UNIVERSITY EXAMINATIONS: 2020/2021

SCHOOL OF BUSINESS & PUBLIC

MANAGEMENT
ORDINARY EXAMINATION FOR BACHELOR OF

COMMERCE MKT 1101: PRINCIPLES OF MARKETING

(DISTANCE LEARNING)
DATE: APRIL, 2021 TIME: 3 HOURS

INSTRUCTIONS: Answer all questions

QUESTION ONE
READ THE CASE AND ANSWER THE QUESTIONS THAT FOLLOW
The Samsung Group is South Korea’s largest company and the world’s second largest conglomerate by
revenue. In 2005, it overtook its rivals Sony and Matsushita (responsible for JVC, Panasonic and
Technics) as the world’s leading consumer electronics brand, and became part of the top twenty global
brands overall. A decade ago, Samsung was widely regarded as a supplier of cheap imitations of superior
Japanese products. At the time, the focus of its business was on memory chips and low-margin items such
as microwave ovens and cheap TVs, which were mainly sold through discount stores. Following a major
restructuring of its strategy and operation, it has turned itself into the fastest growing player in the global
consumer electronics industry, with sales of US$ 153.2 billion in 2006. Employing approximately
254,000 people in many countries, the company consists of five main consumer-related business units,
the details of which are shown below
Digital Digital Media LCDs Semiconductors Telecommunications
appliance

Washing Tvs and Large LCD-TFT Memory chips Mobile phone

machines Monitors screens handsets
Air conditioners VCRs Digital PDA phones
and purifiers processors
Microwave DVDs Flash cards Wireless network
ovens systems
Refrigerators Camcorders DVD and Cd Integrated access
drives platforms
Vacuum cleaners Printers and
laptops

1
Samsung Electronics Ltd has built up its position through rationalization and diversification of its

2
 activities, together with strong marketing and innovative product design. From its strong position as a
manufacturer of essential electronic components, Samsung has built its reputation as the major consumer
brand in a range of different product categories. The company is the market leader in the microchip and
TFT-LCD screen sectors, and is the world‘s largest producer of colour TVs, monitors and VCRs. In 2007
Samsung Telecommunication Business reported over 40% growth and became the second largest mobile
phone device manufacturer in the world, with 15.6% market share.
Samsung has used its success in the mobile phone business to drive its brand performance, which can be
attributed to a strategy of delivering innovative products at premium prices. According to their marketing
chief much of their achievement has stemmed from identifying at an early stage that the mobile phone
was changing “from a utility to a fashion statement” This led them into the camera phone market, and
they became the first producer to equip a cell phone with an MP3 player. In 2008, Samsung Electronics
Telecommunication Business declared its new business strategy focusing on consumers and marketing.
Samsung mobile phones are divided into 6 major categories –Style, infotainment, Multimedia,
Connected, Essential and Business.
The change in direction of the company over the last decade is based on a realization that there was more
money to be made from innovating and setting the pace than from producing only me too products. To do
this it has not only been able to draw upon its own extensive manufacturing and R&D capability (more
than 20,000 researchers in 15 laboratories worldwide) but has also worked closely with strategic partners,
including competitors as well as customers, in establishing new industry standards. The approach which
has proved so successful in their mobile phone business is now regarded as the basis for further growth in
all customer sectors, with a particular emphasis on the wireless technology in the home.
Supporting all of its development has been the extensive use of marketing to communicate with
customers and build a brand which is increasingly recognized as a world-leader. However, in order to
achieve its ambition of becoming and remaining number one in the consumer electronics market it plans
to invest even more in research, development and design and at the same time review its brand
positioning. The intention is to invest heavily in integrated communications campaigns, including global
advertising (some of it online) and promotions, which will lift brand loyalty to the point where people
will say ‘I only want a Samsung”.

a) Using the case above state and explain samsung’s:

i. Product mix length-the different products in the product mix
ii. Product mix width-the number of different product lines available
iii. Product Mix depth-average number of products in the product line [6 Marks]

b) Mr Moyh a Marketing guru based in Nairobi Kenya, opines that Samsung seems to be borrowing
something from all the marketing philosophies. Taking his views into consideration and coupled
with Samsung’s intent to invest heavily in Integrated Marketing communications, explain the
marketing philosophy employed by Samsung. [ 4 Marks]
The Product Concept-This concept holds that consumers will favour products that offer the best
quality, performance and features.
The Selling Concept-The idea that consumers will not buy enough of the organizations products
unless the organization undertakes large scale selling and promotional effort
Marketing Concept-The marketing management philosophy holds that achieving organizational
goals depends on knowing the needs and wants of target markets and delivering the desired
satisfaction better than competitors do

3
 c) How has Samsung benefited from Marketing Research? [ 4 Marks]

Gotten to know what customers want

Identify Opportunities for Growth
Compete More Effectively
Stay on Top of Trends.
Make More Informed Decisions

d) A majority of Samsung’s product are facing mature markets. Following the Advice from Mr.
Moyh Samsung intends to pursue Market modification and Product Mix modification
strategies. Make a detailed presentation on approaches they can use to implement market
modification strategies. [ 6 Marks]

In modifying the market, the company tries to increase the consumption of the current segments. It
also looks for ways of increasing usage among present customers.
iIn modifying the product, quality, features, styles and designs are upgraded to inspire more
consumers to use it. Alternatively, the company might add new features that expand the products
usefulness, safety or convenience
product modification - for example, adjusting or improving your product's features, quality, pricing
and differentiating it from other products in the marking
In modifying the promotional strategy, the company’s objective will be to improve sales. It can cut
prices to attract new users and lure competitor’s customers. It can launch a better advertising
campaign or use aggressive sales promotions, trade deals, price offs and contests.

4
QUESTION TWO
Refer to the scenario below to answer the following questions.

Jason West, owner of A-1 Cleaning, began his enterprise in 2001. Jason's primary focus had been
on office cleaning for large corporations. But in recent months with the spread of Corona Virus, Jason has
seen a decline in demand for office cleaning. Surprisingly, the competitive environment appears relatively
stable with no new competitors. However, Jason understands that office cleaning is a high-frequency
service that is usually performed daily; therefore, competitors must be doing something to attract his
customers. Building a competitive advantage seems to be the only option to offset competition. But as
Jason pondered his dilemma, he realized that he needed to better understand how customers assess service
quality and what they are looking for in a superior cleaning service, prior to building his competitive
advantage.
Jason developed a research plan. First, he gathered competitor information primarily through
pamphlets and Web sites but also from a few phone calls to find out exactly what competitors offer in
their cleaning packages. In addition, Jason obtained from the area Chamber of Commerce an updated list
of local corporations to which he would send a short survey.
Though the list of corporations contained 141 local company names, Jason chose to survey 75 of
them. To better understand customer service expectations between both small and large corporations,
Jason divided his surveys into two categories. The survey questions were designed to extract specific data
from respondents with regard to service quality expectations in correlation to service frequency and price.
Jason awaited the results. Though his primary focus had been on large corporations, he
was flexible and would aim his efforts differently if needed.

a) Explain the problem that prompted Jason to carry out a research. [4 Marks]

Decline of demand of service

Competitors doing okay

Know what customers need

Strategies to revive business

b) From the case, delineate Primary and Secondary source of data that Jason used. [4 Marks]
Primary - consist of original information gathered for the specific purpose at hand ie phone calls,
template
Secondary - consist of information that already exists somewhere having been collected for another
purpose camber of commerce, pamphlets

c) Develop three objectives for Jason’s research. [3 Marks]

Customer satisfaction
Competitor prising
Measure performance

d) From the case give examples of sources of Marketing Intelligence used by Jason
[3 Marks]
5
customer understanding.

competitive intelligence
market understanding
product intelligence

e) Describe internal factors that may influence Jason’s pricing decision. [10 Marks]
Marketing Objectives
Marketing Mix Strategy
Costs
Organizational Consideration

QUESTION THREE (10 MARKS)

Coca-Cola undertook a product line extension by introducing coke Lite. Explain the steps they followed
in developing this new brand.
1. Idea generation
2. Idea Screening
3. Concept development and testing
4. Marketing strategy development
5. Business analysis
6. Product development
7. Test marketing
8. Commercialization
[10 Marks]