Exam-style Questions: Marketing Planning

1. a) Define price elasticity of demand and explain why some products are price-elastic and other products are price-inelastic.

b) Outline the factors which may influence an organisation's pricing policy.

(Marks available: 10)

Answer

Answer outline and marking scheme for question: 1

Give yourself marks for mentioning any of the points below:

a) Price elasticity of demand is the sensitivity of quantity demanded to changes in price.

Price elasticity depends upon the characteristics of the product.

Availability of substitutes, proportion of income spent on the good are factors which with determine the degree of price elasticity.

(5 marks)

b) The factors which may influence the organisations pricing policy:

Whether the product is new.

The competitiveness of the market.

The ability to discriminate between different groups of consumers.

(5 marks)

(Marks available: 10)

2. a) What is meant by a random sample.

b) A marketing manager's experience has been that between 10% and 20% of women purchase a new brand of cosmetics within one month of its introduction.

She wishes to estimate, by sampling, the percentage of women who will purchase a particular new Brand X, within one month of its introduction.

How large a random sample should be taken if she wants the estimate to be at 95% confidence level.

(Marks available: 10)

Answer

Answer outline and marking scheme for question: 2

Give yourself marks for mentioning any of the points below:

a) Random sample, everyone is likely to be chosen.

b)





= 1600 approx.

(Marks available: 10)

3. a) What is the product offered by a lottery firm such as Camelot?

b) How might a lottery firm optimise its marketing mix?

(Marks available: 20)

Answer

Answer outline and marking scheme for question: 3

Give yourself marks for mentioning any of the points below:

(a) "A lottery ticket" is the straightforward answer, but a thoughtful candidate may mention some of the characteristics associated with the product:

The excitement at the possibility of winning.

The pleasure of staking a small sum linked with numbers of special significance to oneself.

The feeling of being party to a syndicate which buys several tickets each week.

(Max 10 marks)

(b) Candidates might do well to comment on the four headings of product, price, promotion and place. Camelot have done well to have a midweek draw and to have set the ticket price at £1, a sum which most people will "invest" without discomfort and to make tickets available in a multitude of shops so nobody has to go far to buy one.

Camelot have been fortunate to have free publicity in the televised draw and winner notification on the news.

Camelot have done well to emphasise the proportion of receipts that goes to charitable causes and the relatively low proportion that goes to administration: punters may feel they have a small chance of winning, but they are not throwing their money away.

(Max 10 marks)

(Marks available: 20)