NCERT Solutions for Class 12th: Ch 12 (VSQs and SAQs)


Page No. 289

Very Short Answer Questions:

1) Define marketing. How is it different from selling? Discuss.


It refers to that process under which valuable goods/ services are created, offered and by doing transaction independently, the needs are satisfied. These activities include the following:

Gathering and analysing market information, Marketing planning, product designing, standardisation and grading, packaging and labelling, branding etc.

Starting point
The selling starts after production has taken place. It starts before goods are produced.
Means It is achieved through advertisement personal selling and sales promotion. Various marketing activities.
Main focus Attracting consumers. Consumer satisfaction.
Ends/profit maximisation   Profit maximisation is achieved through volume of sales. Profit maximisation is achieved through customer satisfaction.

2. What is marketing concept? How does it help in the effective marketing of goods and services?


Orientation of marketing implies that focus on the satisfaction of customers need, is the key to the success of any organisation in the market. All the decisions in the firm are taken from the point of view of the customers. e.g., What product will be produced, with what features and at what price shall it be sold or where shall it be made available for sale will depend on what do the customer wants.
Marketing concept helps in effective marketing of goods and services by using the following
(i) Identification of market or customer who are chosen e.s the target of marketing effort.
(ii) Understanding needs and wants of customers in the target market.
(iii) Development of products or services for satisfying needs of the target market.
(iv) Satisfying needs of target market better than the competitors.
(v) Doing all this at a profit.

3. What is marketing mix? What are its main elements? Explain.


Marketing mix refers to the aggregate of policies formulated with a view of successfully completing the different marketing activities.

Elements of marketing mix:

• Product mix – Product mix refers to all the decisions relating to the product. These decisions are mainly with regard to branding, packaging, labelling, colour, design, quality, size and weight of the product.

• Price mix- It refers to all those decisions which are concerned with the price fixation of any product or service. Under price mix, besides fixing the price of the product or service, decisions regarding credit sale, discount, etc are also included. Price mix includes the following decisions:
→ Determining of price of product or service.
→ Determining of trade and cash discount.
→ Credit policy.
→ Period of credit and procedure to be adopted in case of non-receipt of payment.

• Promotion mix- promotion mix refers to a combination of promotional tools used by the business to inform and persuade the customers about the products. Promotion mix include advertising, personal selling, sales promotion, publicity.

• Place mix- Place mix refers to the combination of all the decisions relating to make products available to consumers. If the product is not available on the right time, in the right quantity and at the right place then the consumer will not be able to buy it.

4. How does branding help in creating product differentiation? Does it help in marketing of goods and services? Explain.


Branding helps a firm in distinguishing its products from that of its competitors. This helps the firm to secure and control the market for its products. If products were sold by generic names, it would be very difficult for marketers to distinguish their products from its competitors. Thus, most marketers give a name to their product, which helps in identifying and distinguishing their products from their competitor product. This process of giving a name or a sign or a symbol etc to a product is called Branding.

5. What are the factors affecting determination of the price of a product or service? Explain.


The factors affecting determination of the price of a product or service:

• Cost of production: Before price fixation, it is necessary to compile data relating to the cost of production and keep that in mind. Two types of cost
(i) Fixed cost.
(ii) Variables cost.
At least the price should be able to recover the variables cost.

• Demand for product: If demand is relatively more than supply, higher price can be fixed.

• Price of competing firms: The price is also affected by the nature and degree of competition. The price will tend to reach the upper limit in case there is less degree of competition while under free competition, the price will tend to be set at the lowest level.

• Purchasing power of customers: what is the purchasing power of the customers and at what price and how much they can purchase?

• Government regulation: sometimes price of the commodity is also fixed by the government.
Marketing methods used: Price is also affected by other elements of marketing such as distribution system, quality of salesmen employed, quality and amount of advertising, sales promotion efforts, the type of packaging, product differentiation, credit facility and customer service provided.

6. What do you mean by ‘Channels of distribution’? What functions do they play in the distribution of goods and services? Explain.


Channels of distribution Smoothen the flow of goods by creating possession, place and time utilities. They facilitate movement of goods by overcoming various time, place and possession barriers that exist between the manufacturers and consumers.
The important functions they play in the distribution of goods and services.

• Sorting: Middleman procure supplies of goods from a variety of sources which is often not of the same quality, nature and size.

• Accumulation: This function involves accumulation of goods into larger homogeneous stock, which help in maintaining continuous flow of supply.

• Allocation: Allocation involves breaking homogenous stock in to smaller, marketable lots.

• Assorting: Middlemen build assortment of products for resale. There is usually a difference between the product lines made by manufacturers and the assortment or combinations desired by the users. Middleman produces variety of goods from different sources and delivers them in combinations, desired by customers.

• Product promotion: Advertising and other sales promotion activities are organised by manufacturers. Middlemen also participate in certain activities such as demonstrations, special displays, contest, etc. to increase the sale of products.

• Negotiation: Channels operate with manufacturers on the one hand and customer on the other. They negotiate the price, quality, guarantee and other related matters with customers, so that transfer of ownership is properly affected.

• Risk Taking: Risk taking in the sense of the price, demand fluctuations, spoilage, destructions.

7. Explain the major activities involved in the physical distribution of the product?


The major activities involved in the physical distribution of the product are transportation, inventory, warehousing, order processing.

• Transportation: Transportation is that activity through which products are moved from one place to another. Transportation involves cost. While choosing the means of transportation, the following elements should be kept in consideration: Cost, speed, dependability, frequency, power, safety.

• Inventory: Inventory means the stock of raw materials, semi-finished goods and finished goods held in anticipation of sales or use. The main reason as to why this decision is important is that if the inventory is either more or less than required.
Warehousing: warehousing requires investment so after analysing its advantages and usefulness desirable decision should be taken.
→ Which is better option? (To own or to rent a warehouse)
→ Which is the right location for a warehouse? (Nearer the factory or nearer the market)
Order processing: order processing means the process which is followed to fulfil the materials order of the customer. Customer satisfaction and speed of shipment are directly interrelated.

8. ‘Expenditure on advertising is a social waste’ Do you agree? Discuss.


Advertising is regarded as the life-blood of modern business but on the other hand, some scholars are of view that money spent on advertising is a waste.

Following are the points of criticism:

• Adds to costs:  An organisation has to spend large amount on advertising, It increases the cost of the products to meet this expenditure, price of the product is raised because of this reason advertising costs are passed on to the consumers in the form of high prices.

Undermines Social Values: Advertising undermines social values and promotes materialism. It breeds discontentment among people as they come to know about new products and feel dissatisfied with their present state of affairs. This criticism is not entirely time. Advertisement in fact helps buyer by informing them about the new products which may be improvement over the existing products.

Confuses the Buyers: Through advertisement so many products are being advertised which makes similar claims that the buyers gets confused as to which one is true and which one should be relied upon.

Encourage sale of Inferior products: Advertisement does not distinguish between superior and inferior products and persuade people to purchase even the inferior products.

Some Advertisement are in Bad taste: Many times, foul language and objectionable picture are used in advertising in order to attract a particular class and may be hurt their feelings.

9. Distinguish between advertising and personal Selling.


Basis of difference 
Personal selling
Form This is impersonal. This is personal.
Message  There is uniformity means message is same for all the customers. The message has no uniformity which means it can be changed keeping in view the behaviour of the customers.
Flexibility It lacks flexibility. It is completely flexible.
Reach Message can be carried to numerous of people at same time. Through this medium the message is conveyed to a single people or a group of person at a time.
Cost Less costly method. More costly method.
Time  It takes a little time in conveying any information to the customers. It takes a more time in conveying information to the customers.
Media  T.V, radio, newspaper, magazines. Through salesman.
Feedback This gives no information about the reactions of the customers. The reaction of the customers becomes immediately known or clear.

Application Type Questions

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


The societal marketing concept holds that the task of any organisation is to identify the needs and wants of the target market and deliver the desired satisfaction in an effective and efficient manner, so that the long term well-being of the consumers and the society is taken care of. In case any business activity encourages pollution, deforestation, storage of resources, population explosion, then its benefits can not be justified. As marketing manager of a big hotel located at an important tourist destination certain care need to be taken regarding environment.
(i) Proper drainage facility
(ii) In-built plant for re-cycling the waste
(iii) Solar geysers to be used
(iv) Rain water harvesting
(v) proper maintainance of greenery-lawns, parks, gardens
(vi) CNG based vehicles to be used to provide transport facility to the guests.

2. Suppose you are the marketing Vice President of an insurance company, planning to design a new mediclaim policy for senior citizens. What information would you like lo collect to perform this task and how will, you collect such information? Discuss.


The following information about the senior citizens should be collected
(i) Age of the senior citizen
(ii) Their source of income
(iii) Medical background
(iv) Present working states
There are various sources of collecting the above information – personal visits, questionnaires, medical reports from nursing homes, doctor clinics etc.

3. What shopping products have been purchased by you/your family in the last six months? Make a list and specify what factors influenced the purchase of each of these products.


The following shopping goods were purchased by my family
• Clothes Price, fashion, occasion for which they were bought.
• Refrigerator Brand, price, features, books, durability.
• Shoes Size, price, brand , material used.
• Furniture (study table) Design, quality, finishing, comfort level, cost.

4. What information is generally placed on the package of a food product? Design a label for one of the food product of your choice.


The following information is normally placed on the package of good product
• Name of the product
• Brand name
• Veg/Non-veg sign (green/red dot)
• Price
• Manufacturing date and date of expiry
• Ingredients
• Net weight
• Directions for use
• FPO mark
• Preservatives used

5. For buyers of consumer durable products, what ‘customer care services’ would you plan as a manager of a firm marketing new brand of motorcycle. Discuss.


For marketing motorcycles, the following customer care services can be planned
• Specified period warranties
• Easy monthly instalments
• Exchange offer
• 0% finance scheme
• Free servicing

Case Problem

Nokia takes four-lane road to consumers.

NEW DELHI After having grabbed a king size 79% share of the 15,000 crore mobile handset market in India, Nokia India has found a new way of connecting people.
The mobile handset manufacturer has embarked upon a brand new retail strategy that is based on a classification of its consumers into four major groups that separates people in terms of usage, income level and lifestyle.

The classification is based on an extensive survey— the Nokia Segmentation Study —that was carried over two years involving 42,000 consumers from 16 countries. It studied the impact lifestyle choices and attitudes have on the mobile devices consumers buy and how they use them.
The strategy, which was announced globally in June last year, is being unfolded in India now. While the nitty-gritty of the new strategy is still being worked out, it is likely that the company would follow separate marketing strategies for the four different segments. The advertising campaigns could be different for the segments.

Nokia’s entire product portfolio has now been re-aligned towards these four groups to address the specific needs of each. The first of these segments Live, aimed a first time users whose basic need is to stay in touch with voice as the main driver, would have basic handsets low on features and price.
“These may be functional phones but the target group for these phones range from SEC C (low socio-economic class) to SEC A1+ (very high socio-economic class) markets”, says Nokia India marketing head Devinder Kishore. The second segment Connect looks at more evolved users who look for more functionality and features and connectivity. Accordingly, phones in this segment would have GPRS, camera and music capabilities.

The next two categories, Achieve and Explore, are aimed at high-end users and have Nokia’s top-end handsets, e.g., Achieve segment looks at enterprise users who need to have business functionalities in their phones. Nokia’s new E-series has been put under this segment with handsets having QWERTY keyboards and full Internet capabilities.

Aimed at high-end lifestyle users, Explore would be the most prominent segment for the company in the coming years. Says Nokia India multimedia business director Vineet Taneja, “This segment would see the most vibrant growth in the coming year. It will look at five different areas—applications, imaging, mobile, TV, music and gaming. We are fast developing (the ecosystem to support these areas.”

Nokia acquired music solution and content provider LoudEye and GPS solution provider Gate5. It is all slated to launch its most high-profile handset, which boasts of having a 5 mega pixel camera and GPS capabilities apart from iPod quality music, in February.

Says Taneja, “There is increasing demand for convergence and multiple functionalities in high-end handsets. The N-series will try to address that”. Nokia feels that the new platform strategy wherein different handsets are launched under a platform, like the N-Series, will become a status and style statement and drive numbers.

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


Live, Connect, Achieve and Explore.

2. What is the basis of classification of the market used by the company?


SEC Socio-Economic Class, usage and lifestyle

3. What do you mean by realignment of product portfolio? Illustrate this from the case above.


It means that whatever product Nokia is planning to develop now, it will be according to the needs of the consumers. The four different handsets are Live, Connect, Achieve and Explore, being planned keeping the needs of four different types of users.

4. Identify the points that can be highlighted in marketing campaigns for each segment.


The points that can be highlighted in marketing campaigns for each segment can be
• Latest model
• Reasonable price
• Better performance
• Advanced technology
• Consumer friendly

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


Different considerations in the mind of each segment while purchasing mobile phones are:

• The first of these segments Live, aimed at first time users whose basic need is to stay in touch with voice as the main driver. So, here price of the phone is the main consideration.

• The second segment connect looks at more evolved users who look for more functionality and features and connectivity. So, here the features of the phone as well as an economic price tag are considered.

• The next two categories, Achieve and Explore, are aimed at high-end users. So, here the uniqueness of the handset and its business functionalities are the main points considered by the consumer.
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