Mkt 604 Strategic Marketing Town Campus Question Paper
Mkt 604 Strategic Marketing Town Campus
Course:Masters Of Business Administration Marketing Management
Institution: Kca University question papers
Exam Year:2014
UNIVERSITY EXAMINATIONS: 2013/2014
EXAMINATION FOR THE MASTERS OF BUSINESS ADMINISTRATION
(MBA) MARKETING MANAGEMENT
MKT 604 STRATEGIC MARKETING TOWN CAMPUS
DATE: AUGUST, 2014
TIME: 3 HOURS
INSTRUCTIONS: Answer Question One and Any Other Three Questions
QUESTION ONE (31 MARKS)
Case Study
Defender Alarms
Consumers'' attitudes must change
most homeowners are indifferent toward electronic home alarms,
adopting a “it won’t happen to me” attitude and believing that physical barriers such as window &
door grilles, deadbolts and the like are adequate. These merely provide a false sense of security. But
that has all changed. Today competition from small operators and electricians has seen the adoption
rate of home alarm systems approaching 25% of the estimated 500,000 households in Perth.
The Defender Alarms Co., established in 1997, is one of the largest of the established local home
alarm companies in Perth in terms of sales. It is the only company that specialises in electronic alarm
systems solely for the domestic market. Despite its size, it competes effectively with the industry''s
leaders that tend to offer a variety of security products and services to several markets, hence spreading
their resources thin. The company currently employs 2 sales representatives, 2 electricians, 1 customer
service personnel, and 2 administrative staff. It is managed jointly by Tom and Michael. Both are
qualified electronic engineers with 20 years experience in the design of electronic alarm systems prior
to founding Defender Alarms.
1
Marketing: The company’s alarms are manufactured by a local electronics company according to a
design specification owned exclusively by Defender Alarms. The standard system is then “customised”
to the requirements of each customer. The price of a fully-installed system depends on the size of the
house and the number of rooms to be monitored. A typical family home would need at least 4 sensors
at a price of about 1500.Ittakesafulldayforasystemtobeinstalledbyaqualifiedelectrician.Thecompany″scustomersaremainlyownersofupmarkethomesvaluedinexcessof800,000 (Perth’s
median house price is 500,000)locatedin"low−risk"suburbs.Ontheaverage,theircustomerspay2000 for a 4-sensor alarm. The company has recently noticed a steady increase in the number of
inquiries from owners of medium-priced homes in "high-risk" suburbs, 70% of whom have had a
recent experience with a burglary or attempted break-in. Such incidents have doubled in the past 5
years for most suburbs.
With sales averaging 400 units a year over the past 10 years, Tom figured that the company could
easily handle a further 100 units with existing resources. But declining sales since last year had him
concerned for the future of his company and the industry as a whole. Given the current nature of
Defender’s alarms and its target market of upmarket homes, business was reaching a critical point.
This segment already has an adoption rate of about 70%. The directors projected a decline in the
number of alarm installations to 300 this coming year.
Also, at least 20 new security companies and 10 existing car alarm companies have started marketing
burglar alarms in the past 2 years. These companies typically bulk purchase generic alarm components
(sensors, siren, central console, etc.) from suppliers and advertise their business in local newspapers.
Independent electricians are then contracted to do the installation. Some electricians are also known to
market and install alarms on their own through word-of-mouth. The competitive nature of this business
has driven the price to as low as 900fora4−sensorsystem.TheBreakthrough:PortmanisaMelbourne−basedproducerofauniqueandpatentedportableburglaralarmsystem1.codenamed“PortaAlarm”.Theproducthasthefollowingfeatures:ThesystemisdesignedtobeinstalledDIY(do−it−yourself)inlessthan3hours.Thecontrolboxhousesthesiren,andisboltedintoawallnexttoanelectricalsocket.Itistamper−proofwithabuilt−inbackuppowersupply.Ahand−heldremotecontrolwithaPINnumberarmsand2disarmsthesystemandcanbeleftsafelybytheentrancedoor.2.Theentire5−piecesystemisportable.Itcanberemovedandreinstalledinanotherpremises.AccordingtoPortman,theproducthasrevolutionisedasectoroftheindustryintheeasternStates.Theprice,convenience,andversatilityofthealarmsystemhavemadeitashoppingproductasopposedtoanunsoughtproduct.CurrentDIYalarmsarecheapandunreliable.Thesearesoldinhardwarestoresandelectronicstores.Althoughthe“PortaAlarm”isascaled−downversionofaregularalarmsystem,itisequalinperformanceandreliability.Ithastheappearanceandsophisticationofaprofessionally−installed,qualityalarmsystem.PortmaniscurrentlylookingforaPerthsupplierorretailer.DefenderAlarmshasbeenapproachedandnegotiationisinprogresswiththefollowingtentativedistributorshipterms:ThatDefenderAlarmsagreestopurchaseaminimumof500“PortaAlarm”systems(unbranded)ayearataunitcostof500. The product carries a recommended retail price (RRP) of 800. 2. That Defender Alarms be responsible for developing its own marketing through its own branding, packaging and other promotional efforts. 3. That the sole distributorship be agreed for a period of 3 years, after which it will be re- negotiated. Other Opportunities: It is normal practice for suppliers & manufacturers of security hardware to approach security companies, such as Defender, to offer bulk purchase deals. Sometimes the security companies act as agents. FireFight and Prolock are two of the more aggressive suppliers whose products the directors believe could complement Defender''s range. The trade terms and product specifications are as follows: FireFight: The company has recently introduced a range of FireFight-brand lightweight domestic fire extinguishers. These are all-purpose extinguishers suitable for both electrical fire and grease fire. The extinguishers are easy to use and come in a range of sizes. The base model costs50 within a
Recommended Retail Price (RRP) of 99.ThecompanyisalsothesoleimporterofAustralia″sonlyremotesmokedetectorsystemfordomesticuse.Insteadofthewidelyavailablesingle−unitdetectors,thissystemcomeswithseparatedome−shapedsensorslinked(wireless)toacentraldetector−alarm.Thetennisball−sizedsensorscaneasilybe3attachedtotheceilingofnominatedrooms.Thecentraldetector−alarm,costing100, can control up to
5 sensors. The sensors cost 20each.BoththeseproductsarenotavailableinPerth.FireFightiscurrentlylookingforaPerthdealer,andispreparedtooffera2−yearexclusivedistributorship−minimumpurchase:200unitsofextinguishersand200unitsofsmokedetectors.ProLock:Itisincreasinglycommonforsecuritycompaniestoinstallhigh−securitywindowanddoorlocksforhomes.Thesecompaniesbuypopularbrands,suchasLockwood,atheavilydiscountedpricesandprofitfromboththesaleandinstallationoftheselocks.Fullyinstalled,theselockscostabout30260.00 A well-advertised company recently charged 350.00—fullyinstalledpopularbrand.ProLockimportsTaiwanese−madegeneric(unbranded)locksandisaggressivelymarketingtheseproductstosecuritycompaniesforhomeinstallation.Itcharges200 for locks for a typical 3-bedroom
house.
Required
(a)
The above case gave a descriptive account of the situation. Undertake a situation analysis i.e.,
in-depth understanding of the key issues guided by the following subheadings.
(i) Customer Analysis
(iii) Competitor Analysis
(iv)
(b)
Market Analysis
(ii)
[20 Marks]
Internal Analysis
Explain the meaning of Strategic Business Units (SBU) strategy. Using Nation Media group as
an exemplar, describe the ideal characteristics of an SBU.
[13 Marks]
QUESTION TWO (23 MARKS)
a)
Knowing your competitors is just as important as knowing your customers. Describe the
potential competitor strategies.
b)
[12 Marks]
Management of Neptune international, a leading software producer has decided to conduct an
internal analysis of the business’s skills and assets that contribute to sustained profitability.
Described the key non-financial performance indicators (KPI) that they can use.
[13 Marks]
4
QUESTION THREE (23 MARKS)
In reference to the mobile telecommunication industry in Kenya,
a) Explain four competitive positions.
b) Describe the market leader strategies
[8 Marks]
[10 Marks]
QUESTION FOUR (23 MARKS)
Using a well labelled diagram, map the Product Life Cycle (PLC) model on Rogers’s adoption rate of
new products diagram. Explain the marketing strategies at each stage of the PLC and identify the
associated adopter categories.
QUESTION FIVE (23 MARKS)
i)
Using the growth share matrix, explain how a firm can analyze it business portfolio, clearly
explaining the strategic options.
ii)
[12 Marks]
Explain four sub-systems within an organization which influence strategy implementation
[11 Marks]
QUESTION SIX (23 MARKS)
a)
Competitive advantage, or edge, results from the execution of a strategy not pursued by
competing businesses. Explain the characteristics of sustainable competitive advantage (SCA).
[12 Marks]
b)
Identify and explain the generic strategy applied by Toyota. Explain the sources of sustainable
competitive advantage under this generic strategy.
[11 Marks]
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