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BUS 205 – Marketing Management

Final Review

1. Presentation Photos Sharing2. Comments on Project Presentation3. Final Exam Information & Review Questions4. Case Study Example5. Peer Evaluation of Your Group Members

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Project Presentation – Section 1

Topics Peer Content Present Total

Red Bull 72.7 45 40 158(12)

Victoria’s Pink 82.3 35 50 167(13)

Kodak 67.3 35 35 137(10)

P&G 85 50 45 180(14)

Shanghai Tang 64.1 45 40 149(11)

Neptunus 73.4 40 40 153(11)

Zara 78.5 40 50 169(13)

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Project Presentation – Section 6

Topics Peer Content Present Total

Red Bull 67.3 40 35 142(11)

Victoria’s Pink 75.8 40 45 161(12)

Kodak 71.7 45 35 152(11)

L’Oreal 71 45 40 156(12)

Shanghai Tang 76.2 50 40 166(13)

Neptunus 65.8 35 30 131(10)

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Positive Comments:

1.Formal dress made you look professional2.Eye-catching ppt slides with video aid3.Well-organized content and presentation flow4.Good coordination among the members5.Confident at Q&A session6.Very fluent English7.Loud voice

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Negative Comments:

• Chatting when another member is presenting• Low voice• Too much information (text) in the slides• Read off notes• No eye contacts• Questions asked not really answered

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The most impressive moments:

I would like you to recall the most impressive moments in your memory:

For example:

The most fluent presenter

The loudest (or shyest) presenter

The most impressive event

The best coordination among the group members

……

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The most impressive moments: Section 1

Very fluent & loud presenters: Victorial’s Pink group, P& G group, Leo and JoelChris, Flora, James, Baseball, Vincent, Brad…

Very prompt responses: Pokka, Reece

Very good coordination among the group members:Victoria pink, P&G group, Leo & Joel

The most impressive events:Victoria’s pink dress; VS’s Video commercialsSmall scale survey done by Shanghai Tang

The most focused topics: P& G and Neptunus

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The most impressive moments: Section 6

Very fluent & loud presenters: Adam Yeung, Tommy & the whole group of Victoria’s pinkFungDavid & the whole group of L’OrealSarah

Very prompt responses: Adam Yeung, Sarah

Good coordination among the group members:Fung’s Kodak, Vince’s SH Tang Group

The most impressive events:Vince’s SH Tang Group’s mini gameChris’s Neptunus (Cabinet meeting in Q&A)

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Final Exam Information

- This paper contains TWO sections (Section A and Section B) and a total of SIX questions.

- This paper carries 100 marks. Section A carries 40 marks while Section B carries 60 marks.

- Answer TWO COMPULSORY questions in Section A and choose any TWO questions out of FOUR in Section B.

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Final Exam Information

December 13 (Saturday)14:00-16:00Gym

Review Questions – I believe these are the questions at minimum you should be able to answer at the end of a marketing management course

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Review Questions - Before the Midterm:1. Define marketing and outline the steps in the marketing process

2. What is the goal of marketing?

3. The five core marketplace concepts: needs, wants, and demands; market offering; value and satisfaction; exchange and relationships; markets

4. The key elements of a customer-driven marketing strategy (STDP)

5. Outline 4 steps in the strategic planning process

6. What is business portfolio? How to use BCG matrix to analyze the portfolio

7. Explore several strategies for growth and downsizing (Product/market expansion grid)

8. Define four major types of buying decision behavior

9. Define business market and explain the differences between business markets and consumer markets

10.Understand the nature of business demand and outline three types of buying situations

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Review Questions - After the Midterm:Product

1. The definition of product2. The major classifications of consumer products and industrial products3. Describe the stages of the product life cycle4. Describe how marketing strategies change during the product’s life cycle

Price 5. What is price? 6. Discuss the importance of value in setting prices7. What are the two broad pricing strategies that can be used in new product

introduction?Place

8. What is a marketing channel?9. How channel members add value?10.What decisions should be made when designing a channel?11.How to manage and motivate channel members?

Promotion12.What is a promotion mix13.What are the major promotion tools?14.Describing the steps in developing effective communication15.Differentiate a pull and a push strategy

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Case Study: Apply Daily

Newspaper Crisis: The Cut-Throat Price War

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Guide To Case Analysis – Ten Commandments

1. Read the case twice, once for an overview and once to gain full command of the facts; then take care to explore every one of the exhibits.

2. Make a list of the problems and issues that have to be confronted.

3. Do enough number crunching to discover the story told by the data presented in the case.

4. Look for opportunities to apply the concepts and analytical tools in the text chapters.

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Guide To Case Analysis – Ten Commandments

5. Be thorough in your diagnosis of the situation, you may make a one- or two-page outline of your assessment.

6. Support any and all opinions with well-reasoned arguments and numerical evidence; don’t stop until you can purge “I think” and “I feel” from your assessment and, instead, are able to rely completely on “My analysis shows.”

7. Develop charts, tables, and graphs to expose more clearly the main points of your analysis.

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Guide To Case Analysis – Ten Commandments

8. Prioritize your recommendations and make sure they can be carried out in an acceptable time frame with the available skills and financial resources.

9. Review your recommended action plan to see if it addresses all of the problems and issues you identified.

10.Avoid recommending any course of action that could have disastrous consequences if it doesn’t work out as planned; therefore, be as alert to the downside risks of your recommendations as you are to their upside potential and appeal.

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Teaching Objectives of Apple Daily Case

• To analyze the impact caused by a new entrant, Apple Daily, on the Chinese newspaper industry.

• To explore Chinese newspaper readers’ attitude and behavior.

• To discuss the situations under which a market reader will pursue a cut-price strategy.

• To explore the effectiveness of marketing strategies applied by different publishers in the newspaper battle.

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Synopsis (1)

The price of Chinese newspapers was traditionally determined by the Newspaper Society of Hong Kong and members of the Society would standardize their press price accordingly.

Although there was no written rule that members had to follow the standard price, all newspaper publishers including non-member, Oriental Daily News, cooperated by following this rule for many years until a new Chinese newspaper, Apple Daily, entered the market in June 1995.

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Synopsis (2)

Apple Daily was launched in the newspaper market with indirect promotional strategies to reduce its cover price to $2.

Such price cutting caused confusion and uncertainty in the newspaper market in Hong Kong where the selling price was standardized at $5.

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Synopsis (3)

On December 9, 1995, Oriental Daily News sparked the price war by cutting its newsstand price from $5 to $2 a copy, a giveaway level.

Apple Daily, Sing Pao, Hong Kong Daily News, and Tin Tin Daily News soon followed suit with their prices varying from $1 to $4.

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Discussion Questions

About Apple Daily & the Chinese Newspaper Industry:

1. Analyze the Chinese newspaper industry according to Porter’s Five-Factor Model. Which factor(s) would you most important in this industry?

2. Discuss the key factors leading to the successful launching of Apple Daily. What do you think is Apple Daily’s core competence?

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Discussion Questions

About the Price War:

3. When is it justified for a new entrant to adopt a low price to gain an advantage in the market?

4. As soon as Oriented Daily News reduced its selling price from $5 to $2, other newspaper also followed suit with a price cut. Do you think that was a good move? Was there an alternative to the price cut?

5. Did the price cut spark a sensible war in the Chinese newspaper industry?

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Porter’s Five-Factor Model

Threat of Potential Entrants

Threat of Potential Entrants

Bargaining Power of

Customers

Bargaining Power of

Customers

Threat of SubstituteProducts

Threat of SubstituteProducts

Bargaining Power of Suppliers

Bargaining Power of Suppliers

Source: Adapted from Michael E. Porter, “Industry Structure and Competitive Strategy: Keys to Profitability” Financial Analysis Journal,July-August 1980,p.33.

IndustryProfitability

Competition among

existing firms

Competition among

existing firms

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Discussion Questions - Porter’s Five-Factor Model (1)

The important forces are the rivalry among the incumbents and the power of suppliers.

Justification:The market is dominated by the 5 most popular Chinese-language newspaper.

The major input into a newspaper is newsprint but its costs had soared about 30%. The supplier power is very strong as the Hong Kong market is only a small part of the global market

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Discussion Questions - Porter’s Five-Factor Model (2)

The threat of substitution (magazines or TV programs) is also significant.

The threat of entry is relatively low as the newspaper industry has no specific regulations and barriers against a new contender.

Buyers have limited power as they cannot affect the selling price of newspaper.

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Discussion Questions - Porter’s Five-Factor Model (3)

However, when considering some negative factors:

soaring newsprint costs, slack advertising, self-censorship ahead of Hong Kong’s reversion to Chinese rule in 1997, the economic recession in Hong Kong

The newspaper industry becomes less attractive.

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Discussion Questions – Key factors to success (1)

Key factors to success: a. Target segment – a newspaper for the whole family

b. Marketing concept – identify the changing needs and wants of newspaper readers. Position itself as a daily magazine newspaper. Differ from other traditional newspaper in terms of design, content and writing style.

c. Coordination of the marketing mix elements – -improve content (product)-aggressive price-cut strategy-good incentive to the distributors-advertising & sales promotion to create

awareness and encourage trials on the product

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Discussion Questions – Key factors to success (2)

d. Distinctive image – creating a reputation for:-charging the lowest price-providing prestige quality at a good price-going all out to give superior customer service-designing unique product attributes-coming up with unusually creative advertising

Core Competence:Innovative newspaper content & an aggressive marketing strategy

But this competence was not sustainable because it was easily imitated by other newspapers.

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Discussion Questions – Justification for adopting a low price (1)

Difficulty in creating sustainable differentiation- Even if the publisher is tactful enough to create various unique selling points or identify promising niches, rivals are still able to imitate this so-called “uniqueness” without much difficulty.

Consumer Purchase pattern - Reading habits are difficult to change and long-term readers are very unlikely to switch.- A low price can encourage the variety-seeking behavior especially from price-conscious customers.

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Discussion Questions – Justification for adopting a low price (2)

Publishers tend to adopt this strategy in the hope of enjoying scale economies.

If the publisher can successfully convert price-conscious readers into loyal readers, it can eventually fine-tune its cost structure.

Whether the product package (in terms of design, format, content) of the newcomer is attractive enough to retain customers remains the key to the success.

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Discussion Questions – Following a price cut is a good move or not? Alternative actions?

All these newspapers targeted the mass market, they would have definitely lost a market share if they did not follow the move.

Discounting a price cannot be a long-term strategy and they would have to improve the quality of their content (consumer survey, top 8 criteria concerned content)

Alternative actions:- Entered the price war and simultaneously improved the

quality and attract new readers (e.g., Hong Kong Daily)- Cut the price but made no improvement caused readers

to switch (e.g., Tin Tin Daily & Sing Pao)

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Discussion Questions – A sensible war or not? (1)

The main effects of the price war

1. It sifted out the less competitive newspapers and reallocated the market share among the rest of the competitors.

2. It also forced the publishers to improve their newspapers’ quality to meet customers’ wants and needs.

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Discussion Questions – A sensible war or not? (2)

Not a sensible war:

In the short run, it caused publishers to suffer a big loss. The revenue could not cover the increasing costs of operation and could not compensate for their losses through larger market share.

In the long run, it drive out some marginal firms with weak capital base and led to a higher unemployment rate.

Publishers should have put more effort into content, style, and paper quality according to what consumers wanted. The main factor affecting the sales volume is the product itself rather than promotion.