ICSE Class 10 Commercial Applications Board Exam Question Paper 2016 with Solutions

ICSE Class 10 Commercial Applications Board Exam Question Paper 2016 with Solutions

SECTION-A (40 Marks)
(Attempt all questions from this Section)

Question 1:
State a difference between each of the following: [10 Marks]

(a) Marketing and Selling [2 Marks]

Answer:

Teacher's Note:
a) Marketing is a broader concept that begins long before production and continues even after the sale takes place, focusing on customer satisfaction.
b) Students must present the difference in a tabular format with corresponding points for clarity and to score full marks.

(b) Renewable resources and Non-renewable resources. [2 Marks]

Answer:

Teacher's Note:
a) Renewable resources are naturally replenished over a short time span, whereas non-renewable resources take millions of years to form.
b) Providing suitable examples for both categories is essential for obtaining full marks in this type of comparative question.

(c) Apprenticeship Training and Internship Training. [2 Marks]

Answer:

Teacher's Note:
a) Apprenticeship focuses heavily on learning a craft or trade under a master worker over an extended period.
b) Internship typically bridges formal education and professional practice through institutional tie-ups.

(d) Direct Cost and Indirect Cost. [2 Marks]

Answer:

Teacher_s Note:a) Direct costs can be conveniently traced to a specific product or department, while indirect costs are shared across multiple operations.
b) The official key contains minor spelling variations ("on cost centre"), but students should use standard accounting terminology ("or cost centre").

(e) Cash Credit and Overdraft. [2 Marks]

Answer:

Teacher's Note:
a) Cash credit is typically sanctioned for a working capital requirement against goods or assets, often maintained in a separate account.
b) Overdraft is a facility granted to current account holders allowing temporary excess withdrawals up to a sanctioned limit.

Question 2:
(a) What are convenience products? Give two examples. [2 Marks]

Answer:
Convenience Products: The products which customer purchases for personal convenience and are purchased frequently, immediately and with minimum efforts, are known as convenience products. For example, news-paper, cigarettes etc.

Teacher's Note:
a) Convenience goods are bought frequently with minimum comparison and buying effort.
b) Students must include a definition along with at least two valid examples to secure full marks.

(b) What is understood by the Going Concern Concept of Accounting? [2 Marks]

Answer:
In going concern concept of accounting, it is assumed that the business will continue to exist for a long time in the future. A firm is said to be a going concern when there is neither the intention nor the necessity to wind up its affairs. This concept also implies that the existing liabilities will be paid at maturity. Unsold stock of goods are taken to the next year.

Teacher's Note:
a) Under this fundamental accounting assumption, the enterprise is viewed as operating indefinitely without liquidation.
b) Mentioning the valuation of assets and continuity of operations is crucial for a complete answer.

(c) Mention any four causes of the Greenhouse Effect. [2 Marks]

Answer:
Four causes of greenhouse effect are: Carbon dioxide, Water vapour, Methane and Ozone.

Teacher's Note:
a) Greenhouse gases trap heat in the atmosphere, leading to global warming.
b) Students should list exact primary greenhouse gases as accepted by the examining board.

(d) What are the advantages of 'Account Payee' crossing of a cheque? [2 Marks]

Answer:
Advantage of 'Account Payee' crossing of a cheque is:
1. To prevent fraudulent encashment.
2. Crossing provides a protection or safeguard against loss to the securing payment through a bank.

Teacher's Note:
a) Account payee crossing ensures that the proceeds of the cheque are credited only to the specified payee's bank account.
b) This eliminates the risk of cash encashment by unauthorized persons.

(e) What is a 'Recurring Deposit Account'? [2 Marks]

Answer:
Recurring Deposit Account: In this account, the account holder is required to deposit a specific amount every month for a specified period of time. After the expiry of the specified period, the depositer gets back his total deposit amount with interest thereon. A pass book is issued to the depositer but no cheque book is issued.

Teacher's Note:
a) This deposit type encourages regular savings habits among individuals by depositing fixed sums periodically.
b) Interest is compounded and paid along with the principal upon maturity.

Question 3:
(a) Explain any two qualities of a good salesman. [2 Marks]

Answer:
Two qualities of a salesman:
1. Cheerful: Pleasing manners and a smiling face are necessary for a successful salesman. He should be polite and courteous.
2. Sensitive: A good salesman should be sensitive to the needs and expectations of customers. He is a good listener and has patience.

Teacher's Note:
a) Personality traits and effective communication skills are vital for building rapport with buyers.
b) Students should state any two well-explained qualities as requested by the question.

(b) What are Open Market Operations of a Central Bank? [2 Marks]

Answer:
Open Market Operations: The open market operations mean the sale and purchase of securities by the central bank in the open market. When the central bank wants to reduce the volume of credit, it sells securities in the market. Similarly, when the central bank wants to expand credit, it buys securities in the open market. This increases the money supply in the banking system.

Teacher's Note:
a) Open market operations act as a quantitative monetary policy tool to control money supply and credit creation.
b) Clearly distinguishing between the sale and purchase of securities is necessary for full credit.

(c) Why are interviews an essential part of the selection procedure? [2 Marks]

Answer:
Interviews are essential part of the selection procedure because employer can judge the candidate's suitability for a job by assessing his/her facial expression, postures, gestures and speaking skills. Interviews are also beneficial to the candidate as he/she gets the opportunity to know about the job and the organisation.

Teacher's Note:
a) Interviews facilitate two-way communication and evaluation of non-verbal cues.
b) Both employer and candidate perspectives should be highlighted for a comprehensive answer.

(d) What is 'Indirect Labour Cost'? [2 Marks]

Answer:
Indirect labour cost is the wages paid to the labour which indirectly helps in the production process, which cannot be wholly and directly identified with a particular product.
Example: Wages paid to storekeeper, foreman, timekeeper, inspectors.

Teacher's Note:
a) Indirect labour supports manufacturing operations generally rather than working directly on specific units.
b) Providing appropriate industrial examples like storekeeper or foreman strengthens the answer.

(e) Mention any two features of a Balance Sheet. [2 Marks]

Answer:
Features of Balance Sheet:
1. A Balance Sheet is always prepared on a particular date.
2. It is prepared after the preparation of Income and Expenditure account (or Profit and Loss Account).

Teacher's Note:
a) A Balance Sheet reflects the financial position (assets and liabilities) of an enterprise at a specific point in time.
b) Students can list any two accurate features from standard accounting characteristics.

Question 4:
Justify a reason either for or against each of the following: [10 Marks]

(a) On the job training includes practical and theoretical learning. [2 Marks]

Answer:
Against: Under on the job training, employees are assigned a specific job and they learn by performing the job in actual work condition.

Teacher's Note:
a) On-the-job training is strictly practical ("learning by doing") at the actual workplace.
b) Theoretical instruction is typically imparted during off-the-job training methods.

(b) A demand draft is preferable to a cheque. [2 Marks]

Answer:
For: A demand draft is preferable to a cheque because it is payable to the person named in it or to his order. It is always payable on demand and is, therefore known as 'demand draft'.

Teacher's Note:
a) Demand drafts are pre-paid instruments issued by a bank, which eliminates the risk of dishonour due to insufficient funds.
b) This makes them highly preferred in business transactions where trust or certainty of payment is critical.

(c) Central Bank is the 'lender of last resort'. [2 Marks]

Answer:
For: The Central Bank acts as the bank for all commercial banks in the country. Commercial banks are required to keep a cash reserve with the Central Bank so as to control credit in the country. When a commercial bank needs funds it can obtain loans and rediscount bills with the Central Bank.

Teacher's Note:
a) The Central Bank comes to the rescue of commercial banks facing financial panic or liquidity crunch.
b) Mentioning financial assistance and rediscounting of bills explains the rationale clearly.

(d) Training is related to improving skills for performing a job. [2 Marks]

Answer:
For: Training increases adaptability of employees to new methods and new technology. It helps the employees to do the job more efficiently.

Teacher's Note:
a) Training focuses on enhancing specific job-related operational skills.
b) It directly contributes to organizational productivity and reduced error rates.

(e) In a competitive market, parity pricing is the appropriate strategy. [2 Marks]

Answer:
For: Parity-pricing involves charging according to what competitors are charging. Under this pricing strategy a business firm adjusts its own price policy to the general pricing structure in the industry.

Teacher's Note:
a) Parity pricing helps firms maintain competitive standing without engaging in price wars.
b) It is widely adopted for homogeneous products in competitive market structures.

SECTION - B (60 Marks)
(Attempt any four questions from this section)

Question 5:
(a) Explain 'Sales-Oriented Stage' and 'Marketing-Oriented Stage' of Marketing. [5 Marks]

Answer:
Sales Oriented Stage: In this stage, the focus shifted from production to selling. 'How to Sell' became a problem and the new motto was 'get rid of what you have'. Products cannot be sold without an effective sales force. It required emphasis on increasing the sales even at the cost of consumer satisfaction. Thus, the sales-oriented stage was characterised by hard selling. The sales concept paid little attention to whether the product was actually needed or not.
Marketing-oriented Stage: A company philosophy focused on discovering and meeting the needs and desires of its customers through its product mix. Consumer awareness forced the producers to promote marketing. The aim of marketing should be to know and understand the customer so well that the product or service fits him or her and thus sells itself. In this stage the key questions became:
What do customers want?
How can we develop it?
How can we keep our customers satisfied?

Teacher's Note:
a) The sales orientation emphasizes aggressive selling and persuasion, whereas marketing orientation centers on customer needs and satisfaction.
b) Students must detail the evolution of business philosophy to earn full marks.

(b) Why is Service becoming more important than a Product? Give five reasons. [5 Marks]

Answer:
Service is becoming more important than a Product because:
1. Economic Planning: Government of India launched five year plans in 1951 to achieve rapid growth of the country. Industrialisation requires industrial infrastructure (transport, communication, power, insurance, banking, finance etc.) and social infrastructure (education, medical facilities, community services etc.). Therefore, these services have expanded rapidly in the country.
2. Increasing Urbanisation: Urbanisation has been another cause of expansion of Service sector in India. There has been shifting of population from rural to urban areas. Urbanisation leads to rise in demand for infrastructure services such as communications, public utilities and distribution services.
3. Media: Television, internet and other media have led to spurt in tourism. Modern technology has made business more comfortable. Tourism in turn has promoted all types of services such as hotel, restaurants, travel agents, amusement parks, event management etc. Expanding world trade has also had a demonstration effect.
4. Rise in Per Capita Income: Growing per capita income has led to demand for new and better services. Interior decoration, garden care, beauty parlours, slimming centres, health clubs etc. are examples of these services. More leisure time creates demand for recreation and entertainment services such as water parks, etc.
5. Women Workforce: Higher percentage of women in workforce has created demand for baby sitting, household domestic help and such other personal services.

Teacher's Note:
a) The shift toward a service economy is driven by socio-economic factors, rising incomes, and changing lifestyles.
b) Students should clearly list and explain any five distinct reasons as requested in the question.

(c) Explain any five steps generally involved in the selection of employees. [5 Marks]

Answer:
Various stages of the Selection Process of employees in an organisation are:
1. Preliminary Interview: This is the first step in the process of selection which is conducted to know the minimum qualification, experience and age of the candidates.
2. Application Form: After qualifying Preliminary interview the candidates are asked to fill in the prescribed application form to get the written details of the candidates.
3. Employment Test: This is conducted to check the required skills in the candidates.
4. Selection Interview: It is a method of checking the information obtained through application and employment test, through face to face communication with the candidates. It also helps the candidate to acquire knowledge about the job details and the company.
5. Checking References: It is the process of verifying the names given by the candidate, of the people who knows about him, his previous job and his character.
6. Medical Determination and Final Approval: A medical test is conducted to ensure the physical fitness of the candidate which leads to the final approval. The finally approved candidate are issued appointment letters.

Teacher's Note:
a) Employee selection is a sequential filtering process designed to hire the most competent candidate.
b) Listing the steps in chronological order is essential for scoring maximum marks.

Question 6:
(a) Explain the five consumer rights as per the Consumer Protection Act, 1986. [5 Marks]

Answer:
The Consumer Protection Act provides for the following rights of consumer:
1. The right of safety: This is the right to be protected against the marketing of goods which are hazardous to life and property. There are various risks involved in the consumption and use of products, such as food, drugs, toys, electrical appliances, etc. For example, gas cylinder, if not sealed properly may cause injury or even death. The consumers have the right to get protection against such risks.
2. The right to choose: The consumer should be assured access to a variety of goods at competitive prices. This means the seller should not use aggressive selling techniques to sell the product to the consumer. There should be freedom to choose from alternative products. This requires free competition in the market. If enough varieties of products at competitive prices are available in the market, consumers have the opportunity to make a free choice.
3. The right to be informed: The consumer has the right to be informed about the quality, potency, purity, standard and price of the goods he intends to purchase.
4. The right to be heard: The consumer has a right to register his dissatisfaction and get his complaint heard at appropriate forums. This right includes the right to make protest. The above three rights are meaningless without the right to be heard. Therefore, grievances and claims of consumers must be heard and considered.
5. The right to seek redressal: It means the right to get claims and complaints settled against manufacturers or sellers due to unfair trade practices and exploitation by them. The consumer has been granted the right of redress if the performance, quality, etc., of a product is unsatisfactory. The product must be repaired, replaced or taken back by the seller. The right to seek redressal will reduce post-purchase doubts and grievances of consumers.

Teacher's Note:
a) These statutory rights safeguard consumers against exploitation by manufacturers and traders.
b) Students must explain all five rights precisely as defined under the Consumer Protection Act.

(b) Explain any two elements of Public Relations. [5 Marks]

Answer:
'Empathy': Empathy means looking at things and events from the other's point of view. It requires that the communicator be in tune with the communicatee. The former should understand the attitude of the latter. For example, a good speaker should know the emotions and sentiments of his audience. Put yourself in the shoes of the listener before you speak.
Empathy involves seeing and feeling matters as others see and feel. It enables an executive to be sensitive with problems of his workers and clients. A person with empathy can be receptive and appreciative of the ideas and opinions of others. Public relations managers and executives must acquire and master the art of empathy. This requires planned practice, experience and experimentation. Empathy is different from sympathy.
'Dialogue': Dialogue means a conversation between two persons with a purpose. If a person goes on talking without allowing other to participate in the discussion or talk, then it is a monologue. In a civilised society, dialogue is the only weapon of reasoning and understanding. Democracy and freedom cannot survive without discussion and debate. In a dialogue each person presents facts and views and considers the fact and views presented by others. It is a reasonable exchange of ideas and opinions. Dialogue reveals the true personality of a person. It helps to reduce prejudice and builds up mutual confidence. Effective dialogue requires impartial listening and understanding.
A good way to start a dialogue is by asking questions and listening to the answers. Dialogue requires a topic about which the participants are informed and to which all can make a contribution by original thinking and discussion.

Teacher's Note:
a) Empathy and dialogue are fundamental communicative pillars for establishing harmonious public relations.
b) Detailed explanation of both elements is required to cover the 5 marks weightage.

(c) 'All vacancies at various levels in an organisation cannot be filled through an internal sources of recruitment'.
Explain any five external sources of recruitment. [5 Marks]

Answer:
External Sources of Recruitment: External sources of recruitment means recruitment of employees from the sources outside the organisation. External sources of recruitment are given below:
1. Advertisements: Advertisements in newspapers and journals are the most widely used method of attracting candidates for all types of jobs. Advertisements bring in a large number of applications due to wide circulation of a national newspaper. This method is convenient and economical also.
2. Placement Agencies: Private employment agencies advertise the vacancies, receive applications, conduct interviews and short-list candidates on behalf of employers. These agencies have become a popular source for recruiting managerial and technical personnel.
3. Employment Exchanges: Employment exchanges run by the Government are another external source of recruitment. Anyone seeking employment can get himself registered with the employment exchange. Employers notify job vacancies to employment exchanges. The exchange supplies a list of candidates to fulfil required qualifications.
4. Gate Hiring: Small firms make recruitment at the factory gate. Workers gather at the factory gate after reading the notice of vacancies. The suitable candidates are selected. This method is used to fill temporary and casual vacancies.
5. Unsolicited Applicants: Persons in search of employment visit offices of companies. They carry their resume and certificates. A record of such candidates may be maintained and they may be considered if there is a vacancy. Unsolicited applicants are also known as casual callers.
6. Educational Institutions: Representatives of companies hold interviews in educational institutions and select the qualified students. This source is also known as campus recruitment. It is suitable for recruiting engineers, computer experts and managers.
7. Jobbers and Contractors: When workers are to be hired at a short notice and without going through the usual selection procedure, jobbers and contractors serve as a useful source of recruitment.
8. Recommendations: Applicants introduced by friends and relatives can be a source of recruitment. When an existing employee or a business friend recommends a person, a sort of preliminary screening takes place.

Teacher's Note:
a) External recruitment injects fresh talent and wider choice into the organization.
b) Students should explain any five distinct external sources clearly with headings.

Question 7:
(a) Explain fixed cost with suitable example. [5 Marks]

Answer:
Fixed cost: Fixed costs are those costs which remain fixed in amount irrespective of changes in the volume of output during a given period of time. Such costs do not change with changes (increase or decrease) in the level of activity upto a certain limit.
For Example: A sugar mill wholly remains closed for about three months during a year due to non availability of raw material (sugar-cane). But the mill-owner has to incur certain costs like the rent of factory building, factory manager's salary, insurance premiums and municipal taxes. These costs are called fixed costs or supplementary costs or overhead costs. They remain the same irrespective of quantity of production during the short period. Fixed cost line is parallel to X axis indicating that the fixed costs remain constant.

Teacher's Note:
a) Fixed costs do not vary with the volume of production within relevant ranges.
b) Providing an industrial or business example helps clarify the conceptual explanation.

(b) Explain variable cost and semi-variable cost with suitable examples. [5 Marks]

Answer:
Variable Cost: Variable costs are those costs which vary in amount which changes in the level of output or activity. Such costs increase and decrease in same proportion in which the level of output increases or decreases. Variable costs vary in total amount but remain constant per unit production.
For example: When the level of output increases from 3,000 units to 4,000 units, the amount of variable costs increase from Rs. 15,000 to 20,000. In this case, the variable cost per unit remains unchanged at Rs. 5 (15,000 / 3,000 and 20,000 / 4,000). Thus, there is a linear relationship between volume of production and total variable costs.
Semi-Variable Cost: Semi variable costs are those costs which vary but not in direct proportion to changes in the volume of production. They are a combination of fixed and variable costs. Such costs are neither perfectly fixed nor absolutely variable.
For example: Telephone charges - Rent remains fixed whereas the charges for calls made during a month are variable.

Teacher's Note:
a) Variable costs fluctuate directly with output levels, whereas semi-variable costs contain both fixed and variable elements.
b) Including numerical illustrations for variable costs adds precision to the answer.

(c) Explain the first two stages of Product Life cycle. [5 Marks]

Answer:
First two stages of Product Life Cycle:
1. Introduction: In this stage, the new product will be launched in the market. Cost incurred in launching the product will be high and sales may be low. Since the product is of a new variety, competition is virtually absent, market is limited and prices are relatively high. This stage is also very risky because a high percentage of new products fail during this period. Effective strategies like introductory offer, money-back guarantee, removing technical and other deficiencies etc., may be employed.
2. Growth: In this stage, Demand and Sales increase and competitors enter the market. Having covered its research and development costs the product becomes profitable. In this stage, promotional focus shifts from "buy my product to buy my brand". Strategies like heavy advertising, expanding distribution channels and keeping the price at competitive levels may be employed.

Teacher's Note:
a) The introduction stage involves high promotional spending and low sales, while the growth stage witnesses rapid market expansion.
b) Students must detail both stages thoroughly to secure full marks.

Question 8:
Write short notes on:
(a) (i) Principle of Timeliness.
(ii) Money Measurement Concept. [5 Marks]

Answer:
(a) (i) Principle of Timeliness: According to this principle, an accounting system should be established in such a fashion that it provides information to all users in a timely manner. If timely information is available to the management, corrective steps can be immediately taken. In India, there is a provision for publishing half-yearly financial reports of the companies. This provides timely information to investors and potential investors to make their investment decisions.
(ii) Money Measurement Concept: According to this principle only those transactions can be recorded in the books of accounts, which can be expressed in the terms of money. This makes accounting records relevant, simple and easy to understand. For example, the retirement of the chairman of the company cannot be recorded because it is not possible to measure the monetary effect of retirement except in terms of gratuity and other benefits payable to the chairman.

Teacher's Note:
a) Timeliness ensures decision-usefulness of financial data, while money measurement restricts accounting entries to monetary transactions only.
b) Both sub-parts must be addressed adequately since they share the 5-mark allocation.

(b) Newspapers as a media for advertising. [5 Marks]

Answer:
Newspapers: Educated and civilised people all over the world read newspapers as a matter of habit. Newspapers reach all places and are read by all types of people. Therefore, newspapers advertising has a general and wide appeal. Newspapers can be classified into several categories on the basis of frequency of publication, (daily, weekly, monthly), language (Hindi, English etc.), region, time (morning, evening and day editions). The choice of particular newspaper for advertising depends upon the circulation of the paper, the type of readers it serves, the geographical region in which it is popular, the cost of space and general reputation of the paper.
The features of newspapers as a media of advertising are:
1. Newspapers has a wide circulation and therefore, the advertisement reaches a large number of persons.
2. The choice of a particular newspaper for advertising depends upon the circulation of the paper, language, types of readers it serves etc.
3. Newspaper are printed daily and therefore the advertisement can be repeated daily.

Teacher's Note:
a) Print media like newspapers provide wide geographical reach and high frequency options for advertisers.
b) Mentioning classification criteria and key features ensures comprehensive coverage.

(c) Narmada Bachao Andolan and the Chipko Movement. [5 Marks]

Answer:
Narmada Bachao Andolan: This was started in 1986 under the leadership of Medha Patkar. It aimed primarily to educate those directly affected about the social and environmental impact of large development projects. It began as a protest against the construction of dams in the Narmada valley. The Andolan mobilised and organised residents of the Narmada Valley on human rights, and environmental issues related to big dams. The leaders of this movement are fighting against displacement and disregard of the rights of the people.
Chipko Movement: It is a tree-embracing movement started in April 1973 in Mandal Village in Uttrakhand against felling of trees by forest contractors. It is a spontaneous peoples movement started by the village women based upon non-violent resistance reflecting awareness of the local people against environmental degradation. Mr. Chandi Prasad Bhatt and Mr. Sunderlal Bahuguna led the movement from the front.

Teacher's Note:
a) Both movements represent significant environmental and social activism in post-independence India.
b) Students should state key leaders, dates, and objectives for both social movements.

Question 9:
Case Study
Maruti Nero, a product of the Maruti group has created a very good reputation in the automobile market. It has nearly 180 outlets and operates in nearly 100 cities. The company provides genuine spare parts and 24/7 roadside assistance with longest warranty coverage. It has collaboration with Tata Motors regarding its sale, service and spares. There are many dealers of Tata motors in Delhi and outskirts, so this has rapidly increased the sale of the car. The company normally goes for institutional advertising in most of the cases. It is indeed a reality that Maruti with minimum advertising has become a popular brand.
With reference to the above:
(a) What is Institutional advertising? State and explain the other types of advertising. [6 Marks]

Answer:
Institutional Advertising: The aim of this type of advertising is to build a favourable image of the organisation rather than to promote the sale of a product or service.
Other types of Advertising: Advertising can be classified in the following categories:
1. Product Advertising: The main objective of product advertising is to promote the sale or reputation of a particular product, brand or service. It is sponsored by manufactures, traders and other organisations to promote the uses, features, benefits and image of their products and services.
2. Informative Advertising: This type of advertising contains information about a product/service or institution. It makes consumers aware of the existence, features, uses of goods and services. For example, advertisements suggesting how to save petrol or avoid accidents are informative advertising.
3. Persuasive advertising: This type of advertising is designed to persuade the consumers to buy a product or service or to support an idea.
4. Reminder Advertising: It attempts to remind people about the product/service or idea.
5. Concept Advertising: This is also known as 'primary demand advertising' or 'pioneering advertising'. Its purpose is to stimulate demand for a new type of product. Advertisements designed to change life style of people is concept advertising. For example, 'a diamond is forever' seeks to promote diamond jewellery as a concept.

Teacher's Note:
a) Institutional advertising focuses on corporate reputation, while product advertising promotes specific offerings.
b) Students must explain institutional advertising along with other distinct categories of advertising to secure full marks.

(b) What is a brand promotion? Explain the methods used for brand promotion. [5 Marks]

Answer:
Brand promotion: Brand promotion comprises all the activities which a business performs to persuade and motivate people to buy the brands of the company. It is done by the manufacturer but sometimes wholesalers and retailers may also undertake brand promotion. The main purpose is to build a market for a brand and to meet competition. For example, several brands are advertised on TV like Pepsodent toothpaste, Lux soap, Titan watches, and so on. In short, brand promotion means making a brand popular.
Methods used for brand promotion:
1. Advertising: It is a widely used medium for brand promotion. Advertisements on TV, radio, newspapers and magazines reach a large number of people. It is due to repeated advertisements that Pepsodent toothpaste, Rin detergent powder, Surf Excel, Hero Honda bike, Maruti car, Nokia mobile, Maggi noodles, Horlicks and other brands have become popular in the market.
2. Sales Promotion: These are the short-term incentives to promote the sale of a brand. It induces buyers to purchase a brand through various incentives like discount coupons, prize contents, money refund. It provides the buyers incentives to purchase the brand 'now' - immediately and without any delay. In fact, available only for a specified short period. It temporarily raises the demand and when incentives are withdrawn, the demand falls down. Now-a-days mobile companies are using sales promotion techniques which induces consumers to buy a connection from a particular company.
3. Maintaining and Improving Quality: In order to promote their brands, business firms are continuously maintaining and improving the quality of their brands. Brands continue to enjoy confidence of consumers only when their quality is maintained and improved.

Teacher's Note:
a) Brand promotion creates distinct brand identity and customer preference in competitive markets.
b) Listing methods like advertising, sales promotion, and quality maintenance provides a complete answer.

(c) Suggest and explain any two suitable media to be used by the company to advertise its product. [5 Marks]

Answer:
Company should use Television and Newspapers for advertising its product:
1. Television: Television is comparatively a new but fast growing medium of advertising. It has become very popular and effective due to the combined force of picture and sound. It has a dramatic impact on the minds of viewers. On television, products can be demonstrated and their use can be explained. Therefore, advertisement has to be repeated frequently.
2. Newspapers: Educated and civilised people all over the world read newspapers as a matter of habit. Newspapers reach all places and are read by all types of people. Therefore, newspaper advertising has a general and wide appeal. The choice of a particular newspaper for advertising depends upon the circulation of the paper, the type of readers it serves, the geographical region in which it is popular, the cost of space and general reputation of the paper.
A daily newspaper has a wide circulation so that the message can quickly reach a large number of people. The advertisement can be repeated daily to remind customers and to create a lasting impression. Because of its repetition value, newspaper advertising is very useful in the introduction of a new product or brand name. There is the benefit of selectivity. Desired markets or regions can be approached through local or regional newspapers. There is greater flexibility as the advertisement can be changed daily and presented in a new form for greater impact.

Teacher's Note:
a) For automobiles like Maruti Nero, visual demonstration on television and detailed regional reach via newspapers are highly effective.
b) Students must suggest two media and explain their specific benefits in detail.

Question 10:
This statistic shows the global smart phone market share held by Nokia each quarter from 2007 to 2013. In the third quarter of 2007, Nokia's market share was 48.7 percent. By the third quarter of 2012 the company's market share had slipped to just 3.5 percent.
Nokia is a Finnish company head-quartered in Espoo, Finland. The company has a long history dating as far back as 1865 and first began developing what would later be modern mobile phone technology in the 1960s. The company has previously been a very strong competitor in the mobile phone and telecommunication market. While the company has struggled to maintain a significant share of the smart phone market, and has also recorded multiple losses in recent quarters, when it comes to feature phones, the company does maintain a relatively secure share of the market when compared to other vendors. The company also continues to perform well in the Asia-Pacific region as well as in the Middle East and Africa were they have previously recorded the greatest sales. Across the North American market however, the company has recorded very poor sales.
Previously Nokia used the operating system Symbian for its smartphones. Until 2010, Symbian was, performing well in the global market but has since been overtaken by the very dominant Android system and also Apple's iOS. As of February 2011, Nokia made the announcement that they would be switching to the Microsoft Windows OS. The company was hoping to be able to make a comeback in the smart phone market with the adoption of the Windows operating system. In 2012 however, sales saw another decrease when compared to the previous 2 years. The Windows mobile operating system did not prove to be popular and market share slipped further. Even after Nokia's high-profile acquisition by Microsoft; the market share of the brand still remains at a dismal 3 percent.
With reference to the above:
(a) Explain any five uses of Product Life Cycle to a business enterprise like Nokia. [5 Marks]

Answer:
Uses of Product Life Cycle:
1. When the product life cycle is known the firm can prepare an effective product plan.
2. Management can take advance steps before the decline of the product.
3. The maturity stage can be extended by finding new uses of the product.
4. Technological innovations can be adopted to improve the quality, features and design of the product.
5. Product life cycle points out the needs for significant and periodic adjustments in the marketing strategy or marketing mix of the firm.

Teacher's Note:
a) Understanding PLC stages helps firms formulate strategic adaptations across introduction, growth, maturity, and decline.
b) Students must list five distinct applications of PLC to score full marks.

(b) Explain the various steps taken by Nokia after 2010 to improve the brand image. [5 Marks]

Answer:
Steps taken by Nokia:
1. After 2010, Nokia switched to the Microsoft Windows OS from Symbian operating system.
2. Nokia sold its mobile division to Microsoft to improve its brand image.

Teacher's Note:
a) Nokia attempted strategic realignment through software partnership and corporate restructuring.
b) The official key lists these specific strategic actions taken during its market decline phase.

(c) What are the promotional activities that can be undertaken to increase the market share of Nokia? [5 Marks]

Answer:
Nokia can adopt following promotional activities to increase its market share:
1. Exchange Offers: Company can announce the exchange of an old mobile phone with a new mobile after payment of a specified amount.
2. Price-off offers: Company can offers modern and new products at below the normal price.
3. Prize Contests: Company can announce prize for dealers, salesman, customers, distributors under various activities.

Teacher's Note:
a) Sales promotion techniques like exchange offers and price-offs stimulate immediate consumer demand.
b) Providing specific promotional tools relevant to consumer electronics secures full credit.