Indian Institute of Management, Bangalore

Marketing Management
Quiz No. 2

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Name : Roll No. :

Time : 30 minutes Marks Total :25 (3+2)

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Instructions : Answer all questions. This is an open book, open note exam. All questions
carry equal marks. Each question has only one correct answer. Choosing the correct
answer carries 3 marks and giving the right reason carries 2 marks each. Write your
answer within the space provided for answers.

MULTIPLE CHOICE QUESTIONS

1. A genetic engineering firm has created a variety of wheat seeds that would
yield 4 times the volume per acre in comparison to the current yield in Latin
America and eastern European countries. Even though there are a few
concerns about the carcinogenic nature of these crops, more or less it has been
a big success in the above-mentioned countries. Now the firm wants to try it
out in India. In American and European countries the firm had succeeded by
segmenting the market based on land holding of farmers in multiples of
hectors, manpower availability, machine availability and market tapped
(global market). In India, the top management of the firm wants to follow the
same basis of segmentation while an Indian consultancy firm suggested a
multi- phase segmentation basis with the cancer proneness of the
consumer market the primary basis and seed usage pattern of the farmer,
seed usage rate of the farmer, location of cultivation and family size of the
farmer as the secondary basis. The view of the top management and the
view of the consultancy firm can be termed as

a) Mass marketing and target marketing

b) Niche marketing and target marketing
c) Both target marketing
d) Target marketing and niche marketing
e) Mass marketing and niche marketing
f) The above is not marketing at all

Reason: The segmentation variables of the top management are irrelevant in Indian
context; the land holding is much smaller, India does not export wheat, manpower is not
a significant constraint in India etc. So, if those variables are used for segmentation, it
will lead to one big undifferentiated segment. Hence, mass marketing. Multiphase leads

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to niche market as cancer proneness (as the primary basis) cannot be common
occurrence.

2. The top management of the above genetic engineering firm succeeded in

implementing their European and American segmentation policy in India
along with two more variables i.e. farmer family size and farmer family
income. Considering the government control on export of commodity
products in India, they also dropped the market tapped variable. Now it can be
termed as

a) Mass marketing
b) Target marketing
c) Niche marketing
d) Developmental marketing
e) Both Target and niche marketing
f) None of the above

Reason: As this is not a multi-phase segmentation, all the variables are used
together for segmentation. Farmer family size and family income can used to segment the
market even though the other variables are insignificant. Hence, it is the usual target
marketing.

3. After following the segmentation policy of the top management, the

differentiation theme was developed and it was based on value to the
ultimate farmer and end consumer. So, the positioning strategy will be

a) High price, high quality, exclusive distribution and selective promotion

b) Low price, standard quality, mass distribution and trade promotion
c) Medium to low price, high quality, Wholesaler – retailer network,
extensive promotion
d) High to medium price, poor quality, exclusive distribution, blitz promotion
e) Low price, poor quality, minimal distribution, no promotion
f) None of the above

Reason: As the differentiation is based on value to the ultimate farmer and end
consumer, and the product is commodity in nature, you need high volume to offset the
lower price. So, the position strategy is an obvious choice.

4. Due to the poor performance of the product after the first 2 years with the
above mentioned STP model, the top management accepted the consultancy
firm’s point of view and the segmentation policy suggested by the Indian
consultancy firm was implemented. The differentiation theme was developed
and it was based on lifestyle proposition and future glorification theme for
the user farmer. So the positioning strategy will be

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 a) High price, high quality, exclusive distribution and selective
promotion
b) Low price, standard quality, mass distribution and trade promotion
c) Medium to low price, high quality, Wholesaler – retailer network,
extensive promotion
d) High to medium price, poor quality, exclusive distribution, blitz promotion
e) Low price, poor quality, minimal distribution, no promotion
f) None of the above

Reason: In question 1, we have already identified a multiphase segmentation model

based on cancer proneness of the end consumers as a niche marketing strategy. In
addition, lifestyle proposition and future glorification positioning for commodity product
would also be closer towards niche marketing rather than target / mass. So, the
positioning strategy is an obvious strategy for niche marketing.

5. Based on the above strategy, the product achieved some stability in its sales
volume in the next 3-4 years. However, with the increase in consumer
awareness regarding the health hazards and its causes, the wheat crop
marketed faced strong consumer resentment. The market declined sharply.
The Indian branch of the global genetic engineering firm decided to rechristen
itself with Indian flavour. The marketing division suggested the segmentation
based on social class and culture. The differentiation was based on food for
all themes. So, the positioning strategy will be

a) High price, high quality, exclusive distribution and selective promotion

b) Low price, standard quality, mass distribution and trade promotion
c) Medium to low price, high quality, Wholesaler – retailer network,
extensive promotion
d) High to medium price, poor quality, exclusive distribution, blitz promotion
e) Low price, poor quality, minimal distribution, no promotion
f) None of the above

Reason: Social class and culture based segmentation is surely target marketing
strategy. The clue for 4Ps for positioning is food for all theme. Here, the company is
moving from the exclusivity of niche marketing to focus on the end user (public in
general) for the first time. Hence, mass distribution with low price is the only way to
ensure food for all which will put pressure on the farmers to produce the said variety of
wheat (pull strategy). The logic is that high volume would offset the low price. So, the
choice is obvious.

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