As a result we were able to carve our own niche in

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marketplace by allowing them to fly instead of drive, or even fly more often. As a result, we were able to carve our own niche in the market." To keep prices low, cost must be low. The most obvious cost item is the aircraft Kulula.com uses. Kulula.com has become more economical in its choice of aircraft. More than two-thirds of these seats are booked online through Kulula.com's web portal, with the balance coming though its contact centre and travel agents. Kulula.com has been able to grow with the rapid increase in demand, and true to its brand, continue to add innovative features such as a one stop online travel shop. Besides flights, the online portal now offers travellers the opportunity to book their car hire (through a partnership with Imperial/Khaya car rental), hotel rooms (in partnership with Protea Hotels) and even a lift to and from the airport. As a result, Kulula.com has shown sustainable growth and has become South Africa's largest e-commerce site, trading well over R1 million a day online and carved their share of the market - growing domestic air travel by 16%. Growth over the next year of next generation technologies will enable a new level of interaction between the traveller, supplier, intermediary and corporate procurement department. QUESTION 1 (a) A problem with the marketing of a new service such as that of Kulula.com is to convince the potential customer of the quality of the service offered. Discuss four characteristics of services (12 marks) and illustrate in a practical way how these characteristics can be taken into consideration in marketing Kulula.com to convince the potential customers of the value of the service (6 marks). (18)
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MNM3036/201 14 (b) Explain the different pricing options available to a business entering the market, such as Kulula.com, which enters the market with a new product (6 marks) and indicate what introduction price was followed by Kulula.com in its marketing strategy (1 mark). (7) [25] QUESTION 2 (a) It is obvious that it may be possible to ascribe the growth in popularity of the Kulula.com brand to some sound branding decisions by Kulula. Discuss the different aspects that can contribute to the building of brand equity and indicate in a practical way if and how Kulula has applied or can still apply these principles under the following headings: (i) Perceived quality (6) (ii) Brand loyalty (6) (iii) Brand associations (6) (18) (b) Analyse the way in which Kulula.com has succeeded in reaching a favourable rate-of- return through its pricing strategy. Refer to the different components making up the calculation of rate-of- return. (It is expected of you to describe the meaning of the “rate - of- return pricing” and to explain the components playing a role in this type of pricing (4 marks) and to apply your answer in a practical way to Kulula.com (3 marks). It is NOT expected of you to make any calculations.) (7) [25] QUESTION 3 a After being in business for quite a number of years, Kulula.com should now be in the growth phase of the product life cycle. Describe the characteristics of the growth phase of the product life cycle (4 marks) and the recommended marketing strategies in that phase (6 marks).
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