1. (TCO 1) Explain the of three types of marketing information. (Points : 22)
Answer – The three types of marketing information is listed and explained below
1. Recurring day to day information – This is the information that is needed for performing the
operational duties and for tactical decision making. Examples include the trends in car sales
for the past three months, or the lifestyles of the drivers, inventory in the warehouses etc.
based on which the company can make its operational marketing strategies
2. Marketing intelligence – This is the information that is relevant for creating the future plan
and strategy for the business and is developed from a variety of sources over a period of
time. Examples include new trends in the industry, competitive analysis of major
competitors etc.
3. Research studies – This is a third type of marketing information that is not recurring in
nature but is stored and filed in the organization and can be very useful if can be searched
and used when it is needed. This information can be used by multiple users in different ways
and for different purposes which were not originally intended.
2. (TCO 2) The international marketing research process is more complex than that of a
domestic research process. Please explain with examples. (Points : 22)
Answer – The international marketing research process is much more complicated than the
domestic research process because of the necessity to ensure construct, measurement, sampling,
and analysis equivalence before any cross cultural study is conducted. For example, when doing an
international marketing research process it may be necessary to create profiles of target customers
again as they would be different from domestic ones. It could be necessary to hire local researchers
who know the costs and methods that are workable in local markets, which can be a time consuming
and logistically complex task to undertake. It could also be necessary to make cultural adaptations
and understand or validate them with the help of local experts to ensure that findings are
consistent. Therefore due to all these extra considerations to be taken to examine the cultural
aspect, hire local people and appreciate it from a local point of view in the target geography, makes
the international research process more complex than a domestic research process.
3. (TCO 3) In determining a location for a convenience copying center, what kinds of
secondary data should be available for each proposed location? (Points : 22)
Answer – The data that is needed for making the decision on where to locate the copying centre is
critical as it would directly impact the attractiveness and ease of use of the business, and hence its
future revenues and profitability. Secondary data that would be useful to know for each proposed
location would be the number of people living within a given radius, the number of commercial
establishments, offices and schools close to the proposed location, information of competitors
already existing at the proposed locations and any the demographic and income profiles of the
people living in each of the locations. All this information could be used for evaluating attractiveness
of one location over the other and in making the final location decision.
4. (TCO 4) Provide examples where a product audit would be much more suitable. Provide
examples where a Nielsen store audit would be more useful. (Points : 22)
Answer – A product audit would be very useful in case of a product that has a lot of customer
complaints and issues and the company is losing sales and hence needs to do improve the product if
it wants to address these issues. In this case, a product audit will be very useful as it can be used to
find out if the product is able to achieve its functionality, what more is needed, what do customers
want, finding out issues to address all of which would ensure that the product could be made better,
and ensuring customer satisfaction.
A Nielsen store audit would be useful in a case where the management team of a large chain of
supermarkets is preparing for its future strategy and wants in depth information at a store level
about its stores and competitor stores, intelligence it can use in decision making. With the Nielsen
store audit, the company would be able to know how stores are doing across categories of products,
locations, types of stores and on key business metrics – all of which would be very useful to analyse
and use for formulating the next year’s business strategy.
5. (TCO 5) Explain the two types of consumer purchase panels. (Points : 22)
Answer – Consumer purchase panels are very useful to understand how purchasing activity of a
product or service over a period of time that could then be used for analysing many other things
such as product performance, effectiveness of promotions etc. The two types of consumer purchase
panels are
1. Home audit approach – In this the panel member agrees to permit an auditor to check the
household stocks of certain product categories at regular intervals. The panel member could also
save all used cartons, wrappers, and so on, so the marketing research auditor can record them.
2. Mail diary method – In this the panel member records the details of each purchase in certain
categories and return the completed diary by mail at regular intervals which can then be used by the
marketing research team for further analysis.
6. (TCO 6) Explain the observational method, both pros and cons. (Points : 22)
Answer – Observational method is a research technique that involves human or mechanical
observation of what people actually do or what events take place during a buying or consumption
situation. In this information is collected by observing people or process at work and is a very useful
technique for providing information on current behaviour.
Pros of the observational method includes
1. Help to identify problems and opportunities based on what is happening actually and hence
provides actionable insights
2. Very useful supplement to other methods as various attributes that can be useful - for
example during an interview the type, condition, and size of the residence, the respondent’s
race, and the type of neighbourhood is recorded – which would make the data much richer
3. Less expensive and very accurate method for collecting purely behavioural data such as instore traffic patterns or traffic passing a certain point on a highway system
4. Can be used where no other method is applicable. For example if one is doing on very small
children who cannot articulate their preferences or motives, the only way to study them
would be through observation
Cons of Observational Methods includes
1. Observational methods cannot observe motives, attitudes, or intentions, which sharply
reduces their diagnostic usefulness.
2. Observational methods are often more costly and time consuming, and may yield biased
results if there are sampling problems or if significant observer subjectivity is involved.
7. (TCO 7) Explain the practical problems encountered in using a sales response criterion for
budgeting and evaluation purposes. (Points : 22)
Answer – When one wants to use data for budgeting and evaluation purposes, they would want the
data to be as accurate as possible and where the data is an actual definite number rather than an
estimated probabilistic figure. This is because there could be decisions taken that would have
material impact and also decisions on future strategy which would be effective only if the supporting
and underlying data is effective. However, when using a sales response criterion, the data can be
based one estimates and extrapolation and there could be probabilities of possible sales which
makes the data not very accurate. In addition, the data needs to be collected from many sources
which could make the data unreliable and in some cases conflicting. These are the practical
problems encountered in using a sales response criterion for budgeting and evaluation purposes.
8. (TCO 8) What is a disguised question and when is it normally used? (Points : 22)
Answer – A disguised question is an indirect question whose true purpose or intention is not obvious
to respondents and is asked in an indirect or generic manner. The disguised question is investigative
in natured and can be framed in a clear or in a flexible manner. It is used to examine issues for
which direct questions may not elicit truthful answers, and hence an indirect approach is required. It
is useful in motivational research and also in finding out people’s attitude towards sensitive issues
which they may want to speak out openly.
9. (TCO 9) Define simple random sampling and systematic sampling, including an example of
use. (Points : 22)
Answer Simple Random Sampling - Simple random sampling is an approach in which each population
member has an equal probability of being selected. An example of simple random sample in use is
when there is a population of 100 employees, and 15 of them have to be picked at random to take
part in an employee focus group. For this, all the 100 employee names can be written and dropped
into a hat, with the contents of the hat being mixed thoroughly with 15 of them being picked at
random from the hat.
Systematic Sampling - Systematic sampling involves systematically spreading the sample through the
list of population members, thus ensuring that samples are collected from across the population. An
example of systematic sample is when there is a telephone survey being conducted with the
population form a telephone directory. Using a random number generator, a number is selected at
random, say 25, and then the person at number 25 on each page of the directory is selected for the
survey, thus ensuring that the all pages of the telephone directory are covered.
10. (TCO 10) Define penetration pricing. (Points : 22)
Answer –Penetration pricing is a pricing strategy based on the concept that average unit production
costs continue to go down as cumulative output increases. In this potential profits in the early stages
of the product life cycle are sacrificed in the expectation that higher volumes in later periods will
generate sufficiently greater profits to result in overall profit for the product over its life. In this, the
product is offered at a low cost, sometimes even below the cost price and holding the price constant
till the unit costs drop to produce a desired percentage mark-up, and then reducing price as costs fall
while maintaining the required percentage mark up . Penetration pricing is undertaken when a
company wants to drive volumes and increase market share.