Marketing Sample Paper on Marketing Exam

Marketing Exam

Question 1:

 I agree with the strategy of reducing the product development process, as it helps to reduce the additional expenses incurred in creating a new product. Using the savings initial promotion campaigns, it would be appropriate and profitable for the businesses. When a company introduces a new product in the market, there is a need to invest heavily on product promotion. This helps in making the customers aware of the existence of the product in the market.  The lack of expansive marketing of the product would lead to adverse sales volume. The offering of coupons is appropriate in encouraging most customers to use the product. The coupons used by the company creating a strong brand in the market would attract the consumer.

The pull strategy helps in creating an increased consumer demand by pushing appropriate messages to the targeted audience. It also improves on the customer loyalty to the new brand. Pull strategy and couponing makes a direct approach for the consumer’s loyalty. Also, the strategy offer incentives to the consumers in which the customers are more pleased with the products. The use of coupons helps to take advantage of the increased adoption of mobile technology (Beldona, Lin, & Yoo, 2012). Thus, the coupons approach would be effective in popularizing the products among a wider coverage of the consumers. The regular use of the coupons in the agreed period would improve the stream of customers to the company. It has been determined that 95 per cent of consumers enjoy using the coupons. Therefore, the strategy would be appropriate, as it would lead to a stream of new customers and increased sales in the company.
2:

Generating buzz through advertising can be done in various ways. Buzz involves the process of making people to talk to about your company.  For instance, advertising informs the customers on the existence of the products and services. First, use conventional ways by differentiating the company from other companies. If the companies understand that it has very small market share, it would consider using storytelling approach in its advertising. The telling stories always appear to be honest and thus, many people would be willing to share the products and services with their friends. This creates a buzz promoting the sales of the products. Storytelling in advertising is appropriate for the creation of a popular buzz.

The second advertising strategy that creates buzz is becoming more active online. The company’s participation in the online social interactions such as the creation of blog and facebook is appropriate. When the online pages are used to converse with influencers and posting the videos to the YouTube, such actions would easily create a buzz on the particular products and services. Most important, the ideas should be in line with the company’s brand in order to create effective buzz beneficial to the customers.  In addition, the advertising strategy can create a buzz by giving people free samples (Hinz, Skiera, Barrot & Becker, 2011). People always enjoy free things. Thus, the free products and services would cause the people to talk about the products and services with their friends and relatives.

 Some of dangers of engaging in buzz marketing include the nuisance factor.  Buzz creates a problem of the risk of real messages being lost among the internet contexts. It is difficult to get the full attention of the people. Thus, people may brand the messages spam or even delete them. Another danger is the creation of negative buzz. During the advertisements, the advertisers may create negative buzz on the business. This is opposite from the expected results from buzz marketing (Hinz et al., 2011). In other occasions, the buzz marketing approach has the danger of causing unethical issues. For instance, buzz marketing is questioned about the privacy issues affecting the performance of the company. Since, it exposes the personal information of the people during the campaigns. Lastly, the buzz marketing approach is not measurable making it inappropriate for the marketing in the organization.

3:

 Profit computation

 Strategy 1:

 Sales 1.25 x $40,000,000= $50, 000, 000

Less:                                =($16,000,000)

Gross contribution            $34,000,000

Less: Other expenses

 Advertising expenses      ($2,000,000)

 Fixed expenses                 ($3,000,000)

 Profits                                         $29,000,000

 Strategy 2:

PEoD= % change in Quantity demanded/%change in price

-3=%change in QQdd/0.20

 Change in QQdd = 0.60. Therefore, the strategy would lead to a 60 per cent increase in the sales volume of the company.

 Sales Computation

 Reducing price by 20% = 0.80 x $40,000,000= $32,000,000.

 Increased sales by 60 per cent= 1.60 x $32,000,000=$51, 200,000

Sales                                         $ 51, 200,000

Less:  Variable expenses          ($20,480,000)

 Gross contribution                             $ 30, 720,000

 Less: fixed expenses               ($ 3,000,000)

Profits                                     $ 27,720,000

Between the two strategies in consideration, the first strategy will generate the highest profits. The first strategy involves the expenditures on advertising the products and services of the company. On the other hand, the second strategy involves the reduction of the prices in the products and services offered by the company. Even though, the overall revenues under the second strategy seem to be very high, the strategy does not match the profits of the first strategy. This implies that advertising is an important aspect in improving the profitability of the company.

References

Beldona, S., Lin, K., & Yoo, J. (2012). The roles of personal innovativeness and push vs pull delivery methods in travel-oriented location-based marketing services. Journal of Hospitality and Tourism Technology, 3(2), 86-95.

Hinz, O., Skiera, B., Barrot, C., & Becker, J. U. (2011). Seeding strategies for viral marketing: an empirical comparison. Journal of Marketing, 75(6), 55-71.