Marketing Management and Strategy

BEM3041 RWA 100% Alternative Assessment replacing Group and Exam Elements
2021/2

Q1 part 1 (55 marks)
Explain why a product or service’s contribution (selling price minus variable cost) is an
important element in developing a marketing strategy, giving examples to illustrate your
answer. You can use any example including those covered in the module such as the
Strategist Simulation or any of the other case studies examined.

Q1 part 2. (45 marks)
Imogen, the brand manager for ‘Skinsoft’, was reviewing price and promotion alternatives for
her brand. She wanted to increase market share, but was unsure whether she should ask for
an increase in advertising budget or consider a price promotion.

The current volume, price, and cost summary for ‘Skinsoft’ follows:
Imogen thought she might be able to negotiate with her boss and secure either a temporary
10 percent price reduction, or an investment of an incremental £150,000 in advertising.
a. What absolute increase in unit sales and revenue would be necessary to recoup the
incremental increase in advertising expenditure?

b. What increase in absolute unit sales and revenue would be necessary to maintain the
level of total contribution if the price is reduced by 10 percent?

c. Which alternative would you recommend to Imogen? Explain your choice.

Q2 Part 1 (40 marks).
Explain the difference between Exis3ng, Latent and Incipient Demand, giving real examples in each
case. (40 marks)

Q2 Part 2 (60 marks).
What role does market research play in helping companies beDer sa3sfy each form of demand. Give
examples to illustrate your answer. (60 marks)

Q3.
Hendrix Ltd have just developed a new component, an ‘axis’ for use in large capacity flash drives. The
current component with which it would compete, costs £4 and its price in real terms has been
dropping at 7% per annum over the past three years.