Examiners’ commentaries 2021

MN3141 Principles of marketing

Important note
This commentary reflects the examination and assessment arrangements for
this course in the academic year 2020–2021. The format and structure of the
examination may change in future years, and any such changes will be
publicised on the virtual learning environment (VLE).
Information about the subject guide and the Essential reading references
Unless otherwise stated, all cross-references will be to the latest version of the
subject guide (2019). You should always attempt to use the most recent edition
of any Essential reading textbook, even if the commentary and/or online reading
list and/or subject guide refer to an earlier edition. If different editions of
Essential reading are listed, please check the VLE for reading supplements – if
none are available, please use the contents list and index of the new edition to
find the relevant section.

General remarks

Learning outcomes
At the end of this course and having completed the Essential reading and Activities, you
should be able to:
• discuss the function and effect of advertising/promotion from an organisational
perspective
• describe the pricing behaviour of firms in an uncertain environment where
information may be limited or wrong
• describe and analyse the marketing behaviour of firms and consumers.

What the examiners are looking for

The guidance as in previous years remains that you should pay special attention to the
content of the Study Guide, you should read the relevant chapters of Kotler and Armstrong
and you should keep up-to-date with developments in marketing by reading the business
sections of newspapers, relevant blogs and listen to podcasts on the subject. There is also
value in observing the practice of marketing as you visit shops whether physical ones or
online and seeking to understand why advertisers design campaigns in the way that they do.
There was one common feature that distinguished better answers from weaker ones. The
former paid attention to the narrative in the question text and made explicit references to it
where necessary. Weaker answers answered questions in more general terms. We have
been using questions based around ‘cases’ and will continue to do so, this approach
encourages students to apply their knowledge to real situations and it is a better assessment
of understanding rather than just recall of concepts.
The exam paper questions that follow generated scores that were in line with other courses
at this level. The questions were generally well understood and there were some very strong
answers.
Examination revision strategy
Many candidates are disappointed to find that their examination performance is poorer
than they expected. This can be due to a number of different reasons and the Examiners’
commentaries suggest ways of addressing common problems and improving your
performance. We want to draw your attention to one particular failing – ‘question spotting’,
that is, confining your examination preparation to a few question topics which have come
up in past papers for the course. This can have very serious consequences.
We recognise that candidates may not cover all topics in the syllabus in the same depth,
but you need to be aware that examiners are free to set questions on any aspect of the
syllabus. This means that you need to study enough of the syllabus to enable you to
answer the required number of examination questions.
The syllabus can be found in the Course information sheet in the section of the VLE
dedicated to this course. You should read the syllabus very carefully and ensure that you
cover sufficient material in preparation for the examination. Examiners will vary the topics
and questions from year to year and may well set questions that have not appeared in
past papers – every topic on the syllabus is a legitimate examination target. So although
past papers can be helpful in revision, you cannot assume that topics or specific questions
that have come up in past examinations will occur again.
If you rely on a question spotting strategy, it is likely you will find yourself in
difficulties when you sit the examination paper. We strongly advise you not to
adopt this strategy.
Examiners’ commentaries 2021

MN3141 Principles of marketing – Zone A

Important note
This commentary reflects the examination and assessment arrangements for this
course in the academic year 2020–2021. The format and structure of the
examination may change in future years, and any such changes will be publicised
on the virtual learning environment (VLE).
Information about the subject guide and the Essential reading references
Unless otherwise stated, all cross-references will be to the latest version of the
subject guide (2019). You should always attempt to use the most recent edition of
any Essential reading textbook, even if the commentary and/or online reading list
and/or subject guide refer to an earlier edition. If different editions of Essential
reading are listed, please check the VLE for reading supplements – if none are
available, please use the contents list and index of the new edition to find the
relevant section.

Comments on specific questions

Question 1
The table below shows the costs and benefits for consumers of buying sports shoes.
Also shown are the scores that a representative sample of consumers in this
category awarded each of those consequences. The final three columns show how
these consumers rated the different brands on each criterion.
Criterion Evaluation Easystride Speeder Xpress

Feels +9 3 6 8
comfortable

Wears out quickly -7 10 1 6

Absorbs shocks +6 4 5 3
well

Has an attractive +4 5 7 8
style

Has a high price -2 2 4 9

Evaluation of each criterion is scored on a +10 (very positive) to - 10 (very negative)

rating scale. Brand ratings are scored on a rating scale scoring a consumer’s belief
about a brand’s performance on each criterion where 10 = the brand very much
delivers the benefits (or costs) and 1= the brand does not do so at all.
a) What are the attitudes that consumers have towards the different brands?
(5 marks)
b) If you were marketing the Easystride brand how could you use the marketing
mix?
(8 marks)
c) If you were responsible for marketing the Xpress brand of shoes, describe the
segmentation characteristics of the people towards whom you’d try and market
your brand.
(7 marks)
d) The evaluation of the different criteria is scaled from +10 to -10, evaluate the
difference between using this approach to one where respondents had 100
points to allocate between the different consequences.
(5 marks)

Reading for this question

Study Guide, Chapter 14 deals specifically with this topic. Broader references can be found
in the Kotler and Armstrong in the following chapters: segmentation (7), branding (8),
pricing (11).

Approaching the question

a) This question required students to show customer attitudes to the different brands
and one means of doing so was to perform some basic calculations in order to
establish customer attitudes using the compensatory approach. Better answers
showed how the calculations had been performed i.e. that for the Easystride brand a
total score of -3 would be obtained by multiplying 9 (customers’ evaluation of the
feels comfortable criterion) by the score customers gave Easystride on that criterion
(3), giving a total of 27. This process would be repeated for Easystride for all the
other criteria as well. Using this approach Easystride scores -3, Speeder 97 and
Xpress 62. The Speeder brand therefore has the best score (strongest customer
attitudes) overall. The strongest answers recognized that the compensatory approach
was not the only means by which attitudes could be calculated. For example, using
the lexicographic rule, Xpress would also be the strongest brand, because it has the
maximum rating. Using the disjunctive rule people who apply a high value to a
particular criterion would choose a brand that rates highest on that. Or if a customer
is loyal to one of the brands they may choose that regardless of score.
b) There are a number of options open to Easystride, the brand can improve features
where it performs badly, for example it could try and improve levels of comfort or
make the shoes more durable. It can use communications in order to improve
customers’ evaluations of those criteria where it performs well, however there are
none that would apply in this instance. Where the brand believes it scores less well
than it could use communications in order to influence customer attitudes, for
example it could try and improve perceptions of its styling.
c) In terms of Behavioural segmentation: Benefits: These people will value comfort and
shoe styling and not worry about the fact that the shoes wear out quickly or the price
issue. Occasions: special social events. Psychographic: Image and fashion
conscious, likely readers/viewers of style magazines and youtube channels. Likely
people who go to parties and entertain and have busy social lives, changing shoes
and fashions often is not a problem. Demographic Likely earning incomes where
spending large sums of money on stylish/comfortable shoes is not a problem
d) Negative numbers can indicate which functional consequences present negative
utility for the consumer and which lower the value of the offering (Schwartz, 1999).
For example, a utilitarian benefits-oriented respondent that would want to indicate
that high price is a very negative consequence indicates this by giving 50 points to
the attribute. Another consumer, that is more hedonic and might see high price
equalling high prestige, may also give 50 points to the attribute. Yet, the meaning of
these two numbers is entirely different. This information does not get lost using the -
10/+10 scale. The ± 10 scale is an absolute ranking, where respondents can assess
each criterion in isolation without paying attention to their rankings of other criteria
(although they may do so regardless). Need to consider the issue of cognitive load on
respondents for different scales.
Question 2
A firm has found that while people are used to paying 10 US cents for a cup of coffee
that they make at home using instant coffee, they are willing to pay US$1 in order to
drink coffee that has the flavour of freshly brewed coffee that can be bought at
leading cafes. The firm has now produced pods containing coffee that are used with
its own brand coffee machines in order to produce such coffee. Each pod can be
used to make one cup of coffee and costs US$1. The firm refers to this as a
‘premiumisation’ strategy.

Discuss the advantages and disadvantages to the firm of pursuing this strategy.
(25 marks)

Reading for this question

Section 8.2 of the study guide deals with the notion of value. Chapter 7 of Kotler and
Armstrong also deals with this topic.
Approaching the question
The answer could make use of the following concepts. This strategy is referred to as
Premiumisation and involves charging more for more (see Kotler). In this case this will
mean more customer benefits for a higher price per cup, specifically this will mean
increased quality vs. ordinary powdered coffee and better convenience vs. filter coffee
and going to a shop.
There are various factors driving this change and making it profitable. Increased living
standards have led to increased consumption of higher quality coffee than the coffee
which costs 10c and customers can afford to pay for more convenience. There are now
more cafes selling premium coffee and thereby providing an anchor for pricing and
quality.
Reasons why this strategy may be effective are due to switching costs for customers,
once they have a machine will they be able to buy generic pods and this could lead to
price insensitivity. The potential for growth could arise from e.g. selling other drinks in
pods and licensing brands
Whether this proposition is sustainable long term will depend on the offering’s relative
advantage, is it better than powdered coffee is it good enough to compete with filter
coffee?
• What if the consumer wanted to make coffee for a number of people?
• Not all the hedonic benefits of coffee shops and if people use filter machines for
hedonic benefits
• Will people be willing to pay a premium for these benefits?

Question 3
Bristol Myers Squibb is a global biopharmaceutical business. They say the following
about their promotions:

“We promote the appropriate use of our products directly to healthcare

professionals and organizations such as doctors, nurse practitioners, physician
assistants, pharmacists, technologists [and] hospitals … We also provide
information about the appropriate use of our products to consumers in the U.S.
through direct-to-consumer print, radio, television and digital advertising and
promotion. In addition, we sponsor general advertising to educate the public about
our innovative medical research and corporate mission.”

Source: Bristol Myers Squibb. Accounts for the fiscal year ended December 31, 2017
Discuss why the firm may be using promotions in this way.
(25 marks)
Reading for this question
Chapter 3 and 10 of the study guide and chapters 3 and 14 of Kotler and Armstrong.
Approaching the question
There are 3 broad areas that could be covered, but there may be others. In order to score
better marks the points made had to show the links with the extract above.

Answers could start with a reference to the existence of different groups of stakeholders
who would be recipients of BMS’s marketing communications, better answers may
attempt to explain how the information needs of different groups could vary. Not all of
these stakeholder groups are involved in the purchasing of BMS’s products for example,
from some of these stakeholders BMS may be looking for political support, for example
that could facilitate research into different areas or enable a more favourable regulatory
environment. The latter may help explain why the company undertakes campaigns that
are simply designed to help educate the public.

Answers could also distinguish between business-to-business markets (b2b) and

business to consumer markets (b2c) and how the information needs between these can
vary and will require different types of communications. A reference to the difference
between push and pull promotions would be relevant here.

Good answers would also refer to the way by which different stakeholder groups could
influence each other for example informed patients may raise issues with their physicians.

The extract refers to the different media used by BMS and answers could explain how
each medium may be effective for some communications objectives rather than others.
For example, mass media such as television may be an effective means of reaching large
audiences where the objective is to make people aware of the BMS brand and
demonstrate how large and credible the organisation is. In contrast print media may be
more effective where the company is trying to communicate more detailed information
about its products and their benefits to specific audiences.

Question 4
White Papers can be defined as documents that inform audiences about a topic or
issue and at the same time highlight the role or benefits of a solution being promoted
by the writer. Typically, the publisher of a white paper will ask anyone who wants a
(free) copy to provide their email address and a mixture of information about
themselves and their organisations. According to the professional networking site,
LinkedIn, White Papers can be used in order to promote an organisation or
individual. White papers can be used to generate leads to new customers and to
convert such prospective customers into customers. LinkedIn also recommends
that people try and promote their paper in advance of publication by publicising its
forthcoming publication.
Using course concepts discuss the advantages and disadvantages to marketers of
using White Papers.
(25 marks)

Reading for this question

Chapter 10 of the Study Guide and chapter fourteen of Kotler and Armstrong.
Approaching the question
The challenge presented by this question is that students need to apply the concepts and
principles that they have learnt in relation to other elements of the communications mix and
apply them to white papers.
Key concepts that would be relevant to answer this question would be those related to
credibility and trust, since white papers are used by marketers to inform stakeholders based
on their subject expertise. It could also be argued that such information may be particularly
important where customers perceive risk. Answers could make reference to
communications concepts such as the hierarchy of effects and explain how the use of white
papers can influence customers at different stages. For example, offering people a free
booklet about a topic can help raise awareness and since something being free may
encourage them to find out more. Once they start reading the white paper and are
enthused by the expertise on offer, their attitude towards the marketer may become more
positive.

Offering the white paper in return for email address etc. exchange and establishes value
and ensures that the marketer receives some non-monetary benefit in return that can be
used for more personalised selling later.

This tool can be said to have advantages such as utility for business-to-business markets
where expertise matters. It can be can be effective in building
dialogue/reputation/relationship.

The challenges of using white papers would be that time is needed for their production,
there is possible dissemination of valuable information/knowledge.

Question 5
This is what Colgate-Palmolive (CP is a multinational marketer of, amongst other
goods, health and personal care products) say about their distribution in emerging
markets (markets with lower-than-average per capita income):

“Especially valuable in emerging markets are our relationships with small rural
shops whose owners have influence on their shoppers’ purchase decisions. We
support small store owners with inventive customized programs that address their
unique business challenges. These programs, which provide information on how to
make our categories more relevant, focus on having the ideal assortment of
products in each store and increasing visibility of our products at point of sale”.
Source: Colgate Palmolive Annual Report 2014
Evaluate the advantages and disadvantages to Colgate Palmolive of using the
marketing mix in this manner and compare the use of this distribution channel with
possible alternatives.
(25 marks)

Reading for this question

Chapters one, twelve and thirteen of the Study Guide. Chapters three and twelve of Kotler
cover relevant material.
Approaching the question
Answers to this question could start with reference to the macro environment and the
impact of lower incomes on consumption and peoples’ willingness to buy from smaller
more local shops whose price per kilo or litre is relatively higher than those products
bought in bulk.
This question is however, principally focused on the distribution topic and answers could
have referred to the functions of channel members and in this instance, CP is saying that
it believes its channel members in rural areas of developing countries play an important
role in advising customers about the purchase options. This higher level of personal
interaction may not necessarily be usual in more developed economies, but since it
characterises the retail environment of developing countries it must be considered.

Drawing on the concepts of value and exchange from chapter one, answers could also
have explained how CP believes it needs to provide value back to its retailers in the form
of promotional materials and other forms of retailing help. This form of collaboration
should help the profits of both CP and the local retailers. CP is also helping retailers
marketing efforts by providing insights into customer preferences, for example, that the
retailer may not have.

Answers could draw upon the promotion topic in order to highlight how the methods used
by CP help retailers to promote the offer to potential customers and this will help CPs
products to compete more effectively against those of other brands.

Question 6
Too Good To Go is a social enterprise which markets an app designed to help
consumers purchase food that would otherwise have been thrown away. However,
this is how they describe the product that customers will receive:

“We call Too Good To Go orders ‘Magic Bags’, because beyond knowing the gist of
what your order contains (for instance, muffins and pastries, or sandwiches and
salads), the contents are a total surprise. It works in everyone’s favour: stores get
the flexibility they need to make sure nothing gets thrown away, and you get to enjoy
an exciting - and delicious - discovery.”

Using course concepts discuss why the firm may be using the marketing mix in this
manner.
(25 marks)
Reading for this question
Chapters one and thirteen of the Study Guide and chapter one of Kotler cover relevant
material.
Approaching the question
This question presents an interesting product which seems to have characteristics that, at
first glance, may be expected to put off customers i.e. the company is only making a
limited effort to addressing expressed customer needs.

As a result the offering should fall below customer expectations, lead to dissatisfaction
and ultimately a loss of customers. However, this question is designed to encourage
students to consider that the offering only partially consists of the actual products and the
fulfilment of customers’ physical needs, there is a significant component here of social,
self-esteem or even self-actualisation needs being addressed. The latter point refers to
customers, for example, feeling good about themselves (self-esteem) by purchasing
products that would otherwise be wasted. So, the fact that the product does not
necessarily meet their physical needs may not be a problem and they may be willing to
compromise without this affecting their satisfaction.

This question is therefore also referring to material in chapter 13 where there is covering
of social responsibility, consumerism and the societal orientation. The modern trend
towards customers being more willing to make choices as consumers that support the
environment will mean that at least some segments will accept this offering, the latter
point also allows students to make reference to psychographic segmentation and the role
of values in making purchase decisions.

As well as the buyer behaviour concepts referred to above, reference could also have
been made to the self-concept and the fact that the business model is relying on variety
seeking behaviour, with the marketer taking advantage of consumers’ willingness to try
different products.

In answering this question students could also make reference to the broad concept of
exchange, i.e. the cost to consumers is that they may not get exactly what they are
looking for, but it is a cost they are willing to pay because this offering is in line with their
values.

Question 7
In each of the following instances evaluate the firms’ usage of the marketing mix:

a) Easy Breakfast contained cereal, a spoon and milk, it potentially offered

consumers the convenience of having all the items necessary for breakfast all in
one place and specifically for children who needed to make breakfast for
themselves.
(10 marks)

b) Webudget and Money were competing personal budgeting apps. Money pursued
a strategy of simplifying the app by automating various functions. In contrast,
Webudget enabled customers to customize the app to their own preferences
before they could start using it. This was also supposed to empower customers
and encourage them to adopt better financial habits.
(10 marks)
c) Adobe offers a PDF Reader free of charge, but payment has to be made in order
to create PDF’s with more advanced functions.
(5 marks)

Reading for this question

Chapter nine of the Study Guide and chapter 9 of Kotler cover relevant material for part (a)
and (b) of this question, for part (c) chapter ten of Kotler and Armstrong and chapter eleven
of the Study Guide were relevant.
Approaching the question
Part (a)

One approach for this question would be to use the Rogers’ framework to assess whether
this would be offering a relative advantage to customers in comparison to what is
available already. Good answers would assess the benefits offered and the target
segment at which they were aimed and evaluate whether parents would be willing to pay
for them. Reference could also be made to the notion of complexity i.e. if children can
open all this packaging and assemble the components they could perhaps do so with the
same components at home. The initial success of the product may also depend on
‘observability’ could advertising show the benefits of the offer in a manner that would
resonate with customers?
Part (b)

The answers to this question could also make effective use of the Roger’s framework.
Money has the relative advantage in terms of making the app easier to use and delivering
benefits more quickly to customers. Webudget is more complex but compensates by
offering better longer term benefits. It could also be said that Money is the more tangible
offering and Webudget is more intangible. People who adopt Webudget may need to
believe in the values of empowerment etc. in order to compensate for the more difficult
initial experience. In real life a product that was the equivalent Money was successful and
one which was similar to Webudget went out of business.
Part (c

This is a freemium business model (though students may not necessarily use the term).
The free aspect means that it is seen as low risk and will encourage customers to install.
Once customers have seen the product benefits they may be encouraged to pay. Also at
play would be the endowment effect – people attach more value to what they have
already. The installation and time/effort needed to understand how this works
(relationship specific investments) involves the use of switching costs to keep customers

Question 8
In each of the following examples discuss why the firms are using the product
element of the marketing mix in the manner described:

a) “We continue to pursue ways to increase the value of our medicines through
innovations during their lifecycles. This can include expanding the disease areas
for which our products are indicated and finding new methods to make the
delivery of our medicines easier and less costly. Such activities can offer
important opportunities for differentiation”.

Source: Amgen Annual Accounts for the fiscal year ended December 31, 2017
(15 marks)

b) Loro Piana is an Italian luxury cashmere brand. “If people buy Loro Piana they
like to feel a little bit like they are part of a club, a club of connoisseurs,”
according to Fabio D’Angelantonio, its chief executive. Part of what Loro Piana
offers [its customers] — if they are forking out for its pricey cashmere (clothing)
— is an entry to actual ‘private club’ style meeting with other kindred spirits”.

Source: https://www.ft.com/content/7aa55f62-3782-11ea-a6d3-9a26f8c3cba4
(10 marks)

Reading for this question

Chapter nine of the Study Guide and chapter 9 of Kotler cover relevant material for part (a)
of this question, for part (b) chapter eight of Kotler and Armstrong and chapter 8 of the
Study Guide were relevant.
Approaching the question
Part (a)

This question relates to the management of products through their lifecycles. The Amgen
example refers to how existing products could have their plc’s extended by being
developed for new disease areas (for which the original formulation was not designed).
Answers can also make reference to the fact that product innovation can also focus on
how the drugs are consumed by the patient i.e. methods that are simpler and easier for
customers e.g. patches rather than injections. There could also be relevant references
here to the notion of value and benefits for example. Also relevant here would be
references to the company being able to differentiate its offer from competitors whose
number will increase during the growth and maturity stages.
Part (b)

This question is about co-creation. Loro Piana sells a good (expensive cashmere
clothing), this initiative allows the company to deliver ‘value in use’ with customers gaining
various hedonic benefits by being able to socialize with other Loro Piana customers. The
customers are likely to share similar lifestyles and values (‘kindred spirits’) and the
‘private club’ aspect means that entry is exclusive to those people. Loro Piana thus
becomes associated with a particular lifestyle and the value it offers is not just in terms of
the clothing, but also the people and experiences to which it gives access.
Examiners’ commentaries 2021

MN3141 Principles of marketing – Zone B

Important note
This commentary reflects the examination and assessment arrangements for
this course in the academic year 2020–2021. The format and structure of the
examination may change in future years, and any such changes will be
publicised on the virtual learning environment (VLE).
Information about the subject guide and the Essential reading references
Unless otherwise stated, all cross-references will be to the latest version of the
subject guide (2019). You should always attempt to use the most recent edition
of any Essential reading textbook, even if the commentary and/or online reading
list and/or subject guide refer to an earlier edition. If different editions of
Essential reading are listed, please check the VLE for reading supplements – if
none are available, please use the contents list and index of the new edition to
find the relevant section.

Comments on specific questions

The exam rubric for this exam is as follows:

The assessment will be an open-book take-home online assessment within a 6-hour

window. The requirements for this assessment remain the same as the closed-book exam,
with an expected time/effort of 3 hours.

Candidates should answer FOUR of the following EIGHT questions. All questions carry
equal marks.

Each answer must not exceed 750 words (3,000 words for the whole paper). Anything
beyond 750 words will not be read. The word limit is to discourage spending beyond the
3 hour expected time/effort by producing excessively lengthy responses. Any citations,
references and direct quotations citations/references are included in the word count. Any
figures, graphs or tables are excluded from the word count.

The rubric may change for your exam, but the overall structure will remain the same i.e. four
questions out of eight to be answered in three hours. The format and content of the questions will
remain the same regardless of whether the exams are online or offline.
Question 1
The table below shows the costs and benefits for consumers of buying sports shoes.
Also shown are the scores that a representative sample of consumers in this category
awarded each of those consequences. The final three columns show how these
consumers rated the different brands on each criterion.
Criterion Evaluation Easystride Speeder Xpress

Feels +9 3 6 8
comfortable

Wears out quickly -7 10 1 6

Absorbs shocks +6 4 5 3
well

Has an attractive +4 5 7 8
style

Has a high price -2 2 4 9

Evaluation of each criterion is scored on a +10 (very positive) to - 10 (very negative)

rating scale. Brand ratings are scored on a rating scale scoring a consumer’s belief
about a brand’s performance on each criterion where 10 = the brand very much
delivers the benefits (or costs) and 1= the brand does not do so at all.
a) What are the attitudes that consumers have towards the different brands?
(5 marks)
b) If you were marketing the Easystride brand how could you use the marketing mix?
(8 marks)
c) If you were responsible for marketing the Xpress brand of shoes, describe the segmentation
characteristics of the people towards whom you’d try and market your brand.
(7 marks)
d) The evaluation of the different criteria is scaled from +10 to -10, evaluate the difference
between using this approach to one where respondents had 100 points to allocate between
the different consequences.
(5 marks)

Reading for this question

Study Guide, Chapter 14 deals specifically with this topic. Broader references can be found
in the Kotler and Armstrong in the following chapters: segmentation (7), branding (8),
pricing (11).

Approaching the question

a) This question required students to show customer attitudes to the different brands
and one means of doing so was to perform some basic calculations in order to
establish customer attitudes using the compensatory approach. Better answers
showed how the calculations had been performed i.e. that for the Easystride brand
a total score of -3 would be obtained by multiplying 9 (customers’ evaluation of the
feels comfortable criterion) by the score customers gave Easystride on that criterion
(3), giving a total of 27. This process would be repeated for Easystride for all the
other criteria as well. Using this approach Easystride scores -3, Speeder 97 and
Xpress 62. The Speeder brand therefore has the best score (strongest customer
attitudes) overall. The strongest answers recognized that the compensatory
approach was not the only means by which attitudes could be calculated. For
example, using the lexicographic rule, Xpress would also be the strongest brand,
because it has the maximum rating. Using the disjunctive rule people who apply a
high value to a particular criterion would choose a brand that rates highest on that.
 Or if a customer is loyal to one of the brands they may choose that regardless of
score.
b) There are a number of options open to Easystride, the brand can improve features
where it performs badly, for example it could try and improve levels of comfort or
make the shoes more durable. It can use communications in order to improve
customers’ evaluations of those criteria where it performs well, however there are
none that would apply in this instance. Where the brand believes it scores less well
than it could use communications in order to influence customer attitudes, for
example it could try and improve perceptions of its styling.
c) In terms of Behavioural segmentation: Benefits: These people will value comfort
and shoe styling and not worry about the fact that the shoes wear out quickly or the
price issue. Occasions: special social events. Psychographic: Image and fashion
conscious, likely readers/viewers of style magazines and youtube channels. Likely
people who go to parties and entertain and have busy social lives, changing shoes
and fashions often is not a problem. Demographic Likely earning incomes where
spending large sums of money on stylish/comfortable shoes is not a problem
d) Negative numbers can indicate which functional consequences present negative
utility for the consumer and which lower the value of the offering (Schwartz, 1999).
For example, a utilitarian benefits-oriented respondent that would want to indicate
that high price is a very negative consequence indicates this by giving 50 points to
the attribute. Another consumer, that is more hedonic and might see high price
equalling high prestige, may also give 50 points to the attribute. Yet, the meaning of
these two numbers is entirely different. This information does not get lost using the
-10/+10 scale. The ± 10 scale is an absolute ranking, where respondents can
assess each criterion in isolation without paying attention to their rankings of other
criteria (although they may do so regardless). Need to consider the issue of
cognitive load on respondents for different scales.

Question 2
A firm has found that while people are used to paying 10 US cents for a cup of coffee
that they make at home using instant coffee, they are willing to pay US$1 in order to
drink coffee that has the flavour of freshly brewed coffee that can be bought at leading
cafes. The firm has now produced pods containing coffee that are used with its own
brand coffee machines in order to produce such coffee. Each pod can be used to make
one cup of coffee and costs US$1. The firm refers to this as a ‘premiumisation’
strategy.

Discuss the advantages and disadvantages to the firm of pursuing this strategy.
(25 marks)

Reading for this question

Section 8.2 of the study guide deals with the notion of value. Chapter 7 of Kotler and
Armstrong also deals with this topic.
Approaching the question
The focus of this question is the concept of premiumisation and the question illustrates the
concept in practical terms, good answer would explain it in more conceptual terms i.e.
offering customers more benefits but at a higher price. Answers could elaborate further by
noting that improved benefits in this instance appears to refer to increased convenience
and a better taste.

The discussion of advantages and disadvantages could start with advantages and note
issues related to the marketing environment that may favour this approach. Specifically,
these factors could (amongst others) include improved living standards and ability to
purchase such coffee together with easily available supply. Reference could also be made
to a social and cultural environment that has coffee consumption as a social norm. The
prevalence of shops selling various coffee products also establishes a price anchor for the
marketers of the pod.

Issues that the marketer would need to consider and which may prove to be advantages or
disadvantages are for example switching costs i.e. once people have bought the machines
could they be restricted to buying the marketer’s own pods (an advantage) or is there a
supply of generic pods that customers could use instead (which would make customers
more price sensitive). The latter would be a disadvantage if the business model the
marketer were pursuing was one where profits are made from the sale of pods rather than
machines. Other possible advantages would depend on e.g. the potential for the marketer
to achieve growth by selling other drinks in a pod format or even selling pods with the
brands of well known coffee marketers.

The discussion of advantages and disadvantages could also bring in discussions around
the relative advantage of this offer and the complexity of using the machines.

Sophisticated answers could argue that coffee powder sold in large jars has a lower
environmental impact than coffee where each cup involves the production of a plastic pod
and the marketer may need to consider consumer concerns about plastic waste.

Question 3
‘Ted Baker is a quintessentially British brand with a quirky yet commercial fashion
offering... . The menswear collection is a reflection of popular contemporary culture,
with a sense of humour and style mixed in. It also includes our Phormalwear range,
offering a number of distinctive suiting collections that combine heritage British
tailoring with a modern outlook. The womenswear collection is a fresh and feminine
mix of European elegance with London flair, and is a celebration of beauty,
individuality and exquisite attention to detail. Stores and concessions are designed to
showcase the brand's unique style of retail theatre and to ensure our customers enjoy
a welcoming and pleasurable shopping experience. Each store boasts a fully bespoke
design that is full of innovative and distinctive touches. Ecommerce enables us to
offer our customers access to an extended product range and provides us with a
means to talk directly with our customers and engage them with the brand in non-
traditional ways. Our wholesale partners ("Trustees") are custodians of our collections
and uphold our brand integrity by ensuring that their retail environment and brand
adjacencies* are in keeping with the profile and positioning of the brand. We have built
up strong relationships with some of the best independent retailers and department
stores around the world. We operate both territorial and product licences. Our licence
partners are all experts in their field and share our passion for unwavering attention
to detail and firm commitment to quality’.
*this refers to stocking brands that occupy similar market positions close to each
other on store shelves
Source: Ted Baker Annual Accounts March 2018

Critically discuss Ted Baker’s use of the marketing mix.

(25 marks)
Reading for this question
This question deals with products, brands and distribution. The relevant reading is in the
chapter eight of the study guide and the chapters eight and twelve of Kotler and Armstrong.
Approaching the question
The text provides clues about links to different concepts covered in the course and better
answers established the links between the explanations of Ted Baker’s application of
marketing and relevant marketing concepts. The product has hedonic characteristics given
the reference to aesthetics and this could also be linked with the intangibility of the offering
and the link could be made with the importance of retail stores that better enable customers
to assess the quality of the offering.

Answers could also refer to the use of branding and customers self-concept and the idea
that this product addresses psychosocial needs as well as physical needs.

In terms of the references to distribution answers could refer to references in the text to
“brand’s unique style of retail theatre” in order to highlight the value of physical retailing to
the brand and reference could also be made to the importance of selecting specific third-
party retailers in order to communicate the brand’s position as effectively as possible and
minimise noise. Regarding the material in the text on e-commerce, answers could identify
the benefits of this such as Ted Baker being able to interact directly with customers (as
opposed to selling via third party retailers) and develop longer-term relationships with them.

The reference to ‘brand adjacency’ is an important one and good answers could explain
how the brand may be able to position itself on the basis of its proximity to specific other
brands on retailers’ shelves.

Good answers would also cover pricing and highlight how the text focuses on the ways by
which the brand emphasises differentiation and exclusivity and these could be mechanisms
to apply the price-quality effect and thereby make customers less price sensitive.

The critical element of the answer could evaluate some of the above approaches. For
example, the company is using a multichannel approach to distribution, and this could be
the basis for conflict with channel members, for example where they believe that it gives
customers a better offer when it sells via its directly owned channels. The reference to retail
theatre could be expensive to offer and require constant innovation. Overall, the fashion
aspect of the company’s offer is susceptible to changing trends and could be risky from that
perspective.

There is a great deal that could have been said about this case and the above points only
offer a sample. The main feature that distinguishes stronger answers from weaker ones is
that the former focus on evidence selected from the text and use that to frame their
reference to specific course concepts.

Question 4
Design and describe a behaviour modification programme in a university setting that
would encourage people to behave in ways that will reduce the possibility of the
transmission of a virus that can be transmitted through the air and by touching
contaminated surfaces. Your answer should make explicit reference to marketing
concepts, frameworks and theories.
(25 marks)
Reading for this question
This question refers to
Approaching the question
This question is principally about promotion and the notion of exchange. Answers should
recognize that although nothing is being sold, all marketing concepts are applicable
(including price). Answers could start with a reference to the notion of exchange – i.e.
people giving up convenience etc. in order to comply. However, the initiative will be more
effective if the cost of compliance etc. is reduced e.g. extent of behaviour change is
minimized e.g. placing sanitisers close to where people will use them.
Segmentation concepts could also be applied in terms of messages that e.g. target people
with different levels of risk-taking or segmentation on the basis of language (although in this
instance any communications could be in multiple languages. References could also be
made to concepts from marketing communications e.g. cognitive aspects of communication
(eye-catching communications), and also those focusing on influencing attitudes. Coverage
of communications could also cover word-of-mouth and viral communications via apps for
example. In all the previous instances good answers would explain why a particular
element of the marketing or communications mix could be effectively used. For example,
for word of mouth it could be argued that people may trust communications from friends
and relatives. References could also be made to prospect theory and how concepts linked
this could be used.

This was a straightforward question and one whose context all students should be familiar
with, however relatively few candidates answered it.

Question 5
A dollar store (where everything costs $1) describes its customers as being a mixture
of those people who need to shop there (because they don’t have enough money) and
those who want to do so (because they enjoy purchasing a bargain).
e) Using course concepts to justify your answer explain which of these two groups could be
linked to the psychographic basis for segmentation.
(5 marks)
f) The dollar store sells well-known brands, but the package sizes are different to those sold
in competing supermarkets. For example, toothpaste sold in supermarkets in 125ml tubes
may be sold in 100ml tubes in the dollar store. Discuss the advantages and disadvantages
to the dollar store when it does this.
(10 marks)
g) It has been observed that many people leave such stores having bought products which
they may not have intended to purchase when they first entered. Discuss why this may
happen and possible criticisms of stores encouraging such behaviour by consumers.
(10 marks)
Reading for this question
Reading from the Study Guide on segmentation (chapter six) would be relevant here, as
would the related material from Kotler and Armstrong (chapter seven). For part (b) students
needed to be familiar with the ‘difficult comparison effect’ in chapter eleven of the Study
Guide. For part c it would have helped if students had been familiar with some of the issues
covered in chapter 13 of the Study Guide.
Approaching the question
a) Psychographic segmentation is where customers are segmented based on values, attitudes and
lifestyles etc. And in this instance, it would be the people who want to buy from the dollar store
rather than because economic circumstances forcing them to do so (which would be demographic
segmentation).
b) This approach may make customers less price sensitive because they are less able to compare
prices, and this may increase the profitability of the sales for the store. The disadvantages of this
approach would be that it will make decision making more difficult for rational customers who
want to compare prices and as a result they may trust the store less. Less well-informed
customers who do not immediately realise this but who become aware later on may also lose trust
in the brand. This line of argument was generally understood.
c) This may happen because people may be attracted by what seem to be bargains, even if they
may not actually need the product being sold. Anticipating customer needs in this manner may be
effective marketing. But it can also be criticized in terms of possibly encouraging over-
consumption and people buying goods to address needs that have been stimulated by the
marketer.
Question 6
TripAdvisor offers users the chance to read traveller reviews of hotels, restaurants
and destinations. It is available on the web and as a mobile phone (handphone) app.
This is what the company says about the distribution of their offer to consumers via
mobile phones:

“In addition, the mobile phones continue to monetize at a significantly lower rate than
desktops and tablets and advertising opportunities are more limited on mobile phone
devices. Given device sizes and technical limitations of these devices, mobile phone
consumers may not be willing to download multiple apps from multiple companies
providing similar service and instead prefer to use one or a limited number of apps for
their hotel, restaurant and attractions activity. In addition, as new devices and
platforms are released, users may begin consuming content in a manner that is more
difficult to monetize”.
Source: TripAdvisor 2017 Annual Report

Note: the term monetise refers to the ability of TripAdvisor to generate revenues.

Using course concepts, discuss the costs and benefits to TripAdvisor of using mobile
phones as a distribution channel.
(25 marks)
Reading for this question
This question deals with distribution and as such Chapter 12 of the Study Guide and Chapter
12 of Kotler would be relevant.
Approaching the question
Answers to this question could start by linking Tripadvisor with the concept of multichannel
distribution. This could start with an explanation of multichannel and costs/benefits in
general terms, e.g. additional costs but reduces Tripadvisors’ reliance on any one channel
and may open sales to different segments.

In this instance, Mobile phones are one means by which Tripadvisor can reach final
consumers and the company can also reach consumers via the website. The advantages of
mobile phones are their convenience of various types for user (reduces non-monetary
costs) e.g. searching for information and ease of payment and those market segment that
have mobile telephones and not laptops/desktops. Phones will also be easier for travellers
on the move.

However mobile phone disadvantages will be that they require users to download an app
and that takes up screen space and memory (compared to using a PC) and the text points
out that there is competition for screen space on phones. Phones are also monetising at
lower levels compared to PCs.

Question 7
You are asked to develop content for the web-page promoting an innovative new
product on a crowd-funding website. A brief description of the product is given below:
“Lumen is a device and app that measures your metabolism through the breath. With
the app, you will receive daily personalized meal plans to help you lose weight and
optimize your workouts. You may think you have a fast or slow metabolism, but in fact
it changes every day based on the food you eat, the amount you sleep and if you
workout. ~ Sustainably lose weight ~ Optimize your workouts ~ iOS & Android
compatible ~ Backed by science”
The crowd-funding website allows consumers to read about new products, watch
videos promoting the products and place advance orders for them. The funds
generated from these advance sales will enable the promoters to take the product from
the prototype stage into production. It is possible that there will be delays in this
process or the product may not get delivered at all and the backers will lose the money
that they have paid. Typically, all the information a possible purchaser might need is
held on one page (there are no links). The organisation promoting this product is new
and customers will not have heard of it previously. For nearly all customers the
product category is new as well.
Identify the topics that the page should cover. Using marketing concepts explain why
they would be important to help market this offering and state any assumptions you
are making.
(25 marks)
Reading for this question
This question focuses on Rogers’ framework for assessing new products and the relevan
reading for this is in Chapter nine of the Study Guide.

Approaching the question

This question is easily linked to the Rogers’ adoption framework and the concepts
associated with that. Most students who attempted this question recognised this
association and answering the question was therefore a relatively simple matter of making
links between the product description in the question and the elements of Rogers’
framework. Where necessary students could make use of assumptions.

• relative advantage of this product compared to existing offerings. Relative advantage: ‘The
degree to which an innovation is perceived as being better than the idea it supersedes’.
• observability – use of videos etc. that allow people to see the benefits. Observability: ‘The
degree to which the results of an innovation are visible to others’.
• Trialability – allowing people to use and return the product they they are not satisfied.
Trialability: ‘The degree to which an innovation may be experimented with on a limited basis’.
• How people can incorporate the product in their lifestyles. Compatibility: ‘The degree to which
an innovation is perceived as consistent with existing values and values of the potential
adopter’.
• Showing how easy to use the product is. Complexity: ‘The degree to which an innovation is
perceived as relatively difficult to understand and use’.

Other concepts that could be referred to are as follows, trustworthiness of the brand
(existing offerings), credibility of the management etc.

Question 8
‘Pay-what-you-want’ is a concept used by some restaurants whereby customers can
choose to pay what they believe a meal is worth. Using course concepts, discuss how
restauranteurs can use the marketing mix in order to ensure that their use of the
concept will be profitable.
(25 marks)
Reading for this question
Chapter 11 of the Study Guide deals with material highly relevant to this question as do
chapters 10 and 11 of Kotler and Armtrong.
Approaching the question
This question is clearly centred around the pricing topic. The challenge posed by the
question was that students would need to identify which topics within pricing should be
applied here. As part of this cognitive process students should have readily recognised that
the ‘pay what you want’ concept clearly involves customers paying different amounts for
what is the same product and service. Therefore, this question could logically be linked to
the concept of price discrimination. Good answers would then explain what price
discrimination means. Secondly in this instance it is the customers themselves who are
deciding what prices they will pay (the restaurant is not imposing the discrimination criteria),
therefore this is an example of indirect price discrimination. A number of answers made
excellent reference to the ways by which the restaurant could ‘encourage’ customers to pay
more for example by appealing to customers fairmindedness, charitable nature and so on.
Those customer segments more prone to responding to these appeals would then pay
higher prices.
Other concepts that could be applied here are related to the notion of risk. Since customers
could, at the extreme pay nothing at all, perceived risk would be relatively low and this may
encourage trial from those potential customers who are unfamiliar with this restaurant.
Reference could also be made to social norms, and on the menus the restaurant could
refer to the average amount paid by its customers. The restaurant could also avoid locating
itself in those areas where people may tend to take advantage of the offer. Some products
would need to retain fixed prices e.g. those which are simply resold by the restaurant such
as drinks.
Also worth noting is the idea presented in the study guide that products where marketers
can have such variable pricing and even 0 at the extreme are ones where marginal costs
are low. This would tend to mean that the restaurant should have a range of dishes where
the marginal cost of production is quite low, such as lentils. In such instances if someone
pays very little it may still generate a profit. However low amounts paid for lobster (an
expensive dish for the restaurant to purchase) would obviously be loss making.
Students be aware that they are marked on such questions on the basis of making
reasonable points within the time available. It is not a matter of having to refer to specific
concepts. So answers may have been rewarded similar marks, although their content could
have been quite different. However it should be stressed that for a question such as this
one, answers that simply provided generic advice about how a restaurant could increase its
sales, without taking due cognisance of its ‘pay-what-you-want’ pricing strategy, would
score relatively few marks.