1. (TCO A, B, C) Describe a value proposition and provide an example. How important is value to the consumer? (Points : 5)

There is no universal definition of the term value proposition. Value proposition in marketing is a statement that summarizes why a consumer should buy a product or service. Basically, value proposition should convince a potential consumer that the product or service will solve his/her problems and it is impossible to live without that product or service. Value proposition can be in form a statement or an ad. Prime example is Apple iPad ad. Apple does not have a convincing written statement on this product, but what they have is very convincing ad.

From a consumer point of view, a value of a product or service is linked to quality and reliability. Most consumers are cost conscientious. They always look for a good value and they only decide what is valuable and what is not! 2. (TCO A, B, C) How would you describe relationship marketing? Why are these relationships so important to successful marketing? (Points : 5)

Relationship marketing is relatively a new concept surfaced in late 1980s. It can be defined as marketing activities that attract, maintain and enhance customer relationships. In a nutshell, relationship marketing simply means customer retention and satisfaction. Basically, a trust relationship—thru quality product offering, is built among all stakeholders, especially with the customers (this is not a “buddy-buddy” relationship). Now a days, most companies focus on relationship marketing because they want to retain the customers for years to come. It is cost effective to retain the customers than finding the new ones. A small increase in customer retention rates can have a dramatic effect on company’s profit.
Building relationships has become a successful marketing tool and it is in vogue in most