SECTIONA

AttemptallFOUR(4)casestudyquestionsfromSectionAforatotalof20marks.Answer

toeachquestionislimitedto350words,noreferencesrequired.

'ConsciousHiking:Hikingavaluetrailofmarketingresponsibility'

FoundedinMelbourne,Australia,ConsciousHikingisrenownedfordesigninghigh-quality

outdoorclothingandequipmentforsportssuchasskiing,snowboarding,mountaineering,

rockclimbing,surfing,hikingandfishing.TherearehundredsConsciousHikingstoresin

Australiaand36internationally.Inadditiontoitsphysicalretailstores,ConsciousHiking

offersanonlinestorewithitsfullrangeofproducts,whichcanbeorderedfromanywhere

intheworld.

ConsciousHikingexcelsatcreatingvaluewithconsumersacrosstheentireconsumption

experience.Fromthematerials,manufacturingprocesses,transportandlogistics,

promotionalcommunication,purchaseanddisposalofitsproducts,ConsciousHiking

providesopportunitiesforconsumerstobeinvolvedinthevalue-creationprocess.

ConsciousHiking'sapplicationofvaluecreationintheconsumptionprocessstemsfroma

genuineunderstandingofitstargetconsumersandcraftingavaluepropositionthat

appealstotheirneedsandwants.ConsciousHikingunderstandsthatmuchofitsconsumer

basehasadesiretoknowhowitsproductsaresourcedandproduced,alongwith

maintainingapremiumqualitystandard.Forexample,beforeaconsumerpurchasesa

ConsciousHikingproduct,heorshecanexplorewhatmaterialstheproductismadefrom,

howitismade,howitistransportedandultimatelymadeavailableforhimorherto

purchase.ConsciousHikingprovidesconsumerswithopportunitiestogainproduct

knowledgeandinteractviaitswebsiteandcommunicationcampaigns.Providingthis

informationoffersapathwaytocreatevalueviaeducatingandsharingknowledgewith

consumersinthepre-consumptionphase.Thecompanyusesstorytellingand

environmentalawarenessstrategiestoengagewiththeirconsumers.

Onceaconsumerpurchasesaproduct,ConsciousHiking'smaingoalistodelivera

premiumqualityproductfortheconsumertoexperience.Maintainingalevelofpremium

qualityallowsConsciousHikingtoachieveahighstandardofvaluewhileconsumersuse

(value-in-use)itsproducts.Thecraftsmanshipofitsproductsisguaranteed.Conscious

Hikingbelievesinthequalityofitsproductssomuchthatitoffersconsumerstheoption

(andactuallypreferstheytakeupthatoption)tofixproductsthathavesimplywornout,

ratherthanhavingthembuynewproducts.Throughits'RepairConsciously'and'Worn

Consciously'initiatives,ConsciousHikingbuildsmorevaluewithconsumersbyproviding

themwithinstructionsonhowtomaintain,careforandrepairtheirproducts.Tomany

consumers,thisisasignofahigh-qualityproductandrepresentsvalueformoneyinthe

consumptionprocess.Italsomarksatransitiontothedisposalpointintheconsumption

processthatmakesConsciousHikingdifferentfrommanyotherorganisations.

Continued...

3BMA151(SHOU)-PrinciplesofMarketing

Continued...

Often,whenconsumersfinishusingaproductitissimplydisposedof.Manyorganisations

overlookthisopportunitytoreconnectortocontinuecreatingvaluewithconsumers.For

ConsciousHiking,thedisposalpointintheconsumptionprocessisperhapswhereitcreates

themostvaluewithconsumers.Atthedisposalconsumptionpoint,consumersare

encouragednottobuynewproductstheydonotreallyneed-atestamenttoConscious

Hiking'sfocusondesigningdurablepremiumproducts.Inaddition,opportunitiesforother

consumerstopurchaseandreuseold,butstilluseable,productsandtofacilitatetherepair

orrecyclingofworn-outConsciousHikinggearareprovided.Providingopportunitiesto

createvaluewithcustomersatthedisposalpointoftheconsumptionprocesshelpsbuild

deepandcontinuousrelationshipswithconsumers.

PartofhowConsciousHikinghasbeenabletoestablishitsmarketpositionisthrough

understandingitsmarketingenvironmentandtargetaudience.MuchofConsciousHiking's

growthoverthelastsevenyearsoccurredduringthefall-outoftheGlobalFinancialCrisis.

Ratherthancutbackonitsmarketingvisibilityorreducethequalityofproductstooffer

cheaperproductsortoachievebetterpricemargins,ConsciousHikingreliedon

communicatingitsphilosophyandfocusingontheenduringqualityandvalueofits

products.Inturn,thisfulfilledconsumerneedslinkedtolargersocioculturaltrends,such

asfrugality,valueformoney,reusing,repairingandrecycling,duringthistimeperiod.

ConsciousHikingunderstoodthatmanytargetconsumershadadesiretospendtheir

discretionaryincomemorewiselyonfewer,buthigh-quality,productsthatwouldlast.

Consumersappreciatedacompanythatalsocommittedtoofferingpathwaystopurchase

quality,usedproductsorhelpthemrepairproductstheyalreadyowned.FromConscious

Hiking'sunderstandingofthemarketingenvironmentandconsumertrendsduringa

difficulteconomicperiod,itwasabletobuildauthenticrelationshipswithitsconsumers

andbetterpositionitselfagainstcompetitors.

However,somescepticsquestionConsciousHiking'sapproach.SomebelieveConscious

Hiking'shighpricesandpromotionalmaterialsaretargetedtoaffluentconsumerswho

havetheluxuryoftimetopursueadventuresinexoticlocations,ratherthanless-affluent

budget-consciousconsumerslookingforvalueformoneyindurableproducts.Severalof

ConsciousHiking'sstoresarelocatedinhighsocioeconomicareas,indicatingsome

potentialinsighttothelatterstrategy.OthersnotethatConsciousHiking'spathwaysfor

fixingandpurchasingusedConsciousHikingequipmentaresimplymarketingstrategies

thatsteerconsumerstowardstradingupandpurchasingadditionalproductstheymight

beinterestedin.Despitesomescepticismontheauthenticityofaltruismembeddedin

ConsciousHiking'sinitiatives,thecompanycontinuestomaintaindouble-digitgrowth.

4BMA151(SHOU)-PrinciplesofMarketing

Continued...

Usingtheinformationprovidedinthecasestudyanswerthefollowingquestions.

Question1

IdentifytheFIVE(5)marketingmanagementorientationsthatguidethecompany's

marketingstrategy.WhatmarketingmanagementorientationdoesConsciousHiking

utilise?Justifyyouranswer.

[5marks]

Question2

Describetheenvironmentalforcesthataffectthecompany'sabilitytoserveitscustomers.

Explainhowchangesinthemacroenvironmentaffectmarketingdecisions.Identifyatleast

twomacro-environmentalforcesanddiscusshowthesetrendshaveshapedopportunities

forConsciousHiking'ssuccessintheoutdoor-clothingmarket.

[5marks]

Question3

Listanddiscussthemainbasesforsegmentingconsumermarket.Describetheprofileof

atypicalConsciousHikingcustomer.DiscusshowConsciousHikingsegmentsitstarget

audiencebyidentifyingrelevantmarketsegmentationvariables.

[5marks]

Question4

Describetheelementsofamarketingmix,andexplainhowintegratedmarketingmix

createscustomervalue.DiscusshowConsciousHikingcreatesvalueforconsumersby

identifyingthefourPsoftheirmarketingmixstrategy.Justifyyouranswer.

[5marks]

[SectionATotal:20marks]

350

maintaining a premium quality standard. For example, before a consumer purchases a

Conscious Hiking product, he or she can explore what materials the product is made from,

how it is made, how it is transported and ultimately made available for him or her to

purchase. Conscious Hiking provides consumers with opportunities to gain product

knowledge and interact via its website and communication campaigns. Providing this

information offers a pathway to create value via educating and sharing knowledge with

consumers in the pre-consumption phase. The company uses storytelling and

environmental awareness strategies to engage with their consumers.

Once a consumer purchases a product, Conscious Hiking's main goal is to deliver a

premium quality product for the consumer to experience. Maintaining a level of premium

quality allows Conscious Hiking to achieve a high standard of value while consumers use

(value-in-use) its products. The craftsmanship of its products is guaranteed. Conscious

Hiking believes in the quality of its products so much that it offers consumers the option

(and actually prefers they take up that option) to fix products that have simply worn out,

rather than having them buy new products. Through its 'Repair Consciously' and 'Worn

Consciously' initiatives, Conscious Hiking builds more value with consumers by providing

them with instructions on how to maintain, care for and repair their products. To many

consumers, this is a sign of a high-quality product and represents value for money in the

consumption process. It also marks a transition to the disposal point in the consumption

process that makes Conscious Hiking different from many other organisations.

Continued...3 BMA151 (SHOU) - Principles of Marketing

Continued...

Often, when consumers finish using a product it is simply disposed of. Many organisations

overlook this opportunity to reconnect or to continue creating value with consumers. For

Conscious Hiking, the disposal point in the consumption process is perhaps where it creates

the most value with consumers. At the disposal consumption point, consumers are

encouraged not to buy new products they do not really need - a testament to Conscious

Hiking's focus on designing durable premium products. In addition, opportunities for other

consumers to purchase and reuse old, but still useable, products and to facilitate the repair

or recycling of worn-out Conscious Hiking gear are provided. Providing opportunities to

create value with customers at the disposal point of the consumption process helps build

deep and continuous relationships with consumers.

Part of how Conscious Hiking has been able to establish its market position is through

understanding its marketing environment and target audience. Much of Conscious Hiking's

growth over the last seven years occurred during the fall-out of the Global Financial Crisis.

Rather than cut back on its marketing visibility or reduce the quality of products to offer

cheaper products or to achieve better price margins, Conscious Hiking relied on

communicating its philosophy and focusing on the enduring quality and value of its

products. In turn, this fulfilled consumer needs linked to larger sociocultural trends, such

as frugality, value for money, reusing, repairing and recycling, during this time period.

Conscious Hiking understood that many target consumers had a desire to spend their

discretionary income more wisely on fewer, but high-quality, products that would last.

Consumers appreciated a company that also committed to offering pathways to purchase

quality, used products or help them repair products they already owned. From Conscious

Hiking's understanding of the marketing environment and consumer trends during a

difficult economic period, it was able to build authentic relationships with its consumers

and better position itself against competitors.

However, some sceptics question Conscious Hiking's approach. Some believe Conscious

Hiking's high prices and promotional materials are targeted to affluent consumers who

have the luxury of time to pursue adventures in exotic locations, rather than less-affluent

budget-conscious consumers looking for value for money in durable products. Several of

Conscious Hiking's stores are located in high socioeconomic areas, indicating some

potential insight to the latter strategy. Others note that Conscious Hiking's pathways for

fixing and purchasing used Conscious Hiking equipment are simply marketing strategies

that steer consumers towards trading up and purchasing additional products they might

be interested in. Despite some scepticism on the authenticity of altruism embedded in

Conscious Hiking's initiatives, the company continues to maintain double-digit growth.4 BMA151 (SHOU) - Principles of Marketing

Continued...

Using the information provided in the case study answer the following questions.

Question 1

Identify the FIVE (5) marketing management orientations that guide the company's

marketing strategy. What marketing management orientation does Conscious Hiking

utilise? Justify your answer.

[5 marks]

Question 2

Describe the environmental forces that affect the company's ability to serve its customers.

Explain how changes in the macroenvironment affect marketing decisions. Identify at least

two macro-environmental forces and discuss how these trends have shaped opportunities

for Conscious Hiking's success in the outdoor-clothing market.

[5 marks]

Question 3

List and discuss the main bases for segmenting consumer market. Describe the profile of

a typical Conscious Hiking customer. Discuss how Conscious Hiking segments its target

audience by identifying relevant market segmentation variables.

[5 marks]

Question 4

Describetheelementsofamarketingmix,andexplainhowintegratedmarketingmix

createscustomervalue.DiscusshowConsciousHikingcreatesvalueforconsumersby

identifyingthefourPsoftheirmarketingmixstrategy.Justifyyouranswer.

[5marks]

[SectionATotal:20marks]