Page 12 - CIMA OCS Workbook February 2019 - Day 2 Suggested Solutions

CIMA FEBRUARY 2019 – OPERATIONAL CASE STUDY

EXERCISE THREE (MARKETING)
Email
To: Sally Gomez
From: You
Date: Today
Subject: RE: Marketing

Marketing mix

The marketing mix represents the variables a company can change so as to meet customer needs
profitably and efficiently. The 4Ps model is a popular framework for discussing this.

Product

Trigg Adventure designs and manufactures high quality children’s outdoor play equipment in both
the domestic and commercial markets. Customers in the commercial market can opt for a
bespoke product and have this installed by Trigg Adventure.

There is scope to increase the number of product configurations available to domestic customers
– they can currently choose a maximum of 3 from the basic extension arm, deluxe extension arm
and the deluxe climbing bridge. There is also scope to increase the range of accessories on offer
to domestic customers to include not only items such as slides, swings and nets but also add-ons
such as tunnels and sandpits.

For commercial customers there is scope to tailor the offering even further, for example if the
equipment is for a school playground, Trigg Adventure could offer interactions to be incorporated
into the design, such as a noughts and crosses board, other games that use numbers/ letters of
the alphabet or perhaps a chalkboard. If the equipment is for an adventure playground in an
unusual setting, for example in the grounds of an historic site, perhaps Trigg Adventure could
offer a themed version of the equipment to suit its surroundings.

For commercial customers, and those domestic customers with sufficient space, Trigg Adventure
could explore the feasibility of offering indoor children’s play equipment. They could, for
example, approach gyms that offer family membership so there is somewhere for children to be
entertained whilst their carers are in the social areas, or they could approach restaurants,
shopping centres and of course dedicated indoor play centres.

Price

Trigg Adventure appears to use a cost plus pricing strategy whereby the direct material cost,
direct labour cost, and overhead costs for the product are added together, then a mark-up
percentage is added (to create a profit margin) in order to derive the price of the product. The
price points for domestic customers are fixed according to the specification they choose but, Trigg
Adventure does offer discounts to their five main retailers of domestic products. Due to the
bespoke nature of the commercial products, they are priced on a job by job basis.

The installation service is included in the price of commercial products. There is perhaps scope to
offer a free installation service on potentially lucrative jobs in order to win the business and
hopefully subsequent business based on it.

68 KAPLAN PUBLISHING