122 Direct Marketing and Sales Promotion. PART A Has ONE question worth 50% of the total marks

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1 Direct Marketing and Sales Promotion Examination December 2012 CAM Diploma 122 Direct Marketing and Sales Promotion Time: 09:30 11:30 Date: 4 December 2012 Two Hours Duration This examination is in THREE compulsory parts. PART A Has ONE question worth 50% of the total marks PART B Has TWO questions; select ONE. The answer will be worth 25% of the total marks PART C Has TWO questions; select ONE. The answer will be worth 25% of the total marks You are required to give your answers in the answer book provided. DO NOT repeat the question in your answer, but show clearly the number of the questions attempted on the appropriate pages of the answer book. Please start each question on a new page. Rough work and notes must be written in the answer book or on supplementary sheets and must be clearly identified. CAM Foundation 2012

2 Direct Marketing and Sales Promotion Examination December 2012 DIRECT MARKETING AND SALES PROMOTION PART A Compulsory Case Study: Chillberries Background Chillberries opened in October 2012 in Knutsford, Cheshire, in northern England. It is located just a short walk from Tatton Park, the historic mansion that hosts the Royal Horticultural Society (RHS) Tatton Park Flower Show. This show annually attracts 85,000 visitors, of whom are 71% female and ABC1 profile ( Chillberries is a funky, cowthemed shop, complete with rustic beams and fake-turf flooring, and provides a fun environment for all, selling frozen yoghurt, hot and cold drinks and hot snacks. Product Among the most popular products on offer are the frozen yoghurts, which come in a variety of flavours and with a large range of toppings, from juicy strawberries to deluxe brownie pieces. The yoghurt is fat-free and locally sourced, as well as being pro-biotic, pre-biotic and counts towards one of your five-a-day the British government s recommended five helpings of fruit and vegetables a day. In addition, Chillberries sells a variety of hot and cold drinks. It also has a Winter Warmers Menu, which includes Winter punch, Turkish Apple Tea and a range of hot snacks such as pancakes and fruit toast, intended for cold winter days. Customers Pauline Coffey, the owner, said, We now have the most incredible space, a stunning, characterful and beautiful frozen yogurt shop. Mums can come and relax before or after dropping off children, or bring children with them who can play upstairs in a safe fun stimulating environment. Teenagers can come and chill with mates, watch some MTV and the best bit of all is our delicious frozen yogurt. Market Frozen yoghurt is a relatively new concept for the UK, although it has been established in other countries for many years because of its role as a zero-fat alternative to other snacks. The frozen yoghurt category is worth $700m in the US. Although it has been slow to take off in the UK, it does have a major retail presence with Ben & Jerry's among the leading manufacturers in the category (quoted from The Grocer, October 2010). Frozen yoghurt bars are not just intended to be a place for people who fancy some dessert; they also want to take a slice of business away from coffee shops and juice bars. They are intended to be a casual place for groups of friends to hang out and they have been carefully designed to look sleek, trendy and inviting, somewhere you wouldn't mind spending a few hours. Customers are encouraged to believe they are tapping into a lifestyle choice; hence they are bars rather than parlours. Tristan Pestana, the co-owner of UK's leading frozen yoghurt chain, Snog, says: Everyone's getting a bit tired of the whole café culture and this is definitely going to be the next big thing. (quoted from The Independent, July 14, 2011) Currently, the owner is building awareness and customer loyalty, but requires a significant direct marketing campaign that will maximise sales and awareness for the peak selling period of spring and summer. Adapted from various sources for examination purposes.

3 CAM Diploma PART A Compulsory It is recommended that you spend approximately ONE hour on Part A. Question One Your agency has recently been retained to assist with developing a new marketing strategy for Chillberries. Currently, the owner is building awareness and customer loyalty, but requires a significant direct marketing campaign for the peak selling period (spring and summer) that will maximise sales and increase awareness. Write a report that: a. outlines your proposals for a direct marketing plan that will maximise sales and increase awareness for Chillberries (25 marks) b. recommends TWO types of sales promotion that could be used to increase customer retention c. advises Chillberries of the implications of ONE existing regulation in relation to the promotional activities you have recommended. (Total 50 marks)

4 Direct Marketing and Sales Promotion Examination December 2012 PART B Compulsory Sales Promotion It is recommended that you spend approximately HALF AN HOUR on Part B. Answer EITHER Question Two OR Question Three Question Two Major retailing organisations such as the supermarket chain Asda, and bookseller and stationery chain WHSmith, have made the strategic decision not to adopt loyalty card marketing programmes. This is in considerable contrast to other major retailers, who have developed loyalty cards with millions of active and enthusiastic users. a. Discuss the advantages and disadvantages of retail loyalty card marketing programmes. b. Explain how the various categories of data collected by retail organisations may contribute to effective relationship marketing programmes. (Total 25 marks) Question Three An insurance company is considering a new sales promotion campaign and has asked you for advise on how to use marketing research to plan and manage this marketing activity more effectively. Prepare a briefing paper that: a. identifies TWO marketing research methods that would enable the insurance company to plan and develop a new sales promotional campaign b. outlines the role of the focus group in developing marketing research, and lists FOUR questions that can be used in a focus group to assist with planning effective sales promotions for this insurance company. (Total 25 marks)

5 CAM Diploma PART C Compulsory Direct Marketing It is recommended that you spend approximately HALF AN HOUR on Part C. Answer EITHER Question Four OR Question Five Question Four Bluestone Jewels is a jewellery manufacturer that has traditionally marketed its range through the retail channel. The range derives its uniqueness from the inclusion of a semiprecious stone that is only found in the region where the company has its manufacturing base. Recent PR coverage in the national press and a female fashion magazine has led to a huge increase in enquiries from across the nation, requesting either a catalogue or a website featuring the product range for direct orders. Prepare a report that: a. advises the company on the advantages and disadvantages of THREE media options it may consider to attract customers to its new website and place orders on-line b. justifies the media approach and provides recommendations on which media activities are likely to produce the best results. (Total 25 marks) Question Five a. In the context of the Business-to-Consumer (B2C) sector, outline the strengths and weaknesses of telephone marketing, and direct mail when used to develop customer value and customer relationships. b. Provide examples within the B2C sector where telephone marketing, s and direct mail have been used effectively to retain and develop customer relationships. (Total 25 marks) END OF EXAMINATION

6 Direct Marketing and Sales Promotion Examination December 2012

7 CAM Diploma

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