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 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.
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 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
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 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
what?
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.
- 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 “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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