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.
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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. It takes a full day for a system to be installed by a qualified electrician.
The company''s customers are mainly owners of upmarket homes valued in excess of $800,000 (Perth’s
median house price is $500,000) located in "low-risk" suburbs. On the average, their customers pay
$2000 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 $900 for a 4-sensor system.
The Breakthrough: Portman is a Melbourne-based producer of a unique and patented portable burglar
alarm system
1.
codenamed “PortaAlarm”. The product has the following features:
The system is designed to be installed DIY (do-it-yourself) in less than 3 hours. The control
box houses the siren, and is bolted into a wall next to an electrical socket. It is tamper-proof
with a built-in backup power supply. A hand-held remote control with a PIN number arms and
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disarms the system and can be left safely by the entrance door.
2.
The entire 5-piece system is portable. It can be removed and reinstalled in another premises.
According to Portman, the product has revolutionised a sector of the industry in the eastern States. The
price, convenience, and versatility of the alarm system have made it a shopping product as opposed to
an unsought product. Current DIY alarms are cheap and unreliable. These are sold in hardware stores
and electronic stores.
Although the “PortaAlarm” is a scaled-down version of a regular alarm system, it is equal in
performance and reliability. It has the appearance and sophistication of a professionally-installed,
quality alarm system. Portman is currently looking for a Perth supplier or retailer. Defender Alarms
has been approached and negotiation is in progress with the following tentative distributorship terms:
That Defender Alarms agrees to purchase a minimum of 500 “PortaAlarm” systems (unbranded) a year
at a unit cost of $500. 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 costs $50 within a
Recommended Retail Price (RRP) of $99.
The company is also the sole importer of Australia''s only remote smoke detector system for domestic
use. Instead of the widely available single-unit detectors, this system comes with separate dome-
shaped sensors linked (wireless) to a central detector-alarm. The tennis ball-sized sensors can easily be
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attached to the ceiling of nominated rooms. The central detector-alarm, costing $100, can control up to
5 sensors. The sensors cost $20 each.
Both these products are not available in Perth. FireFight is currently looking for a Perth dealer, and is
prepared to offer a 2-year exclusive distributorship - minimum purchase: 200 units of extinguishers
and 200 units of smoke detectors.
ProLock: It is increasingly common for security companies to install high-security window and door
locks for homes. These companies buy popular brands, such as Lockwood, at heavily discounted prices
and profit from both the sale and installation of these locks. Fully installed, these locks cost about 30%
more than the retail price of DIY locks. The retail price of popular DIY locks for a typical 3-bedroom
house is $260.00 A well-advertised company recently charged $350.00 — fully installed popular
brand.
ProLock imports Taiwanese-made generic (unbranded) locks and is aggressively marketing these
products to security companies for home installation. It charges $200 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]
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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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