes to the customers. | | **Place:** | The restaurant can have longer working hours and provides take-away services. #### 2. HKDSE practice paper 2012 Q8d The TechPower Group is a European manufacturer of electronic consumer products. In response to increasing popularity of the tablets (平板電腦), the Group has developed a super-lightweight tablet. The marketing Department of TechPower proposes to produce a low-priced version for sale to the general public. Suggest an appropriate marketing mix strategy for the low-priced version of the tablet. (8 marks) | Element | Suggestion | |---|---| | **Product:** | The low-priced tablet should only provide the basic features because it is cheap. | | **Price:** | TechPower can set a low price (i.e. penetration pricing strategy) to attract the customers. | | **Place:** | TechPower should only rely on a few intermediaries (i.e. selective distribution channel) to sell the low-priced tablets. | | **Promotion:** | TechPower can promote the low-priced tablets in sales promotion activities, such as Road Show for computers. | #### 3. HKDSE Sample Paper 2009 Q10 Ken Ton is a manufacturer of bathroom and kitchen products. It also sells its products to property development companies who buy in bulk for building residential flats. Compare and contrast the marketing mix strategies that the manufacturer would adopt for business buyers and individual buyers. (12 marks) | Element | Business Buyers | Individual Buyers | |---|---|---| | **Product** | Ken should provide the tailor-made and after-sales services to property development companies. | Ken should sell more standardized products to individual buyers. | | **Price** | Ken should offer discount to property development companies for bulk purchase. | Ken should set the prices which are a little bit lower to its competitors. Ken should offer discount to loyalty customers.| | **Promotion** | Ken should have a special sale team to promote the products to property development companies through cold-calling or company visits. | Ken should promote its products on the Internet and in the magazine. | | **Place** | Ken should have its own retail shop and a sale team to serve the property development companies. | Ken should have its own retail shop and webpage to sell his products. | #### 4. HKDSE 2019 Q6 Speedy Company is a fast-growing company which sells sports equipment and accessories in Hong Kong. Currently, the company has six retail stores and 40 staff. After reviewing the mid-year report of the company, Jeff, the General Manager, was disappointed with the performance of the company. He called an urgent meeting. Patrick, the Marketing Manager, replied, 'We have already launched several advertising campaigns to enhance the image of our brand. To further boost our sales, we need to formulate other promotional strategies." **(a) Apart from the element of the promotion mix mentioned in the case, give two other elements of the mix and explain how Speedy Company could use each of the elements to boost its sales. (4 marks)** * Sales promotion: Speedy Company can offer discounts, gifts and lucky draws. * Public relations: Speedy Company can sponsor sports events and use of celebrities to promote the products. * **Personal selling:** Speedy Company can introduce product features to customers #### 5. HKDSE 2021 Q3 **(a) Explain the meaning of 'personal selling' in a marketing mix strategy. (2 marks)** Personal selling promotes products to customers through personal presentation in order to make sales. **(b) Describe two advantages to a computer company of using personal selling to sell its software. (4 marks)** * **Customised service:** Using personal selling enables salespersons to explain product information to customers and obtain feedback directly, so as to provide customised services to satisfy customers' particular needs. * **Building of customer relationships:** Using personal selling facilitates the building of customer relationships through personal interaction and communication, encouraging customers to develop a preference for the product. #### 6. HKDSE 2018 Q2 Suggest three product strategies that a travel agency could adopt to attract customers. (6 marks) * **Variety of tours:** A travel agency can offer different kinds of theme tours and personalized trips. * **Quality of services:** A travel agency can assign reliable and professional tour guides. * **Add-on services:** A travle agency can provide travel packages including airline service, hotel service, car rental service, etc. * **Branding:** A travel agency can establish the brand name of the agency. #### 7. Branding is the process of creating and maintaining a brand image. Explain the differences between brand extension and multi-branding. **Brand extension:** A brand extension strategy is to use a successful brand name to launch new or modified products in a new category. For example, Apple Inc. creates a new version of iPhone every year. The new one has high quality and more functions. **Multi-branding:** Multi-branding strategy refers to the use of different brand names by a firm to similar products in the same product category. For example, Procter & Gamble (P&G) produces Head & Shoulders, Vidal Sassoon and Pantene Pro-V, each positioned at a different benefit and targeted different segments. #### 8. Mr Choi has five Chinese restaurants and two western restaurants in Hong Kong. He is planning to open another restaurant in Central. Yesterday Mr Choi's presented some ideas of his new restaurant to the stakeholders. He receives great support from some of the group's stockholders. Some stakeholders think that Mr Choi's current fame and a series of new strategies in terms of product, pricing and public relations will surely benefit the sales of the newly positioned restaurant in Central. From the perspective of individual product, suggest with examples three appropriate product strategies which may help Mr Choi increase the sales in the newly positioned restaurant in Central. (6 marks) **Product Strategies** * **Product characteristics:** Mr Choi can sell both Chinese and Western dishes in his new restaurant. The dishes must be high quality and healthy. * **Building brand name:** The brand name of the new restaurant must reflect the fusion of Chinese and Western cultures. * **Product appearance:** The decoration of the new restaurant and dishes can match the Chinese and Western cultures. #### 9. Explain how a company can expand its products through line stretching and line filling. (2 marks each) **Line stretching:** Line stretching is a strategy of increasing the number of products under an existing product range. The aim is to capture new customers who are not covered by the company's existing product range. **Line filling:** Line filling aims to take advantage of marketplace gaps to reduce competition by increasing the number of products under an existing product range. The aim of line filling is to serve existing customers rather than getting new customers. #### 10. Explain two forms of line stretching. * **Downward stretching:** Downward stretching is to introduce a product within the product line that has less functions and less expensive. This will have an appeal to the less demanding users who are looking for a cheaper price. * **Upward stretching:** Upward stretching is to introduce an upgrade version of existing products to satisfy the more demanding customers who would like to pay more for better products. #### 11. Explain three internal and three external factors affecting pricing decision. **Internal Factors** * **Marketing objectives:** * If a company aims at maximising profits and perceiving as a market leader, it will set a high price. * If a company aims at maximising market and surviving, it will set a low price. * **Marketing mix strategy:** If a company wants to develop a high-quality product image position, it will set a high price. * **Costs:** A price should set higher than the cost plus a fair rate of return. * **Management philosophy and value:** A company may consider social factors in setting price. Sometimes, the price may below the cost because of social responsibility. **External Factors** * **Nature of the market:** Pricing decision will be affected by the nature of market. The company can set higher (lower) price in a less (more) competitive market. * **Competitor's strategies** The company should consider the price and quality of competitor's products when it sets the prices. * **Consumers' perception:** Pricing decisions will be affected by consumers' perception of the benefits they get from the product. #### 12. Explain two types of pricing strategies when launching a new product. * **Skimming pricing strategy:** Skimming pricing strategy is to set a highest possible price to capture a higher profit from the price-insensitive customers. * **Penetration pricing strategy:** Penetration pricing strategy is to set a relative low price to attract a large number of customers before competitors enter the market. #### 13. HKDSE 2016 Q9a Describe the factors to be considered by the smartphone manufacturer when setting the price for its new mobile phone. * **Marketing objectives:** The smartphone manufacturer should consider its marketing objectives, such as whether the company wants to maximise the profit or capture more market share. * **Other marketing mix strategies:** The pricing strategy should match the objectives of its product, place and promotion strategies. * **Cost of the products:** The price should be high enough to cover the total cost of the products. * **Nature of the market:** If there is less (more) competitors in the same market, the smartphone manufacturer can set a higher (lower) price. * **Competitors' strategies:** The smartphone manufacturer can set a price which is similar or a little bit lower than its competitors. * **Affordability:** If the purchasing power of the customers is high (low), the smartphone manufacturer can set a higher (lower) price. * **Customers' perception:** If the products are very unique and valuable to customers, the smartphone manufacturer can set a higher price. #### 14. Describe four common types of channel members (distribution channels). * **Wholesalers:** A wholesaler buys products from manufacturers and sells them to retailers. * **Distributors:** Distributors usually purchase a narrow range of products from manufacturers and sell them to retailers. * **Retailers:** Retailers sell products to consumers. * **Agents:** Agents sell products on behalf of the manufacturers and earn commission. #### 15. HKDSE 2018 Q7b A newly-established company selling bicycles is planning to distribute the bicycles to its customers through middlemen. **(b) Explain the factors that the company should consider when deciding whether to distribute the bicycles to customers through middlemen. (12 marks)** * **Costs:** The company should consider the costs, such as commissions and other fees paid to middlemen. The higher is the commission and middleman fees, the lower profit that the company can earn. * **Control of the sales of bicycles:** The company should consider the control of the sales of bicycle, e.g. whether the company wishes to have more control. If the company wish to have more control of the sales of bicycles, it should use direct distribution channel (no intermediary) to sell its bicycles. * **Relationship with customers:** The company should consider the relationship with customers, e.g. whether the company wishes to maintain a direct and close relationship with its customer. If the company sell the bicycles in its own shops, it can collect direct feedback on the products and provide professional advice to customers immediately. * **Customer needs:** The company should consider the customer needs. Target customers usually buy bicycles in physical shop and they come from diverse geographical areas. Hiring intermediaries can be more cost effective by saving the start-up cost, and help reaching geographically dispersed consumers very effectively. #### 16. HKDSE 2014 Q6a Apart from maintaining a good relationship with retailers, suggest two ways in which a wholesaler can encourage retailers to carry more of its products. * **Monetary incentive:** The wholesalers can provide monetary incentives like a higher level of trade discount to retailers when they make bulk purchase. * **Better credit term:** The wholesalers can offer better credit term, such as a longer credit period. This provides a longer time for the retailers to pay for their purchases. #### 17. Explain the strategies that a firm can use when distribute their products. * **Intensive distribution:** Intensive distribution is a strategy in which manufacturers sell their products to as many channel members as possible. For example: Companies sell fast-moving consumer products (such as soft drinks, tissues, sweets, shampoos and toothpaste) by intensive distribution strategy. * **Selective distribution:** Selective distribution is a strategy which manufacturers rely on a few intermediaries to sells their product (i.e. a method between intensive and selective distribution). For example: Some electrical appliance manufactures (such as TV, washing machines and computers) sell their products only through selected large and reputable retailers. * **Exclusive distribution:** Exclusive distribution is a strategy which manufacturers give the right to a limited number of dealers (very few) to sell their products in their regions. For example: Companies sell prestigious or high-end products (such as luxury cars and branded clothing) by exclusive distribution strategy. | Distribution Strategy | Number of Intermediaries | Control of Intermediaries | Number of Customers | |---|---|---|---| | Intensive Distribution | As many as possible | Low | Large | | Selective Distribution | More than one, but fewer than all of the intermediaries | Medium | Medium | | Exclusive Distribution | A limited number of intermediaries | High | Small | #### 18. HKDSE 2016 Q3 Explain three benefits to a company of adopting a direct distribution channel for its products. (6 marks) * **Save distribution cost:** The company can reduce commission to intermediaries which can save distribution cost. * **Better customer support:** The company sells its products to the customers directly. Therefore it can have a better understanding of customers' needs. * **Better control on the sales of products:** The company can set the price and control quantity of the products by itself. It can also decide how the products are displayed and promoted. #### 19. HKDSE 2015 Q6b For any three elements of the promotion mix, suggest one way each for Samsung Ltd to stimulate the sales in its own stores. (6 marks) * **Advertising:** Samsung can place advertisement on mass media, such as magazine and the Internet. * **Sales promotion:** Samsung can issue discounts or cash coupons to loyalty customers. * **Direct Selling:** Samsung can promote its products via mail, phone, SMS, WhatsApp message or e-mail. * **Public relations:** Samsung can have a press conference for the new products. * **Personal selling:** Sales representatives can recommend the products to customers. #### 20. Explain the steps in developing a promotion campaign. * **Step 1 Identifying target audience** The marketer needs to understand who the target customers (i.e. people with whom he wants to communicate). * **Step 2 Setting communication objectives** The marketer needs to set communication objectives (i.e. what the marketer wants the target audience to obtain). There are four types of communication objectives: * Build awareness of the product * Increase consumers' interests in the product * Increase consumers' desire to buy the products * Generate actual purchase from target customers * **Step 3 Designing communication messages** The Marketer needs to develop a message that will achieve the company objective. The message should contain four elements which are message content, message structure, message format and message sources. * **Step 4 Setting the budget** The marketer needs to make a budget to determine how much financial resource is to be deployed in the promotion strategy. * **Step 5 Deciding the promotion mix tools** The marketer needs to decide how to promote the products and allocate fund over the promotion mix tools. #### 21. Explain four elements of designing communication message. * **Message content** The message content should able to attract the target customers and satisfy customers' needs. * **Message structure** The marketer needs to consider if conclusion of the message is to be delivered directly to the customers or let customers draw their own conclusion or if only the good sides of the products are mentioned. * **Message format** It refers to which format and media the message is used in communicating the message to customers. For example, for a radio advertisement, a marketer needs to think about the words, sounds and voices in the advertisement. * **Message source** It refers to the subject who conveys the message to customers. The subject can be the manufacturers or spokesmen of the products. #### 22. List two forms of communications and give examples for each of them. * **Mass communication:** Example: Advertising, sales promotions, events and experience and public relations. * **Personal communication:** Example: Direct marketing, interactive marketing, word of mouth, personal selling and sales force.