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

  1. Customer buying habits change: new preferences may require different outlets or digital access.
  2. Existing channel performance is poor: weak coverage, service or sales can justify replacement.
  3. Product requirements change: new products may need specialist handling or technical support.
  4. Costs become excessive: a different channel may provide the required service more economically.
  5. 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

  1. Price pressure can reduce profit margins.
  2. Greater advertising and sales-promotion expenditure may be necessary.
  3. Customers may switch more readily to competing brands.
  4. Market share and sales may decline.
  5. 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

  1. Attention: a recognised personality helps the message stand out.
  2. Awareness: the celebrity’s audience exposes the brand to more potential buyers.
  3. Credibility: a suitable endorser can strengthen confidence in relevant product claims.
  4. Image association: desirable attributes of the celebrity may reinforce brand positioning.
  5. 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

  1. Intermediary margins increase channel cost or reduce the manufacturer’s margin.
  2. The firm has less direct control over retail presentation and customer service.
  3. Customer feedback may be delayed or filtered.
  4. Intermediaries may favour competing products.
  5. 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

  1. Target audience: choose media the intended buyers actually use.
  2. Message requirements: demonstration, detail, sound or visuals influence the suitable medium.
  3. Reach and frequency: the medium must provide sufficient exposure in the required area.
  4. Budget and cost effectiveness: compare total cost with useful audience contacts and likely response.
  5. 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

  1. Research to understand several customer segments.
  2. Product design and development for different segment needs.
  3. Production and inventory costs from maintaining multiple variants.
  4. Separate advertising and promotional programmes.
  5. 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

  1. Convenience: customers can obtain routine assistance without waiting for an agent.
  2. Extended availability: suitable digital tools can be accessed outside normal office hours.
  3. Lower service cost: staff can focus on complex issues instead of repeated simple enquiries.
  4. Faster resolution: customers can complete straightforward actions immediately.
  5. 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

  1. Repeat clear, consistent product messages.
  2. Demonstrate correct product use and benefits.
  3. Provide samples or trials that permit direct experience.
  4. Reinforce positive experience through reliable quality and service.
  5. 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

  1. Meet real customer needs: design useful products that deliver the promised benefits.
  2. Protect consumer welfare: avoid unsafe products and provide truthful use and risk information.
  3. Reduce environmental harm: improve packaging, resource efficiency and responsible waste management.
  4. Use ethical marketing: avoid deceptive claims and exploitative selling practices.
  5. 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

  1. Improve or modify useful product features.
  2. Reposition the product for a new use or customer segment.
  3. Enter suitable new geographic markets or channels.
  4. Adjust price and promotion to encourage renewed trial.
  5. 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

  1. Input costs rise: higher material, labour or distribution costs may require price adjustment.
  2. Demand exceeds supply: limited capacity and strong demand may support a higher price.
  3. Product value improves: additional benefits or quality can justify a premium.
  4. Previous pricing is unsustainable: margins may be insufficient to maintain operations and service.
  5. 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

  1. May encourage an internal seller-centred view rather than close attention to customer experience.
  2. The basic four elements do not fully describe people, processes and physical evidence in services.
  3. A static mix may respond poorly to fast-changing markets.
  4. Separate treatment of elements can overlook their interdependence.
  5. 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

  1. Relative advantage: customers adopt faster when the product offers a clear benefit over existing alternatives.
  2. Compatibility: a product that fits users’ values, habits and existing systems is easier to accept.
  3. Complexity: difficult learning or operation slows adoption.
  4. Trialability: low-risk testing or sampling helps customers evaluate the product before full commitment.
  5. 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

  1. Performance and software compatibility for her intended tasks.
  2. Purchase price and total ownership cost.
  3. Battery life, portability and weight.
  4. Reliability, build quality and suitable screen, storage and memory.
  5. Warranty, repair availability and after-sales support.
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