Principles of Marketing Solved Question Paper’ 2023
COMMERCE
(Core)
Paper:
C-511 (Group-III) (Principles of
Marketing)
Full
Marks: 80
Pass
Marks: 32
Time:
3 hours
The
figures in the margin indicate full marks for the questions
1. (a) State whether the
following statements are True or False: 1x4=4
(1)
Consumer determines price; price determines cost.
Ans:
False (Prices determined by forces of demand and supply)
(2)
Supervision is an element of directing function of management.
Ans:
True (four directing elements - communication, leadership, supervision, and
motivation)
(3)
Budgetary control is necessary for decentralizing the control system.
Ans:
False
(4)
PERT stands for Project Evaluation and Review Technique.
Ans:
Project or Program Evaluation Review Technique (PERT)
(b) Fill in the
blanks/Choose the correct option from the following: 1x4=4
(1)
Marketing is both consumer oriented and _______ -oriented.
Ans:
Market
(2)
Social issues of consumer reflect difference in _______.
Ans:
Cultural values
(3)
Warehousing covers two sub-functions, namely _______ and _______ of finished
goods.
Ans:
Storage and Management
(4)
Marketing creates _______ for goods and services.
(i)
customer.
(ii)
demand.
(iii)
product.
(iv)
All of the above.
Ans: (ii) Demand
2. Write short notes on
the following: 4x4=16
(a) Demographic
environment.
Ans:
Demography:
It is defined as the statistical study of the human population and
its distribution. This is one of the most influencing factors because it deals
with the people who form the market. A company should study the population, its
distribution, age composition, etc. before deciding the marketing strategies.
Each group of population behaves differently depending upon various factors
such as age, status, etc. if these factors are considered, a company can
produce only those products which suits the requirement of the consumers. In
this regard, it is said that “to understand the market you must understand its
demography”.
(b) Market segmentation.
Ans: Marketing Segmentation
A
market consists of large number of individual customers who differ in terms of
their needs, preferences and buying capacity. Therefore, it becomes necessary
to divide the total market into different segments or homogeneous customer
groups. Such division is called market segmentation. They may have uniformity
in employment patterns, educational qualifications, economic status,
preferences, etc. Market segmentation enables the entrepreneur to match his
marketing efforts to the requirements of the target market. Instead of wasting
his efforts in trying to sell to all types of customers, a small scale unit can
focus its efforts on the segment most appropriate to its market. It is defined
as “The strategy of dividing the market in order to consume them”.
According
to Philip Kotler, “It is the subdividing of market into homogenous subsets of
consumers where any subset may be selected as a market target to be reached
with distinct Marketing Mix”
Basis of Segmentation:
Market
segmentation dividing the Heterogeneous market into homogenous sub-units.
Heterogeneous means mass marketing, which refers people as a people.
Homogeneous means dividing the market into different sub units according to the
tastes and preferences of consumers.
Objectives
of Market Segmentation
a) To identify the need, taste and buying
motive of the target consumers
b) Grouping of customers on the basis of their
common characteristics such as behaviour, income, age, geography etc.
c) To introduce product according to the needs
of the consumers.
d) To make Consumer oriented approach for the
firm
e) To introduce suitable marketing mix.
f) To define marketing strategies, targets and
goals of the firm.
(c) Product support
service.
Ans: After-sale
services or product support service: Customers are the assets of every
business. Sales professionals must try their level best to satisfy customers
for them to come back again to their organization. After sales service refers
to various processes which make sure customers are satisfied with the products
and services of the organization. The needs and demands of the customers must
be fulfilled for them to spread a positive word of mouth. In the current
scenario, positive word of mouth plays an important role in promoting brands
and products. After sales service makes sure that products and services meet or
surpass the expectations of the customers. After sales service includes various
activities to find out whether the customer is happy with the products or not?
After sales service is a crucial aspect of sales management and must not be
ignored.
(d) Direct marketing.
Ans: Direct marketing or Zero-level
channel of marketing (producer to consumer): Zero
level marketing channel is also called as direct marketing or direct selling.
This channel consists of the producer who directly sells his products to the
ultimate consumers. This is the shortest, simplest, & cheapest form of
distribution. Producers are benefited by increased profit, whereas consumers
are benefited by reduced price. This is possible because it eliminates the
middleman completely. With the development of sophisticated & efficient
retailing like supermarkets, chain-stores, automatic selling machine is
financially sound follow this channel of distribution. For products like
jewelry & industrial goods like machinery, this is the best channel.
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B.Com 5th Principles of Marketing Solved Question Papers (CBCS and NON-CBCS Pattern)
3. (a) Define marketing.
Discuss about the evolution of marketing concept. 4+10=14
Ans: Marketing:
Marketing is an ancient art and is found everywhere. Formally or informally,
people and organizations engage in a vast numbers of activities relating to
exchange of goods and services that could be called marketing. Good marketing
has become an increasingly vital ingredient for business success. It is
embedded in everything we do- from the clothes we wear, to the web sites we
click on, to the ads we see. Marketing deals with identifying and meeting human
and social needs or it can be defined as “meeting needs profitably”.
The
American Marketing Association has defined marketing as “an organizational
function and a set of processes for creating, communicating and delivering
value to the customers and for managing customer’s relations in ways that
benefit the organization and the stake holders.”
Peter
Drucker says it this way that,” the aim of marketing is to know &
understand the customer so well that the product or service fits him and sells
itself. All that should be needed is to make the product or the service
available.”
History of Marketing
FULL NOTES WILL BE AVAILABLE IN OUR YOUTUBE VIDEO
Or
(b) What do you mean by
marketing mix? Discuss the characteristics, objectives and importance of
marketing mix. 4+3+4+3=14
Ans:
Marketing mix refers to one of the major concept in modern marketing. According
to Philip kotler “marketing mix is a set of controllable marketing variables
that the firm blends to produce the response it wants in the target market”. It
is the combination of four controllable variables which constitutes the
company’s marketing system. The four controllable variables are:
a)
The product
b)
The price structure
c)
The promotional activities
d)
The distribution system
These
elements are inter-related and inter dependent since decisions in one area
usually actions in other area.
Features of marketing mix:
1)
Combination of four controllable variables: Marketing mix is the combination of
four variables inputs namely product, price, promotion and place that
constitute the core of organizations marketing system
2)
Inter relation of variables: The four P’s of marketing mix are interrelated and
independent as the decision of one area automatically depends upon the other.
3)
Managerial activity: Marketing mix is a managerial activity i.e. it is the
responsibility of the marketing manager to combine the four ingredients in the
right proportion as to achieve optimum results.
4)
Dynamic concept: Marketing mix is a dynamic concept as there is need of
continuous changes as per the changes taking place in the marketing
environment.
5)
Consumer orientation: All marketing activities are directed towards consumer
satisfaction therefore marketing mix variables need to be flexible to adopt the
needs expectation, purchasing power and buying behavior of the consumer.
4. (a) What are the
elements that influence in deciding the principles of market segmentation?
Discuss. 14
A market consists of large number of individual customers who
differ in terms of their needs, preferences and buying capacity. Therefore, it
becomes necessary to divide the total market into different segments or
homogeneous customer groups. Such division is called market segmentation. They
may have uniformity in employment patterns, educational qualifications,
economic status, preferences, etc. Market segmentation enables the entrepreneur
to match his marketing efforts to the requirements of the target market.
Instead of wasting his efforts in trying to sell to all types of customers, a
small scale unit can focus its efforts on the segment most appropriate to its
market. It is defined as “The strategy of dividing the market in order to
consume them”.
According
to Philip Kotler, “It is the subdividing of market into homogenous subsets of
consumers where any subset may be selected as a market target to be reached
with distinct Marketing Mix”
According
to Philip Kotler,
market segmentation means "the act of dividing a market into distinct groups of buyers who
might require separate products and/or marketing mixes."
According
to William J. Stanton,
"Market
segmentation in the process of dividing the total heterogeneous market for a
good or service into several segments. Each of which tends to be homogeneous in
all significant aspects."
Basis of Segmentation:
Market
segmentation dividing the Heterogeneous market into homogenous sub-units.
Heterogeneous means mass marketing, which refers people as a people. Homogeneous
means dividing the market into different sub units according to the tastes and
preferences of consumers. The following factors are considered
before dividing the market:
1.
Geographical
Factors: On the basis of geographical factors, market
may be classified as state-wise, region-wise and nation-wise. Many companies
operate only in a particular area because people behave differently in
different areas due to various reasons such as climate, culture, etc.
2.
Demographic
Factors: This is the most widely used basis for market
segmentation. Market is classified on the basis of population, using ages,
income, sex, etc. as indicators.
a.
Age : It is
known fact that people of different ages like different products, need
different things, and behave differently. Almost all companies use this factor
to reach the target market. On the basis of age, market in our country is
divided into children’s market, teenager’s market, adult’s market, and the
market for old people. Companies use the census data to prepare marketing strategies
on the basis of age.
b.
Sex:
There is a variation of consumption behavior between males and females. This
factor is used as a basis for segmentation for products like watches, clothes,
cosmetics, leather goods, magazines, motor vehicle, etc.
c.
Family
Life Cycle: This is another important factor, which
influences the consumer’s behavior. E.g.: Before making purchases, a bachelor
may consult his friends, a boy may ask his parents and a married man asks his
wife. The study of family life cycle helps a company to prepare an effective
promotional strategy.
3.
Psychological
factors: In psychographic segmentation, elements like
personality traits, attitude lifestyle and value system form the base. The
strict norms that consumers follow with respect to good habits or dress codes
are representative examples. E.g.: Mr. Donald’s changed their menu in India to
adopt to consumer preference. The market for Wrist Watches provides example of
segmentation. Titan watches have a wide range of sub brands such as Raga, fast
track, edge etc. or instant noodle markers, fast to cook food brands such as
Maggi, Top Ramen or Femina, women’s magazine is targeted for modern women.
4.
Economic
Factors: On the basis of economic factors, markets have
been classified in the westerns countries as follows:
a. Upper Class b. Upper-upper class c. Lower-upper class
d. Middle class e. Upper-middle class f. Lower-middle class
g. Lower class h. Upper-lower class i. Lower-lower class
In our country, it is classified as
upper class (rich), middle class, and the lower class. Another classification
based on income in our country is as follows:
a. Very Rich b. The Rich class c.
The Aspiration Class and
d. The Destitute.
5. Behavior Factors:
This is one of the most important bases used for market segmentation. Market is
classified on the basis of attitude of consumers and special occasions.
a.
Occasions:
Sellers can easily find out certain occasions when people buy a
particular product. E.g.: Demand for clothes, greeting cards, etc. increases
during the festival season. Demand for transportation, hotels etc. increases
during the holiday seasons.
b.
Benefits:
Each consumer expects to fulfill certain desire or to derive some benefits from
the product he purchases. E.g.: A person may purchase clothes to save money and
another to impress others. Based upon this, markets may be classified as
markets for cheap price products and market for quality products etc.
c.
Attitude:
On the basis of attitude of consumers, markets may be classified as
enthusiastic market, indifferent market, positive market, and negative market.
Or
(b) Contrast personal
factors with psychological factors that influence consumer buying behaviour. 14
Ans: Personal
Factors: The personal factors include the buyer’s age
and stage in the life cycle, occupation and economic position, personality and
self-concept and lifestyle and values.
a.
Age and Stage in the Life Cycle: People buy different products like food,
cloths furniture and this is often age related. Trends like delayed marriages,
children migrating to distant cities, tendency of professionals has resulted in
different opportunities for marketers at different stages in consumer life
cycle.
b.
Occupation and Economic Position: Occupation also influences buyer’s
behaviour. A blue collar worker will buy work clothes, work shoes and lunch
boxes; a company president will buy dress suits, air travel and club
memberships. Marketers try to identify the occupational groups and then make
products according to their needs and demands. Product choice is greatly
affected by economic circumstances – spendable income, savings and assets and
attitude towards spending and savings.
c.
Personality and Self Concept: Each person has personality
characteristics that influence his / her buying behaviour. Personality means a
set of distinguishing psychological traits that has to response to
environmental stimuli. Personality can be a useful variable in analyzing
consumer brand choice. The idea is that brands also have personalities and
consumers like to choose those brands which suits or match their personality.
Psychological
Factors: A person’s buying behaviour is influenced by psychological factors
such as follows:
a. Learning:
It refers to changes in individual behaviour that are caused by information and
experience. For example, when a customer buys a new brand of perfume, and is
satisfied by its use, then he/she is more likely to buy the same brand the next
time. Through learning, people acquire beliefs and attitudes, which in turn
influence the buying behaviour.
b.
Attitude: It is a tendency to respond in a given manner
to a particular situation or object or idea. Consumers may develop a positive,
or negative or neutral attitude towards certain product or brands, which in
turn would affect his/her buying behaviour.
c. Motives:
A motive is the inner drive that motivates a person to act or behave in a
certain manner. The marketer must identify the buying motives of the target
customers and influence them to act positively towards the marketed products.
Some of the buying motives include:
- Pride and possession
- Love and affection
- Comfort and convenience
d.
Perception: It is the impression, which one forms about a
certain situation or object. A motivated person is ready to act. But the way or
the manner in which he acts is influenced by his/her perception of the
situation. For instance, a student may perceive examinations as an important
event, and therefore, he/she would make every possible effort including
purchase of new stationery like pens, whereas, another student may be casual
about the examinations, and therefore, would not make extra efforts.
e.
Beliefs: A belief is a descriptive thought, which a
person holds about certain things. It may be based on knowledge, opinion,
faith, trust and confidence. People may hold certain beliefs of certain
brands/products. Beliefs develop brand images, which in turn can affect buying
behaviour.
5. (a) Discuss the
strategies relating to product planning and development. 14
Ans:
Product planning is the initial step of the overall marketing programme. In the
competitive business world, producers try to produce products which can be nearer
to consumer expectation. The pressure of competition forces the producers to
replace the existing products by developing new consumers’ suitable and
friendly products. Product planning covers all activities which enable
producers and middle men to determine what should constitute a company’s line
of products. Product development covers the technical activities of product
research, production and design. The well attempt effort of product development
increases the scope to satisfy the needs of the customers.
The
product planning and development cover the following decision making area:
(I)
What products should be produced?
(II)
Expansion of product line.
(III)
Determine the new use of its products.
(IV)
What brand, package and label are used for different products?
(V)
What should be quantity of its production?
(VI)
Pricing policy etc.
In
short, product planning involves the innovation of new products and improvement
in the existing product. In the
words of Karl. H. Tietjen, “Product planning is the act of marketing and
commercialization of new products, the modification of existing lines and the
discontinuance of marginal or unprofitable items”. As per this definition
product planning covers these three considerations.
(I)
The development and introduction of new products.
(II)
The modification of existing lines to suit the changing consumer needs and
preferences and
(III)
Elimination of unprofitable products.
Components
of Product Planning:
a)
Product Innovation:
Innovation is a part of continuous improvement. In the absence of innovation,
products become stale and hence die in the market. Innovation is required to
keep up with the phase of changing market needs. According to Drucker,
“Innovation will change customer’s wants, create new ones, extinguish old ones and
create new ways of satisfying wants.”
b)
Product Diversification: When a
manufacturer offers more products in different areas, it is referred as product
diversification. In fact, when a manufacturer diversification. Diversification
normally involves business in a new area. E.g.:
c)
Product Development: It
involves introducing a new product either by replacing the existing one or
innovating a completely new product. It can either be brand extension or line
extension. Company must be careful while developing new products because
research shows that 92% of them fall in the market. Another danger of product
development is cannibalization.
d)
Product Standardization: It implies
a limitation of types of products in a given class. It gives uniformity in
terms of quality, economy, convenience and Value. E.g.: Each model of T.V.
gives a different standard. Standardization promises a minimum level of
performance and hence is used as a benchmark for quality.
e)
Product Elimination: This
involves an emotional decision of withdrawing the existing product line.
Decision must be carefully taken based upon current market share, future
prospects etc. The product elimination involves reviewing the present product
portfolio, analyze their profitability and then decide on discontinuance of a
product.
f)
Product Mix and Product Line: Product
line is defined as a group of products offered by a company which belongs to
same family of products or similar to each other or substitutes. E.g.: Product
line of ponds for personal care products includes cold creams, talcum powders,
etc. Product Mix is defined as combination of product lines offered by a
company. E.g.: Product mix of Bajaj includes two wheelers, home appliances,
electrical appliances, financial products etc.
Or
(b) Evaluate the
significance of pricing in marketing. What are typical pricing objectives? 10+4=14
Ans: Price is defined as the amount we pay for goods or a
service or an idea. Price is the only element in the marketing mix of a firm
that generates revenue. All other elements generate only cost. Price is a
matter of importance to both seller and buyer in the market place. Only when a
buyer and a seller agree on price, we can have exchange of goods and services
leading to transfer of ownership.
The term ― Price need not be confused with the term ―
Pricing. Price is the value that is put to a product or service and is the
result of a complex set of calculations, research and understanding and risk
taking ability. But pricing is different from price. It refers to decisions
related to fixing of price of a commodity. A pricing strategy takes into
account segments, ability to pay, market conditions, competitor actions, trade
margins and input costs, amongst others. It is targeted at the defined
customers and against competitors.
Importance of Pricing:
Importance of
pricing is spelled out by the following points.
1. Price is the pivot for an economy: Price is the
prime mover of the wheels of the economy namely, production, consumption,
distribution and exchange price influences consumer purchase decision. It
reflects purchasing power of currency. It can determine the general living
standards of people. In essence, by and large every facet of our economy life
is directly or indirectly governed by pricing.
2. Price Regulates Demand: Price increase
or decrease the demand for the product or service. De- marketing strategy can
be easily implemented to meet the rising demand for goods and service.
3. Price is the competitive weapon: The marketers have to perform in a highly competitive
environment. Price is a very important instrument to fight competition. It is
the competition that contributes maximum to the importance of pricing. Pricing
is a highly dynamic function. Because of the immense competition and in meeting
competition, pricing decisions acquire their real importance.
4. Price is the Determinants of profitability: Price determines
the profitability of firm by influencing the sales revenue. Low price is not
always necessary to increase profit. A right price can increase the sales
volume and there by profit. The impact of price rise of fall is reflected
instantly in the rise or fall of the product profitability.
5. Price is a Decision Input: Pricing is
highly risky decision area and mistakes in pricing might reasonably affect the
firm, its profits, growth and future.
6. Marketing
Communication: Price plays an important
role in marketing communication. High price may indicate higher quality. Price
communicates value to the consumer. Customers are basically value-maximizing.
They want to have the maximum value from a given purchase. They form an
expectation of value and act on it. A buyer’s satisfaction is a function of the
product’s perceived performance and the buyer’s expectations. So, if the
product meets the expectations of consumers and their value definitions at the
given price point, price is seen as acceptable. Otherwise consumers tend to be
dissatisfied. They may say that the product is overpriced and they may reject
the offer.
The above discussion indicates that pricing is a critical
element in any company’s marketing plan, because it directly affects revenue
and profit goals. Effective pricing strategies must consider costs as well as
customer perceptions and competitor reactions, especially in highly competitive
markets. Today, many firms are trying to follow the low-price trend. At the
same time, many marketers have been successful in selling more expensive
products and services by combining unique product formulations with engaging
marketing campaigns.
Objectives of Pricing
A business firm
will have a number of objectives in the area of pricing. These objectives can
be short term or long term or primary objectives:
(i) Profit
maximization in the short term.
(ii) Profit
optimization in the long term.
(iii) A minimum
return on investment
(iv) A minimum
return on sales turnover.
(v) Achieving a
particular sales volume.
(vi) Achieving a
particular market share.
(vii) Deeper
penetration of the market.
(viii) Entering
new markets.
(ix) Target
project on the entire product line.
(x) Keeping competition
out, or keeping it under check.
(xi) Keeping
parity with competition.
(xii) Fast
turnaround and early cash recovery.
(xiii)
Stabilizing price and margins in the market.
(xiv) Providing
the commodities at prices affordable by weaker section.
(xv) Providing
the commodities at prices that will stimulate economic development.
6. (a) What do you mean
by physical distribution system? Explain the importance of inventory control in
physical distribution system. 4+10=14
Ans: Physical distribution is the process of making the
movement of the product to the consumers. It encompasses all the activities
involved in the physical flow of products from producers to consumers. Physical
distribution makes the product available at the right place and at the right time,
thereby maximizing the company’s chance to sell the product and strengthen its
competitive position. The products have to be carried to places of consumption;
they have to be stored; and they have to be distributed. The product has to be
marketed over an extensive marketing territory. It has to be transported
through long distances, stored for a considerable length of time before being
consumed. Physical distribution largely determines the customer service level.
Inefficient physical distribution leads to loss of customers and markets. There
are some products which are subject to the seasonality factor - either
production is continuous but demand is seasonal, or demand is continuous but
production is seasonal. In all such cases, physical distribution acquires
additional importance.
Inventory Planning and Control:
Inventory refers
to the stock of products a firm has on hand and ready for sale to customers.
Inventories are kept to meet market demands promptly. Inventory is the link
interconnecting the customer’s orders and the company’s production activity. Infact the entire physical
distribution management rotates around the inventory management. Inventory
management is the heart of the game of physical distribution. Marketing managers undertake an
inventory planning to develop adequate assortments of products for the target
market and also try to control the costs involved in obtaining and maintaining
inventory.
FULL ANSWER IN OUR YOUTUBE VIDEO
Or
(b) Define a channel of
distribution. Discuss the role of distribution channels in marketing and
distribution. 4+10=14
Ans: Channels of Distribution: One of the important problems
of marketing is the distribution of goods & services to the right place,
person & the right time. Manufacturers often find it difficult to decide about
the effective distribution system. The channel of distributions refers to the
group of intermediaries, which perform the distribution functions. A channel of
distribution is an organised net-work or a system of agencies and institutions
which, in combination, perform all the activities required to link producers
with users and users with producers to accomplish the marketing task.
According to Philip Kotler, “The distribution is the set of
all firms & individuals that assist in the transferring the little of goods
& services as they move from producers to customers.”
According to Richard Buskirk, “Channel of distribution
is that system of financial organization by which a producer sends his products
to the hands of consumers.”
According to Cundiff and Still, “Channels of
distribution are those marketing nets through which the producer flows the
products toward the market.”
Functions (Role) of the Channels of Distribution
The following are the main function of the channel of
distribution:
(1) Extending Suggestions Regarding
Price-Determination: The middlemen are in the direct contact of the
consumers. Therefore, they possess the knowledge that on what price may the
consumer accepts the product. Thus, the channel of distribution extends
necessary advice to the producers in the price-determination.
(2) Regularizing the Decisions: The channel
of distribution regularizes the decisions and the transactions, resulting in
the lowering of the costs. If the products are sold off to some such store
which has many branches in the city, the producer then doesn't need going to
various branches frequently or repeatedly. The main cause of the same is that
if the product seems suitable for the store, it will itself send the purchase
order to the manufacturer and in this way, with only the limited efforts, it
will become possible to sell the products in bulk quantities.
(3) Managing the Finance: We find that
the agents generally send some advance money along with the order. Very often
the product is supplied to the agents through the bank so that the company gets
the documents discounted from the bank. Thus the finance is arranged. Thus
it-is also the function of the agents to arrange the finance.
(4) Performing the Promotion
Activities: By the middlemen, particularly by the retailers, the
advertisements, individual sales, and the sales promotion activities are
performed. Very often the middlemen themselves plan and implement the promotion
activities and sometimes the manufacturers to extend their help in such work.
Really, the result or the outcome of the sales, by the producer, very much
depends upon the promotion activities undertaken by the middlemen.
(5) Serving the Consumers: Due to the
middlemen only, the consumers get their required products. Only in accordance with
the needs of the consumers, the retailers arrange to purchase the products from
the wholesalers and the manufacturers.
(6) Minimizing the Total
Transactions: If there were no middlemen, the producer would have been
required to sell the product directly to the consumers which would have result
into more of expenditure and trouble. Really speaking, due to the existence of
the middlemen only, the number of total transactions is reduced which also
reduces the costs of distribution.
***
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