College of Administrative Sciences and Economics

MKTG 402 – Marketing Management I

Spring 2022 – Remedial Exam

Question I (15 points)

Describe briefly the marketing myopia in a company you choose (3 pts). Justify why this is
myopia as conceptualized in the Levitt article (3 pts). What are your specific strategy
prescriptions to remove this marketing myopia (8 pts)?

To address this question, you are required to identify a real life problem of marketing myopia.
This could be a problem that may exist in one of the companies that you work for, or it could
be a problem pertaining to the strategy of an actual company that you know about. Over the
past years given the recessions and economic crisis there may likely be many interesting
examples.

Hint: You must first identify the specific marketing myopia problem for your chosen
company as defined and explained in the Levitt article. The basic premise of marketing
myopia is that companies may define their business incorrectly, and that the optimal business
definition and long-term strategy of a firm must be predicated on serving consumer needs.

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Question II (15 points)
Marketing has often been defined in terms of satisfying customers’ needs and wants. Critics
maintain that marketing does much more than satisfying customers’ needs and wants and, in
fact, create needs and wants that did not exist before. According to these critics, marketers
encourage consumers to spend more money than they should on goods and services they
really do not need. What is your opinion of this on-going debate? Take a stance and defend
your position using two examples of companies from the list of cases we have discussed in
class to exemplify the differences between the concepts.

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Question III (15 points)

Consider that IBM manufactures two types of laptop computers, a 750 MHz computer and a
faster 1.0 GHz computer. There are two segments of consumers in the market: personal users
and business users. The following table gives you the willingness to pay of the two segments
for the two products. Assume that all costs of production are negligible.

Table: Perceived Economic Value

Personal Users Business Users

Segment Size 60,000 40,000
IBM 750 MHz $ 500 $ 1500
IBM 1.0 GHz $ 750 $ 2500

1. If IBM were to use a single product policy for this market which product should they
introduce and at what price?
2. If IBM were to use a product line policy of launching both products what will be the
optimal price for both products and the profits achieved with the product line?
3. Can you list two factors which would make the product line policy even more
profitable compared to the single product policy?

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Question VI (15 points)

Use the following perceptual map to answer questions below:

a. Based on the perceptual map of painkillers

on the left, can you “name” the dimensions
Tylenol (which are indicative of the benefit)? (2
Excedrin points)
Advil
Nurofen

Aspirin

b. Select the best “place” for a new product-market entry by drawing a circle on the map above. Explain
(5 points).

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 c. If the vector on the map below represents an ideal vector evaluated by preference regression, and
the star represents a new product concept, is the concept well-positioned? Please comment (2 points).

29. Effectiveness

Tylenol
Excedrin
Advil
Nurofen
Gentleness

Aspirin

d. Based on the map below, which segment would you (as a marketing manager) enter with what kind
of a product, given the preferences and the qualifications of the segments? (5 points)

30.

Segment 1:
Age = ~32,
Income= ~ $41k
Segment 2:
Age = ~67,
30. Income= ~ $16k

Segment 1:
Age = ~32,
Income= ~ $41k

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Question V (15 points)

Provide a brief answer. Your answer should be a paragraph or two and must not be more than
½ a page long.

The chairman of the board of a large oil company in the midst of the oil shortages of the 80's
once said: “The marketing concept is fine for packaged consumer products. These are
differentiated products in highly competitive industries that need to advertise to stimulate
demand. But we are producing standardized products in a situation of scarcity. Our main
concern is not satisfying consumer needs, but trying to discover and exploit scarce resources”.
Would you support the chairman’s position? Why or why not? Can you think of specific
conditions in this industry under which the chairman might become more concerned with
satisfying consumer needs and adopt the marketing concept as discussed in the first week of
this course?

Question VI (25 points)

Use the following explanation to answer question 6 (25 points):

Identify and evaluate the strategies of Savin and Kodak. How did they overcome Xerox’s
entry barriers?

Xerox 914, introduced in 1959, which truly revolutionized the copying industry. The first
plain-paper copier, it was easy to use and operated at seven copies per minute. The 914 was
responsible for the number of copies made in the United States increasing from 20 million to
9.5 billion in only ten years. Major strategic thrust for Xerox in the 1970s, was the ‘‘Office of
Future.’’ This concept recognized that the copier was only one instrument of office
productivity, and Xerox wanted to be a leader in the broader playing field.

Savin was a small company obsessed with participating in the copier market and frustrated by
the patent chokehold of Xerox. Finally, with the help of an Australian inventor and a
consortium of firms from the United States, Germany, and Japan, Savin developed a liquid-
toner approach that avoided Xerox patents. Its breakthrough became the Savin 750,
manufactured by Ricoh in Japan and introduced in 1975 at $4,999, less that the (then) annual
lease price of a Xerox machine. Instead of a direct sales force, Savin sold through dealers who
could contact Xerox customers with an attractive alternative when their contracts expired.
Dealer service was feasible because the machine was relatively small and reliable; the Savin
750 averaged 17,000 copies between failures. It made twenty copies per minute, the first in
less than five seconds, a pace far superior to Xerox efforts at the low end. By 1977, Savin
placed more copiers in the United States than Xerox. Meanwhile, Ricoh captured the top
market share in Japan, as measured in units.

Kodak entered the market in 1975 with its Ektaprint 100, a plain-paper copier that soon
became the industry standard for reliability in the mid-volume market. The firm then
developed a series of high-end machines that were by many measures the best in the industry.
Kodak moved slowly, however, making sure the products were reliable, carefully building a

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strong service and marketing organization, and avoiding building capacity too quickly. Kodak
was still able to move into third place in copier sales by 1985 because of its technology,
reputation, and resources-and because Xerox was not successful in developing comparable
products.