NCERT Solutions for Class 12 Business Studies Chapter 11 - Marketing

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    Very Short Answer Type Questions

    1. State any two advantages of branding to marketers of goods and services.

    Ans. Branding is an important function performed by a marketer. He/she has to decide to lether the firm’s products will be marketed under a brand name or generic name.
    It has following advantages to the marketers:
    (i) Enables firm to differentiation product.
    (ii) Facilitates advertising and display programmes.
    (iii) Differential pricing.
    (iv) Ease in introduction of new products.

    2. How does branding help in differential pricing?

    Ans. Good branding helps in creating loyalty and habituality for product among the customers. As a result, the firm can take advantage of this and charge a different price (generally a higher price) for its product accordingly.

    3. What is the societal concept of marketing?

    Ans. The societal concept of marketing is an expansion of marketing concept. Apart from the consumer satisfaction, it pays attention to the social, ethical and ecological aspects of marketing.

    4. Enlist the advantages of packaging of a consumer products.

    Ans. Advantages of packaging are as follows:
    (i) Helps in raising the standard of health and sanitation.
    (ii) With the help packaging, the product can be easily identified e.g., Maggi noodles in yellow colour etc.
    (iii) Innovational opportunity e.g., new types of packaging availability have made it easier to market the product.
    (iv) Product Differentiation: Packaging is one of the important means of creating product differentiation.

    5. List five shopping products purchased by you or your family during the last few months.

    Ans. (i) Curtains,
    (ii) Shirts,
    (iii) Cosmetics,
    (iv) Travelling bags,
    (v) Hand bags. (or do it by yourself)

    6. A marketer of colour TV having 20% of the current market share of the country aims at enhancing the market share to 50 per cent in next three years. For achieving this objective he specified an action programme. Name the function of marketing being discussed above. (Ans. Marketing planning.)

    Ans. Marketing planning is the function that has been discussed above. This involves creating a market plan in order to attain the marketing goals and objectives of the organisation.

    Short Answer Type Questions

    1. What is marketing? What functions does it play with process of exchange of goods and services? Explain.

    Ans. According to philip Kotter, Marketing is a social process by which individual groups obtain what they need and want through creating offerings and freely exchange products and services of value with other.

    Functions of marketing activities are as follows:

    (i) Gathering and Analysing Market Information: To identify the needs of the customers, collection of market information is necessary. To gather market information the marketer makes a SWOT analysis.

    (ii) Marketing Planning: Another important activity or area of work of a marketer is to develop appropriate marketing plans, so that the marketing objective of the
    organisation can be achieved.

    (iii) Product Designing and Development: The design of the product contributes to make the product attractive to the target customers. A good design can improve performance of a product and also give it a competitive advantage in the market.

    (iv) Standardisation and Grading: Standardi-sation refers to producing goods of pre-determined specification which helps in achieving uniformity and consistency in the output which reduces the need for inspection, testing and evaluation of the products.
    Grading is the process of classification of products into different groups, on the basis of its features such as quality, size etc. It ensures that goods belong to a particular quality helps in realising higher prices for high quality output.

    (v) Packaging and Labelling: Packaging refers to designing the package for the products. Labelling refers to designing the label to be put on the package. Packaging provides protection to the product and also helps in its promotion. Labelling helps in self service.

    (vi) Branding: It is the process of providing name to product so that it can be easily distinguished from other products available in the market.

    (vii) Customer Support Service: Marketing management is related to developing customer support service such as after sales services, handling customer complaints. This aims at providing customer satisfaction which is a key to marketing success.

    (viii) Pricing of Product: Price is an important factor affecting the success or failure of a product in the market. The marketers have to analyse the factors that determine the price of a product properly.

    (ix) Promotion: Promotion of products and services involves informing the customers about the firm’s product, its features etc. and persuading them to purchase these products. It includes four methods advertising, sales promotion, personal selling and publicity.

    (x) Physical Distribution: The important decisions are as under physical distribution include managing inventory, storage, warehousing and transportation of goods from one place to the other.

    (xi) Transportation: Transportation involves physical movement of goods from one place to another. A marketer has to perform this function very efficiently keeping in mind the nature of product, cost, location of target market, etc.

    (xii) Storage or Warehousing: In order to maintain smooth flow of products in the market, there is a need for proper storage of the products. Further, there is a need for storage of adequate stock of goods to protect against unavoidable delays in delivery or to meet out contingencies in the demand.

    2. Distinguish between the product concept and production concept of marketing.

    Ans. Difference between Product and Production Concept:

    Basis Product Concept Production Concept
    Main focus Product concept focuses on quality of the product. Production concept focuses on quantity of the product.
    Means It can be achieved through continuous improvement in the quality It is achieved through increased production leading to lower costs.
    Objective Its main objective is to maximise the profit through quality improvement. Its objective is to maximise the profit through increased production.

    3. Product is a bundle of utilities. Explain.

    Ans. Yes, product is a bundle of utilities, which is purchased because of its capability to provide satisfaction of certain need. A customer seeks different types of satisfaction from the product. There can be three types of benefits, it provides to a customer (i) functional benefits (ii) psychological benefits and (iii) social benefits, e.g., the purchase of a motorcycle provides functional utility of transportation, but at the same time satisfies the need for prestige and esteem and provides social benefit in the form of acceptance by a group, by riding it.

    4. What are industrial products? How are they different from consumer products? Explain.

    Ans. Industrial products are those products, which are used as inputs in providing other products e.g., raw material, engines, tools, lubricants etc.
    The difference between consumer products and industrial products is based on their ultimate use and nature of purchases.

    Basis of Difference Industrial Products Consumer Products
    Number of Customers The number of customers is limited as they are: mostly used by the producers of other products.For example, oil seeds. The number of customers is higher as they are consumed by many people For example, Mustard oil.
    Channel of Distribution These products require shorter channels of distribution such as direct selling or one level channel. These products require comparatively longer channels before they reach the final consumer. However, channel of distribution for perishable consumer products is small.
    Location These products remain concentrated only in those areas where the industries producing these goods are located. Consumer products readily and conveniently available.
    Demand Demand for industrial product is a derived demand based on the demand for consumer products. Demand of consumer product is not a derived demand rather sets the basis for demand for industrial products.
    Role of Technical Features in Decision Making While purchasing these products technical features play an important role. Such products do not involve any technical complexities in manufacturing. Thereby, technical features do not have much role in the decision making while purchasing.

    5. Distinguish between convenience product and shopping product.

    Ans. Difference between Convenience and Shopping Product:

    Basis of Difference Convenience Product Shopping Product
    Demand Convenience products have a constant and regular demand. Shopping products have a comparatively less frequent demand.
    Nature of Products Essential commodities come under the category of convenience goods. Generally, such goods are durable in nature
    Unit of Purchase and Price These products are available in small units and have low unit price. Thereby, such products have low profit margin. These products usually come in bigger units and have high unit prices. Thereby, the profit margin is also high.
    Nature of Purchase Such products are brought impulsively without devoting much time and effort.Example: Ice-creams, medicines, newspaper, stationary items. Such products are not brought impulsively and the consumer devotes considerable time and effort to compare the price, quality, etc. of the product. Example Jewellery, furniture, clothes, etc.

    6. Describe the functions of labelling in the marketing of products.

    Ans. Labelling refers to designing the label to be put on the package. Label on a product provides detailed information about the product, its contents, methods of use etc. The various functions performed by a label are as follows:

    (i) Describe the Product and Specify its Contents: One of the most important functions of label is that it describes the product, its usage, cautions in use etc., and specify its contents.

    (ii) Identification of the Product or Brand: A label helps in identifying the product or brand e.g., we can easily pick our favourite soap from a number of packages only because of its label.

    (iii) Grading of Products: Labels help grading the products into different categories. Sometimes, marketers assign different grades to indicate features or quality of the product e.g., different type of tea is sold by some brands under Yellow, Red and Green label categories.

    (iv) Help in Promotion of Products: An important function of label is to aid in promotion of the products. A carefully designed label can attract the customer to purchase the product. So, many labels provide promotional messages, some show discount or other schemes etc.

    (v) Providing Information Required by Law: Another important function of labelling is to provide information required by law. e.g., the statutory warning on the package of cigarette or pan masala – ‘Smoking is injurious to health’ or ‘Chewing tobacco causes cancer.’

    7. Discuss the role of intermediaries in the distribution of consumer non-durable products.

    Ans. The term channels of distribution refers to the path through which the ownership as well as the possession of goods passes from the producer to the consumer. Following are the functions performed by the channels of distribution:

    (i) Accumulation: It aims at holding the stock to match between the consumer demand and supply condition. Warehousing helps in maintaining continuous flow of goods and services.

    (ii) Promotion: The marketing channels also help in promoting the demand for the product by displaying, demonstrating and participating in various promotional activities organised by the producers.

    (iii) Negotiating: The marketing channels are the intermediaries between the producers and the consumers. They attempt to reach final agreement on price and other terms of the offer, so that transfer of ownership is properly affected.

    (iv) Risk Taking: Risk taking is the basic responsibility of the intermediaries. It may arise out of physical deteriorations, changes in price levels, natural calamities, change in fashion etc. These are unavoidable as they hold sufficiently large and variety of inventories till the sale of stock.

    (v) Grading/Sorting: Grading is the process whereby they sort the products on the basis of different sizes, qualities, moisture contents and so on. It helps us realising the time value for the product and at the same time ultimate consumer feels satisfied with the uniform quality of the product.

    (vi) Packaging: The products are packed in the small tradable lots for the convenience of the consumer.

    (vii) Assembling / Assortment: Marketing channels aim at satisfying the needs of the customers. The products desired by the consumer may not be available in the market. They procure such goods from different sources, assemble or assort them as per the requirements of the consumers.

    8. Define advertising, what are its main features? Explain.

    Ans. Advertising is defined as the impersonal method of promotion which is paid by the marketer to promote some goods or services. It is commonly use as the promotional tool of the company. The important features of advertising are as follows:

    (i) Paid Form: Advertising is a paid form of communication which means the sponsor has to bear the cost of communication with the prospective buyers.

    (ii) Impersonality: There is no direct face to face contact between the prospect and advertiser. It is therefore, referred as the impersonal method of promotion.

    (iii) Identified Sponsor: Advertising is undertaken by some identified individual or company, who makes the advertising efforts and also bears the cost of it.

    9. Discuss the role of ‘Sales Promotion’ as an element of promotion mix.

    Ans. Sales promotion includes those marketing activities other than personal selling, advertising and publicity that stimulate consumer purchasing and dealer effectiveness, such as display, shows and exhibitions, demonstrations and various non-current selling efforts not in the ordinary routine.

    The main objectives of sales promotion activities are:

    (i) Creation of demand for the product.
    (ii) Educating the consumers about new products or new uses of the old product.
    (iii) Building the brand loyalty for the product among the consumers.

    10. As the marketing manager of a big hotel located at an important tourist destination, what societal concerns would be faced by you and what steps would you plan to take care of these concerns? Discuss.

    Ans. As a Marketing Manager at a famous tourist destination, following would be the societal concerns:

    1. Any activity of the hotel should not harm the environment of the tourist place.
    2. None of the activities should be against the ethics or sentiments of people.

    Steps to combat such concerns:

    1. Waste management system in the hotel keeping environmental protection in mind.
    2. Affordable pricing of the accommodation and food.

    11. What information is generally placed on the package of a food product? Design a label for one of the food products of your choice.

    Ans. In a packaging of food product following information are generally required:

    1. Brand mark, Brand name
    2. Registered office address
    3. Customer service number
    4. Ingredients details
    5. Veg/Non-Veg mark
    6. Allergen caution details
    food product?

    12. For buyers of consumer durable products, what ‘customer care services’ would you plan as a manager of a firm marketing new brand of motorcycle? Discuss.

    Ans. Customer care services for marketing a new brand of motorcycles would include:
    (i) Providing free and hassle-free servicing for few initial years from purchase time.
    (ii) Making available the spare parts whenever required.
    (iii) Facility of servicing (paid) and repairing.
    (iv) Lodging complaints of customers using the product on a regular basis.
    (v) Regular contact with customers for new updates, services, facilities etc.

    Long Answer Type Questions

    1. What is the marketing concept? How does it help in the effective marketing of goods and services?

    Ans. Orientation of marketing implies that focus on the satisfaction of customers need, is the key to the success of any organisation in the market. All the decisions in the firm are taken from the point of view of the customers, e.g., What product will be produced, with what features and at what price shall it be sold or where shall it be made available for sale will depend on what do the customer want.

    Marketing concept helps in effective marketing of goods and services by using the following:
    (i) Identification of market or customer who are chosen as the target.
    (ii) Understanding needs and wants of customers in the target market.
    (iii) Dev elopment of products or services for satisfying needs of the target market.
    (iv) Satisfying needs of target market better than the competitors.
    (v) Doing all this at a profit.

    2. What is marketing mix? What are its main elements? Explain.

    Ans. Marketing mix refers to the combination of four basic elements known as four P’s— Product, Price, Promotion and Place.

    (i) Product Mix: Product mix basically concerned with the features related to a product e.g., range, quality, size, labelling, packaging, branding etc. All products must satisfy consumer needs and expectations. It aims at providing good quality products at fair prices.

    (ii) Price Mix: It includes decisions relating to price determination, discounts and allowances, credit terms. It covers pricing objectives and pricing policies. Price should cover not only cost of production and selling expenses but also a reasonable profit margin. The price policy adopted by the enterprise should not only be cost based but also demand based and competition based.

    (iii) Place Mix: Place mix links the seller and buyer. The choice of channels of distribution and transport are the two major issues here. There are various factors which help in deciding the channel e.g., the time and the place, where the goods have to reach or transportation.
    It is the nature of goods, place of destination, cost and availability etc.

    (iv) Promotion Mix: It refers to all marketing activities to increase the volume of sales of the product of an enterprise. It consists of means of marketing communication with a view to informing and persuading the prospective buyers to buy a certain product. It includes advertising, personal selling, publicity and sales promotion.

    3. How does branding help in creating product differentiation? Does it help in marketing of goods and services? Explain.

    Ans. Branding helps a firm in distinguishing its products from that of its competitors. This helps the firm to secure and control the market for its products. If products were sold by generic names, it would be very difficult for the marketers to distinguish their products from its competitors. Thus, most marketers give a name to their product, which helps in identifying and distinguishing their products from the competitors product. This process of giving a name or a sign or a symbol etc., to a product is called Branding.

    4. What are the factors affecting determination of the price of a product or service? Explain.

    Ans. There are number of factors which affect the fixation of the price of a product.

    Some of the important factors in this regard are discussed as below:

    (i) Product Cost: The cost sets the minimum level or the floor price at which the product may be sold. There are broadly three types of cost—fixed costs, variable costs and semi variable cost. Total cost is the sum of all three. Generally, all firms try to cover all their costs, atleast in the long run. In addition, they aim at earning a margin of profit over and above the costs.

    (ii) The Utility and Demand: The utility provided by the product and the intensity of demand of the buyer sets the upper limit of price, which a buyer would be prepared to pay. Infact the price must reflect the interest of both the parties to the transaction — the buyer and the seller. The buyer may be ready to pay up to the point, where the utility from the product is atleast equal to the sacrifice made in terms of the price paid. The seller would, however, try to cover the costs. According to the law of demand, consumers generally purchase more units at a low price than at a high price.

    (iii) The Extent of Competition in the Market: The price is also affected by the nature and degree of competition. The price will tend to reach the upper limit in case there is less degree of competition while under free competition, the price will tend to be set at the lowest level.

    (iv) Government and Legal Regulations: In order to protect the interest of public against unfair practices in the field of price fixing, government can intervene and regulate the price of commodities, government can declare a product as essential product and regulate its price.

    (v) Pricing Objectives: Pricing objectives are another important factor affecting the fixation of the price of a product or a service. Apart from price maximisation, the pricing objectives of a firm may include.
    (a) Obtaining Market Share Leadership: If a firm objective is to obtain larger share of the market, it will keep the price of its products at lower level, so that greater number of people are attracted to purchase their products.
    (b) Surviving in a Competitive Market: If a firm is facing difficulties surviving in the market because of intense competition or introduction of a more efficient substitute by a competitor.
    (c) Attaining Product Quality Leadership: In this case, normally higher prices are charged to cover high quality and high cost of R & D (Research and Development).

    (vi) Marketing Methods used Price Fixation: Price is also affected by other elements of marketing such as distribution system, quality of salesmen employed, quality and amount of advertising, sales promotion efforts, the type of packaging, product differentiation, credit facility and customer service provided.

    5. Explain the major activities involved in the physical distribution of products.

    Ans. Physical distribution covers all the activities required to move goods physically from manufacturer to the customers. Important activities involved in the physical distribution include transportation, warehousing, material handling and inventory control.

    (i) Order Processing: In a typical buyer-seller relationship, order placement is the first step. Products move from the manufacturers to customers via channel members while orders move from customers to manufacturers. Therefore, a good speedy and accurate system of order processing becomes a necessity.

    (ii) Transportation: Transportation is the means of carrying goods and raw materials from the point of production to the point of sale. It is one of the major elements in the physical distribution of goods. It is important unless the good are physically made available, the sale can not be completed.

    (iii) Warehousing: Warehousing refers to the act of storing and assorting products in order to create time utility in them. The basic purpose of warehousing activities is to arrange placement of goods and provide facilities to store them. The need for warehousing arises because there may be difference between the time, a product is produced and the time it is required for consumption. Generally, the efficiency of a firm in serving its customers will depend on, where these warehouses are located and where are these to be delivered.

    (iv) Inventory Control: A very important decision in respect of inventory is to decide the level of inventory. Higher the level of inventory, higher will be the level of service to customers but the cost of carrying the inventory will also be high because lot of capital would be tied up in the stock. The decision regarding level of inventory involves prediction about the demand for the product. A correct estimate of the demand helps to hold inventory and cost level down to a minimum.
    The major factors determining inventory levels are:
    (a) Firm’s policy regarding the level of customer service. Higher the level of service, greater will be the need to keep more inventories.
    (b) Scope of accuracy of the sales forecast. In case, more accurate estimates are available, the need for keeping very high level of inventory can be minimised.
    (c) Responsiveness of the distribution system i.e., ability of the system to transmit inventory needs back to the factory and get products to the market.
    (d) Cost of inventory, which includes holding cost, such as cost of warehousing, tied up capital etc. and the manufacturing cost.

    6. ‘Expenditure on advertising is a social waste’ Do you agree? Discuss.

    Ans. The opponents of advertising say that the expenditure on advertising is a social waste as it adds to the cost, multiplies the needs of the people and undermines social values. The proponents, however argue that the advertising is very useful as it increases the reach, brings the per unit cost of production down and adds to the growth of the economy.
    Following are the points of criticism:

    (i) Adds to Cost: The opponents of advertising argue that advertising unnecessarily adds to the cost of product, which is ultimately passed on to the buyers in the form of high prices of the product. It is line that advertisement of a product cost lots of money but it helps to increase the demand for the product as large number of potential buyers come to know about the availability of the products, its features etc., and are persuaded to buy it. This increases the demand and therefore the production. As a result, the per unit cost of production comes down as the total cost is divided by larger number of units.

    (ii) Undermines Social Values: Advertising undermines social values and promotes materialism. It breeds discontentment among people as they come to know about new products and feel dissatisfied with their present state of affairs. Advertisement in fact helps buyer by informing them about the new products which may be improvement over the existing products.

    (iii) Confuse the Buyers: Another criticism against advertisements is that so many products are being advertised which make similar claims that the buyer gets confused as to which one is true and or which to be relied upon, e.g., there are so many brands of soaps, shampoos, cars, TVs, cell phones etc. which are advertised. The supporters of advertisement, however argued that we are all rational human beings who make our decisions for purchase of products on factors, such as price, style, size, etc. Thus the buyers can clear their confusion by analysing the information provided on the advertisements and other sources before taking a decision to purchase a product.

    (iv) Encourages Sale of Inferior Product: Advertising does not distinguish between superior and inferior products and persuade people to purchase even the inferiors products. The desired level of quality will depend on the economic states and preferences of the target customers. Advertisements sell products of a given quality and the buyers will buy, if it suits their requirements.

    (v) Some Advertisements are in Bad Taste: Another criticism against advertising is that some advertisements are in bad taste. They show something which is not approved by some people. Some advertisements spoil the relationship between employer and employee, husband and wife etc.
    From the above discussion, we have learnt that though advertisements are crticised but still they have their own advantages. It is not a social waste, rather it adds value to the social cause by giving a boost to production and generating employment.

    7. Distinguish between advertising and personal selling.

    Ans. Difference between Advertising and Personal Selling

    Basis Advertising Personal Selling
    Nature Advertising is indirect and impersonal in nature. Personal selling is direct or face to face communication in nature.
    Coverage It is a means of mass level of coverage. Only limited number of people can be contacted at a time.
    Medium It involves use of oral, written+visual messages. It is dependent on oral messages.
    Cost It is economical method. It is costly.
    Feedback It lacks direct feedback. It facilitates direct, immediate feedback.
    Suitability It is suitable for all types of products. It is more suitable for product in the introductory stages of product life cycle.

    8. Explain the factors determining choice of channels of distribution.

    Ans. The decision of choosing channels of distribution depend on various factors, which are discussed as follows:

    (i) Product Related Factors: The choice of channels of distribution depends upon the factors related to product. It includes whether the‘ product is an industrial product or a consumer product, perishable or non perishable. Industrial products require shorter channel and consumer products require longer channel.

    (ii) Company Characteristics: The important company characteristics affecting the choice of channels of distribution include the financial strength of the company and the degree of control it wants to hold on other channel member. Direct selling involves lot of foods to be invested in fixed assets say starting own retail outlets or engaging large number of sales force. Similarly, if the management wants to have greater control on the channel number, short channels are used but if the management do not want more control over the middlemen, it can go in for longer channel or large number of intermediaries.

    (iii) Competitive Factors: The choice of channel is also affected by what the competitor has selected as its channel. Sometimes, firm may decide to go for the same channel and sometimes absolutely opposite.

    (iv) Market Factors: Important market factors affecting the choice of channel of distribution include size of market, geographical concentration of potential buyers and quantity purchased.

    (v) Environmental Factors: Sometimes environmental factors also help in deciding the channel of distribution, e.g., in a depressed economy, marketers use shorter channels to distribute their goods in an economical way.

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