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Marketing Management V1B
Part A

Q1 What three variables should a company monitor when analyzing competitors?

Q2 In satisfying customer needs, distinguish between responsive marketing,

anticipative marketing and creative marketing.

Q3 (a) Discuss various types of buying behaviour situations.

(b) "Consumers are being influenced by a number of personal factors in the

purchase of products and services." Discuss.

Q4

Channels of distribution used are different for different products." Discuss.

Q5 (a) Explain the terms product item, product line and product mix with
appropriate examples.

(b) Explain different product mix pricing strategies.

PART B

Q1 What do you understand by marketing ? Explain the marketing management

Q2 Distinguish between marketing information system and marketing research.

Discuss important applications (scope) of marketing research.

Q3 What are the decisions that a brand manager has to take ? Explain them with

suitable examples.

Case Study

Frito-Lay Adds Spanish Accent to Snacks

LEAD STORY-DATELINE: Wall Street Journal, May 22, 2002.
Frito-Lay currently has a 58 percent market share in the salty-snack market in t
he U.S. As a means of
finding a large growth opportunity, Frito-Lay is pursuing a more aggressive mark
eting strategy to target
the Hispanic population with its salty snacks by selling a mix of new and existi
ng Latino-oriented products
in a single display. In addition to the five spicy snacks Frito-Lay already sell
s in the U.S., it has added to
their product line the new Doritos Rancheros as well as four items that were top
sellers in its Mexican
subsidiary in Sabritas. This new product mix was rolled out in November 2001 in
20,000 stores in 14
cities with the tag line "A Todo Sabor," meaning "In Full Flavor."
Frito-Lay has rolled out this campaign in Chicago and the Southwest. Cities were
chosen based on
census data and sales data that indicated conglomerations of snacking Hispanics.
Frito-Lay has set a
sales target of $25 million in its first year of marketing these five new items.
Frito-Lay has chosen to hone in on the Hispanic population as a target segment.
As stated by their vice
president of ethnic marketing, "We couldn't ignore this segment. It's a populati
on the size of Canada." As
part of its test marketing strategy, Frito-Lay has chosen flavors that are likel
y appealing to Hispanic
tastes, including spicy pork rinds and lime flavored potato chips called "Lays L
imon." These products are
being placed in racks near the checkout lanes and next to beer coolers.
Frito-Lay has long marketed its snacks with a spicy flare to the Hispanic market
, yet it has not always
been easy. Some of their test products have failed, such as Adobadas, a tomato-a
nd-chili chip that the

targeted Hispanic market found to be too mild. As a result, blind taste tests we
re done in Miami, New
York, Houston, and Los Angeles among 800 Latinos to test 35 different products.
Participants were asked
to rank everything from heat level and oiliness to aroma and appearance. The res
ults showed that
Hispanic snackers felt American snacks were not spicy enough and were looking fo
r something with
"uniquely authentic Latin flavors."
As a result of the market research, some changes were made to Doritos' original
line. For instance, the
Doritos Taco flavor, which was introduced in 1972 as "stacked with authentic Mex
ican taco flavor and just
the right blend of spices," failed to make the Latino grade. Some products were
rebranded, such as their
Baken-ets pork skins, which now adorn the Sabritas smiley-face trademark.
Other food makers are following Frito-Lay's lead in targeting Hispanics, such as
Subway, which is now
marketing a pork "carnitas" sub in Southern California. OtherPepsico units, such
as Gatorade, are getting
in on the act by launching flavors that will appeal to the Latino population, su
ch as mango and tropical
punch flavored "Xtremo."
The main competition faced by Frito-Lay is Barcel, a unit of the Mexican bakery
Grupo Bimbo SA, which
is importing snacks from Mexico. They realistically foresee doubling their busin
ess in the U.S. within the
next year or two.

TALKING IT OVER AND THINKING IT THROUGH!

1. Why has Frito-Lay chosen to more aggressively target the Hispanic market
with its snack line?

2. How has Frito-Lay altered its current product line to carry out its new ethni
c

marketing strategy?

3. What basis did Frito-Lay use for making changes to their product line?

4. How do you envision that Frito-Lay's marketing strategy will impact the
approach other firms in the consumer products industry may take to ethnic
marketing?
5. If you were in charge of marketing for Frito-Lay, what product line
extensions would you recommend in light of the information you have
learned about the Hispanic market in this article? Explain your reasoning.

Part C

1. Which of the following would best describe the calculation of a customer s

lifetime value?
a. The present value of the stream of future costs expected over the lifetime
b. The present value of the stream of future profits expected over the lifetime
c. The present value of the stream of future income increases expected over the
lifetime
d. The future value of the stream of future costs expected over the lifetime

2. ____________ is the customer s objective assessment of the utility of an offeri

ng
based on perceptions of its benefits relative to its cost.
a. Value equity
b. Net equity
c. Relations equity
d. Brand equity

3. There are five different levels of investment in customer-relationship buildi

ng.

They are basic, reactive, proactive, partnership, and what?

a. Accountable
b. Objective
c. Subjective
d. Accounting

4. Creating structural ties with customers is a long-term process for a company.

Which of the following would not be a good suggestion for creating those ties?
a. Concentrate on current sales
b. Charge a lower price to consumers who buy larger supplies
c. Create long-term contracts
d. Turn the product into a long-term service

5. A _________________ advantage is one that a company can use as a

springboard to new advantages.
a. Leverageable
b. Relationship
c. Contractual
d. Customer

6. Total customer value is the bundle of costs customers expect to incur in eval
uating,
obtaining, using, and disposing of the given market offering.
a. True
b. False

7. A person s feelings of pleasure or disappointment resulting from comparing a pr

oduct s
performance (or outcome) in relation to his or her own performance (or outcome)
is
called satisfaction.
a. True

b. False

8. Customer expectations are created by buying experience, friends

advice, and marketers

and competitors

and associates

information and promises.

a. True
b. False

9. A value inquest consists of the whole cluster of benefits the company promise
s to
deliver; it is more than the core positioning of the offering.
a. True
b. False

10. One of the tools used to track and measure customer satisfaction is a compla
int and
suggestion system.
a. True
b. False

11. Companies that navigate all the pitfalls to reach their customer value and s
atisfaction
goals are called high-performance companies.
a. True
b. False

12. Examples of resources that a company can use to carry on its business proces
ses are
labor, materials, and information.
a. True
b. False

13. The shared stories, experiences, beliefs, and norms that every employee has

and
shares within a company are called policies.
a. True
b. False

14. Visionary companies are acknowledged industry leaders and are widely admired
, set
ambitious goals, communicate to their employees, and embrace a high purpose beyo
nd
making money.
a. True
b. False

15. A value chain is a tool used by a company to identify ways to create more cu
stomer
value through its activities.
a. True
b. False

16. The process of calculating a company s customer defection rate is called custo
mer
a. True
b. False

17. A highly satisfied consumer stays loyal longer, buys more products talks fav
ourably
about the company, and shops at competitors regularly to keep up with price
a. True
b. False

18. Customer lifetime value describes the present value of the stream of future
profits
expected over the customer s lifetime purchases.

a. True
b. False

19. Value equity is the customer s subjective and intangible assessment of the bra
nd, above
and beyond its objectively perceived value.
a. True
b. False

20. A customer advantage is something that a company can use as a springboard to

new
a. True
b. False

21. A _________ consists of the activities a person is expected to perform in a

a. Position
b. Status
c. life cycle
d. role

22. Product choice is greatly affected by economic circumstances: spendable

income, savings and assets, debts, borrowing power, and what?
a. How much is owned by a person
b. How much is in the bank
c. Attitudes toward spending and saving
d. All of the above

23. There are five main traits that describe brand personalities in marketing to
day.
They are sincerity, excitement, competence, sophistication, and what?
a. Reliable
b. Humorous

c. Daring
d. Ruggedness

24. Maslow s theory of motivation is made up of five levels. Which of the followin
g is
not one of those levels?
a. Self-concept needs
b. Social needs
c. Self-esteem needs
d. Physiological needs
25. ________________ mean(s) that the person has learned to recognize
differences in sets of similar stimuli and can adjust responses accordingly.
a. Drive
b. Cues
c. Discrimination
d. Learning

26. A(n) ______________ is a person s enduring favourable or unfavourable

evaluations, emotional feelings, and action tendencies toward some object or
a. Attitude
b. Cue
c. drive
d. feeling

27. Complex buying behaviour involves a three-step process. Which of the followi
ng
is not one of those steps?
a. The buyer makes a thoughtful choice.
b. The buyer recognizes the need.
c. The buyer develops attitudes about the product.
d. The buyer develops beliefs about the product.

28. There are a number of ways in which marketers can learn about the stages of
the
buying process for their product. Which one is described as purchasers recalling
the events leading to their purchase?
a. Prescriptive method
b. Retrospective method
c. Prospective method
d. Introspective method

29. Candy has decided to go to McGill University because of the scholarships she
will receive. In what stage of the Buying Decision Process is she involved?
a. Purchase
b. Information Search
c. Post Purchase
d. Problem Recognition

30. When consumers compare their expectations to the actual delivery of a produc
t
or service and the expectations are exceeded, the consumers are said to be
what?
a. Unhappy
b. Disappointed
c. Delighted
d. Satisfied

31. The field of retail behaviour studies how individuals, groups, and organizat
ions
select, buy, use, and dispose of goods, services, ideas, or experiences to satis
fy
their needs and desires.
a. True

b. False

32. Different ethnic and demographic niches do not always respond favourably to
mass market advertising.
a. True
b. False

33. Social classes do not reflect income alone, but also other indicators such a
s
occupation, education, and area of residence.
a. True
b. False

34. Aspiration groups are those whose values or behaviour an individual rejects;
dissociative groups are those the person hopes to join.
a. True
b. False

35. Another shift in buying patterns is an increase in the amount of dollars spe
nt and
influence wielded by children and teens.
True
False
36. In the Empty Nest I stage, families are made up of older married couples, no
children living at home, and the head of household is in the labour force.
a. True
b. False

37. People who are computer-savvy are good prospects for home banking to pay
bills, switch money between accounts, and check their balances.
a. True

b. False

38. Brand personality is only created by those companies that have created a
cartoon character to represent their products and services.
a. True
b. False

39. Motivation researchers often collect

n

in-depth interviews

(like word associatio

and role playing) with a few dozen consumers to uncover deeper motives
triggered by a product.
a. True
b. False

40. An attitude is a person s enduring favourable or unfavourable evaluations,

emotional feelings, and action tendencies toward some object or idea.
a. True
b. False
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