HIGHER EDUCATION PROGRAMMES
Academic Year 2025:
January-June
Formative Assessment 2 (FA2):
Marketing Management 1
(HMKT130-1)
NQF Level, Credits:
5, 16
Weighting:
20%
Assessment Type:
Assignment
Educator:
D. Adams
Examiner:
D. Adams
Due Date:
2 May 2025
Total:
100 Marks
Instructions:
•
This paper consists of four (4) questions, consisting of essay questions.
•
It is based on Units 6-9 (Chapters 7-11) of your prescribed courseware.
•
All questions are compulsory.
•
Your assessment must be typed using the following:
o Font: Arial
o Font size: 12
o Line spacing: 1.5
•
A Copyleaks Report will be issued via ColCampus once the assignment is
submitted. Please ensure that you follow the correct steps when uploading your
assignment, to ensure that the Copyleaks Report is correctly issued. You
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should be working towards a similarity/plagiarism score of 30% or less.
Currently, no marks will be deducted for a similarity/plagiarism score that
exceeds 30%.
Learning Outcomes Assessed:
•
Explain the nature and relevance of customer satisfaction and loyalty in a
marketing context by emphasising the need to measure customer satisfaction.
•
Identify South African legislation that can have an impact on marketing
decision-making.
•
Describe bases commonly used to segment consumer markets.
•
Describe six marketing–management philosophies and their role in the
evolution of marketing thought.
•
Discuss the nature of marketing’s external environment and explain how it can
affect a firm's marketing efforts.
•
Identify the types of consumer buying decisions and discuss the significance of
consumer involvement.
2
•
Advise a firm on which competitors to attack and which to avoid.
•
Distinguish between the four levels at which competitive activity can occur.
•
Contrast the various alternative strategies for selecting target markets.
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Question 1
[33 Marks]
Read the Starbucks extract below and answer questions 1.1 to 1.3 that follow.
Starbucks - Our Company
Our story begins in 1971 along the cobblestone streets of Seattle’s historic Pike
Place Market. It was here where Starbucks opened its first store, offering freshroasted coffee beans, tea, and spices from around the world for our customers to
take home. Our name was inspired by the classic tale Moby-Dick, evoking the
seafaring tradition of the early coffee traders.
In 1982, Howard Schultz joined Starbucks and was captivated by the coffee. After a
trip to Milan in 1983, he was inspired by the Italian coffeehouse culture and returned
to Seattle to bring that experience to Starbucks. By 1987, Starbucks transformed
from a store selling coffee beans into a coffeehouse, symbolised by the change from
brown aprons to green ones. Starbucks expanded rapidly, opening in Chicago,
Vancouver, California, New York, and internationally in Japan (1996), Europe
(1998), and China (1999). Over the next two decades, Starbucks grew into a global
brand, welcoming millions of customers each week.
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In everything we do, we are always dedicated to Our Mission: With every cup, with
every conversation, with every community - we nurture the limitless possibilities of
human connection.
It takes many hands to craft the perfect cup of coffee – from the farmers who tend
to the red-ripe coffee cherries to the master roasters who coax the best from every
bean and to the barista who serves it carefully. We are committed to the highest
standards of quality and service, embracing our heritage while innovating to create
new experiences to savour.
We like to say that we are not in the coffee business serving people but in the people
business serving coffee. Our employees – who we call partners – are at the heart of
the Starbucks experience. We are committed to making our partners proud,
investing in their health, well-being, and success, and creating a culture of belonging
where everyone is welcome.
We Believe in the Pursuit of Doing Good As it has been from the beginning, our
purpose goes far beyond profit. We believe Starbucks can and should positively
impact the communities we serve.
We aspire to be people-positive – investing in humanity and the well-being of
everyone we connect with, from our partners to coffee farmers to the customers in
our stores and beyond.
We strive to become resource-positive – giving back more than we take from the
planet. We are working to store more carbon than we emit, replenish more
freshwater than we use, and eliminate waste.
We know we can’t do it alone. It takes all of us.
Source: Starbucks. [website]. Our Story. Retrieved from:
https://www.starbucks.com/about-us/ [Accessed 18 October 2024]
1.1.
Referring to the information provided in the extract, identify the five (5) key
prerequisites that need to be met for a successful repositioning exercise. In
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your response, use examples from Starbucks’ story to illustrate how the
company has effectively met these prerequisites.
(5x3 = 15 marks)
1.2.
In the service industry, particularly within coffeehouse chains like Starbucks,
customer service quality is a key driver of customer experience (Examiners
statement).
With this in mind, provide practical examples of how Starbucks can incorporate
the six (6) characteristics of well-trained personnel—competence, courtesy,
credibility, reliability, responsiveness, and communication—into its daily
operations to improve customer satisfaction and sustain a competitive
advantage.
(6x2 = 12 marks)
Hint to students: Ensure that specific practical examples from Starbucks' operations
are provided.
1.3.
Below is an image of a Starbucks Verismo coffee machine. Based on your
understanding of consumer product classifications, identify this product's
category and provide a well-structured justification for why the Starbucks coffee
machine fits into this category.
(2 marks [identification] + 4 marks [justification of choice] = 6 marks)
Source: Amazon. (n.d). Starbucks 7.62111E+11 Verismo System, Coffee and
Espresso Single Serve Brewer, Black [Image] Retrieved from
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https://www.amazon.com/Starbucks-Verismo-System-CoffeeEspresso/dp/B01M9E8L73 [Accessed 19 October 2024]
Question 2
[20 Marks]
Read the extract below and answer question 2.1, which follows.
Case Study: Blockbuster
Chris Hope’s examination of Blockbuster’s downfall illustrates the risks established
businesses face that fail to evolve with changing consumer needs and market
conditions. Once the leader in video rentals, Blockbuster ultimately could not sustain
its dominance due to a lack of foresight and adaptability in the face of rapidly shifting
technological and consumer trends.
Founded in the 1980s, Blockbuster quickly became a popular video rental chain
recognised worldwide and synonymous with home entertainment. By the late 1990s,
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it had a global footprint of thousands of stores. However, as new technologies
emerged, this large physical presence—and a revenue model heavily reliant on instore late fees—became liabilities.
Blockbuster’s downfall was driven by an inability to recognise the internet’s potential
to reshape the entertainment industry. While Netflix, a small competitor in the late
1990s, embraced the shift to digital and pioneered a subscription-based model
without late fees, Blockbuster doubled down on its brick-and-mortar approach. The
company’s focus on immediate revenue from fees clouded its view of longer-term
customer satisfaction and convenience, hindering its response to changing
consumer expectations.
Netflix capitalised on the increasing demand for easy access to entertainment,
innovating with a model that valued convenience and flexibility. In contrast,
Blockbuster dismissed Netflix’s subscription model as a temporary trend and
underestimated the power of digital transformation. Blockbuster’s lack of investment
in digital infrastructure limited its ability to transition into the growing online streaming
market. By the time Blockbuster attempted to pivot, Netflix was already wellestablished in digital streaming and held a dominant market position.
Ultimately, Blockbuster’s approach to measuring success hindered its evolution.
The company continued to focus on short-term financial performance rather than
the broader shifts in consumer behaviour. This rigid perspective left Blockbuster
unable to detect and respond to critical trends, culminating in mounting debt and
revenue decline. In 2010, Blockbuster declared bankruptcy and closed hundreds of
stores, marking the end of an era for the video rental giant.
Blockbuster’s story serves as a reminder for businesses in any industry: staying
competitive requires both a commitment to understanding new consumer
preferences and a willingness to adapt strategies accordingly. Continual
assessment and agility in strategy are essential in an ever-evolving business
landscape.
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Source: Future Learn. [website]. Blockbuster. Retrieved from:
https://www.futurelearn.com/info/courses/growth-strategies-for-a-newbusiness/0/steps/379774 [Accessed 19 October 2024]
2.1.
Considering the provided extract, discuss the four (4) stages of the product life
cycle and apply each stage to the Blockbuster case study. Provide detailed
examples for each stage to illustrate Blockbuster's position within the product
life cycle.
(4x5 = 20 marks)
Question 3
[17 Marks]
Read the scenario below and answer questions 3.1 and 3.2, which follow.
Student Hub
Samantha is the marketing manager at Student Hub, a retail store catering to
university students. One of the store's popular products is SmartNotes, a digital
notepad designed to help students take notes and sync them across their devices.
With the increasing demand for SmartNotes, Samantha needs to make strategic
decisions about distributing the product effectively to reach students at the right time.
*Fictitious scenario
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3.1.
To help Samantha make informed distribution decisions for SmartNotes at
Student Hub, identify and discuss the three (3) basic levels of distribution
intensity. Additionally, explain how each distribution strategy could be applied
to meet student demand for the product efficiently.
3.2.
(3x4 = 12 marks)
Samantha is considering adding a new product to Student Hub to meet the
growing needs of university students. While SmartNotes has been successful,
Samantha is uncertain about introducing a new product.
In light of this, list the key reasons why introducing new products would benefit
Samantha and Student Hub.
(1x5 = 5 marks)
Question 4
[30 Marks]
Read the scenario below and answer questions 4.1 and 4.3 that follow.
A Case Study of 'Relax & Revive' Spa
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"Relax & Revive" is a newly established spa located in a busy urban area. The spa
offers various services such as massages, facials, and skincare treatments. The spa
wants to increase its market presence and build long-term customer relationships.
The management team is focused on reaching out to potential clients and ensuring
they have a positive first impression of the spa.
*Fictitious scenario
4.1.
Using the six (6) steps that propel consumers in the purchase-decision
process, explain how "Relax & Revive" can guide potential customers through
each stage effectively.
4.2.
(6x3 = 18 marks)
"Relax & Revive" spa wants to expand its reach and build customer
relationships in a competitive urban market. Explain how the spa can use the
following four (4) non-shop retailing methods - telephone retailing, direct-mail
catalogues, interactive online retailing, and internet retailing - to engage
customers and increase market visibility. Provide relevant examples for each
method.
(4x2 = 8 marks)
Note to students: Despite seven (7) non-shop retailing methods, you are only
required to explain the four (4) non-shop retailing methods mentioned in the question.
4.3.
Franchising offers many advantages to businesses looking to expand. Explain
four (4) advantages that franchising could provide to "Relax & Revive" spa in
its growth strategy.
(4x1 = 4 marks)
[TOTAL = 100 MARKS]
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