31/3/2022 1 Marketing Revision B Q2 Boomerang Book An Australian based graphic designer has recently come up with a new idea to help parents better organise the care of their babies and young children. The idea, a book called ‘Boomerang Book’, holds information on babies’ and kids’ needs and preferences in a Filofax style diary. The ‘Boomerang Book’ has sections on food and drink, activities, favourite toys, bed and nap times, and emergency phone numbers – a vital resource for childminders and babysitters, or anyone else looking after young children when they are away from their parents. In terms of the production cost of the ‘Boomerang Book’, total fixed costs are $120,000 and the variable cost per unit is $8.50. (i) The graphic designer is uncertain how to price the ‘Boomerang Book’. You are required to advise the graphic designer on the steps which should be taken to reach an appropriate pricing decision. (20 Marks) (ii) Imagine that a cost-oriented pricing method is to be used to determine the price for the ‘Boomerang Book’. Calculate the unit cost and price which should be charged for the ‘Boomerang Book’ assuming sales of 50,000 ‘Boomerang Books’ in the coming year and a desired target margin of 25% on the selling price. (5 Marks) (iii) Imagine sales of the ‘Boomerang Book’ are higher than the initial projection and the variable production cost per unit decreases to $8. Calculate the new break-even volume for the ‘Boomerang Book’. (5 Marks) 1 2 31/3/2022 2 Q2 Boomerang Book – Dec 2012 An Australian based graphic designer has recently come up with a new idea to help parents better organise the care of their babies and young children. The idea, a book called ‘Boomerang Book’, holds information on babies’ and kids’ needs and preferences in a Filofax style diary. The ‘Boomerang Book’ has sections on food and drink, activities, favourite toys, bed and nap times, and emergency phone numbers – a vital resource for childminders and babysitters, or anyone else looking after young children when they are away from their parents. In terms of the production cost of the ‘Boomerang Book’, total fixed costs are $120,000 and the variable cost per unit is $8.50. (i) The graphic designer is uncertain how to price the ‘Boomerang Book’. You are required to advise the graphic designer on the steps which should be taken to reach an appropriate pricing decision. (20 Marks) (ii) Imagine that a cost-oriented pricing method is to be used to determine the price for the ‘Boomerang Book’. Calculate the unit cost and price which should be charged for the ‘Boomerang Book’ assuming sales of 50,000 ‘Boomerang Books’ in the coming year and a desired target margin of 25% on the selling price. (5 Marks) (iii) Imagine sales of the ‘Boomerang Book’ are higher than the initial projection and the variable production cost per unit decreases to $8. Calculate the new break-even volume for the ‘Boomerang Book’. (5 Marks) 3 4 31/3/2022 3 Q2 Boomerang Book – Dec 2012 Answer (ii & iii) Q2 Y-coil shoes If Brad Reno has his way, every man, woman and child will one day walk with a spring in their step – and on their shoes. The spring coil will be attached to the heel of a space-age shoe that Reno wants to sell to the world. The inventor of the Y-coil line of pain-relief footwear isn’t doing too badly – in 12 months he has already sold 50 000 pairs of the footwear that make you bounce as if you are on a trampoline. Since reaching the shelves in the UK, the shoes have become something of a cult. They are only sold through authorised dealers and targeted towards those with painful leg, foot and back problems. The shoes have proved to be popular among police officers, nurses and anyone who works on their feet. They are priced at roughly ￡75–￡100, depending on the style, but Reno argues that freedom from pain is priceless. Required: i. Brad Reno has set a price level of ￡75–￡100 for his pain-relief footwear. What steps should Brad have taken to reach this pricing decision Explain which price setting method you would have recommended be used and why. (20 marks) ii. Imagine the company has fixed costs of ￡8.2 million, and that each pair of shoes has a variable cost of ￡62 and retails at ￡100. If the present rate of sales is maintained, how long will it take Brad to realise a target return of ￡1 000 000 (10 marks) 5 6 31/3/2022 4 Q2 Y-coil shoes – Dec 2008 If Brad Reno has his way, every man, woman and child will one day walk with a spring in their step – and on their shoes. The spring coil will be attached to the heel of a space-age shoe that Reno wants to sell to the world. The inventor of the Y-coil line of pain-relief footwear isn’t doing too badly – in 12 months he has already sold 50 000 pairs of the footwear that make you bounce as if you are on a trampoline. Since reaching the shelves in the UK, the shoes have become something of a cult. They are only sold through authorised dealers and targeted towards those with painful leg, foot and back problems. The shoes have proved to be popular among police officers, nurses and anyone who works on their feet. They are priced at roughly ￡75–￡100, depending on the style, but Reno argues that freedom from pain is priceless. Required: i. Brad Reno has set a price level of ￡75–￡100 for his pain-relief footwear. What steps should Brad have taken to reach this pricing decision Explain which price setting method you would have recommended be used and why. (20 marks) ii. Imagine the company has fixed costs of ￡8.2 million, and that each pair of shoes has a variable cost of ￡62 and retails at ￡100. If the present rate of sales is maintained, how long will it take Brad to realise a target return of ￡1 000 000 (10 marks) Q2 Y-coil shoes – Dec 2008 (i) 7 8 31/3/2022 5 Q2 Y-coil shoes – Dec 2008 (ii) Total time needed 242,105/50,000 = 4.84 years Actual time needed from now 4.84 – 1 = 3.84 years（or 46.08 months） Since 50,000 pairs of shoes have been sold in 12 months, he needs another 3.84 years to achieve the target return. Target return volume Q2 Prize Prize is a reward and recognition company based in Newcastle, England. The company provides corporate rewards, and incentive and motivation schemes which assist employers in retaining staff, a key issue as few firms want to see their investment in the skills and experience of their workforce migrating to a marketplace rival. Commenting on the demand for its services, Peter Blair, the Managing Director of Prize said: ‘Our company has grown out of the fact that employers want to mark employee performance that is over and beyond the call of duty. They want to both motivate and reward exceptional work – be it the successful completion of a project, the making of a sale, or the achievement of a sales target. But increasingly, it is not enough to just offer financial recognition. Employers come to us to offer their staff life-changing experiences.’ What this boils down to is rewarding the valued employee with a memory, with an occasion of exhilaration or excitement that he or she will never forget. It might be white-water rafting, it might be parachuting – but the point is that it is associated with their life outside of work. The event will always remind them of the employer that furnished the experience. Blair believes that this facet of company life is becoming more and more important: ‘The experience and its subsequent memory induce a type of brand loyalty to the employer that provided it.’ Required: (i) Explain how potential clients will approach this buying decision and the steps Prize can take to facilitate the process. (15 marks) (ii) What is likely to be important to clients when they evaluate the service provided by Prize (15 marks) 9 10 31/3/2022 6 Q2 Prize – Dec 2015 Prize is a reward and recognition company based in Newcastle, England. The company provides corporate rewards, and incentive and motivation schemes which assist employers in retaining staff, a key issue as few firms want to see their investment in the skills and experience of their workforce migrating to a marketplace rival. Commentin
g on the demand for its services, Peter Blair, the Managing Director of Prize said: ‘Our company has grown out of the fact that employers want to mark employee performance that is over and beyond the call of duty. They want to both motivate and reward exceptional work – be it the successful completion of a project, the making of a sale, or the achievement of a sales target. But increasingly, it is not enough to just offer financial recognition. Employers come to us to offer their staff life-changing experiences.’ What this boils down to is rewarding the valued employee with a memory, with an occasion of exhilaration or excitement that he or she will never forget. It might be white-water rafting, it might be parachuting – but the point is that it is associated with their life outside of work. The event will always remind them of the employer that furnished the experience. Blair believes that this facet of company life is becoming more and more important: ‘The experience and its subsequent memory induce a type of brand loyalty to the employer that provided it.’ Required: (i) Explain how potential clients will approach this buying decision and the steps Prize can take to facilitate the process. (15 marks) (ii) What is likely to be important to clients when they evaluate the service provided by Prize (15 marks) Q2 – Prize – Dec 2015 Answer (i) 11 12 31/3/2022 7 Q2 – Prize – Dec 2015 Answer (ii) 13 14 31/3/2022 8 Q3 Essay When the marketing consultant Peter Green was invited to develop an integrated marketing communications plan for a chain of petrol stations in the West Midlands, England, he drove into one of them to check out the customer experience. The forecourts were filthy, the attendants sloppy and the service virtually non-existent. When he called the client to find out what plans they had to address these issues, he was told not to worry because all that was expected from him was a bright new look and feel for the advertising. He walked away from the job. Required: i. What are the steps involved in developing an integrated marketing communications plan and what type of promotions mix would you anticipate being developed for a chain of petrol stations (30 marks) ii. Was Peter Green justified in walking away from the job Explain your reasoning. (10 marks) Q3 Essay – Dec 2009 When the marketing consultant Peter Green was invited to develop an integrated marketing communications plan for a chain of petrol stations in the West Midlands, England, he drove into one of them to check out the customer experience. The forecourts were filthy, the attendants sloppy and the service virtually non-existent. When he called the client to find out what plans they had to address these issues, he was told not to worry because all that was expected from him was a bright new look and feel for the advertising. He walked away from the job. Required: i. What are the steps involved in developing an integrated marketing communications plan and what type of promotions mix would you anticipate being developed for a chain of petrol stations (30 marks) ii. Was Peter Green justified in walking away from the job Explain your reasoning. (10 marks) 15 16 31/3/2022 9 Q3 Essay – Dec 2009 – Answer i 17 18 31/3/2022 10 On the one hand, Peter Green was correct to walk away from the job because clearly the client does not appreciate the need for an integrated approach to marketing communications. It is, of course, vitally important that the brand values expressed in marketing communications activity are consistent with the reality of the product and service offering. In other words, the qualities and principles which lie at the heart of the petrol station chain brand must be reflected in their offering and service. On the other hand, perhaps Peter Green should have stuck with the job and taken the opportunity to explain to this client the value of an integrated approach to marketing their service. Depending on his powers of persuasion, this might be a whole new beginning for the petrol station, providing the basis for developing sustainable competitive advantage for the years to come. Q3 Essay – Dec 2009 – Answer ii Q3 Essay “In today’s global market we rarely have the luxury of waiting for everybody to get comfortable before rolling out a new product … we usually have to get it out first to pre-empt the competitors.” Based on an extract from: Business Strategy Review Why do some companies try to ‘pre-empt the competitors’ by being first to launch a new product and in what circumstances would you recommend launching a mass market penetration strategy for a new product (Total 40 Marks) 19 20 31/3/2022 11 Q3 Essay – June 2012 “In today’s global market we rarely have the luxury of waiting for everybody to get comfortable before rolling out a new product … we usually have to get it out first to pre-empt the competitors.” Based on an extract from: Business Strategy Review Why do some companies try to ‘pre-empt the competitors’ by being first to launch a new product and in what circumstances would you recommend launching a mass market penetration strategy for a new product (Total 40 Marks) Q3 Essay – June 2012 – Answer 21 22 31/3/2022 12 23 24 31/3/2022 13 Marketing Gentle Reminders Please check the EBS portal regularly for the latest update on your exams Revision Practices – CANVASS 25 26 31/3/2022 14 Marketing J2010-D2021 Topic J 2010 D 2010 J 2011 D 2011 J 2012 D 2012 J 2013 D 2013 J 2014 D 2014 J 2015 D 2015 J 2016 D 2016 J 2017 D 2017 M 2018 J 2018 D 2018 M 2019 J 2019 D 2019 M 2020 A 2020 D 2020 M 2021 J 2021 D 2021 1 1 1 1 1+3 1 3 1 1+3 1 1+3 1 1 1 1 1 1 1 1 1 2 1 1 1 1 1 1 1 3 1+3 1 1 1 1 1 1 1 1 1 3 1 1 1 1 1 1 1+3 1+3 1 1 1 1 1 1 1 1 1 1 1 1 1 1 4 3 2 1+2 1+3 1 1 1+3 1 1 3 1+2 +3 1+2 1 1 2 1+3 1 3 5 2 1 1+3 3 3 2 1 3 1 1+2 1 1 1+3 1 2 6 2 2 2 1+3 1 2 3 1 1 1 1+2 1 1 1+3 3 1 1+2 7 1+2 3 1 1+3 1 1 1 1 1+2 1+2 1 1+2 +3 1 1 1 1+2 1+3 1 1+2 1 2+3 8 1 3 1 2 1 1 1 1 1+2 1 1+3 1+3 1+3 1 1 1+2 1+3 1 1 3 3 9 1+3 2 2 1 1 1 1+3 1 1 1+2 1+3 1 10 2 1+2 +3 1 1 2 1 1 1 1+3 1 1 1+3 2 11 2 3 1+3 1 1 3 1 1 1+3 1 1+3 1 1 3 12 1+3 1+2 3 1 1 3 1+2 1 1 1 1+3 1+3 1 3 13 14 1 3 1 1+2 1 1 1+3 1 1 15 1 1 1 1 1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 16 1 1 1 1+3 1 1 1 1 1 1 17 1 1 1 1 1 1 1 1 1 1 1 1 1 18 3 3 3 1 1 1 1 1 1 1 1 1 1 1 Exam Structure Section I Case Study 1 – Q1（30 marks） Case Study 2 – Q2（30 marks） Section II Essay Question – Q3（40 marks） Word Limit Q1 – 1350 Q2 – 1350 Q3 – 1800 Total 4500 27 28 31/3/2022 15 Q1 Framework – Key Concepts Q1: To develop marketing strategy (To devise marketing plan) 1. Environmental Analysis (PEST) 2. Industry Analysis (Five Forces) 3. SWOT 4. Product Life Cycle + BCG Matrix 5. Ansoff Growth Matrix 6. Marketing Objective 7. Porter’s Generic Competitive Strategies 8. Miles & Snow Strategies 9. Strategies for New Market Entry /Growth/mature/Declining Markets 10. Market Segmentation, Target Segment Selection & Positioning 11. Marketing Programme Decisions (4P) 12. Implementation & Control Opportunity Assessment 14 marks Marketing Strategy 16 Marks 4 Cs The macro context The customer context The competitive context The company context Suggestions: Before your exam Start your revision early – Revise the key concepts – Review past exam questions Check the date and time for your exam Stay healthy: Eat and sleep well 29 30 31/3/2022 16 Suggestions: During the exam 1. Write in your own words! (Keep the similarity index low!) 2. Do not simply ‘copy and paste’ from these sources – EBS textbook, PPT & past exam answers: Please paraphrase! – Non-EBS materials: You must cite and paraphrase 3. Your answer must integrate both: – the key concepts – the case/question details 4. Save and backup your answers 5. Manage your time effectively 6. Do not share your answers with your classmates 7. Do not contact your lecturer for exam answers Indicate the question number according to the exam paper 31 32 31/3/2022 17 Indicate the question number according to the exam paper Indicate the question number according to the exam paper 33 34 31/3/2022 18 All the best to your exam! Good Luck! 35