Advanced Diploma in Purchasing and Supply. Marketing for Purchasers. L5-10/May-08 LEVEL 5 MARKING SCHEME. May Carrington

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1 Advanced Diploma in Purchasing and Supply Marketing for Purchasers L5-10/May-08 LEVEL 5 MARKING SCHEME May 2008 Carrington

2 SECTION A Q1 to test candidates knowledge and understanding of the marketing mix to test candidates ability to apply the marketing mix to influence consumer buyer behaviour and increase sales Syllabus References: 2.3, 3.1, 3.2, 3.4, 3.5, 3.6 Would expect candidates to use the marketing mix headings as a framework. Answers should examine each of the four marketing mix elements in the context of influencing consumers and/or increasing profitability. Candidates should be rewarded where they provide justification in respect of influencing consumers and/or increasing profitability. An example of areas which could be explored are: Product: Use customer feedback/research to modify product and/or launch new products Review competitor products Review the product range (using BCG Matrix, PLC). Pricing: Review competitor pricing Determine appropriate pricing strategy Balance between encouraging sales and increasing profitability Positioning Place: Breadth of coverage Managing distribution outlets Positioning Promotion: Branding Packaging Incentives/offers Merchandising The above is an indication only, as there are many factors which could be explored under each of the mix elements. 6 marks for Product, Price, Place and 7 marks for Promotion. format which are lacking in evaluation should only be awarded a maximum basic pass overall, ie total 13 marks.

3 Q2 to test candidates knowledge and understanding of branding of different branding strategies to test candidates ability to apply this knowledge and understanding specifically to the Carrington case Syllabus References: 3.1 Many of the advantages of either branding strategy are fundamentally shared, though operationalised in different ways, such as: Can generate a loyal base of repeat customers Could command higher prices Clear product differentiation However, there are some more specific advantages of each strategy, as follows: Individual range branding has several advantages, such as: Can clearly differentiate between different (similar) competing products Helps to position the product in the minds of the customer (e.g. perceptual map) Can launch new products as extensions to existing products Individual products are more distinguishable Similarly Family Branding presents a range of advantages: Can help to clearly differentiate the entire portfolio rather than individual products Helps position the product in the minds of the customer along more value-laden terms Entirely new products can be launched more easily as they are not struggling for product recognition Promotional messages can focus more on the generic augmented and potential brand value (rather than product attribute values) Promotional messages can benefit from economies of scale as one message could be used for the whole portfolio rather than several messages for each product Promotional messages may benefit from greater levels of recognition Good answers are likely to draw out the merchandising and consumer behaviour issues alluded to in the case study. In an impulse purchase scenario, if a customer is searching for a specific product there is a risk that a similar competing product may be selected if found sooner. However, if the customer is searching within the family brand area they are a) more likely to locate their favoured product, and b) if they cannot, they are more likely to select an alternative product from within the brand portfolio rather than a product form the competition. Better candidates would also be expected to highlight the rationale for branding, ie differentiation, recognition, getting noticed in the crowd. They should also draw attention to the costs of building/maintaining a brand.

4 Marks should be awarded as follows: Up to 2 marks for appropriate informal report answer format Up to 9 marks each for evaluation of each branding strategy (18 marks for first question requirements) Up to 5 marks for fully justified recommendation (second question requirement). Exceptionally, where the recommendation element is written in more depth and with considerable supporting justifications up to 10 marks may be awarded for this element (and a maximum of 13 marks available for the evaluation of the branding strategies aspect). format which are lacking in evaluation should only be awarded a maximum basic pass overall, ie total 13 marks. SECTION B Q3 (a) to test candidates knowledge and understanding of the target marketing process Syllabus Reference: 2.4 Segmentation Identifying bases for segmenting the market into groups of buyers who have similar needs and wants. Typical bases for segmenting consumer markets include: geographics, demographics, psychographics, and behaviour. Bases in business markets typically include: company size, location, usage rate, purchasing function (i.e. centralised or decentralised), and end market. Targeting Identifying and selecting viable market segments based on a range of factors: the size of the segment, growth potential, structural attractiveness (e.g. lack of competition or power of competition etc.), and wider objectives and resources. Positioning Selecting a suitable position within the market segment and deploying the marketing mix to create an offer of interest to the targeted segments. On the one hand (especially in consumer markets) is the positioning of the offer in the mind of the customer tools such as the perceptual map could be used in this case (i.e. the relative attractiveness of the offer versus alternative offers). Positioning is more than about the attitude of the customer and how this is influences by e.g. branding and promotion, it also includes the wider elements of the marketing mix.

5 Choice of distribution strategy for example, is a key factor in positioning offers, as is of course the pricing of the offer. Better answers will more clearly differentiate between consumer and business markets and produce a well argued discussion relating each component to the overall process. Up to 5 marks for each of the stages. Answers which are just presented in simple/brief (effectively) bullet point format which are lacking in evaluation should only be awarded a maximum basic pass overall, ie total 8 marks. Total Marks: 15 marks Q3 (b) to test candidates knowledge and understanding of segmentation to test candidates ability to apply their knowledge of segmentation and identify the characteristics of an effective market segment Syllabus References 2.4 Segment size. Growth/profit potential. Attractiveness. Can it be reached via a distinct marketing mix? Does it offer potential for competitive advantage? Fit with marketing/corporate objectives and strategy. Fit with corporate image. Are marketing activities capable of being measured? Resources capability. 2 marks for each criterion examined. Answers which are just presented in simple/brief (effectively) bullet point format which are lacking in detail should only be awarded a maximum basic pass overall, ie total 5 marks. Total Marks: 10 marks

6 Q4 to test candidates knowledge and understanding of marketing orientation to test candidates ability to apply this knowledge in the context of implementing a high level of marketing orientation within an organisation Syllabus References 1.1, 1.2 In a marketing orientated business: The customer is at its heart Products/services are designed with customer satisfaction in mind The is a close relationship with customers There is regular/ongoing market research Customer satisfaction permeates the organisation Every member of staff recognises the importance of customer satisfaction Customer loyalty is rewarded Satisfying customers is rewarded Staff training, recruitment, retention is important How it can be achieved: Engagement with customers Regular communications (internal and external) Rewarding customer loyalty Staff objectives feature customer satisfaction and retention Ensure staff are trained in customer service Reflecting service quality etc via the marketing mix Commitment to customer centricity from the Chief Exec and the senior management team Rewarding/recognising staff who deliver excellence to customers 2 marks for each factor examined. format which are lacking in detail should only be awarded a maximum basic pass overall, ie total 13 marks.

7 Q5 Explain how micro and macro environmental factors can influence the product profitability of a company which trades internationally. (25 marks) to test candidates knowledge and understanding of the micro and macro environment to test candidates ability to apply this knowledge in an international context Syllabus References 1.4, 4.2 Candidates should examine the following: Macro:- Political factors Economic factors Social factors Technological factors Legal factors Micro:- Customers Competitors Suppliers Staff Shareholders Other stakeholders Would expect better candidates to discuss Porters Five Forces Model. 2 marks for each factor examined (in the context of impact on profitability). Would expect equal treatment of micro and macro factors. format which are lacking in detail should only be awarded a maximum basic pass overall, ie total 13 marks.

8 Q6 to test candidates knowledge and understanding of the marketing planning process to test candidates ability to create a framework for measuring the effectiveness of the plan Syllabus References 5.1, 5.2 Typically, the marketing planning process would include: Mission and corporate objectives Marketing audit SWOT Assumptions Marketing objectives Segmentation, targeting and positioning Marketing mix Budget Resource allocation Execution Control, monitoring and review Measurement would be undertaken on the basis of performance against targets, and could be based on the following: Sales volumes Income Profit Market share Cost management (versus budgets) Customer satisfaction levels (measured by research) Operational efficiency (eg reduction in down time ) Brand awareness/recognition (measured by research) 18 marks for examination of the process; 7 marks for the framework. format which are lacking in detail should only be awarded a maximum basic pass overall, ie total 13 marks. END OF MARKING SCHEME