MARKETING MANAGEMENT

IMPORTANT QUESTIONS
MODULE I
Introduction of Marketing Management

Section A
2 marks questions
1. Define Marketing Management
The American Marketing Association “ an organizational
function & a set of processes for creating, communicating&
delivering value to customers & for managing customer
relationships in ways that benefit the organization & its
stakeholders”.
2. Define Market
According to Philip Kotler “market is an area or atmosphere for
a potential purpose”.
3. Define marketing mix
According to Philip Kotler, ‘marketing mix is the set of
marketing tools that the firm uses to pursue its marketing
objectives in the target market’. The 4P’s make up a typical
marketing mix - Price, Product, Promotion and Place.
4. 4 c’s of marketing
Customer or Consumer is the king in the competitive world. In
a competitive environment, the product will not create its
demand if it isn’t wanted by the consumer.
 Cost :Price is only a subset of the total cost incurred to satisfy
the want or needs of customers or consumers.
Convenience: The convenience of purchase products helps
most of customers or consumers to choose that product.
Communication :2 way exchange of information between
customer & firm.Maintain a good relation to the customers.
5. What is Market Positioning?
It refers to the ability to influence consumer
perception regarding a brand or product relative to
competitors. The objective of market positioning is to establish
the image or identity of a brand or product so that consumers
perceive it in a certain way.

Section B
5 marks questions
6. Explain the Role of Marketing in the Economic Development?
Role of Marketing in the Economic Development
1. Increases entrepreneurial activities which results in the
effective utilization of natural resources.
2. Promotes the development of agriculture, mining & plantation
by distributing their outputs to the customers
3. Increases foreign exchange earnings trough exporting
4. Helps in the growth of industrial sectors
5. Earns capital for the business through the creation of demand
& increased consumption
6. Generate more employment opportunities.
7. Explain Marketing Utilities?
1. Form Utility – offers products in a usable form. Ex: soap in a bar
form or liquid form.
2. Place Utility – offers the product at the place of the customers.
3. Time Utility - availability of the product as an when required by
the customers. Ex: ATM services
4. Possession Utility – gives the buyer the right to own & use the
product at his own will.
8. What are the Concepts / Orientations of Marketing?
1. Production Concept – Mass production – reduce cost - max
profit
2. Product Concept – introduce best product – better quality,
design, features etc
3. Sales Concept – max effort to sell the product – effective
distribution channels – promotional activities
4. Market Concept – identify the needs & wants by conducting
surveys & research
5. Societal Concept – firm should balance customer satisfaction,
profits & long term welfare of the society
9. What are the elements of marketing mix?
PRODUCT: refers to the item actually being sold. A product
is an item that is built or produced to satisfy the needs of a
certain group of people. The product can be intangible or
tangible as it can be in the form of services or goods.
Price :It 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 cost of other direct and indirect
factors. Price refers to the amount a customer pays for a
product.
 Place :refers to the point of sale.In the marketing mix, the
process of moving products from the producer to the intended
user is called place. In other words, it is how your product is
bought and where it is bought. This movement could be
through a combination of intermediaries such as distributors,
wholesalers and retailers. In addition, a newer method is the
internet which itself is a marketplace now.
Promotion: Refers to all the activities undertaken to make the
product or service known to the user and trade. This can
include advertising, word of mouth, press reports, incentives,
commissions and awards to the trade. It can also include
consumer schemes, direct marketing, contests and prizes.

10. What are the Functions of Marketing Management?

 Determination of marketing objectives
Managerial marketing process starts with the determination of
mission and goals of the entire enterprise and then defines the
marketing objectives to be accomplished. Objectives may be
short term or long term.
 Planning
It is concerned with formulation of policies relating to product,
price, channels of distribution, promotional measures, forecast
of target sales etc. Planning provides the basis for an effective
marketing for the enterprise.
 Organising
It implies determination of various activities to be performed
and assigning these activities to right person, so that marketing
objectives are achieved. it is necessary that the
organisationstructure is flexible and accommodative. This will
 help in better interaction between organisation and
environment.
 Co-Ordinating
Marketing involves various activities and these are inter-related
and interdependent. Product decisions, pricing strategies,
channel structure, research activities etc .. all require proper
coordination. Only then the objectives can be achieved.
 Directing
Direction helps in rightful performance of the work. At the
same time, it is necessary that employers are properly
motivated. Motivation not only helps in better performance by
the employee but also holds him back to the organisation for
longer periods.
 Controlling
Controlling is a managerial function concerned with
comparison of actual performance with the standard
performance and locating the shortcomings if any, finally
corrective measures are taken to overcome the shortcomings.
 Staffing
Success in marketing efforts depends on the efficiency of
people employed in the business. Staffing searches & selects
competent people to perform the marketing activities.
 Section C
15 marks questions
11. What is market & explain types of market?
According to Philip Kotler “market is an area or atmosphere for
a potential purpose”.

Types of Market
1. Place or Geographical Area Market
a) Local Market – customers of a local market are residents of the
area covered.
b) Regional Market – covers a particular area of the country
c) National Market – covers the whole nation
d) International Market- global Market – crosses the boarders of
the nation
2.Time Market
a) Very short period Market – market lasts for a single day or for a
very few days
b) Short period Market - market lasts for a week or few weeks
c) Long period Market – covers durable goods. market lasts for a
long period
3. Sales Market
a) Wholesale Market- is a market where bulk quantities are sold
to the customers
 b) Retail Market - is a market where small quantities are sold to
the customers
4.Types of goods & Market
a) Product Market – delivers the tangible goods ex: food items,
vegetables
b) Service Market - delivers the intangible goods ex: banking,
insurance
5. Use of goods & Market
a) Consumer Market – here firms sell household goods for
personal consumption. Ex: durables(tv, computer),soft goods(
clothes, shoe) & services(workshop, hair dressing)
b) Industrial Market - the goods sold in this market are used in
business as raw materials.
6. Nature of goods & Market
a) Financial Market- Market where financial instruments are
bought & sold. Ex: shares, debentures etc…. Financial Market
are 2 types capital market & money market.
b) Commodity Market- Market where primary products are
bought & sold.Commodity Market are 2 types: Hard
Commodity Market( gold, silver) and Soft Commodity Market
(agricultural products)
7.Competition Market
a) Perfect Market
❖ Unlimited no:of buyers & sellers
❖ Similar products
❖ Free entry & exit
❖ No restriction for starting & closing a business
 b) Imperfect Market
❖ Large no:of buyers & sellers
❖ Differentiated products
c) Monopoly Market -
❖ Single seller
❖ Absence of competition
❖ Price is determined by the company without considering the
demand of the product
d) Monopolistic Competition Market
❖ Many sellers
❖ Differentiated products which are closely identical to one
another
e) Oligopoly Market
❖ Small no:of sellers
❖ Existing firms create a barrier for the entry of new firms
f) Duopoly Market
❖ 2 sellers
❖ Independent to each other & formulate their own policies
8.Nature of transactions & Market
a) Spot Market- goods are sold for cash & delivered immediately
b) Future Market – delivery & payment of goods are made for a
future date

12. What is Marketing environment? Explain its classification?

 Marketing environment is a group of factors comprises of both
controllable and uncontrollable forces that affect the ability of
firm to generate value and attract and serve consumer.
Marketing environment is classified into :
a) micro environment
b) macro environment
a) micro environment

Environment that directly related to the marketing firm is

known as micro environment.They are close to the
organisation.They have a direct impact on the marketing
operations.The major components of micro environment:
 Company-type of
organisation,objectives,structure,management, vision and
mission.
 Suppliers-parties who deliver the rawmaterials for the
production of goods or services.
 Marketing intermediaries-parties assisting in the promotion
and distribution of goods and services to the consumer.
 Public-party who maintains an interest in the marketing
activities of a firm.
Financial public, Govt public, media public, citizen public, local,
general & internal public
Customer-firms have to examine the needs and interest of the
target market
b) macro environment
 Macro environment consists of a large number of
unpredictable and uncontrollable external factors.It affects the
environment as a whole.The outside forces greatly influence
the marketing decisions of an organisation.The important
macro environment factors are:
 Demographic factors-refers to the characteristics of the
population chosen for marketing.
 Economic factors-factors that influence the purchasing power
of consumers in the marketing.
 Cultural factors-it includes values, norms and tradition of the
society.
 Natural factors-utilisation of natural resources for the
manufacturing of products.
 Technological factors-innovations and modifications in
production and marketing activities.
 Political factors-includes government policies and rules
affecting the marketing operations.
13. Explain theFunctions of marketing?
Functions of marketing is classified into four categories:
➢ Functions of Exchange
➢ Functions of Physical Supply
➢ Facilitating Function
➢ Market Information
➢ Functions of Exchange
It covers buying and assembling and selling functions .It includes:
a) Buying and Assembling:
 Buying is the first stage in the process of marketing. A
manufacturer has to purchase raw materials for producing the
goods.
Assembling is the process of bringing together similar goods
purchased from different sources for the purpose of selling.
b) Selling:
It is the stage where the ownership and possession of the
goods and services are transferred from the seller to the buyer
in return of money.
➢ Functions of Physical Supply
It aims at ensuring the goods and services are offered at the
right place at the right time. The methods of physical supply
are:
a) Transportation:
Transportation means the movement of goods from one place
of origin to the place of customers.
b) Storage and Warehousing:
It has been used by the manufacturers, wholesalers and
retailers for preserving the raw materials and finished products
to ensure smooth supply of goods to consumers.

➢ Facilitating Function
It is the subsidiary function which is considered as the
supporting functions of marketing.Major facilitating functions
are
a) Financing:
 Marketing is an economic activity which requires money to
perform all its functions.
b) Risk Bearing:
An efficient marketer can adopt certain measures to reduce risk
factor as it is not avoidable in marketing.
c) Standardisation and Grading:
Standardisation refers to fixing and maintaining the standards
for quality, quantity, size and other features of the product.
Grading:
It is the process of classifying the product on the basis of
quality, size, colour etc. It is the part of standardisation.
➢ Market Information
Collection of relevant market information is an important
function of marketing.A marketer requires information
regarding the needs and wants of the customers, market
conditions, competitors products etc to formulate market
strategies.
14. Explain Market segmentation. Also explain steps/ process
in market segmentation?
Market segmentation is the process of dividing the market on
the basis of different needs and characteristics of consumer. A
market can be segmented on the basis of
age,gender,income,education etc.
According to Philip Kotler,”market segmentation is the act of
dividing a market into distinct groups of buyers who might
merit separate products or marketing mix”.
STEPS/ PROCESS IN MARKET SEGMENTATION
1. Define the market: The first step is to identify the target
market.Market consists of large no.of consumers, consumer
preferences & interests which offers numerous opportunities
for a firm.
2. Identify the market needs :Here the needs of the potential
customers in the identified market are analysed.Then select the
market where the company is going to market their
products.After selecting the market, firm has to conduct the
detailed study of customers needs & wants.
3. Division/ segmentation stage
On the basis of the identified needs of the market, the firm has
to divide the selected market into sub markets or segments
4. Study of different market segments
A detailed study of the needs , behavior & size of the segments
enables firms to make a further break down of the segments
into different sub segments.
5. Selection of a particular market segment
After studying the needs of the different market segments , the
firm has to select an appropriate market segment.Selection
depends upon the marketing resources possessed by the firm &
its ability to address the needs of that segment
6. Formulation & implementation of Marketing strategies(
positioning stage)
Here the firm formulates & implements adequate strategies to
market its products in the selected market segment.This is
necessary to create an image for the product in the minds of
the customers.This stage is followed by evaluation & correction
phase which helps firms to find out the deficiencies of the
marketing strategies implemented & make suitable corrections
& modifications.
 MODULE II
PRODUCT MIX

Section A
2 marks questions
1. Define product mix.
Product mix, also known as product assortment or product portfolio,
refers to the complete set of products and/or services offered by a firm.
A product mix consists of product lines, which are associated items that
consumers.

2. Define a brand
Branding, by definition, is a marketing practice in which
a company creates a name, symbol or design that is easily identifiable as
belonging to the company. ... There are many areas that are used to
develop a brand including advertising, customer service, promotional
merchandise, reputation, and logo

3. Define trademark
A trademark is a word, phrase, symbol, and/or design that identifies and
distinguishes the source of the goods of one party from those of others.
A service mark is a word, phrase, symbol, and/or design that identifies
and distinguishes the source of a service rather than goods.
4. Who are split royals
Consumers who are loyal to two or three brand.
5. What is meant by PLCM
Product life-cycle management (PLM) is the succession of strategies by
business management as a product goes through its life-cycle. The
condition in which a product is sold (advertising, saturation) changes
over time and must be managed as it moves through its succession of
stage.
6. What is labelling?
 Labelling or using a label is describing someone or something in a word
or short phrase.

Section B
5 marks questions
7. Explain the factors considered in product development
A firm has to conduct detailed study of the target market conditions
before developing and introducing product.
a. Demand: The demand for a product is influenced by various factors,
such as price, consumer's income, and growth of population. ... For
example, the demand for apparel changes with change in fashion and
tastes and preferences of consumers. The extent to which these
factors influence demand depends on the nature of a product.
b. Availability of raw materials: Raw materials are commodities that are
bought and sold on commodities exchanges worldwide. Traders buy
and sell raw materials in what is called the factor market because raw
materials are factors of production as are labour and capital.
c. Finance: It is focused on revenue, expenses, profit and shareholder
value. For most companies, the old adage “cash is king,” still reigns.
... Marketing is responsible for helping the organization acquire and
keep profitable customers and therefore relate its functions directly
to cash flow.
d. Development teams - Some firms have marketing and
business development teams that are primarily account managers –
who take the brief and pull in the required external resources as
required – or project managers who are able to apply their skills in a
variety of marketing and business development situations.
e. Legal standards- a firm should comply with the legal requirements
f. Reputation – the product should increase the reputation and image of
the company
8. State the objectives of pricing

Survival: It is apparent that most managers wish to pursue strategies that

enable their organizations to continue in operation for the long term. So
survival is one major objective pursued by most executives. For a
 commercial firm, the price paid by the buyer generates the firm’s
revenue. If revenue falls below cost for a long period of time, the firm
cannot survive.

Profit: Survival is closely linked to profitability. Making a USD 500,000

profit during the next year might be a pricing objective for a firm. Anything
less will ensure failure. All business enterprises must earn a longterm
profit. For many businesses, long-term profitability also allows the
business to satisfy their most important constituents–stockholders.
Lower-than-expected or no profits will drive down stock prices and may
prove disastrous for the company.

Sales: Just as survival requires a long-term profit for a business enterprise,

profit requires sales. As you will recall from earlier in the text, the task of
marketing management relates to managing demand. Demand must be
managed in order to regulate exchanges or sales. Thus marketing
management’s aim is to alter sales patterns in some desirable way.

Market share: If the sales of Safeway Supermarkets in the Dallas-Fort

Worth metropolitan area of Texas, USA, account for 30 per cent of all food
sales in that area, we say that Safeway has a 30 per cent market share.
Management of all firms, large and small, are concerned with maintaining
an adequate share of the market so that their sales volume will enable the
firm to survive and prosper. Again, pricing strategy is one of the tools that
is significant in creating and sustaining market share. Prices must be set
to attract the appropriate market segment in significant numbers.

Image: Price policies play an important role in affecting a firm’s position

of respect and esteem in its community. Price is a highly visible
communicator. It must convey the message to the community that the
firm offers good value, that it is fair in its dealings with the public, that it
is a reliable place to patronize, and that it stands behind its products and
services.

9. What are the service marketing mix

1. Product: In case of services, the ‘product’ is intangible, heterogeneous

and perishable. Moreover, its production and consumption are
inseparable. Hence, there is scope for customizing the offering as per
customer requirements and the actual customer encounter therefore
assumes particular significance. However, too much customization
 would compromise the standard delivery of the service and adversely
affect its quality. Hence particular care has to be taken in designing the
service offering.
2. Pricing: Pricing of services is tougher than pricing of goods. While the
latter can be priced easily by taking into account the raw material costs,
in case of services attendant costs - such as labor and overhead costs -
also need to be factored in. Thus a restaurant not only has to charge for
the cost of the food served but also has to calculate a price for the
ambience provided. The final price for the service is then arrived at by
including a mark up for an adequate profit margin.
3. Place: Since service delivery is concurrent with its production and cannot
be stored or transported, the location of the service product assumes
importance. Service providers have to give special thought to where the
service would be provided. Thus, a fine dine restaurant is better located
in a busy, upscale market as against on the outskirts of a city. Similarly, a
holiday resort is better situated in the countryside away from the rush
and noise of a city.
4. Promotion: Since a service offering can be easily replicated promotion
becomes crucial in differentiating a service offering in the mind of the
consumer. Thus, service providers offering identical services such as
airlines or banks and insurance companies invest heavily in advertising
their services. This is crucial in attracting customers in a segment where
the services providers have nearly identical offerings.
5. People: People are a defining factor in a service delivery process, since a
service is inseparable from the person providing it. Thus, a restaurant is
known as much for its food as for the service provided by its staff. The
same is true of banks and department stores. Consequently, customer
service training for staff has become a top priority for many
organizations today.
6. Process: The process of service delivery is crucial since it ensures that
the same standard of service is repeatedly delivered to the customers.
Therefore, most companies have a service blue print which provides the
details of the service delivery process, often going down to even defining
the service script and the greeting phrases to be used by the service
staff.
7. Physical Evidence: Since services are intangible in nature most service
providers strive to incorporate certain tangible elements into their
offering to enhance customer experience. Thus, there are hair salons
that have well designed waiting areas often with magazines and plush
sofas for patrons to read and relax while they await their turn. Similarly,
 restaurants invest heavily in their interior design and decorations to
offer a tangible and unique experience to their guests.

10.What are the types of Labels

▪ Brand label: It plays an important role in labelling as it gives information
about the brand. It can be removable or non-removable.
▪ Descriptive label: It specifies product usage.
▪ Grade label: It describes the aspect and features of the product.
▪ Price label : shows the maximum retail price
▪ Quantity label- shows the quantity
▪ Date – shows date of mfd and expiry
▪ Warning label – shows risk associated with the product
Section C
15 marks questions
11.what are the product mix strategies
1. Expansion of Product Mix:
Expansion of product mix implies increasing the number of product lines. New
lines may be related or unrelated to the present products. For example, Bajaj
Company adds car (unrelated expansion) in its product mix or may add new
varieties in two wheelers and three wheelers. When company finds it difficult
to stand in market with existing product lines, it may decide to expand its
product mix.

2. Contraction of Product Mix:

Sometimes, a company contracts its product mix. Contraction consists of
dropping or eliminating one or more product lines or product items. Here, fat
product lines are made thin. Some models or varieties, which are not
profitable, are eliminated. This strategy results into more profits from fewer
products. If Hindustan Unilever Limited decides to eliminate particular brand of
toilet shop from the toilet shop product line, it is example of contraction.

3. Deepening Product Mix Depth:

Here, a company will not add new product lines, but expands one or more
excising product lines. Here, some product lines become fat from thin. For
example, Hindustan Unilever Limited offering ten varieties in its editable items
decides to add four more varieties.

4. Alteration or Changes in Existing Products:

ADVERTISEMENTS:

Instead of developing completely a new product, marketer may improve one

or more established products. Improvement or alteration can be more
profitable and less risky compared to completely a new product. For example,
Maruti Udyog Limited decides to improve fuel efficiency of existing models.
Modification is in forms of improvement of qualities or features or both.

5. Developing New Uses of Existing Products:

This product mix strategy concerns with finding and communicating new uses
of products. No attempts are made to disturb product lines and product items.
It is possible in terms of more occasions, more quantity at a time, or more
varied uses of existing product. For example, Coca Cola may convince to use its
soft drink along with lunch.

6. Trading Up:
Trading up consists of adding the high-price-prestige products in its existing
product line. The new product is intended to strengthen the prestige and
goodwill of the company. New prestigious product increases popularity of
company and improves image in the mind of customers. By trading up product
mix strategy, demand of its cheap and ordinary products can be encouraged.

7. Trading Down:
The trading down product mix strategy is quite opposite to trading up strategy.
A company producing and selling costly, prestigious, and premium quality
products decides to add lower- priced items in its costly and prestigious
product lines.Those who cannot afford the original high-priced products can
buy less expensive products of the same company. Trading down strategy
leads to attract price-sensitive customers. Consumers can buy the high status
products of famous company at a low price.

8. Product Differentiation:
This is a unique product mix strategy. This strategy involves no change in price,
qualities, features, or varieties. In short, products are not undergone any
change. Product differentiation involves establishing superiority of products
over the competitors.

By using rigorous advertising, effective salesmanship, strong sales promotion

techniques, and/or publicity, the company tries to convince consumers that its
products can offer more benefits, services, and superior performance.
Company can communicate the people the distinct benefits of its product

12.Explain PLC

The product life cycle is the process a product goes through from when it is
first introduced into the market until it declines or is removed from the
market. The life cycle has four stages - introduction, growth, maturity and
decline.

While some products may stay in a prolonged maturity state, all products
eventually phase out of the market due to several factors including saturation,
increased competition, decreased demand and dropping sales.

Stages in PLC

1. . Introduction
Once a product has been developed, the first stage is its introduction stage. In
this stage, the product is being released into the market. When a new product
is released, it is often a high-stakes time in the product's life cycle - although it
does not necessarily make or break the product's eventual success. .

It is in this stage that the company is first able to get a sense of how consumers
respond to the product, if they like it and how successful it may be. However, it
is also often a heavy-spending period for the company with no guarantee that
the product will pay for itself through sales. Costs are generally very high and
there is typically little competition. The principle goals of the introduction
stage are to build demand for the product and get it into the hands of
consumers, hoping to later cash in on its growing popularity.

2. Growth
By the growth stage, consumers are already taking to the product and
increasingly buying it. The product concept is proven and is becoming more
popular - and sales are increasing.

Other companies become aware of the product and its space in the market,
which is beginning to draw attention and increasingly pull in revenue. If
competition for the product is especially high, the company may still heavily
invest in advertising and promotion of the product to beat out competitors. As
a result of the product growing, the market itself tends to expand. The product
in the growth stage is typically tweaked to improve functions and features.

As the market expands, more competition often drives prices down to make
the specific products competitive. However, sales are usually increasing in
volume and generating revenue. Marketing in this stage is aimed at increasing
the product's market share.

3. Maturity
When a product reaches maturity, its sales tend to slow or even stop -
signaling a largely saturated market. At this point, sales can even start to drop.
Pricing at this stage can tend to get competitive, signaling margin shrinking as
prices begin falling due to the weight of outside pressures like competition or
lower demand. Marketing at this point is targeted at fending off competition,
and companies will often develop new or altered products to reach different
market segments.

Given the highly saturated market, it is typically in the maturity stage of a

product that less successful competitors are pushed out of competition - often
called the "shake-out point."

In this stage, saturation is reached and sales volume is maxed out. Companies
often begin innovating to maintain or increase their market share, changing or
developing their product to meet with new demographics or developing
technologies.
4. Decline
Although companies will generally attempt to keep the product alive in the
maturity stage as long as possible, decline for every product is inevitable.

In the decline stage, product sales drop significantly and consumer behavior
changes as there is less demand for the product. The company's product loses
more and more market share, and competition tends to cause sales to
deteriorate.

Marketing in the decline stage is often minimal or targeted at already loyal

customers, and prices are reduced.

Eventually, the product will be retired out of the market unless it is able to
redesign itself to remain relevant or in-demand. For example, products like
typewriters, telegrams and muskets are deep in their decline stages (and in
fact are almost or completely retired from the market

Chapter 3
Section A
 2 marks questions

1. What is pricing?
Pricing means determination of selling price for a product or service.

2. What are the factors influencing pricing?

I. Internal factors II. External factors

Organisational factors Buyers/ customers

Marketing mix Demand
Product differentiation Competition
Cost Suppliers
Pricing objectives Economic conditions
Government

3. What is the role/ significance of pricing in marketing strategy?

 It helps to attain the objectives
 It is an economic regulator
 It denotes the quality of products
 It influences demand

4. What are the objectives of pricing?

 Return on investment
 Market share
 Profit maximisation
 Meeting or preventing competition
 Price stabilisation
 Pricing for market skimming
 Survival

5. What are the considerations involved in formulating the pricing policy?

 Competitive situation
 Goal of profit and sales
 Long range welfare of the firm
 Flexibility
 Government policy
 Overall goal of business
  Price sensitivity
6. What are the objectives of pricing policies?
 Price profit satisfaction
 Sales maximisation and growth
 Making money
 Preventing competition
 Market share
 Survival
 Market penetration
 Market skimming
 Early cash recovery
 Satisfactory rate of return

Section B
5 marks questions

7. What are the pricing strategies? / What are the kinds of pricing

i) Odd pricing- Price ending in an odd number. Eg: 499, 999 etc. Also known as
charm pricing.
ii) Psychological Pricing- Many consumers believe that price is an indicator of
quality. Some people prefer high priced products because they feel that the
product is of high quality
iii) Customary Pricing- Price fixed by custom or tradition. Eg: Soft drinks of different
companies are also priced uniformly.
iv) Pricing at the prevailing prices- It means the price at which similar other products
are sold in the market. It is a competition oriented method of pricing.
v) Geographical Pricing- When a manufacturer serves a large number of distant
regional markets he can adopt different prices in each area without creating any
ill-will among customers. Petrol is priced in this way.The cost of transportation is
charged under three methods
(1) FOB Pricing: Free on Board pricing may be of FOB origin and FOB
destination. In FOB origin pricing the buyer has to bear the cost of transit and
in FOB Destination pricing the cost of transit is included in the selling price.
(2) Zone Pricing: The company divides the market into zones and quotes uniform
prices to all buyers who buy within a zone.
(3) Base point pricing- It includes the basic transportation cost from the base point
to the buyer location
vi) Dual Pricing- Is a method of pricing where a portion of the products are
compulsorily sold to the Government or its authorised agencies at a substantial
low price and the rest in open market at a high price.
 vii) Administered pricing- It is the practice of pricing the products purely on the basis
of the policy decisions of the sellers not on the basis of cost, competition and
demand.
viii) Mark up pricing- It is cost plus pricing. Followed by wholesalers and retailers.
When the goods received the retailers adds a certain percentage to the
manufacturers price to arrive at the retail price. The adding percentage is known
as mark up pricing
ix) Price Lining- It consists of selecting a limited number of prices at which the retail
store will sell its products. Pricing decisions are made initially and remain
constant for a long period.
x) Negotiated pricing- Price is not fixed. It is to be paid depends on bargaining
xi) Monopoly pricing- It exists where a product is sold exclusively by one producer.
As there is no competition or no substitutes for the new product pricing is easier.
xii) Expected pricing- The price range is fixed by conducting surveys with the
consumers and the price is fixed considering the response of the consumers.
xiii) Sealed Bid Pricing- The expenditure anticipated is worked out in detail and the
competitors offer a price. The minimum price quoted is accepted and the work is
awarded to the party.
xiv) Oligopolistic pricing- There are few large sellers who compete for larger
market share prevails. Any firm may fix the price and others will follow that price
xv) Symbolic Price- An artificial high price is fixed to impart prestige or quality
image.
xvi) Promotional Pricing- It takes into consideration the fact that price is an
important ingredient in the marketing mix. Under this practice price is fixed to
increase the volume of sales.
xvii) Was Is pricing- The customers are offered a discount. It is also a promotional
pricing
xviii) Going Rate Pricing- It is demand oriented pricing method. It is the present
running rate at which the products are marketed.
xix) Perceived value pricing- The buyer’s perception value will be considered as
the key to pricing. Cost of production is not taken into consideration
xx) Variable Pricing- The company charges different prices for similar goods at a
given time to similar buyers depending upon the quantity of purchase.
xxi) Non variable pricing- The company charges similar price for the sale of goods
xxii) Single Price Policy- All the buyers irrespective of their class , size or
conditions of purchase are charged similar prices.

8. What are the process of pricing?

Development of Pricing Objectives
In the beginning of this chapter ( Price Setting Procedure ) various pricing, objectives
have been looked at. Developing pricing objectives are necessary because all
subsequent decisions are based on objectives. Objectives must be consistent with
company’s overall objectives and marketing objectives.

Determination of Demand
Demand determination of a product is the responsibility of marketing manager, aided
by marketing research personnel and forecasters. Demand and competition typically
set the upper limits of the price. Demand forecasts furnish estimates of sales potential
of a product reflecting the quantity that can be sold in a specified period

Estimation of Costs
Over the long-run, prices must exceed average unit costs to earn a profit. Cost set the
lower limits of the price. The reality of the free market economy is such that customers
now pass up certain brand names in case they pay less without sacrificing quality.

Examining Competitors Costs, Prices, and Offers

Examining the market demand and company costs, a range of possible prices can be
considered. However, the company must also examine the cost, prices, and possible
responses of competitors in the industry. Learning competitors’ costs, prices, and
offers is an ongoing function of marketing research

Selecting a Pricing Strategy

A pricing strategy is a course of action framed to affect and guide price determination
decisions. These strategies help realizing pricing objectives and answer different
aspects of how will the price be used as a variable in the marketing mix, such as new
product introductions, competitive situations, government pricing regulations,
economic conditions, or implementation of pricing objectives

Selection of a Pricing Method

After selection of the pricing strategy or strategies to accomplish the pricing
objectives, a company decides about a pricing method. A pricing method is a
systematic procedure for setting the prices on a regular basis

9. What are the new product pricing strategies?

Price skimming- price skimming is a pricing strategy in which a marketer sets a
relatively high initial price for a product or service at first, then lowers the price over
time.[1] It is a temporal version of price discrimination/yield management. It allows
the firm to recover its sunk costs quickly before competition steps in and lowers
the market price.
Price skimming is sometimes referred to as riding down the demand curve. The
objective of a price skimming strategy is to capture the consumer surplus early in the
product life cycle in order to exploit a monopolistic position or the low price
sensitivity of innovators.[2]Price skimming is a product pricing strategy by which a
firm charges the highest initial price that customers will pay. As the demand of the
first customers is satisfied, the firm lowers the price to attract another, more price-
sensitive segment.
Therefore, the skimming strategy gets its name from skimming successive layers of
"cream," or customer segments, as prices are lowered over time.

Penetration pricing- penetration pricing is a pricing strategy where the price of a

product is initially set low to rapidly reach a wide fraction of the market and initiate
word of mouth.[1] The strategy works on the expectation that customers
will switch to the new brand because of the lower price. Penetration pricing is most
commonly associated with marketing objectives of enlarging market share and
exploiting economies of scale or experience

10.What is RPM? Explain its forms.

Resale Price Marketing is a form of price fixing. It is a form of vertical price

control exercised by the manufacturers through the various stages of
distribution channel whereby, they maintain a uniform retail selling price for
their branded products.
The forms are individual resale price maintenance and collective resale price
maintenance
Under Individual resale price maintenance, there is no strict agreement with
regard to resale price control. Retailers can look to alternative sources of
supplies. Hence, collective resale maintenance is highly effective.
Under the collective resale price maintenance, the manufacturers of different
brands of the same product or a close substitute enter into an agreement to
observe retail price maintenance and notify it as a condition to all traders who
draw supplies from them.

10. What are the advantages of RPM?

 1. It eliminates price competition at the retail level, as uniform price will be set.

2. It ensures price stability.

3. It prevents quality deterioration.

4. Fixation of fair selling price restricts excessive profiteering.

5. It promotes fair trade practices.

6. It protects the interest of the consumers. Consumers are saved from

shopping around to find out the best seller and enjoy the convenience of getting
the goods at the nearest shop

Section C
15marks questions
11. Explain pricing strategies
1.new product pricing
a.Price skimming- price skimming is a pricing strategy in which a marketer sets
a relatively high initial price for a product or service at first, then lowers the
price over time. It is a temporal version of price discrimination/yield
management. It allows the firm to recover its sunk costs quickly before
competition steps in and lowers the market price.
Price skimming is sometimes referred to as riding down the demand curve.
The objective of a price skimming strategy is to capture the consumer
surplus early in the product life cycle in order to exploit a monopolistic
position or the low price sensitivity of innovators. Price skimming is a product
pricing strategy by which a firm charges the highest initial price that
customers will pay. As the demand of the first customers is satisfied, the firm
lowers the price to attract another, more price-sensitive segment.
Therefore, the skimming strategy gets its name from skimming successive
layers of "cream," or customer segments, as prices are lowered over time.

b.Penetration pricing- penetration pricing is a pricing strategy where the price

of a product is initially set low to rapidly reach a wide fraction of the market
and initiate word of mouth.] The strategy works on the expectation that
customers will switch to the new brand because of the lower price.
 Penetration pricing is most commonly associated with marketing objectives of
enlarging market share and exploiting economies of scale or experience
2.product line pricing

a.Captive pricing

Captive pricing involves your company taking advantage of a product that will be
used primarily to attract a large volume of customers. That product can sometimes
be a loss leader—a basic product sold for a very low price or frees in order to bring in
new business. The point is to encourage a customer to buy additional products that
enhance their original purchase.
b.Bait pricing

It involves the assiduous use of discounting: putting items on discount helps pick up
store traffic.

3.Psychological pricing strategies

a.Charm pricing
This strategy, often called "charm pricing," involves using pricing that ends in "9" and
"99."

b.Prestige' pricing strategy

Prestige pricing is the complete opposite of odd or charm pricing. Prestige pricing
involves making all numerical values into rounded figures

c.BOGOF': Buy one, get one free.

This is a pricing strategy in which customers pay the full price for one product or
service to get another for free.

d.Comparative pricing

Comparative pricing may be tagged as the most effective psychological pricing

strategy. This simply involves offering two similar products simultaneously but
making one product's price much more attractive than the other.

4.promotional pricing strategies

a.Loss leader : A loss leader pricing strategy, a term common in marketing, refers to
an aggressive pricing strategy in which a store prices its goods

b.Special event : Special event pricing entails linking a price discount to a holiday,
season or specially advertised sale day. The benefit of special event pricing is sales
volume. ... They may like what they see and become repeat customers, or they may
buy regularly priced items while shopping for the sales items.

5. differential pricing strategy :allows a company to adjust pricing based on various

situations or circumstances. The price variations come in different forms, from
discounts for a particular group of people to coupons or rebates for a purchase.

Geographical & negotiated pricing

6.price adjustment strategies : Companies must adjust their basic prices to account
for differences in customers and situations.

MODULE IV
PHYSICAL DISTRIBUTION MIX

Section A
 2 marks questions
1. What is physical distribution?
Physical distribution includes all the activities associated with the supply of
finished product at every step, from the production line to the consumers.
Important physical distribution functions include customer service, order
processing, inventory control, transportation and logistics, and packaging and
materials.
2. Define logistics
"planning, implementing, and controlling the physical flows of material and
finished goods from point of origin to point of use to meet the customer's
need at a profit.
3. Define SCM
Supply chain management encompasses the planning and management of all
activities involved in sourcing and procurement, conversion, and all logistics
management activities. ... In essence, supply chain management integrates
supply and demand management within and across companies.
4. What do you mean by Retailer
A retailer is a person or business that you purchase goods
from. Retailers typically don't manufacture their own items. They purchase
goods from a manufacturer or a wholesaler and sell these goods to consumers
in small quantities.
5. What is channel conflict
A Channel Conflict arises when the channel partners such as manufacturer,
wholesaler, distributor, retailer, etc compete against each other for the
common.

Section B
5 marks questions
6. Explain the types of logistics
a. Inbound logistics refers to the network that brings goods or materials to
your business. Your inbound logistics network includes everything you
need to transport, store, and deliver goods to your business from other
suppliers.
b. Process logistics: A logistical process tries to find the best solution for
manufacturing and distributing goods by considering how the market uses
these products. As part of this process, a company also should consider
the factors that affect production quality and efficient transportation
between hubs
 c. Outbound logistics: is the process of storing, transporting and distributing
goods to customers. The outbound logistics process starts with a customer
sales order, moves on to warehouse packing and ends with
product delivery.
d. Reverse logistics: It typically involves returning a product to the
manufacturer or distributor or forwarding it on for servicing,
refurbishment or recycling.
7. Explain types of channel conflict
Channel conflict can be explained as any dispute, difference or discord arising
between two or more channel partners, where one partner’s activities or
operations affect the business, sales, profitability, market share or similar goal
accomplishment of the other channel partner.

Vertical Level Conflict

In the vertical level conflict, the channel partner belonging to a higher level enters
into a dispute with the channel member of a lower level or vice-versa.

Horizontal Level Conflict

The conflict among the channel partners belonging to the same level, i.e., issues
between two or more stockists or retailers of different territories, on the grounds of
pricing or manufacturer’s biases, is termed as horizontal level conflict.

Multi-channel Level Conflict

When the manufacturer uses multiple channels for selling the products, it may face
multi-channel level conflict where the channel partners involved in a particular
distribution channel encounters an issue with the other channel.

8. List out the advantages of direct marketing

Flexible Targeting:
Direct marketing enables an enterprise directly identify, isolate and
communicate with well-defined target markets.

Cost-Effectiveness:

The cost per acquisition of direct mail can be significantly less than other
marketing methods.

Rapid Delivery:
 Direct marketing is both swift and flexible in achieving results. This is
especially true for telemarketing, one of the direct marketing tools, as the
results of a conversation can be logged immediately and scripts adjusted
straight away to improve results

Geographic Targeting:

Direct marketing can be used for any level of geographic targeting, whether
it’s the local area surrounding a shop or restaurant, regional targeting by
postcode or county, national targeting and even international targeting. Direct
marketing can prove a far cheaper way of testing the market than a costly
personal sales visit.

Invisible strategies

Here marketing strategies will be invisible to competitors. The marketing

offers are made with the personal communication with the customer.

9. What are the distribution channel strategies on the basis of distribution

intensity

a.Intensive Distribution: As many outlets as possible. The goal of intensive

distribution is to penetrate as much of the market as possible.

b.Selective Distribution: Select outlets in specific locations. This is often based

on a particular good and its fit within a store. Doing this allows manufacturers
to pick a price point that targets a specific market of consumer, therefore
providing a more customized shopping experience. Selective distribution caps
the number of locations in a particular area.

c.Exclusive Distribution: Limited outlets. This can mean anything from luxury
brands that are exclusive to special collections available only in particular
locations or stores. This method helps maintain a brand’s image and product
exclusivity. Some examples of companies that enact exclusive distribution
would be high-end designers like Chanel or even an automotive company like
Ferrari.

Section C
15 marks questions
10. Explain the services of retailers
To Customers:

▪ A Retailer ensures ready stock availability of goods for the customers in

sufficient quantities and sells the goods to the customers as per their quantity
specifications.
▪ A retailer ensures availability of a wide variety of choices of products for the
customers by keeping different varieties at various prices and also different
brands as well.
▪ A retailer can provide credit facilities and heavy cash discounts on the
purchase of different products to the customers.
▪ Retailers can provide customized services and pay personalized attention to
the customers for achieving a higher level of satisfaction with the delivery of
product or service.
▪ Retailers introduce new products to the customers and also guide them with
the usage of the products.
▪ Retailers can provide additional services like free home delivery or after sales
services.
▪ Retailers purchase and maintain a stock of those products which are mostly
demanded by the customers. They aim at catering to the requirements of all
kinds of customers with varied buying capacities.

To Wholesalers:

▪ Retailers are a valuable source of information and feedback for the

wholesalers who in turn pass on the same information to the producers of the
products. Crucial information related to the changes in the buying preferences
of the customers, their experience with the usage of the products, feedback
on the prices and quality of the products is passed on to the wholesalers. This
helps in improving the existing services and in customizing the product
solutions as per the requirements of the customers.
▪ A retailer absorbs most of the burden of the wholesaler and also of the
manufacturer by selling the goods in small quantities to the customers. The
wholesalers are relieved from the burden of maintaining direct touch with the
customers and managing the entire gamut of activities involved in convincing
the customers for purchasing their products.
▪ Retailer supports the wholesaler by acting as a channel for distributing the
goods to the customers.
▪ Retailer acts as the point of contact between the customer and the
wholesaler. Retailers are responsible for creating and improving the demand
for various products by taking care of the display and merchandising activities.
▪ Retailers act as a major source of funding for the wholesale trade by placing
the orders and making payments in advance to the wholesalers for those
goods.
11.what are the functions of retailing

A retailer is a person or business that you purchase goods from. Retailers typically
don't manufacture their own items. They purchase goods from a manufacturer or a
wholesaler and sell these goods to consumers in small quantities.

i) Merchandising:
Merchandising covers the activities of planning and supervising the marketing of
goods at the right places, times and prices and in right quantities to the right
customers. It facilitates a proper coordination of supply with demand. The marketing
activities of assembling (buying) of goods from different producers and wholesalers
and preparing them for resale to consumers at a profit are called merchandising
activities.
Retailers have to assemble and maintain enough stocks of a variety of goods so that
they can meet adequately consumer demand and fulfil consumer expectations.
(ii) Warehousing:
In order to meet consumer demand promptly, the retailer must keep goods in ready
stock and avoid an out-of-stock position as far as possible. Hence, he should have
reasonable storage facilities.
(iii) Selling:
Successful buying must be combined with efficient methods of selling, advertising
and sales promotion. The retailer is the last point of sale in the machinery of
distribution. Retail trade is an important branch of commerce where goods are
directly sold to the final consumer.
(iv) Risk-Bearing:
Goods are bought and stored in .anticipation of sales at a profit. Consumer demand
is always changing. Prices, too, fluctuate. Hence, the risk of loss due to changes in
demand and changes in prices is always present. Then, again, there is always the
possibility of the loss of goods by fire, theft, riot, deterioration in quality, etc., the
risk of loss due to changes in -demand, changes in style and fashions, changes in
prices are borne by retailers.
(v) Grading and Packing:
A retailer may have to perform the marketing functions of branding, grading and
packaging when lie deals with ungraded goods received from producers.
(vi) Grant of Credit:
Credit sales offer a lot of convenience to salaried and wage-earning people. A credit
sale is a sales promotion device, for it encourages permanent and regular customers
to deal with one retailer. People who “run an account” with the retailer go to one
shop. For the sale of durable and costly goods to consumers, a hire-purchase or an
installment sale facility is offered. In its absence, the sale of costly consumer durable
goods may not be possible on a large scale. Many people buy goods on hire-purchase
or HP.
(vii) Guide to Wholesaler or Producer:
Manufacturers and wholesalers can secure first-hand information of the wants of
consumers from retailers, because retailers have personal contacts with their
consumers. They can guide manufacturers to produce those articles which are likely
to be in great demand in the near future due to changes in the tastes and habits of
consumers.
The retailer is the best source for the determination of the pulse of demand, e.g.,
changing consumer preferences and tastes, and changes in fashions. Marketing plans
are based on probable consumer demand.
(viii) Last Outlet in the Chain of Distribution:
In relation to producers and wholesalers, retailers act as the last outlet for the
distribution of goods within the country. A retailer is the connecting link between the
wholesaler and the consumers. Individual sales in small quantities is the
responsibility of the retailer. In the absence of retailers, it would be impossible to
distribute goods to ultimate consumers, and most of our wants will remain
unsatisfied. In short, the entire trade will be paralysed.
(ix) Advertising, Salesmanship and Sales Promotion:
Manufactured goods are worthless unless they pass the acid test of retail
distribution. The retailer must employ efficient methods of promotion, i.e.,
salesmanship, advertising and sales promotion. Nothing can be sold without the
means of promotion or means of marketing communication

Module 5
Recents trends in marketing
Section A
2 marks questions

1. What is Relationship marketing?

 It is a system of marketing with conscious intention to develop and manage long term
relationship with customers , suppliers, distributors, or other parties in the marketing
environment.
2. What are the steps to develop Relationship marketing?
❖ Identification of key customers
❖ Assigning duties to skilled relationship managers
❖ Assigning duties to overall managers
3. What are the levels of Relationship marketing?
❖ Basic Marketing
❖ Reactive marketing
❖ Accountable Marketing
❖ Pro active marketing
❖ Partnership marketing

4. What are the benefits of Relationship marketing?

❖ Great reviews
❖ More feedback
❖ More word of mouth
❖ Higher return on investment from customer acquisition
❖ Multiplication of sales
❖ Less advertisement cost

5. What is social Marketing?

It is the application of marketing theories and techniques to social situations in which
the impact of marketing decisions on the well being of society is studied.

6. What are the advantages of social marketing ?

❖ Consumption of socially desirable products
❖ Promotes health consciousness
❖ Green marketing initiatives
❖ Helps to eradicate social evils
❖ Helps to develops long term relationship with customers
❖ Improvement of standard of living
❖ Cheapest way of marketing
Section B
5 marks questions

7. What are the benefits of online marketing?

❖ Less expensive
❖ Anytime business
❖ Customer relationship
❖ Flexibility
❖ Mass medium
 ❖ Adaption to external market
❖ Increased customers
❖ Cheaper products
❖ Information
❖ Easy Analysis

8. What is Green marketing? Explain its importance?

Is the marketing of environment friendly products and services based on the
environmental benefits. Its importance are:
❖ Promotion of pure quality products
❖ Fair dealing with customers and society
❖ Protection of ecological environment

9. What are the advantages of Tele marketing

❖ Cost effective
❖ Business expansion
❖ Follow up
❖ Improved customer satisfaction
❖ Profitability
❖ Immediate feedback
❖ Establishment of Brand name

10. What are the principles of viral marketing?

❖ Give away products and services
❖ Easy transfer to others
❖ Scalability from small to very large
❖ Generation of motivation
❖ Utilisation of existing networks
❖ Take advantage of resources of others

Section C
15 marks questions
11. What is online marketing?list out the advantages
online marketing is the practice of leveraging web-based channels to spread a
message about a company's brand, products, or services to its potential customers.
The methods and techniques used for online marketing include email, social media,
display advertising, search engine optimization, Google AdWords and more.
1. Convenience and Quick Service
The incredible convenience of marketing online is one of the biggest advantages of
internet marketing. The internet has extremely easy accessibility with consumers
using the internet and reaching markets anywhere in the world. Because of this,
purchasing goods from across borders now reduces the cost of transportation.

2. Low Cost for Operations

One of the main advantages of online marketing for businesses is its low operating
cost. You can advertise cheaper with internet marketing than with traditional
methods of advertisement such as ads in newspapers, on television and on the radio.
In online marketing, you can easily get a free listing in a wide range of business
directories.

3. Measure and Track Results

An aspect of internet marketing that is rarely available with traditional marketing is
the ability to measure and track results. With online marketing, your business can
utilize varying tools for tracking the results of your advertising campaigns. Using
these tools, not only can you measure and track but also illustrate the progress of
your marketing campaign in detailed graphics

4. Demographic Targeting
Marketing your products and services online gives you the ability to target audiences
based on demography. This allows you to concentrate your efforts on the audience
that you truly want to offer your products or services. With demographic targeting,
you can better target your marketing efforts on specific demographic regions.

5. Global Marketing
The ability to market your products and services globally is one of the biggest
advantages of global marketing for business. Within several months of aggressive
SEO, you can secure millions of viewers and reach huge audiences from across the
world. You can now reach every corner of the world, where there is internet.

6. Ability to Multitask
One of the core benefits of online marketing is its ability to handling millions of
customers at the same time. As long as a website’s infrastructure is efficient,
numerous transactions can easily take place simultaneously.
7.24/7 Marketing
Internet marketing reduces cost and runs around the clock. That means that your
marketing campaigns run for 24 hours a day, 7 days a week. Compared to traditional
marketing, internet marketing does not constrain you with opening hours. At the
same time, you would not be worrying about overtime pay for your staff.
12. What is telemarketing .List out the advantages and disadvantages.
Telemarketing is a method of selling products and services over the
telephone. It has both advantages and disadvantages. Telemarketing is
a method of direct marketing in which a salesperson solicits prospective
customers to buy products or services, either over the phone or through a
subsequent face to face or web conferencing appointment scheduled
during the call.
Advantages

• Easy to Get to Customers

• Cost Effective
• No time limit
• Platform for interaction
Disadvantages

• Customer Lists and Training Personnel can be Costly

• there is no guarantee that people listed will be receptive to a
telemarketer’s call or the products the telemarketer is
promoting
• telemarketers must deal with some customers who perceive
any telemarketing offer to be a scam and an uninvited
annoyance, especially if the person has registered his number
with the Federal Communications Commission’s Do Not Call list