Evaluate Dixons’ decision to close its high-street shops and to go ‘fully online’ as the only method of selling its products.

Explain why marketing objectives should be considered when devising a marketing mix.

Chinese online retailing giant Alibaba recorded over $\$ 240$ billion in sales in $2013$ $-$ more than Amazon and eBay combined. On its busiest day of the year, Alibaba sold $\$ 5.75$ billion of goods, three times more than what all of America spent on all US shopping sites combined in the same $24$ hours. Alibaba is planning to become a public limited company by selling shares on the New York Stock Exchange. This will value the company at $\$ 150$ billion or more. With the capital it raises, Alibaba has plans not only to dominate China, but to launch its own US marketplace.

At first Alibaba's business was a B$2$B marketplace connecting American merchants with Chinese suppliers. It quickly expanded into retail B$2$C operations with Taoboa, where eight million small businesses now list their items. It later up-scaled with Tmall, a shopping site where premium brands such as Apple, Nike and Disney host virtual shops for Chinese consumers. During the last nine months of $2013$ Alibaba made over $\$ 6.5$ billion dollars in revenue from selling fees, nearly half of which was profit. Alibaba's greatest challenge in entering the US market will be to gain customers trust. In the past it's been criticised for allowing dishonest businesses to sell illegal counterfeit goods on its sites. Customers searching for products have to go directly to Alibaba's sites as, unlike most e-commerce companies, it doesn't permit search engines to index its products. Merchants are able list for free on sites like Taobao, but it charges them a premium if they want their goods promoted in its search engine.

One New York customer has used Alibaba on several occasions in recent years. He said that although he wasn't sure whether to trust the site at first, in the end the prices for goods were too competitive to ignore. He was able to buy the products direct from the manufacturers at $10 \%$ of the price he would have paid on a US website.

The arrival of Alibaba will be a worrying prospect for Amazon, which uses its ability to undercut its competition to continue to build its business.

Evaluate the likely impact on American consumers of Alibaba setting up operations in the USA.

This company recently commissioned a primary market research report. The details are highlighted below:

Aim: To measure PepsiCo's brand's consumer perception as a 'healthy' product.

Sample size: $1000$ people in the USA from different age and income groups and from different regions.

Sampling method: Random - from grocery store loyalty card lists Survey method: Online questionnaire coupled with focus groups to gain first-hand knowledge of consumers' opinions.

Potential research problems: There may be a potential bias from the surveyed population. Surveyed people may have issues that prevent them from answering accurately - the questionnaire has been designed to ask questions in the easiest and least embarrassing way possible. The possibility of not being able to contact a respondent has been addressed by setting the computer to select an alternative customer to add to the sample.

Initial secondary research: Last year Coca-Cola's brands had $41 \%$ market share to PepsiCo's $29.9 \%$. Coca-Cola's sales fell by $20 \%$ in USA last year compared to PepsiCo's $8 \%$.

Discuss the possible problems PepsiCo might have faced when conducting its market research.

Explain why the additional three Ps are so important to service-based businesses.

A US-owned food exporting business plans to enter the market in Trinidad and Tobago for the first time. The directors have yet to decide whether to sell high- or low-priced products and which type of shops they should sell through. The marketing manager obtained the following data from secondary sources, without leaving his desk - which is why it is sometimes called desk research.

• The two-island republic has one of the highest per capita GDPs in the Caribbean over US $\$20000$ in $2013$.

• GDP grew by $2 \%$ in $2013$.

• The retail market is made up of over 500 stores (supermarkets, grocery stores and petrol stations), with sales estimated at just over US$1 billion in$2013$.

• Aiming for a 'one-stop' shopping experience, many supermarket chains have begun to renovate and remodel their stores.

• The market leader is Hi-Lo Food Stores.

• In-house bakeries and delis are becoming more common.

• Retail food sales rose by nearly$50 \%$between$2000$and$2013$.

• Supermarkets are increasing the number of premium-priced low-fat and healthfood products on offer.

Evaluate the usefulness of secondary research to the US food exporter trying to market its goods in Trinidad and Tobago.

The origin of UGG in Australia lies in the wide-open beaches of Byron Bay $-$ a surfers' paradise. Surfers looked for ways to keep their feet dry and warm $–$ and handmade sheepskin boots offered natural warmth and comfort. The foundation was laid for a marketing phenomenon as the global brand now has sales of over US $\$1$ billion. The UGG boot is now globally well known; the promotion focuses on celebrity endorsements and prices are high to reflect the image of the brand. UGG offers online, premium outlets and, increasingly, its own stores as places for customers to purchase just UGG products. These products include more than just boots as there are now UGG men's footwear products and even a range of bridal shoes called 'I Do'! The shift towards increasing its retail operation means that UGG has put more emphasis on the extended marketing mix such as physical evidence. In its shops it has tried to match the fun-loving, free-wheeling image of its brand and its customers. Stores are in high-street locations with a welcoming exterior. Inside, the layout is spacious, light and colourful with quality fittings and furniture. There is ample seating to allow customers and their partners to relax as they try UGG products on for size.

In line with its retail expansion, UGG has upgraded its IT platform to improve the ordering and delivery process. The new software will gather sales, stock and orders in a single system, collecting data from the point of sale. From a customer-service perspective this means that orders can be filled more quickly and a closer relationship established.

Evaluate the importance of the people element of the extended marketing mix to the success of UGG’s retail outlets.

Tube Investments of India is planning to enter the ultra-premium cycle market segment - with price ranges from $\$ 300$ to $\$ 4000$. 'Though the market size is small, we cannot afford to be absent from this segment,' TI Cycles' vice president said. Last year TI Cycles sold $2.8$ million units and the marketing objective for the current year is $3.1$ million units. The company started making electric scooters last year and has already launched BSA Workouts exercise equipment. The ultra-premium bicycles will not add greatly to total sales revenue $-$ but they will help to take the brand upmarket as Indian consumers' incomes increase.

Explain one reason why TI wants to market products in different market segments.

Le Sportif is a health and sports club located in Paris. The club has performed well over the last two years but now faces competition from two clubs, Wellness and Glides, which have just opened. Wellness, which targets high-income professional clients, has been particularly successful and has attracted a number of customers from Le Sportif.

The management of Le Sportif conducted some extensive market research to find out more information about their customers. They used a series of focus groups to find out about customers' views on Le Sportif and a questionnaire to provide them with more precise data about the way customers used the club.

Le Sportif has responded positively to its market research by adopting the following strategies:

• introducing a family membership scheme

• introducing a range of family-based classes to encourage health and fitness

• opening a coffee shop.

The management of Le Sportif believe that this new customer-oriented approach, which targets a niche market of health and fitness for the whole family, will give the club a USP and will enable it to stand out from the competition.

Evaluate the advantages and disadvantages of Le Sportif’s method of differentiating itself from competitors.

Outline three benefits of e-commerce for consumers of foreign holidays.

Tesco Lotus $-$ the brand name used by the European supermarket in Thailand - had $15 \%$ of the supermarket grocery (food) market in $2013$. Total sales in this sector amounted to ${\pounds25}$ billion. Two French-owned companies operating in Thailand were second and third on the list of firms' market shares $-$ Big $\mathbf{C}$ had $7 \%$ and Carrefour $4 \%$. If non-food items are included then Tesco Lotus has $43 \%$ market share. Being market leader gives Tesco Lotus a huge advantage $-$ and it is not standing still. It has plans to both open new stores and enter new markets. Recently, Tesco Lotus entered the fast-growing school-uniform market, worth $\$140$ million a year, with prices $20-30\%$ lower than traditional shops.

This expansion is not without its critics and the new Thai government has taken action to protect locally owned shops and to ensure good consumer choice is maintained. A new law is proposed that would severely restrict the opening of all new foreign-owned stores. Consumer groups are split on the new law - they want to keep the variety offered by local stores, but they enjoy the big stores and low prices too.

Explain two advantages Tesco Lotus might gain from being 'market leader' in Thailand.

Explain the benefits and limitations for a large hotel business of forming a joint venture with a hotel business in country $\mathbf{X}$ with the aim of establishing a new chain of hotels there.

Samsung has added four new Galaxy smartphones to its existing line, designed to deliver an 'exceptional experience at an affordable price'. The new products are targeted at the low-price market segment of the smartphone market where Samsung really wants to grow its market share.

The Galaxy Core II, Galaxy Star $2$, Galaxy Ace $4$ and Galaxy Young $2$ all run Google's Android $4.4$ KitKat system and feature smaller displays and less-powerful processors than the flagship model, the Galaxy S$5$, but they still do a remarkable job and offer the consumer an exceptional experience for the price.

Last week Samsung also announced the specifically fitness-focused Galaxy S$5$ Sport, which will be both dust- and water-resistant. The product is an innovative response to the way smartphone owners use their phones when they are at the gym, out for a run and even cycling. The phones come with new fitness apps which allow you to do things like measure your performance on a running machine or map your ride when you are cycling.

Evaluate Samsung’s decision to target the ‘low-price’ market segment of the smartphone market.

We are a global food and beverage company operating in highly competitive categories and we rely on continued demand for our products. To generate revenues and profits, we must sell products that appeal to our customers and to consumers. Any significant changes in consumer preferences or any inability on our part to anticipate or react to such changes could result in reduced demand for our products and erosion of our competitive and financial position. Our success depends on: our ability to anticipate and respond to shifts in consumer trends, including increased demand for products that meet the needs of consumers who are concerned with health and wellness; our product quality; our ability to extend our portfolio of convenient foods and beverages in growing markets; our ability to develop or acquire new products that are responsive to certain consumer preferences, including reducing sodium, added sugars and saturated fat; developing a broader portfolio of product choices and increasing non-carbonated beverage offerings; our ability to develop sweetener innovation; our ability to improve the production and packaging of our products; and our ability to respond to competitive product and pricing pressures.

Evaluate the advantages and disadvantages for PepsiCo of changing its marketing strategy in response to changes in consumer preferences.