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Mkt 602 Marketing Management Town Campus Question Paper
Mkt 602 Marketing Management Town Campus
Course:Masters Of Business Administration Marketing Management
Institution: Kca University question papers
Exam Year:2014
UNIVERSITY EXAMINATIONS: 2013/2014
EXAMINATION FOR THE MASTERS OF BUSINESS ADMINISTRATION
(MBA) MARKETING MANAGEMENT
MKT 602 MARKETING MANAGEMENT TOWN CAMPUS
DATE: AUGUST, 2014
TIME: 3 HOURS
INSTRUCTIONS: Answer Question One and Any Other Three Questions
QUESTION ONE (31 MARKS)
LOWES COMPANIES: BATTLING HOME DEPOT
The increasingly competitive battle for do it yourself (DIY) home improvement market have players
like Home Deport, Lowe’s, Builders Square, independent retailers and individual hard ware stores, all
trying to attract DIY baby boomers
HOME DEPOT
Home Depot helped stimulate the do it yourself markets rapid growth. Prior to Deport''s founding in
1978, father and son lumber yards and a few specialty distributors who sold primarily to contractors
and trades people who dominated the hard ware market. Home Depot opened the market to average
consumers, allowing them to buy the pieces for a home improvement project at one store.
Home Depot has become the world’s largest home improvement retailer and one of the 20 largest
retailers in the USA. As of 1997, it operates about 530 stores in the United States and 29 stores in
Canada. It has announced plans for its first international store in Chile.
The average Home Deport Store has approximately 103,090 square feet of indoor selling space and an
additional 20,000 to 28,000 square feet of outside garden centre space, including house plant
enclosures. The typical store carries 40,000 to 50,000 individual items and offers installation services
for many products. The company has 122,000 employees who it calls associates and prides itself on
high level of customer service its associates offer. Analysts give home depot high marks for its
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operational execution.
Home Depot targets DIY primarily although home improvement contractors and other professionals
are becoming increasingly important. To sustain its growth, the company will target the professional
segments, so as to expand its defined market from 140 billion dollars to 360 billion dollars. This will
be as a result of including property maintenance, heavy construction, building general contracting,
trade, and flooring sectors. In 1997, Home Deport purchased Maintenance, Ware House /America
Corporation, a direct mail catalog company that targets repair and remodeling pros. It is also installing
separate check out areas for these professionals and adding special products. The company is also
reducing the number of products it carries so as to focus on the bestselling items. Home Depot wants to
concentrate on home improvement products rather than be seen as the home solution, by offering a full
range of goods and services to home owners.
LOWE’S
Lowe’s has been in business since 1946 when the son of a dry goods dealer founded the company in
North Carolina. The company grew by selling lumber, tools and hard ware to contractors in the rural
south. In the 1980’s however Lowe’s began to cater to the retail consumer in an attempt to offset the
ups and downs caused by swings in housing starts. The company added luxury house wares and fixed
up its store fronts to attract women customers and to shift away from its contractor oriented format.
Chief executive officer Robert Tillman notes that men want to go into a store, get the item they want at
a good price, and get out. Women, he notes want a shopping experience and a welcoming atmosphere.
Lowe’s shift in emphasis was reasonably successful, but its business really took off in 1989. Lowes
observed Home Depot’s success with its superstore formats and decided to try its own version, a
45,000 sq. feet center with 2000 more items than its smaller stores. Lowe’s stores that time ranged
from 800 to 25,000 square feet. In 1995, the smallest store Lowe’s opened had 85,000 square feet and
its largest stores had 115,000 square feet. Although Lowe’s and Home Depots sell similar products,
Lowe’s sells dryers and washers , television sets, microwaves, refrigerators, stereos and VCR''S,
whereas most Home Depot stores do not carry these items.
As it has developed bigger stores, Lowe’s has significantly lowered its prices and moved to an
everyday low price strategy. Also like Home Depot, Lowe’s offers a low price guarantee. Many
analysts attribute Lowe’s success to its ability to lock up small rural markets.
Through 1995, 60% of Lowe’s new store activity was in its existing market. In 1996, the company
changed its strategy and announced that 80% of its expansion would be in new markets especially in
major cities. Lowe’s intends to open 60 or more stores per year. Lowe has about 60,200 employees.
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Tillman notes that 50% of do it your self-sales takes place in the top 25 urban cities and Lowe’s
operates in only one of these cities . Much of its expansion will be in markets already served by Home
Deports. By the end of 1997, about 119 of Homes Depot’s stores were competing directly with 106 of
Lowe’s stores. Lowe’s continues to see the do it yourself and contractor segments as its target market,
although contractor sales including builders of new homes and contractors who perform repairs and
remodel jobs for home owners, account for less than 20 % of its sales, down from 35% in just five
years.
Tillman indicates that Lowe’s competitive strategy will capitalize on three societal trends. He notes
that women have an increasing role in purchasing decisions and many of them actually do the
improvement work. Yet, he adds, most of the industry’s stores, advertising, and merchandising are
targeted to and managed by men. He also argues that baby boomers want less hassle, one stop
shopping, and someone they can trust to help with home improvement projects. Finally he notes that
generation X consumers don’t waste time shopping and are into convenience, trust and technology.
Maybe so, but America’s Research Group polled 800 consumers on the subject of large home
improvement centers. The company found that the chief complains were long check-out lines, too big
and too confusing stores, time wasted getting into and out of the stores, and parking lots, failure to
follow through on advertised items and lack of qualified help.
QUESTION ONE - Case Study (31 Marks)
Use the above case to answer the following questions:
a) Who are Lowe’s competitors and what strategies are those competitors employing? (10 Marks)
b) Discuss Porter’s competitive strategy that the company is using.
(10 Marks)
c) What competitive position does Lowe’s occupy?
(5 Marks)
d) What is Lowe’s central marketing problem?
(6 Marks)
QUESTION TWO (23 MARKS)
a)
The term marketing is one that is widely used and misused at the same time. To some, it has an
image of glamorous and exciting careers; to others it concerns the cynical exploitation of
consumers using a variety of means of persuasion. Give as detailed definition of marketing,
refuting the above argument.
b)
(11 Marks)
Typically, marketing has evolved through five significant stages. Discuss these stages, and at
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each stage bring out the relevant philosophy and give examples of how it is applied by
companies in the Kenyan market.
(12 Marks)
QUESTION THREE (23 MARKS)
Successful companies know the importance of constantly watching and adapting to the changing
environment. Discuss the macro environmental factors outside the company’s marketing environment
that may facilitate or hinder management’s ability to develop and maintain successful transactions with
its target consumers. Cite examples from the Kenyan market for each case.
(23 Marks)
QUESTION FOUR (23 MARKS)
(a)
Positioning is the act of a company’s offering and image to occupy a distinctive place in the
target market’s mind. Every marketer therefore needs to develop a distinctive positioning for
the target market. Select five companies and their respective products/services and discuss the
place they hold in the customers’ minds in the Kenyan market
(b)
(12 Marks)
Companies need to identify the level of product relevant to their specific target market. Using
your company products/services as examples, evaluate the various product levels and explain
characteristics at each level relevant to your target market.
(11 Marks)
QUESTION FIVE (23 MARKS)
a)
In-spite of challenges in its environment, markers must decide what combinations of
advertising, personal selling and other promotional tools will make the most effective
promotional program for the company. Determine factors to be taken into consideration when
deciding this mix.
b)
(12 Marks)
Analyze today’s challenges facing marketing managers (11 Marks)
QUESTION SIX (23 MARKS)
Using a fast moving goods company for your case, discuss the basis for segmenting both consumer and
organizational products.
(23 Marks)
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