SUPPLEMENTARY EXAMINATION

PROGRAMME Master of Business Administration (General)

MODULE Strategic Marketing Management

YEAR One (1)

INTAKE January 2018

DATE 27 July 2018

TIME 09h00 – 12h00

DURATION 3 hours

TOTAL MARKS 100

INSTRUCTIONS TO THE CANDIDATE

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

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SECTION A [40 MARKS]
Answer ALL questions in this section.

Read the article below and answer ALL the questions that follow.

Exclusive Books

In 1951, Phillip and Pamela Joseph opened a small bookstore in the middle of Hillbrow. Fifty years later, this little shop
has grown into a nationwide chain of 40 stories, employing 1 200 people and stocking between 50 000 to 10 000 titles.
Its reputation has grown and Exclusive Books has become known as the country’s foremost bookseller. The first
Exclusive Books store soon became known for its intimate atmosphere and ability to anticipate customer’s reading
needs. More than just selling books, the shop offered a cultural experience. Its popularity grew to the extent that large
premises were required only three years after it first opened its doors. In 1957, Exclusive Books became one of the very
first shops in South Africa to open for trading hours at night, over weekends and public holidays. This was a popular
move which changed the face of bookselling in South Africa.

In 1973, Exclusive Books moved to Pretoria Street in Hillbrow. The shop soon established itself as a Mecca for book
enthusiasts. The innovative architectural and interior design of the bookshop set the trend for all future Exclusive Books
outlets. The shop’s revolutionary and refined, tranquil atmosphere made it favourite place for book enthusiasts to linger,
especially since it was one of the first shops to offer late trading. Even today, the relaxed atmosphere of Exclusive
Books is believed to play a primary role in attracting and keeping people in the store.

The 1970s was the era of Hector Petersen and the Soweto uprisings, of detentions without trials and political bans.
Exclusive Books embraced the defiant ethos of the time. The shop was known to sell reading material unavailable
anywhere else and thus became the darling of the liberal set, frequented by activists and gangsters. However, in 1976,
the owners of Exclusive Books emigrated, selling the business to The Premier Group. It was also in 1976 that the first
Exclusive books branch was opened in Cape Town. Between 1976 and 1994, six shops were added to the chain. The
1980s saw a period of rapid growth, highlighted by the opening in 1986 of the Hyde Park branch. In 1994, the Hyde
Park branch was revamped and at nearly 1 000m2 became the biggest general bookshop in the southern hemisphere –
a status which it still enjoys today. A further revamp was completed in June 1999 which increased the floor space to 1
100m2.

In 1998, five more shops were acquired after Facts and Fiction, a Gauteng-based chain, merged with Exclusive Books.
The chain then enjoyed an estimated market share of 35% with group sales of approximately R250 million. At the end of
1999 Exclusive Books had 18 outlets, including 2 new outlets that were opened at the Johannesburg International (in
the international departure area) and Cape Town airports. In April 2006, Exclusive Books had 39 stores in South Africa
and a store in Gaborone, Botswana. Johannesburg alone has twelve branches. The branch in Sandton Square
(specializing in business books) is a very impressive store with beautiful décor and a coffee shop. This is also the
branch in the chain that offers the most titles, although smaller than Hyde Park branch in terms of floor space occupied.
Exclusive Books (a member of the Johnnic Communications Group) through advertising and strategic repositioning, has
re-established a 55-year old bookstore company as a cutting edge, leading national brand. During 2002-2004 Exclusive
Books achieved and sustained 20-30% year-on-year growth in books sales, becoming the second largest contributor to
Johnnic Communications Retail’s revenues and a dominant market player. Due to popularity and demand Exclusive
Books has doubled in size and extended the range and selection of its titles. With something for everyone, one will not
have any problem finding something of interest or of relevance to one’s interests. Exclusive Books was rated the best
book retailer in South Africa during 2005.

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Book retailing in South Africa is dominated by three booksellers: the bookshop chain Exclusive Books with 401
substantial specialist bookshops; the media chain CNA with about 350 outlets; and the BMA book clubs Lesersking and
Leisure Books. This concentration in the retail industry where almost 70% of the market is shared among the three top
companies works to the advantage of multi-national publishers who are able to make titles it allows for relatively
effective low-cost entry by small local publishers if the titles are accepted by one of the three leading booksellers. These
leading booksellers are generally fairly sensitive to the needs of publishing including small local publishers; yet the main
requirement for The chain’s earlier dedication to providing a cultural experience has not changed. People still visit
Exclusive Books as much to browse as to buy. In 1999 Exclusive Books reinvented their brand identity creating a
younger more friendly and accessible image. As part of this strategy, Seattle Coffee cafes have been introduced to 14 of
the stores. This joint venture has made Exclusive Books a kind of ‘cultural playground’. It was also around this time that
the chain’s loyalty programme Fanatics was launched to further stimulate sales. Exclusive Books ensure that the staff
they hire have a very good knowledge of books and a passion for reading. In 2003, with the help of Ogilvy & Mather,
Exclusive Books managed to successfully reposition their brand, ensuring that the new image encouraged South
Africans to buy more books. The campaign aimed to broaden the relationship with Fanatics members.
Source: Russell, Abratt, Klopper, Viljoen; Contemporary Cases in Southern African Marketing, 2001

QUESTION 1 (40 Marks)

1.1 Discuss the growth strategy that Exclusive Books had pursued to become a leading bookseller. (20 marks)

1.2 Evaluate how competitive forces in the industry have shaped Exclusive Books’ strategy. (20 marks)

SECTION B [60 MARKS]

QUESTION 2 (20 Marks)

More and more companies are realising the value of sponsorships, events and experiences as a part of the overall
marketing strategy.

Discuss the factors marketers must consider when creating the communication strategy and using examples discuss the
benefits that accrue to an organisation from sponsoring events.

QUESTION 3 (20 Marks)

Differentiation is the key to a successful brand. Capital Bank will launch soon in the market and wants to know the most
preferred differential strategy it could use.

Compare the differentiation strategies employed by two leading banks of your choice and propose a unique
differentiation strategy for Capital Bank to enter the market.

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QUESTION 4 (20 Marks)

Mobile phones like fashion seem to somewhat have a similar life cycle, which cannot be categorised by the normal bell
curve for a product life cycle.

Compare and contrast graphically the life cycle for fashion to that of washing powders. Advise the marketers of fashion
on the most appropriate strategies to capitalise on the growth strategies.

QUESTION 5 (20 Marks)

Distribution plays a key role in achieving the business’s targeted goals. However, the distribution channels differ from
B2C, B2B and service providers. In addition to this, the internet and technology are changing these channels of
distribution.

Using appropriate examples graphically illustrate and discuss the distribution channels for B2B, B2C and service
providers. Your discussion must include how the internet and technology is changing this distribution landscape.

END OF PAPER

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