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Cam 101: Principles Of Marketing Question Paper
Cam 101: Principles Of Marketing
Course:Bachelor Of Commerce
Institution: Kca University question papers
Exam Year:2009
1
UNIVERSITY EXAMINATIONS: 2009/2010
FIRST YEAR STAGE 1 EXAMINATION FOR THE DEGREE OF
BACHELOR OF COMMERCE
CAM 101: PRINCIPLES OF MARKETING (SATURDAY CLASS)
DATE: DECEMBER 2009 TIME: 2 HOURS
INSTRUCTIONS: Answer Question ONE and Any other TWO Questions
QUESTION ONE
The ‘Delicious’ Restaurant
After graduating with a Bachelor of Science Degree in Marketing from KCA University in 2008, Mike
got a job with Tumbo Enterprises as a Marketing Officer. The firm, a medium-sized concern was
located in a busy Nairobi’s industrial area and dealt with the buying and selling of grains and poultry
products. Most of the firm’s customers were small and medium-term hotels in Nairobi city. At times,
Mike would personally deliver the products at the buyer’s premises. Mike soon gained a lot of
experience and skills in business and felt the urge of becoming his own boss. In the year 2009, Mike
quit his job and set up a medium sized hotel; ‘Delicious’ Restaurant in the Nairobi’s busy industrial
area.
Mike is the General Manager of the hotel and his wife who is a CPA 1 holder is the Accountant. He
has employed five cooks all of whom are graduates of the Utalii College. There are twenty employees
entrusted with service operations. During peak periods, part-time employees are hired to ease the
situation. Business operations start at 5.00am and close at 11.00pm everyday.
2
The Customers
The restaurant carters for all types of customers both blue collar and white collar workers. The
reputation of the hotel has earned the hotel customers from the busy Nairobi city who either drive there
or order food to be delivered to their offices. Besides, the firm has also acquired special occasion
customers in terms of outside catering. The number of customers per day is approximately 400.
The Product
The hotel prepares all types of National dishes to cater for its client’s needs. The meals range from
breakfast to dinner.
Pricing Strategy
Mike has adapted a low pricing strategy which has earned him customer loyalty. On average, the firm
earns a 50% return on sales yearly.
Competitive Situation
Delicious Restaurant is surrounded by sixty competitors that range from small to medium-sized hotels.
It is estimated that about ten food kiosks and five medium-sized hotels are set up yearly. This trend is
due to the high rate at which businesses are set up in this location.
The Macro-environment
With the liberalization of the Kenyan economy, Mike has to work extremely hard to thrive in a
competitive environment. Franchising has become a common mode of business in the food industry.
With multi-national in the region, people from other origins, e.g. whites and the reds have come to
manage such enterprises. The government has lifted the VAT levied on food products while at the
same time, it has raised the minimum wage rates.
a) Conduct a PEST analysis for ‘Delicious’ Restaurant. (10 Marks)
b) Comment on weather the hotel is practicing the Marketing or the production concept?
(2 Marks)
c) Support your decision in (ii) above. ( 4 Marks)
d) Elucidate the Market targeting strategy employed at delicious restaurant ( 4 Marks)
e) The demand for the hotel services tend to fluctuate depending on the days of the month.
Explain the ways in which Mike would manage such demand levels using the Marketing mix
framework. (10 Marks)
3
QUESTION TWO
a) Give any FOUR reasons for the slow growth in sales of new products just after inception.
(8 Marks)
b) Give a detailed account of the major distribution strategies. (12 Marks)
QUESTION THREE
a) Differentiate between the introductory phase and Growth phase of the product life cycle
(10 Marks)
b) Explain the appropriate Marketing strategies to be used at the Growth Phase. (10 Marks)
QUESTON FOUR
a) Traditionally, price has operated as the major determinant of buyer choice. However Nonprice
factors have increased in importance over the years. Describe any six Factors
affecting price sensitivity (12 Marks)
b) Identify FIVE product related factors affecting the choice of distribution channels.
(8 Marks)
QUESTION FIVE
a) Describe the ‘consumer adoption process’ and highlight the stages involved in the process.
(12 Marks)
b) Discuss the factors have to be taken into account when commercializing a new product.
(8 Marks)
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