Principles of Marketing

Tutorial Handbook

2021-2022

Semester Two

PLEASE NOTE THE FOLLOWING IMPORTANT POINTS:

 Tutorial attendance will be monitored

 The tutorial programme is run on a weekly basis (Week 1 to Week 12)
 Most tutorials require individual/group preparation – preparation
prior to the tutorial is compulsory
 YOU ARE NOT ALLOWED TO CHANGE TUTORIAL GROUPS
 Weekly Tutorial Tasks:

Tutorial 1: Getting to know your Seminar Group & What is Marketing?

Tutorial 2 (Linked to Lecture 1): The Foundations of Marketing

Tutorial tasks:
1. Choose a product which you have purchased recently and conduct a detailed marketing mix
analysis for your chosen product.

2. With the same product, think about what adds value to the consumer (think about pleasing,
delightful experiences, customer services, product extensions).

3. In pairs, choose three different products within the same market and explain in detail how each
one is trying to gain a competitive advantage over the others.

Tutorial 3 (Linked to Lecture 2): The Marketing Environment

Tutorial Tasks:
1. In groups:
a. Identify why PESTLE and SWOT analyses are used by companies.
b. What are the differences between the models?
c. Give a scenario as to why a company might use each model (Hint – internal and external
environments).
d. Conduct a PESTLE and SWOT of a Product/Service of your choice.

2. Choose your Product/Service for the 1st piece of Coursework (due in week 6 of term) and agree it
with your seminar tutor.

Tutorial 4 (Linked to Lecture 3): Market Segmentation, Targeting and Positioning

Tutorial Task: From Market Segmentation to Marketing Mix – Fitness Centers

Making friends: The “making friends” market segment sees fitness centers as an opportunity to mix
with people with similar goals and lifestyles and to make new friends.
Losing it: The next market segment is “losing it”, which refers to the goal of losing weight.
Taking shape: The “taking shape” market segment consists of consumers who are primarily interested
in improving the look of their body.
Peak performers: Consumers in the “peak performers” segment are highly disciplined and self-
motivated individuals when it comes to their health and fitness. They are highly focused upon achieving
their personal best.
Health requirements: Consumers in this market segment attend a fitness center because they are
trying to improve their health, strength, or because of “doctor’s orders”.
Sports focus: This segment are those consumers who are heavily involved in sport and use a fitness
center to help improve their fitness in order to participate in their chosen sport.
Discussion Questions
1. Review the above market segments and identify which segments would make attractive target
markets for fitness centers. Why do you think these would be the most attractive target
markets?
2. Using your list of target market/s, identify how the fitness center should be structured (in terms
of facilities, equipment, classes, design, staff, location, and so on) to meet the needs of your
target market/s.
3. Do you think would be possible to target multiple target markets with the one fitness center, or
should you look to specialize and target one customer segment only? Why?
4. Briefly describe the defining characteristics of product A’s market segment (e.g. demographic,
psychographic, geographic or behavioural).

Tutorial 5 (Linked to Lecture 4): Understanding Customer (Buyer) Behaviour

Tutorial Tasks:
1. Consider your last low involvement and high involvement purchase.
Note down the factors, which influenced the decision to purchase both products.

Assemble your ideas into the following headings;

 Individual influences
 Situational influences
 Group influences
 Marketing mix influences

2. Purchasing Decisions

Purchase Decision Possible Players and Roles Explanation

A new family car   

The weekly groceries at

the supermarket   

An overnight movie
rental

Sky TV subscription

A set of saucepans
 QUESTIONS
1. Start by completing the above table for the product purchase decisions.

2. Do you think it is important that firms need to understand the various roles in the family
decision making process? Why?

3. Outline, with some examples, how this knowledge/understanding would influence a firm’s
marketing activities.
Tutorial 6 (Linked to Lecture 5): Marketing Research and Information

Tutorial Tasks
ACTIVITY/TASK
Clive, the owner of the Little Italy Pasta company, was still not happy. He had recently sacked Mitchell
(who had since started a business in competition with Little Italy). He had given up using consultants and
had instead hired Sue-Anne as his new marketing manager. Clive was convinced that he needed a new
marketing plan to achieve the $3m per annum profit he wanted within the next two years. Clive did not
plan to work forever and wanted to build his fortune fast. As part of her contract agreement, Sue-Anne
was able to establish her own marketing department, consisting of: Prue, Astrid and David.

The following is an excerpt of their most recent marketing meeting:

Sue-Anne: Astrid, what were the key findings of the market research with our customers?
Astrid: The research showed that we have established good customer loyalty. Around 60% of our
customers buy our products on a regular basis.
David: What about non-customers?
Astrid: We’ll, the figures aren’t as strong there. We have a less than 5% unprompted awareness and
less than 10% prompted!
Prue: That’s surprising after all the advertising that was done last year. But hang on – didn’t I see a
brand awareness figure of 25%?
Sue-Anne: That figure included both customers and non-customers, so the number’s a lot lower when
we look at non-customers only.
David: So is the sales growth a result of increased brand awareness or growing loyalty of existing
customers?
Prue: It’s probably interrelated. A higher level of advertising will lead to increased loyalty, because the
advertising is more noticeable by those customers, which then reinforces their initial purchase decision.
David: So what you’re saying is that we need to continue the advertising.
Sue-Anne: Look the keys to success are going to be distribution, brand, and product range and quality –
in that order. Therefore, a level of advertising is always going to be important for brand building.
Astrid: But how do we improve distribution? We already sell to 70% of suitable restaurants, cafes and
delicatessens in the main cities.
David: Well that gives us a great track record to expand to nationally.
Prue: Plus we can sell more product varieties to those existing stores. Like the new frippaloni – our own
pasta style to the world.
Sue-Anne: Sure, we have lots of good ideas, but they all cost money. Each new product line will cost
around $500,000 to bring to market. Geographic  expansion is at least $1m per area to set up, and then
another $500,000 per year to maintain.
David: And on top of those costs, we need to combat Mitchell’s new pasta company. It’s a sure bet that
he will be targeting our retailers, because he knows many of them.
Sue-Anne: Well, we’ve got to make sure that our retailers have a reason to stay with us – namely a
broad product range, a trusted name, loyal customers, and good trade promotion deals.

Their recent financial figures are as follows:

  Year Year 1 Year 2 Year 3
 
Sales ($m’s) 7.4 8.2 11.0

Market share 6.1% 6.5% 7.9%

COGS ($m’s) 2.2 2.4 3.2

Marketing ($m’s) 1.4 1.5 3.7

Fixed Costs 2.6 2.7 2.9

($m’s)

Pre-tax profit 1.2 1.6 1.2

($m’s)

Brand awareness 16% 17% 25%

The marketing expenditure for Year 3 was:

Marketing Salaries $500,000

Advertising $2,000,000

Trade Promotions $750,000

Sales Force
$450,000
Incentives/Bonuses

TOTAL $3,700,000

QUESTIONS
1. There are several research results provided in the above discussion, along with some financial
information; which particular metrics do you consider to be the most important? Why?
2. Given the case information, what would you recommend to the firm? Are they tracking well, or
do they need to revise their strategies approach?
3. What other information would you need to better advise this firm?

Tutorial 7 (Linked to Lecture 6): Integrated Marketing Communications

Tutorial Tasks – Section A

 
1. Make a list of all available marketing communication tools. Using the list, select the most appropriate
IMC mix for:
 A new hairdresser in a busy shopping mall
 A large firm introducing a new line of candy bars
 A charity launching its pre-Christmas drive
 A 5-star hotel on the beach, starting to offer business conference services

2. How similar/different is each of your IMC plans?

3. Other than to assist with communication, in what other ways would the choice of IMC (media choice
and message) affect the brand’s/firm’s positioning?

Tutorial Task – Section B

Watch the iconic Coca Cola Christmas ad at: (http://www.youtube.com/watch?
v=e1CRvIj7R6k&feature=player_embedded#!)
1) The Coca-Cola Company began its Christmas advertising in the 1920s with shopping-related ads
in magazines like The Saturday Evening Post. For many people in the UK, the appearance of Coca
Cola’s iconic Christmas advert marks the beginning of the festive season. How do these annual
television ads make you feel? What makes them so successful? Can you think of any other
brands who successfully use Christmas to advertise their products in a similar way?
2) Get your tutor to play other adverts to you. What emotions do you feel when you watch them.
What does marketing achieve through this medium?

*Launch Mystery Shop*

Tutorial 8 (Linked to Lecture 7): Services Marketing Management

Tutorial Tasks – Task A

1. You are required to complete a mystery shop in two contrasting service environments (retailer,
restaurant, beauty salon, bank, travel agent etc). Using the recording tool designed last week,
you must monitor and evaluate the customer service your experience in the two service
providers.
Prepare a presentation of your mystery shop findings to deliver in the tutorial using the
following headings:
 Main findings from regarding the customer service experienced at each service provider
 Examples of good/bad customer service
 Analysis of the services marketing mix elements (People, processes, physical evidence)
 Recommendations for improvement to the customer service at each service provider

Task B
Services have a number of distinct characteristics (see list below) that create a unique set of marketing
challenges for services marketers. Your task in this exercise is to review the following statements to
identify its particular distinguishing service characteristic.
 
ACTIVITY/TASK
a) “I’m so disappointed with the restaurant last night. We went there for the first time a few weeks
ago and it was fantastic, but last night the food was overcooked and the service was very slow.
b) “The plane back home was only half full – that’s a lot of lost income – they should work harder
to fill those seats”
c) “I offer a one hour free consultation first – for us both to see if I’m the right lawyer for you.”
d) “I want my hair cut long on one side, short on the other, and I want it to be colored purple.”
e) “Our (bank) customers, who have less than $50 in their accounts, really aren’t worth having!”
f) “It’s so hard to choose an accountant, it is so difficult to know what you’re really going to get”
g) “I’m never going back to that shop – all the staff are either rude or lazy.”
 
QUESTIONS
1. Connect each of the above statements with a service characteristic (using the following list).
 i. Services are harder to evaluate (before and after purchase)
ii. Services are more variable
iii. Services are more perishable
iv. Services can be more customized
v. Services are sold before production
vi. Services can be unprofitable
vii. Services are people reliant
2. Why is it important that service marketers understand these characteristics? How does it affect
their marketing activities?
3. How does the extended marketing mix (the 7Ps) relate to the above list of characteristics?
4. Which do you think is harder to market; goods or services?

Tutorial 9 (Linked to Lecture 8): Pricing

Tutorial Tasks-Task A
In this exercise, you are presented with eight product alternatives, as you would find in a supermarket
environment. As you will see, price is simply one aspect of the consumer’s perception of value. So review
the following list of pasta sauces, which one would you buy?

ACTIVITY/TASK
Brand Positioning/Marketing Price

The leading brand name – heavily advertising on TV for 20 years – well

A $3.99
known and recognized

B Imported from Italy – authentic Italian pasta sauce $3.99

A fairly well known brand, normally retails at $3.80 – on special for one
C $3.39
week only

D A well-known brand that gives ALL profits to charity $3.25

E Locally-made pasta sauce – ‘help support the local community’ $2.99

F An unknown brand $2.49

An unknown brand with an unusual flavor of sauce – not offered by the

G $2.99
other brands

H The supermarket (private label) brand $2.69

 
QUESTIONS
1. Which one pasta sauce would you purchase? Why
2. How does your selection compare to your fellow students?
3. Therefore, how important was the role of price in the overall purchase decision?
4. Considering the popular choices, what aspects of the product’s positioning appears to be the most
effective in generating sales?

TASK B
Spring water is a product that has become popular over the past 10-15 years or so. During the growth
phase of the market, a number of businesses were set up to deliver ‘bulk’ (large bottle) spring water
directly to offices, businesses, and homes. consumer’s homes. This case looks at a home-
delivered spring water firm that used door-to-door sales (canvassing) as their main promotional
method. This approach was adopted to ensure that their customers were all located in close
geographical proximity (in order to reduce delivery time). One of the firm’s three owners believes that
by using this promotional method the firm can set its price at a premium level, as consumers are not in
a position to compare prices. He said:
 “These consumers are not in a supermarket and cannot compare prices. We turn up at their door
unexpectedly and say we can deliver spring water in bulk to your home at a good price, which
compared to their normal small bottle purchase that sounds like a great deal. Therefore, I think
we should charge $7.50 for our bottles.”

 However, the second owner did not want to be so aggressive on price. According to her:
 “I think that we should under-cut the market. Currently, the cheapest bottle on the market is $5,
so let’s go out there with at a $4 price. At that price we will win a lot of customers. Then, later
on, we can price the increase every six months or so – first to $5, then to $6, and finally to $7.
That means that we’ll have lots of customers all paying $7 per bottle.

The third owner wasn’t sure about either of the first two approaches. His view was:
 “I think that we should be a price follower. We know that the market is willing to pay between
$5 and $6.50 per bottle. Personally, I think it would be risky to price outside that range. We don’t
know whether the market will pay more, and we also don’t know if our customers will be happy
with a series of price increases.”
 
QUESTIONS
1. Given the pricing views of the three owners, what price would you set? Why?
2. Would it be feasible to start by under-cutting the market to grow market share and then
increase prices to the captive customer base? Why/why not?
3. Other than competitor pricing, what other factors should the management team take into
account when setting their prices?

Tutorial 10 (Linked to Lecture 9): Product and Brand Management

Tutorial tasks:
Task 1
Choose a brand of trainers that you think incorporate different ‘core’ products and…
o Define the core, tangible and augmented product for the brand
o What might the ‘potential’ product look like in the future?

Task 2
ACTIVITY/TASK
Stirling and Marshall first met when studying marketing at university. Both were ambitious and had
plans to run their own businesses. Over time they decided to start a business together. Initially they
spent many months discussing what sort of business they should go into. Obviously they considered
various service businesses, like consulting, business colleges, and various internet-based offerings.
However, it was eventually an opportunity in the children’s toy market that appeared to have quite
good potential.

They had observed that parents were becoming increasingly time-poor and, as a result, had less time to
spend with their children. And is order to compensate for this, the parents typically spent large
amounts on their children to entertain them. Obvious examples were the success of PlayStations, iPods,
PC’s, and even mobile phones. Stirling simply stated: “These are big ticket items. The level of spend on
children is dramatically increasing – and this trend should continue. Parents are simply looking for
things to keep their children entertained for long periods of time – and the only solution is expensive
electronic gadgets. If we can bring some alternative games and toys to the market, then we should fill a
large market need and also hit a competitive gap.” Needless to say that Marshall also felt that this was
the most viable opportunity that they had so far considered – and hence “S & M Toys” (named after
their initials) was born.

Let’s do some research?

Having set the direction for the business, the next step was to identify what products they could bring
to the market. Not having children of their own, they called upon the expertise of their fellow student
Majdi, who was a father of four young children. Through a series of discussions over coffee, various
possible ideas were canvassed, such as:
 Talking books that teach languages. That is, touch a picture in a book and it says the word in
different languages (whichever one you want to learn),
 An interactive doll that can actually have conservations with the child. That is, some sort of
smart logic that allows it to make sensible responses (somewhat like the ‘help’ function with
software), and
 A board game that you can play by yourself (but not on a PC). For example, you play
 Monopoly against pretend opponents that are built into the ‘electronic’ circuits of a
sophisticated game board.

Although there were probably a few good ideas thrown around, both Stirling and Marshall felt (without
doing any formal evaluation) that they really hadn’t stumbled across a really strong product concept.

The break-through
A few weeks after this first meeting, the S & M team met up with Julia and Thomas, also students from
their university classes. “I like the S & M name”, said Thomas, “It’s really suitable for the kid’s market.
It’s a sort of a play on M&M’s, which is a well-known chocolate. Therefore, you might be able to
leverage some sort of connection there, to help launch the brand”. “Yeah, good idea – didn’t think of
that connection. We might be able to do something with it down the track”, said Marshall. Launch
plans were one thing, what was lacking now was some strong product concepts, and that’s where they
thought Julia and Thomas might be able to help. After discussing their various ideas to date, and
highlighting that they just felt that their ideas were just too technical (which was not their expertise),
they admitted they were becoming a little concerned whether they could actually take advantage of
their chosen opportunity. “Just an idea”, Julia said after a few moments silence, “But aren’t most of
your ideas targeted at smart kids?” Stirling and Marshall nodded and told her that they believed that
parents would spend more money on ‘gifted’ children, and even most of the private educational
services appeared to be targeted at smarter kids. “But aren’t you guys after a gap in the market?
Maybe you should look at non-smart kids instead!” said Thomas. “Look, these aren’t the right words,
but something like ‘simple toys for simple kids’ is the right approach”, said Julia. They all laughed. It
wasn’t the right words, but the idea sure seemed right! After that breakthrough, the group of four
quickly went into a productive ad hoc brainstorming session. Some of the ideas generated included:
 Scrabble with extra vowels and zero points for hard letters,
 Table tennis tables with bigger racquets and bigger slower balls, and
 Ugly dolls (to make ugly kids feel beautiful).
Let’s NOT roll the dice
However, the one idea that seemed to stand out, as the one to go ahead with was a board game with
an electronic dice system. This dice system would be programmable, so that selected players would
always get better rolls of the dice. This would mean that the ‘selected’ child would win more often
(rather than parents pretending to lose). This would, of course, be more fun for the child and they
would want to play longer and more often. What was especially exciting about this concept was that it
lent itself to a range of board games. So once they had the technology developed, it should be a simple
manner to modify the programming for different styles of games. “OK Stirling, let’s get some customer
feedback. Let’s organize a quick survey. We can do it ourselves and just stop parents, say outside s
supermarket stire, and say we are doing a survey for uni”, said Marshall. One week later they were in
the field with their questionnaire. They did their best to explain their concept as follows:
 This board game allows for children of different ages to compete on an equal basis both amongst
themselves and against adults. This is possible because of a simple electronic dice system that will give
better dice rolls to selected players. A total of 5 settings are available, thereby enabling children of
different playing ability to have the same, or a better, chance of winning.
After they managed to interview 50 respondents, they decided that they had enough information. It
was actually a lot harder getting the interview than they had imagined. They tried to approach people
with children, but most said they were too busy, or it was too awkward with the kids running around.
The survey outcomes were quite encouraging. While only 5% said that would definitely buy and 30%
said that they would probably buy.
The main reasons parents stated for NOT buying the game was that it would be:
 “unfair”,
 “cause more fights among the kids”,
 “too confusing”,
 “always needing batteries” and
 “more fun rolling your own dice”.
But these negatives were ignored,  “About 1/3 of parents will buy this game – that’s a strong result”,
they concluded, “Let’s move on to the next step”.

Making it happen
Their next step was finding a company who could manufacture a system device. Marshall knew
someone who could write the software program. Apparently, for a simple ‘race’ board game (where the
object was to get around the board first), this was a very simple program. All you would need would be
to key in number of players and their individual ‘difficulty’ level. And provided no-one ‘missed-a-turn’,
the ‘weaker’ players would get consistently higher numbers on the dice. After a few weeks of phone
calls and emails, they finally found a factory in China that could produce the electronic dice system for
$3 per unit. They had already worked out that it would be around $5 per unit to produce a simple ‘race’
game (with board, pieces, instructions, and box). With import to Australia, the total unit cost would be
somewhere around $10 per unit. That seemed quite good. An electronic’ style game typically retails for
around $50-$60, so there is plenty of margin to cover costs.

What’s in a name?
The S & M team now turned their attention to the product launch. They needed a good brand name – it
needed to be simple and clearly communicate the game’s unique design and benefits. They considered
“Handicap” (but thought it wouldn’t be politically correct), “Cheater” (considered too negative), and
“Bias” (too confusing). Finally they agree on “Head Start” – obviously they still had to check whether
they could register this name. If that was unavailable, they might just call it the S & M game instead.
Once they had the name, they started looking at packaging design, board layout ideas, how to pitch the
PR, a list of benefits (for the outside of the box) and so on.
Cold, hard reality!
Things were going pretty well, although a bit slower than anticipated. Then they got an email from the
factory in China. They want payment upfront for the electronic dice systems, with a minimum order of
10,000 units. Delivery would then be guaranteed for within two months. They also realized that the
board game supplier would also have similar requirements for minimum orders and payment upfront.
That means that they would have an upfront investment to make of around $100,000. Funny, but even
though they had forecasted to make more than that in the first year alone, the thought of spending
$100,000 (which they may lose) suddenly made them very nervous. So nervous in fact, that they have
turned to you for help. What do you recommend?
 
QUESTIONS
 What information do they NOT have that they would probably need?
 What information do they have that is questionable?
 What are the reasons suggesting that they should continue and develop/launch?
 What are the reasons suggesting that they should stop now?
 Therefore, do you think they should:
- Continue to launch?
- Get more information?
- Forget it/stop?

Tutorial 11 (Linked to Lecture 10) - Distribution Management

Tutorial Tasks
Task 1
This activity provides a hypothetical channel selection decision for the Pizza Galore chain. Assuming that
Pizza Galore wanted to introduce a mini breakfast pizza (say with bacon and eggs), then which would
be the best way for them to distribute it? Why would this be the best option?
 
ACTIVITY/TASK
 Possible Channels
 Offer as a ‘take away’ option in all their stores (which would require their stores opening 4-5 hours
earlier than normal)
 Offer as a ‘take away’ option in their key/busy stores (that is, those located in shopping centers and
on main roads)
 Offer as a home delivery option only (which would still require their stores to open 4-5 hours earlier
than normal)
 Distribute via gas/fuel stations (that is, set up a small pizza section in larger petrol stations)
 Distribute via convenience stores
 Distribute via coffee shops (exclusively offer to selective coffee shops)
 Set a range of special vending machines to be located around the city and at key train/bus stations
 Set up a range of special kiosks (small booths) in key city and transport locations
 
QUESTIONS
1. Are there any other channel alternatives that you can think of that may be suitable?
2. Which retail channel/s would you select for the best way to distribute the new breakfast pizza
products? Why?
3. Do you think that there is a viable target market for this product?
Tutorial 12 (Linked to Lecture 11): Marketing Implementation
Tutorial Tasks
Task 1
 Discuss the ways in which managers might attempt to block a marketing report.

Task 2
Listed below is a series of statements about marketing. Identify which ones do you agree with and which
ones you disagree with? When you have finished, compare your perceptions against those of your
fellow students .
(Please note that there are no right or wrongs answers – this activity is designed to explore the range of
perceptions of marketing held by different people.)

ACTIVITY/TASK
 Marketing is simply another word for advertising.
 The main goal of marketing is to maximize the number of customers, all other goals are not as
important.
 People who are successful in marketing are really creative and outgoing – but are not that good
with numbers and statistics.
 Marketers do not usually end up as CEO’s. Most CEO’s have a finance, engineering, or legal
background.
 People in marketing roles tend to have little interaction with staff from other departments
(functions) within a firm.
 Marketers tend to be seen as wishy-washy, because they are constantly changing their minds.
 Marketing is all about making people buy products who don’t really want them.
 Marketing is a highly regarded profession throughout the business community.
 Many key marketing decisions within a firm are so important that the CEO (or the senior
executive team) often undertakes them (rather than the marketing department).
 Marketing tasks are fairly simple, particularly compared to complex and serious roles/functions
like finance and engineering.

QUESTIONS
1. Which of the above statements do you agree with?
2. Which ones are you not sure about?
3. Are your perceptions of marketing similar to your fellow students?
4. As perceptions of marketing sometimes differ in the business world, what implications would this
have for the profession of marketing?