Principles of Marketing Solved Papers: Nov' 2016 (3rd Semester)

COMMERCE (Speciality)
Course: 301
(New course)
(Principles of Marketing)
Full marks: 80
Pass marks: 24
Time: 3 hours
1.       (a) Write True or False:                                                         1x4=4

a)      Marketing means selling, but selling does not mean marketing.         False
b)      Market segmentation strategy and market positioning strategy are the facets of a single coin of segmentation strategy that identifies the customers to be targeted.    False
c)       All advertising is propaganda, but all propaganda is not advertising.                  False
d)      Physical distribution is a major component of marketing mix.                              True
(b) Fill in the blanks:                                                                                                      1x4=4
a)      The concept of after pay has turned everybody to enjoy now and pay later.
b)      The consumer buying process is a 5 step activity.
c)       Branding is the process of finding and fixing the means of identification.
d)      Wholesale traders are essential  middleman.
2.       Write short notes on:                                            4x4=16
a)      Product mix
Ans: Product mix: Product is one of important part of marketing mix because it reflects the good or bad reputation of any organization.  The products represent any business efficiently.  Successful organizations always search out the buying habits of their customers and designed their products based on those buying habits in order to meet the customer’s requirements. They also design their products based on important factors such as purchasing power and geographical locations etc.  They try to design products which are affordable for customers.  Companies always design their products according to customer’s budget and affordability.
They do not compromise on their product quality.  Some companies maintain their quality and do not compromise on price but there are some companies which produce products according to the affordability of customers. Marketers communicate with their customers directly and convince them to buy their products.

b)      Product emotional buying motives
Ans: Product buying motives are sometimes driven by emotions. The examples of emotional factors are stated below:
a) Pride and to maintain Social status.
b) Fashion or imitation
c) The desire to live in comfort.
d) Love and affection for family members.
e) Consumers are sometime habited to specific products.
f) Jealousy towards others.
g) Wish to praise and admired by others.
c)       Skimming price policy
Ans: Skimming Pricing : This method aims at high price and  high profits in the early stage of marketing the product. It profitably taps the opportunity for selling at high prices to those segments of the market, which do not bother much about the price. This method is very useful in the pricing of new products, especially those that have a luxury or specialty elements. The product is promoted to create awareness. If the product has no or few competitors, a skimming price strategy is employed. Limited numbers of product are available in few channels of distribution.
d)      Travelling salesman
Ans: Travelling salesman are those who travels within an assigned territory in order to sell their products. They visit different customer at different places with a view to persuade them to buy their company’s product. Travelling salesmen are also known as peddler. They are paid a fixed salary plus incentives for achieving the target sale. Their employer also allows travelling expenses and allowances to them.

3.       (a)What are the significances of modern marketing? Explain any six new waves of thought that have come to light in marketing.                                          6+8=14
Ans: Significance of Modern marketing: Marketing is a unique function of business which satisfies social values, needs and wants of an individual. It serves as the springboard for all industrial production. The importance of marketing can be studied under the following heads:
A. Uses to the Society
(1)   Employment of Various Persons: Since the things are manufactured or produced due to marketing, hence many people get employment through the production activities. Transport, storage and wholesale and retail services cover many persons. In this way, it might be said that by marketing the employment is created.
(2)  Availability of Various Products for Use: Today, the sphere of marketing has become worldwide or international. Due to it, the products manufactured in the foreign lands too become avail­able for consumption. All this could become possible due to the growth of the marketing and its development.
(3)  Increase in the National Income of Country: If the marketing activities are efficiently undertaken and things are produced in accordance with the needs or requirements of the cus­tomers, there must be some increase in the demand of the things. The production goes up which leads to the increase in the national income.
B. Uses to the Producers
(1)   Helpful in Earning More Profits: Whenever any manu­facturer produces some commodity, he has to seek the help of so many people in letting the same reach the hands of the consumers. For instance, there is the need of the middlemen, the godown ­owners, the traders, the owners of transport companies, etc. By establishing proper distribution channel, more profits can be earned.
(2)  Getting Information Regarding Demand. By the study of marketing, the producers are able to get information regard­ing the changing demands.
(3)  Reduction in Distribution Costs. By the wide studies of distribution, it is also known that the products be passed on to the consumers on the minimum possible costs.
C. Uses to the Consumers
While purchasing the products, the consumers must have full knowledge of the things. This can be possible only through marketing. By the study of marketing, the consumer is able to acquire knowledge as to how the middlemen resort to their exploitation. For avoiding the middlemen's exploitation, the con­sumer co-operative societies are being promoted and developed.
D. Uses to the Middlemen
By the 'middlemen' is meant those persons who send the products from the producer to the consumer. The lower are the ex­penses of the middlemen, the greater is their profit. By studying the marketing, they get the knowledge as to how the expenses of dis­tribution be kept lower. Unless the middlemen possess sufficient knowledge of marketing, they can't become successful.
E. Uses to the Nation
With the help of marketing, in the progressive and developing countries too, good managers and entrepreneurs can be encou­raged. For resorting to the most efficient use of the resources avail­able in the country, marketing of the commodities is very necessary. By the study of marketing, the economy could be kept safeguarded against the evil effects of instability. Only due to the marketing, the processes of production and distribution continue to exist. In it the condition of full employment could be achieved. Really speaking, marketing occupies an important role in the economic development.
Six Fundamental concept of Marketing are:
There are six concept of marketing which the companies keep in mind:
i) Production concept: The production concept is one of the oldest concepts in business. It holds that consumers will prefer products that are widely available and inexpensive. So, production concept oriented business concentrate on achieving high production which reduces cost and focus on mass distribution.
ii) Product concept: This concept holds that consumers will prefer those products that are high in quality and performance and with innovative features. Managers in these organization focus on making superior products and improving them. But the marketer must keep in mind that the customers will buy the best quality product only when they need or want it.
iii) Selling concept: Now a days, as the technology advances along with the quantity and quality of the goods, the art of selling the goods are also very essential. The firms which follow the selling concept believe that in order to motivate a customer to buy his product, he must be convinced by aggressive selling and promotional efforts. Firms following selling concept make use of advertising powers and other persuation techniques to influence the customers.
iv) Marketing Concept: The marketing concept emerged in the mid 1950’s. The business generally shifted from a product – centered, make and sell philosophy, to a customer centered, sense and respond philosophy. The marketing concept concentrates on the need of the customers. This concept says than product should be designed and produced keeping in mind the need of the customers and try to satisfy the need better than the competitor. The marketing concept holds that the key to achieving organizational goals consist of the company being more effective than competitors in creating, delivering and  communicating superior customers value. This concept puts the customers at both the beginning and the end of the business cycle. Every department and every worker should think about the customer and acts as per need of the customer.
v) Consumer concept: As per this concept, companies’ aims at providing consumers separate offers or services. This is possible through one to one marketing.
vi) Societal marketing concept: A company must not blindly follow the goal of customer satisfaction because it may lead to many social and environmental ills for example, a customer may want to have drugs so just to satisfy customer the firms should not supply him drugs. This concept requires that company should deliver superior value to the consumer to improve the consumer and the society. It focuses on consumer welfare. Firms should not produce harmful products.
(b) What is marketing mix? What are its elements? Discuss the variables of promotion mix.     2+4+8=14
Ans: Marketing Mix: Marketing mix refers to one of the major concept in modern marketing. According to Philip kotler “marketing mix is a set of controllable marketing variables that the firm blends to produce the response it wants in the target market”. It is the combination of four controllable variables which constitutes the company’s marketing system .the four controllable variables are:
a)      The product
b)      The price structure
c)       The promotional activities
d)      The distribution system
These elements are inter related and inter dependent since decisions in one area usually actions in other area.
Elements of Promotion Mix
There are four elements of promotion mix:
a) Advertising: Advertising is a non-personal presentation of goods, services or idea. In advertising existing and prospective customers are communicated the message through impersonal media like radio, T.V., newspapers and magazine. It involves transmission of standard message simultaneously to a large number of people. The message transmitted is known as advertising.
b) Personal Selling: Personal selling is the process of assisting and persuading the existing and prospective buyer to buy the goods or services in person. It involves direct and personal contact of the seller or his representative with the buyer.
c) Publicity: Publicity is a non-personal non-paid stimulation of demand of the product or services or business unit by planning commercially significant news about the services or business unit by planning commercially significant news about in the print media or by obtaining a favorable presentation of it upon radio, television or stage.
d) Sales promotion: Sales promotion consists of all activities other than advertising, personal selling and publicity, which help in promoting sales of the product. Such activities are non-repetitive and one time offers. According to American Marketing Association, sales promotion include, “those marketing activities other than personal selling, advertising and publicity that stimulate consumer purchasing and dealer effectiveness, such as point of purchase displays, shows and exhibitions, demonstrations and various non-recurring selling efforts not in the ordinary routine.”
4.       (a) What are various stages of buying process? Discuss the major psychological determinants of consumer behaviours.                                                                        6+8=14
Ans: Steps in buying decision process
The marketing scholars have developed a “stage model” of the buying process. The consumer passes through 5 stages. But consumers do not always pass through all five stages in buying a product. They may skip some stages.
(1) Problem Recognition: The buying process starts when the buyer recognizes a problem or need. The need can be triggered by internal or external stimulus. With an internal stimulus, one of the person’s normal needs hunger thirst etc. become a drive or a need can be aroused by external stimuli. Marketers need to identify the circumstances that trigger a particular need by gathering information from a number of consumers.
(2) Information Search: An aroused consumer will be inclined to search for more information. A person at times simply becomes receptive to information about a product or he may enter looking for a reading material, phoning friends, going online etc. Through gathering information, the consumer learns about competing brands and  other features.
(3) Evaluation of Alternatives: The information search and  comprehension (evaluation) stages represent the information processing stage. These 2 stages constitute the cognitive field of the purchase process. Cognition refers to acquisition of knowledge.
Some basic concepts help us in understanding consumer evaluation: first the consumer is trying to satisfy a need, second the consumer is looking for certain benefits and  third the consumer views each product as a bundle of attributes to satisfy this need.
(4) Purchase Decision: The buyer must be convinced that the purchase of the product is the legitimate course of action. This stage stands as a barrier between a favourable attitude towards the product and  actual purchase. Only if the buyer is convinced about the correctness of the purchase decision, will be proceed. At this stage, he may seek further information regarding the product or attempt to assess the information already available.
(5) Post Purchase Behaviour: The purchase leads to specific post purchase behaviour, usually it creates some restlessness in the mind of the individual. He is not sure about the product. He may feel that the other brand would have been better. It can be defined in terms of satisfaction. If the performance of the product falls short of expectations, the consumers is disappointed, if it meets expectations, the consumer is satisfied, it is exceeds expectations, the consumer is delighted. These feelings make a difference in whether the customer buys the product again and  talks favourably or unfavorably about it to others.
(b) What benefits accrue to a firm through practising the segmentation strategy? Critically discuss the bases for market segmentation.                  6+8=14
Ans: Advantages / Importance / Significance of Market Segmentation:
The purpose of segmentation is to determine the differences among the purchases which may affect the choice of the market area and marketing strategies. Following are some of the benefits of marketing segmentation.
1)      Facilitates consumer-oriented marketing: Market segmentation facilitates formation of marketing-mix which is more specific and useful for achieving marketing objectives. Segment-wise approach is better and effective as compared to integrated approach for the whole market.
2)      Facilitates introduction of suitable marketing mix: Market segmentation enables a producer to understand the needs of consumers, their behavior and expectations as information is collected segment-wise in an accurate manner. Such information is purposefully usable. Decisions regarding Four Ps based on such information are always effective and beneficial to consumers and the producers.
3)      Facilitates introduction of effective product strategy: Due to market segmentation, product development is compatible with consumer needs as there is effective crystallization of the specific needs of the buyers in the target market. Market segmentation facilitates the matching of products with consumer needs. This gives satisfaction to consumers and higher sales and profit to the marketing firm.
4)      Facilitates the selection of promising markets: Market segmentation facilitates the identification of those sub-markets which can be served best with limited resources by the firm. A firm can concentrate efforts on most productive/ profitable segments of the total market due to segmentation technique. Thus market segmentation facilitates the selection of the most suitable market.
5)      Facilitates exploitation of better marketing opportunities: Market segmentation helps to identify promising market opportunities. It helps the marketing man to distinguish one customer group from another within a given market. This enables him to decide his target market. It also enables the marketer to utilize the available marketing resources effectively as the exact target group is identified at the initial stage only.
6)      Facilitates selection of proper marketing programme: Market segmentation helps the marketing man to develop his marketing mix programme on a reliable base as adequate information about the needs of consumers in the target market is available. The buyers are introduced to marketing programme which is as per their needs and expectations.
Basis of Segmentation:
Market segmentation dividing the Hetrogenous market into homogenous sub-units. Heterogeneous means mass marketing, which refers people as a people. Homogeneous means dividing the market into different sub units according to the tastes and preferences of consumers. The following factors are considered before dividing the market:
1.       Geographical Factors: On the basis of geographical factors, market may be classified as state-wise, region-wise and  nation-wise. Many companies operate only in a particular area because people behave differently in different areas due to various reasons such as climate, culture, etc.
2.       Demographic Factors: This is the most widely used basis for market segmentation. Market is classified on the basis of population, using ages, income, sex, etc as indicators.
a)      Age                : It is known fact that people of different ages like different products, need different things, and  behave differently. Almost all companies use this factor to reach the target market. On the basis of age, market in our country is divided into children’s market, teenager’s market, adult’s market, and  the market for old people. Companies use the census data to prepare marketing strategies on the basis of age.
b)      Sex: There is a variation of consumption behavior between males and  females. This factor is used as a basis for segmentation for products like watches, clothes, cosmetics, leather goods, magazines, motor vehicle, etc.
c)       Family Life Cycle: This is another important factor, which influences the consumer’s behavior. E.g.: Before making purchases, a bachelor may consult his friends, a boy may ask his parents and  a married man asks his wife. The study of family life cycle helps a company to prepare an effective promotional strategy.
3)      ological factors: In psychographic segmentation, elements like personality traits, attitude lifestyle and  value system form the base. The strict norms that consumers follow with respect to good habits or dress codes are representative examples. E.g.: Mr. Donald’s changed their menu in India to adopt to consumer preference. The market for Wrist Watches provides example of segmentation. Titan watches have a wide range of sub brands such as Raga, fast track, edge etc. or instant noodle markers, fast to cook food brands such as Maggi, Top Ramen or Femina, women’s magazine is targeted for modern women.
4)      Economic Factors: On the basis of economic factors, markets have been classified in the westerns countries as follows:
a. Upper Class                   b. Upper-upper class                      c. Lower-upper class
d. Middle class                  e. Upper-middle class                    f. Lower-middle class
g. Lower class                    h. Upper-lower class                      i. Lower-lower class
In our country, it is classified as upper class (rich), middle class, and  the lower class. Another classification based on income in our country is as follows:
a. Very Rich                        b. The Rich class                c. The Aspiration Class and
d. The Destitute.
5. Behavior Factors: This is one of the most important bases used for market segmentation. Market is classified on the basis of attitude of consumers and special occasions.
a.       Occasions: Sellers can easily find out certain occasions when people buy a particular product. E.g.: Demand for clothes, greeting cards, etc increases during the festival season. Demand for transportation, hotels etc increases during the holiday seasons.
b.      Benefits: Each consumer expects to fulfill certain desire or to derive some benefits from the product he purchases. E.g.: A person may purchase clothes to save money and  another to impress others. Based upon this, markets may be classified as markets for cheap price products and  market for quality products etc.
c.       Attitude: On the basis of attitude of consumers, markets may be classified as enthusiastic market, indifferent market, positive market, and  negative market.

5.       (a) What steps are involved in new product development? Discuss how to achieve success in new product development.                   7+7=14
Ans: Stages in New Product Development Process
The introduction of new product usually passes through various stages. In each stage, the management must decide whether to move on to next stage with the product idea or not. Practically, in this process some of the ideas will be eliminated at every step. There are six stages involved in the new product development. The stages are given below:
(I) Idea generation: New products are produced on the basis of new ideas. Ideas may be generated from various sources like customers, dealers, distributors, salesman, top executive, consultancy organisation, Research and Development Department etc. The first step is to collect ideas as many as possible so that the company can find out one of the best idea out of those ideas to convert the same in to actual product.
(II) Screening of Ideas: All new ideas cannot be converted into products as it requires heavy capital investments. Those ideas should be screened and all unworkable ideas should be dropped. Only most viable, feasible and promising one should be selected for further processing. The company uses the concept testing method. In this method, consumer response to a description or picture or drawings is measured even before the product is actually produced. The purpose is to find out few best ideas.
(III) Business Analysis: During this stage, an attempt is made to predict the economic consequences of the product for the company. In these stages, the management should perform the following:
(a) Identify product features.
(b) Estimate market demand and product profitability.
(c) Establish a programme to develop the product.
(d) Assign responsibility for further study of the product feasibility.
(IV) Product Development or Prototype testing:  This step consists of the following:
(a) Prototype development giving visual image of the product.
(b) Consumer testing of the model or prototype product.
(c) Branding, packing and labeling of the product.
The marketing people determine an appropriate brand name, package and price and making sure that both tangible and intangible features are considered and included. Focus groups, target market surveys and other market research techniques with the physical product give the marketer additional information.
(V) Market Testing: Test marketing involves placing a full developed new product for sale in one or more selected areas and observing its actual performance under a proposed marketing plan. In the words of P. Kotler- “Test marketing is the stage at which the product and marketing programme are introduced into more realistic market settings”. The basic purpose is to evaluate the product performance and marketing programme in a real setting prior to the commercialization. This step provides the scope of correction and modification of the product as well as marketing programme. Many products fail after commercialization because of lack of test marketing. In this process, the marketers approach the trial purchasers and first repeat purchaser to know their feelings and reaction about the product as well as marketing programme. On the basis of their opinions the marketers make certain required modification in the product as well as marketing programme. After the favourable result usually, products are sent for commercialization.
(VI) Commercialization: After favourable response in test marketing, full scale production and marketing programme are planned and then the product is launched. It may be in phased manner or the product may be introduced simultaneously depending on the company’s plan and resources available. The phased manner introduction helps to avoid short supply of the product due to initial gaps in production and distribution.
Strategy of the company at new product development stage
The stage 1 is where the product is launched. A product launch is always risky. You never know how the market will receive the product. There have been numerous failures in the past to make marketers nervous during the launch of the product. The length of the introduction stage varies according to the product. If the product is technological and receives acceptance in the market, it may come out of the introductory phase as soon as it is launched. Whereas if the product is of a different category altogether and needs market awareness, it may take time to launch.
The need for immediate profit is not a pressure at the introduction phase of a product. The product is promoted to create awareness. If the product has no or few competitors, a skimming price strategy is employed. Limited numbers of product are available in few channels of distribution.
Characteristics of Introductory stages of Product life cycle
Ø  Higher investment, lesser profits
Ø  Minimal Competition
Ø  Company tries to Induce acceptance and gain initial distribution
Ø  Company needs Promotions targeted towards customers to increase awareness and demand for product
Ø  Company needs Promotions targeted towards channel to increase confidence in the product
(b) Explain the stages of product life cycle. What strategies a company resort to keep growing in growth stage? 8+6=14
Ans: Product Life Cycle
A product is like a human being. It is born, grows up fast, matures and then finally passes away. Product life cycle is the stages through which a product or its category bypass. From its introduction to the marketing, growth, maturity to its decline or reduce in demand in the market.  Not all products reach this final stage, some continue to grow and some rise and fall. In short, The PLC discusses the stages which a product has to go through since the day of its birth to the day it is taken away from the market.
However, the basic difference in case of human beings and products is that a product has to be killed by someone. Either the company (to bring better products) or by competition (too much external competition). There are several products in the market which have lived on since ages (Light Bulbs, Tubelights), whereas there are others which were immediately taken off the shelf (HD DVD).
Product Life Cycle
Thus the Product life cycle deals with four stages of a products life.
Stages of Product life cycle:
A) Introduction: The stage 1 is where the product is launched. A product launch is always risky. You never know how the market will receive the product. There have been numerous failures in the past to make marketers nervous during the launch of the product. The length of the introduction stage varies according to the product.
If the product is technological and receives acceptance in the market, it may come out of the introductory phase as soon as it is launched. Whereas if the product is of a different category altogether and needs market awareness, it may take time to launch.
Characteristics of Introductory stages of Product life cycle
Ø  Higher investment, lesser profits
Ø  Minimal Competition
Ø  Company tries to Induce acceptance and gain initial distribution
Ø  Company needs Promotions targeted towards customers to increase awareness and demand for product
Ø  Company needs Promotions targeted towards channel to increase confidence in the product
B) Growth: Once the introductory phases are over, the product starts showing better returns on investment. Your customers and channels begin responding. There is better demand in the market and slowly the product starts showing profits.
This is a stage where competition may step in to squash the product before it has completely launched. Any marketing mistakes done at this stage affect the product considerably as the product is being exposed to the market and bad news travels fast. Thus special care has to be taken in this stage to ensure competition or bad decisions do not affect the growth stage of the product.
Characteristics of Growth stage of Product life cycle
Ø  Product is successfully launched
Ø  Demand increases
Ø  Distribution increases
Ø  Competition intensifies
Ø  Company might introduce secondary products or support services.
Ø  Better revenue generation and ROI
C) Maturity stage: One of the problems associated with maturity stages in a technologically advanced environment is the problem of duplication. Not only is the product available in duplicate markets, but also there are several competing products which arise with the same features and capabilities. As a result, the USP’s of the product become less attractive.
Along with competition, Penetration pricing becomes a weapon for competitors. Competitors sell products with the same features at lesser prices thereby trying to penetrate in the market. Nonetheless, The sales of a product (especially sales from return customers) is at its peak point during the maturity stages. The growth of sales may be lesser, but the sales revenue of the organization is maximum during the maturity stage of product life cycle.
Characteristics of Maturity stages of Product life cycle
Ø  Competition is high
Ø  Product is established and promotion expenditures are less
Ø  Little growth potential for the product
Ø  Penetration pricing, and lower profit margins
Ø  The major focus is towards extending the life cycle and maintaining market share
Ø  Converting customers product to your own is a major challenge in maturity stage
D) Decline: 1 product, 10 competitors, minimum profits, huge amount of manpower and resources in use – A typical scenario which a product might face in its last stage. In this stage the expenditures begin to equal the profits or worse, expenses are more than profits.
Thus it becomes a typical scenario for the product to exit the market. It also becomes advantageous for the company as the company can use resources it was spending on the declining product on an altogether different project. Characteristics of Decline stages of Product life cycle
Ø  Market is saturated
Ø  Sales and profits decline
Ø  Company becomes cost conscious
Ø  A lot of resources are blocked in rejuvenating the dead product.
Strategies for the differing stages of the Product Life Cycle
A) Introduction: The need for immediate profit is not a pressure. The product is promoted to create awareness. If the product has no or few competitors, a skimming price strategy is employed. Limited numbers of product are available in few channels of distribution.
B) Growth: Competitors are attracted into the market with very similar offerings. Products become more profitable and companies form alliances, joint ventures and take each other over. Advertising spend is high and focuses upon building brand. Market share tends to stabilise.
C) Maturity: Those products that survive the earlier stages tend to spend longest in this phase. Sales grow at a decreasing rate and then stabilise. Producers attempt to differentiate products and brands are key to this. Price wars and intense competition occur. At this point the market reaches saturation. Producers begin to leave the market due to poor margins. Promotion becomes more widespread and use a greater variety of media.
D) Decline: At this point there is a downturn in the market. For example more innovative products are introduced or consumer tastes have changed. There is intense price-cutting and many more products are withdrawn from the market. Profits can be improved by reducing marketing spend and cost cutting.
6.       (a) What are the goals and tasks of promotion? Discuss the factors that affect the promotion mix.  6+8=14
Ans: Objectives/Aims of Promotion mix:
a) To provide Information to the consumers: Informative promotion can convert an existing need into a want or to stimulate interest in a new product. People generally do not buy a product or service unless and until they know its purpose and its benefits to them. Informative messages are significant in promoting complex and technical products like automobiles, computers and investment services. It is also important for a “new” brand being introduced into an “old” product class. In a nutshell, informative promotion helps in Increasing the awareness of a new brand, product class, or product attribute.
b) To persuade consumers to purchase: Persuasive promotion is designed to stimulate to purchase or an action. Persuasion generally becomes the main promotion goals when the product enters the growth stage of its life-cycle. The persuasive promotion aims at: (1) Encouraging brand switching; (2) Changing customers’ perception of product attributes; (3) Influencing customers to buy now and (4) Persuading customers to call.
c) To remind about the existing brand: Reminder promotion is used to keep the product and brand name in the audience’s mind. Reminder promotion is very active during the maturity stage of product life-cycle. It assumes that the target market has already been persuaded of the good’s or service’s merits. Reminder promotion aims at: (1) Reminding consumers that the product may be needed in the near future; (2) Reminding the consumers where to buy the product and (3) Maintaining consumer awareness.
There are many factors which influence promotional mix and they are known as product market factors. 
1. Nature of the product: Different product requires different promotional mixes. Consumer goods and industrial goods require different strategies. Consumer goods are sold through advertising, personal selling and displays. But industrial good require more personal selling.
(a) Product complexity: If a product is technically sound and complex in nature then it requires personal selling. For example, Industrial products. On the other hand if the product is simple we can go for advertising. For example, most of the FMCG products.
(b) Brand differentiation: Promotional mix is affected by brand differentiation and the degree to which the brand is differentiated from competitor’s brand.
(c) Purchase frequency: If buyers buy frequently a product, such as soap, tooth paste etc. the marketer will invest a good amount on advertising to push competition brands.
2. Nature of the market: Different market requires different promotional mixes and strategies. In industrial market, advertising plays a more informative role then the persuasive role for industrial buyers. Personal selling emphasizes on two roles, i.e. information and persuasion in the industrial and consumer’s market.
3. Stage in the product life cycle: The promotional product mix varies within stage in the product life cycle. The nature of demand varies according to the stages in the life cycle. During the introductory stage, the customers do not realize the qualities of the product. Here, information about the product and its benefits are made known to the buyers. In this stage, more importance must be given to personal selling and trade shows. In the growth stage, customers know the qualities of the product. Hence to stimulate demand, advertising must be increased. In the maturity stage, sales and profits decline and hence all the promotional activities should be cut down.
4. Market penetration: Here the product is already known to the buyers. In that situation, a sustaining promotional strategy is suitable. A brand has insignificant market penetration means it has a small market or struggling market. Market size and location: Product’s market size and location also influences the promotional mix. In narrow market, where the numbers of potential buyers is small, direct mail is used. In a broad market advertising is used.
5. Characteristics of buyers: The characteristics of prospective buyers strongly influence the promotional mix. Experienced professional buyers such as industrial purchasing agents need personal selling. Inexperienced buyers need advertising. Some buyers give importance to time, some to purchase of products, buyers act according to the influence of friend, relatives etc.
6. Distribution strategy; Companies fighting more through distribution for establishing their brands, invest more money on personal selling and advertising. Companies which have already established their brand in the market have to invest only a small amount in personal selling and advertising.
7. Pricing strategy: Pricing strategy influence the promotional mix strategy. If the brand is priced higher than the competition, more personal selling is needed to get a middleman to stock and push the brand. If the brand is priced lower, little promotion is needed.
(b) Explain the role of wholesalers in the process of physical distribution. Can they be eliminated from the process of distribution? Discuss                     6+8=14
Ans: Wholesale trader is one who sales to other middlemen, institutions and individuals a fairly large quantity. According to American Management Association, wholesalers sells to retailers or other merchants and/or individual, institutional and casual users but they do not sell in significant amounts to ultimate consumers. Wholesale trade is to do with marketing and selling merchandise to retailers, wholesalers or to individuals commercial and professional or other institutional contrast to household consumers, to individuals for personal use.
Functions or services of wholesaler (Role of Wholesalers in the process of physical distribution)
The wholesaler renders a number of services to trade, industries and commerce. The services rendered by the wholesaler may be classified as:
a)      Service to Manufacturer.
b)      Service to Retailer.
c)       Service to Consumer.
d)      General Services.
To Producers
a)      The wholesaler provides valuable information to the producers regarding the needs and the requirement of the consumer.
b)      As the wholesaler takes the responsibility of collecting order from retailers, he relieves the producers from this task and thereby encourage producers to concentrate on production.
c)       The wholesaler provides finance to the producers at the time of need.
d)      The wholesaler helps the producers in determining the quality and quantity of goods to be produced as he is in direct contact with the retailers.
e)      The producers are helped to maintain steady prices for the product because wholesaler buys when prices are low and sell when prices are high.
To Retailers
a)      The retailers are relieved of maintaining huge stock of goods because the wholesaler fills up the stock regularly. The wholesaler buys in large quantities and sell them at convenient lots to the retailers.
b)      The wholesaler provides finance and credit facilities to the retailer and thereby relieves the financial difficulties of the retailer.
c)       The wholesaler saves retailers from many types of risks. The retailer is not required to carry huge stock as he can get them from the wholesaler at regular interval. By extending credit has saved the retailers a lot.
d)      The wholesaler provides valuable advices to the retailer on all matters relating to new product and market condition and thereby relieves him from collection of market data.
e)      The wholesaler gives trade discounts on bulk purchase and as such it enables the retailers to earn handful amount of profit.
To Consumer
a)      He enables the consumer to purchase required quantities of goods at the desired time because he supplies goods regularly to the retailers.
b)      He provides goods at a cheaper rate because he facilitates in large scale production.
c)       The wholesaler is in a better position to stabilize prices of the products by adjusting demand and supply. The consumers are benefited a lot on account of stabilization of prices.
d)      There is no shortage of goods as the wholesaler goes on large purchasing.
e)      The wholesalers are wealth of information and as such this information are shared by the consumers.
Need of wholesalers
1.       It is not possible for the producers to sale the goods in small quantities to the retailers directly. The wholesalers are the only way to transfer the goods to the retailers. The manufacturers are relieved of making individual sales to consumers in small quantities.
2.       Retailers supply valuable and reliable information to wholesalers. The wholesalers transfer the information about the consumers' demands and the changes occurring in their likes and dislikes to the manufacturers. Information about the consumers' likes and dislikes received from the retailers through the wholesalers enable the manufactures to make suitable adjustments in the design, size and contents of their products. Thus they can manufacture right types of goods at right time.
3.       Wholesalers provides finance facility to the producers in the form of advance and also provide credit to the retailers. So, both producers and retailers are largely dependent on the wholesalers.
(Old course)
Full marks: 80
Pass marks: 32
1.       (a) Write True or False:                                                          1x4=4
a)      Mega marketing is the set of those strategies where closed markets are opened-up.                             True
b)      Perception process leads to thought and thought leads to action.                    
c)       The riskiest part of marketing management today is the development and distribution of new product.
d)      Going rate pricing is the method of setting the prices on the basis of demand.
(b) Fill in the blanks:                                                                                        1x4=4
a)      Speed marketing is also called as ________ marketing.
b)      With the help of market segmentation, the firm would be in a better position to spot and compare marketing _________.
c)       In case of ‘push’ policy of marketing strategy, the ___________ play an active role in creating demand.
d)      Advertising increases and stabilises the sales ____________.
2.       Write short notes on:                                                                             4x4=16
a)      Place mix
b)      Sociology determinants of consumer behaviour
c)       Branding
d)      Skimming price policy
3.       (a) Compare ‘marketing’ with ‘selling’. Discuss those entities with which marketing people are involved. 4+7=11
(b) Discuss the factors which influence the marketing concept. What are the benefits of marketing concept to the firms and the society?                                       5+6=11
4.       (a) What is consumer behaviour or buying process? Discuss those economic determinants which influence the consumer behaviours.                                   3+8=11
(b) Bring to light the costs of market segmentation. Discuss the benefits of sound marketing segmentation. 6+5=11
5.       (a) What are the objectives of product planning? How to achieve success in new product development? 5+6=11
(b) How is brand success determined? What are the benefits of branding to producers and consumers?               4+7=11
6.       (a) Explain the appropriate approach to pricing or pricing policy.                         11
(b) What is promotion mix? Discuss the factors that affect the promotion mix.   3+8=11
7.       (a) Who is a wholesaler? Discuss the functions of wholesaler in the process of marketing of goods. Explain the services rendered by wholesaler to producer.                     2+6+4=12
(b) Discuss the role of physical distribution system and explain various components of physical distribution system.  6+6=12

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