MODEL QUESTION BANK- PRINCIPLES OF MARKETING (BBA-204)

MODEL QUESTION BANK

PRINCIPLES OF MARKETING (BBA-204)

                

Q1. Explain the Nature, Objectives and scope of marketing management in present business environment?

Ans.     Nature of marketing management:

(i)                 Marketing is responsible for an economic growth: Marketing embraces all the business activities involved in getting goods and services from the hands of producer into the hands of final consumers. The business steps through which goods progress on their way to final consumer is the concern of marketing.

(ii)               Marketing is a legal process by which ownership transfer: In the process of marketing the ownership is transfer from seller to purchaser or from producer to the end user.

(iii)             Marketing is a system of interactive business activity: Marketing is that process through which business enterprises, institution, or organization interacts with the customer and stakeholders with the objectives to earn profit, satisfy customers, and manage relationship. It is the performance of business activity that directs the flow of goods and services from producer to consumer or user.

(iv)             Marketing is managerial function: According to this approach the emphasis is on how the individual organization processes marketing and develop the strategic dimensions of marketing activities.

(v)               Marketing is the social process: Marketing is the delivery of a standard delivery of living to society. Societal Marketing performs their essential functions:-

·         Knowing and understanding the consumers changing needs and wants.

·         Efficiently and effectively managing the supply and demand of products and services.

Scope of marketing management

1.      Study of consumer want and needs: Goods are produced to satisfy consumer wants. Therefore study is done to identify consumer needs and wants motivates consumer to purchase.

2.      Study of consumer behavior: Marketers performs study of consumer behavior. Analysis of buyer behavior helps marketer segmentation and targeting.

3.      Production planning and development: Product planning and development Starts with the generation of product idea and end with the product development and commercialization. Product planning include everything from branding and packaging to product line expansion and contraction.

4.      Pricing Policies: Marketers has to determine pricing policies for their products. Pricing policies differs from products to product. It depends on the level of competition. Product life cycle, marketing goals and objectives, etc.

5.      Distribution: Study of distribution channel is important in marketing for maximum sales and profit goods are required to be distributed to the maximum consumers at minimum cost.

6.      Promotion: Promotion includes personal selling, sales promotion and advertising. Right promotion mix is crucial in accomplishment of marketing goals.

Objectives of Marketing Management:

(i)                 Creation of demand

The marketing management’s first objective is to create demand through various means. A conscious attempt is made to find out the preferences and tastes of the consumer. Goods and services are produced to satisfy the needs of the customer. Demand is also created by information the customers the utility of various goods and services.

(ii)               Creation of Goodwill and public image

To build up the public image of a firm over a period is another objective of marketing. The marketing department provides quality products to customers at reasonable prices and thus creates its impact on the customer.

(iii)             Customer satisfaction

The marketing manager must study the demand of customer before offering them any goods or services. Selling the goods or services is not that important as the satisfaction of the customer’s needs. Modern marketing is customer-oriented. It begins and ends with the customer.

(iv)             Market share

Every business aims to increasing its market share i.e. the ration of its sales to the total sales in the economy. For instance both pepsi and coke compete with each other to increase their market share. For this they have adopted innovative advertising, innovative packaging, sales promotion activities, etc.

(v)               Generation of profits

The marketing department is the only department which generates revenues for the business. Sufficient profits must be earned as a result of sale of want satisfying products. If the firm is not earning profits, it will not be able to survive in the market.

Q. 2) Explain the various philosophies of Marketing. Discuss the utility of each of the philosophies in the present marketing environment.

Ans. The various types of Marketing Philosophies are as follows:-

1.      Production Philosophy :  According to this philosophy, it was believed that profits could be maximized by producing at large scale, thereby reducing average cost of production. It was also assumed that consumers would favour those products which were widely available at an affordable price. Thus, availability & affordability of the products were considered to be the key to the success of a firm. Therefore, greater emphasis was placed on improving the production and distribution efficiency of the firms. The utility of this Philosophy is only when demand exceeds supply & vice versa.

2.      Product  Philosophy : As a result of emphasis on production capacity during earlier days, the position of supply increased over period of time. Thus, with the increase in the supply of the products, customers started looking for products which were superior in quality, performance and features. Therefore, the emphasis of the firms shifted from quantity of production to quality of products. The focus was on product improvement & it became the key to profit maximization, under the product philosophy. The utility of this philosophy applies to those customers who look for quality products no matter of price.

3.      Selling  Philosophy : With the passage of time, the product quality and availability did not ensure the survival and growth of the firms because of large number of sellers selling quality products. The business philosophy changed. It was assumed that customers would not buy, or not buy enough, unless they are adequately convinced or motivated to do so. Therefore, firms must undertake aggressive selling and promotional efforts to make customers buy their products. Thus, focus of business shifted to pushing the sale of products through aggressive selling techniques with a view to persuade the buyers to buy the products. In today’s market, it applies to those firms who need to maximize their sales or who are not famous enough & to those products which are not popular enough.

4.      Marketing Philosophy : Marketing orientation implies that focus on satisfaction of customer’s needs is the key to the success of any organisation in the market. It assumes that in long run an organisation can achieve its objectives of profit maximization by identifying the needs of its present and prospective buyers and satisfying them in an effective way. Thus, the focus of the marketing philosophy is on customer needs and wants and the customer’s satisfaction becomes the means to achieving the firms objective of maximizing profit.

In present market, it helps in generating demand and customer value at a profit. The greater the satisfaction, the happier the customer will be.

5.      Societal Marketing Philosophy : The societal marketing philosophy holds that the tasks of any organisation is to identify the needs and wants of the target market and deliver the desired satisfaction in an effective and efficient manner so that the long-term well-being of the consumer and society is taken care of. Thus, the societal marketing philosophy is the extension of marketing philosophy as supplemented by the long-term welfare of the society. Apart from the customer satisfaction, it pays attention to the social, ethical and ecological aspects of marketing. The utility of this philosophy is everywhere in today’s marketing environment & applies to all organisation whether small or big.

Q. 3) Differentiate between Marketing Concept and Selling Concept.

Ans: Before moving to conceptual differentiation, consider the following point- “Marketing refers to a large set of activities of which selling is just one part.” The major difference between marketing philosophy and selling philosophy is listed below:

1.      Transfer of Title vs Satisfying Customer Needs : The main focus of selling is on affecting transfer of title and possession of goods from sellers to consumers. In contrast, marketing activities put greater thrust on achieving maximum satisfaction of the customer’s needs and wants.

2.      Profit Through Maximising Sales vs Customer Satisfaction : All selling activities directed at maximizing sales and, thereby, the profits of the firms. Marketing on the other hand, is concerned with customer satisfaction and thereby increasing profits in the long run.

3.      Start  and End of the Activities : Selling activities start after the product has been developed while, marketing activities start much before the product is produced and continue even after the product has been sold.

4.      Difference in the Emphasis : In selling, the emphasis is on bending the customer according to the product while in marketing,  the attempt is to develop the product and other strategies as per the customer needs.

5.      Difference in Strategies : Selling involves efforts like promotion and persuasion while marketing uses integrated marketing efforts involves strategies in respect of product, promotion, pricing and physical distribution.

Q. 4) What do you mean by Marketing Environment? Discuss various factors affecting marketing environment.

Ans.  The marketing environment refers to all those forces and factors that affect the firm’s ability to build and maintain successful relationship with customers. The various factors affecting marketing environment are

1.      Internal Environment : This refers to the factors existing within an organisation and an organisation have control over them i.e. it can alter or modify them accordingly whenever required. They are usually linked with strengths and weakness of any organisation.

2.      External Environment : This refers to those factors which are beyond the control of a firm, its success depend to large extent on its adaptability to the environment. These are linked with opportunities and threats. External environment are consists of :

a)      Micro Environment : The environmental factors that are in its proximity. The factors influence the company’s non-capacity to produce and serve the market. They are different for different firms as they affect a particular firm only. The factors are :

i) Customers : Customers can affect any organisation at very large. They are the only source of demand. They plays very important role in any organisation.

ii) Suppliers : The suppliers to a firm can also alter its competitive position and marketing capabilities. These are raw material suppliers, energy suppliers, suppliers of labour and capital.

iii) Middleman : They play very important role for any producer for promoting, selling and distributing the goods and services to ultimate customers. 

iv) Public : A public is defined as ‘any group that has an an actual or potential interest in or impact on a company’s ability to achieve its objectives.’

v) Competitors : These are those who sell the goods and services of the same  and similar description, in the same market. Apart from competition on price, there are like product differentiation.

vi) Facilitators : These are those who provide services to business organisation, such as transport, banks, etc.

b) Macro environment : Macro environmental factors act external to the company and are quite uncontrollable. These factors do not affect the marketing ability of the concern directly but indirectly the influence marketing decision of the company. The factors are :

i) Demographic Environment : Here, the marketer monitor the population because people forms market. Marketers are keenly interested in size and growth rate of population in different regions.

ii) Economic Factors : These consists of macro-level factors related to means of production and distribution that have an impact on the business of organisation.

iii) Physical Forces : Components of physical forces are earth’s natural renewal and non-renewal resources, both of these often change the level and type of resource available to a marketer.

iv) Technological Factors : These consists of factors related to knowledge applied, and the materials and machines used in the production and that have an impact on the business of an organisation.

v) Political and Legal Forces : Development in the political and legal field greatly affect the marketing decisions. Sound marketing decisions cannot be taken without taking into account, the government agencies, political party in power & in opposition in their ideologies, pressure groups and laws of the land.

vi) Social and Cultural Forces : The social forces attempt to make the marketing socially responsible. It means that the business firms should take a lead in eliminating socially harmful products and produce only what is beneficial for the society.

Q.5 ) Define Positioning. What are the different strategies used by marketer to position its product ?

Ans.) Positioning of product means all those activities that help in occupying place in the minds of customers. Its objective is to occupy a clear, unique and advantageous position in the consumer’s mind.

Different positioning strategies are as follows:-

1. Attributes : This strategy basically focuses upon the characteristics of the product. Lets take an example of motorbikes some are emphasizing on fuel economy, some on power, looks and other stress on durability. Hero Cycles Ltd. Positions first, emphasizing durability and style for its cycles.

2. Benefits : At time even you would have noticed that a product is positioned along two or more product characteristics at the same time. For example, Hero Motocop insists on ‘high mileage’ along with ‘low price’ in their motorbikes.

3. Against the Competitors : In some cases, reference competitor(s) can be the dominant aspect of the positioning strategies of the firm, the firm either uses the same of similar positioning strategies used by the competitors or the advertiser uses a new strategy taking the competitor’s strategy as the base. For example, Colgate when entered into the market focused on the family protection but Pepsodent entered into the market with focus on 24 hour protection and basically for kids. Colgate changed its focus from family to kid’s teeth protection which was a positioning strategy adopted because of competition.

Q. 6) What do you mean by Target Marketing? What are the different approaches of target marketing? How will a marketer select any of these approaches?

Ans.) Target Marketing involves breaking a market into segments and then concentrating   marketing efforts on one or few key segments. It can be the key to attracting new business and making your small business’s a success.

Different approaches of target marketing are :

1. Undifferentiated Marketing : It refers to an approach when a firm produces only one product or product line and targets all of its customers with a single marketing mix. This approach attempts to sell through persuading a wide audience. Example of this market is toothpaste, which are not made especially for one consumer group or segment and are sold in high quantities.

2. Differentiated Marketing : This  refers to the approach of the firms, which produce numerous products with different marketing mixes. These products are designed to satisfy the smaller segments. Most companies do this for specialization and to remain competitive. This marketing essentially requires market segmentation and incurs a higher production cost, inventory cost and marketing costs.

3. Concentrated Marketing : A concentrated market is a subset of the market on which a specific product is focusing. Each market essentially defines specific product features such as product design, price range, production quality and demographics that is intended to impact. This approach is most suitable to smaller firms, which have lesser resources.

Q.7) What do you mean by Segmentation? Differentiate between Segment and Segmentation. What are the basis of Market Segmentation?

Ans.) Segmentation means to divide marketplace into parts, or segments, which are definable, accessible, actionable and profitable and have growth potential. In other words, a company would find it impossible to target the entire market, because of time, cost and effort restrictions.

Market segment is a market that has been divided into a channel group already. Segmentation is the process of identifying those market traits and dividing that market into a segment.

The bases of market segmentation are :

A. Demographic Segmentation : It divides the markets into groups based on variables such as age, gender, income, family size, occupation, education, religion, race and nationality. Demographic factors are the most popular bases for segmenting the consumer group. Moreover, these factors are easier to measure than most other type of variables.

1) Age : Some companies offer different products, or use different marketing approaches for different age groups. For example, McDonald’s  targets children, teens, adults and seniors with different ads and media.

2) Gender : Gender segmentation used in clothing, cosmetics and magazines. For example, Fairness creams for females, Hair Gels for males and so on.

3) Income : Income is used to divide the markets because it influences the people’s product purchase. It includes housing, furniture, automobiles, clothing, beverages, luxury goods, financial services ,travel and so on.

4) Family Cycle : Products need vary according to age, number of persons in household, marital status, and number and age of children. These variables can be combined into single variables called family life cycle. Housing, home appliances, furniture, food and automobiles are few of the numerous products market segmented by the family life cycle stages.

B. Geographic Segmentation : It refers to dividing a market into different geographical units such as nations, states, regions, cities or neighbourhoods. For example, national newspaper are published and distributed to different cities in different language to cater to the needs of the consumer. Geographic variables such as climate, terrain, natural resources and population density also influence consumer product needs.

C. Psychographic Segmentation : It pertains to lifestyle and personality traits. In the case of certain product, buying behavior  predominantly depends on lifestyle and personality characteristics.

1) Personality Characteristics : It refers to a person’s individual character traits, attitude and habits. This type of segmentation is used  when a product is similar to many competing products, and consumer needs for products are not affected by other segmentation variables.

2) Lifestyles : It is the manner in which people live and spend their time and money. Company’s making cosmetics, alcoholic beverages and furniture’s segment market according to the lifestyles.

D. Behavioural Segmentation : In behavioural segmentation, buyers are divided into groups on the basis of their knowledge of, attitude towards, use of or response to a product. It includes segmentation on the basis of occasion, user-status, usage rate, loyalty status, buyer-readiness stave and attitude.

1) Occasion : Buyers can be distinguished according to the occasion when they purchase a product, use a product or develop a need to use a product. For example, Cadbury’s advertising  to promote the product during wedding season is an example of occasion segmentation.

2) User Status : Sometimes the markets are segmented on the basis of user status, that is, on the basis on non-user, ex-user, potential-user, first-time user and regular user of the product. Large companies usually target potential users, whereas small companies focus on current users.

3) Usage Rate : Markets can be distinguished on the basis on usage rate, that is, on the basis on light, medium and heavy users. Marketer usually prefer to attract heavy users rather than several light users, and vary their promotional efforts accordingly.

4) Loyalty Status : Buyer’s can be divided on the basis of their loyalty status – hardcore loyal( consumer who buy one brand all the time), split loyal( consumer who are loyal to two or three brands), shifting loyal( consumer who shift from one brand to another), and switchers loyal( consumer who show no loyalty to any brand).

Q8. Define marketing mix .what is the need and importance of marketing mix for a marketer?                                                                                                                                                                                                                                   

Answer . ''Marketing mix is the set of marketing tools that a firm uses to pursue its marketing objectives in the target market''. 'The marketing mix refers to set of actions or tactics that a company uses to promote its brand or product in the market. The 4Ps make up a typical market mix -price, product, promotion, and place. However, nowadays, the marketing mix increasingly includes several other Ps like packaging, positioning, people and even politics as vital mix elements.                                                                

Importance of marketing mix:                           

All the elements of the marketing mix influence each other. They mark up the business plan for a company and handled right, can give it great success. But handled wrong and the business could take years to recover. The marketing mix needs a lot of understanding, market research and consultation with several people, from users to trade to manufacturing and several others. 

4Ps of marketing mix are discussed as follows:

1.Price  - Price refers to the value that is put for a product . It depends on costs of production, segment targeted, ability of the market to pay, supply - demand and an indirect marketing tool that firm uses to pursue its marketing.                                                        

2. Product  - Product refers to the item actually being sold. The product must deliver a minimum level of performance, otherwise even the best work on the other elements of the marketing mix won't do any good .                                                                     

3. Promotion  - Promotion this refers to all the activities undertaken to make the product or service known to the user or trade .This can include advertising ;word of mouth , press-reports ,incentives ,commission and awards to the trade .It can also include consumer schemes ,direct marketing ,contests and prizes .

4. Place - Place refers to the product of the sale .In every industry, catching the eye of the consumer and making it easy for her to buy it is the main aim of a good distribution or 'place' strategy .Retailers pay a premium for the right location .In fact, the mantra of a successful retail business is 'location', location, location.                                    

Needs of marketing mix:                                               

The marketing mix needs a lot of understanding ,market research and consultation with several people, from users to trade to manufacturing and several others.                                                               

Q9:  Define product. What are the various types of products? Explain with suitable examples.                                              

Answer. The product element of the marketing mix signifies the tangible or intangible product offered to the customer which is the satisfier of the need. It has a combination of tangible or intangible attributes (benefits, features, function, uses)  that a seller offers a buyer for purchase. For example -a seller of a toothbrush not only offers the physical product but also the idea that the consumer will be improving the health of their teeth.                                           

Types of product

1. Consumer product              

2. Industrial product

1.Consumer product -Product which are for direct consumption or which require no further processing are known as consumer product. These goods are offered to household and ultimate consumer e.g shirts, cars, watches etc. Consumer product can be further classified into following categories :

ON THE BASIS OF DURABILITY

1.Durable product -The goods which are used for a longer period of time are known as durable goods. They are generally of high price and requires after sale service and promotion tools for sale.

2.Non durable product -Goods which are consumed in short period of time are called non durable goods. These product are generally sold at low price and with less profit margin.

3.Services -Services refer to an activity, performance, benefits or satisfaction which are offered for sale.   

ON THE BASIS OF BUYING BEHAVIOUR         

1. Convenient goods-Which are bought by consumers with minimum shopping efforts i.e the goods which are easily available everywhere For example. salt, match box, bread, etc.

2. Shopping goods -The goods or services which are bought after some shopping efforts i.e search or comparison of goods on the basis of price, quality, suitability etc. e.g TV, furniture, car, etc.

3. Specialty goods - These are the goods of unique nature and hold special importance for customers. The buyer puts special efforts in obtaining these goods. These can be low priced or high priced. For exampl:. Designer clothes, cars such as Mercedes etc.                       

2. Industrial products - Industrial products are used as input or raw material to produced consumer goods. For example. Tools, machinery etc.

1. Materials and parts - These product are used complete to product. There are raw materials such as cotton, sugar, etc. and manufacturing parts such as bulb , tyre, etc.

2.Capital item - These are the fixed assets which are used for production of final goods.

2.Suppliers and business service - These products are used to give finishing touch to products and facilitate smooth flow of goods produced by industry.

Q10. What do you mean by product life cycle? Explain the various stages with their characteristics.

Answer. PLC is the course of product's sales and profits over its life time. It involves five distinct stages ; product development, introduction, growth, maturity, and decline.

1.Product development  - Product development begins when the company finds and develops a new - product idea. During product development, sales are zero and the company's investment costs mount.

2.Introduction - Introduction is a period of slow sales growth as the product is introduced in the market. Profits are nonexistent in this stage because of the heavy expenses of product introduction .

3.Growth - Growth is a period of rapid market acceptance and increasing profits.

4.Maturity - Maturity is a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits level off or decline because of increased marketing outlays to defend the product against competition.

5.Decline  - Decline is the period when sales fall off and profits drop. The sales of most product forms and brands eventually dip. The decline may be slow, as in the case of oatmeal, or rapid, as in the case of phonograph records. Sales may plunge to zero, or they may drop to low level where they continue for many years. This is the decline stage.

Q11. What is new product? Why do companies manufacture a new product? Explain the process of new product development?

Answer. New product: Any offer which is different, improved or modified from the existing product is known as new product.  There could be many reasons for new product development and launch

1. The company would like to increase its product portfolio so that the customers can choose the product from portfolio.

2. Entry into new segment, sub segment.

3. Increase the turnover, and in turn profitability.

4. To increase the customer base.

5. To counter the negative growth of existing product.

The company always tries to improve its sales and introduction of new products or line extension are simple methods by which it can do so.

PROCESS OF NEW PRODUCT DEVELOPMENT

1. Idea Generation- New product development starts with idea generation - the systematic search for new product ideas. A company typically has to generate many ideas in order to find a few good ones.

2. Idea screening- The purpose of idea generation is to create a large number of ideas. The purpose of the succeeding stages is to reduce the number. The first idea -reducing stage is idea screening, which helps spot good ideas and drop poor ones as soon as possible.

3. Concept Development and Testing-An attractive idea developed into a product concept. It is important to distinguish between a product concept, and a product image.

Concept Testing -Testing new-product concepts with a group of target consumers to find out ot the concepts have strong consumer appeal.

4. Marketing Strategy Development- Designing an initial marketing strategy for a new product based on the product concept. Suppose Daimler Chrysler finds that concept 3 for the fuel-cell-powered electric car tests best.

5. Business Analysis - A review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company's objectives.

6. Product Development - Developing the product concept into a physical product in order to ensure that the product idea can be turned into a workable product.

7. Test Marketing - The stage of new-product development in which the product and marketing program are tested in more realistic market setting.

8. Commercialization - Introducing a new product into the market, if will have to build or rent a manufacturing facility. 

Q.12) Define Price. What are the different strategies used for pricing adopted by marketer to sell its products?

Ans.)  Price is the value that is put to a product or service and is the result of a complex set of calculations, research and understanding and risk taking ability. Pricing is the most important element of the marketing mix, as price is the only element of the marketing mix, which generates a turnover for the organisation.

An organisation can adopt a number of pricing strategies, the pricing strategy will usually be based on corporate objectives. Followings are the different pricing strategies adopted by marketer :

Pricing Strategy	Definition	Example
Penetration Pricing	Here the organisation sets a low price to increase sales and market share. Once market share has been captured the firm may well then increase their price.	A television satellite company sets a low price to get subscribers then increases the price as their customer base increases.
Skimming Pricing	The organisation sets an initial high price and then slowly lowers the price to make the product available to a wider market. The objective is to skim profits of the market layer by layer.	A games console company reduces the price of their console over 5 years, charging a premium at launch and lowest price near the end of its life cycle.
Competition Pricing	Setting a price in comparison with competitors. Really a firm has three options and these are to price lower, price the same or price higher than competitors.	Some firms offer a price matching service to match what their competitors are offering. Other firms may take this further by refunding the customer more money than the difference between their product price and the lower price offered by the competitor firm.
Product Line Pricing	Pricing different products within the same product range at different price points.	An example would be a DVD manufacturer offering different DVD recorders with different features at different prices e.g. A HD and non-HD version.. The greater the features and the benefit obtained the greater the consumer will pay. This form of price discrimination assists the company in maximising turnover and profits.
Bundle Pricing	The organisation bundles a group of products at a reduced price. Common methods are buy one and get one free promotions or BOGOFs as they are now known. Within the UK some firms are now moving into the realms of buy one get two free can we call this BOGTF i wonder?	This strategy is very popular with supermarkets who often offer such strategies.
Psychological Pricing	The seller here will consider the psychology of price and the positioning of price within the market place	The seller will therefore charge 99p instead £1 or $199 instead of $200. The reason why this methods work, is because buyers will still say they purchased their product under £200 pounds or dollars, even thought it was a pound or dollar away. My favourite pricing strategy.
Premium Pricing	The price set is high to reflect the exclusiveness of the product.	Examples of products and services using this strategy include London department store Harrods, first class airline services and Porsche.
Optional Pricing	The organisation sells optional extras along with the product to maximise its turnover.	This strategy is used commonly within the car industry as I found out when purchasing my car.
Cost Plus Pricing	Cost plus pricing sets the price of the product by adding a set amount (mark up) to the production costs. The mark up is based on how much profit that the firm want to make. Cost plus pricing ensures that the costs of production are covered but it could place the company at a competitive disadvantage as it fails to consider consumer demand or competitor pricing.	For example a product may cost £100 to produce and as the firm have decided that their profit should be 20% they set the product's price at £120.00 (£100 plus 100/100*20)
Cost Based Pricing	Cost based pricing is similar to cost plus pricing as it is based on costs of production and marketing but it will build in additional factors such as market conditions to set pricing.	Cost based pricing can be useful for firms who want to base their products on costs but operate in an industry where product pricing changes regularly (volatile pricing).

Q13. What do you mean by promotion mix? Explain the various elements of promotion mix?

Ans.) Promotion Mix can be defined as a specific combination of promotional methods used for one product or a family of products. The promotion mix is one of the 4Ps of the marketing mix. It is believed that there is an optimal way of allocating budgets for the different elements within the promotional mix to achieve best marketing results, and the challenge for marketers is to find the right mix of them. It consists of public relations, advertising, sales promotion, personal selling, etc.

Various elements of promotion mix are as follows :

1. Advertising : Any non personal paid form of communication using any form of mass media. It is the paid presentation and promotion of ideas, goods, or services by an identified sponsor in a mass medium. Examples include print ads, radio, television, billboard, direct mail, brochures and catalogs, signs, in-store displays, posters, mobile apps, motion pictures, web pages, banner ads, emails

2. Sales Promotion : It is media and non-media marketing communication used for a pre-determined limited time to increase consumer demand, stimulate market demand or improve product availability. Examples include coupons, sweepstakes, contests, product samples, rebates, tie-ins, self-liquidating premiums, trade shows, trade-ins, and exhibitions

3. Personal Selling : It is the process of helping and persuading one or more prospects to purchase a good or service or to act on any idea through the use of an oral presentation, often in a face-to-face manner or by telephone. Examples include sales presentations, sales meetings, sales training and incentive programs for intermediary salespeople, samples, and telemarketing

4. Direct Selling : It Involves door-to-door selling. It involves direct face to face contact  between the buyer and the seller. Here the company appoints its employ to move from house to house in order to promote or sell the maximum quantity with respective time period, usually they are targeted.

5. Direct Marketing : Direct Marketing is a channel-agnostic form of advertising that allows businesses and nonprofits to communicate directly to the customer, with methods such as mobile messaging, email, interactive consumer websites, online display ads, fliers, catalog distribution, promotional letters, and outdoor advertising.

6.) Publicity : Publicity is gaining public visibility or awareness for a product, service or your company via the media. It is the publicist that carries out publicity, while PR is the strategic management function that helps an organization communicate, establish and maintain communication with the public. Examples include newspaper and magazine articles, TVs and radio presentations, charitable contributions, speeches, issue advertising, seminars.

Q.14. What do you mean by sales promotion? Discuss the different types of sales promotion.

Ans.) Sales promotion is one level or type of marketing aimed either at the consumer or at the distribution channel (in the form of sales-incentives). It is used to introduce new product, clear out inventories, attract traffic, and to lift sales temporarily. Sales promotions are the set of marketing activities undertaken to boost sales of the product or service. Sales promotions typically increase the level of sales for the duration they are floated. Usually, as soon as the schemes end, the sales fall, but hopefully, settle at a higher level than they were before the sales promotion started. Examples are buy soap, get diamond free; buy biscuits, collect runs; buy TV and get some discount or a free item with it and so on. 

There are three types of Sales Promotion strategies:

1. Consumer Sales Promotion: Promotion which directly targets the consumer is known as consumer sales promotion. Consumer sales promotion is a marketing technique that is used to entice customers to purchase a product. The promotions typically last for a set period of time and are used to achieve a specific purpose, such as increasing market share or unveiling a new product. These promotions are intended to enhance the value of a product purchase by either reducing the overall cost of the product (i.e., get same product but for less money) or by adding more benefit to the regular purchase price (i.e., get more for the money).

2. Sales force Sales Promotion: Promotion which target the sales directly is known as sales force sales promotion. These schemes are intended to motivate sales people to put in more efforts to increase sales, increase distribution, promote new or seasonal products, sell more deals to resellers, book more orders develop prospects lists and build up morale and enthusiasm.
Some of these activities are meant to prepare the sales people to do their jobs well and include sales meetings and manuals, training programmes, sales presentations, film and slide shows etc. Prize distribution to winners is the more tangible aspect of any such programme.

3. Trade Sales Promotion : Promotion which target the dealers directly is known as trade promotion. They work to push a product through the channel by increasing a retailer or other intermediary's demand. Trade sales promotion is a promotional incentive directed at retailers, wholesalers, or other business buyers to stimulate immediate sales. It include the following: Off-Invoice Allowances, Buying allowance, Display and advertising allowance, etc.

Q.15. Explain the process of Personal Selling by taking suitable example.

Ans.)  The personal selling process is an 7 step approach: prospecting, pre-approach, approach, presentation, meeting objections, closing the sale, and follow-up. Each step of the process has sales-related issues, skills, and training needs, as well as marketing solutions to improve each discrete step.

Process of personal selling are as follows :

1. Prospecting : Searching for prospects is prospecting. Here, prospect is a person or an institution who is likely to be benefited by the product the salesman wants to sell and can afford to buy it. Prospecting is the work of collecting the names and addresses or persons who are likely to buy the firm’s products and services. While collecting the details, ‘suspects’ must be separated from ‘prospects’ to avoid or reduce waste of time, treasure and talent.

For example, Suppose you are hired by ‘The Hindustan Unilever Limited’ to sell ‘Pure It’ RO water purifier. Here you have to analyse those who can afford purchasing the product and those who are in need of it.

2. Pre-approach: Pre-approach is to get more detailed facts about a specific individual to have effective sales appeals on him or her. It is a record round effort to get details regarding the prospect such as his ability, need, authority, accessibility to buy; it is a closer look of prospects, likes and dislikes, tastes, habits, financial status, social esteem, material status, family background and the like. The sources of information are his fellow salesmen, customers, local newspapers, special investigators, sales office, directories, observation and the prospect. Here you are required to analyse those who have the potentials to buy the product. You need to analyze certain characteristics or qualities like nature etc of the potential buyers.

3. Approach: Approach means the meeting of the prospect in person by the salesman where he makes face to face contact with prospects to understand them better. Approach is such a delicate and critical stage of the sales process that the sales are either won or lost. Approach is stepping stone for sales presentation. It is because of this delicacy that sales are likened to a chain where break of one link will break it into useless lump of hooks.

Here you have to approach to the potential buyers respectively and to move to next step i.e presentation.

4. Presentation : Presentation implies an array and decoration of articles in the shop. It is the heart of selling process. Effective presentation has the capacity to convince the customer of his sales proposition. It creates and holds the interest of customers towards the products. It would be wrong to assume that all those who enter the shop do buy the products.

Here you are required to give brief details about the products including price, quality, status, merits, advantages, scope, etc. You should use only positive words about your product.

  5. Meeting Objections: For a creative and persuasive salesman, the process of selling really starts when the prospect raises objections. In absence of sales resistance the salesman is merely an order booking clerk. For every action of salesman there is prospect’s pro-action or reaction that is, approval or disapproval. These objections may be genuine or mere excuses. Overcoming objections is really a delicate stage that makes or mars the unbroken chain of selling process. Being a very crucial aspect, the experts have a set procedure for overcoming the objections namely, listen to the prospect cushion the jolt anticipate the objections and prevent their occurrence. It is the creative task of bringing the customer to the sales track once again.

Here you are required to handle all the objections of the respective buyer very smartly.

6. Closing: All the earlier stages of sales talk namely, prospecting, pre-approach; approach, presentation and handling the objections have been designed to induce the prospect to make decision to buy so that a sale can be concluded. The success in earlier stages will lead to the last stage of closing the sale and clinch the deal. Here, ‘closing’ means the act of actually getting the prospect’s assent to the sales proposal or he gets an order. The underlying point of closing sale is to persuade the prospect to act right now than postponing or delaying the action. It is here that the prospect is turned into a customer desire into demand. Though it sounds very easy, it is the most difficult task.

If deals turn out to be positive, then give details regarding delivery period, any other offers (if included), after sale services, mode of payment etc.

7. Follow up : It includes all the after sale services. It only occur if the previous stage i.e. closing of sale occurred positive. It includes taking feedback, other services, etc. It helps to build a positive reputation in the eye of customers. Here includes taking timely feedback after respective time of delivery and other things.

Q16. Define marketing research .Explain its objectives, significance?

Answer. Marketing research is a systematic way of gathering information about marketing environment so that a marketing manager can take better decision.

Marketing research is a function which fills the gap between the company and its marketing environment by providing information to the key managers for their decision making.

Marketing research can be conducted either by in house employees or by outsourced agency.

OBJECTIVES OF MARKETING RESEARCH

1. To Provide basis for proper planning - Marketing and sales forecast research provides sound basis for the formulation of all marketing plans, policies, programmers and procedure.

2. To Reduce Marketing costs - Marketing research provides way and means to reduce marketing costs like selling, advertisement and distribution etc.

3. To find out new markets for the product - Marketing research aims at exploring new markets for the product and maintaining the existing ones.

4. To Determine Proper Price Policy - Marketing research is considered helpful in the formulation of proper price policy with regard the products.

5. To know The Market Competition - Marketing research also aims at knowing the quantum of competition prevalent in the market about the product in question. The company may need reliable information about competitor’s moves and strategies which are of immense significance for further planning.

Importance of Marketing Research

1. Marketing Research Provides Valuable Data - Marketing research provides valuable data to the decision makers. It provides data about demand, supply, consumer behaviour, competition, etc. This data is used for decision making. This data improves the quality of decisions. It makes the decision very successful.

2. It Studies And Provides Data About Consumer Behaviour - Marketing research provides data about consumer behaviour. It provides data about age, incomes, likes, dislikes, etc of the consumers about a company product. This data is used to make production and making policies.

3. It Helps To Select Suitable Sales Promotional Techniques - Marketing research helps the company to select suitable sales promotion techniques. It helps to select marketing techniques. It helps to select proper media for advertising. It helps to solve the problems of after - sales service. It also helps to prepare the budget for advertising and sales promotion.

Q 17. Explain the marketing research process?

Answer. Marketing Research Process

1. Defining the problems - The market research process beings with the identification of a problem faced by the company. The clear - cut statement of problem may not be possible at the very outset of research process because often only the symptoms of the problems are apparent at that stage.

2. Design & prepare your research instruments - In this step of the market research process it's time to design your research tool. Survey is the most appropriate tool (as determined in step 2), you'll begin by writing your questionnaire. In focus group is your instrument of choice, you'll start preparing questions and materials for moderator. You get the idea. This is the process when you start executing your plan.

3. Collection of data - This is the meat and potatoes of your project, the time when you are administrating your survey, running your focus groups, conducting your interviews, implementing your field test etc. The answers, choices and observations are all being collected and recorded, usually in spreadsheet form. Each nugget of information is precious and will be part of the mouthful conclusions you will soon drawn.

4. Analysis of data - Step 3 (data collection) has drawn to a close and you have heaps of raw data sitting in your lap. If it's on scraps of paper, you'll probably need to get it in spreadsheet form for further analysis. It's already in spreadsheet form; it's time to make sure you've got it structured probably. Once that's all done, the fun begins.