YO U R

S T U DY M AT E R I A L S

UNIT 401MARKETING STUDY PERIOD 1, 2011

In this package you should receive the following: Study Guide Topics, Readings and Suggested Answers Information Topic and Assignment Schedule Contains the recommended allocation of topics per week of the Study Period, as well as assignment and examination dates. Chifley Learning Centree-Communities Login instructions and information for using Chifley's learning centre. Assignment Submitting your Assignment Instructions and protocols for submitting your assignment via e-Communities. Assignment Your assignment/s for this Unit. Contains important information regarding plagiarism. Sample Examination Sample Examination An examination which is structured similar to the actual examination. You are advised to use this as a practice for your examination. Sample Examination Answers The answers to the sample examination. Assessment Your assessment for this unit comprises: Assignment Examination Textbook Please also ensure you obtain the following textbook edition: Kotler & Armstrong, Principles of Marketing, 13th edition, Prentice Hall, 2009 Textbooks are available from Melbourne Co-operative Bookshop. www.rmitbookshop.com.au/apesma.html Worth 30% 70% Marked out of 30 marks 70 marks

After checking the contents of this package, if any component is missing or damaged, please contact the Client Care Centre, via: Email: mba@chifley.edu.au Phone: (613) 9695 8855 Fax: (613) 9695 8901

TO P I C A ND A S S I G NM E N T S C H E D U L E
STUDY PERIOD 1, 2011
Week No. 1 2 3 4 5 6 7 8 9 10 11 Begins on 31 Jan 7 Feb 14 Feb 21 Feb 28 Feb 7 Mar 14 Mar 21 Mar 28 Mar 4 Apr 11 Apr 101 1 2 2 3 3 3 4 5 5 6 7 7 Assign Due 20 April 7, 8 8 8, 9 9 10 10 09 Jun PM 102 1 1 2 2 3 3 4 4 5 5 6 6 Assign Due 20 April 7 8 8 9 10 10 201 1 2 2 3 3 4 4 5 5 6 6 Assign Due 13 April 7 202 1 1 2 2 3 3 4~ 4~ 5 5 6 Assign Due 13 April 6 303 1 2 2 3 3 4 4 5 5 6 6 Assign Due 13 April 7 305 1 2 3 3 4 4 5 5 * 6 6 Assign Due 13 April 7 306 1 2 2 3 3 4 4 5 5 6 7 7 Assign Due 20 April 8 8 9 9 10 10 10 Jun PM 307 1 2 3 4 4 5 5 5 * * 6 Assign Due 13 April 7 308 1 2 3 3 4 4 5 6 6 * 7 Assign Due 13 April 8 401 1 2 2 3 3 3 4 4 5 5

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The topics covered in the assignment are indicated by * No Topic allocated. Work on assignment ~ Unit 202 Topic 4 not assessed in assignment ^ Unit 601 Assignment 2 is aligned to Topics 15

TO P I C A ND A S S I G NM E N T S C H E D U L E
STUDY PERIOD 1, 2011
Week No. 1 2 3 4 5 6 7 8 9 Begins on 31 Jan 7 Feb 14 Feb 21 Feb 28 Feb 7 Mar 14 Mar 21 Mar 28 Mar 402 1 2 3 3 4 4 5 5 6 403 1 2 3 3 4 4 * 5 5 Assign 1 Due 30 March 6 404 1 1 2 2 3 3 4 4 5 405 1 2 2 3 3 4 4 4 5 406 1 2 2 3 3 4 4 5 5 416 1 2 3 3 4 4 5 5 * 423 1 1 2 2 3 3 4 4 5 5 Assign Due 6 April 6 430 1 1 2 2 2 3 4 4 5 501 1 1 2 3 3 4 4 * * 5 Assign Due 6 April 5 601 1 2 3 3 4 4 Assign 1 Due 16 March 5 5

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6 6 Assign Due 13 April 7

6 7 Assign 2 Due 13 April 8

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7 7 Assign Due 20 April 8 8 9 9 10 10

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7 7 Assign 2 Due 27 April 8 8 9 10 10 10 Jun AM

6 Assign Due 20 April 7 7 8 9 10 10

7 7 Assign Due 27 April 8 8 9 9 10

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25 Apr 2 May 19 May 16 May 23 May 30 May 6 Jun 13 Jun

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The topics covered in the assignment are indicated by * No Topic allocated. Work on assignment ~ Unit 202 Topic 4 not assessed in assignment ^ Unit 601 Assignment 2 is aligned to Topics 15

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Chifley Business School provides a range of online learning services to meet your study needs. The most important of these is e-Communities, which enables you to access additional information to support your studies and to interact with fellow students and the Unit Chair for each unit you are enrolled in.

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1. 2. 3. 4. 5. Go to the Chifley Business School MBA website: www.chifley.edu.au/mba Click on 'Student login' Enter your login, which is your Chifley number, and your password, which is your surname. Click the 'Sign on' button Click on the Chifley 'e-Communities' tab at the top of the page. Your one-stop shop for administrative information and extra study resources such as: Unit Chair and Client Care contact details Textbook list and ordering information GRAD discussion forumfor debating current affairs Application forms Instructions for using e-Communities Techniques for managing distance education Tips for researching, writing and referencing assignments Exam preparation hints and study techniques Academic regulations and policies. Click this link to take you through to the discussion forums and learning resources. Shows upcoming events and lets you enter events/reminders that only you can see. There are four different events which are colour coded according to the type of event. Global events (Green) Events that relate to every MBA unit, such as census deadlines Course events (Orange) Unit specific events, such as assignment due dates and exam dates Group events (Yellow)Other unit specific events User events (Blue)Add your own events/reminders that only you can see. Lists general and unit specific key dates, such as assignment due dates and Study Period start/end dates. Lists your unit(s) e-Community. If you are enrolled in more than one unit, you can switch between each e-Community by clicking on the unit name. Shows you who is online and allows you to chat directly with others who are online, including your Unit Chair. Click on the person's name and then hit 'Send message' to start an instant chat session.

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Personalise your e-Community by uploading a photo of yourself to appear as your profile picture. To do this, go to the Profile page: Click on your name under Online Users Hit 'Edit profile' Scroll down to 'Picture of you' Browse to upload a small jpeg of yourself.

To post a discussion item, click on the title of the forum and choose 'Add a new discussion topic' to start your message, or click on an existing discussion topic and select 'Reply'. Once your message is complete, click 'Submit' and it will be added to the discussion forum.

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To customise how frequently you receive emails: Click on your name under Online Users on the left-hand menu to bring up your Profile page Click the 'Edit profile' tab Click the 'Show advanced' tab Choose the email frequency from under 'Email digest type'.

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Chat online in real time with your Unit Chair and other students enrolled in your unit. Your Unit Chair may arrange a formal chat session a few weeks prior to your assignment due date and before your scheduled exam date. However, you can use the chat room at any time. For example, you may like to set up a study group with other students and then organise your own chat session date and time.

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Online submission closes at exactly 11.55pm, Australian Eastern Standard Time on the assignment due date. You will not be able to submit your assignment after this time. Your assignment must be submitted in ONE file. The following file extensions will be accepted: DOC, DOCX, PDF, PPS, RTF, TXT, XLS, XLSX, ZIP. You are permitted to zip up to eight documents into one file. To do this you will need to use software such as WinZip. You can download an Evaluation version of WinZip from the website http://www.winzip.com. For most units, the maximum file size of your assignment is 1Mb. However, the following units have larger size limits: Unit 2022Mb Unit 3082Mb Unit 4031.5Mb Unit 4061.5Mb Unit 5015Mb

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You can upload an updated version of your assignment before your assignment is due. You cannot resubmit after the assignment due date has passed. To resubmit your assignment: 1 2 3 4 Hit 'Click here to submit your assignment' Click the red 'X' to delete the assignment that you have already submitted Click 'Yes' to confirm Hit 'Browse' to upload your new assignment.

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Assignments must be submitted online via e-Communitiesemail or hard copies are not accepted.

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Please name your assignment file with the following: your surname your student ID the Unit you are completing the Study Period.

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As soon as your assignment is uploaded you will see it on the screen. However, you may like to print or save the submission page after you have uploaded your assignment. This will act as acknowledgement that your assignment has been submitted. Always keep a copy of your assignment for your own reference.

CHIFLEY BUSINESS SCHOOL

UNIT PDM 401 MARKETING

ASSIGNMENT STUDY PERIOD 1, 2011

Date: To be received no later than 27 April 2011 Marks: 30% of total assessment Recommended length: Maximum of 2500 words (excluding appendices, references and bibliography) While some may see this as a restriction in the level of detail you may include, its purpose is to encourage you to focus on the issues and key concepts for each question. The word limit also encourages you to write concisely, a skill highly valued in business. As a general rule appended material should not exceed 10% of the volume of the actual assignment i.e. 250 words. Topics covered: 15

GENERAL INSTRUCTIONS
All assignments are to be submitted online by the due date. Instructions for how to submit your assignment are included with these study materials. Hardcopy submissions will not be accepted.

PRESENTATION OF ASSIGNMENT
You should include a title page that lists your name, Student ID and the unit number and title. Number all pages sequentially. Any published material you refer to should be properly referenced and included in a bibliography at the end of your assignment (see Plagiarism notice overleaf).

Chifley Business School, 2011.

PLAGIARISM
Plagiarism is a form of cheating, by representing someone else's work as your own or using someone else's work (another student or author) without acknowledging it with a reference. This is a serious breach of the Academic Regulations and will be dealt with accordingly. Students found to have plagiarised can be excluded from the program. Plagiarism occurs whenever you do any of the following things without acknowledging the original source: copy information from any source (including the Study Guide, books, newspapers, the internet), use another person's concepts or ideas, summarise or paraphrase another person's work. How do I avoid plagiarism? To ensure you are not plagiarising, you must acknowledge with a reference whenever you: use another person's ideas, opinions or theory include any statistics, graphs or images that have been compiled or created by another person or organisation paraphrase another's written or spoken word. By understanding and using one of the referencing systems detailed in My Resource Centre on e-Communities, you will be able to avoid plagiarism. There are three main referencing systems: the Harvard or author/date system; e.g. 'Smith (1985) listed five key factors' the Oxford or footnote system, e.g. 'Smith listed five key factors1' the use of end notes in place of footnotes. For further information on referencing please refer to My Resource Centre on e-Communities. Collaborating with other students When submitting your assignment online, you will be asked whether you have collaborated with any other students in preparing your assignment. If you have done so, you must inform the marker of your assignment by recording the name(s) of any such student(s) in the box provided. You must also make a declaration that the work you are submitting is entirely your own. What are the penalties? The penalties for plagiarism are: deduction of marks, a mark of zero for the assignment or the unit, or exclusion from the program. Plagiarism is dealt with on a case-by-case basis and the penalties will reflect the seriousness of the breach. Please note: claiming that you were not aware of need to reference is no excuse.

ASSIGNMENT
General Motors was founded on 16 September 1908 and employs 204,000 people in every major region of the world. Its head office is in Detroit in the United States and it operates in around 140 countries. GM and its strategic partners produce vehicles in 34 countries, and sells and services these vehicles under the following brand names: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, Germany, the United Kingdom, Canada and Italy. In 2008, GM sold 8.35 million vehicles globally. GM previously led in global sales for 77 consecutive years (1931 to 2008), longer than any other vehicle manufacturer. However, in the last several years General Motors has found itself in considerable trouble, compounded by the global financial crisis. In mid 2009 General Motors filed for bankruptcy from which it reemerged via a financial bailout and a reorganisation in which a new entity acquired the most valuable assets. Under this survival plan GM is temporarily majority-owned by the United States Treasury, which has a 60% stake in the company after a $50 billion US government bailout. The Canadian government also has a stake. As part of the reorganisation, GM gas cut its US workforce by 20,000 employees with the company planning to concentrate on its four core US brands: Chevrolet, Cadillac, Buick and GMC. In a move to sell off underperforming asserts, GM has tried to sell a majority stake in its European brands, Opel and Vauxhall, and in early 2010, GM sold Saab. As part of its rationalisation in the key US market the company is winding down its Hummer, Pontiac and Saturn brands. Despite the reorganisation and changes in its operations, GM experienced a US $4.3 billion loss for the last six months of 2009, for a variety of reasons, including greatly reduced consumer and business demand caused by the global financial crisis, and recessionary conditions in leading markets. There are some bright spots, however, with General Motors' best success internationally being its performance in China, where its sales rose 66.9% in 2009the equivalent of around 1,830,000 vehicles. GM's decision to retain full ownership of Opel and Vauxhall, its two key European operations will also help it remain a global player in major markets. Additionally, the manufacturer is in the process of planning and launching a whole range of more energy efficient vehicles based on new and existing technologies, which it hopes will have considerable appeal. Using the theoretical concepts, consider how General Motors might use marketing audits and marketing planning to inform and guide its marketing of its consumer vehicle brands in consumer markets. Do not focus on its commercial vehicles targeted to business markets. Submit an integrated report that responds to and establishes linkages between the following: Why would General Motors undertake formal marketing auditing and marketing planning? What is the link between auditing, planning and corporate strategy? Do not simply discuss these at a broad level. Apply these concepts directly to General Motors. (6 marks)

1 401 ASSIGNMENT

UNIT 401

MARKETING

2 401 ASSIGNMENT

How might General Motors use specific business tools to assist them in undertaking formal marketing auditing and planning? Provide four examples. Note: do not describe the business tools at length but rather explain how they might be used. (3 marks) Thinking specifically of the consumer vehicle market, what are the most important factors in General Motors macro-environment? Briefly describe them and explain the reasons for their importance. (3 marks) Thinking specifically of the consumer vehicle market, what are the most important factors in General Motors micro-environment? Briefly describe them and explain the reasons for their importance. (3 marks) How could General Motors use marketing research and marketing intelligence to assist them in undertaking marketing planning and implementing marketing strategy? Provide a specific example of each. (6 marks) How could General Motors use segmentation and specific segmentation variables like demographics, psychographics, buyer-graphics and geographics? Provide a specific example. (3 marks) How could an understanding of market positioning be of assistance to General Motors? Provide a specific example. (3 marks) How could an understanding of buyer behaviour be of assistance to General Motors? Provide a specific example. (3 marks) Ultimately, your report should demonstrate that you understand the linkages between marketing audits, marketing plans and marketing strategies, and their relationships with each of the concepts or thematic areas above and that you can apply these to General Motors consumer vehicle business.

RECOMMENDED APPROACH
Your assignment should demonstrate that you understand the linkages between the key theoretical concepts in Topics 15 and that you can apply them to a 'real life' situation, in this instance General Motors. You should therefore be fully familiar with the content of the early Topics in this unit before making a substantive start on the assignment. You are required to submit a report rather than an essay, so make sure it is structured to contain thematically titled sections with a logical flow of arguments from one to another rather than a series of stand alone answers to individual questions. Do not title each section as Question 1, Question 2, etc. Your ability to discern the themes and how they are linked together is one of the judgment criteria that will be used in assessing your work.
MARKETING

UNIT 401

A table of contents and an introduction are appropriate, but an executive summary is not really necessary. A brief conclusion drawing your various themes together and leaving the reader with one or two insights, while not essential, can add value. If needed you may provide supporting appendices, but be judicious in your selection.

The assignment should be tackled systematically, and your grade will be dependent on your ability to fulfil the terms of the set brief as fully as possible within the word count. Use concise descriptions and do not include lengthy material taken from single sources. Given the nature of this assignment and the amount of information that may require synthesis, use bullet points to summarise where necessary. Note that all questions are not of equal value in this assignment. In terms of allocating your effort (and the words), follow the marks allocated to each section. In preparing your assignment you may draw upon material from a range of sources beyond your Study Guide, including the internet, the news media, trade journals, financial analyst reports, marketing textbooks and academic marketing journals. While it is not mandatory to do so, reading widely will add value to your paper by providing you with additional insights and ideas. If you draw upon material from the internet, make sure the sources are reputable. For information on evaluating web resources visit: http://www.lib.berkeley.edu/TeachingLib/Guides/Internet/Evaluate.html. Wherever you draw upon the work of others in your assignment, you must acknowledge this by referencing the source of the information (e.g. the Study Guide, General Motors websites, national and international newspapers, textbooks, and so on). This applies to more than just direct quotationsyou must also reference things like key definitions, ideas from authors consulted, statistics and tabular data that you use in your report. If you find helpful sentences in an existing document that you wish to include in your report, you must either paraphrase them significantly and reference the source or include them as direct quotations. You must use a globally accepted referencing system (e.g. the Harvard system or the Oxford system) and also include a bibliography. Refer to My Resource Centre on e-Communities for more information. Failure to provide references in academic work (as in the commercial sector) is unacceptable. All papers are a combination of one's own work and ideas and information from other sources. It would be extremely unusual to strike a paper that is based entirely on a student's own knowledge and ideas. If you do not provide references in your assignment, it will be automatically marked as a FAIL grade and Chifley Client Care will contact you about this serious issue. Finally, pay attention to the clarity of your presentation. Is your assignment cogent and clearly expressed? Ensure to proof read your assignment, and ask someone else to read it also. Where necessary, make revisions in light of their comments and feedback.

3 401 ASSIGNMENT

ASSESSMENT GUIDELINES
Following are the general criteria that will be used in determining grades for this assignment.
High distinction (80%+)

Assignment must demonstrate that the student has gained a thorough grasp of the key theoretical concepts presented in Topics 15 of the Study Guide, and has applied them to a practical situation in a way that shows an exceptional ability to discern themes and show the linkages between concepts. Questions are addressed comprehensively in a way that demonstrates a high degree of originality with in-depth analysis, sophisticated thinking and evidence of extensive reading and research. Presentation of the assignment is extremely logical, cogent and clearly expressed.

UNIT 401

MARKETING

4 401 ASSIGNMENT

Distinction (70%79%)

Assignment must demonstrate that the student has gained an extremely good grasp of the key theoretical concepts presented in Topics 15 of the Study Guide, and has applied them to a practical situation in a way that shows a high level of ability to discern themes and show the linkages between concepts. Questions are addressed in a comprehensive or 'valueadded' way with in-depth analysis, sophisticated thinking and evidence of wide reading and research. Presentation of the assignment is very logical, cogent and clearly expressed.
Credit (60%69%)

Assignment must demonstrate that the student has gained a good grasp of the key theoretical concepts presented in Topics 15 of the Study Guide, and has applied them to a practical situation in a way that shows an above average ability to discern themes and show the linkages between concepts. Questions are addressed in a comprehensive or 'value-added' way with a moderate level of analysis and clear insights. Presentation of the assignment is reasonably logical, cogent and clearly expressed.
Pass (50%59%)

Assignment must establish that the student has gained a basic understanding of the key theoretical concepts presented in Topics 15 of the Study Guide, and has applied them to a practical situation in a way that shows an adequate ability to discern themes and show the linkages between concepts. Questions are addressed at a basic but acceptable level using a limited level of analysis. Not a lot of 'value-added' insights. Presentation of the assignment is adequate but could be more logical, cogent or clearly expressed.

UNIT 401

MARKETING

CHIFLEY BUSINESS SCHOOL

SAMPLE EXAMINATION

Exam code: Title of paper: Exam duration: Reading time:

PDM 401 Marketing 3 hours writing time 10 minutes

Candidates are reminded that they should have no material on their desks unless its use has been specifically permitted by the following instructions.

PERMITTED MATERIALS
Non-text Retrievable Calculator Standard English Dictionary Yes Yes

Candidates are required to return the examination and the examination script book. Failure to return the examination may lead to the withholding of examination results. To enable your examination to be identified, write your name and student number, and sign in the box below.

Student ID number .................................... Surname ................................................... Other names (in full) .......................................... Signature ..................................................

Chifley Business School, 2011.

UNIT PDM 401 MARKETING

INSTRUCTIONS TO CANDIDATES
1. Marks will be allocated as follows: Part A Part B 2. 3. 4. 40 marks 30 marks

Answer both questions in Part A. Part B contains four questions from which you must answer two (2). Your answer to each question must be relevant, well written and well argued. In order to pass, you must directly answer the question. Any additional relevant insights that you offer once you have addressed the question may attract additional marks. However, if you do not directly answer the question, you will not pass. Answers must be written in the examination script book provided. Ensure that your name and student number are written clearly on the examination script book.

5. 6.

PART A
Answer both of the following two (2) questions. Each question is worth 20 marks. (Total: 40 marks) Question 1 In Australia, recent figures indicated that approximately 76% of people who had multiple telecommunications products (typically fixed line phones, mobile/cell phones and Internet accounts) consolidated their accounts with a single provider. Three years ago, the figure was just 48%. So, over the last three years an additional 28% of Australians consolidated all their telecommunications with a single provider. Recent figures for the US and Canada were broadly in line with the Australian trends, except for one interesting fact. Of the 76% of customers with consolidated accounts in Australia, roughly two thirds had these accounts with the provider who had given them their fixed line phone. In the US and Canada the number of customers who fitted this behaviour and were loyal to their fixed phone provider was less than 50%. Using your knowledge of three marketing theories (customer loyalty, the value concept and relationship marketing), what advice would you offer AT&T, the US telecommunications company, about the following: why customer loyalty is important for their business how they can create 'value' for their loyal customers how they can develop relationships that simultaneously create 'value' for both AT&T and their customers? Question 2
The only really valuable asset from a marketing perspective is brand! After all, in the increasingly saturated and turbulent air travel market, it is our brand that the customers who fly with my airline are really buying!

1 401 SAMPLE
EXAMINATION

Suppose that this was the suggestion put to you by the Marketing Director of Cathay Pacific Airways. Critically discuss the statement. a) Outline the function of brands and their role in a turbulent and competitive marketplace. b) Discuss the impact that changing forces in the marketing environment might have on an airline's brand. c) Discuss how an airline might position its brand in the minds of its target market. Use examples from an airline (or airlines) with which you are familiar to support your discussion.

UNIT 401 MARKETING

2 401 SAMPLE
EXAMINATION

PART B
Answer two (2) of the following four questions. Each question is worth 15 marks. (Total: 30 marks) Question 3 In the highly competitive mobile phone and data device market, Blackberry and Palm have been the market leaders for many years. New competitors such as Nokia, HTC and Samsung are beginning to make major inroads into the market with their own 'smart phone' offerings. Apple has also successfully launched the iPhone (a 3G 'smart phone' product) into this market. The Apple iPhone includes a wide range of applications using the internet to access services such as email and websites, maps, internet banking, Google Earth, iTunes and many more. It also contains a high quality camera, MP3 and movie player and storage and display of digital photographs and images. You have been asked to recommend the most effective place or distribution strategies to maximise the iPhone's market share in the local market. Using a relevant process for planning place strategies, recommend and justify a particular set of place/distribution strategies for the iPhone. Please note that you are required to design an optimal place strategy not simply recount the strategy that Apple currently uses. Question 4 Imagine that you have been asked to advise the marketing team of Canon's photocopier and office machines division (whose products include copiers, printers, faxes, scanners and multi-function centres) in the development of a marketing plan. The marketing plan for the office machine's business unit must be consistent with Canon's five year corporate goals. The corporate goals in the latest plan are: grow profits and revenues by 5% per year provide products renowned and valued by customers for their quality and performance so that Canon's reputation is considered No. 1 in all market segments increase market share among those customer segments that buy on quality rather than on price. Using your knowledge of business-to-business marketing and marketing planning, suggest how Canon's office machine's division should incorporate analysis of all critical operating environments (the 5 Cs: company, competitors, collaborators, customers and context) into their plans. Use specific examples of forces in the environment for an office equipment maker like Canon rather than talking at a general level. Be sure also to justify the particular analysis approaches that you propose.

UNIT 401 MARKETING

Question 5 According to many marketing commentators, the principal causes of conflict between the producers of goods and services and marketing intermediaries comes down to arguments over who is in control and how the profit is to be shared. Suppose you were asked to analyse distribution negotiations between a new company producing educational software and a major computer products retailer in your country. a) What are the major considerations that a producer should take into account when developing a distribution strategy and selecting distribution channels? b) What arguments should the Marketing Manager for the computer products retailer offer to justify why they want a significant share of the profits from the sale of this new company's software? Question 6 Imagine you are advising an engineering consultancy which specialises in working on communications infrastructure projects on setting prices for their range of services for the period 201020014. You are aware that according to marketing theory there are three generic approach to price settingcost-based pricing, value-based pricing and competitionbased pricing. a) Contrast the three generic approaches to price setting mentioned above. b) Discuss which pricing approach you think is most suitable for this 'product' and why. c) Recommend what step(s) you would need to make to apply this strategy.

3 401 SAMPLE
EXAMINATION

UNIT 401 MARKETING

CHIFLEY BUSINESS SCHOOL

UNIT PDM 401 MARKETING

SAMPLE EXAMINATION ANSWERS

The following answers are provided as a guide to the type and level of detail required by students in the final examination.

PART A
Question 1 In a good answer the following points should appear. The work of Frederick Reichheld of Bain and Company (quoted in Topic 10) identified that a 5% increase in loyalty could add upwards of 25% to an organisation's bottom line profitability. This clearly shows why AT&T ought to be focusing their marketing efforts on increasing the loyalty of customers. This loyalty manifests itself in providing the organisation with the opportunity to extract more value from customers through getting a greater share of their 'wallet' (telecommunications purchasing)which clearly fits with the logic of offering integration of all telecommunications products into one account from one provider. Customer loyalty is about attitude and behaviour. Attitudinal loyalty exists when a customer has a positive predisposition towards a brand. But attitude isn't enough to change people's purchasing behaviour. Behavioural loyalty comes from either a habit or an incentive (reward). So AT&T clearly need to create some 'reward' for loyal behaviour. In considering how they might reward loyal behaviour from customers, AT&T need to examine their value proposition in relation to others offered in the marketplace. The concept of 'value' is centred on the idea that the product does more for the customer than whatever the customer had to give up to get it. Therefore, value isn't the product, but what the product does for the customer. So in the AT&T example, the value of telecommunications is in the ability it provides to make contact with others, do business or live your life conveniently. The value of 'integrating' with one supplier/provider is increased convenience (one bill), cheaper prices (discounts offered for purchasing multiple telecommunications products) and an overall relationship that is perceived as providing better service. At present it would appear that to North Americans there's no particular value that one company offers that another company doesn't. In the Australian scenario, the customers see some value in loyalty, and much of this 'value' has been created in the last few years as the quote suggests: ' over the last three years an additional 28% of Australians consolidated all their telecommunications with a single provider'.

Chifley Business School, 2011.

2 401 SAMPLE
EXAMINATION ANSWERS

Customers consider they have received value when the benefits they perceive they derive from a product or service meet or exceed both their expectations and the cost (time, money and effort) to acquire it. Differential value is when either the benefits the customer perceives are greater than those offered by any other offer, or the benefits are the same, but the cost to the customer is less. AT&T needs to think about how it can create differential value for its loyal customers. Simply offering a consolidated account isn't differential because, according to the case, many competitors also offer these. So what can AT&T do to make their offer different? Can they provide a 'better product' (e.g. better coverage, more international roaming agreements, better clarity of calls, faster data transfer or messaging, etc.)? Can they leverage more value for the customer from the AT&T brand name (e.g. reassurance, size, reputation and familiarity, a better set of corporate values and behaviours, etc.)? Can they position themselves more effectively as the sort of company the customers would want to do business with through promotion (e.g. sponsoring high profile teams or identities, marketing to existing customers the benefits of staying with AT&T, etc.)? Can they make themselves easier to do business with via place or process strategies (e.g. Internet and phone payment, a streamlined account system, account monitoring, the ability for customers to easily look up new product information, etc.)? Can they differentiate by emphasising the high quality of customer service offered by their people, or evidence that their physical telecommunications infrastructure offers reliability and the latest in technology? Can they price in ways that offer customers better perceived valuesuch as Optus do in Australia by allowing customers to 'roll over' any unused value of minimum calls each month for up to three months, and offering free calls to other Optus customers after 8pm? Or can they offer benefits that accrue the longer you're with AT&T such as a loyal users' program (like the airlines' frequent flyer programs), special offers that are only available to long-term AT&T customers, incentives for renewing your agreement, etc. It is not possible to have all customers remain loyal, as some customers won't ever value the effects of loyalty or want a relationship. However, even if it were possible, it would not necessarily be desirable to structure a loyalty campaign around this aim, as loyalty campaigns cost money and not all customers are particularly profitable. For example, a person who makes very few calls of any type will be substantially less profitable than travelling salesperson who makes a large number of mobile phone calls every day. If a loyalty campaign is to create value for the organisation as well as the customer, it needs to be aimed at those customers who will generate a level of profit that justifies spending money to help retain their business. So AT&T needs to concentrate on developing relationships with customers who are likely to provide them with a defined minimum level of profit, want and value a relationship and see benefits in being loyal. In a market of millions of potential customers, finding the right sort of customers to build relationships with can be difficult and expensive. AT&T should therefore minimise its initial marketing outlay by developing a value proposition that will be attractive to its target customers and then building strong relationships with intermediaries such as retailers, agents, brokers, etc. who will recommend the AT&T product. AT&T can then use database technology and CRM style software to analyse customer behaviour, identify profitable customers and build relationships with them by contacting

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them regularly and suggesting how they can get better value from their AT&T accounts. AT&T could introduce rewards for various levels of usage (e.g. faster access to the Internet, free software upgrades if you use more than XMB, free messaging if you've been with AT&T more than three years, etc.). They could try to find additional 'augmented' services to offer to different segmentslike preferential booking services for sporting and entertainment events etc., and offer these exclusively or in advance to AT&T customers. Most importantly, they need to try to make the customers 'feel' like AT&T is working with them to achieve their wants and needs in life or business. Question 2 In a good answer the following points should appear. This question is about brand. In your response you would need to explore what the role and purpose of a brand is, what benefits it confers on both buyers and sellers and how branding impacts on the marketing mix. You would want to highlight that brand has become one of the most popular marketing strategy alternatives available to organisations. Brands offer the following advantages. A brand becomes synonymous in the minds of the market with the particular actual and expected product attributes that the firm offers. So, in the case of Cathay Pacific Airways (CP) they would want customers to think 'efficient, reliable, safe air travel and great in-flight service = Cathay Pacific!' Brands can simplify the choice and purchase processes for customers. So CP would want customers to automatically chose CP because it is an effective solution to their wants and needs and because it is easier than searching for alternatives. Thus, brands can become the basis for a relationship and ultimately the basis for loyalty or brand equity. So CP would need to have strategies designed to stimulate and reward loyalty to the CP brand. Of course, the CP brand is one thing that is extremely difficult for competitors to match. It offers CP an ability to uniquely differentiate, create a relationship with customers and protect that relationship from competitor copying. It allows the CP marketers to develop strategies aimed at getting customers to select and remain loyal to the brand, rather than having to establish a new marketing offer each time. All of this is particularly true in services marketingwhere competitive differences in 'product' are much more difficult to develop and maintainand Cathay Pacific Airways is a service organisation. This has both positive and negative aspects to it. The brand creates an image in the market reflecting a perceptual view in the minds of consumers. The stronger the brand image in the minds of consumers, the harder it is to change or reposition it. If, for example, Cathay Pacific Airways was trying to change its brand image, say from being strongly associated with Hong Kong and China to being a player in the North American marketplace, that would be difficult, at least in the medium term. You might also point out that unlike pure services (e.g. Internet stock broking, travel agents, insurance, etc.), CP is in a market that places a heavy emphasis on physical evidence planes, the seating and equipment in the cabin, the lounges where people wait, etc. Much of what determines customer satisfaction is these more tangible or experiential issues, thus to suggest that the only thing people are buying is the brand is perhaps an over-simplification.

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They are also buying CP's safety record, the experience of the flight, how new and what type of fleet CP fly, etc. Of particular issue will be the destinations that CP offerafter all people are unlikely to say 'Well if you don't fly to Johannesburg where I want/need to go, I'll fly to Hong Kong instead because I'm really only interested in flying with Cathay! So to suggest that performance issues (e.g. destinations, times and frequency of flights, etc.) don't matter as much as brand is perhaps too simple. Nevertheless, brand can be a critical component of an airline's marketing strategy in an increasingly saturated and turbulent air travel market. The airline industry is subject to many changing forces from both the macroenvironment and the microenvironment. These include rising fuel prices which increase the bargaining power of the airlines' suppliers and put pressure on the airlines to increase their ticket prices; the impact of global terrorism which may cause potential customers to choose to use substitute products instead such as buses, trains and hire cars; and the threat of new entrants and increasing competition from discount airlines which causes the bargaining power of potential customers to increase. An airline's brand can be used to stress quality, service, safety and security to the market and encourage potential customers to continue to fly with them in spite of increased ticket prices, increased choice, cheaper alternatives and concerns about the threat of terrorism. In demonstrating how Cathay Pacific (or some other airline) positions brand, the sorts of examples that are likely to come up include: Physical evidencethe types of planes, the way the planes are fitted out and the use of exclusive lounges for frequent travellers. Brandnot just the name, but the way the planes are painted (for example, Qantas with the red tail and white kangaroo, United in silver base metal colours with the stylised U on the tail). Promotionin the advertising (Qantas with very Australian images and the theme song 'I still call Australia home'; United with the tag line 'Fly the friendly skies'; British Airways with 'The world's favourite airline', and so on). PeopleSingapore Airlines use of the image of the Singapore Girl as the service difference that they offer, and in showing the Singapore Girl in a host of international scenes (London, New York, Moscow), they indicate their coverage of the world market. Productsuch as the food and entertainment on flights (Qantas, for example, use famous Australian chef Neil Perry to design particularly Australian menus in First and Business Class, Cathay serve a predominantly Asian menu, Singapore Airlines talks about a unique in-flight entertainment system that provides videos and games that can be fast forwarded, rewound, paused, etc.). There are more examples, of course, that you may draw onthese are just intended as some examples.

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PART B
Question 3 In a good answer the following points should appear. Because Apple's goal is to maximise its market share, its place (distribution) strategies need to balance economics (what channels will maximise sales of iPhones) with a strong focus on more coverage (reaching more places to sell to more people), which may come at the expense of control (losing some of the decision-making power and contact with phone purchasers). This means that they should pursue an 'intensive' distribution strategy targeting many segments rather than a 'selective' or 'exclusive' strategy targeting only a few segments. The iPhone is a tangible good, which means that they need to have contact with customers when they are thinking about, looking for information on, evaluating, buying and post-purchase evaluating smart phones. Apple also needs to think about logistics management such as how the phones get to the customers, connecting the phones to networks (which Apple doesn't do) and servicing. Smart phones are a high-involvement and relatively expensive product, so there will be a need for a channel that offers information, promotion, contact, matching, negotiation, finance and payment, technical and ongoing after-sales support. Consequently Apple are likely to need to adopt multichannel distribution systems, probably involving: An indirect channel using as many existing network providers who sell and support phones as possible (to maximise coverage) particularly if those network providers also have their own sales forces and retail outlets in places likely to reach potential customers. This may also involve selling through outlets that only sell phone handsets (i.e. phone shops that are not linked to network providers, possibly including online retailers like Amazon.com and the online offerings of retailers like Officeworks, Harvey Norman, Tesco and Wal Mart) and who have their own logistics and payment systems. A direct channel via Apple's own stores and online at Apple.com again improves coverage but some thought will need to be given to how customers connect to networks and, when purchased online, to the logistics of getting the phones to the customers. In seeking to achieve maximum market share Apple will end up with an Intensive Hybrid channel model. Question 4 In a good answer the following points should appear. The question is about marketing planning, so you need to be careful not to write a corporate plan for Canon. First we should recognise Canon's marketing plan for office equipment business is one of a number in a diversified multi-business-unit organisation. So we would usually have to consider some portfolio analysis using BCG or GE analyses to understand the positioning of the office equipment business unit first within Canon and where the various product groups like faxes, printers, copiers and so on fit within the office equipment business. This analysis would help us to understand which product groups we ought to build, hold/defend, harvest or divest. However the question doesn't provide enough information for this analysis so we need to make some assumptions like: Faxes are in the late stages of the product lifecycle so are unlikely to be stars. We would not want to invest to grow but would want to defend share

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Copiers and printers are in the mature stage of their lifecycle and again we are unlikely to want to invest to grow very much but would certainly want to defend Multi-function centres (all in one machines that are fax, copier and printer) are stars and so this is the product group that we will be targeting for growth. Using Malcolm McDonald's seven step process, the Canon Office Equipment division would need to complete the following steps. Step 1: Analyse and understand the corporate mission and objectives. These have been given in the question and we need a plan that grows profits and revenues by 5% per year and market share in the quality driven segments, but also defends the Canon brand in the office equipment market. Step 2: Here is where we look at the 5 Cscompany, competitors, collaborators, customers and context. Starting with the first of the Cs (company) we need to look at how good Canon's office equipment division is in the following areas: Marketing (being a tangible goods maker and provider we would mostly focus on the 4 Ps) Distribution channels and channel partners Production Finance Human resources. The strengths and weaknesses of the business unit will allow it to grow revenues and profits and market share while protecting brand image. We could use Porter's Five Forces analysis to analyse the industry (i.e. customers, competitors, collaborators and competitors). We need to research and understand specific information about the customers such as: Who buys office equipment? How can this market be segmented? Are the wants and needs of small businesses different to those of home users, large corporations and institutions? Are the office equipment wants and needs of education organisations different to businesses in finance and banking? We need to examine and understand the product offerings of competitors such as Brother, HP and Lexmar and substitutes such as computer makers or software designers who might be producing systems that allow people to download documents to devices rather than printing them out. We also need to understand the marketing implications of the forces in context: PoliticalWhat opportunities are emerging from recent Australian government stimulus programs such as tax breaks, payments to stimulate consumer spending, investments in infrastructure like building the broadband network, etc. What will this mean for the overall demand and segment prospects for office equipment? EconomicWhat geographic areas of the economy and what industries are in growth, flat or in decline? What are these industries likely to be doing in the future? Socio-culturalAre there issues like lowering carbon footprints and environmental concerns that could impact the marketing of office equipment? Are the business managers and owners of tomorrow likely to want different devices and ways of doing business to the decision makers we deal with now?

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TechnologyWhat are the new and emerging technologies, such as WiFi, wikis, fibre optics, new materials, different paper types, etc, that will impact on our equipment and the devices that they need to connect to? LegalAre there product liability issues emerging? What legal obligations are attached or likely to be attached to the equipment we sell and support? EnvironmentHow do the issues of global warming, environmental impact, pollution and materials scarcity affect the way we make and dispose of our equipment? How might these be changing? We would then look at Canon's strengths and weaknesses, and their opportunities (things that provide positive potential for Canon's office equipment division) and threats (negative potential). Step 3: From these analyses the marketing objectives can be written using the SMART format and designed to seize the opportunities found in the analysis of the 4 Cs other than company (customers, competitors, collaborators and context analysed using PESTEL). Step 4: Develop marketing strategies. Drawing on the strengths and weaknesses we found analysing the company we write statements of how the office equipment business unit will accomplish the marketing objectives. These would set out which markets and segments are to be targeted and what marketing mix (the 4 Ps or 7 Ps) will meet the needs of, and create or add value for, these customers. Step 5: Prepare a marketing plan that documents the outcomes of the previous steps in the marketing planning process. Step 6: Integrate the marketing plan with other functional elements of the corporate plans (technology, HR, finance, etc). This includes ensuring that the marketing plan is consistent with corporate objectives and strategies, production objectives and strategies, human resource objectives and strategies, and so on. The profit and loss accounts and balance sheets that flow from these plans must also be developed. Step 7: Measure, review and amend operating plans. This is conducted continuously throughout the planning cycle.

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Question 5 In a good answer the following points should appear. The key issues here are the roles and value that intermediaries provide in place/distribution channel strategies, and how that should be rewarded. Addressing the first issue, a good answer should start by saying that place is primarily about balancing the competing issues of economics, coverage and control. It is here that the course notes suggest that coverage addresses issues such as: What's the most effective and efficient way to get the product to the customer? How can we expose the optimum number of customers to the 'offer'? What other parties do we need to get involved in its voyage? Added to this are issues about how much control over the rest of the marketing mix the company will have to sacrifice in order to get the coverage (exposure to the maximum number of customers) that they seek. So in planning its place strategy the software company would be looking at issues like: What customer segments do we want to reach? How and where do they currently buy products like this? Who are the intermediaries that currently have a relationship with target customer segments for these sorts of educational software products? Should we be using direct, indirect or hybrid channels (and in what proportion)? What will each channel alternative provide in economic returns, coverage, and at what cost (transport, storage, handling, promotion, margin, etc.)? Having thought through these issues, the company should then consider how they want to position their products and how their place/distribution channel strategies can contribute to helping to achieve the company's overall marketing objectives. Are they keen to position their company as offering inexpensive products designed for everyone, or more exclusive products aimed at discerning user? Is their software designed to work on a single operating system (e.g. Windows) or on several operating systems (e.g. Windows, Macintosh, Linux). The channel members they select must then reinforce these positions and objectives. In addressing the second half of the questionjustifying to the software company why the retailer wants a significant share of the profitit's worthwhile pointing out first that marketing channels perform nine important functions: 1. 2. 3. 4. 5. 6. 7. 8. 9. buying selling storage transportation risk-taking gathering market information promotion financing sorting.

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In negotiations, then, the retailer would rely on the fact that they are principally responsible for the following. Sellingand providing a convenient physical (and virtual perhaps) location for people to buy. Storage (at places convenient to the customer)and in sufficient quantities to meet demand in that area. Risk-takingin ordering products from the software company and then having to find customers to buy them. Gathering market informationon who buys, what they buy, when they buy, how they pay, what issues they raise, etc.and ideally share this with the software company. Promotionusually at point of sale (through display, posters, sales staff who support the products, etc.), but also possibly by promoting the software company's products as part of their own promotional or advertising campaigns. Providing an assortment of products that attract customers and satisfy a whole range of their wants and needs. On this basis, they need margins that not only cover these costs but allow them to make a reasonable profit, because otherwise they might as well promote and sell other things (including promoting products by the software company's competitors). Question 6 In a good answer the following points should appear. Again the key theory is contained in the question itself. It's still important to point out that price is a difficult strategy area and that it needs to help position the product effectively. Therefore it must be in line with all the other elements of the marketing mix. Your answer needs to stress that often the most obvious symbol of a product's position and value for customers is the price. You then need to respond to the specific question: How should an engineering consultancy apply each of the three generic approaches to pricing? A cost-based approach would set the prices for work based on the expected costs of actually doing the work plus some margin, that not only covers shared or fixed costs, but also results in a profit or return on investment. The advantage of such an approach is that it is easy to calculate and manage most businesses have very good figures on their costs, and most people can be trained fairly quickly and easily in how to use cost-based calculations to work out a price. So, in a business like engineering consulting, most managers and staff could quickly be trained in how to estimate the number of hours' or days' work involved for different types of staff, uses of equipment, inputs by specialists, etc., to produce an outcome. Then the margin could either be set in the costs per day/hour/unit of input or added on as a percentage when the work plan was done. So ease of use is a major plus for this approach. The disadvantage is the opportunity foregone (would the customer have paid more?)the fact that the costs have little to do with customers' capacity or willingness to pay. Added to which there is the problem that the price isn't benchmarked against what anyone else might do the work for, hence it is inward looking only rather than recognising the dynamics of the marketplace customers and competitors.

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These problems are better addressed by either of the other two methods. Competitionbased pricing recognises that the price must be positioned in some relationship to what others might charge for the same work. That doesn't mean that the consultancy can't charge more should they feel it is justified and they have positioned themselves as being worth

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more. The advantage of competition-based pricing is that it does take into account that customers often look at various alternative suppliers (or at least check prices from time to time) so the price needs to stand up to some sort of comparison. It also allows for market fluctuations and responds to cycles in industries. When times are good everyone charges more, when times are tight the focus is on winning work and the competition become 'hungrier', so this approach forces the firm to monitor competitor behaviouran important aspect of any successful marketing strategy. The disadvantage of this approach is that it doesn't factor in any reference to the organisation's costs. The price may fluctuate because of changes in the competitive environment, but that doesn't necessarily mean that the firm is able to cover all its needs (including profit) at this price. It also may lead to 'lazy' marketing, with firms simply moving as their competitors move, rather than making deliberate decisions about how they want to position themselves and their business. Finally, there is value-based pricing. This is possibly the most 'pure' of the marketing focuses in pricing because it is based on what the perceived value of the work is for the customer. It focuses the organisation on not only determining what the job is worth to the customer, but also on demonstrating greater value if they want to charge more money. It also has the advantage of being easier to sell because it's based on a customer view of what is being bought and sold. Better answers might highlight that it also has the side benefit of creating a more marketing-oriented organisation and getting people to focus on the value that the organisation creates or adds for the customers (discussed in Topic 1). The disadvantage is that it is much harder to calculate. It is particularly difficult in services such as the one referred to in the question where the nature of each task that an engineering consultant might face is different each time they calculate a price. If there are 'products' that tend to be standard each time (say some sort of standard inspection or audit process), these might be easier to price in this fashion than project work that needs to be priced each time it is sought. It also doesn't necessarily bear any reflection of the costs of doing the work customers may perceive little value in a task that is hard to do and expensive for the consultant. So the consultant may not end up making sufficient money to cover fixed costs and overheads or generate adequate returns. In making a recommendation there is no right answerit comes down to having presented a balanced overview of the three approaches to pricing and advocating (and justifying) an approach. A better answer might suggest that a combination of approachessay valuebased pricing cross-checked to the cost-plus marginwould be valuable. This might overcome the weaknesses of each and still provide the advantages of each.

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