NCERT Solutions Class 12 Business Studies Chapter 11 Marketing

NCERT Solutions for Class 12 Business Studies Chapter 11 Marketing Very Short Answer Type Questions

Question. (i) Explain the advantages of branding to marketers of goods and services.
Answer: Branding implies giving a unique name, sign, symbol, or term for identification of a product. The following are the advantages of branding to the marketers:

1. Branding enables a firm to distinguish its products from the product of other firms.
2. It facilitates advertising of the product. A product with a generic name cannot be advertised.
3. Through good branding manufacturer can create loyalty of the product. Thus the firm can benefit from this and charge a different price for its products.
4. It helps in establishing the base if a new product is to be launched. This is because if a new product is launched under a good and established brand, it is expected to get a good boost and benefit from reputation of the brand.

Question. List the characteristics of a good brand name.
Answer: A good brand name consists of the following characteristics:

1. The brand should be short and easy to spell, pronounce and remember. For example – Aashirvad, Pantene.
2. A brand should suggest the benefits or qualities of the product and also suit its functions. For example-Complan, Fair and Lovely.
3. The name should be unique as well as adaptable to packaging and labelling requirements. It should also be adaptable to different mediums of advertising and languages.
4. A brand name should be versatile and should be able to adapt to the new products if introduced under the brand.
5. It must be distinctive and capable of being legally protected.

Question. What is societal concept of marketing?
Answer: According to societal concept of marketing the organisations must identify the needs of the market and the target consumers and deliver the desired results in an efficient manner. The organisation should identify not just the immediate needs of the market rather should aim at long –term wellbeing of the consumers. Besides consumer satisfaction, organisations should aim at ecological, ethical and social aspects such as pollution, scarcity of resources etc.

Question. List the characteristics of convenience products.
Answer: Convenience products refer to those products that are purchased frequently, immediately and with minimum time and effort.

The following are the characteristics of a convenience product:

1. Such products are easily available at convenient places with minimum time and effort wastage.
2. Convenience products are consumed frequently and have a continuous demand. Essential commodities come under the category of convenience products.
3. They are available in small units and low and standardised prices.
4. The competition in the market for such products is high. As such, heavy advertising is required for these products.

Question. Enlist the advantages of packaging of consumer products.
Answer: Packaging refers to the process of developing and designing the container for a product.

A good packaging has the following advantages:

1. It enables differentiation and identification of a product from other products.
2. It acts as a promotional tool. Use of colours, symbols, pictures, symbols in packaging helps in attracting the customers.
3. Appropriate packaging contributes to the convenience of handling the product.
4. It helps in protecting the quality of the product from any kind of damage, spoilage, breakage etc. particularly at the time of storage and transportation.

Question. What are the limitations of advertising as a promotional tool? Enlist.
Answer: The following are the limitations of advertising as a promotional tool:

1. It lacks personal form of communication and hence is less forceful.
2. Evaluation regarding the effectiveness of the advertisement is very difficult to conduct.
3. Advertisements come in standardised form and cannot be moulded as per requirements of different groups of people.
4. Effectiveness of advertising is low as there can be numerous advertisements.

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

1. Utensils
2. Clothes
3. Washing machine
4. Furniture
5. Grocery

NCERT Solutions for Class 12 Business Studies Chapter 11 Marketing Short Answer Type Questions

Question. What is marketing? What functions does it perform in the process of exchange of goods and services? Explain.
Answer: Marketing refers to the process wherein the buyers and sellers interact with each other for purchase and sale of goods and services. Earlier, marketing had different approaches with respect to its definition.

1. It was sometimes described as post- production process that involves purchasing of the final products and sometimes, as a pre-production process that involves merchandising (designing) of the product. In reality, marketing is a much wider concept than this.
2. It consists of those activities that are involved in the process of exchange of goods and services between producers and consumers.
3. These activities are basically the functions performed under marketing. It involves planning and designing of the product, packaging and labelling of the product, standardising, branding, warehousing, transportation, advertising, priding and distribution.
4. It also includes activities that are performed even after the sale of product such as maintaining customer relations and collecting feedback.

Question. Distinguish between product concept and production concept of marketing.
Answer:

Basis	Production Concept	Product Concept
Focus	Is on quantity of product	Is on quality of product
Means	Through availability and affordability of product	Through improvement of quality of products
Ends	To earn profits through large volume of production	To earn profits through quality of product

 

Question. Product is a bundle of utilities? Do you agree?
Answer: When a customer decides to buy a product, his/her main focus lies on the utility which he/she receives while consuming it. A customer seeks different types of satisfaction from the product. Benefits derived from a product can be of three types – functional benefits, psychological benefits and social benefits.(iii) Product is a bundle of utilities? Do you agree?

1. For instance, when a customer purchases a car, it provides him functional utility as a means of transport. He also receives psychological benefits in the form of pride and self-esteem that he has brought a car. Along with this come the social benefits in the form of acceptance by the peers.
2. Thus a product is said to be bundle of utilities and a buyer while buying a product values all kinds of utilities.

Question.  What are industrial products? How are they different from consumer products? Explain.
Answer: Industrial products refer to those products that are used as inputs for the production of other goods. Such goods are not meant for final consumption rather they are used as raw material and inputs by the manufacturers for the production of consumer goods. For example, machine, tools etc are industrial products.

Consumer products refer to those products that are used by ultimate customers for their personal consumption. For example, toothbrush, edible oil and detergents are consumer goods.

Difference between industrial product and consumers products are as follows:

 

Basis	Industrial Products	Consumer products
No. of customers	Number of customers is limited. For example , oil seeds are used by the producers of mustard oil	The number of customers is higher. For example, mustard oil in home is used by large number of customers.
Channel of distribution	Such products require shorter channels of distribution such as direct selling or one level channel	These products require longer channels before they reach the final consumer. For perishable commodities it is small
Location	Industrial products remain concentrated only in those areas where industrial producing goods are located.	Consumer products are readily and conveniently available.
Demand	Demand for industrial products are derived demand based on the demand for consumer products.	Demand of consumer product is not derived demand rather sets the basis for demand for industrial products.
Role of technical features in decision making	Technical features play an important role while purchasing these products	Such products do not involve any technical complexities in manufacturing. Technical features does not have much role in decision making while purchasing

Question. Distinguish between convenience product and shopping product.
Answer: Following are the difference between convenience product and shopping product –

Basis of difference	Convenience product	Shopping product
Demand	These products have a continuous and frequent demand	These products have a relatively less frequent demand
Nature of products	Essential commodities come under the category of convenience goods	Such goods are durable in nature
Unit of purchase and price	These products are available in small units and have low unit price. These have low profit margin	These products come in bigger units and have high unit prices. Profit margin is also high.
Nature of purchase	Such products are bought without devoting much time and effort	Such products are bought by consumers after devoting much time in comparing the price , quality etc of the product.
Example	Soaps , medicines, newspapers, stationery items etc.	Jewellery ,furniture , clothes

 

Question. ‘Product is a mixture of tangible and intangible attributes’. Discuss.
Answer: Generally a product is referred to as a tangible asset which has physical attributes. In marketing, a product does not only have physical or tangible attribute but also intangible attributes.

In other words we can say that the decision of the customer to buy a certain product does not only depend upon tangible attributes but also intangible attributes. For example a car can be described large, red and luxurious. Large and red are tangible attribute attributes as they describe physical attribute of the car while luxurious is primarily an intangible attribute as it describes beneficial and imagery aspects of the car.

Question. Describe the functions of labeling in the marketing of products.
Answer: In the marketing process, labelling plays an important role in packaging of the product. Label on a product provides detailed information about the product, its contents, methods of use etc. the various functions performed by a label are as follows:

1. Describe the product and specify its content: One of the most important functions of labels is that it describes the product, its usage, caution in use etc.
2. Identification of the product or brand: A label helps in identifying the product or brand e.g. we can easily pick our favourite soap from a number of packages only because of its label.
3. Grading of products: Label helps in grading the product into different categories. Sometimes marketers assign different grades to indicate features or quality of the product e.g. different type of tea is sold by some brands under yellow, red and green label categories.
4. Help in promotion of products: An important function of label is to aid in promotion of the products. A carefully designed label can attract customers to purchase that product. Some labels provide promotional messages, some show discount or other schemes.
5. Providing information required by law: Another important function of labelling is to provide information required by law. E.g. the statutory warning on the package of cigarette or pan masala – ‘smoking is injurious to health’ or ‘chewing tobacco causes cancer’.

Question.  Discuss the role of intermediaries in the distribution of consumer non-durable products.
Answer: The term channels of distribution refer to transfer of goods from place of production to the place where they are consumed.

The following are the different functions of intermediaries in the distribution of consumer non-durable products: Arrangement: an intermediary receives the supply of goods from various sources. He then sorts these goods into homogenous groups based on their characteristics such as size, quality etc. For instance, an electronic goods seller receives supply of different electronic goods and then sorts them based on their functions.

1. Collection: An intermediary maintains large stock of goods so as to ensure easy flow of supply. For instance, an electronic goods seller maintains large stock of each type of electronic item.
2. Allocation and Packing: This function includes breaking the larger stock into smaller units. For instance each electronic and their spare parts are packed separately. Building Variety: An intermediary acquires various goods from different sources and assembles them at a single place. Thus it maintains a variety of goods. He procures the products and then sells them in different combinations as desired by the consumers. For instance, a television and a video player are preferred together by most of the people. Thus, the retail can sell a combination of both. Promotion of product: They assist in the promotion activities, undertaken by the manufacturers. For example, the manufacturers use advertising for the promotion of their product. The intermediaries can aid this process by putting banners and displays. For example an electronic goods retailer puts up banners for various products highlighting their features.
3. Mediation: Middle men perform the function of setting a deal that can satisfy both the producers and consumers. They negotiate the price, quality, quantity etc. for efficient transfer of ownership so as to satisfy the needs of both the parties.
4. Bearing risk: Risk taking is the basic responsibility of the intermediaries. Intermediaries acquire goods from the producers and keep them in their possession till the final sale. Suppose a retailer acquires large quantity of sugar. After a period of time, the price of sugar rises which reduces its demand. Thus the retailer may lose out as the stock remain unsold.

Question. Explain the factors determining choice of channels of distribution.
Answer: The choice of channels of distribution depend upon various factors which are discussed as below:

1. Product related factors: The important product related considerations is deciding the channels. It includes whether the product is industrial product or consumer product. Industrial product require shorter channel and consumer product require longer channel.
2. Company characteristics: The two important characteristics are its financial strength and the degree of control that the company wishes to hold on the intermediaries. Shorter channels require greater funds than longer channels and offer greater control over the members of the channel. Thus companies that are financially strong or wish to command greater control over the channel of distribution opt for shorter channel of distribution. Competitive factors: The degree of competition and the channels opted by other competitors affect the choice of distribution channels. Depending on its policies a company can adopt a similar channel as adopted by its competitors or adopt for a different channel. For example, if the competitions opt for sale through retail sale, it may also do the same or it can opt for direct selling.
3. Environmental factors: Environmental factors such as economic constraints and legal policies play an important role. For example, requirement of complex. Legal formalities at each step of distribution induces the company to opt for shorter channels.
4. Market factors: In depressed economy, marketers use shorter channels to distribute their goods in an economical way.

Question.  Explain briefly the components of physical distribution.
Answer: The main components of physical distribution are:

1. Order processing – Processing of order comprises number of steps such as placement of order, transmission of order by the intermediaries to the manufacturer, maintenance of inventory as per requirement, delivery of goods etc. As all such processes take time a physical distribution system should be such that it should ensure speedy and proper order processing.
2. Transportation of products – Transportation of goods refers to physical movement of goods from the place where they are manufactured to the place where they are consumed. To make the goods physically available to the consumers they must be transported from the place of production to the place of consumption.
3. Warehousing – Warehousing refers to the process of storing the produced goods before the final act of sale. If a company has a larger number of warehouses, it will be able to readily provide goods on time at different locations. Maintaining warehouses involves costs.
4. Maintenance of inventory – The firms maintain inventory so as to ensure timely supply of products. Similar to warehousing, maintenance of inventory shares a positive relation with customer service.

Question. Define advertising. What are its main features?
Answer: Advertising can be defined as the paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor.

Following are the important features of Advertising: Non-Personal: Advertising is a non-personal form of presenting information regarding a product, service or idea. There is no face to face contact. The advertisement is directed to a large number of persons simultaneously. Identified Sponsor: Advertising is done by an identified seller or the manufacturer who makes efforts for getting the product or service advertised and also bears all its costs. Paid form: Advertising is a paid for of communication. Sponsor has to bear the cost of advertising the product to the target customers.

(xii) Discuss the role of ‘sales promotion’ as an element of promotion mix.

Answer: Sales promotion refers to the incentives that are offered to the buyers so as to encourage them to purchase the product. It includes activities such as offering discounts, gifts, free samples etc. Such activities supplement other promotional activities undertaken by the company such as advertising and direct selling. They increasingly attract the customers and induce them to immediately purchase the product. Such activities are especially useful at the time of the launch of the product. They bring an initial boost to sales.

Following sales promotion techniques employed by manufacturers are:

Samples: Free samples are distributed in small packs to stimulate consumers. It can be done on a door-to-door basis, by demonstrations or inserting in another packet containing a similar product. For example, shampoo pouches are given free with tooth paste.

Coupons: Sometimes in the packet of a product there will be a discount coupon for the next purchase For example, Reliance Textiles distribute discount coupons to their shareholders. Discount coupons are also printed in certain advertisements appearing in magazines. They have to be presented to the retailer while buying the product. Product combinations: Offering another product free, as a gift, with the purchase of a product, e.g., a milk shaker along with Nescafe, or mugs with Bournvita, or a pen stand along with a packet of chips. They are effective in getting new consumers for the product. Such incentives are opted by companies to attract more customers and boost its sales.

NCERT Solutions for Class 12 Business Studies Chapter 11 Marketing Long Answer Type Questions 

Question. Define Marketing. How is it different from selling? Discuss.
Answer: Marketing refers to the process wherein buyers and sellers interact with each other for purchase and sale of goods and services. It comprises of a range of activities such as planning, designing the product, packaging and labelling of the product, pricing and distribution and also after sale services such as maintaining customer relations and collecting feedback.

Selling on the other hand, refers to the promotion activities undertaken for the sale of goods and services. Such promotion activities can be in the form of advertising, publicity, etc. Through the process of selling, product is converted into cash. Thus selling can be regarded as part of marketing.

Following are the difference between selling and marketing:

Basis of		Selling	Marketing
Difference
(1)	Focus	Selling focuses on	Marketing focuses
		seller’s needs i.e.,	on customers’
		increase in the	needs and desires
		sales volume.	i.e., consumer
			satisfaction.
(2)	Scope	Selling is a	Marketing is a
		narrower concept.	wider concept.
		Selling is a part of	Marketing includes
		marketing.	selling.
(3)	Basis	It is based on profit	It is based on profit
		through sales	through consumer
		volume.	satisfaction.

 

(4)	Approach	It is a fragmented	It is an integral
		approach to	approach to
		achieve short term	achieve long term
		goals.	goals.
(5)	Process	It is concerned with	It begins before
		the goods already	the production and
		produced.	continues even
			after the sale has
			been completed.
(6)	Supremacy	Producer is	Consumer is
		considered kingpin	considered king pin
		of market.	of market.

Question. What is the marketing concept? How does it help in the effective marketing of goods and services?
Answer: Marketing concept of marketing management lays emphasis on customer satisfaction; It believes that customer satisfaction plays a vital role in the success of any organisation. In the long run, any organisation can survive and maximise profits only if it identifies customer needs and effectively work towards fulfilling them. This concept identifies the fact that people purchase a product for satisfaction of specific needs such as functional, social, psychological needs. Any organisation must aim towards identifying such needs and satisfy them in an effective manner. That is it must take all decisions based on needs and requirements of the customer. An organisation works and sells not according to what it has but according to what the customers wants.

The marketing concept is based on the following points:

1. The effort of all marketing activities must be directed towards a particular segment of market or group of customers.
2. The organisations must clearly identify the needs and requirement of the target customers.
3. It should develop such products and services that satisfy the needs of the customers.
4. It should not just independently work towards customer satisfaction but should also aim at satisfying the customers better than its competitors.
5. The main aim of all marketing is profit.

Marketing concept helps in effective marketing of goods and services. If all marketing activities are directed towards customer satisfaction, marketing of goods and services would take place in an effective manner. If decisions of production, pricing, designing, etc are based on needs of the customers, selling would not be a problem.

Question. What is marketing mix? What are its main elements?
Answer: Marketing mix refers to the set of marketing tools that are used to achieve various objectives of marketing. In the process of marketing, market offering plays a pivotal role. For effective marketing, an organisation must decide the various features of the products such as its size, quality, local of sale etc. Such decisions are affected by large number of factors.

These can be broadly divided into two: controllable factors and non controllable factors. Controllable factors are those which can be influenced at the level of the firm. For example whether the drink will be packed in glass bottles or plastic cans, what will be the brand name of the drink, what will be its price, what distribution network will be used, how the advertisement will be etc is decided at the level of marketing manager of the firm. But there are certain factors which affect the decisions but are not controllable at the firm’s level. These are called environmental variables. For example – the political factors such as government policy on whether to allow any technical or financial collaboration in the area of soft drink, production or economic factors such as rate of inflation prevailing in a given period or a credit policy of the central bank affecting the total availability of money in the market, all of which affect the sale of a particular product but cannot be controlled from within. To be successful, the decisions regarding ‘controllable factors’ are to be taken keeping the environmental variables into consideration. The controllable variables become the marketing tools which are constantly shaped and reshaped by marketing managers to achieve marketing success. For example a firm can reshape a market offering by bringing in a change in any of the variables under its own control like change in price or product feature etc. Thus from a number of alternatives available a firm can choose a particular combination to develop a market offering.

Thus marketing mix is described as the set of marketing tools that a firm uses to pursue its marketing objectives in a target market.

The following are the elements of marketing mix:

1. Place or physical distribution mix refers to the activities relating to making the products available to the customers at the right place and at the right time. Physical distribution mix consists of two things; physical distribution and channels of distribution. Physical distribution includes all those activities involved in moving products or service from producer to consumer. It includes activities such as – Order processing, Transportation, warehousing, Inventory control, etc. The channels of distribution are those routes through which goods move from the producer to the ultimate consumer. These channels of distribution consists of middlemen such as wholesalers retailers, agents.
2. Product means goods or services or anything of value and satisfies needs of a customer. For example, car, soap, toothpaste, etc are products. In marketing, a product relates not just to the physical product but it also includes the satisfaction of various needs and utilities of the consumer. For example, toothpaste is bought for whitening teeth, strengthening gums etc. product also includes after sales services such as taking feedback, redressing consumer complaints etc. Important decisions regarding a product relate to its designing, quality, features, labelling, branding and packing.
3. Promotion deals with informing and persuading the customers regarding the firm's product. Promotion mix refers to the activities relating to persuading and motivating customers to buy the product. Promotion mix involves decision with respect to:

• Advertising
• Personal selling
• Publicity
• Sales promotion.

1. Price is defined as the amount of money paid by a buyer in consideration of the purchase of a product or service.
2. The factors considered in the pricing decision are:
3. Product Cost: It sets the minimum price level at which product would be sold. It includes cost of producing, selling and distributing, along with a reasonable profit margin for the manufacturer.
4. Competition: If there is no competition the business firm can fix the price freely. But if there are competitors in the market the firm must consider the factor before fixing the price. Higher competition in the market leads to lower pricing due to fear of losing customers to competitors.

Question. How does branding help in creating product differentiation? Does it help in marketing of goods and services? Explain.
Answer: Branding implies giving unique name, sign, symbol or term for the identification of a product. Through branding a firm differentiates its products from that of other similar products. A marketer has to decide whether the firm’s products will be marketed under a brand name or a generic name. Generic name refers to the name of the whole class of the product. If products were sold by generic names, it would be very difficult for the marketers to distinguish their products from that of their competitors. Thus most marketers give a name to their product which helps them in identifying and distinguishing their products from the competitors’ products.

It helps in marketing of goods and services in the following ways:

Enables Marking Product Differentiation - Branding helps a firm in distinguishing its product from that of its competitors.

Helps in Advertising and Display Programmers’ – Branding helps in advertising and display programs. Without a brand name, the advertiser can only create awareness for the generic product and can never be sure of the sale for his product.

Differential Pricing: Branding helps a firm to charge different price for its products than that charged by its competitors. This is possible because if customers like a brand and become habitual of it, they do not mind paying a little higher for it.

Ease in Introduction of New Product: If a new product is introduced under a known brand, it is likely to get off to an excellent start. Thus, many companies with established brand names decide to introduce new products in the same name. For example, Samsung extended the brand name of its Television to Washing Machines and other durable products, like Microwave oven.

Question. What are the factors affecting determination of the price of a product or service? Explain.
Answer: Price’ is defined as the amount of money paid by a buyer in consideration of the purchase of a product or service. Pricing plays an important role in the marketing of tools.

The following are the factors that determine price of a product or service:

Product Cost: One of the most important factor affecting price of a product or service is its cost. This includes the cost of producing, distributing and selling the product. The cost sets the minimum level or the floor price at which the product may be sold. At the time of introducing a new product or while entering a new market, the products may be sold at a price, which does not cover all the costs. But in the long run, a firm cannot survive unless at least all its costs are covered. There are broadly three types of costs: viz., Fixed Costs, Variable Costs and Semi Variable Costs. Fixed costs are those costs, which do not vary with the level of activity of a firm. Those costs which vary in direct proportion with the level of activity are called variable costs. Semi variable costs are those costs which vary with the level of activity but not in direct proportion with it. For example, compensation of a sales person plus a commission of 5 per cent on sales. With an increase in the volume of sales, the total compensation will increase but not in direct proportion with the change in the volume of sale. Total Costs are the sum total of the fixed, variable and semi-variable costs for the specific level of activity, say volume of sales or quantity produced.

The Demand and Utility: The price must reflect the interest of both the parties to the transaction—the buyer and the seller. The buyer may be ready to pay up to the point where the utility from the product is at least equal to the sacrifice made in terms of the price paid. The seller would, however, try to at least cover the costs. According to the law of demand, consumers usually purchase more units at a low price than at a high price. The price of a product is affected by the elasticity of demand of the product. The demand is said to be elastic if a relatively small change in price results in large change in the quantity demanded. In the case of inelastic demand, the total revenue increases when the price is increased and goes down when the price is reduced. If the demand of a product is inelastic, the firm is in a better position to fix higher prices.

Extent of Competition in the Market: The lower limit and the upper limit where the price would settle down is affected by the nature and the degree of competition. The price will tend to reach the upper limit in case there is lesser degree of competition while under conditions of free competition, the price will tend to be set at the lowest level.

Legal Regulations: In order to protect the interest of public against unfair practices in the field of price fixing, Government can intervene and regulate the price of commodities. Government can declare a product as essential product and regulate its price.

Pricing Objectives: Pricing objectives are another important factor affecting the fixation of the price of a product or a service. If the firm decides to maximise profits in the short run, it would tend to charge maximum price for its products. But if it is to maximise its total profit in the long run, it would opt for a lower per unit price so that it can capture larger share of the market and earn greater profits through increased sales.

Apart from profit maximisation, the pricing objectives of a firm may include:

Obtaining Market Share Leadership: If a firm’s objective is to obtain larger share of the market, it will keep the price of its products at lower levels so that greater number of people are attracted to purchase the product.

Surviving in a Competitive Market: If a firm is facing difficulties in surviving in the market because of intense competition or introduction of a more efficient substitute by a competitor, it may resort to discounting its products or running a promotion campaign to liquidate its stock.

Attaining Product Quality Leadership: In this case, normally higher prices are charged to cover high quality and high cost of Research and Development.

Methods of Marketing: Price fixation process is also affected by other elements of marketing such as distribution system, quality of salesmen employed, quality and amount of advertising, sales promotion efforts, the type of packaging, product differentiation, credit facility and customer services provided.

Question. What do you mean by ‘channels of distribution’? What functions do they play in the distribution of goods and services?
Answer: Channels of distribution refer to the individuals, institutions, agents who facilitate the process of distribution. As the potential consumers are spread over a larger geographical area, it becomes difficult for the producers or the manufacturers to directly contact the customers for the sale of their products. Here channels of distribution play an important role. They facilitate the transfer of goods from the place of production to the place where they are consumed. For example, for a manufacturer of sugar in Punjab, it would be difficult to contact the customers in other parts of the country. To ease the process, it would sell its products to the wholesalers who in turn would sell it to the retailers. The retailers then finally sell the products to the customers. Channel of distribution also reduces the efforts of the customers by offering various goods and services at a convenient single location. For example at a retail store a customer can get a wide variety of goods.

The following are the functions of channels of distribution.

• Arrangement: An intermediary receives the supply of goods from various sources. He then sorts these goods into homogenous groups based on their characteristics such as size, quality etc. For instance, an electronic goods seller receives supply of different electronic goods and then sorts them based on their functions.
• Collection: An intermediary maintains large stock of goods so as to ensure easy flow of supply. For instance, an electronic goods seller maintains large stock of each type of electronic item.
• Allocation and Packing: This function includes breaking the larger stock into smaller units. For instance each electronic and their spare parts are packed separately.
• Building Variety: An intermediary acquires various goods from different sources and assembles them at a single place. Thus it maintains a variety of goods. He procures the products and then sells them in different combinations as desired by the consumers. For instance, a television and a video player are preferred together by most of the people. Thus, the retail can sell a combination of both.
• Promotion of product: They assist in the promotion activities, undertaken by the manufacturers. For example, the manufacturers use advertising for the promotion of their product. The intermediaries can aid this process by putting banners and displays. For example an electronic goods retailer puts up banners for various products highlighting their features.
• Mediation: Middle men perform the function of setting a deal that can satisfy both the producers and consumers. They negotiate the price, quality, quantity etc. for efficient transfer of ownership so as to satisfy the needs of both the parties.
• Bearing risk: Risk taking is the basic responsibility of the intermediaries. Intermediaries acquire goods from the producers and keep them in their possession till the final sale. Suppose a retailer acquires large quantity of rice. After a period of time, the price of rice rises which reduces its demand. Thus the retailer may lose out as the stock remains unsold.

Question. Explain the major activities involved in the physical distribution of products.
Answer: Physical distribution refers to movement of products from the place of production to the place of consumption. The following are the major activities involved in the physical distribution of products:

1. Processing of order: Processing of order comprises number of steps such as placement of order, transmission of order by the intermediaries to the manufacturer, maintenance of inventory as per the requirement, delivery of goods etc. As all such processes take time, a physical distribution of system should be such that it should ensure speedy and proper order processing and customer satisfaction.
2. Transportation of products: Transportation of products refer to the physical movement of goods from the place where they are manufactured to the place where they are consumed. To make the goods physically available to the customers, they must be transported from the place of production to the place of consumption.
3. Warehousing: Warehousing refers to the process of storing the produced goods before the final act of sale. If a company has a larger number of warehouses, it will be able to provide goods on time at different locations.
4. Maintenance of inventory: The firms maintain inventory so as to ensure timely supply of products. Similar to warehousing, maintenance of inventory shares a positive relation with customer service. Maintenance of inventory also involves cost as a huge amount of capital remains tied up in the stock unless it is sold. A firm’s decision to maintain inventory is based on several factors such as how well the distribution system responds to the orders and the deliveries, cost involved in holding the inventory, firms’ objectives etc.

Question. Expenditure on advertising is a social waste’. Do you agree? Discuss.
Answer: Advertising is criticized on the grounds that it unnecessarily adds to the cost of the company, weakens social values and aggravates, builds up consumer needs and desires for multiple products. However, some people think that advertisement through greater sales bring down the cost and aids the process of growth.

The following points helps in judging whether advertising can be considered as a waste.

1. Higher cost: advertisement expenses adds to the cost of the company. The companies pass on these increased prices on the customers in the form of higher prices. However the supporters of advertisement argue that advertisement in fact brings down the per unit cost of production. This is because through advertisement greater number of customers will be attracted towards the product which in turn implies an increase in the demand for the product. In response to the increase in demand, manufacturers increase production. With increase production, the per unit cost of production comes down.
2. Weakens social values: One of the major criticism to advertising is that it weakens social value and instead promotes materialism in the society. Advertisement attracts customers through new products and induces them to purchase it. With increased knowledge about the availability of the new products, customers feel dissatisfied about what they currently have. Hence they end up buying even what is not required. Such a process of discontentment and purchase of new product is never ending and materialism increases. On the other hand it is argued that advertisement just informs the buyers about the availability of various products and the final decision to purchase the product lies with the customers.
3. Creates confusion: it is often argued that a number of advertisement on similar products confuse the customers. For example a number of advertisement on different toothpaste claim for healthy, strong and white teeth by their use. With numerous advertisement, the customers get confused as to which brand he should buy. Supporters of advertisement do not agree on this and argues that advertisement provides choice to the customers.
4. Promotes inferior goods: It is argues that products of inferior quality and superior quality are advertised. However such claims are partially true as quality is a relative concept. What can be inferior to one customer can be superior to another. Hence advertisement promotes all kinds of goods and customers purchases them if it suits them.
5. Objectionable advertisement: It is said that often advertisement undermine social values and are in bad taste.

Sometimes, languages, images and content of the advertisement may not appeal to the society at large. On the other hand it is argued that good or bad taste is a subjective phenomenon and varies from person to person. What may be accepted by one, may be offensive for other.

Thus it can be said that expenditure on advertisement though draws criticism but the objections are not entirely true.

Question. Distinguish between advertising and personal selling.
Answer: Advertising is an impersonal, paid form of communication used by the marketers for the promotion of goods and services. On the other hand personal selling involves direct communication of the seller with the potential customers.

The following are the differences between advertising and selling-

Basis of	Advertising	Personal
difference		selling
Personal vs	It is an impersonal	It is a personal
impersonal	form of	form of
	communication	communication
	where the seller	where the seller
	communicates with	directly interacts
	customers through	with the
	various mediums	potential
	such as TV,	customers.
	newspapers, etc.
Reach	Advertising has a	It has a

 

	broader reach as	narrower reach
	the advertisement	as only a few
	reaches a large	people can be
	number of people	contacted
	simultaneously	directly.
Flexibility	It is inflexible as	It is flexible as
	advertisements are	the seller can
	standardised and	adjust the
	cannot be adjusted	message as per
	as per the	the
	requirements of	requirements of
	different	different
	customers	customers.
Target group	It is more suitable	It is more
	where marketing	suitable when
	has to be done to	marketing is to
	a large number of	be done for a
	people .	few selected
		consumers. For
		example if
		marketing is to
		be done for
		intermediaries
		and retailers,
		personal selling
		is more useful.
Cost involved	As advertising	Personal selling
	reaches the	is relatively
	masses	more expensive.
	simultaneously,
	the cost per
	person is low.
Time involved	Advertising	Through

 

	reaches large	personal selling
	number of people	only few people
	simultaneously.	can be contacted
	Thus it can cover	at a time, it
	the entire market	takes a lot of
	in a short period of	time and effort
	time	to cover the
		entire market.
Customer	Through	As the seller
feedback	advertising	directly contacts
	feedback and	the customers
	reactions of the	he can get the
	customers cannot	feedback from
	be judged	customers
		directly.
Medium of	It involves	It is through
communication	communication	personal
	through mass	communication
	media such as	through sales
	television,	persons
	newspaper, radio
	etc.
Objective	The main objective	The basic
	of advertising is to	objective of
	create interest of	personal selling
	the customers	is to create
	towards the	awareness about
	product	the product and
		induce decision
		making.

Application based questions:

Question. As marketing manager of a big hotel located at an important tourist destination, what societal concerns would be faced by you and what steps would you plan to take care of these concerns? Discuss.
Answer:

The following are the societal concerns that the marketing manager would face:

• The marketing manager should ensure that there is no pollution with the activities carried out in the hotel so as to harm the environment.

• The facilities that are offered in the hotel are just and fair.

The following steps can be taken to take care of these concerns:

• The manager should ensure that the waste from the hotel is appropriately managed so that there is no pollution. For example – disposing the biodegradable and non- biodegradable properly.

• The staff of the hotel should be trained and given strict instruction that the price charged for any of the items that the customers purchase from the hotel must not be greater than its MRP.

Question. Suppose you are the marketing vice president of an insurance company, planning to design a new mediclaim policy for senior citizens. What information would you like to collect to perform this task and how will you collect such information? Discuss.
Answer: Some of the important information that required to be collected is as follows:

• size of the market.

• common health problems that the senior citizens in the country face.

• proportion of total senior citizens already have a mediclaim policy.

• total amount and total time for which the senior citizens would be willing to take the mediclaim policy.

For collecting information, sampling techniques can be used. Primary research can be undertaken. From the entire target population, a sample can be selected from which the information can be collected through methods such as questionnaire, direct investigation. Based on the information collected, suitable policy can be formed.

Question. What shopping products have been purchased by you/your family in the last six months. Make a list and specify what factors influenced the purchase of each of these products.
Answer: The following are some of the items purchased by my

Family in the last six months:

• clothes
• study table
• cycle
• bed
• cooking range

The following are the factors that influenced purchase of these items:

• Price of the product: Due to festival season there was sale in the items, hence the prices were low.
• Necessity of the product.
• Quality of the product.
• Brand of the product.
• Price of the competing brands of the item.

Question. What information is generally placed on the package of a food product? Design a label for one of the ford product of your choice.
Answer: The following are the information placed on the package of a food product:

• Name of the product.
• Graphic symbolising the product.
• Content /ingredient of the product.
• Direction to use.
• Special features of the product.
• Caution if any, to be taken.
• Date of manufacture.
• Date of expiry.

Question. For buyers of consumer durable products, what ‘customer care services’ would you plan as a manager of a firm marketing new brand of motorcycle, Discuss.
Answer: The following are the customer care services for marketing new brand of motorcycle:

• easy monthly installment.
• extended warranty periods.
• free first service.
• 0% finance scheme.

Case problems:

Nokia takes four-lane road to consumers.

NEW DELHI: After having grabbed a king-size 79% share of the ` 15,000-crore mobile handset market in India, Nokia India has found a new way of connecting people. The mobile handset manufacturer has embarked upon a brand new retail strategy that is based on a classification of its consumers into four major groups that separates people in terms of usage, income level and lifestyle. The classification is based on an extensive survey – the Nokia Segmentation Study —that was carried over two years involving 42,000 consumers from 16 countries. It studied the impact lifestyle choices and attitudes have on the mobile devices consumers buy and how they use them. The strategy, which was announced globally in June last year, is being unfolded in India now. While the nitty-gritty of the new strategy is still being worked out, it is likely that the company would follow separate marketing strategies for the four different segments. The advertising campaigns could be different for the segments. Nokia’s entire product portfolio has now been re-aligned towards these four groups to address the specific needs of each. The first of these segments Live, aimed a first time users whose basic need is to stay in touch with voice as the main driver, would have basic handsets low on features and price.

“These may be functional phones but the target group for these phones range from SEC C (low socio-economic class)

to SEC A1+ (very high socioeconomic class) markets,” says Nokia India marketing head Devinder Kishore. The second segment Connect looks at more evolved users who look for more functionality and features and connectivity.

Accordingly, phones in this segment would have GPRS, camera and music capabilities.

The next two categories, Achieve and Explore, are aimed at high-end users and have Nokia’s top-end handsets. For example, Achieve segment looks at enterprise users who need to have business functionalities in their phones. Nokia’s new E-series has been put under this segment with handsets having QWERTY keyboards and full Internet capabilities. Aimed at high-end lifestyle users, Explore would be the most prominent segment for the company in the coming years. Says Nokia India multimedia business director Vineet Taneja, “This segment would see the most vibrant growth in the coming year. It will look at five different areas – applications, imaging, mobile TV, music and gaming. We are fast developing the ecosystem to support these areas.”

Nokia acquired music solution and content provider LoudEye and GPS solution provider Gate5. It is all slated to launch its most high-profile handset, which boasts of having a 5 mega pixel camera and GPS capabilities apart from iPod quality music, in February. Says Taneja, “There is increasing demand for convergence and multiple functionalities in high-end handsets. The N-series will try to address that.” Nokia feels that the new platform strategy wherein different handsets are launched under a platform, like the N-Series, will become a status and style statement and drive numbers.

Questions

Question. Identify the four market segments that Nokia plans to address as per the news report above.
Answer:

As per the above, the four market segments that Nokia plans to address are:

• Low socio-economic.
• High socio-economic.
• Business class.
• Prominent class.

Question. What is the basis of classification of the market used by the company?
Answer: The basis of classification used by the company is the potential scope of use of the mobile phone that a segment would make. The segment which is expected to make the maximum use of the technology is given the maximum features, on the other hand, one which is expected to make minimum use is given only the basic features. Phone targeted at low socio economic segment has only the basic features, on the other hand, phone that is targeted at the business class has the top end handsets with high end features as mobile , TV, music, gaming, imaging etc.

Question. What do you mean by realignment of product portfolio? Illustrate this from the case above.
Answer: Realignment of product portfolio means rearranging the entire product range and classifying them into different market segments. For instance, in the given case the entire range of mobile handsets of Nokia have been divided into four market segments based on the lifestyle and attitude of the target population.

Question. Identify the points that can be highlighted in marketing campaigns for each segment.
Answer: The points that can be highlighted in the marketing campaign of different segments are as follows-

Name of the segment	Highlighting point in the
	marketing segment
Live	Simple to use and low price
Connect	Connectivity along with
	features as GPRS, camera and
	music capabilities
Achieve	Business functionality for work
	on the go with QWERTY
	keyboard and internet
	capabilities
Explore	Most high end handsets with
	applications as imaging mobile
	TV, music and gaming

Question. What are the different considerations in the mind of consumers of each segment while purchasing mobile phones as given in the above case?
Answer:

Name of the segment	Considerations in the Mind of
	consumers
Live	Price and simplicity to use
Connect	Connectivity along with
	functionality and features
Achieve	Business functionality
Explore	Convergence and high end
	multiple functionalities

 

NCERT Solutions for Class 12 Business Studies Chapter 11 Marketing Objective Type Questions

Question. Which level of packaging refers to additional layers of protection that are kept till the product is ready for use.
(a) Primary
(b) Secondary
(c) Transportation
(d) All of the above 
Answer: B

Question. “A popular brand of Hair Conditioners comes in different categories for different hair, say for ‘normal hair’ and for other categories”. Identify the function of labelling in the above example.
(a) Providing Information Required by Law
(b) Describe the Product and Specify its Contents
(c) Grading of Products
(d) Promotion of Products A
Answer: C

Question. A car manufacturer’s offer to sell a particular brand of car at a discount of ₹ 10,000, for a limited period. Identify the sales promotion activity in the above example.
(a) Refund
(b) Product Combinations
(c) Rebate
(d) Discount
Answer: C

Question. Which of the following statement is true for marketing.
(a) It is a process whereby people exchange goods and services for money
(b) It has been referred to as performance of business activities that direct the flow of goods and services from producers to consumers.
(c) It includes many activities that are performed even before goods are actually produced and continue even after the goods have been sold.
(d) All of the above
Answer: D

Question. Important decision with respect to place include :
(a) selection of dealers
(b) intermediaries to reach the customers
(c) providing support to the intermediaries
(d) all of the above.
Answer: D

Question. __________ means goods or services or ‘anything of value’, which is offered to the market for exchange.
(a) Place
(b) Product
(c) Promotion
(d) Price 
Answer: B

Question. Creams and medicines are the examples of __________ products.
(a) Convenience
(b) Shopping
(c) Speciality
(d) None of these
Answer: A

Question. That part of a brand which can be recognised but which is not utterable is called __________
(a) Brand Mark
(b) Trade Mark
(c) Brand Name
(d) All of the above
Answer: A

Question. Which of the following philosophy of marketing assumes that in the long run an organisation can achieve its objective of maximisation of profit by identifying the needs of its buyers
(a) Selling
(b) Marketing
(c) Product
(d) Societal 
Answer: B

Question. What is the main focus of the societal concept of marketing philosophy?
(a) Quantity of product
(b) Quality, performance, features of product
(c) Customer needs
(d) Customer needs and society’s well being
Answer: D

Question. __________refers to producing goods of predetermined specifications, which helps in achieving uniformity and consistency in the output
(a) Standardisation
(b) Packaging
(c) Labelling
(d) Grading 
Answer: A

Question. Which of the following are considered as the pillars of marketing.
(a) Packaging
(b) Labelling
(c) Both (a) and (b)
(d) None of these 
Answer: C

Question. Which of the following function of management helps in building customer’s loyality and in promoting its sale.
(a) Promotion
(b) Branding
(c) Pricing of Products
(d) Grading
Answer: B

Question. Which of the following statement is false for brand name :
(a) The brand name should be short and easy to pronounce.
(b) A brand name should be similar with other brand names
(c) A brand should suggest the product’s benefits and qualities.
(d) None of these 
Answer: B

NCERT Solutions for Class 12 Business Studies Chapter 11 Marketing One Word Answer Type Questions

Question. If the company has enough funds and the management also wants to have greater control on the channel members, which channel of distribution should the company adopt?
Answer: Direct Level Channel/ Zero Level Channel/ Short channel of distribution.

Question. ‘Buy one get one free’ is printed on the label of the package of a mosquito repellant. State the labelling function being performed by this statement. 
Answer: Sales promotion.

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

Question. ‘Beauty Products Ltd.’ is a natural and ethical beauty brand famous for offering organic beauty products for men and women. The company uses plant based materials for its products and is the 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: Societal Marketing Concept.

Question. Sunita took her niece, Aishwarya for shopping to ‘Benetton’ to buy her a dress on the occasion of her birthday. She was delighted when on payment for the dress, she got a discount voucher to get 20% off for a meal of ₹ 500 or above at a famous eating joint. Identify the technique of sales promotion used by the company in the above situation. 
Answer: Usable benefit.

Question. A consumer products manufacturing company is offering a number of consumer products like toiletries, detergent powder, food products etc. Identify the element of marketing mix being referred here. 
Answer: Product/ Product Mix.