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Q) State any three objectives of marketing. (CH 19)
Answer: 3 objective of marketing are as follows:
Provide Satisfaction to Customers : All marketing activities are directed towards customer satisfaction. Marketing starts with ascertaining consumer needs and produce goods that satisfy those needs most effectively.
Increase in Demand : Through advertising and other sales promotional efforts, marketing aims at creating additional demand for their products.
Provide Better Quality Products for Customers: The business houses try to update and upgrade their knowledge and technology to continuously provide better products.
What is meant by price? What are the factors involved in fixing the price?(Ch 20)
Answer:
Price is the amount charged for a product or service.
It is the second most important element in the marketing mix.
Many factors like demand for a product, cost involved, consumer’s ability to pay, prices charged by competitors for similar products, government restrictions etc. have to be kept in mind while fixing the price.
“The salesperson's play an important role in the process of sale as they act as an important link between the manufacturer and the customer.” Do you agree with this statement ? Give any two reasons in support of your answer. (CH 21)
Ans: Yes, I do agree with the statement that the salesperson's play an important role in the process of sale as they act as an important link between the manufacturer and the customer.
This is because:
1. The salespersons help in collecting market information, credit information, delivering goods and collecting payments.
2. They also helps in matching the demand with supply because they know what the consumers want.
Q) State any three types of services provided by retailers to wholesalers. (CH 22)
Ans: Service provided by retailers to wholesalers:
Market Information: Retailers supply valuable information to wholesalers about changes in tastes, fashion etc. of consumers.
Help in Distribution: Retailers relieve the manufacturers and wholesalers of the burden of collecting and executing a large number of small orders from various consumers.
Sell New Products: New products will be displayed in retail outlets in a attractive way so as to persuade consumers to buy these products.
‘External Trade is an important indicator of economic conditions of a nation, both importing and exporting countries are benefited by it.’ In the light of the statement briefly describe any four points of importance of external trade.
Ans: Four points of importance of external trade are:
Promotes Specialisation: External trade promotes specialisation. When there is an expansion in the demand for a particular commodity, its producer is encouraged to specialise in its production. For example, there is demand of Japanese electronic goods all over the world. The result is that Japan’s efficacy in this field has developed enormously.
Improves Standard of Living: On account of import trade, a country can consume goods, which it does not produce. On the other hand, it earns foreign exchange through export trade.
Enhances Competition: External trade enhances competition, which compels the domestic firms to improve technology of production, production process and quality of the products.
Generates Employment Opportunities: External trade facilitates the growth of agricultural, commercial as well as industrial activities, which in turn generates more and more employment opportunities for the people.
Q) Discuss briefly :
(a) 'Market Research and
(b) “Product Planning and Development’ as functions of marketing
Marketing Research : Marketing research is a process of collecting and analysing information regarding customer needs and buying habits, the nature of competition in the market, prevailing prices, distribution network, effectiveness of advertising media, etc. Marketing research gathers, records and analyses facts for arriving at rational decisions and developing suitable marketing strategies.
Product Planning and Development : The marketeers gather information regarding what are the needs of the consumers and then decide upon what to produce. The task of marketing begins with planning and designing a product for the consumers.
Q) State any four functions of a distribution channel
Answer: Four functions of a distribution channel are:
It helps in establishing a regular contact with the customers.
It provides inspection of goods by the consumers.
It facilitates the transfer of ownership as well as the delivery of goods.
It assists the provision of after sales services, if necessary.
It helps in financing by giving credit facility.
It assumes all risks connected with the carrying out the distribution function.
Give any two differences between advertising and sales promotion.
Objectives
Objectives of advertising is to create a favourable consideration for the product.
The objective of sales to promotion is to stimulate the consumers to buy the product.
Effect
It has a long term effect. (AD)
It has a short term effect and useful for increasing immediate sales. (SP)
It is a form of retailing wherein two parties enter into an agreement in which one party authorizes others to sell or produce and sell specific goods and services. Write the name of this kind of retailing. Write two merits and two limitations of this kind of retailing.
2 Merits of Franchise are:
The Franchiser can expand his business without investing additional capital.
The customer gets assurance of standardised goods and services both in terms of quality and price.
2 Limitations of Franchise are:
The Franchiser does not have close control over the activities of the franchisee.
The franchisee’s poor performance in dealing with customers may bring a bad name to the brand due to which the franchisor’s business may be adversely affected.
Although both importing and exporting countries are benefited by external trade but there are difficulties that are faced both by buyers and sellers in it. Explain any four such difficulties.
Ans: Four difficulties in external trade are:
Distance : External trade involves transport of goods over long distances, except for neighbouring countries. Distance between various countries makes it difficult to establish quick and close trade contact between the importers and exporters.
Greater Risk: In external trade goods are exposed to greater degree of risk. Risk in transit of goods is more because of long distance. Goods are transported by ship, which may sink due to storm or collide with submerged rocks.
Restrictions: External trade is subject to various restrictions by way of customs, tariff, quotas and exchange regulations, which restrict the scope of external trade.
Lack of Personal Touch: In external trade, the transactions are made with unknown persons through correspondence. There is no direct contact between the buyer and seller. So the risk of dispute and bad debts are always there.
Q) ‘The marketing concept is characterized according to the philosophy of the producer.’ Briefly describe such philosophies.
Answer: ‘The marketing concept is characterized according to the philosophy of the producer.’ Such philosophies include:
Production Concept: This concept means profits could be increased by producing large quantity of goods reducing the cost of production. A limitation of this concept is that quality conscious customers hesitate in buying.
Product Concept : The producer in this class lay focus on the quality of products and services. For example, normal toothpaste is not preferred when compared with toothpaste with salt [or with any other protective items]
Selling Concept : In order to survive and grow business firms adopted aggressive selling technique to attract customers to buy their product.
Marketing Concept : Business firms adopting marketing concept, identified that consumer needs and wants must be considered which producing a product. Before starting productions, the target market for the product should be identified. Under marketing concept, customer satisfaction is the key to maximise profits.
Societal Marketing Concept : Under this concept, social welfare should be dealt by business firms. Public health, education, environmental protection etc. are some of the social goals to be considered.
Q) What is meant by product? Describe the various types of products on the basis of use.
Answer:
Product refers to the goods and services offered by the organisation.
Based on use, the product can be classified as:
(a) Consumer goods : Goods meant for personal consumption by the households or ultimate consumers are called consumer goods. This includes items like toiletries, groceries, clothes etc. Consumer goods can be further classified as :
i) Convenience Goods - Convenience goods which are bought frequently without much planning.
ii) Shopping Goods - These are goods which are purchased less frequently and are used very slowly like clothes, shoes.
iii) Speciality Goods - Speciality goods have special characteristics for certain categories of goods. People generally put special efforts to buy them.
(b)Industrial Goods : Goods meant for consumption or use as inputs in production of other products or provision of some service are termed as ‘industrial goods’. For example (i) raw materials, (ii) machinery, (iii) components, and (iv) operating supplies
Q) Briefly describe any five objectives of advertising.
Ans: Five objectives of advertising are:
Introduction of new product : Advertising helps inform the prospective customers about the features, price, usage, availability etc of the new product.
Increase in sale : Advertising helps in turning non-users of products to users of products and also in attracting the consumers of competitor’s products. Therefore increasing the sales.
Maintaining existing buyers : Advertising is used to remind the consumers about how good their products or services are and that they are still in the market as reliable suppliers.
Create and enhance goodwill of the firm : Through advertising, the firms can communicate their achievements to the consumers and clarify any misconceptions or doubts in the mind of the public about themselves or their products, if any.
Dealer support : Some advertisements, besides the information about the product characteristics, price etc., include a list of dealers and distributors.
Q) Give any four limitations of Departmental stores.
Ans: Four limitations of Departmental Stores are;
Large amount of capital investment is required to start and run a departmental store.
They are generally located at places far from residential areas, so they are not very convenient for buying goods of daily use.
The operating cost of the departmental stores is very high since it includes cost of location (in the form of rent or purchase price of building), decoration of building, salary of large number of employees and provision of various facilities for the convenience of customers.
There is no direct contact between owners and customers in departmental stores. The owners do not get first-hand information about the tastes, preferences, likes and dislikes of the customers.
Q) Kiran’s uncle and aunt are into the business of manufacturing medicated socks in Canada. Since the socks are not available in India, Kiran decides to import them from Canada and sell to various chemists in India. Explain the steps involved in importing socks from Canada to India.
Ans: Steps involved in importing goods are:
Trade Enquiry: It is a written request by the importer to the exporters for supply of relevant information regarding the price, quality, quantity and various terms and conditions of export etc. In response to the trade inquiry of the importer, the exporter prepares the quotation and sends it to the importer.
Obtaining Import Licence: An importer cannot import goods without having a valid licence from the Import Licensing Authority.
Obtaining Foreign Exchange: As foreign exchange transactions are controlled by Reserve Bank of India, the importer has to submit an application along with necessary documents to the Exchange Control department of RBI.
Placing the Indent or Order: The indent may be sent directly to the manufacturer of goods or to the exporting agent.
Sending Letter of Credit: Usually, the exporter asks the importer to send a letter of credit. An importer can get a letter of credit issued as per terms and conditions of his banker and send it to the exporter.
Procuring(Get) the Shipping Documents: The importer will arrange to obtain necessary documents such as bill of lading, shipping bill, etc., after receiving the advice letter from the exporter.
Appointment of Clearing Agent: The importer may take delivery on his own or appoint an agent known as clearing agent, to take delivery of the goods. The importer sends necessary documents to his agent to clear the goods
Formalities to be Completed by the Clearing Agent: The clearing agent must complete certain formalities such as i) endorsement for Delivery, ii) Bill of Entry, iii) Payment of Dock Charges, iv) despatch of Goods by Rail/Road, and v) Advice to the Importer.
Delivery of goods from Railway/Transport Authority: The importer can take delivery of the goods from the railway or transport authority and carry them to his godown.
Q) Describe the modern concept of marketing.
Anwer: The modern concept of marketing implies:
Focus on customer orientation. - The marketing activity starts with an assessment of the customers needs and plan the production of items that satisfy these needs most effectively.
Integrated Marketing - All marketing activities like product planning, pricing, packaging, distribution and sales promotion are combined into one as coordinated marketing efforts. This is called integrating marketing. It involves:
(i) Developing a product that can satisfy the needs of the consumers;
(ii) Taking promotional measures so that consumers come to know about the products, its features, quality, availability etc.;
(iii) Pricing the product keeping in mind the target consumers’ purchasing power and willingness to pay;
(iv) Packaging and grading the product to make it more attractive and undertaking sales promotion measures to motivate consumers to buy the product; and
(v) Taking various other measures (e.g., after sales service) to satisfy the consumers’ needs.
c) Earn profit through maximisation of customer satisfaction - If the customers are satisfied, they will continue to buy, and many new customers will be added. This will lead to increased sales and so also the profits.
Q) Explain the various methods of fixing the price.
Answers: The various methods of fixing the price are:
Cost Based Pricing: Price of the product is fixed by adding the amount of desired profit margin to the cost of the product. If a particular soap costs the marketeer Rs. 8 and he desires a profit of 25%, the price of the soap is fixed at Rs 8 + (8x25/100) =Rs. 10.
Competition Based Pricing: Price is usually fixed closer to the price of the competing brands. It is called ‘young rate pricing.
Demand Based Pricing: Prices are determined by the demand for the product.
If the demand is high they decide to take advantage and fix a high price.
If the demand is low, they fix low prices for their product.
At times they resort to differential prices and charge different prices from different groups of customers depending upon their capacity to pay.
Objective Based Pricing:
If, at the introductory stage of the products, the organisation wishes to capture large parts of the market and enter the market, it fixes a low price.
Alternatively, the organisation may decide to earn high profit by taking advantage of a group of customers who give more importance to their status, they fix a high price to only entice those customers who can afford it.
Q) ‘For successful selling the salesperson usually goes through a selling process which involves certain steps.’ State these steps before the delivery of goods are ensured.
Ans: For successful selling, the salesperson usually goes through a selling process which involves the following seven steps.
(i) Prospecting
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(ii) Pre approach
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(iii) Approach
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(iv) Presentation and demonstration
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(v) Answering the queries/objections and their clarification
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(vi) Action or ending the process of sale
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(vii) Follow up or after sales service
Prospecting - Prospecting refers to identifying the prospective buyers in his area of operation.
Pre-Approach - Having done this, he has to obtain the necessary information about the customer, his capacity to pay, choice and preferences etc.
Approach & Presentation and demonstration- After this, he approaches the customer to gain his attention, greet him and make his presentation i.e., inform the customer about the product, its qualities, price etc. and demonstrate its use, if required.
Answering the queries/objections and their clarification - Then he handles the customers queries, persuades him to make his final decision.
Ending the process of sale - He ends the process of sale with receiving his order and thanking him.
After sales service - Finally he ensures the delivery of goods and provides the necessary after sales service.
Q) ‘Retailing these days aims at earning profit by offering customers more choice, more convenience and better facilities.’ In the light of the statement, describe any four recent trends that you may have observed in retailing.
Ans: Four recent trends that you may have observed in retailing are:
In keeping with the changing lifestyles of consumers where they now have more purchasing power but lesser time, retailers are offering services like free home delivery, pre-packed goods (milk, juice etc.), after sales services, convenience of shopping for different products under one roof (departmental stores) and shopping through the Internet, e-mail, post, SMS or telephone.
In order to encourage consumers to buy products, retailers are offering attractive schemes of financing products, especially for consumer durables like refrigerators, television, air-conditioners etc.
With a view to offer variety to consumers with convenience and easy accessibility, today retailing includes automatic vending machines. Through these machines, consumers can buy items like chocolates, cold drink cans and so on by inserting coins and pressing a button. The item gets delivered from the machine without any human intervention.
The combination of a supermarket and a departmental store forms a hypermarket. It is a large scale retail facility which provides an enormous range of products under one roof. A consumer can buy all his/her weekly or monthly requirements in one trip from the hypermarket.
Q) One of your friends has newly entered into export trade and has received an enquiry to send quotation for goods. He has already sent the quotation and is expecting to receive the order. Now he wants to know from you the procedure generally adopted for exporting goods. Explain to him, in brief, the various steps to be taken by him after the receipt of order up to the appointment of forwarding agent.(export)
Ans: The various steps to be taken by him after the receipt of order are:
Credit Enquiry: The exporter must ensure that there is no risk of default in payment. He should verify the credit worthiness of the importer. For this purpose he may ask the importer to send a letter of credit.
Obtaining Export Licence: An exporter in India has to complete various formalities and apply for export license to the appropriate authority. If the authority is satisfied it will issue the export license.
Production or Procurement of goods: The exporter has to produce the goods or buy them from the market. The goods must be in accordance with the instructions given in the indent regarding the quality, quantity, price, etc.
Pre-shipment Inspection: To ensure that only good quality products are exported from our country, the Government of India has made compulsory pre-shipment inspection of goods by certain authorised agencies.
Excise Clearance: In India, manufactured products are subject to excise duty under the Central Excise Act. Therefore excise clearance certificate is a must for the goods to be exported.
Packing and marking of the goods: Packing should be done strictly according to the instructions given in the indent. If loss arises due to defective packing, the exporter may have to bear it.