Short answer & Case Study session Principles of Marketing FMT, 2016

Strategy for Short answer questions Step 1 – identify directive words Step 2 – identify the topic Step 3 – plan your answer

Short answer Describe the BCG Growth – Share Matrix. Explain how the business can use the matrix and discuss the limitations of the Matrix. [2 points] Your answer should include: Description of BCG growth – share Matrix Explanation of how businesses can use the Matrix Discussion of the Matrix limitations

Example answer Description of BCG growth – share Matrix (pg. 43) The BCG Matrix classify SBUs by using the Relative Market share and Market Growth Rate. SBUs are classified into: Cashcow Star Dog Question mark

Explanation of how businesses can use the Matrix - They can use the matrix to decide what to do with each SBUs. For example, they will decide to invest in the STARS, consider carefully for the QUESTION MARKS, harvest & maintain the CASH COWS, and may be drop the DOGS.

Discussion of the Matrix limitations The matrix is difficult, time consuming and costly to implement as it is not easy to measure relative market share and market growth rate. Also, the matrix focus on current situation of the business, so may not be correct for the future.

Note: although it is not required, you will get extra marks for explaining your answer with realistic examples.

Now your turn Question 2: What are four sources of information in the consumer buying behavior? Discuss how a consumers might use the sources while purchasing a trip for summer holiday in Thailand. [2 points]

Step 1: Identify directive words What are four sources of information in the consumer buying behavior? Discuss how a consumers might use the sources while purchasing a trip for summer holiday in Thailand. [2 points]

Step 2: Identify the topic What are four sources of information in the consumer buying behavior? Discuss how a consumers might use the sources while purchasing a trip for summer holiday in Thailand. [2 points]

Step 3: Plan your anwer What are 4 sources of Information? (pg. 152, 153) 4 sources of information in Consumer Buying Behavior include: Personal sources: from family, friends – highly believable Public sources: internet search, reviews of product on mass media Commercial sources: Advertising, sale staff – company can control this sources but it less believable for the consumers Experiential sources: Past experience with the product – highly believable for consumers

how a consumers might use the sources while purchasing a trip for summer holiday? A trip for summer holiday usually requires complex buying behavior from customer, because it is high cost and risky, especially if the consumer never go to Thailand before. Thus the consumer might use all four sources of information. Personal sources: They will ask their friends and family members who have travelled to Thailand and bought tour to Thailand Experiential sources: They will base on their previous experience of traveling and purchasing tours before Public sources: They will read all articles about travelling to Thailand and check other customers’ review Advertising sources: Brochure, leaflet of the tour operators company. Sale staff

Notes: you will get extra marks if you discuss implications for a tour operator company such as Viettravel

Part 2: Case study

Strategy to answer case study session Step 1: Read the question carefully, identify the directive words and the topics Step 2: Scan the case study for the information Step 3: Plan your answer

Step 1: Identify Directive words What are four market target strategies? Which targeting strategy is now followed by H&M. Discuss the advantages and disadvantages of the strategy for H&M. [3 points] Describe how H&M brands (H&M, &Other Stories, COS) are positioned to compete with Inditex. Produce a positioning map for H&M in comparison with Inditex. [3 points]

Question 1: What are four market target strategies? 4 market target strategy are Undifferentiated: no segmentation, same basic product for everybody Differentiated (segmented): have different products to target different segments Concentrated (niche): focus on one or two small segments Micro marketing: target to individual customers

Which target strategy is now followed by H&M Now you need to scan the text: “H&M apparel chain made its name churning out fun, cheap fashions - rock-bottom-priced goods H&M is testing a higher-priced accessories chain called & Other Stories - affordable luxuries - in a different store.” H&M has added about 150 outlets of its upscale COS”  H&M company is having different stores to targets at different target segments  H&M using differentiated targeting strategy

Discuss the advantages and disadvantages of the strategy for H&M Higher sales, larger number of customers Stronger position in the market to compete with Inditex  larger, more stable market share in apparel market Disadvantages: Expensive: Need to build different stores for H&M, & Other Stories, and COS. Need to promote the brands separately  Suitable for H&M as it is a big company and need to expand to compete with Inditex

Question 2 Describe how H&M brands (H&M, &Other Stories, COS) are positioned to compete with Inditex Position is how customers think about the product/brand. Now you need to scan the text: “H&M apparel chain made its name churning out fun, cheap fashions - rock-bottom-priced goods H&M is testing a higher-priced accessories chain called & Other Stories - affordable luxuries - in a different store.” H&M has added about 150 outlets of its upscale COS”  This is the position of each brand.

Produce a positioning map for H&M in comparison with Inditex. Positioning Map: the map about how products/brands are position against competitors, usually drawn on important attributes Now scan the text for Inditex positioning strategy: “With the new chain, H&M is following Inditex’s strategy. The Spanish company has expanded with the Massimo Dutti chain, oriented toward urban professionals, and seven other brands. In 2008 it opened Uterqüe, its own fashion and accessories chain, which has 92 stores and posted 9 percent sales growth last year. Zara made up 66 percent of sales and 29 percent of stores for Inditex.”

Did you notice? H&M Brand is directly compete with Zara COS is quite similar to Massimo Dutti &Other stories is heading with Uterque

This is an example of position map for H&M and Inditex Luxurious style Casual style Low price High price

Final words: You need to remember the key terms, be able to explain the term in your own words, Find realistic examples to help you understand and remember the key terms. Don’t let the long case study confuse you, focus on the questions.

The final exam is at the same format as this midterm test Please note The final exam is at the same format as this midterm test