FINAL EXAMINATION

PROGRAMME Master of Business Administration (General)

Postgraduate Diploma in Business Management

MODULE Strategic Marketing Management

YEAR One (1)

INTAKE January 2019

DATE 28 May 2019

TIME 09h00 – 12h00

DURATION 3 hours

TOTAL MARKS 100

INSTRUCTIONS TO THE CANDIDATE

1. Questions must be attempted in the answer book provided.

2. All queries should be directed to the invigilator; do not communicate or attempt to communicate with any
other candidate.
3. You have THREE HOURS to complete this paper. You are not allowed to leave the examination room within
the first hour and in the last 15 minutes of this examination.
4. This is a CLOSED BOOK examination.
5. Read ALL instructions carefully.

ID
Read the article below and answer ANY FOUR (4) questions.

Is a little loyalty too much to ask for?

The South African retail market is a battleground at the moment: fierce competition by brands; a vast choice available to
consumers; and a weak economic climate that has resulted in fickle, price-sensitive customers who lack loyalty.

This could sound harsh and inflated but the proof is in the latest report compiled by WhySatisfy. It analysed the
performance of SA retail companies online and on social media in Q3 2017 based on their following: share of voice, and
conversation sentiment.

Quality vs quantity
You’ve probably heard most of the biggest SA online retailers go on about how customer acquisition is their focus. It’s
all about getting as many new customers’ details as they can because they can then flood them with marketing material
later. Is having a large audience that is not actively engaging with the brand better than a smaller, much more engaged
one? Is this numbers game really worth it in the long run though when it comes to brand loyalty and profit?

Free loyalty programmes are a popular choice for retailers to use as it poses little risk for consumers to join and
therefore appeals to a wide audience. Problem is that they have now trained customers to wait for discounts. So not
only do they not get any value add when customers join the free loyalty programme (a.k.a. 'margin killers'), they will
actually cost money in the long run while customers wait dormant until the next sale or discount coupon to arrive in their
inbox. Retailers are not rewarding brand loyalty, they are rewarding membership.

Clicks Clubcard has moved into the top spot as South Africa's most used loyalty programme at 67%, just beating last
year's loyalty leader, Pick n Pay Smart Shopper.

Retailers are also trying to gain customers by relentlessly offering rewards through contests and competitions which
does create buzz and contributes to their share of voice online, but more detrimentally creates a following of serial
competition chasers that don’t actually value the brand.

“Contests don’t build loyalty to the brand. They build loyalty to the prizes.”
Pick n Pay seems to be doing something right as they have the greatest following, the most active social audience and
the best-performing content. This is not surprising though as it all stems from, and is supported by, their unwavering
core values of providing customers with what they need – quality goods at affordable prices, with good before, during
and after sales customer service.

The key then to owning a genuine share of voice online and building an audience of value is in the content! Creating
and using content effectively, to fulfil specific objectives, is in-depth and multi-faceted, with many brands still missing the
mark. To help delve a little deeper, here’s what Joe Steyn-Begley from Mark1 Media thinks…

“Brands have to design content with specific platform objectives in mind. And together with designing for specific
objectives, you need to advertise for specific objectives. It doesn't help you try to drive sign-ups for a Black Friday
newsletter and your promotion objective is set to create awareness. It seems straightforward but still, so many
companies get it wrong. My suggestion would be to revisit the objectives you can set on Facebook, decide on the
specific format and work things backwards from there.”

ID 1
Are you relevant though?
The next important layer is the promotion of the content, especially considering the anticipated launch of Facebook’s
alternative News Feed – Explore. Promoted content campaigns need to be thoughtfully targeted, completely relevant to
the target audience, fit the platform seamlessly and remain authentic to the brand. Unless you have enormous budgets
to play with, using broad demographics in your targeting is like your message being a drop in a vast ocean. Rather use
the platform’s unique targeting abilities and focus your messages to the interests of your target audience.

Of those who take part in conversations about retail online, the core interest groups are: family and parenting, business
and music. Also, topics that customers feel strongly about and that always stand out are: corporate social responsibility
(CSR), online shopping and price. The SA retail audience has almost a 50/50 gender split, showing that the old 'women
love shopping' stereotype is dying. Why not use all this knowledge and more to engage with your audience in a more
meaningful way that will increase its performance?

Success in retail is still rooted in doing everything you can to ensure a great customer journey – bend over backwards if
you have to! If you’ve cracked this then the rest will follow. Get those glowing reviews and recommendations on social
media to combat any irritable customers complaining.

Retailers are at the mercy of social media in that way as consumers are quick to use this platform to moan about poor
quality or bad service. That being said, any retailer can convert negative sentiment into positive with a solid and
streamlined customer care plan.
Source: http://www.bizcommunity.com/Article/196/179/170529.html

QUESTION 1 (25 Marks)

1.1 Critically discuss the key points in the article regarding the use of loyalty programmes and the resulting
managerial implications thereof. (15 marks)

1.2 The Bottom of the Pyramid (BoP) consumers in emerging markets are untapped markets for many FMCG
companies, which can increase their market-share and bottom line if targeted correctly. Develop strategies on
how marketers can target the BoP consumers. (10 marks)

QUESTION 2 (25 Marks)

“Brands have to design content with specific platform objectives in mind. And together with designing for specific
objectives, you need to advertise for specific objectives. It doesn't help you try to drive sign-ups for a Black Friday
newsletter and your promotion objective is set to create awareness.

2.1 With reference to the statement above, advise marketers on the steps that they need to undertake when
creating a marketing communication to ensure the correct message is sent out. (10 marks)

2..2 Discuss with examples, how marketers can use viral marketing to get their messages across to the market.
(15 marks)

ID 2
QUESTION 3 (25 Marks)

The article indicates that “The SA retail audience has almost a 50/50 gender split, showing that the old saying 'women
love shopping' stereotype is dying”.

Discuss how marketers could segment their markets to succeed in the digital era and discuss the 7 crucial elements that
play a role in the conversion of these consumers.

QUESTION 4 (25 Marks)

Success in retail is still rooted in doing everything you can to ensure a great customer journey – bend over backwards if
you have to! If you’ve cracked this then the rest will follow. Get those glowing reviews and recommendations on social
media to combat any irritable customers complaining.

Evaluate how the customer journey has changed and the role social media played in this change and recommend to
marketers strategies to ensure a great customer journey.

QUESTION 5 (25 Marks)

“Countries like Nigeria and Ethiopia have shown positive GDP per capita growth however are classified as being
politically unstable.”

In light of the statement above as the marketing manager of Clicks advise the CEO on how to develop new market
growth strategies to grow the Clicks brand in Northern Africa.

END OF PAPER

ID 3