CBSE Class 12 Business Studies Marketing Management Worksheet Set D

MARKETING MANAGEMENT

MARKETING
“Marketing is a social process by which individual and groups obtain what they need and want through creating offerings and freely exchanging products and services of value with others.”

FEATURES OF MARKETING:

1.NEEDS AND WANTS:
The focus of marketing is on the satisfaction of the needs and wants of individuals and organizations.

2. CREATING A MARKET OFFERING
Market offering refers to a complete offer for a product or service, having given features like size, quality, taste etc. at a certain price, available at a given outlet or location.

3. CUSTOMER VALUE
A product will be purchased by the buyer only if it is perceived to be giving greatest benefit or value for the money.
Ex. Offering Free Insurance when buying a car.

4. EXCHANGE MECHANISM
Exchange refers to the process through which two or more parties come together to obtain the desired product or service from someone, offering the same by giving something in return. The conditions of any exchange to take place are given below:
(a) Involvement of at least two parties
(b) Each party should be capable of offering something of value to the other.
(c) Each party should have the ability to communicate and deliver the product or service
(d) Each party should have freedom to accept or reject other party’s offer.

MARKETING MANAGEMENT PHILOSOPHIES

1. PRODUCTION CONCEPT
The firms following production concept focus on lowering the cost of production by means of mass production and distribution.

2. PRODUCT CONCEPT
Firms which follow the product concept propose that the way to realize business goal is by making products that are of high quality.

3. SELLING CONCEPT
The firms which follow selling concept believe that the organizational goal can be achieved through convincing the customers by aggressive selling promotional efforts (Advertising, personal selling etc.

4. MARKETING CONCEPT
This concept says that product should be designed and produced keeping in mind the need of the customer and try to satisfy the need better than the competitor.

5. THE SOCIETAL MARKETING CONCEPT
The believers of this concept argue that companies should not blindly follow the goal of customer satisfaction by way compromising the social and environmental evils such as pollution, deforestation, population explosion etc.

FUNCTIONS OF MARKETING

1. GATHERING AND ANALYSING MARKET INFORMATION
It refers to conducting research to understand what customer wants to buy, when they are likely to buy, in what quantity they will buy, what price they will be able to pay, what purpose the customer is buying etc.

2. MARKETING PLANNING
After conducting research, the marketer has to plan the steps to achieve marketing objectives under market planning. They make plans to increase production or to increase sale or to use promotion tools and specify the action programs to achieve these objectives.

3. PRODUCT DESIGNING AND DEVELOPMENT
This activity refers to the decisions like what should be the quality standards used in product, what shape or design would be used, what type of packaging, how many models, how it can be made better than the competitor’s product etc.

4. STANDARDISATION AND GRADING
Standardization means producing goods of predetermined quality standards to achieve uniformity and consistency in the product.
Grading is the process of classification of products into different groups on the basis of size, quality and other important characteristics.

5. PACKAGING AND LABELLING
Packaging refers to designing of packets, wrappers and cartons etc. which are used to pack the product. Labelling refers to designing the labels to put on the package which may vary from simple tag to complex graphics.

6. BRANDING
Branding is special name of a product which helps to distinguish the product of a firm with that of the competitor. For, example, Sony, BPL, LG using company name as brand names whereas Ariel, Tide, Surf Excel etc.

7. CUSTOMER SUPPORT SERVICES
Customer support services refer to after sales services, handling customer complaints, maintenance services, consumer information, technical services etc.

8. PRICING OF PRODUCTS
Price means the money which a customer has to pay to buy a product or service. Price is an important factor that affecting success or failure of a product.

9. PROMOTION
It involves informing the customers about the firm’s products, its features etc. and persuade them to purchase these products. E.g., Advertising, Sales promotion, personal selling etc.

10. PHYSICAL DISTRIBUTION
It covers all the activities requires to physically move goods from manufacturers to the customers

11. TRANSPORTATION
It involves physical movement of goods from one place to another. It creates place utility.

12. STORAGE OR WAREHOUSING
It is necessary to make arrangement of goods in order to maintain a regular supply of goods in the market. It creates time utility.

MARKETING MIX
Marketing mix refers to the ingredients or the tools which the marketer mixes in order to interact with a particular market.

ELEMENTS OF MARKETING MIX
Four elements of marketing mix, popularly known as four Ps are as follows:
1. Product
2. Price
3. Place
4. Promotion

1. PRODUCT
A product is any good or service that a consumer wants. It is a bundle of utilities or a cluster of tangible or intangible attributes which can be exchanged for a value.

PRODUCT MIX: The product mix refers to important decisions related to product such as branding, packaging, labelling et..

BRANDING
Branding is the process of giving a name or sign or a symbol etc. to a product of a firm in order to distinguish its product from that of their competitors.

Various terms relating to Banding:
1. Generic Name: It means the name of whole class of a product. E.g., soap, book etc.
2. Brand: A brand is a name, term, sign, symbol, design or some combination of them used to identify the products in order to differentiate from those of the competitors. E.g. Ariel, Surf excel, Parker, Dunlop etc.
3. Brand Name: The part of the brand which can be spoken. Eg. Asian Paints, Safola, Maggie etc.
4. Brand Mark: It is a part of Brand which can be recognized but which cannot be spoken or expressed in a word. It appears in the form of symbol, design. Eg. Gattu of Asian paints, Symbol of LIC, Blue and red ball of Pepsi, Tick sign of Nike.
5. Trade Mark: A brand or part of a brand that is given legal protection is called trade mark. It means other firms cannot use such name or mark in the country.

PACKAGING
Packaging can be defined as a set of tasks or activities which are concerned with the designing, production of an appropriate wrapper, container or bag for the product.

Level of Packaging:
There are three levels of packaging:
1. Primary Package: It refers to the product’s immediate container of product till it is used. For example, tube of paste, match box. In some cases, primary package is kept till the consumer is ready to use the product. E.g. plastic packet for socks.
2. Secondary Packaging: These are additional packing which give more protection. Generally, consumers throw secondary package when they start using the product. For example, card board box used to keep tooth paste, shaving cream etc.
3. Transportation Packaging: These are packaging used for storing or transporting the goods. For example, corrugated boxes used to transport tooth paste, kurkure.

LABELLING
Labelling means putting identification marks on the package. Label is the carrier of information. It provides information like – name of the product, name of manufacturer, contents of products, expiry and manufacturing date, expiry date, instructions for use, weight, price etc.

PRICE
Price of a product is the amount of money paid by the buyer (or received by the seller) in consideration of purchase of a product or service. Pricing is the function of determining product value in terms of money before it is offered to consumers for sale. A good pricing policy enables a firm to achieve maximum sales revenue.

PRICE MIX: Price mix refers to important decisions related to fixing of price of a commodity.

FACTORS AFFECTING PRICE DETERMINATION:

1. Product cost: This includes the cost of producing, distributing and selling the product. The price of the product must be able to cover the total cost of the product. Total cost means Fixed cost and Variable cost.
Fixed costs are fixed irrespective of production level. E.g. rent, machinery cost, salary etc.
Variable cost varies with production. E.g. Raw material, wages of labour etc.

2. The utility and demand: The utility provided by the product and intensity of demand sets the upper limit of price. When the demand of the product is inelastic then the company can fix up high price. Whereas when the demand is elastic then price has to be brought down.

3. Extent of competition in the market: When a firm does not face any competition then it can enjoy complete freedom in fixing the price. But when competition is more, then the price is fixed keeping in mind the price of competitors’ products.

4. Government and legal regulations: To protect the interest of general public, the government has all the right to control the prices of various products especially in case of essential commodities such as food items, drugs, LPG etc.

5. Pricing objectives: If the objective of company is profit maximization, then generally high price is fixed. If the objective of company is sales maximization, it will . prefer low price to increase sale and capture big market share.

6. Marketing methods used: Price fixation is also affected by the various techniques of marketing methods some of which are given below:
• Aggressive and intensive advertising to promote sales
• Type of packing
• Quality of salesmen employed
• Distribution system
• Credit facility and customer service provided
• Sales promotion efforts.

PHYSICAL DISTRIBUTION (PLACE)
It refers to the set of decisions need to be taken in order to make the product available. It is a process by which the goods are transferred from the place of production to place of consumption. There are two important decisions relation to this aspect.
(I) Channels of Distribution
(II) Physical Distribution

(I) Channels of distribution
Channels of distribution are firms and individuals who help in transferring goods from place of manufacturing to place of consumption.

Types of channels:

1. DIRECT CHANNEL (Zero level channel): It is a case when firms sell their products directly to customers without adopting any intermediary. E.g. e-commerce

INDIRECT CHANNEL:
2. One level channel: In this, only one intermediary i.e., retailer is adopted between manufacturer and customer.
3. Two level channels: This is commonly used distribution path where two intermediates are adopted by firms to sell the products i.e. the wholesaler and retailer.
4. Three level channels: In this path, in addition to wholesaler and retailer, one more middleman is added called as distributors or agents.

(II) PHYSICAL DISTRIBUTION
The physical handling and movement of goods from place of production to the place of distribution is referred as physical distribution.

Components of Physical distribution:
1. Order Processing: Order processing means the time and steps involved between taking order from customer and delivery of goods as per order.
2. Transportation: Transportation is the means of carrying goods from the place of production to the point of sale.
3. Warehousing: Warehousing refers to the act of storing and assorting the products in order to create time utility.
4. Inventory Control: The inventory needs to be maintained so that the goods can be supplied whenever demanded. But inventory includes cost of capital blocked and risk of price fluctuation. So, the firms must weigh the cost and benefits and accordingly the optimum level of inventory should be maintained.

PROMOTION
Promotion refers to the use of communication with the twin objectives of informing the potential customers about a product and persuading them to buy it.

Promotion Mix:
It refers to the combination of various promotional tools to persuade the customers to buy the products. It includes:
a. Advertising b. Personal selling c. Sales Promotion d. Public relation.

1. ADVERTISING
Advertising can be defined as the paid form of non-personal presentation and promotion of idea, goods or services by an identified sponsor.

Features of Advertising:
1. Paid Form: The sponsor has to pay for advertising he has to bear a cost to communicate with customers.
2. Impersonality: There is no face-to-face contact between customers and advertiser. It creates only monologue.
3. Identified sponsor: Advertising is given by an identified company or firm or individual.

2. PERSONAL SELLING
Personal selling involves face to face interaction between seller and buyer for the purpose of sale. Companies appoint sales persons to contact prospective buyers and create awareness about the product with the aim of making sales.

3. SALES PROMOTION
Sales promotion refers to short term use of incentives or other promotional activities that stimulate the customer to buy the product. These include all promotional efforts other than Advertising, Personal selling and public relations. E.g., discounts, rebate, refunds, quantity gifts, lucky draw, product combination, usable benefit, 0% finance etc.

4. PUBLIC RELATIONS
Public relations involve a variety of programs designed to promote or protect a company’s image and its individual products in the eyes of the public.
“Public Relations practice is the planned and sustained efforts to establish and maintain goodwill and mutual understanding between organization and its public”. Public relation activities are specially designed for concerned groups such as employees, investors, bankers, shareholders etc.

MIND MAP

Important Questions for NCERT Class 12 Business Studies Marketing Management

Question. Which of the following is the example of Shaving Cream?
(a) Primary Packaging
(b) Secondary Packaging
(c) Transport Packaging
(d) None of the above

Answer :  A

Question. ________ is an advantage of advertisement.
(a) Better Reach
(b) Less Effective
(c) Rigidity
(d) Lack of Feedback

Answer :  A

Question. ________ is objection to advertisement.
(a) Undermines social values
(b) Decrease in price
(c) Knowledge on various products
(d) Improvement in Quality of Product

Answer :  A

Question. The basic aim of sales promotion tools is
(a) increase output
(b) increase demand by informing target market
(c) increase price
(d) increase in sales volume
Answer :  B

Question. It is a merit of Advertising:
(a) enhancing customer satisfaction and confidence
(b) is less flexible
(c) is the paid form
(d) is by an identified sponsor
Answer :  A

Question. ________ is the central point in the marketing point of view.
(a) Customer’s satisfaction
(b) Customer’s welfare
(c) Quality of the Product
(d) Quantity of Product

Answer :  A

Question. ________ develop relationship.
(a) Publicity
(b) Advertisement
(c) Sales Promotion
(d) Personal Selling

Answer :  D

Question. The collection of utilities is known as ________ .
(a) Purchaser
(b) Seller
(c) Product
(d) Market

Answer :  C

Question. Which of the following is the function of marketing?
(a) Promotion
(b) Physical Distribution
(c) Transport
(d) All the above

Answer :  D

Question. ________ makes flexibility available.
(a) Publicity
(b) Advertisement
(c) Sales Promotion
(d) Personal Selling

Answer :  D

Question. ‘Providing finance at 0%’ which of the following adopts this method.
(a) Advertisement
(b) Personal Selling
(c) Sales Promotion
(d) Publicity

Answer :  B

Question. Customer is the ________ of the market.
(a) King
(b) Servant
(c) Sympathiser
(d) Seller

Answer :  A

Question. Customer’s satisfaction alone can ensure success. Which marketing concept holds this view?
(a) Production concept
(b) Product concept
(c) Marketing concept
(d) Selling concept

Answer :  C

Question. ________ removes doubts immediately.
(a) Advertisement
(b) Personal Selling
(c) Sales Promotion
(d) Publicity

Answer :  B

Question. Radha took her daughter Sita for shopping to ‘Super Stores’ to buy her a top for her birthday. She was delighted when on payment of the top she got a bag along with the jean free of cost. Identify the technique of sales promotion used by the company.
(a) Rebate
(b) Discount
(c) Product combination
(d) None of these 
Answer. C

Question. Hanuman is engaged in the manufacturing of refrigerators. He surveyed the market and found that customers need a refrigerator with a separate provision for water cooler in it. He decided and launched the same refrigerator in the market. Identify and explain the marketing philosophy involved. Identify the marketing management philosophy being followed by ‘Beauty Product Ltd’.
(a) Societal marketing concept
(b) Product concept
(c) Production concept
(d) Marketing concept
Answer. D

Question. To attract customers, many companies provide short term incentives to encourage them to make immediate purchase of the product or service. One of the commonly used scheme is “SCRATCH A CARD AND WIN THE CAR”. Identify the sales promotion technique.
(a) Quantity gift
(b) Container premium
(c) Instant draw
(d) Rebate
Answer. C

Question. Shri Shri Ltd. entered into the market with its ayurvedic medicines. The company is enjoying good market benevolence. In order to have the customers trust, they also provide after sale consultations and also have supervision on complaints if any. Now they have entered the consumer items like cosmetics and food products in the market. Identify the element of marketing mix discussed here.
(a) Product
(b) Price
(c) Place
(d) Promotion
Answer. A

Question. Rahul Electronics is having the showroom in Laxmi Nagar. Number of electrical products are sold at his shop. Currently a stock of air conditioners is not sold. He asked one of his friends to suggest a way to sell it in off season. He suggested him to give offers on air conditioners like installation charges, stabilizer, would be free of cost, and one music system of SONY as free. Identify the promotional tool which can be used by the Rahul electronics through which his stock gets out.
(a) Sales promotion
(b) Marketing
(c) Advertising
(d) None of these
Answer. A

Question. Exotica Ltd. company manufactures perfumes of different flavors. They pack the perfume bottles in the bubble wrap so that the chances of breaking minimizes. Each container has 10 bottles of perfume and 100 containers are loaded in the truck at once. Which of the following is the purpose of packaging the bottles in the containers?
(a) Transportation
(b) Warehousing
(c) Both (a) and (b)
(d) None of these
Answer. C

Question. ‘Beauty Products Limited’ is a natural and ethical beauty brand famous for offering organic beauty products for men and women. The company uses plant waste materials for its products for men and women. The company uses plant waste materials for its products and is the number one beauty brand in the country. It not only satisfies its customers but also believes in overall protection of the planet. Which marketing management philosophy is followed by Beauty Products Limited?
(a) Production concept
(b) Product concept
(c) Selling concept
(d) Societal concept
Answer. D

Question. Suzy is very thirsty. She is in the middle of a desert but soon finds a cold drinks’ shop. She goes and purchases three bottles and drinks them to satisfy her thirst. After drinking the cold drink she realises that it has been developed after analysing the needs and preferences of the potential customers. On observing the outer side of the bottle she finds details like contents, flavour, size, price, etc. Which feature of marketing is highlighted in the above case?
(a) The cold drink emphasises on exchange
(b) The cold drink provides additional market offerings
(c) The cold drink creates a market offering by giving details like contents, flavour, etc.
(d) None of the above
Answer. C

Question. “Every time I travelled, people asked me to bring them chips, khakra and pickles from all over the country,” says Arti. Finally, she and her colleague, Ramesh, decided to make a business out of it. They launched a Facebook page, asked people what they wanted, and they came up with a list of about 100 places and tiedup with two dozen vendors to begin with. They were servicing people from Jaipur who wanted spices from Kerala, people from Panipat who wanted halwa from Jammu and people from Delhi who ordered fresh tea leaves from Darjeeling. Through their business, they wished to bridge the gap between sellers and buyers. The business is now worth millions.
Explain any two important activities that Arti and Ramesh will have to be involved in for making the goods available to customers at the right place, in the right quantity and at the right time.
(a) Advertising and Marketing
(b) Transportation and Warehousing
(c) Transportation and Motivation
(d) Personal Selling and Bonus Issue
Answer. B

Question. Advertisements of a protein supplement must inform the potential buyer that the product if taken beyond a given dose can be harmful to the diabetics. Which dimension of business environment is highlighted here?
(a) Technological environment
(b) Socio-cultural environment
(c) Legal environment
(d) All of these
Answer. C

Short Answer Type Question answer

Question. ‘Beauty Products Ltd ‘ is a natural and ethical beauty brand famous for offering organic beauty products for men and women. The company used plant based materials for its product and is No. 1 beauty brand in the country. It not only satisfies its customers but also believes in overall protection of the planet.
Identify the marketing management philosophy being followed by ‘Beauty Products Ltd’.
Answer : Social marketing concept.

Question. Who is marketer?
Answer : A person or an organization or a group of persons who provide goods or services to satisfy the needs of customers. He is called as provider of satisfaction.

Question. ‘They don’t sell what they can make , but they make what they can sell’. Name the concept to which this statement is related?
Answer : It is related to marketing concept.

Question. Explain any two points of responsibilities of a customer.
Answer : (i) Consumer must exercise his rights.
(ii) Insisting on cash memo.

Question. Suggest any two remedies available under Consume Protection Act .
Answer : (i) Removal of defeats from goods.
(ii) Replacement of goods.

Question. What is meant by publicity?
Answer : It refers to non – paid form of impersonal communication by seller.

Question. Zoom udyog, a car manufacturing co. has started its business with zoom 800 and slowly launched zoom-1000, wagon –Z ,swify –fy etc. and offered various services like after service , availability of spare parts etc. identify the element of marketing mix referred here.
Answer : Product .

Question. A commercial unit uses rocks, trees , electric poles, historical management and walls to advertise its products. Which fault of the company does this advertising policy show.
Answer : Misuse of public property.

Question. A toy manufacturing company is spending substantial amount of money to persuade the target customers to buy its toys through advertisements, personal selling and sales promotion techniques. Identify the element of marketing mix referred here.
Answer: Promotion/promotion mix

Question. “Introducing a scheme of 50% + 40% less by the KOUTONS” is the example of which sales promotion technique?
Answer: The name of this sales promotion scheme is ‘Discount”.

Question. A leading leather manufacturing company is using banned animal skin to make huge profit. Name the marketing concept which is ignored here.
Answer: Societal concept

Question. Identify the method of sales promotion in the following cases:
i. A mobile company offers a discount of Rs. 1000 to clear off excess inventory.
ii. A customer gets Rs 5 off on return of an empty wrapper while
making a new purchase of the same product.
Answer: The method of sales promotion:
i. Rebate
ii. Refund

Question. Mr. Gupta is a production manager in a leather manufacturing unit. He was very strict and does not have cordial relations with his subordinates. So, the subordinates always feel they are under stress and they are not working in a good environment. The subordinates always take least initiative and fear to express their problems or suggestions before Mr. Gupta. What do you think is wrong with Mr. Gupta? Name the values which are ignored.
Answer: i. Freedom of working
ii. Lake of coordination
iii. Lake of initiative
iv. Lake of proper environment for working

Question. There are some characteristics that should be kept in mind while choosing a brand name. Explain any three such characteristics that a good brand name should have.
Answer: Characteristics:-
a) Short & easy to pronounce
b) Suggestive
c) Distinctive

Question. Explain any three functions of Packaging. 3
Answer:
1. Product identification
2. Protection
3. Promotion

Question. Top MNC’s spend nearly 15 to 20% of their revenue on advertisements. Is such heavy expenditure justified?
Explain from the point of view of criticism of advertisement.
Answer: No, such huge expenditure is not justified. Some other criticism are:
1. Adds to cost
2. Undermines social values
3. Confuses buyers
4. Encourages sales of inferior goods

Question. Information originally drafted in English is wrongly translated. Name the communication barrier related to this also explain any two barrier under this category?
Answer: Semantic barriers Other barrier under same category
i. Badly expressed message
ii. Symbol with different meanings
iii. Technical jargon

Question. Mr. Shah has written a book on Business Studies. What factors must be considered by Mr. Shah before fixing the price of the books?
Answer:
i. Pricing object
ii. Product cost
iii. Completion in the market
iv. Utility and demand
v. Government and legal regulation