Principles and Practice of Marketing — 2022
KNEC Diploma in Supply Chain Management, Module II. Original theory examination questions with explained model answers for revision.
November 2022
Paper codes: 2903/205
Time: Not shown in supplied scan
Instructions: Not shown in supplied scan
Question 1(a) — 10 marks
Explain five circumstances under which an organization may modify its channel arrangements.
Model answer
- Customer buying habits change: new preferences may require different outlets or digital access.
- Existing channel performance is poor: weak coverage, service or sales can justify replacement.
- Product requirements change: new products may need specialist handling or technical support.
- Costs become excessive: a different channel may provide the required service more economically.
- Market or competitive conditions change: expansion, new rivals or unavailable intermediaries may make the previous arrangement unsuitable.
Question 1(b) — 10 marks
Cello Limited is operating in an industry with high levels of competition. Outline five negative effects of such competition on the firm’s operations.
Model answer
- Price pressure can reduce profit margins.
- Greater advertising and sales-promotion expenditure may be necessary.
- Customers may switch more readily to competing brands.
- Market share and sales may decline.
- Continuous product and service improvement increases investment and operating pressure.
Question 2(a) — 10 marks
Explain five benefits that a firm may derive from using celebrity endorsements to promote its products.
Model answer
- Attention: a recognised personality helps the message stand out.
- Awareness: the celebrity’s audience exposes the brand to more potential buyers.
- Credibility: a suitable endorser can strengthen confidence in relevant product claims.
- Image association: desirable attributes of the celebrity may reinforce brand positioning.
- Trial and sales: identification with the endorser can encourage customers to investigate and try the product.
Question 2(b) — 10 marks
Koni Limited distributes its products using indirect channels. Outline five limitations that the firm may face from using such channels.
Model answer
- Intermediary margins increase channel cost or reduce the manufacturer’s margin.
- The firm has less direct control over retail presentation and customer service.
- Customer feedback may be delayed or filtered.
- Intermediaries may favour competing products.
- Channel conflict or intermediary failure can disrupt availability and damage the brand.
Question 3(a) — 10 marks
Explain five factors that an organization may consider when selecting the type of media to use in product promotion.
Model answer
- Target audience: choose media the intended buyers actually use.
- Message requirements: demonstration, detail, sound or visuals influence the suitable medium.
- Reach and frequency: the medium must provide sufficient exposure in the required area.
- Budget and cost effectiveness: compare total cost with useful audience contacts and likely response.
- Timing and credibility: the medium should deliver the message promptly in a context the audience trusts.
Question 3(b) — 10 marks
Bunga Limited uses the differentiated market coverage strategy to serve its target markets. Outline five costs that the firm may incur by using this strategy.
Model answer
- Research to understand several customer segments.
- Product design and development for different segment needs.
- Production and inventory costs from maintaining multiple variants.
- Separate advertising and promotional programmes.
- Distribution, sales and administration for different offers and customer groups.
Question 4(a) — 10 marks
Explain five reasons why many firms have a self service option as a customer care strategy.
Model answer
- Convenience: customers can obtain routine assistance without waiting for an agent.
- Extended availability: suitable digital tools can be accessed outside normal office hours.
- Lower service cost: staff can focus on complex issues instead of repeated simple enquiries.
- Faster resolution: customers can complete straightforward actions immediately.
- Greater control: customers can choose when and how to check information or manage their accounts.
Question 4(b) — 10 marks
Outline five strategies that an organization may use to enhance consumer learning.
Model answer
- Repeat clear, consistent product messages.
- Demonstrate correct product use and benefits.
- Provide samples or trials that permit direct experience.
- Reinforce positive experience through reliable quality and service.
- Supply accessible instructions, customer support and credible user information.
Question 5(a) — 10 marks
Kanto Limited, a newly established firm intends to apply the societal marketing concept in its marketing activities. Explain five ways in which the firm may apply the concept.
Model answer
- Meet real customer needs: design useful products that deliver the promised benefits.
- Protect consumer welfare: avoid unsafe products and provide truthful use and risk information.
- Reduce environmental harm: improve packaging, resource efficiency and responsible waste management.
- Use ethical marketing: avoid deceptive claims and exploitative selling practices.
- Balance long-term interests: consider customers, society and sustainable profitability when making marketing decisions.
Question 5(b) — 10 marks
Outline five measures that an organization may take to extend the life cycle of a product at the decline stage.
Model answer
- Improve or modify useful product features.
- Reposition the product for a new use or customer segment.
- Enter suitable new geographic markets or channels.
- Adjust price and promotion to encourage renewed trial.
- Reduce unnecessary costs and concentrate on viable customer groups while maintaining service.
Question 6(a) — 10 marks
Explain five instances when a firm may decide to increase the prices of its products.
Model answer
- Input costs rise: higher material, labour or distribution costs may require price adjustment.
- Demand exceeds supply: limited capacity and strong demand may support a higher price.
- Product value improves: additional benefits or quality can justify a premium.
- Previous pricing is unsustainable: margins may be insufficient to maintain operations and service.
- Positioning changes: a credible premium strategy may require prices consistent with the enhanced offer.
Question 6(b) — 10 marks
Outline five limitations of the marketing mix concept as applied in marketing.
Model answer
- May encourage an internal seller-centred view rather than close attention to customer experience.
- The basic four elements do not fully describe people, processes and physical evidence in services.
- A static mix may respond poorly to fast-changing markets.
- Separate treatment of elements can overlook their interdependence.
- The mix alone does not explain relationship building, implementation capability or wider environmental forces.
Question 7(a) — 10 marks
Explain five factors that may affect the rate of adoption of innovations in the market.
Model answer
- Relative advantage: customers adopt faster when the product offers a clear benefit over existing alternatives.
- Compatibility: a product that fits users’ values, habits and existing systems is easier to accept.
- Complexity: difficult learning or operation slows adoption.
- Trialability: low-risk testing or sampling helps customers evaluate the product before full commitment.
- Observability: visible results and recommendations from other users make the benefits easier to recognise.
Question 7(b) — 10 marks
Ms Sophia intends to buy a laptop. Outline five factors that she will consider when evaluating the laptop to buy.
Model answer
- Performance and software compatibility for her intended tasks.
- Purchase price and total ownership cost.
- Battery life, portability and weight.
- Reliability, build quality and suitable screen, storage and memory.
- Warranty, repair availability and after-sales support.