UNIVERSITY EXAMINATIONS: 2021/2022
EXAMINATION FOR BACHELOR OF BUSINESS IN INFORMATION
TECHNOLOGY
BUSS 205: PRINCIPLES OF MARKETING
FULL/ PART TIME
DATE: DECEMBER, 2021 TIME: 2 HOURS
INSTRUCTIONS: Answer Question ONE and Any other TWO Questions
QUESTION ONE (20 Marks) Compulsory
Read the case below and answer questions.
The case discusses the dispute between US-based global fast food chain McDonald’s and one of
its Indian joint venture partners, Connaught Plaza Restaurants (CPRL) led by Vikram Bakshi
(Bakshi), which affected the fortunes of the fast food chain in the highly competitive Quick Service
Restaurant (QSR) market in India. McDonald’s, which entered the country in 1996, operated
through two master franchisees, one a 50-50 joint venture with Bakshi called CPRL covering the
northern and eastern parts of the country, and another with Hardcastle Restaurants Pvt. Ltd (HRPL)
owned by Amit Jatia, covering the southern and western parts. In 2008, after more than 15 years
of smooth operations during which McDonald’s acquired a pan-India presence and became
synonymous with fast food in the country, the partnership between Bakshi and McDonald’s turned
sour after McDonald’s tried to buy out Bakshi’s 50% stake. McDonald’s contended that CPRL
was not maintaining the required quality and had failed to pay royalties for two years. In 2013,
Bakshi was ousted as the MD of CPRL, but he was reinstated in 2017 after the case was referred
to the National Company Law Tribunal (NCLT). The tribunal also barred McDonald’s from
interfering in CPRL’s operations. On August 21, 2017, McDonald’s terminated the franchise
agreement with CPRL for 169 restaurants operating across northern and eastern India. Bakshi,
however, continued to run his outlets as he had earlier. As the impasse continued, competitors
started gaining ground in the lucrative Indian QSR market. McDonald’s posted a loss of Rs. 3.05
billion in the financial year ended December 2017. Moreover, the mass closure of the restaurants
disappointed customers and affected the brand image of McDonald’s in the country. Going
forward, analysts feared that McDonald’s could lose a long-term growth opportunity in India’s
rapidly growing QSR market if it did not sort out its problems soon.
Required:
a) Explore ways in which McDonald’s could tackle its franchise dispute and revive its brand
image in India (10Marks)
b) Analyze the impact of the crisis on McDonald’s brand image. (5 Marks)
c) List the challenges that would face a company like while operating in a foreign country
(5Marks)
QUESTION TWO (15 Marks)
a) Define “Market segmentation” (2Marks)
b) Discuss the four main strategies used in segmenting markets (8Marks)
c) Highlight any five cultural factors that would affect consumer behavior. (5Marks)
QESTION THREE (15 Marks)
Explain the following marketing philosophies:
a) Societal Marketing concept (5Marks)
b) Production concepts (5Marks)
c) Selling concept (5Marks)
QUESTION FOUR (15 Marks)
a) With the help of a well labeled diagram, discuss the stages in a product life cycle
(10 Marks)
b) List any 5 components in the marketing Mix. (5 Marks)
