Principles and Practice of Marketing — 2024

KNEC Diploma in Supply Chain Management, Module II. Original theory examination questions with explained model answers for revision.

November 2024

Paper codes: 2903/205; 2907/205; 2914/205; 2924/205; 2925/205; 2926/205
Time: 3 hours
Instructions: Answer any FIVE questions. All questions carry equal marks. Answer the questions in English.

Question 1(a) — 10 marks

Duds Limited often participates in trade fairs. Explain five benefits that the firm may derive from participating in these events.

Model answer

  1. Generate leads: direct contact identifies prospective customers and distributors.
  2. Demonstrate products: visitors can see performance and ask technical questions.
  3. Build awareness: a well-presented stand increases recognition of the firm and its brands.
  4. Gather market intelligence: feedback and competitor displays reveal trends and opportunities.
  5. Develop relationships: face-to-face meetings support follow-up sales, partnerships and supplier contacts.

Question 1(b) — 10 marks

Outline five factors that may influence the rate of adoption of a new product.

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 2(a) — 10 marks

Explain five strategies that a firm may use to expand its market share.

Model answer

  1. Improve customer value: better quality, service or features can attract buyers from competing offers.
  2. Adjust pricing: suitable prices and targeted incentives can encourage trial while protecting sustainable margins.
  3. Strengthen promotion: relevant communication builds awareness and preference in the target market.
  4. Expand distribution: additional suitable outlets or channels make the product easier to obtain.
  5. Retain and develop customers: reliable service, loyalty programmes and appropriate cross-selling increase repeat business.

Question 2(b) — 10 marks

Bandat Limited has been encountering challenges when setting prices of its products using the value-based pricing method. Explain five such challenges.

Model answer

  1. Measuring perceived value: customer benefits are subjective and difficult to translate into a precise price.
  2. Diverse customer views: segments may value the same product differently.
  3. Research cost: reliable interviews, tests and analysis require time and skilled staff.
  4. Changing perceptions: competitors, technology and customer experience can alter willingness to pay.
  5. Explaining the premium: customers may reject a price unless the firm credibly communicates and delivers the promised value.

Question 3(a) — 10 marks

Outline five reasons why a firm should maintain a well-balanced marketing mix.

Model answer

  1. Ensures product, price, promotion and distribution support the same positioning.
  2. Helps meet target customers’ needs across the whole buying experience.
  3. Prevents one weak element from undermining the others.
  4. Uses limited marketing resources more effectively.
  5. Supports consistent competitive performance and sustainable customer satisfaction.

Question 3(b) — 10 marks

Explain five limitations of the product life cycle concept.

Model answer

  1. Uncertain stage boundaries: managers may find it difficult to identify the current stage reliably.
  2. Different patterns: products do not all follow the same smooth introduction-to-decline curve.
  3. Weak forecasting: the concept alone cannot predict how long a stage will last.
  4. Management influence: promotion, innovation and repositioning can alter the apparent cycle.
  5. Self-fulfilling decisions: assuming inevitable decline may cause premature withdrawal of support from a viable product.

Question 4(a) — 10 marks

Explain five factors that a marketer should consider when analyzing competitors.

Model answer

  1. Objectives and strategy: understand the customers, positioning and growth goals rivals pursue.
  2. Product and service capability: compare quality, features, innovation and customer support.
  3. Pricing and costs: assess price levels, discounts and the ability to sustain competitive offers.
  4. Market presence: evaluate share, distribution coverage, brand strength and customer loyalty.
  5. Resources and likely response: financial strength, staff and technology influence how rivals react to the firm’s actions.

Question 4(b) — 10 marks

Mimaz Limited uses catalogues to promote its products. Outline five reasons why the firm uses this promotion tool.

Model answer

  1. Displays a range of products in one accessible reference.
  2. Provides specifications, prices and ordering information.
  3. Allows customers to compare alternatives at their convenience.
  4. Can target selected customer groups or existing buyers.
  5. Supports remote ordering and reduces repeated routine sales explanations.

Question 5(a) — 10 marks

Outline five factors that may influence the choice of a supplier by a firm.

Model answer

  1. Ability to meet required quality and technical specifications.
  2. Total cost and competitive pricing.
  3. Delivery reliability and suitable lead time.
  4. Financial strength and production capacity.
  5. Reputation, ethical conduct and after-sales support.

Question 5(b) — 10 marks

Describe five instances when a firm may use the concentrated market coverage strategy to serve its markets.

Model answer

  1. Limited resources: a small firm may focus its budget and skills on one attractive segment.
  2. Specialist expertise: the firm may serve a niche better than broad-market competitors.
  3. Distinct customer needs: a clearly identifiable group may require a tailored offer.
  4. Weak niche competition: a neglected segment may provide a defensible entry opportunity.
  5. Strong segment economics: a sufficiently large, profitable and accessible niche may support the firm’s objectives.

Question 6(a) — 10 marks

Outline five circumstances under which a manufacturer may distribute products through exclusive stores.

Model answer

  1. A prestigious image requires controlled presentation.
  2. Products need specialised demonstration, installation or after-sales service.
  3. The manufacturer wants close control of customer experience and brand standards.
  4. A high-value or differentiated product can support a limited number of outlets.
  5. Selected dealers are willing to invest in dedicated facilities and promotion in return for exclusivity.

Question 6(b) — 10 marks

Describe five ways in which marketing activities may promote economic development of a country.

Model answer

  1. Employment: selling, advertising, distribution and related services create jobs.
  2. Market expansion: connecting producers with buyers supports production and trade.
  3. Efficient distribution: goods move from surplus areas to places where they are needed.
  4. Innovation and productivity: customer feedback and competition encourage improved products and business methods.
  5. Income and public revenue: increased trade and enterprise activity raise earnings and taxable economic activity.

Question 7(a) — 10 marks

Explain five internal factors that may trigger the need for an organization to purchase a product.

Model answer

  1. Stock depletion: routine consumption creates a need to replenish materials.
  2. Equipment failure or wear: operations require replacement machinery, spares or maintenance items.
  3. Expansion plans: increased capacity or new branches create additional requirements.
  4. Product or process change: new designs and technologies require different inputs.
  5. Performance improvement: managers may seek safer, more efficient or higher-quality alternatives to existing supplies.

Question 7(b) — 10 marks

Describe five areas where a sales person may provide support to customers during the buying process.

Model answer

  1. Need identification: ask questions to establish the customer’s problem and intended use.
  2. Product information: explain specifications, benefits, limitations and suitable alternatives.
  3. Evaluation: demonstrate the product and help compare relevant features and total cost.
  4. Purchase arrangements: clarify price, payment, delivery and order documentation.
  5. After-sales support: explain installation, use, warranty and the procedure for resolving problems.
PreviousNext