NCERT Class 12 Business Studies Chapter 10 Marketing

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NCERT Class 12 Business Studies Chapter 10 Marketing

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Marketing

Chapter: 10

PART – ⅠⅠ – BUSINESS FINANCE AND MARKETING

EXERCISE

VERY SHORT ANSWER TYPE

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

Ans: The two advantages of branding to marketers of goods and services are:

Brand Recognition and Loyalty: A strong brand helps in building customer loyalty.

Competitive Advantage: A well-established brand differentiates the product from competitors.

2. How does branding help in differential pricing? 

Ans: Branding enables differential pricing by creating a unique identity and perceived value, allowing companies to charge premium prices.

3. What is the societal concept of marketing? 

Ans: The societal marketing concept is the extension of the marketing concept as supplemented by the concern for the long-term welfare of the society. Apart from the customer satisfaction, it pays attention to the social, ethical and ecological aspects of marketing. There are a large number of such issues that need to be attended to.

4. Enlist the advantages of packaging of consumer products. 

Ans: (i) Product Differentiation: Packaging is one of the very important means of creating product differentiation. The colour, size, material, etc., of the package makes a real difference in the perception of customers about the quality of the product. 

(ii) Rising Standards of Health and Sanitation: Because of the increasing standards of living in the country, more and more people have started purchasing packaged goods as the chances of adulteration in such goods are minimised.

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

Ans: (i) Clothing and Footwear.

(ii) Electronics.

(iii) Home Appliances.

(iv) Furniture.

(v) Grocery Items.

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.

SHORT ANSWER TYPE

1. What is marketing? What functions does it perform in the process of exchange of goods and services? Explain. 

Ans: Marketing orientation implies that focus on satisfaction of customer’s needs is the key to the success of any organisation in the market. It assumes that in the long run an organisation can achieve its objective of maximisation of profit by identifying the needs of its present and prospective buyers and satisfying them in an effective way.

Marketing as a social process. It is a process whereby people exchange goods and services for money or for something of value to them. Taking the social perspective, Phillip kolter has defined marketing as, “a social process by which individual groups obtain what they need and want through creating offerings and freely exchanging products and services of value with others”.

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

Ans: 

Production Concept Marketing	Product Concept Marketing
Emphasizes mass production and cost efficiency.	Emphasizes product quality and features.
Consumers prefer widely available and affordable products.	Consumers prefer superior quality and innovative products.
Profit maximization through large-scale production.	Profit maximization through continuous product improvement.

3. Product is a bundle of utilities. Explain. 

Ans: Product is a bundle of utilities, which is purchased because of its capability to provide satisfaction of certain need. A buyer buys a product or service for what it does for her or the benefit it provides to her. There can be three types of benefits a customer may seek to satisfy from the purchase of a product, viz., 

(i) Functional benefits.

(ii) Psychological benefits. and 

(iii) Social benefits.

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 producing other products. The examples of such products are raw materials, engines, lubricants, machines, tools, etc. In other words, industrial products are meant for non-personal and business use for producing other products.

Basic	Industrial Products	Consumer Products
Meaning	Industrial products are those products, which are used as inputs in producing other products.	Products, which are purchased by the ultimate consumers or users for satisfying their personal needs and desires are referred to as consumer products.
Examples	The examples of such products are raw materials, engines, lubricants, machines, tools, etc.	For example, soap, edible oil, eatables, textiles, toothpaste, fans, etc. which we use for our personal and non-business use are consumer goods.

5. Distinguish between convenience products and shopping products. 

Ans:

convenience Products	shopping Products
Those consumer products, which are purchased frequently, immediately and with least time and efforts are referred to as convenience goods.	Shopping products are those consumer goods where buyers devote considerable time, to compare the quality, price, style, suitability, etc., at several stores, before making final purchase.
examples of such products are cigarettes, ice creams, medicines, newspaper, stationery items toothpaste etc.	Some of the examples of shopping products are clothes, shoes, jewellery, furniture, radio, television, etc.

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

Ans: The various functions performed by a label are as follows:

(i) Describe the Product and specify its contents: Let us look at some of the labels of the products used by us in our day to day life. The label on the package of a local tea company describes the company as ‘Mohini Tea Company, an ISO 9001:200C Certified Company’; a popular brand of Prickly Heat Powder, describes how the product provides relief from prickly heat and controls bacterial growth and infection, giving caution forbidding its application on cuts and wounds.

(ii) Identification of the Product or brand: The other important function performed by labels is to help in identifying the product or brand.

(iii) Grading of Products: Another important function performed by labels is to help grading the products into different categories. Sometimes marketers assign different grades to indicate different features or quality of the product.

(iv) Helps in Promotion of Products: An important function of label is to aid in promotion of the products. A carefully designed label can attract attention and give reason to purchase. We see many product labels providing promotional messages

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

Ans: Important decision areas in this respect include selection of dealers or intermediaries to reach the customers, providing support to the intermediaries. The intermediaries in turn keep inventory of the firm’s products, demonstrate them to potential buyers, negotiate price with buyers, close sales and also service the products after the sale. The other decision areas relate to managing inventory, storage and warehousing and transportation of goods from the place it is produced to the place it is required by the buyers.

8. Define advertising? What are its main features? Explain. 

Ans: Advertising is perhaps the most commonly used tool of promotion. It is an impersonal form of communication, which is paid for by the marketers (sponsors) to promote some goods or service. The most common modes of advertising are ‘newspapers’, ‘magazines’, ‘television’, and ‘radio’.

The important distinguishing features of advertising are as follows:

(i) Paid Form: Advertising is a paid form of communication. That is, the sponsor has to bear the cost of communicating with the prospects. 

(ii) Impersonality: There is no direct face-to-face contact between the prospect and the advertiser. It is therefore, referred to as impersonal method of promotion. Advertising creates a monologue and not a dialogue. 

(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 refers to short-term incentives, which are designed to encourage the buyers to make immediate purchase of a product or service. These include all promotional efforts other than advertising, personal selling and publicity, used by a company to boost its sales. Sales promotion activities include offering cash discounts, sales contests, free gift offers, and free sample distribution.  

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: It is so because any activity which satisfies human needs but is detrimental to the interests of the society at large cannot be justified. The business orientation should, therefore, not be short-sighted to serve only consumers’ needs. It should also consider large issues of long term social welfare. The societal marketing concept is the extension of the marketing concept as supplemented by the concern for the long-term welfare of the society. Apart from the customer satisfaction, it pays attention to the social, ethical and ecological aspects of marketing. There are large number of such issues that need to be attended to.

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: Package of fast food products like ready to eat Dosa, Idli or Noodles, describe the procedure of cooking these products; the Package of a toothpaste brand lists the ‘Ten Teeth and Gum Problems’, which the product claims to fight with its ‘Complete Germicheck Formula’; the Package of a brand of Coconut Oil describes the product as pure coconut oil with Heena, Amla, Lemon and specifies how these are good for Hair. Thus, one of the most important functions of labels is to describe the product, its usage, cautions in use, etc. and specify its contents.  

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: As motorcycles are high-value items it is important to provide good post-sale services to the consumer. Customer care services are crucial for building brand loyalty, enhancing customer satisfaction, and ensuring long-term success.

(i) Pre-Sales Services: Presales is a process or a set of activities/sales normally carried out before a customer is acquired. It’s a strategic phase that involves understanding customer needs and preparing solutions. 

(ii) Sales & Delivery Services: In sales, delivery refers to the way communication is presented between a salesperson and a prospective customer. Businesses can target customers who are closer by, which can lead to increased sales.

(iii) After-Sales Services: The purpose of after-sales service is to increase loyalty among customers and make them your brand advocates. After-sales service can help a brand differentiate itself from competitors. 

LONG ANSWER TYPE

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

Ans: Marketing orientation implies that focus on satisfaction of customer’s needs is the key to the success of any organisation in the market. It assumes that in the long run an organisation can achieve its objective of maximisation of profit by identifying the needs of its present and prospective buyers and satisfying them in an effective way.

It may be noted here that marketing is not merely a post-production activity. It includes many activities that are performed even before goods are actually produced, and continue even after the goods have been sold. For example, activities such as  identification of customer needs, collection of information for developing the product, designing suitable product packages and giving it a brand name are performed before commencement of the actual production. Similarly, many follow up activities are required for maintaining good customer relations for procuring repeat sales.

It is a process whereby people exchange goods and services for money or for something of value to them. Taking the social perspective, Phillip kolter has defined marketing as, “a social process by which individual groups obtain what they need and want through creating offerings and freely exchanging products and services of value with others”. Thus, marketing is a social process where in people interact with others, in order to persuade them to act in a particular way, say to purchase a product or a service, rather than forcing them to do so.

The process of marketing facilitates exchange of products and services between the buyers and the sellers. The buyers, however, make buying decisions on their perceptions of the value of the product or service in satisfying their need, in relation to its cost. A product will be purchased only if it is perceived to be giving greatest benefit or value for the money. The job of a marketer, therefore, is to add to the value of the product so that the customers prefer it in relation to the competing products and decide to purchase it.

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

Ans: The marketing mix refers to the combination of strategies and tactics that a business uses to promote its products or services in the market. The marketing mix consists of various elements, which have broadly been classified into four categories, popularly known as four Ps of marketing.

These are: 

(i) Product: Product means goods or services or ‘anything of value’, which is offered to the market for sale. For example, Hindustan lever offers number of consumer products like toiletries (Close-Up toothpaste, Lifebuoy soap, etc.), detergent powder (Surf, Wheel), food products (Refined  Vegetable Oil) etc. 

These aspects are very important, particularly in the marketing of consumer durable products (like Automobiles, refrigerators, etc.). The important product decisions include deciding about the features, quality, packaging, labelling and branding of the products.

(ii) Price: Price is the amount of money customers have to pay to obtain the product. In case of most of the products, level of price affects the level of their demand. The marketers have not only to decide about the objectives of price setting but to analyse the factors determining the price and fix a price for the firm’s products. Decisions have also to be taken in respect of discounts to customers, traders and credit terms, etc., so that customers perceive the price to be in line with the value of the product.

(iii) Place: Place or Physical Distribution include activities that make firm’s products available to the target customers. Important decision areas in this respect include selection of dealers or intermediaries to reach the customers, providing support to the intermediaries (by way of discounts, promotional campaigns, etc.). The intermediaries in turn keep inventory of the firm’s products, demonstrate them to potential buyers, negotiate price with buyers, close sales and also service the products after the sale.

(iv) Promotion: Promotion of products and services include activities that communicate availability, features, merits, etc., of the products to the target customers and persuade them to buy it. Most marketing organisations, undertake various promotional activities and spend substantial amount of money on the promotion of their goods through using number of tools such as advertising, personal selling and sales promotion techniques (like price discounts, free samples, etc.). A large number of decisions are to be taken in each of the area specified above. 

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

Ans: One of the most important decisions that a marketer has to take in the area of ‘product’ is in respect of branding. If products were sold by generic names, it would be very difficult for the marketers to distinguish their products from that of their competitors. Thus, most marketers give a name to their product, which helps in identifying and distinguishing their products from the competitors’ products. This process of giving a name or a sign or a symbol etc. Branding not only helps in product differentiation, rather also helps in the marketing of goods and services. The following points highlight the importance of branding in the marketing of goods and services.

(i) Brand: A brand is a name, term, sign, symbol, design or some combination of them, used to identify the products, goods or services of one seller or group of sellers and to differentiate them from those of the competitors. For example, some of the common brands are Bata, Lifebuoy, Dunlop, and Parker. Brand is a comprehensive term, which has two components, brand name and brand mark.

(ii) Helps in Advertisement: Branding helps a firm to advertise their product. Raising awareness of a brand, communicating its key messages, and creating a positive image in the minds of consumers. A strong brand name and logo distinguish the product from generic or competing products.

(iii) Enables Differential Pricing: Good branding helps in creating a loyalty of the consumers towards the product. Allowing companies to charge different prices based on their brand reputation, quality, and customer loyalty, essentially justifying a premium price for a product with a strong brand image compared to competitors. 

(iv) Facilitates Introduction of New Products: A critical phase in the supply chain that involves the planning, design, development, and launch of a new product.Nowadays, many companies such as Samsung, Cadbury, etc. have multiple products under a single brand name.

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

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

(i) Product cost: One of the most important factor affecting price of a product or service is its cost. This includes the cost of producing, distributing and selling the product. The cost sets the minimum level or the floor price at which the product may be sold. Generally all marketing firms strive to cover all their costs, at least in the long run. In addition, they aim at earning a margin of profit over and above the costs. 

(ii) The Utility and Demand: While the product costs set the lower limits of the price, 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. In fact 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 at least equal to the sacrifice made in terms of the price paid.

(iii) Extent of Competition in the Market: Between the lower limit and the upper limit where would the price settle down? This is affected by the nature and the degree of competition. The price will tend to reach the upper limit in case there is lesser degree of  competition while under conditions of 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. Generally the objective is stated to be maximise the profits. But there is a difference in maximising profit in the short run and in the long run.

(vi) Marketing Methods Used: Price fixation process 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 services provided.

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

Ans: The main components of physical distribution are explained as follows: 

(i) Order Processing: In a typical buyer-seller relationship, order placement is the first step. Products flow from manufacturers to customers via channel members while orders flow in the reverse direction, from customers to the manufacturers. A good physical distribution system should provide for an accurate and speedy processing of orders, in the absence of which, goods would reach the customers late or in wrong quantity or specifications. This would result in customer dissatisfaction, with the danger of loss of business and goodwill. 

(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 because unless the goods are physically made available, the sale cannot 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.

(iv) Inventory Control: Linked to warehousing decisions are the inventory decisions which hold the key to success for many manufacturers, especially those where the per unit cost is high. A very important decision in respect of inventory is deciding about the level of inventory. 

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 people and undermines social values. The proponents, however, argue that advertising is very useful as it increases the reach, brings the pay unit cost of production down and adds to the growth of the economy. It is therefore important to examine the major criticisms against advertising and see the extent to which these are true.

The opponents of advertising argue that advertising unnecessarily adds to the cost of the product, which is ultimately passed on to the buyers in the form of high prices. an advertisement on TV, for a few seconds, for example, costs the marketers several lakhs of rupees. Similarly an advertisement in print media say in a newspaper or a magazine costs the marketers a large amount of money. The money spent adds to the cost, which is an important factor in fixation of the price of a product.

7. Distinguish between advertising and personal selling.

Ans: 

Advertising	Personal Selling
Advertising is an impersonal form of communication.	Personal selling is a personal form of communication.
Advertising involves transmission of standardised messages, i.e., the same message is sent to all the customers in a market segment.	In personal selling, the sales talk is adjusted keeping view of the customer’s background and needs.
Advertising is inflexible as the message can’ t be adjusted to the needs of the buyer.	Personal selling is highly flexible. As the message can be adjusted.
It reaches masses, i.e., a large number of people can be approached.	Only a limited number of people can be contacted because of time and cost considerations.
In advertising the cost per person reached is very low.	The cost per person is quite high in the case of personal selling.
Advertising can cover the market in a short time.	Personal selling efforts take a lot of time to cover the entire market.
Advertising makes use of mass media such television, radio, newspaper, and magazines.	Personal selling makes use of sales staff, which has limited reach.
Advertising lacks direct feedback. Marketing research efforts are needed to judge customers’ reactions to advertising.	Personal selling provides direct and immediate feedback. Sales persons come to know about the customers’ reactions immediately.
Advertising is more useful in creating and building interest of the consumers in the firm’s products.	Personal selling plays an important role at the awareness stage of decision making.
Advertising is more useful in marketing to the ultimate consumers who are large in numbers.	Personal selling is more helpful in selling products to the industrial buyers or to intermediaries such as dealers and retailers who are relatively few in numbers.

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

Ans: The Factors determining the choice of channel of distribution are:

(i) Technical Product: Highly complex technical products usually require direct sales channels with dedicated technical expertise to explain features and address customer concerns effectively. 

(ii) Product price: The price of a product may vary depending on whether it’s sold directly to consumers by the manufacturer or through intermediaries.

(iii) Frequency of purchase: Purchase frequency describes the number of times that your customers make a purchase from you within a specified period of time. Purchase Frequency measures the purchase cycle of a product and gives you an indication of how often people are buying the product. 

(iv) Selling to Customer or business: Selling to a business, like a retailer or wholesaler, is considered an “indirect” channel as it involves intermediaries between the producer and the final consumer. The choice of channel depends on factors like product type, market size, and customer requirements.

(v) Selling abroad: International distribution channels are the chains of companies like exporters, importers, wholesalers, distributors and retailers to get your product from your home country sold in countries abroad.

(vi) Competition channel of distribution: The choice of channel also depends on the channel selected by the competitors. This competition happens between different intermediaries at the same level within the distribution chain, like different retail stores selling the same brand.