THE UNIVERSITY OF THE WEST INDIES CAVE HILL EXAMINATIONS OF DECEMBER. 2010. CODE AND NAME OF COURSE: MKTG3000- MARKETING MANAGEMENT. DATE AND TIME: DURATION: 2 HOURS INSTRUCTIONS TO CANDIDATES: This paper has 4 pages and 6 questions. Answer section A, and any two (2) questions from section B SECTION A Fantastic Accommodations Ltd. isa rapidly growing, successful medium sized hotel chain. The company’s management is considering expanding its customer base. At a recent conference for tourism officials, the Managing Director of the company came into contact with the concept of customer lifetime value (CLTV). He would like to utilise this concept to testthe feasibility of the expansion plans. The firm thus hired a marketing consultant to prepare some estimates for the hotel, Below are the estimates prepared by the consultant: No. of new customers the campaign would attract 1,000 ‘Yearly retention rates: Yet Yr2 | ¥r3 [ Yr4 [ ¥r5 60% 5% 80% 90% 100% Acquisition costs (per customer) 900 Desired rate of return: 20% It will run for one year (Year 0) The Present Value Interest Factors (PVIF) based on a 20% rate of return: Yel [¥r2 [¥r3 [¥r4 [¥r5 PVIF (20%) [083 | 0.69 [0.579 [0.482 [04 TURN OVER ‘The University of the West Indies llPage 2 The consultant also indicated to management that she expected all the operating revenue and cosis patterns to be the same for these acquired customers as for those already’ serviced, Based on historical patierns the average guest spends 10 nights at the hotel and pay $80 per night. Historically, costs per guest are 40% of revenue and this is expected to continue. Question Based on theabove information management of Fantastic Accommodations Lid. asked you tocalculate the per customer CLTV in dollars and givea brief secommendation concerning the feasibility of the programme. (15 marks) Question 2 ‘The management does not understand customer relationship marketing and especially The Loyalty ladder for B2C marketers. Explain the characteristics of and company responses to EITHER the Suspects, Prospects and Customers OR the Clients, Supporters and ‘Advocates. Ensure that all pertinent information about the three elements chosen are included in the report. (15 marks) SECTION B Answer any two (2) questions. Fach question is worth TWENTY FIVE (25) marks. Question 3 Confused Brands Inc. is considering a re-branding exercise. It currently sells a variety of products but does not have a clear or consistent branding policy. Your manager informs you that as part of the exercise, they are considering using one of the recognised options- 4 branded house, subbrands, endorsed brands or a house of brands, She has requested you to produce a reportthat critically analyses these various options to assist with the decision. Jn addition, she informs you that the company has some serious inquiries for private brands, so you are also requested to includea section that analyses private branding in the report, the A detail diagram that depicts the brand architecture model mustaccompany the report. (25 marks) TURN OVER The University ofthe West Indies Course Code: MiTG3000 201Page 3 Question 4 a, Your friend has a small company that sells exotic merchandise. He is eager to establish a web presence because he thinks this would boost his sales. He attended a seminar and heard of something called the IDC Strategic process that is important for e-marketing success, Your friend asked you about this process since he is unaware of what it is. Clearly explain to your friend with relevant examples the IIDC Strategic process. (12 marks) b. After making some inquiries you learned that your friend is interested in e- marketing because of an interesting order pattern that has been observed. The firm has been receiving small but significant inquiries from African and Asian countries for its merchandise although these items can be obtained locally in these countries Some of the countries that he has received inquiries from ate Angola, Mozambique, Niger, Chad, Bhutan, Bangladesh and Mongolia. It should be noted that currently almost all of the firm’s revenue comes from local clientele. Your friend, based on the unsolicited foreign inquiries, is of the opinion that if he invests in a web presence his firm’s sales will mushroom from having a global presence. Using critical analysis advise your friend on the feasibility of realising his expectations ‘om the chosen route. (3 marks) Question 5 Bottom Line Ltd., a fast growing small business, recent hired you as their marketing Manager. Although the pay and working conditions are excellent, the relationship between you and your bosses is always strained. While you have Christian values, they areonly interested in increasing profilseven ifitinvolvesshady deals. Meanwhile they see Corporate Social Responsibility as the ideas of people who are trying to saddle businesses with unprofitable and unnecessary costs. Finally tostop theacrimonicusrelationship, you schedule a meeting with management and outline to them that social responsibility can have far-reaching positive results for those who implementit. Thisseems to resonate with them, so they ask you to prepare an analytical report detailing these benefits. With the aid of pertinent diagram(s) and examples, prepare this report, (25 marks) TURN OVER The University of the West Indies MKTG3000Page 4 Question 6 a. Breadfruit and Trotters Ltd. (BTL) produces and markets widgets. Due to the prevailing economic conditions (the recession} management fs considering a ten (10%) percent price cut for the firm’s products to stimulate demand. Onexamining the marketplace, itis determined that widgets havea priceclasticity of demand of 1.20. BIL hes the following current price and cost struct Unit price - $200 Unitcost- $100 “The unit cost will increase by the same amountas the inflation rate, which based on. the Central Bank figures is running at 10% for the current year. With the aid of any relovant calculations BRIEELY explain to the manager the {ull implications of this move, (10 marks) b. Beside the economic factors mentioned above analytically explain to the ‘management the impact the following factors could have on pricing policies - competition, government policies and the company’s marketing objectives. (15 marks) END OF QUESTION PAPER ‘The University of the West Indies Course Co MKTG3000 a eee