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SUBJECT : MARKETING STRATEGY

DATE : 26 MARCH 2001 (MONDAY)

TIME : 6.30PM to 9.30PM

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INSTRUCTIONS TO CANDIDATES

1.    The duration for this examination is THREE (3) hours.

2.    This examination paper consists of THREE (3) sections. An answer sheet is also attached.

        SECTION A (10 Marks)

        Section A has TEN (10) multiple choice questions worth one mark each. Answer ALL questions by

        circling your answers on the answer sheet provided. Remove this sheet and attached it to your

        Answer Book. No deductions will be made for incorrect answers or non-responses.

        SECTION B (30 Marks)

        Section B has THREE (3) questions, each worth 10 marks. Answer ALL questions in the answer

        book provided.

        SECTION C (60 Marks)

        Section C has SIX (6) questions. Answer any THREE (3) questions in this section in the answer

        book provided. Each question carries 20 marks each.

 

3.     Please write your Examination Registration Number on all examination materials handed in. Do not

        write your name.

4.     Total number of pages (including this page)     :            5

Answer ALL TEN (10) multiple-choice questions in this section. Circle your answers on the answer sheet provided. Each correct answer is worth 1 mark. No deduction will be made for incorrect

answers or non-responses. Remove the answer sheet and attach it to the Answer Booklet.

1.    Building a _______ is inherent in using a standardized product for an international marketer.

       a.    domestic product

       b.    local advertising

       c.    global brand

       d.    decentralized organisation

       e.    all of the above

2.    Products that _______ are most likely to be adapted.

       a.    have a strong home-country image

       b.    are sold primarily by exporting

       c.    are industrial products

       d.    have strong cultural differences affecting the purchase

       e.    all of the above

 

3.    Researchers may get poor results because the interviewees are reluctant to answer question for

       cultural reasons, or because they are:

 

       a.    eager buyers.

       b.    well-educated.

       c.    brand loyal.

       d.    overly polite.

       e.    None of the above

 

4.    Delivery, stock-out performance, and customer-direct delivery are all related to which are of the

       marketing mix?

 

       a.    Advertising and promotion

       b.    Logistics of networking capabilities

       c.    Service quality issues

       d.    Media research capabilities

       e.    Marketing research

5.    Investing in _______ of technology-based industries is risky.

       a.    target marketing

       b.    research and development

       c.    market segmentation

       d.    product life cycle

       e.    advertising

6.    In considering which markets to enter, a key issue is unrealised:

       a.    market segmentation

       b.    market introduction

       c.    market saturation

       d.    market regulations

       e.    market potential

7.    The mode of entry into a foreign market can be through the following except:

       a.    exports.

       b.    licenses.

       c.    franchising

       d.    cartel arrangement

       e.    joint venturing

8.    In selling to very small retailers, the producer may:

       a.    ask for a letter of credit

       b.    sell on consignment

       c.    increase retailer’s advertising allowance

       d.    both (b) and (c)

       e.    all of the above

 

9.    When a company breaks down its product and sells it in parts in order to avoid price controls, it is

       practicing _______.

 

       a.    unbundling

       b.    synergy

       c.    matched sales

       d.    price-evasion

       e.    none of the above

10.  Service quality is dependent upon the:

        a.   person doing the service.

        b.   technical outcome of the service.

        c.   overall image of the company providing the service.

        d.   both (a) and (c)

        e.   all of the above

There are THREE (3) questions, each worth 10 marks. Answer ALL questions.

Question 1

What is culture?

Question 2

Why standardization versus adaptation is a fundamental issue in international marketing?

Question 3

"When exporting to a market, you’re only as good as your distributor there." Discuss.

Question 1

A few years ago, Oriental Daily News, a Hong Kong newspaper, used predatory pricing (i.e. selling

below costs) to damage or destroy competitors by cutting the retail price from HK$5 (US$) to HK$2

(US$) in response to its major competitor Apple Daily’s initial price cut of one dollar. Discuss and

comment on the appropriateness of the pricing strategy used by Oriental Daily News.

Question 2

Many needs are culturally learned. For example, Japanese enjoy sushi (mainly raw fish together with a

small piece of rice) and their children learn to like it. People of other ethnic may never taste it. Suppose

you are the marketing manager for a prestigious sushi restaurant, what strategies would you suggest for

marketing sushi to Indonesians?

Question 3

As a result of People’s Republic of China’s "One Child" policy and smaller family size, what have been

the key changes in the family consumption behaviour pattern?

Question 4

An important channel design consideration is the coverage of the target market, i.e. distribution intensity.

Explain, with examples, how different factors may affect a firm’s choice of target market coverage.

Question 5

Are consumer tastes converging around the Asia-Pacific Region? What are the implications?

Question 6

Does a society’s aesthetic ideas and values affect a firm’s marketing in that society?

MARKING SCHEME

1.  d                 6.  e

 

2.  d                 7.  d

3.  a                 8.  c

4.  d                 9.  c

5.  b                10. d

Section B

1.    Culture is difficult to define I short, simple terms. The easiest way to get a grasp of the complexity of

       the culture is to examine the varied aspects of it. These aspects include the material culture,

       language, aesthetics, education, religion and attitudes, social organisation, and political life. One

       brief definition states that "culture is the distinctive way of life of a people".

 

2.    Adaptation is usually more costly and raises management complexity. Even though standardization

       is attractive from a cost perspective, differences in buyer profiles, marketing infrastructure,

       distribution systems, and government regulations are factos that lead a firm to adaptation. Firms

       may adapt only a portion of the marketing mix, perhaps adapting advertising while keeping the basic

       product constant.

 

3.    This is true because the distributor is, in effect, the complete foreign market presence for the firm. All

       marketing efforts are largely done by the distributor with relatively little inputs from the exporter. The

       exporter can be supportive in various ways, but that is basically cheering from the sidelines.

 

Section C

 

1.    Though predatory pricing, pricing below costs to damage or destroy a competitor, is prohibited in

       some countries, e.g. USA, there is no stringent pricing policies in Asian countries. Companies can

       set prices at any level according to the marketplace or their own wishes. Predatory pricing is usually

       uses by large company with strong financial support. The company can slash price on a product

       or service can still cover variable costs, but not total costs, and wait for smaller and less affluent

       competitors to go broke. A smaller company may not survive such an attack even if it is more

       efficient than the larger and richer predator.

       In response to Oriental Daily’s attack, most competitors cut down their retail prices to different

       extent in order to maintain a certain market share. There is no absolute answer for this question.

       Candidates are free to comment and discuss their own viewpoints.

       Marks will be given to those arguments with valid and sound marketing concepts. However,

       candidates are expected to point out that the major income of newspaper publishers generally

       comes from advertisements. The wholesale price of some newspapers is always close to or even

       below its production costs.

 

2.    Several approaches are appropriate in this situation. One approach may start from the learning

       theory — beliefs ----> attitude ----> purchase intention. Adopting this approach may suggest the

       followings:

 

       a.    Adapting to the food belief of American by making sushi out of those food ingredients familiar to

              Indonesians.

       b.    Appealing to those Indonesians who like the raw fish, raw oyster etc

       c.    Changing their food beliefs. For example, natural food ingredients are better for health than

              those greasy and deep fried food items.

       d.    Instead of changing the beliefs of the adults, educate the children the good food value of rice

              and raw fish.

              Another approach may start with the theory of classical conditioning where behaviour

              modification may result from repeated and reinforcement advertising messages. Candidates

              may also answer from the viewpoint of diffusion theory. Marketers should first identify the profiles

              of the group of innovators and early adopters for sushi and designated marketing efforts should

              be directed at these groups to inspire the diffusion effects. Alternative approaches with

              reasonable arguments are acceptable.

 

3.    The smaller family size results from "One Child" policy has caused the change of family consumption

       patterns in Mainland China in the following areas:

 

       a.    Desire to consume increases. The new generation of young parents of a core family is more

              receptive to the Western ideas of consumption.

       b.    Decision making power is being shifted to younger members of the family as a result of more

              core families rather than large size families consisting of grandparents, parents, and children. At

              the same time, the sole child’s special status in the family has further pushed this shift

              downwards.

       c.    Fashion and convenience have become the main stream of family consumption. Most parents

              from core families have their careers. Therefore, they have less time for household choirs.

              Products such as washing machines, instant noodles and electric rice cookers are becoming

              very popular in Mainland China.

       d.    They are paying more attention to the educational and cultural needs. More and more families

              are spending more on travel, overseas studies, training and so on. And finally, women’s status in

              the family has also risen. As wives now also have their own careers with an increasing financial

              power, they have a much bigger say in the family’s buying decisions.

 

4.    Candidates should explain the first three types of channel choices — exclusive distribution, selective

       distribution, and intensive distribution. The following factors should be discussed:

 

       a.    Environment factors, e.g. technology, population, social life style etc

       b.    Consumer factors, e.g. types of potential customers, timing for buying

       c.    Product factors, e.g. complexity, perceived risk, and ancillary services

       d.    Company factors, e.g. size, resources, technological capacities

              Candidates are expected to use different examples to explain the impact of the above factors

              on channel choices.

 

5.    Some convergence of consumer tastes is undoubtedly occurring, but it varies by product category.

       (Candidates are expected to provide real-life examples here.) Also, convergence doesn’t mean

       identical tastes, merely that tastes are getting close together, especially in countries with similar

       income levels. The greater the convergence in tastes, the more feasible it is for the firm to offer

       similar or standardised product in many countries with the region. Where it is feasible, there may

       be economies of scale and competitive advantage of the firm.

 

6.    The firm should be sensitive to local aesthetic preferences in the design of its plant, product, or

       package. The design should be appropriate and pleasing to local tastes. The firm should be aware

       that certain colours may be favoured or disfavoured because of religious, patriotic, or aesthetic

       reasons. The marketer needs to know the cultural patterns in colour preference in planning his

       products, packages, and advertising. An understanding of the differences in the music of various

       cultures is critical for advertising messages using music in some ways. Aesthetics also influences the

       choice of brand names. Frequently, the best brand name is in the local language and pleasing to the

       local taste.

*** END OF PAPER ***

CERTIFIED PROFESSIONAL MARKETER (ASIA-PACIFIC)

QUALIFYING EXAMINATIONS

MARCH 2001

MARKETING STRATEGY

CIRCLE your answers below. Remove this answer sheet and attach it to your Answer Book. Please write your examination registration number. Do not write your name.

Examination Registration Number: ________________________________

1.        a.                                 b.                             c.                                 d.

 

2.        a.                                 b.                             c.                                 d.

3.        a.                                 b.                             c.                                 d.

4.        a.                                 b.                             c.                                 d.

5.        a.                                 b.                             c.                                 d.

6.        a.                                 b.                             c.                                 d.

7.        a.                                 b.                             c.                                 d.

8.        a.                                 b.                             c.                                 d.

9.        a.                                 b.                             c.                                 d.

10.      a.                                 b.                             c.                                 d.