marketing for purchasers: exam...

Marketing Exam Analysis © Profex Publishing Limited 2011

MARKETING FOR PURCHASERS: EXAM ANALYSIS & ANSWER FINDER Here we analyse five of the latest exam sittings: what topics were set, where the key pitfalls and easy marks were, what the examiner said – and where you can find material for an answer, in your Course Book. The full text of past exams, marking schemes and Senior Assessors’ reports can be accessed by members at: http://www.cips.org CONTENTS

May 2009 November 2009 January 2010 March 2010 May 2010

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THE MAY 2009 EXAM Section A: case study and two compulsory questions (25 marks each)

A major retailer of own-brand clothes has suffered declining market share in the UK, despite strong branding, and has decided to pursue growth by launching an online store and investigating its roll-out to new international markets.

Q1 Promotional plan for launch of online channel See Chapter 11, Section 2 for the format. A promotional plan might include: situation analysis; identification of target customers/audiences; communication objectives; create the message (DAGMAR, AIDA); develop the promotional mix; budget and allocate resources; buy/schedule media; manage and oversee implementation; monitor and control; evaluate success.

25 marks

Comments: Note that the question addresses a promotional plan – not a marketing plan (which would contain irrelevant elements of the marketing mix). With so much material to cover, the temptation was to generalise: remember to contextualise to the case study (online clothing store) whenever possible.

Q2 Key issues in entering a new international market See Chapter 15, Sections 2 and 3 (for PEST, Five Forces and customer/demand factors affecting the decision) and Chapter 13 for market entry options. We have added some brief notes in the Course Book Upgrade material, to expand PEST to PESTLE.

25 marks

Comments: Again, the temptation in using the PESTLE framework is to generalise: you need to make constant reference to the case material.

Section B (two questions, 25 marks each)

Q3 How purchasing could support marketing objectives See Chapter 2 Section 2 for some general ideas – noting that the question was set in the context of a consumer goods manufacturer. You could start by discussing typical marketing objectives (eg market share, communications success, cost management) and suggest how each could be supported by purchasing. Examples include: selection and management of agencies; supporting product design, development and improvement; supporting sustainable brands; quality management; managing distribution channels; cost management/reduction and so on.

25 marks

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Comments: A large number of answers focused solely on ‘best practice’ in procurement and purchasing responsibilities – but it needed to be demonstrated how these would contribute to the fulfilment of marketing objectives.

Q4 Evaluate the differences between organisational and consumer buying behaviour See Chapter 5, Sections 2 and 3. (Your Passnotes also include a handy summary on pages 19–21.) Your answer should address differences in the DMU, DMP and influences on buyer behaviour. (Make sure you distinguish clearly between the DMU and DMP: a common exam pitfall!)

25 marks

Comments: You needed to address both consumer and organisational buying behaviour to evaluate the comparison. The command word ‘evaluate’ meant that you also needed to draw out similarities as well as differences.

Q5 Outline content of a presentation on the importance and methods of managing customer relationships effectively See Chapter 16, Sections 1 and 2 – noting that the question was set in the context of the financial services sector.

25 marks

Comments: Note the unusual format requirement, worth 2 marks: you may choose to format your answer in the form of presentation slides (or refer to them in your headings). Note also the dual requirements (importance of relationship management and how customer relationships can be managed effectively), which should receive equal emphasis.

Q6 Three dimensions of a service and importance of extended marketing mix for a service of your choice

See Chapter 7, Sections 1 and 4. ‘Three dimensions of a service’ might be ambiguous: you could have answered using the ‘core, actual, augmented’ framework – or People, Process and Physicals (leading you into the second part of the question).

25 marks

Comments: Read the question carefully: discussion of the ‘characteristics’ of services and their challenges were not considered to address the question set. Note also that your answer should be based on a service of your choice. You are strongly advised to build up a portfolio of notes on selected products, services and organisations that interest you, for use as ‘case studies’ for such questions.

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General pitfalls These were all unstructured 25-mark questions, which put pressure on your

answer planning and time management skills.

Several of the questions were set in specific ‘mini-scenario’ contexts (including a service organisation of your choice). This required you to contextualise your answers for some questions in Part B as well as (obviously) for Part A.

Easy marks

There were good marks to be obtained from mainstream syllabus topics such as: promotion planning, international market entry, inter-functional relationships, organisational v consumer behaviour, customer relationships and service marketing.

Several of the questions were very broad in scope, allowing you to select material in which you were confident. Similarly, the opportunity to use ‘a service of your choice’ for discussion in Q6 allowed you to play to your strengths.

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THE NOVEMBER 2009 EXAM Section A: case study and two compulsory questions (25 marks each)

A UK manufacturer of high-tech components has followed four different growth strategies at different phases of its development.

Q1 Using a recognised model, analyse the four growth phases and identify key marketing activities of each See Chapter 8, Section 2. The growth phases were identifiable on the Ansoff matrix as market penetration, market development, product development and diversification.

25 marks

Comments: You were expected to recognise that the growth phases described in the case material aligned precisely to the four strategies of the Ansoff matrix. It would have been more difficult to shape a discussion around other models.

When asked to ‘identify key marketing activities’ in any exam question, consider using the marketing mix as a framework to structure your discussion.

Q2(a) Examine main options for entering the Asian market Ie Direct/indirect export or direct investment. See Chapter 13, ss 2, 3 and 4. Note that the command word ‘examine’ requires not just description of the options, but identification of key risks, issues and considerations for the case organisation.

9 marks

Q2(b) Criteria used to select most appropriate option Suitable evaluation criteria might include: costs, risks, control, profit potential, payback period, fit with strategy, fit with culture, available resources, legal constraints (if any) and so on.

16 marks

Comments: Some candidates seemed confused by part (b), focusing on reasons why a company might want to enter the Asian market. The question specifically asked how the company could choose between the options identified in part (a).

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Q3 Analytical tools and disciplines of marketing which may be useful to purchasers One approach to this question, if you hadn’t thought about it before, might be to review the tools and activities in the Marketing syllabus – and consider which of them also appear in Purchasing-focused modules. Examples might include: SWOT/ PESTLE (of supply market), Five Forces (re supplier/buyer power), marketing orientation (re the ‘internal customers’ of purchasing), relationship marketing (re supplier relations) and promotion (‘procurement marketing’). You should then be able to show how each tool/activity can be used in a purchasing setting.

25 marks

Comments: Note that you were expected not just to enumerate or describe tools, but also to suggest how each could be used in a purchasing setting.

Q4(a) For a product of your choice, examine adoption (diffusion of innovation) through its lifecycle See Chapter 8, Section 1, using both the PLC and the diffusion of innovation model.

10 marks

Q4(b) Analyse each customer classification identified for part (a) Ie Early adopters, late adopters, laggards etc.

15 marks

Comments: Remember that you are required to base your answer on a specific product of your choice: if you failed to do so, your answer would have lost significant marks, as your answer would inevitably have been too generalised.

Q5 Define ‘tactical pricing’; main tactics used in consumer marketing, with examples See Chapter 9, Section 2 – noting the need to provide examples of the tactics you discuss. This raises a common terminology pitfall: failing to distinguish between ‘strategy’ and ‘tactics’. Sort out pricing tactics (eg promotional or psychological pricing) from pricing strategies (skimming, penetration etc).

25 marks

Comments: The examiner accepted either breadth (several tactics discussed briefly) or depth (two or three tactics discussed in detail): worth bearing in mind for future 25-mark unstructured questions.

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Q6 How effective segmentation can contribute to increased profitability See Chapter 6, Section 1 – remembering to focus your answer on segmentation’s contribution to profitability, rather than approaches to segmentation, or targeting and positioning. (‘A number of answers comprised largely irrelevant content, and so scored low marks.’) You might discuss issues such as: better understanding of customer needs; better use of available resources; more relevant products; differentiation from competitors; and so on.

25 marks

Comments: Remember that when asked how a marketing technique or activity can ‘contribute to increased profitability’, you need to consider both the generation of sales and revenue and the reduction of cost/expenditure. General pitfalls

Several questions in this exam focused on tools of analysis (named or unnamed): this put unusual pressure on your ability to select, correctly describe and apply such tools. It is a common pitfall to select irrelevant tools, to label diagrams incorrectly, or to get the terminology wrong. Make sure you know which tools are appropriate in different contexts, and that you can discuss and utilise them accurately.

Easy marks

There were good marks to be obtained from mainstream syllabus topics such as: Ansoff, international market entry, diffusion of innovation, pricing tactics and segmentation.

Several topics should be familiar from previous exams. While we never advise question spotting – and you always need to read and answer the specific question set (not the question you remember having seen before) – this does give an advantage to students who have analysed and practised past exams.

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THE JANUARY 2010 EXAM Section A: case study and two compulsory questions (25 marks each) A leading airline, offering both ‘value’ and ‘premium’ services, has conducted market research into industry-wide demand (rising) and customer satisfaction with its own offering (deteriorating). Concerned, the Board focuses on encouraging existing customers to use the airline more frequently.

Q1 Benefits of building customer loyalty; marketing activities likely to result in greater loyalty See Chapter 16, Sections 1 and 2 – remembering to focus on airline marketing. You may be able to use your own experience of airline reward schemes, frequent flier programmes, membership clubs, added value benefits, price promotions and so on. You can also address issues highlighted by the case (eg service quality problems arising from staff training cutbacks; lack of marketing support; poor use of website to offer added value).

25 marks

Comments: As always, be sure to address both ‘halves’ of the question, for which (unless otherwise stated) you can assume that equal marks will be available.

Q2 How the marketing mix can be used to differentiate ‘premium’ and ‘value’ services more clearly See Chapter 2, Section 1, and Chapter 7, Section 4, if you need to be reminded of the 7Ps, which should be used to structure your answer. Note that the differentiation is a matter of branding (shaping customer perceptions) as well as positioning (targeting the proposition to the needs of different customer groups).

25 marks

Comments: Candidates lost significant marks if they failed to recognise that an airline is a service business: 7Ps are required, not just 4Ps…

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Q3 Potential impact of key marketing decisions, objectives and strategies on purchasing and other functions See Chapter 2, Section 2 for some general ideas. Consider the impact of a short-term sales promotion, say, or a penetration pricing strategy, or the launch of a ‘premium’ brand…

25 marks

Comments: The best way to plan your answer may have been to select some key decisions, objectives and strategies (say, 4); and discuss the impact of each in turn (for 6 marks each: 1 mark to outline the decision/objective/strategy and 1 mark each for impact on purchasing, operations, sales, finance and HR, say).

Q4(a) Evaluate importance of sampling in market research See Chapter 4, Section 6. The main point is that sampling is essential to create a manageable population for study, keeping time/cost down. The limitation of this is that the sample may not be genuinely representative of the views of the whole population.

8 marks

Q4(b) Assess main sampling techniques, using examples See Chapter 4, Section 6. You could discuss simple random, systematic, stratified, quota and/or cluster sampling (for 3–4 marks each.)

17 marks

Comments: Note that ‘sampling’ is a technical term: not to be confused with ‘data gathering techniques’ in general. The command word ‘evaluate’ (in part (a)) requires you to discuss the importance and limitations of sampling. Similarly, in part (b) the command word ‘assess’ requires you to discuss how effective each technique is. Finally, note that you would have lost marks if you failed to give examples of each technique. An excellent test of your exam technique!

Q5 Analyse, using example, key influences on consumer buyer behaviour See Chapter 5, Section 2. You might consider both environmental influences (culture, reference groups, situational factors, marketing messages) and individual influences (need/motivation, social and psychological factors, demographic variables).

25 marks

Comments: This should be straightforward if you have covered the material. Perhaps the main pitfall is discussing organisational buyer behaviour rather than consumer, or discussing the DMP or DMU rather than influences. Read the question carefully – and answer the question set!

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Q6 Factors to consider in selecting pricing strategy for an overseas product launch See Chapter 9, Sections 1 and 2 (and Chapter 14, Section 3 for some specifically international considerations). You could structure your answer using ‘factors in pricing decisions’ (elasticity of demand, costs, desired profit levels, target market segments, competition) – or PESTLE and Five Forces models (external factors such as macro-economic factors, currency issues, social norms, competition).

25 marks

Comments: Some candidates considered the impact of PLC or BCG stages on pricing: neither was strictly relevant, as the question was solely about a product launch.

General pitfalls

The exam mainly consisted of unstructured 25-mark questions, putting pressure on your answer planning and time management skills. Conversely, the more structured question (Q4) required you to calculate the balance of time to spend on each part, noting the mark allocation.

Questions included some explicit ‘qualifiers’ (consumer markets, product launch in a new international market) which you had to spot and address in order to answer the question correctly and relevantly. A useful reminder to take all command words, topic key words and qualifiers into account when interpreting questions.

Easy marks

There were good marks to be obtained from relatively straightforward questions on mainstream syllabus topics such as: customer loyalty; marketing and other organisational functions; buyer behaviour; and pricing strategy.

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THE MARCH 2010 EXAM Section A: case study and two compulsory questions (25 marks each) A major international banking group has been impacted by the global financial crisis, and ‘bailed out’ by the UK Government. A renewed emphasis has been placed on understanding and responding to customer needs, and two key customer groups (families on low incomes, those in full-time education) have been identified as a priority.

Q1 Identify main stakeholders and analyse their needs and objectives See Chapter 15, Sections 3 and 4. We have also added some notes to the Course Book Upgrade material, in case you can’t draw on your knowledge of the Mendelow Power/Interest matrix from other modules. The main stakeholders here are likely to be customers, staff, management, suppliers, investors, Government, community support groups and financial media.

25 marks

Comments: The Mendelow matrix is a useful shorthand tool for categorising and prioritising stakeholders (ie identifying the ‘main’ stakeholders in the sense of the most important) – but remember to focus on stakeholder needs/objectives (interests) rather than power, in the second part of your answer.

Q2 For ONE of the priority customer groups, examine how segmentation, targeting and positioning could help the bank to achieve its stated mission See Chapter 6 – but remember to contextualise. The customer groups are (a) families on low incomes or (b) those in full-time education. The bank’s ‘stated mission’ is to increase financial and marketing support to the customer group, and to increase the bank’s market share so that it is the ‘first choice bank’ for these segments.

25 marks

Comments: It should be obvious that a discussion on generic segmentation approaches was not appropriate here – but several candidates fell into this pitfall.

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Q3 Marketing tools, models and techniques to analyse competitive environment Ie Porter’s Five Forces Model; SWOT (of self and competitors); benchmarking (comparison of marketing mixes); competitor profiling/intelligence; or market research. See Chapter 4, Section 8, and Chapter 15, Section 3 for some ideas.

25 marks

Comments: Having identified appropriate tools (ruling out less relevant ones like PESTLE, BCG, Ansoff or PLC), you needed to explain their use, in order to achieve the depth of content required by this examiner. If you selected five tools, you needed to come up with 5 marks’ worth of content for each: get used to thinking this way!

Q4 How a recognised marketing communications model could be used to assist with the development of a promotional plan to raise awareness of a product/service of your choice Ie AIDA or DAGMAR (or similar): see Chapter 11, Section 2. How would the model apply to market definition, objective (raise awareness), message development (the main application), promotional mix decisions and media schedule (to achieve maximum influence), budget (cost/benefit), implementation and evaluation (eg measuring effects)?

25 marks

Comments: You had to put some effort into analysing the question to get at its core requirements. Note the key words ‘marketing communications model’… ‘to assist with the development of a promotional plan’… ‘to raise awareness’… ‘of a product/service of your choice.’ Check that your answer is relevant to all these elements!

Q5 Key factors influencing each of the marketing mix elements (product of your choice) See Chapter 2, Section 1 for the basic framework – but remember to anchor your answer in the specifics of a particular ‘case study’ product. What factors influenced its design, pricing, promotion, distribution?

25 marks

Comments: For such a question, you will need to start with an outline explanation of the product you have chosen as the focus of your answer. The examiner did not penalise students who chose a service, instead of a product – but bear in mind that you would then have to discuss 7Ps instead of 4Ps…

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Q6 Propose and justify a plan to the Board of Directors to gather market information Focus on the outline of a market research plan: see Chapter 4, Section 1. The specific remit is to gather information on (a) the company’s current market ranking for supplier relationship management and (b) how it is viewed by its suppliers. You need to identify sources of data (both quantitative and qualitative) and data collection methodologies (eg benchmarking, supplier preferencing questionnaires, published research/rankings).

25 marks

Comments: Note that the command ‘propose and justify a plan to the Board’ implies some sort of report format, although this is not explicitly stated. Not worth spending a lot of time or effort on, but 2 marks may be available for a few well-chosen headers… General pitfalls

Several questions mention marketing tools, models and techniques – without naming them: requiring you to identify, select and apply the appropriate ones. This is a common area of weakness for candidates, and will continue to be tested: make sure you know how tools and models are used, and when.

Several questions focus discussion on a product or service of your choice. You are strongly advised to develop a portfolio of notes on the marketing of selected products and services you know well (or can gather sufficient information about). Use them as ‘case studies’ for the exam: whether or not you are asked to do so, extra marks are often available for relevant examples. You will need a small collection of case study examples, though, to avoid duplicating the same ones across more than one answer…

Easy marks

There were good marks to be obtained from relatively straightforward questions on mainstream syllabus topics such as: stakeholders; segmentation, targeting and positioning; competitive environment; marketing communications models; marketing mix; and market research.

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THE MAY 2010 EXAM Section A: case study and two compulsory questions (25 marks each) In the face of difficult market conditions, a major international automotive manufacturer is focusing its efforts on two major models: one cheap, mass-market model and one high-performance executive model.

Q1 Key macro-environmental factors likely to impact on future international marketing strategies See Chapter 12, Section 2 for ideas – using the PESTLE framework – but remember to contextualise where possible. This company is based in India, with markets in the US and Western Europe, and with plans to enter the African and South American markets (issues for the premium model?)

25 marks

Comments: The key phrase here is ‘macro-environmental factors’, which should point you straight to the PESTLE model. On the other hand, you couldn’t get away with a generic PESTLE list: there was plenty of scope for contextualisation.

Q2 Examine and justify marketing mix strategies and activities for either of the two models This is entirely case specific, based on extensive marketing mix data given for each of the models. You basically had to explain why the company had adopted the marketing mix choices it had – or to suggest where they were misguided.

25 marks

Comments: Don’t waste time addressing both models, when the question specifically asks you to select ONE! On the other hand, you might have argued that service is important in the automotive industry, and covered the 7Ps: the examiner considered this entirely valid. Section B (two questions, 25 marks each)

Q3 Influences on organisational buyer behaviour See Chapter 5, Section 3 – noting that this was a manufacturer operating in a B2B market. (Note, too, that you are not required to compare organisational and consumer behaviour.) You could have focused on the DMU; B2B marketing; industry sector; organisation culture; objectives; competition; resource availability; and so on.

25 marks

Comments: This should have been straightforward, if you knew the material – despite a ‘mini scenario’ in which a purchasing manager has been asked to advise marketing colleagues on the influences they should take into account in marketing to corporate users. (Add this to your list of ways in which purchasing can contribute to marketing objectives…)

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Q4 Informal report to:

(a) Examine how staff satisfaction levels can be determined See Chapter 4, Section 3 – remembering that we are gathering data from staff rather than customers. The tools are the same: attitude surveys, observation, individual and focus group interviews (eg exit interviews, appraisal interviews), analysis of statistics (turnover, absenteeism, productivity), and so on.

(b) Assess the role of internal communications in improving staff motivation

See Chapter 15, Section 4. Note that the command word ‘assess’ requires you to discuss its value and limitations. Note, too, that reward systems, working conditions and other influences on motivation are not the subject of this question!

25 marks

Comments: This should have been relatively straightforward, if you had covered the material.

Q5 How major organisations may use the promotional mix to stimulate demand for consumer products (using examples) See Chapter 11 for ideas – but remember to anchor your answer in the specifics of particular organisations/products in consumer markets. You could structure your answer by taking each main element of the promotional mix (advertising, sales promotion, direct marketing etc) in turn. You use communications models (eg AIDA) to explain the stimulation of demand. You might also refer to push and pull strategies. Plenty of scope to display your knowledge!

25 marks

Comments: ‘A common weakness was to focus only on promotional offers, rather than on the promotional mix in its entirety. This is a fairly common occurrence in this examination and future candidates should note that ‘promotional offers’ [or sales promotion] comprise just one element of the promotional mix.

Q6 Marketing activities used to identify prospects and convert them into customers See Chapter 16, Section 3.

25 marks

Comments: Note that there are two requirements to this question: each should be given equal emphasis.

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General pitfalls This was the first opportunity to see how some new syllabus topics might be

examined, with first-time questions on staff as stakeholders, internal communications, and the conversion of prospects into customers.

Easy marks

There were good marks to be obtained from relatively straightforward questions on mainstream syllabus topics such as: international PESTLE factors; marketing mix appraisal; influences on organisational buyer behaviour; and use of consumer promotional mix.

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WHAT THE EXAMINER SAID The Answer Guidance provided by CIPS gives helpful pointers towards answer content, but no new help with exam technique.

The Senior Assessor’s main complaint is that candidates fail to address the specific requirements of the question, instead repeating case study material, or discussing generalities, or ignoring specific topic keywords.

‘Too many answers are presented in very brief form. For example, the answer would make a relevant point, but not support or justify it through additional commentary. This fails to demonstrate the extent of the candidate’s knowledge of the topic.’

‘An evaluation is an assessment or appraisal of a situation/strategy, and so candidates are expected to highlight the positive and negative aspects of each.’

Unlike some CIPS examiners, this examiner does not expect to see recommendations given as part of a report unless specifically asked for.

When invited to discuss elements of the marketing mix, candidates will achieve high marks for demonstrating depth and breadth of understanding: the three levels of the product (core, physical, augmented); different pricing strategies (skimming, penetration, premium, economy); different aspects of distribution (objectives, channel selection, channel management); and the range of elements in the promotional mix (advertising, PR, sales promotion, personal selling, direct marketing).

Strong answers begin with a definition of key terms, although ‘candidates are not expected to spend a long time defining the term’.

You must remember that this is “a marketing exam (albeit ‘for purchasers’)”: failure to address marketing issues (in favour of a purchasing perspective) will ‘score insufficient marks to satisfy the examiner’…

Read the questions! Give examples when asked to do so. Obey the requirements of the command words: they are designed to test your ability to explain, evaluate and apply knowledge – as expected at this level of examination…

‘To satisfy the examiner fully at this level of qualification, answers must be detailed and contain sufficient supporting commentary. Similarly, especially where a question requires candidates to ‘use examples’, failure to do so will result in the opportunity to gain additional marks (by using appropriate examples) being missed.’

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