FINAL EXAMINATION

PROGRAMME Master of Business Administration (General)

Postgraduate Diploma in Business Management

MODULE Strategic Marketing Management

YEAR One (1)

INTAKE January 2017

DATE 30 May 2017

TIME 14h00 – 17h00

DURATION 3 hours

TOTAL MARKS 100

INSTRUCTIONS TO THE CANDIDATE

1. Questions must be attempted in the answer book provided.

2. All queries should be directed to the invigilator; do not communicate or attempt to communicate with any
other candidate.
3. You have THREE HOURS to complete this paper. You are not allowed to leave the examination room within
the first hour and in the last 15 minutes of this examination.
4. This is a CLOSED BOOK examination.
5. Read ALL instructions carefully.

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SECTION A [50 MARKS]
Read the article below and answer ALL the questions that follow.

’Twas the season of ‘wait a lot’ for thousands of Takealot customers

03 JANUARY 2017 - 14:33 PM WENDY KNOWLER

Online retailer Takealot told South Africans in a lavish television advertising campaign: "We’ve got Christmas covered".
But for the thousands of people who did not receive their orders by Christmas Day‚ it turned out to be the season of
"wait a lot". And they were not impressed.

"Absolutely pathetic customer service‚" wrote Ronelle Singh on the retailer’s Facebook page. "I placed an order and
paid additional delivery to receive my item on Christmas Eve — a week later and still no delivery after numerous follow-
up calls to them‚ and no feedback…" "Takealot’s service delivery was beyond appalling this Christmas!" wrote Kirsten
Coutsoudis. "You weren’t able to deliver my Christmas presents by the promised dates‚ sent half packages‚ managers
don’t call back when they say they will…"

But Takealot’s chief marketing officer Julie-Anne Walsh rejects the suggestion that the company over-promised and
under-delivered‚ saying that "can’t be statistically validated and is not accurate".

Asked to quantify Takealot’s late deliveries‚ Walsh would say only that it was "a single-digit percentage of total orders"
— the same as in previous years. She gave the number of successful orders — not total orders — processed in
November and December as "more than 650,000". I think it is safe to assume that "single digit" percentage of late
orders was somewhere between 5% and 9%‚ or the company would surely have said "less than 5%"‚ so I am going to
go with 7.5%. That puts the number of late deliveries at 48,750‚ and given that the total order number would have been
far higher than 650 000‚ let’s round that up to 50,000 Takelot orders that were not fulfilled.

eCommerce analyst Arthur Goldstuck‚ who heads the research company World Wide Worx‚ said it was "generally
agreed" that the acceptable late delivery rate was "a matter of a fraction of a percent rather than a percent or more".
"A single-digit percentage of late deliveries would be disastrous‚" he said. "Even if it was 1% — more than 6,500 orders
in this case — it could turn into a public relations fiasco for any brand in the age of social media."

Did Black Friday — the US retail phenomenon enthusiastically embraced by South Africans a month before Christmas
— have anything to do with all those late Takealot deliveries? Not according to Walsh. So what then?

"Numerous issues can cause a late delivery‚" Walsh said‚ "some within our control and some unfortunately that are out
of our control‚ like a supplier letting us down or stock that we thought we had no longer being available in our
warehouse‚ due to shrinkage‚ etcetera.

"We do‚ however‚ make every effort to communicate changes in delivery dates to our customers as soon as possible
and will credit and refund anyone who deems the revised date to be unacceptable."

Maria Thomas felt Takealot should go a step further.

"Cut your losses and do the right thing‚" she suggested. "Send each customer whose delivery was delayed a discount
voucher as a form of apology."

Walsh responded: "Given the variables at play in any given customer order‚ we deal with every order on an individual
basis‚" she said."So there is no blanket comment or compensation we can give for all [late] orders."

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Goldstuck sees it differently. "In the US in 2013‚ bad weather and poor anticipation of an e-commerce surge led to more
than 2-million packages arriving after Christmas‚ which was a disaster for the industry‚ and most major retailers had to
revise their logistics and renegotiate service levels with courier services‚" Goldstuck said.

"That year‚ Amazon refunded delivery fees and gave gift cards — local retailers need to take a similar approach."

The lead-up to Christmas was the single most "sensitive" period of the year in terms of managing and meeting
consumer expectations of e-commerce‚ Goldstuck said.

"It is critical that an online site communicates clearly whether items are in stock‚ and what delivery time can be
anticipated.

"The moment the company shifts the goalposts after accepting someone’s payment‚ it is not only one the back foot‚ but
should compensate the customer.

"Glib responses are not enough — transparent and continuous communication becomes critical. That didn’t appear to
happen here."

Goldstuck said SA’s online retailers needed to tackle "poor co-operation" from some courier companies. "We are
hearing stories of warehouses clogged up because a major courier service closed shop at 1pm on December 24 and
only opened again five days later."

Online retail finally came fully into itself this holiday season and now exceeds 1% of all retail sales in SA‚ and is growing
exponentially‚ said Steven Ambrose‚ CEO of local technology research firm Strategy. “This places huge strain on the
systems‚ processes‚ and partners‚ for any online retailer. Overall‚ the South African retailers are performing well and
appear to be within internationally acceptable limits for delivery."

* If you did not receive your Takealot order in time‚ the fastest way to reach the company was via its help page.
"Contacting us here captures all the details we need to address your individual query. It’s sent straight to the right team
within the business who can help as quickly as possible and is much more direct than a phone call."

Meanwhile, on the returns front, Ash Govender had to wait more than three weeks for a refund for four items he
returned to Takealot via courier.

"The warehouse confirmed receipt of each item‚ but I still haven’t received my R1,126 refund‚ but they have just brushed
off my e-mailed queries and keep closing my requests. "Then‚ when I phone their 087 number‚ I have to speak to a
different person each time‚ which means that I spend half an hour on the phone and then never hear back…."

According to Walsh, the problem arose from the fact that two of the items were scheduled for collection by the courier
on December 5‚ and another two the following day.

The first courier agent told Govender it would be fine for him to take the lot‚ which led to all four returns being logged as
cancelled.

"The refund has been processed by our finance team and should reflect within the next five working days‚" Walsh said.
"We have taken the complaint seriously and have changed internal processes to accommodate this type of query
effectively in future."

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Good to know‚ because while Govender was on the phone to an apologetic Takealot representative‚ giving him the good
news about his refund‚ he received yet another e-mail from a Takealot agent claiming that his return had been cancelled
and no refund was due.
http://www.businesslive.co.za/bd/companies/retail-and-consumer/2017-01-03-twas-the-season-of-wait-a-lot-for-
thousands-of-takealot-customers/

QUESTION 1 (50 Marks)

1.1 Evaluate the service delivery issues in the article and provide recommendations as to how they should have
been addressed. (20 marks)

1.2 Assess the appropriateness of Ms Walsh’s responses in a customer centric driven market. Recommend a
revised service complaint strategy. (20 marks)

1.3 Provide a revised distribution channel strategy and the associated control measures for Takealot. (10 marks)

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 SECTION B [50 MARKS]
Answer ANY TWO (2) questions in this section.

QUESTION 2 (25 Marks)

The table below displays the findings of a study by an NGO on the marketing tools it had employed before, during and
after a project.

2.1 Analyse the table and assess the findings (during the phases and overall). (10 marks)

2.2 Thereafter, extract the marketing tools you think would be most beneficial to the NGO and discuss how you
would use/revise/add to these tools thereby forming a revised marketing strategy for which the NGO can
employ during the different phases of its projects that is cost efficient and effective. (15 marks)

Table 1: Comparison and Contrast of Marketing Tools Before, During, After a Project
THROUGHOUT
BEFORE DURING AFTER
ALL PHASES
Marketing tools No No No
Most Neutral Most Neutral Most Neutral
Effect Effect Effect Most Effect%
Effect% % Effect% % Effect% %
% % %

1. Emailing 81.9 18.2 81.8 9.1 9.1 81.8 9.1 81.8

2. Telemarketing 72.8 18.2 9.1 63.7 27.3 9.1 36.4 45.5 18.2 57.6

3. Direct Mail 63.6 27.3 9.1 45.5 18.2 36.4 45.5 18.2 36.4 51.5

4. Social Media 81.8 18.2 81.8 9.1 9.1 90 10 84.5

5. Print Media 72.8 27.3 81.9 9.1 9.1 81.8 18.2 78.8

6. Website 90 9.1 81.8 18.2 88.9 11.1 86.9

7. SMS 45.5 45.5 9.1 50 30 20 40 40 20 45.2

8. Fundraiser 54.6 36.4 9.1 54.6 36.4 9.1 50 10 40 53.1

9. Word of Mouth 72.8 27.3 80 10 10 81.8 18.2 78.2

Source: A Chohan, 2016

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QUESTION 3 (25 MARKS)
“The sky is falling! Batten down the hatches! Cut back on everything. The economy is coming to a complete stop! HOLD
IT! Do you really want to throw all of the good things you have been doing out the window because conditions have
changed and the economy is slowing down?” (Dana Baldwin, 2017)

3.1 Assess the statement by Dana Baldwin and recommend to marketers of 2017 as to how best they can survive
the significant economic upheavals without making drastic changes to their strategic marketing plans and
business plans, which very often is done with minimal reflection on what effect these changes might have on
their long-term profitability, growth-ability and survivability. (18 marks)

3.2 Discuss how marketers can market their products to low income consumers in emerging markets. (7 marks)

QUESTION 4 (25 Marks)

“Reports on worldwide online consumer and e-commerce trends show a 20% increase in online sales in 2014,
amounting to $1.5trn. The exponential growth in e-commerce is reported to have outgrown offline business and more
and more consumers are taking to the Internet to shop, according to Derek Wilson, head of online insurance and
financial comparison website, Hippo.co.za.”

With online retailers capitalising on Black Friday, Cyber Monday and early Christmas shopping by consumers, the
festive season can pose as a concern for e-tailers as many consumers are on holiday and tend to refrain from shopping
online. Develop strategies which SA e-tailers can use to avoid the festive season retail slump and improve their
customers’ online shopping experience.

END OF PAPER

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