Marketing Management-1B


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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.




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 the U.S. As a means of

finding a large growth opportunity, Frito-Lay is pursuing a more aggressive marketing strategy to target

the Hispanic population with its salty snacks by selling a mix of new and existing Latino-oriented products

in a single display. In addition to the five spicy snacks Frito-Lay already sells 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 population the size of Canada.” As

part of its test marketing strategy, Frito-Lay has chosen flavors that are likely appealing to Hispanic

tastes, including spicy pork rinds and lime flavored potato chips called “Lays Limon.” 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-and-chili chip that the

targeted Hispanic market found to be too mild. As a result, blind taste tests were 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 results showed that

Hispanic snackers felt American snacks were not spicy enough and were looking for 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 Mexican 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, such 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 business in the U.S. within the

next year or two.




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 ethnic

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


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


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 offering

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 building.

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 evaluating,

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 product’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’ and associates’

advice, and marketers’ and competitors’ information and promises.

a. True

b. False


9. A value inquest consists of the whole cluster of benefits the company promises 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 complaint and

suggestion system.

a. True

b. False


11. Companies that navigate all the pitfalls to reach their customer value and satisfaction

goals are called high-performance companies.

a. True

b. False


12. Examples of resources that a company can use to carry on its business processes 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 beyond

making money.

a. True

b. False


15. A value chain is a tool used by a company to identify ways to create more customer

value through its activities.

a. True

b. False


16. The process of calculating a company’s customer defection rate is called customer

a. True

b. False


17. A highly satisfied consumer stays loyal longer, buys more products talks favourably

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 brand, 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 today.

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 following 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 following

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 product

or service and the expectations are exceeded, the consumers are said to be


a. Unhappy

b. Disappointed

c. Delighted

d. Satisfied


31. The field of retail behaviour studies how individuals, groups, and organizations

select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy

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 as

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 spent and

influence wielded by children and teens.

  1. True
  2. 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 “in-depth interviews” (like word association

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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