36 Short Questions with Answers on “Marketing Management” for Commerce Students:
image source: iampyourbrand.com
1. What is scalloped product life cycle?
In the scalloped P. L.C., sales pass through a succession of life cycles based on the discovery of new- product characteristics, uses or users. Nylon’s sales, for example, show a scalloped pattern because of the many new uses – parachutes, hosiery, shirts, carpeting, boat sails, automobile tires – that continue to be discovered overtime.
ADVERTISEMENTS:
2. What is product development?
Development of new products refers to the different products a company plans, develops and markets It consists of creation of new ideas, determining their sales potential, profitability, production requirements, investment and other resources needed and then producing.
The product is then tested before marketing it on large scale. The decision to produce a particular product depends on identification of needs and expectations of customers together with company’s possible resources to produce it.
ADVERTISEMENTS:
Product planning is the function of top management and specialists from various fields of sales, marketing, production, R and D and finance. The whole process of product development requires close co-ordination with other departments within the company.
3. Write a short note on branding.
‘Brand’ is symbol, a mark or name that helps in identifying the product. It represents product image, quality or value. Brand name consists of words, letters, rupees and numbers that can be spoken, e.g. Lux, Pears, Palmolive, Videocon, BPL, Philips, Bisleri, etc. Brand mark is a symbol or design that can be recognized by sight but not pronounceable, e.g., kelvinator refrigerator has Penguin as its distinguished mark; Eagle products have Eagle bird sitting on globe. Maruti Udoyg has peculiar design as its mark.
The use of brands increased due to growth in competition, packaging and advertising. Branding provides physical identification, legal protection and basis for promotion. The physical identification is important in shipping, sorting, grading labelling and inventory management. The brand which is registered under the Trade and Merchandise Marks Act gets legal protection (it is then known as Trade mark).
ADVERTISEMENTS:
4. How many kinds of brand name are there?
Following are the kinds of brand name:
1. Coined Name:
The name related to producer’s identity, e.g., TATA, Birla, Suzuki.
2. Arbitrary Name:
The name neither symbolizes the producer nor the product, e.g. Kiwi shoe polich, Usha sewing machine, Topaz blades.
3. Suggestive Name:
The name suggests the features and functions of the product e.g. Fair & Lovely fairness cream, Ever Youth home facial.
5. What is packing and packaging?
Packing refers to the activities of wrapping or enclosing the product in a container like tin, bottle, jar, bag, cask, box, etc. to facilitate transportation, storage, sale or consumption. It provides identification and protection to the products. Package delivers convenience value to the consumer. It can act as an important promotional tool for the producer.
Packaging has been defined as all the activities of designing and producing the container for a product. For example, Old Spice aftershave lotion is in a bottle {primary package) that is in a cardboard box (secondary package) that is in a corrugated box (shipping package) containing six dozen boxes of Old Spice.
6. Give a brief list of those factors which have contributed to the growing use of packaging as a marketing tool.
Well-designed packages can create convenience and promotional value. Various factors have contributed to the growing use of packaging as a marketing tool:
(i) Self-service:
An increasing number of products are sold on a self -service basis. The package must perform many of the sales tasks: attract attention, describe the product’s features, create consumer confidence and make a favourable overall impression.
(ii) Consumer Affluence:
Rising consumer affluence means consumers are willing to pay a little more for the convenience, appearance, dependability and prestige of better packages.
(iii) Company and Brand Image:
Packages contribute to instant recognition of the company o brand.
(iv) Innovation Opportunity:
Innovative packaging can bring large benefits to consumers and profits to producers. Companies are incorporating unique materials and features.
7. What do you understand by price?
Price is the exchange value of a product or service expressed in monetary terms. It is the money, which the buyer pays to the seller for a product or service. Price is the amount for which a product, a service or an idea is exchanged regardless of its worth to the buyer.
Thus, rent for house, tuition fees for education, and consultancy fees for doctor, fare for bus, taxi or railway, salary to executive is the price in various forms. In short, ‘price’ is the amount of money to be paid in return for a bundle of utilities.
8. What is pricing?
Pricing is the function of translating into quantitative terms the value of the product or idea by the marketing manager before it is offered for sale to consumers. Pricing is the process of setting objectives, identifying the factors governing the price, formulating price policies and strategies setting prices, implementing them and controlling them
9. What are one price and flexible price policies?
Under one price policy, all the customers who are purchasing a particular quantity at a particular time are charged the same price, i.e., the price is fixed and no changes are made in it.
Under flexible price policy different buyers are charged different prices for the same quantity purchased. The difference in pricing depends on bargaining power of buyer, his paying capacity, personal relationship between buyer and seller and many other such factors.
10. Briefly describe ‘meeting competition’ and ‘under the market’ pricing policies.
The companies adopting ‘meeting competition policy’ adjust their prices according to that of the competitors If the competitors lower their prices, they too do the same. On the other hand, if the competitors increase their price, they also follow suit.
‘Under the market policy’ is a policy in which the company always keeps its prices less than those prevailing in the market.
11. What are bait pricing and price lining policies?
In bait pricing policy, the marketer keeps low priced and high priced goods. He attracts the consumer by showing low priced goods. Once the customer gets attracted towards the low price goods, he is told about its drawbacks and is encouraged to purchase the other high priced product.
Thus, low priced goods act as ‘Bait’ for attracting the buyer. On the other hand in price lining policy, the various products are priced according to their quality standards. The products may be classified as good, better and best.
12. What do you mean by skimming and uniform delivery pricing policies?
Skimming pricing policy aims at extracting maximum profits from the market and as such the manufacturer keeps high price. Uniform delivery pricing policy is one in which the firm bears full transportation cost irrespective of location of buyers.
13. What are production point and zonal delivery pricing policies?
Production point pricing policy is one in which the firm quotes ex-factory price. It does not bear the transportation cost. Such a policy may be ‘ex-factory’ or ‘free on rail’ (F O R.).
Zonal delivery pricing policy is one where the firm divides the country into different zones and quotes uniform price for each zone.
14. Briefly explain the marginal cost pricing method.
In marginal cost pricing method, price is calculated on the basis of variable cost instead of total cost. Variable cost is the cost that varies with the level of production such as labour material, power, etc ,
Marginal cost ignores the fixed cost, i.e., the cost which remains constant and does not change with change in the level of production. Marginal cost refers to the change on cost of production, which is affected by increase or decrease in one unit of production.
15. (a) Give the assumptions of marginal costing, (b) What do you mean by transfer price?
(a) The basic assumptions of marginal costing are:
(i) All elements of cost-production, administration selling and distribution can be segregated into fixed and variable components.
(ii) The selling price per unit remains unchanged or constant at all levels of activity.
(b) A transfer price is a price used to measure the price of goods or services furnished by a profit centre to other responsibility centres within a company.
16. (a) What is breakeven point?
(b) What do you mean by standard cost?
(a) Break-even point is that point of sales volume at which total revenue is equal to total cost. It is a point of no profit, no loss. A business is said to break even when its total sales are equal to its total costs.
(b) It is the amount the firm thinks a product or the operation of a process for a period of time should cost, based upon certain assumed conditions of efficiency, economic conditions and other factors.
17. What is break-even pricing method?
Break-even pricing method helps in knowing the level of output where the revenues will be equal to cost, assuming a certain selling price. Break-even point (B E.P.) represents that level of production at which there is no profit and no loss.
18. Define sales promotion.
Sales promotion has been defined as, those marketing activities, other than personal selling, advertising and publicity that stimulate consumer purchasing and dealer effectiveness, such as displays, shows and demonstrations, expositions and various non current selling efforts not in ordinary routine.
19. What kind of tools can be included under sales promotion?
Sales promotion includes tools for consumer promotion (sample, coupons, cash refund offers, price off, premiums, prizes, free trials, warranties, tie-in promotions, cross-promotions, point-of-purchase displays and demonstrations); trade promotion (price off, advertising, display allowances and free goods); and business and sales-force promotion (trade shows and conventions, contests for sales representatives and specialty advertising).
20. What do you understand by the term ‘advertising’?
Advertising is the popular tool of promotion as it communicates in a persuasive manner about organization or products or services non-personally through paid media. The advertisement should provide new information or support the information the audience already has in order to capture their attention. It should be able to persuade them and influence their attitude and purchase behaviour.
According to William J. Stanton, “Advertising consists of all the activities involved in presenting to a group a non-personal, oral or visual openly sponsored message regarding a product, service or idea.”
21. What are the major steps involved in preparing advertising campaign.
Several steps are involved in preparing an advertising campaign. The major steps are:
1. Analysing advertising target
2. Defining advertising goals
3. Determining advertising budget
4. Selecting advertising media
5. Deciding advertising message
6. Evaluating advertising effectiveness.
22. Write a short note on personal selling.
Personal selling or salesmanship is the process of contacting the prospective buyers personally and persuading them to buy the products. In other words, it is an art of convincing customers to buy the given products or services.
The objective is not only to sell the product but also to make permanent customers. This can be achieved by so presenting the product that the prospective buyers get convinced that the products being presented for sale can well satisfy their needs.
23. What is meant by vertical marketing system?
A vertical marketing system (V.M.S.) comprises the producer, wholesaler(s) and retailer(s) acting as a unified system. One channel member, the channel captain, owns the others or franchises them or has so much power that they all cooperate.
The channel captain can be the producer, the wholesaler or the retailer. V.M.S.s arose as a result of strong channel member’s attempts to control channel behaviour and eliminate the conflict that results when independent members pursue their own objectives. V.M.S.s achieves economies through size, bargaining power and elimination of duplicated services. There are three types of V.M.S.: corporate, administered and contractual.
24. What do you understand by corporate and administered V. M. S.?
While a corporate V.M.S. combines successive stages of production and distribution under single ownership, an administered V.M.S. coordinates successive stages of production and distribution through the size and power of one of the members.
Manufacturers of a dominant brand are able to secure strong trade cooperation and support from resellers. Thus Kodak, Gillette, Procters Gamble are able to command high levels of cooperation from their resellers on connection with displays, shelf space, promotions and price policies.
25. Write any special characteristics of contractual V.M.S.
A contractual V.M.S consists of independent firms at different levels of production and distribution integrating their programs on a contractual basis to obtain more economies or sales impact than they could achieve alone.
26. What do you understand by customer equity?
The aim of Customer Relationship Management (C R M) is to produce high customer equity Customer equity is the total of the discounted lifetime values of all of the firm’s customers. Clearly the more loyal the customers, the higher the customer equity. The drivers of customer equity are: value equity, brand equity and relationship equity.
27. Write a short note on value equity
Value equity is the customer’s objective assessment of the utility of an offering based on perceptions of its benefits relative to its costs. The subdrivers of value equity are quality, price and convenience.
Each industry has to define the specific factors underlying each subdriver in order to find programs to improve value equity. Value equity makes the biggest contribution to customer equity when products are differentiated and when they are more complex and need to be evaluated. Value equity especially drives customer equity in business markets.
28. What is brand equity in customer relation management?
Brand equity is the customer’s subjective and intangible assessment of the brand. The subdrivers of brand equity are customer brand awareness, customer attitude toward the brand and customer perception of brand ethics. Companies use advertising, public relation and other communication tools to affect these subdrivers.
29. Briefly describe the significance of relationship equity in customer relation management.
Relationship equity is the customer’s tendency to stick with the brand, above and beyond objective and subjective assessments of its worth. Subdrivers of relationship equity include loyalty programs, special recognition and treatment programs, community building programs and knowledge-building programs. Relationship equity is especially important where personal relationships count for a lot and where customers tend to continue with suppliers out of habit or inertia.
30. What is meant by E-business?
E-business describes the use of electronic means and platform to conduct a company’s business. The advent of the internet has greatly increased the ability of companies to conduct their business faster, more accurately, over a wider range of time and space, at reduced cost and with the ability to customize and personalize customer offerings.
Countless companies have set up web sites to inform and promote their products and services. They have created intranets to facilitate employees communicating with one another and to facilitate downloading and uploading information to and from the company’s computers. Companies have also set up extranets with major suppliers and distributors to facilitate information exchange, orders, transactions and payments.
