Chapter 1

Question 1

What are the first principles?

Answer 1

• All Customers differ
• All customer change
• All competitors react
• All resources are limited

Question 2

Explain MP 1

Answer 2

All customers differ

Customers have different needs, preferences, and behaviours. These difference can arise from factors like demographics, life experiences, and personal values. To manage this heterogeneity, companies must segment, target, position.

Question 3

Explain MP 2

Answer 3

All customer change

Customer’s preferences and needs evolve. These can be due to factors like aging, shifts in lifestyles,technological advancements or changes in the economic environment

Question 4

Explain MP3

Answer 4

All competitors react

Competitors are constantly watching and responding to a firm’s actions. Competitors may imitate or even improve your successful strategy. Therefore firms must build SCA through unique value proposition, innovative products, strong brands, or deeper customer relationships to stay ahead of their competition.

Question 5

Explain MP4

Answer 5

All resources are limited

Every company face resource constraints, whether it’s budget, time or manpower. The importance to make trade offs in how resources are allocated. Firms must prioritise where to invest their limited resources-whether in marketing, product development or customer service- to maximise their impacts and achieve the best returns on investments.

Question 6

What are the Marketing principles and their key marketing decisions?

Answer 6

1. All customer differ -> Managing customer heterogeneity
2. All customers change -> Managing customer dynamics
3. All competitors react -> Managing sustainable competitive advantage
4. All resources are limited -> Managing resource trade offs

Question 7

What does chain ratio tell us ?

Answer 7

Chain ratio helps companies break down the components of their revenue into manageable parts, such as market demand, market share, and average selling price. It provides a clear view of how changes in strategy - whether in terms of increasing product awareness or adjusting pricing - affect revenue growth.

Question 8

Chain ratio formula

Answer 8

Formula:
Sales Revenue = Market Demand × Firm’s Market Share × Firm’s Average Selling Price