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1. Marketing Management:
Questions and Answers
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Questions and Answers on Marketing Management: Exam
Question and Answers, Interview Questions, MBA
Questions, and Question Bank for students on Marketing
Management! Also learn about:
1. Question and Answers on MarketingManagement
2. Interview Questions on Marketing Management
3. Exam Questions and Answers on Marketing Management
4. Marketing Management Questions And Answers For Mba
5. Marketing Management Important Questions Answers
6. Philip Kotler MarketingManagement Questions And Answers
7. Marketing Management Question Bank With Answers
Questions & Answers on Marketing Management
Q.1. Define Market!
Ans. Traditionally, a market is a physical or a meetingplace where
buyers and sellers gather to buy and sell products and services.
These markets exist for products/services that are daily necessities
like fruits, vegetables, fish,garments, electronic goods, etc. The
transaction for these necessities happens directly with the buyer,
which also includes a process of bargaining.
Modern markets are not different from traditional markets except
the market need not only be a physical place. Modern markets act
like facilitators that allow buyers and sellers of a product or service
for exchange. Modern markets can include products/services which
are daily necessities alongwith durable items like plates, knives,
fans, etc.
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2. For example- supermarkets (Big Bazaar), hypermarkets,
minimarkets,etc., provide all products / services under one roof at
fixed prices. Modern markets however,do not allow bargaining like
in traditional markets but are considered to be relatively cleaner
environment than traditional markets. Modern markets also
include online shopping for food (Big Basket), clothes (Myntra),
etc., which focus on convenience at prices usually higherthan
traditional markets.
Q.2. What are the features of marketing?
Ans. Some of the basic features of marketing are:
1. Marketing is Customer Centric:
Marketing is customercentric means, customers is the king for
marketing firm. He is the pivotal point for all marketing decisions.
The firm has to constantly focus its attention on the changing needs
and wants of the consumer, and ways to satisfy them.
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2. Marketing is Mutually Beneficial:
Marketing is beneficial for both buyer and seller. The exchange
process, provides the selleran opportunity to sell the goods at a
profit and buyer is able to satisfy his needs and wants in a better
way.
3. Marketing is Value Based:
Marketing will be effective and successful only when the business
tries to meet the needs of the market based on a value system
followedby the entire organisation.
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4. Marketing is Influenced by the Environment:
Environment is basically divided as internal and external
environment.While, internal environment is controllable, external
is uncontrollable. External environment includes political and social
environment,competition, technology, cultural, legal, natural
environment etc. Marketing operates in an external environment
and therefore it has to be adjusted as per the changing
environmental conditions.
5. Marketing is Significant for Both Profit and Non-Profit
Organisations:

3. Marketing is not only significant for profit making organisation but
also for non-profit organisation like Educational Institutions,
Temples, Mosques, hospitals etc.
Q.3. What are the merits of sales promotion?
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Ans. The following are the merits or benefits of sales
promotion:
1. Invitation – They include a distinct invitation by alluring
customers to consider or try out the new product that encourages
customers to make purchase of the product.
2. Differentiation – Sales promotion is conducted when producers
have a new product to launch which is different from the existing
products. Sales promotion compels consumers to identify the new
product differently through sales promotion.
3. Pricing strategies – Sales promotions enable producers to adjust
short-term variations of supply and demand of products. Based on
this they can test the highest price they can charge on the product
and the possible discount price they can offerto the customers.
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4. Consumer satisfaction – Customers enjoy some satisfaction from
being smart shoppers when they take advantage of special prices
under varied retail formats.
5. Revenue generation – It attempts to create sales and revenues in
the short-run for retailers especially for complementary products.
For example, discounts on new tea product will increase sales of
complementing goods like sugar, honey or milk.
Q.4. Who are customers?
Ans. Customers are individuals or businesses who purchase
products and services produced by a business.The purchase of
products and services depends upon the willingness and the ability
of the customer to pay in accordance to their needs and wants.
Needs and wants are different from each other, wherein needs are
those products/services which are necessities such as food, water,
clothing or home.
Alternatively, wants are those products / services which an
individual aspires to have in addition to the necessities which an
individual can do without. For example, gold or diamond jewellery,

4. an expensive and branded watch, designer clothes, lottery tickets,
etc.
Q.5. What are the characteristics of sellers or marketer?
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Ans. A selleris an individual or an entity that exchanges any type of
goods or service in return for payment. Sellers are also marketers
that include intermediaries or vendors, suppliers, advertising and
market research agencies, media and entertainment, which
facilitate distribution and sale from businesses to customers.
These sellers or marketers:
1. Identify and target a set of customers that form a target market
which a marketer believes could be addressed by a business.
2. Recognise the nature of product/service that could cater to the
(target) market’s needs.
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3. Promote the features and characteristics or solutions offered
from consumption of the products/services in accordance to the
market’s needs.
4. Distribute the products /services to the target market.
5. Determine relevant pricing strategies that adjust the costs to the
market according to the solution provided by the products / services
(For example, discounts, freebies,etc.).
6. Provide additional services that can enhance the value of the
solutions provided by the products /service (For example, customer
care, etc.).
Q.6. What are the demerits of sales promotion?
Ans. The following are the demerits of sales promotion:
1. Short duration – Sales promotion attempts to generate sales only
in the short-run.
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2. Supplementary marketing strategies – Sales promotion as a
marketing strategy cannot work in isolation. It can work only if its
format is incorporated with advertising and personal selling.
3. Inferior goods and image – For generating quick money,
producers may promote inferior or low quality goods, or packaging.
Also, low pricing on a new product may also indicate low brand

5. confidence and possible reduce sales in the long-run. This may
adversely affect the image of the brand and reduce short term sales.
4. Ineffective promotion – Ineffective promotion caused by lack of
trained and inexperienced salespersons or unavailability of
supporting infrastructure may lead to excess stock.
Q.7. What is the importance of pricing?
Ans. There can be no marketing without pricing. It is a very
significant element of marketing mix, because it affects both
demand and supply i.e. both buyer and seller. Pricing decisions
should therefore be taken very carefully, incorporating both the
strategic environment and the existing status of the market. Prices
should neither be too high nor too low. While too high price, may
drift away the customers and cause loss to sales, too low a price may
bring less revenue and eventually the firm may be out of business.
The importance of pricing can be seen from the following
points:
i. Price affects the profitability position of a firm. It affects the total
revenue and net profits of the firm. This is because profit = revenue
– cost and revenue = price X quantity sold.
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ii. Price act as an agent for economic development of the economy
as it affects the level standard of the society.
iii. Price affects the demand of the product. Law of demand states
that if price goes up, demand decreases and vice-versa, other things
remaining constant.
iv. Price is a quantitative element and can be measured easily. This
is important when certain things like quality of the product cannot
be evaluated. Price of the product helps in arriving at a conclusion
here. High price products are generally perceived to be of better
quality and vice-versa.
v. Price greatly influences the decisions relating to promotion and
advertisement. Promotions expenditure increases the price of the
product.
vi. It is the price which determines the type of customerwho will
use the product. High-priced products are generally purchased by
status-conscious people and higher income group people and low
priced goods by general masses.

6. Q.8. What are the objectives of advertising?
Ans. 1. To do the entire sellingjob (as in mail order advertising).
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2. To introduce a new product (by building brand awareness among
potential buyers).
3. To force middlemen to handle the product (pull strategy).
4. To build brand preference (by making it more difficult for
middlemen to sell substitutes).
5. To remind users to buy the product (retentive strategy).
6. To popularise some change in marketing strategy (change in
price, etc.).
7. To combat or neutralise competitor’s advertising.
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8. To acquaint buyers and prospects with the new uses of the
product (to extend the product’s life cycle).
In sum the primary objectives of advertising is to increase sales.
Q.9. Define sales promotion!
Ans. Sales promotion refers to a traditional element of marketing
communication.It is used to increase the sales of a product by
offeringincentives, gifts, and schemes provided to customers at the
time of purchase. An organization can provide various offers for
promoting a good or service. These offers include coupons,
vouchers, prizes, gifts, discounts, and free product samples. Sales
promotion not only encourages customers to buy a product or
service but also triggers repeated buying. Finally, it helps
organizations to make customers loyal towards their products or
services.
There are two types of views that are found among marketers in
relation to sales promotion. The first view advocates that sales
promotion should be coupled with advertising and personal selling.
This view does not give much importance to sales promotion as a
major element of marketing communication.
The second view asserts that sales promotion and advertising are
two distinct functions with entirely different objectives and
strategies. Thus, it believes that sales promotion is equal to or even
more significant than advertising. Sales promotion stimulates

7. purchase action and advertising develops a brand reputation and
builds market value.
Q.10. Define product hierarchy! What are its
characteristics?
Ans. The product hierarchy is the intra-level characteristics of the
three broad levels of products core, tangible and augmented. In
order to recognize the core product, marketers must first define
what the core benefits the product will provide the customer. The
actual product must be built around the core product.
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The product has as many as four characteristics:
i. Quality level
ii. Features
iii. Brand name
iv. Packaging
All these attributes combined together carefully deliver the core
benefit(s) of the product. The augmented product offers additional
consumerbenefits and service such as warranty and customer
training. Marketers must first identify the core consumer needs
(develop core product), then design the actual product and find
ways to augment it in order to create the bundle of benefits that will
best satisfy the customer.
The product hierarchy stretches from the initial stage of the
product, i.e., need at the basic level for a particular item of franchise
in the process of product planning. There are seven levels of product
hierarchy. The products have to be classified under a product-line in
accordance with their length and width. They shouldinvariably be
named for making it easy to classify the items thereof.
Interview Questions on Marketing Management
Q.11. What are the sources of marketing information?
Ans. Adequate and up-to-date information about changing market
conditions is necessary for successful marketing of products.

8. Decisions concerning the type of product, the price policy, the
channel of distribution and sales promotion can be made rightly
with the help of right marketing information at the right time.
In order to collect marketing information,LSI conduct market
research. SSI’s are often unable to afford continuous marketing
research. However, they can use personal contacts and other
informal methods for collecting required information about
markets.
Marketing information can be collected from the
following sources:
I. Primary Source:
(a) Customers
(b) Dealers
(c) Salesman
II. Secondary Source:
(a) Press- (e.g., Economics Times and Business Today).
(b) Govt. publications- (Different Ministries and departments of the
Central Government and State Government publish regularly some
journals, periodicals etc. Which contain very useful data relating to
business e.g. Annual report on the working of public
understandings; import policy; guidelines for industries etc.).
(c) Publication of financial institutions-The RBI, public financial
institutions and commercial banks publish a lot of useful
information (e.g. monthly bulletin of RBI etc.).
(d) Publication of trade associations-Trade associations and
chambers of commerce collect and publish useful data for the
benefit of their members (useful to analyse business trends in
India).
(e) Private concerns and research institutions-Some research
institutes like National Council of Applied Economic Research,
Indian Institutes of Foreign Trade, etc. Conduct research studies
regularly and publish data of various types. Private agencies like
FICCI also publish data.
Q.12. What is marketing communication?
Ans. The word ‘communication’ is derived from the Latin word
communis which means ‘common.’ We attempt to communicate,
that is, to establish a ‘commonness’with another person. There are
three essential parts of communication,viz., the source, message

9. and receiver. True communication takes place only when the
message means the same thing (in common) to both the parties i.e.,
the sender of the message and its receiver.
Marketing communication is undertaken by marketers through the
devices of promotion viz., advertising, publicity, personal selling
and sales promotion. The effective communication occurs when a
sender (source) sends a message and receiver responds to the
message which satisfies the sender.
Both must have identical meaning of the message. Effective
communication is equal to- receipt of the message plus
understanding plus acceptance plus action, which means decision to
purchase.
Q.13. How internet is magnifying branding strategy?
Ans. The Internet is magnifying the effects of business
intermediaries, the action of interpretation of brands, and the
relationshipbetween image and identity. The outcome is that there
is more noise, and brands are moderated and mediated more, both
by and through the use of the new communication mechanism that
is the Internet. In consequence there is a changing relationship
between brand image and brand identity, and brand identity and
brand reality; customerbeing a moderating factor.
Brand reality is defined as “…organizing branding so that employees
are uniquely proud of the company’s brand leadership and [are]
passionately aligned to branding this through activities they work
on individually, and in teams…”. The concept of brand reality has a
particular significance in the context of the increased
communication power facilitated by the Internet.
Consistency in brand communications is important in building and
maintaining a strong brand image, but often the ultimate
presentation of a brand to customers at the point of purchase is in
the control of a retailer domain rather than the manufactureror
brand owner, whetherthat be on-line or bricks-and-mortar.
Buchanan, Simmons and Bickart found that “context can create
conditions in which customers are likely to rely less on previously
formed attitudes and more on external cues. Despite the extensive
marketing efforts involved in maintaininga high-equity brand’s
positioning, retailers are able to negate the equity of an established

10. brand through their display decisions. This deterioration of brand
equity has obvious implications for the brand in the long run, but it
may even influence profitability in the short run”.
This erosion of brand profitability is a result of retailers leveraging
the value of a high-equity brand to create sales for other brands
carried in the store as well as for the brand itself;an unwelcome
brand linkage from the point of view of the manufacturerbut
intentional on the part of the retailer.
For a variety of reasons – business activity on the Internet with its
increased communication between consumers,the rise of brand
extension, co-branding, the increasing importance of brand
association and other associative effects – brand constellations are
emerging, which further increase the complex relationships
between brands and also increase the interference of brand noise
through their various structures and intermediaries. In an attempt
to conceptualize this, taxonomy of brand linkages is proposed.
Q.14. How are brands classified?
Ans. Brands can be classified into different types as:
1. Manufacturer’s Brand:
Brand used by a manufacture to produce output under his own
name is called manufacture’s brand like HCL, SONY, Godrej,
Panasonic etc. These are mostly used at the national level and are
therefore also called as national brand.
2. Distributor’s Brand:
These brands are developed and owned by the distributor or reseller
like wholesalers and retailers. When manufacturer is unable to
promote the brand on his own, they prefer to produce the product
under distributor’s brand. In India, distributor’s brand is popular in
handicraft, woollen,sport industries etc.
3. Individual Brand:
When different brand names are used for different products, it is
called individual brand. Here the promotional expenditure is high
as different brands have to be promoted individually e.g. Surf,
Wheel and Washing Powder.
4. Family Branch:

11. Here all the products of a company are sold under one family brand
name. This strategy of selling goods under one brand is less
expensive as separate promotion for different brand names is not
required e.g. Lakme for all its beauty products.
5. Umbrella Brand:
In this case all the products may be under the umbrella of one
company or manufacturer. Example: – in India, Godrej, Hindustan
Unilever Limited, Tata etc.
6. Multiple Brand:
In this case the same product is offered by the company under
different brand names. This policy is useful as it promotes
competition between brand managers of two different brands and
also increases company’s total market share.
Q.15. What is the meaning of “Price”?
Ans. Price is the monetary valuation about the tangible and
intangible benefits perceived by the consumeror user. There is a
great interrelationshipbetween this variable with the rest of the
commercial mix components. Due to this relationship, any change
in the product distribution or promotion affects the fixing of the
international price.
There has to be consistency among the marketing mix components,
and the fixing of international prices has to be carried out in total
agreement with the objectives of the international marketing
strategy designed.
For example- to penetrate a particular country market, the company
has to adapt its product according to the statutory rules of that
destination market (such as sanitary and packaging requirements).
These adaptations are going to affect directly export price.
Q.16. What are the Functions of Packaging?
Ans. A good packaging process should serve the following
functions:
1. Protection of the Product:
The most important function of packaging is to protect the product
from damage during handling or distribution, from extreme
temperatures, contamination,loss of content properties and
pilferage.
Examples are given as follows:

12. (a) Protection during handling – For example, glass items,
electronic appliances and anything fragile and intricate are bubble
wrapped before secondary or tertiary packaging.
(b) Protection from extreme temperatures – For example, perfumes
are normally packaged in thick glass bottles to protect them from
extreme temperatures.
(c) Contamination – For example, bottled water, juice boxes, wafers
and chips packets are sealed from dust, dirt, duplicity and
contamination.
(d) Loss of liquid or vapour – For example, aerated water (soda, soft
drinks, etc.) bottles have sealed caps to avoid loss of liquid or fizz.
These caps can be tightened multiple times during consumption of
the aerated water at regular intervals.
(e) Pilferage – Pilferage means theft of part of contents of a package
or spilling the contents but leaving the package through bogus
resealing. A good package protects the product from pilferage.
Continuingthe milk example, pilferage of milk can be easily avoided
in tetra pack rather than milk bags.
2. Provide Easy Handling:
Packaging should provide easy handling during transit from the
producer’s business to the customers.For example, medicinal
tablets are packaged in a blister pack made from plastic and
aluminium that maintains the tablet composition and shape when
purchased from the chemist.
3. Convenient to Display:
A package’s size and shape should be suitable for displaying and
stacking the product in a retail store. For example, medicinal tablets
are packaged in small sized rectangular boxes that can be easily
stacked and displayed in the chemist shop. However, odd-shaped
products like chairs, shoes, etc. will require a specialised space or
section in a retail store.
4. Perform Functionality:

13. The packaging shouldbe functional that facilitates a practical and
suitable way to dispense the ingredients inside a packaged product.
For example, the small hard mints “Tic Tac” manufacturedby the
Italian confectionerFerraro is packaged in small transparent plastic
boxes with small rectangular open-close seal that lets out one tic-tac
at a time when shaken lightly on the palm of one’s hand.
Q.17. What is the relationship between price and market?
Ans. Although the fair value may be close to where the market is
trading, other pricing factors in the market place mean fair value is
used mostly as an estimate of the option’s value. Moreover, fair
value will depend on the assumptions regarding volatility levels,
dividend payments and so on that are made by the person using the
pricing model. Different expectations of volatility or dividends will
alter the fair value result.
This means that at any one time there may be many views held
simultaneouslyon what the fair value of a particular option is. In
practice, supply and demand will often dictate at what level an
option is priced in the marketplace. Traders may have a fair value
on an option to get an indication of whetherthe current market
price is higher or lower than fair value, as part of the process of
making a judgment about the market value of the option.
Volatility:
The volatility figure input into an option-pricing model reflects the
assumptions of the person using the pricing model. Volatility is
defined technically in various ways, depending on assumptions
made about the underlying asset’s price distribution. For the regular
option trader it is sufficient to know that the volatility a trader
assigns to a stock reflects expectations of how the stock price will
fluctuate over a given period of time.
Volatility is usually expressed in two ways- historical and implied.
Historical volatility describes volatility observed in a stock over a
given period of time. Price movements in the stock (or underlying
asset) are recorded at fixed time intervals (for example every day,
every week, or every month) over a given period. More data
generally leads to more accuracy. Implied volatility relates to the
current market for an option.

14. Volatility is implied from the option’s current price, using a
standard option-pricing model. Keeping all other inputs constant,
you can put the current market price of an option into any
theoretical option price calculator and it will calculate the volatility
implied by that option price.
Q.18. What are the strategies for price leadership?
Ans. The price leadership strategy prevails in competitive market
environment.The leading firm then makes pricing moves that are
duly acknowledged by other members of the industry. Thus, this
strategy places the burden of making critical pricing decisions on
the leading firm; others simply follow the leader. The leader is
expected to be careful in making pricing decisions.
A faulty decision could cost the firm its leadership because other
members of the industry would then stop followingin its footsteps.
For example, if, in increasing prices, the leader is motivated only by
self-interest,its price leadership will not be emulated. Ultimately,
the leader will be forced to withdraw the increase in price.
The price leadership strategy is a static concept. In an environment
where growth opportunities are adequate, companies would rather
maintain stability than fight each other by means of price wars.
Thus, the leadership concept works out well in this case. In the auto
industry, General Motors is the leader, based on market share. The
other two domestic members of the industry adjust their prices to
come very close to any price increase by General Motors.
Usually, the leader is the company with the largest market share.
The leadership strategy is designed to stave off price wars and
‘predatory’ competition that tend to force down prices and hurt all
parties. The leaders chastise companies that deviate from this form
through discounting or shaving. Price deviation is quickly
disciplined.
Q.19. Explain the role and importance of packaging!
Ans. There are several factors attributing to using packaging as a
marketing tool.
These factors are:
1. Self-Service:

15. Packaging is given importance because of an increasing number of
products sold on a self-service basis especially among the developed
economies.Self- service implies that there are no sales personnel or
middle-men involved but the package can attract attention, describe
the product features, create consumerconfidence and make a
favourable impression on potential customers.
2. Consumer Affluence:
Another factor that influences the importance of packaging includes
consumeraffluence or a customers’ willingness to pay relatively
more for the convenience, appearance, dependability and prestige
of better packages.
3. Company or Brand Image:
A growing importance to company or brand image and reputation
also contributes to involving packaging as a marketingtool.
Companies are attempting to endow their brands with distinct
identities and features which are conveyed to the customers through
packaging.
4. Innovative Approach:
Innovative approaches to packaging are also an important factor
that benefits both the consumers with convenience and companies
with more profits. For example, soap dispensers or plastic pump
bottles are an easier and convenient way to wash hands and store
beside the wash basins.
5. Product Differentiation:
A good packaging shouldbe an effective means to differentiate the
product from other competing products. Branding along with
packaging can lead to such product differentiation. For example,
Maggi brand is associated with instant noodles.
Exam Questions and Answers on Marketing
Management
Q.20 What is product value equation?
Ans. Every product has an implied value equation, which takes into
account the relationship between its quality, convenience,and
price. This relationshipwill vary for different consumersegments.

16. The team’s first job is to analyze their products’ value equations and
benchmark them against the competition.
The team should investigate:
i. Product positioning, which includes brand value, relative share
position, and private-label development.
ii. Competitive landscape, which includes the pricing supply curve,
relative cost structure, and market discipline (leaders and
followers).
iii. Consumermotivation, which includes segmentation of needs
and benefits, long-term price elasticity, the impulse-buying
dynamic, and life-cycle profitability in each segment.
The objective is to ensure that the pricing structure supports the
value equation as well as captures the full value of any advantages in
cost, quality, or service. We call this “pricing to your sweet spot.”
If, for instance, the product is the only one of its kind to feature a
warranty that consumers particularly value, it should be priced
accordingly. Such a strategy goes beyond traditional pricing tactics
to recognize the value of a product that can be realized in the
marketplace.
Q.21. Give an example of product positioning strategy!
Ans. Over 500 million rupees Cadbury India company has
launched a premium range of chocolates, Temptations, in Roast
Almond Coffee,Old Jamaica, Honey Apricot, Mint Crunch and
Black Forest flavors, in the Indian market. As a part of the product
strategy of the company to launch one major brand every year, the
new product range aims to offerthe consumeran exotic and
international chocolate experience. Temptations is being retailed
through Cadbury’s existing distribution network, reaching out to
250,000 retailers, with the emphasis on larger retail stores.
Cadbury’s already claims a 70% share in value terms of the Indian
chocolates market, pegged at around Rs 50 million (22,000 tonnes
per annum in volume terms), of which 5% is the premium segment.
Why launch in the midst of an FMCG slowdown? The management
of the company feels that one way to beat the slowdown is to keep

17. track of evolving consumerneeds and bring out a product to meet
those needs.
What market research showed was a definite need for a premium
chocolate. The taste profile needed was adult and it needed to be an
indulgence product. The research apparently also revealed that the
consumerseeks variety from indulgence products and has been
buying imported chocolates (such as Ferrero Rocher, Lindt et al).
In the larger metro markets in India, it has been noticed that while
our current premium range (Fruit & Nut and Roast Almond) was
doing well, our presence in this top-end segment had reduced in
favor of imported chocolates, which offeredgreater variety to the
consumer.
Research furtherrevealed two sets of chocolate consumers in India:
those who are exposed to international chocolates and are active
consumers of the same, and those who would love to have the
‘DifferentiatedChocolate Taste’ but find international chocolate
prices prohibitive.
Temptations of taste hope to woo this latter target group of
consumers.“Demographically speaking, we are targeting the 25-40
year-old, SEC A male and female in the top 10 cities of India,” says
the company management.Also, where foreign chocolates tend to
melt at 18°C, Temptations claims to have been specially formulated
to stay solid in tropical temperatures up to 26°C.
The advertising, handled by contract, revolves around the brand
proposition, ‘Too Good to Share’. The TVC shows a mischievous 30-
somethingmodern, urban couple playing pranks on each other to
avoid sharing their Temptations, which is a shift from the usual
‘chocolate is for sharing’ proposition. Cadbury is also working with
ATM kiosk doors, Crosswords bookstores,sampling at premium
restaurants in metros, playing advertisements during movies,all
aimed at targeting the consumerin privacy.
Q.22. What are the levels of products?

18. Ans. A product is closely associated with the need and level of
satisfaction of the customers. It may be defined as an article
introduced in the market, that seeks attention, desire for acquisition
and image for use to get satisfaction of a want or need of a
customer. Obviously,the hierarchy of products is based on their
utility and intensity of customersatisfaction. In developing a useful
product, a planner has to look upon its levels. They are core
products, tangible products or augmented products.
A core product or service which meets the basic need or service may
be defined as the product that provides a core benefit to a customer.
Such a product may be a cloth, a food item or a drinking substance,
irrespective of its taste, color, attraction, beauty consciousness,etc.
A core product is just a substance that satisfies the basic need of a
user and does not allow him any comparison. Thus, a product
planner has to make the core product tangible to introduce it in the
competitive market allowingthe customer to exercise his franchise
rationally, considering comparative advantages.
The product augmentation is a set of approaches followedby a
company in promoting its product through effective delivery and
service, incentives to customers and dealers, warranty to seek
customers’ confidence on product and maintaining a product-
oriented relationship of customers with the company. This level of
products largely draws ‘company-customer’ oriented relationshipin
the market. The product levels also determine the selling process to
a large extent.
The core products play an important role in product planning while
the tangible products initiate the sales management process. The
augmented products drive the concept of extended sales mechanism
for marketing expansion and product diversification.
Q.23. What are the types of pricing models?
Ans. i. The Binomial Model:
There are two main models used in the Australian market for
pricing equity options: the binomial model and the Black Scholes
model. For most traders these two models will give accurate results.
The binomial option-pricing model was first proposed by Cox, Ross

19. and Rubinstein in a paper published in 1979. This solution to
pricing as an option is probably the most common model used for
equity calls.
The model divides the time to an option’s expiry into a large
number of intervals, or steps. At each interval it calculates that the
stock price will move either up or down with a given probability and
also by an amount calculated with reference to the stock’s volatility,
the time to expiry and the risk free interest rate. A binomial
distribution of prices for the underlying stock or index is thus
produced.
On expiry the option values for each possible stock price are known
as they are equal to their intrinsic values. The model then works
backwards through each time interval, calculating the value of the
option at each step. At the point where a dividend is paid (or other
capital adjustment made) the model takes this into account. The
final step is at the current time and stock price, where the current
theoretical fair value of the option is calculated.
ii. The Black Scholes Model:
First proposed by Black and Scholes in a paper published in 1973,
this analytical solution to pricing a European option on a non-
dividend paying asset formed the foundation for much theory in
derivatives finance. The Black Scholes formula is a continuous time
analogue of the binomial model.
The Black Scholes formula uses the pricing inputs to analytically
produce a theoretical fair value for an option. The model has many
variations that attempt, with varying levels of accuracy, to
incorporate dividends and American style exercise conditions.
However, with computing power these days the binomial solution is
more widely used.
Q.24. What is meant by brand equity?
Ans. The brand equity may be understood as the highest value paid
for the brand names during buyouts and mergers. This concept may
be defined as the incremental value of a business above the value of
its physical assets due to the market positioning achieved by its
brand and the extension potential of the brand. In the market a
strong brand will be considered to have high brand equity.
The brand equity will be higher if the brand loyalty, awareness,
perceived quality, strong channel relationships and association of

20. trademarks and patents are higher. High brand equity provides
many competitive advantages to the company. The company may
have low price and high consumerloyalty and also more trade
leverage. It would be difficult to measure the brand equity of
various brands in the market as the parameter are very subjective
and the whole exercise may turn out to be arbitrary.
The integration of all these variables make the brand equity high of
the company. The brand equity furtherleads to brand personality of
the company. The company may decide the brand personality
strategy after analyzing the strength and weakness of the existing
brands in the market. The research on assessingthe brand
personality may be conducted by using the brand rating method to
get quantitative measures.
The methods of photo sorting (trademark) phrase writing and
simulation games may be used for assessingthe brand personality.
The sample consumers for this purpose should be self-directed,
principled, externally directed, status oriented action-oriented
consumers and non-driven consumers.
The effective strategy for implementingthe brand personality
measures would to go for aggressive advertising using the consumer
reviews and comparative product advantages. However, the
consistency in the message should be taken care of properly.
Q.25. What are the features of market concentration?
Ans. Features of the concentration strategy:
i. There exists an intensive company assignation of efforts in a few
markets and a more efficient use of resources so as to prevent them
from being dispersed.
ii. A higher level of commitment and operation consolidation in
each selected market is promoted.
iii. A selection of the few markets that the company considers “key”
for international operation development is made. In general, the
company turns to more dynamic and internationally stable markets.

21. Those markets sale levels develop an increasing tendency to
company participation in the markets selected.
iv. When the international operations risk is concentrated on a few
markets, there appears a company’s greater dependency on that
small numberof markets. The fact that the enterprise is exposed to
the different selectedmarkets ups and downs makes it more fragile.
v. It brings about more knowledge about those markets, and a
greater learning capacity about commercial practices, consumer’s
behaviour and markets competitive environments.
vi. It is advisable for use when the new markets access,
administration, sales and distribution costs are very high for the
entrepreneur. Concentrating on a few markets makes it possible to
generate economies of scale in sales and distribution activities.
vii. It has proved to be very efficient in goods that need to be
adapted as regards product variables and market communication,
which is why it is not advisable to diversify expansion in numerous
countries because adaptation cost would be too high. It is efficient
for the marketing of goods that have a repetitive purchasing process
and that allow consumer’s loyalty.
viii. It is useful forthe products that need a direct or indirect
company’s strong control and participation in the different stages of
the marketing process (through pre and post-marketing services).
In general, it is used in middle stages during the company’s
internationalization.
Q.26. What are the main features of international
product?
Ans. The product has a series of tangible and intangible attributes
which aim at satisfying consumers’ and users’ wishes and needs,
and contributing to the compliance of the entrepreneurial
objectives.
As regards product attributes, a division is made among:
i. Basic product, which is the tangible product essential concept,
also called product heart;

22. ii. Extended product, which comprises the different attributes, like
brand, packaging, style, quality and aesthetic aspects;
iii. Sublimation products or supporting components,which are the
different supporting services that add value to the tangible product
like technical service, training and instructions,delivery and
installation,and legal warranty, and other post-marketing services.
In a wide sense, services, places, and ideas are also recognized as
product. The product is a complex mixture of components, some of
which can be directly perceived by the senses (colour,shape,
materials, etc.) and others which cannot be directly apprehended by
the consumer, but for their mental preconceptions (security, status,
etc.) in response to the positioning developed by the enterprise.
This controllable variable interaction with the rest of the
international marketing mix variables (communication,price and
distribution) makes any modification in one of them affect directly
or indirectly the others.
Q.27. Differentiate between differentiation and
segmentation!
Ans. It is important to distinguish between these two terms which
are commonly confusedin practice. When the company looks for
differentiation, it develops a series of activities competitor-oriented
and this differentiation may be, for example, at tangible attribute
level or at service or intangible attributes that have product value
level.
When the company segments,it takes the heterogeneous market
and partitions it in smallerunits (segments),which are the aim for
its strategy. This division is made by considering one or more
consumers’ features:demographic (sex, age, etc.), socioeconomic
(social status,employment, purchasing power, etc.) or behavioural
(loyalty and purchase frequency,etc.).
In the case of industrial use products, there may be a different
segmentation criteria according to: company size and/or order,
industrial sector, as well as other factors like technological
development, product use, organization structure, and financial
solvency. As a result,segmentation consists in entrepreneurial
actions consumer or user oriented.
Q.28. What are the features of market diversification
strategy?

23. Ans. Features of the diversification strategy:
i. Market penetration is less deep than in the concentration strategy.
ii. This strategy gives greater flexibility to the company due to a
lesserassignation of resources to each market, which reduces
vulnerability in those markets. Thus, it may be efficient to access
markets with a high degree of insecurity and instability.
iii. It can be applied when the implementation of distribution
activities in each new market or in situations where the company
may divert distribution to third intermediaries in the destination
market.
iv. There are not high costs of product adaptation to each new
market due to cultural, economic, or legal issues.
v. The company does not possess too much information about the
variables that govern the function of each market. It has only
superficial knowledge.
vi. It is useful for products in which quick delivery is a competitive
advantage to gain access to country-markets. Also for those cases in
which economies of scale are produced in the productive process,
when the number of penetrated markets increases, with very
competitive prices at international level.
vii. In general, it can be implementedin internationalization
exploratory stages, as well as in more advanced stages when the
company is more consolidated in the international markets.
Q.29. What do services include?
Ans. Apart from tangible qualities,the product has a series of
totally intangible attributes. All those services that add value to the
product and that are centered in consumer-oriented attention are
included in this last group (whether in premarketing, marketing or
post-marketing).
Main services include:
i. Demonstration and advising.
ii. Warrant.
iii. Reparation and replacement of faulty pieces.

24. iv. Time and delivery compliance.
v. Training on use instructions.
vi. Installation and starting up (in the case of machinery).
vii. Those related to answering complaints and claims. These
services try to satisfy consumers’ needs in a period that goes beyond
the purchasing process, providing safety, follow-up and
containment to the buyer, assistance in case of difficulties or doubts
that may appear after the purchase.
Q.30. What are the steps involved in distribution channel
strategy?
Ans. Distribution channel strategy is derived from corporate as well
as marketingstrategy.
There are certain steps in developing suitable distribution
channel strategy:
a. Defining customerservice levels
b. Distribution objectives and steps
c. Structure of network required
d. Policy and procedure to be followed
e. Key performance indicators
f. Critical success factors
Customerservice levels are defined by the nature of the industry,
the products competition and market shares. Affordability has also
been found to decide the level of service. The customer service levels
should match competition and it is furtherbelieved that customer
expectations as such have no limits.
Distribution objectives are influencedby customer expectations and
the objectives define the extent of time, place and possession utility
which any customer can expect from a distribution network. The
operating manuals are found to define the policy and
implementation guidelines.
Policy guidelines include code of conduct for channel members,
system of redressal of complaints, conditional subsidies and the

25. power to handle institutional business. Key performance indicators
actually indicate the effectiveness of a distribution channel.
They are several indicators of effectiveness that have been
detailed below:
1. Consistent achievement of distribution targets
2. Achievement of market shares
3. Achievement of profitability
4. Zero complaints from customers
5. No stock returns
6. Ability to handle emergencies
7. Balanced sales achievement during a period
8. Market coverage with ready stocks
9. Minimizinglosses due to stock outs
10. Minimizingdamages to products
Marketing Management Questions And Answers For
Mba
Q.31. What are the levels of channels in distribution
management?
Ans. There are three channel levels in the context of distribution
management viz. zero level, one level and two level. Levels of
channels depend on the number of intermediaries within a
distribution channel. The greater the number of intermediaries, the
more will be the channel level.
Where products are offered directly by the manufacturerto the
customers,it is zero level channel. Over here manufacturers ensure
that they are themselves equipped to forward their products
smoothly to the end user. Dell at one point of time used to have zero
level channel of distribution.

26. They customized their computers as per the requirements of
customers and distributed them. One level channel involves one
intermediary such that one channel member in between the
manufacturerand customer. Two level channels are found mostly in
case of FMCGs where there are two intermediaries viz. – wholesaler
and retailer.
Q.32. Explain the retail selling process!
Ans. Retail sellingprocess is quite different from the selling at
manufacturing organizations or at the dealer organizations. In case
of retail selling, the wares are already there in the store and are
arranged in such a way that it catches the attention of people.
The process of personal selling starts at the juncture when the
customerenters the store. The retail selling process involves
guiding customers through the store in case a customeris looking
out for help. Simple greetings with a subtle smile on the face is what
is required apart from of course maintaining proper body language
and dress sense.
The ‘People’ factor at the store should be equally well presented
along with the merchandise so that the customers entering the store
perceive an integration among the two. Salesmen at the store
should be able to read the minds of the customers well and in cases
where the customers are lookingout for information,the seller
should have the capacity to address the queries and complaints of
the customers.
Although the salesmen’s jobin modern retail outlets have been
reduced due to effective visual merchandising, they do play a major
‘role to serve, educate and inform customers in taking right
decisions and enabling suitable branding of the store.
Q.33. Discuss the relation between sales and service!
Ans. The relation between sales and service department assumes
significant proportion in case of products that are technical in
nature or require installation and repair services.Often such
products require services like technical advice on installation and
also there are implications for the service department in the
promises made by the sales person. In the case of products like

27. refrigerator, television etc., it is often the recommendations of the
service personnel that influence buyer decisions.
In cases where service is important in sales strategy, provisions for
formal coordination are built into the structure of the organization.
Sales and service should relate by locating sales and service
personnel in the same field offices with regional managers of the
company responsible for the activities of both the departments.
Q.34. What is the relation between sales and physical
distribution?
Ans. Most organizations believe in the norm that all business
operations should be aimed at serving customers at a profit and for
that suitable relationshipneed to exist between sales volume and
costs of various kinds including physical distribution costs.
There are certain distribution related activities like packing, freight
rate quotations and promptness of delivery that are important in
securing sales volume. The costs of such activities are to be kept
under control or else sales volume yields less profit.
The benefits of suitable relationship with physical distribution are
significant. Proper relation between sales and physical distribution
will reduce stock out occurrences and also reduce customer’s
inventory requirements along with cementing relations with
customers and allow greater concentration on demand creation.
Q.35. Explain the relation between sales and production!
Ans. There needs to be suitable coordination between sales and
production activities in an organization. Gone are the days when
production started only after orders were solicited. In today’s era,
production happens in anticipation of future sales. Coordination is
crucial both in the context of planning as well as operations.
Joint consultation is required in planning for the products to be
manufactured, the quantity of products to be manufactured, the
production schedule,inventories etc. There can be errors
committed both by the sales as well as by the production team. The
sales department may accept rush orders or there may be an error
in the sales estimate that might require reshuffling of production
schedules.
Similarly the production department may create output that does
not conform to planned quantities because of labor difficulties,
shortages in raw materials etc. Moreover it is often found that the

28. two departments may work against the interests of each other and
this can make coordination difficult.
It needs to be understood that the concerns of the sales and
production team are quite different.While the production team are
concerned with matters like product line standardization and
simplification,sales executives are concerned with having some
product for everybody. The cooperation of the sales department
helps the production department.
Sales estimates are required for efficient planning of production
schedules and the market knowledge possessedby the sales
department are crucial for production executives for making
effective utilization of plant resources.
It is the sales executives who keep production executives informed
of the changes in market demand for different products and this has
been found to increase the chances of attaining optimum levels of
production. It is not just that the sales team aids the production
department.
The production team provides selling tools in the form of detailed
technical information on products and assists sales people with
product information. When the promotional materials are designed,
the sales people take help of the production team to include certain
specific technical details regarding the products to be sold.
Q.36. Discuss the relation between sales and R&D!
Ans. In many large corporation focusedon developing innovative
products, R&D is constitutedas a separate department. Research
and development’s job is to offer scientific and engineering efforts
to develop new products and improve the aspects of existing
products.
This further calls for structuring product line and adjusting product
features to fit customer wants and this is something that is of prime
concern both for the sales as well as for the production department.
Proper harmony must exist thus between these departments and
this can be achieved in various ways.
One way can be through the new product department route that has
the responsibility of developing new products through coordination
of R&D, production and sales and marketing personnel. The second
way can be through new product managers. The one-person units

29. can be responsible for developing new products by coordinating
with the R&D, production and sales.
The third way can be through new product project management
team that is composed of persons home based in other departments
brought together to work for new product. The fourth way can be
through constitution of product development committee.
Coordination needs to take place at the lower levels of the
organizational hierarchy.
Q.37. Comment on the relationship between sales and HR!
Ans. There are many companies where sales people are located far
away from the corporate office where the HR team exists and this
makes management of sales people a difficult job as far as the HR
team is concerned. Sales departments have often found to handle all
the personnel related problems on their own and the HR team
mainly acts in an advisory capacity.
The HR team who are the specialists in job analysis, recruiting,
selection,training and motivation are often consultedby sales
executives at various junctures.The two departments have often
been found to jointly formulate pension policies, vacation policies,
sick leaves, health checks etc.
Q.38. Explain the sales management planning process!
Ans. There are six steps of sales management planning
process:
a. Analysis- The step basically involves examination of what
happened in the past, look at the present situation and spot the
trend. Analysis of the internal strengths and weaknesses of a
company and the external opportunities and threats are part of this
step.
b. Goal setting- The phase involves providing a direction, guidance
to the sales force. It enables them to understand the way they
should be approaching a project.
c. Sales strategies- The phase witnesses the translation of goals into
actions.
d. Tactical plans- In short, they are more specific action plans.
Tactical plans clarify the assignment of responsibilities and mention
the deadlines for a project.

30. e. Implementation-Plans are actually executed at this stage
f. Control- The step is all about comparing the actual outcomes with
planned results.
There are certain activities that need to well execute so that the
soundness of a sales organization is maintained. The effectiveness
of a sales organization depends upon how well the concerned
executives within the organization forecasts sales and takes
appropriate decisions regarding sales territory development.
Q.39. Explain the relation between sales and finance!
Ans. The relationship between the sales executives and the
executives of finance and accounts department is crucial as it is the
sales team assisting the finance department by furnishing sales
estimates for the company budget and develop sales department’s
budgets.
The finance department aids the sales department by providing
rapid credit checks on prospective accounts and they also keep sales
people informedabout the customers’ credit standings. It has been
often reported that there are some salespeople who are more
interested in obtaining orders than in collecting amounts due that
results in a tendency to grant credit to below-average risks.
The credit terms should be set to permit their use as selling points.
There is requirement for close coordination and communication to
strike a balance between individual interests of sales people and the
best interests of the company they are serving.
Traditionally, it has been found that the executives of the sales
department rely on the accounting department for billing
customers,handling payroll computations and providing data for
sales analysis etc. but then with the development of holistic
management information systems in companies the performance of
the above functions have shiftedfrom the accounts department.
Q.40. What is the relation between sales and purchase?
Ans. The sales executives share a crucial relationshipwith the
executives of the purchasing department and they have been found
to cooperate each other in three distinct ways. First, the sales
department provides purchasing with sales estimates so that

31. adequate stock of raw materials, fabricating parts and other items
can be procured in advance for production purposes.
Second, the executives of the purchase department have been found
to inform the sales executives regarding material surpluses and
shortages. This way sales emphasis can be changed with respect to
products made from these materials.
Third, data on sales department needs are furnishedsuitably so that
purchases can be on advantageous terms by the purchase
department. Often the executives of the two departments have been
found to coordinate their efforts by buying as much as possible from
customers and selling as much to suppliers.
Marketing Management Important Questions
Answers
Q.41. What are the objectives of personal selling?
Ans. Personal selling is used to meet the five objectives of
promotion in the following ways:
1. Building Product Awareness:
A common task of salespeople, especially when selling in business
markets, is to educate customers on new product offerings.In fact,
salespeople serve a major role at industry trades shows.
Sales Promotion where they discuss products with show attendees
but building awareness using personal selling is also important in
consumermarkets. As we will discuss, the advent of controlled
word-of-mouth marketing is leading to personal selling becoming a
useful mechanism for introducing consumers to new products.
2. Creating Interest:
The fact that personal selling involves person-to-person
communication makes it a natural method for getting customers to
experience a product for the first time. In fact, creating interest goes
hand-in-hand with building product awareness as sales
professionals can often accomplish both objectives during the first
encounter with a potential customer.
3. Providing Information:
When salespeople engage customers a large part of the conversation
focuses on product information. Marketing organizations provide
their sales staff with large amounts of sales support including
brochures, research reports, computer programs and many other
forms of informational material.

32. 4. Stimulating Demand:
By far, the most important objective of personal selling is to
convince customers to make a purchase. In the Selling Process
tutorial we will see how salespeople accomplish this when we offer
detailed coverage of the selling process used to gain customer
orders.
5. Reinforcing the Brand:
Most personal sellingis intended to build long-term relationships
with customers.A strong relationshipcan only be built over time
and requires regular communication with a customer.
Meeting with customers on a regular basis allows salespeople to
repeatedly discuss their company’s products and by doing so helps
strengthen customers’ knowledge of what the company has to offer.
Q.42. Discuss the relation between sales and public
relations!
Ans. The executives of the sales department have often been found
to work closely with the public relations department. Public relation
is consulted on various moves taken by the sales department that
may have public relations repercussions.
The sales department executives have often required to relay
information secured through contacts with various publics to the
public relations department so that they can chalk suitable policies
to be followed by the sales executives.
Q.43. What are the factors affecting selection of
advertising agency?
Ans. Selection of a suitable advertising agency in not an easy task.
For instance, there are around 360 recognised advertising agencies
currently operating in India. All of these may not be suitable for all
products.
According to Prof. J. E. Littlefieldand Prof. C.A. Kirkpatrick, “the
relationshipbetween the advertiser and the agency is one of
wedding for life time. Like a selection of life partner, selection of
agency shouldbe done with much exploration and through
investigation so that both will not repent at leisure.Each must know
the idea, the philosophy, the beliefs and the principles of other.
Each must be willing to compromise up to a point because
partnership is a matter of give and take to guarantee long standing
relations based on tolerance and better understanding”. Therefore,

33. while making choice of the advertising agency the advertiser should
keep certain factors into consideration.
The following are main factors which should be kept in
mind while selecting an advertising agency:
i. Suitability – The agency shouldbe suitable enough to satisfy the
needs of the client. It must be able to create attractive, convincing,
interesting, effective and result-orientedsales message.
ii. Agency Infrastructure – The agency should have sound and
establishedinfrastructure to suit the advertiser.
iii. Previous Track Record – The agency shouldhave successful
performance record. The previous record must be of completing
work of clients well in time with full satisfaction.
iv. Image of Agency – Another factor determining selection of
agency is its image. The agency shouldcommand good public image
along with good reputation in the field.
v. Size and Adequacy of Staff – Another factor which must be taken
into consideration while selectingan agency is the size and
adequacy of the staff in it. The size of the agency should be large
enough to handle the work promptly and effectively.The agency
must have the team of experts in different fields such as copy-
writers, artists, photographers, etc.
vi. Rate charged – Rate charged by the agency from its client for its
services also determines the choice of agency. The rate charged by
the agency shouldbe reasonable to suit the pocket of the clients.
Q.44. What are the advantages and disadvantages of
personal selling?
Ans. There are a number of advantages of personal selling,
which are mentioned as follows:
a. Allowing flexibility in communication by maintaininga direct
contact with customers
b. Tailoring a message about die product or service in an apt
manner

34. c. Taking immediate and direct feedback from customers
d. Targeting specific and general markets and customers
Following are some disadvantages of personal selling:
a. Involves huge costs to reach a large number of audiences
b. Includes a problem of delivering consistent and uniform
messages to customers due to variability in sales representatives
and their selling styles.
Q.45. Define marketing research!
Ans. Research can be defined as the systematicmethod of
exploring or carrying out detailed investigation to discover new
facts or tests and verify old facts relating to different aspects of a
particular subject. It is a systematicmethod of exploring, analysing
and conceptualising various facts related to particular subject
matter. Basically, the main objective of the research is to find out
solutions for various problems faced in different fields.
When the term research is applied to find out solution to various
problems of marketing and gather relevant facts it is called
Marketing Research. Thus, MarketingResearch refers to all the
research activities conducted in the field of marketing. The term
Marketing Research has been defined in different ways by different
experts.
Some of them are:
According to American Marketing Association, Marketing Research
is defined as, “The systematicgathering, recording and analysing of
data about problem related to marketing of goods and services.”
According to Philip Kotler, Marketing Research is, “The systematic
problem analysis, model building and fact finding for the purpose of
improved decision making and control in the marketing of goods
and services.”
According to Richard D. Crisp, “Marketing Research is the
systematic, objective and exhaustive search for and study of the
facts relevant to any problem in the field of marketing.”

35. Marketing Research is thus, the collection, analysis and
interpretation of facts and figures related to the marketing. It is the
systematic, objective and exhaustive search of various facts relevant
to any problem in the field of marketing. On the basis of the
information collected, decisions may be taken and control can be
exercised. Thus, Marketing Research is the investigation of facts to
solve marketing problems.
Q.46. What is sales planning?
Ans. There are various sources of information for sales planning
viz. primary data, secondary data, other sources and sales
intelligence.When new data is gathered specifically for a project in
hand, it is primary data. When data already available is used for
some other organizational purpose, the data is secondary data.
MIS or Management Information Systems and DSS or Decision
Support systems can be concluded as examples of other sources of
sales planning. Internal sales data and product life cycle patterns
are some other examples of other sources of information for sales
planning.
The information provided by the sales people to an organization
based on their on-field experiences is termed sales intelligence.
Sales people are expected to provide information for sales planning
as they possess vital information about the market that can be used
to develop sales forecasts and sales quotas.
Q.47. What are the functionsof an advertising agency?
Ans. Advertising agency is an independent body which undertakes
the working of planning and preparing advertising campaign for its
clients. Being a separate business organisation, it performs a
number of functions for its client.
The main functions of an advertising agency are:
1. Selection of Clients:
The first and foremost function of an advertising agency is to
contact and select the clients who are willingto advertise their
product. Preference should be given to those firms which have
sound value, able management and qualitative product.
2. Media Selection:

36. Another function of advertising agency is to select appropriate
media for advertising the clients’ product. In selection of media
several factors like – cost, circulation, nature of product, type of
customers and needs of the client should be kept in mind.
3. Advertising Planning:
Another important function of advertising agency is to plan
advertising programme for its client. For this purpose advertising
agency gets detail knowledge about firm’s product, its advertising
history, market conditions, channel of distribution, knowledge
about competitor’s product and their advertising technique,etc.
4. Creative Function:
The creative function of advertising agency starts when the planning
function is over. It includes the preparation of an advertising copy,
layout, advertising message,theme of advertising, etc. This function
is performed by group of creative people including writers,
designers, artists, etc. employed by the advertising agency.
5. Research Function:
Next major function of advertising agency is the research function
on behalf of its client. For this purpose the advertising agency
gathers and analyses actual information about the product, market,
competitor’s strategy and buyers’ habit, etc.
6. Marketing Function:
Advertising agency also performs certain marketing functions such
as selectingtarget customers,designing product packaging and
labels, developing channel of distribution, etc. on behalf of clients
and advices in this regard.
7. Evaluating Function:
Drafting the advertising copy does not put an end to the agency’s
work. It also has to evaluate the benefits of advertising campaign for
its clients.
Q.48. What is the importance of packaging?
Ans. Some of the major significance of packaging can be
detailed as follows:

37. i. Packaging can make a product more convenient to use or store,
easier to identify or promote or to send out a message.
ii. It can make the important difference to a marketing strategy by
meeting customers’ needs better.
Packaging plays a key role in brand promotion and management.
Packaging is of great importance in the final choice the consumer
will make, because it directly involves convenience, appeal,
information and branding.
iii. The paramount concern of packaging is the reach ability of the
product without any damage. No matter where and how the
products are transported or shipped, they arrive at the customer’s
door in working condition without need of repair or adjustment.
iv. Packaging is especially important in certain industry where
future sales may be based largely on the quality, integrity and
performance of a company’s previous delivery.
v. Packaging plays an important role as a medium in the marketing
mix, in promotion campaigns, as a pricing criterion, in defining the
character of new products, as a setter of trends and as an
instrument to create brand identity and shelf impact in all product
groups.
Q.49. What are the methods of coordination adopted by a
marketing personnel?
Ans. There are basically two types of coordination viz. – formal and
informal. Formal coordination among departments is achieved by
one or more of three methods. The first methodis to build
coordination into the organization through the grouping of all the
allied activities under a top ranking executive. Under this form of
coordination, marketing executives coordinate the operations of
departments under them.
The second method is about achieving coordination through the
general administrative officers like the president, executive VP or
the general manager. Here such executives have been found to

38. coordinate the operations of all company departments. Often it is
not about the departments that perform closely related tasks.
It is because of this that the second method is most widely used by
companies having a small number of departments. The third
method is about usingpolicy, planning and coordinating
committees made up of representatives of concerned departments.
This is often considered the most ineffective methodof
coordination.
In the case of informal coordination, departmental heads are found
to solve interdepartmental problem informally while it still is being
thrashed out through formal mechanisms.
Many companies have been found to prefer informal coordination
methods and solutions so developed may or may not be formally
adopted later by a coordinating body. At certain times, informal
solutions are accepted as tentative and are subject to modification
after review by the formal coordinating mechanism.
Sales executives have often been found to report that informal
coordinating procedures are more important than formal methods
more so in cases where frequent communication is required.
However there is a caveat in this context and that is informal
coordination poses several problems for a company and its
executives.
Marketing personnel must be made aware of the need for
coordination. Marketing personnel must also be given the
opportunity to understand the roles and responsibilities of other
marketing jobs apart from establishinga climate that encourages a
continuous and free exchange of ideas.
Q.50. What are the objectives of sales promotion?
Ans. Sales promotion is concerned with those activities which
bridge the gap between personal sellingand advertising. Its basic
principle is to bring in new customer to try the product.
The main objectives of sales promotion are:
i. To increase the sales and encourage repeat purchase of the goods.

39. ii. To attract new customers by offering better incentives.
iii. To help in establishing the new product in existing and new
market.
iv. To stabilize a fluctuating sales trend.
Philip Kotler Marketing Management Questions And
Answers
Q.51. Define personal selling!
Ans. Personal sellingrefers to face-to-face selling in which a sales
representative tries to convince the customerto purchase a product
by explaining or demonstrating its features. Personal sellinghelps
organizations to keep in touch with their customers at a personal
level.
It is one of the most effective and expensive methods of marketing
communication.In personal selling, a sales representative tries to
persuade customers to buy the products by telling them the value,
features,and benefits of a product or service.
The size and nature of an organization determines its product lines.
Therefore, the role of personal sellingis also determined by the size
and nature of the organization. Large-scale organizations produce a
large quantity of products and need extensive selling as compared
to small-scale organizations. In the personal sellingmethod, the
emphasis is given on improving the relationship of sales people with
existing and prospective customers of the organization.
The organizations also conduct employee reward programs to foster
the desirable behavior of their sales teams with their clients and
customers.Personal selling helps marketers to receive immediate
feedback from customers. In addition, being an expensive tool, it is
mostly used in case of high cost products focusingon limited
markets.
Q.52. What is the difference between price and pricing?
Ans. Amongst the major elements of marketing mix, pricing holds
a key place. A right product at right place with effective
communication cannot make a sale possible until and unless it is
suitably priced. Unlike, other elements of marketing-mix, price is
quantitative in nature. It is the only element that generates revenue
for the firm. Other elements like product, place and promotion are

40. cost element. Price is a sharp tool in the hands of the marketer by
which he can attract the consumers and meet the competition.
Growth and survival, prosperity and profitability, brand image and
firm’s image is influencedto a great extent by pricing decisions. The
decision regarding price are influencedby a host of factors such as,
production cost, demand and supply, nature and type of
competition, government rules and regulations, legal constraints
product, channel of distribution, promotion etc.
Price and pricing are different terms. While pricing is the function
of translating into quantitative terms the value of product or
services by the marketing manager before it is offeredfor sale, price
is the exchange value of any product or service, which can be
expressed in the form of money. It is the amount one pays for a
good or service or an idea. Pricing is the art of translating into
quantitative terms the value of the product to customers.Price must
be such that it is highly perceptible to customers as it significantly
affects their buying decisions.
The importance of pricing normally varies from one industry to
another. For some products, price is a determinant factor in buying
while for others it is an influencingfactor. Though in modern times,
non-price factors play a crucial role in buying decisions, price has in
no way occupied a less significant place.
Price refers to the value of a product which a buyer is willing to pay
and the seller is willing to accept. In this way, the level of
satisfaction both of the buyer and the seller is greatly influencedby
the price.
According to D.W. Cravens, G.E. Hills and R.B. Woodruff “Pricing is
the process of setting objectives, determining the available
flexibility, developing strategies, setting prices and engaging in
implementation and control”.
According to W.J. Stanton, M J. Etzel and B.J. Walker “Price is the
amount of money and/or other items with utility needed have
acquired a product”.

41. Thus, the term price is relative in terms of variables in the entire
marketing programme. It is the sum total of every cost related to the
product, plus the profit margin of the seller.
Q.53. What are the objectives of marketing research?
Ans. The basic objective of the marketing research is to facilitate
the decision making process.
The other objectives are:
1. Planning:
The very bases of planning depend upon marketingresearch. The
formulation and evaluation of planning and its components is done
through marketing research.
2. Problem Solving:
The main objective of marketing research is to find solutions to the
problems of marketing, related to different aspects like product,
place, promotion, pricing, competition, etc.
3. Reducing Cost:
Systematic marketing research helps in avoiding the wrong
decisions by the firm. Research helps the firm in smoother
operations of the business which reduces the cost. Various costs like
selling, advertising, distribution, promotion, etc., can be reduced
with the help of marketing research. Research brings market closer
to the customerand thus, helps in reducing the costs.
4. Survival and Growth of the Firm:
The survival of the firm depends to a large extent on marketing
research. Marketing research helps in identifyingthe competitors’
strength, estimating potential buying power, firm’s position in the
market and accordingly provides suitable information for
appropriate decisions. Thus, the firm can survive. The growth of the
firm depends upon exploring new markets and introduction of new
products, which can be done through marketing research.
5. Introduction of New Product:
Introduction of new product is a difficult task. For successful launch
of the product, it is necessary that the markets are studied through
marketing research. Marketing research is used to find out suitable

42. avenues and place for the new products. It reveals the various
opportunities of new markets and methods to reach the market.
6. Market Orientation:
The objective of the marketing research is to help the firm to
produce those goods and services which consumerwants. It sees
that the goods reach the market quickly and easily.
Q.54. What are the merits and demerits of branding?
Ans. Merits:
Branding as a product decision is beneficial to both consumers and
producers.
Consumers:
i. It helps in identifying the product.
ii. It helps in differentiating the product from rival’s product.
iii. It ensures a good quality product to the customers.
iv. Easy recognition of the product is possible through branding in
stores and shops
v. Purchase of a branded product provides psychological satisfaction
to the consumers.
Producer:
i. It provides the product a distinct identity.
ii. Seller gets a competitive advantage over other rival products.
iii. A good brand name helps in introducing a new product in the
market.
iv. Brand loyalty amongst the consumers helps the company to cut
down its marketing cost.
v. Seller gets a higher price, as the brand has a higher perceived
value.
Demerits:
Consumers:
i. Brand development is a costly process and therefore branded
products are costly.
ii. Too many branded products, many times confuse the consumers.
iii. Once the brand is established, sellermay bring down the quality
and standard of the product.
Producer:
i. Seller is forced to maintain the quality and standard of the
branded products otherwise buyers will switch to other brands.

43. ii. It is necessary for the produce to invest sufficient resources in
promoting the brand name.
Q.55. What are the features of marketing research?
Ans. Various Features of Marketing Research are:
(1) Marketing Research is a Continuous Process:
Marketing Research is a continuous process as markets are complex
and dynamic; and new problems keep on confronting the managers.
The advantage of marketing research will be available to marketer
as well as consumerwhen problem are kept under study in
continuous manner.
(2) It has Vast Scope:
The scope of marketing research is very vast. It encompasses
various aspects of marketing viz. introduction of new product,
exploring new markets, analysing competitors’ position, evaluation
of consumerpreference, evaluating buyer behaviour, selection of
channels, choice of sellingtechniques, formulatingadvertising
strategy, sales promotion measures, etc. Thus, it can be said that the
scope of marketingresearch is wide and comprehensive.
(3) It is Scientific in Nature:
Marketing research is conducted in a scientificmanner. Various
marketing problems are studied in a systematicmanner. First
appropriate data is collected objectively,further the collected data is
suitably analysed and finally interpretations are drawn which
provides comprehensive picture of the situation and related
solutions.
(4) It Act as a Tool for Managerial Decision Making:
Marketing research is a part of marketing information system.It
helps in managing all areas of management in general and
marketing in particular. Marketing research provides valuable
guidelines for managerial decisions. Management understands the
marketing problem through the information provided by the
marketing research. It also suggests suitable solutions to the
problems.
(5) It is Beneficial to Both the Business Units and
Consumers:

44. Marketing research provides benefits both to the firms and
consumers.Business units utilize marketing research as a tool for
solving their various problems. This helps them in smooth
functioning,which raises their capability to effectively serve the
market.
This further increases their profit performance and goodwill in the
market. Consumers are benefitedas they get the goods and services
as per their requirements.This is because the firm producers goods
only after extensive research of the market conditions and the needs
and wants of the buyer.
Q.56. What are the essentials of a good brand name?
Ans. Following are the essentials of a good brand name:
1. Easy to Pronounce and Remember:
A good brand name should be short, simple and easy to pronounce
and remember. This is because customers come from different
cultural backgrounds and they may not be able to pronounce certain
names and thus may be hesitant to use those products. Illiterate
people may have the same problem. Easy to pronounce words can
be easily remembered e.g. Woodland, Liberty, Bata, Surya etc.
2. Match with the Product and its Use:
A good brand name should suggest about the product, its uses,
quality performance, nature etc. e.g. Nescafe Tea, Vicco Vajardanti.
3. It should be Legally Protected:
A good brand name should be legally protected under the law. It
should not be offensive,obscene or negative.
4. It should be Distinctive:
A good brand name should be distinctive, unique and different from
the existing brand names. This helps in better differentiation of the
product e.g. Sony, Onida, Philips, Karbon etc.
Q.57. Define Promotion!
Ans. After developing and pricing the product the next important
task of the marketing manager is to formulate a suitable
promotional strategy so as to inform the potential customers about
the product and persuade them to buy the product. In common
practice selling and promotion are used as synonyms but in real
sense they differ a lot.

45. While the selling is concerned with the transfer of title of goods
from sellerto purchaser, promotion, on the other hand includes all
those activities which stimulate the demand of the customers such
as advertising, personal selling, publicity and sales promotion.
Promotion can serve to the organization directly as well as
indirectly. It directly facilitates exchange by communicating
information about the organization’s goods, ideas and services to its
target market. While indirectly it facilitates exchanges by
communicating information about the various activities of the
company to current and potential customers and society in general.
The overall aim of promotional strategy is to communicate a range
of messages to the customers or distributors, so that the product
can be sold.
According to Philip Kotler, “Promotion encompasses all the tools in
the marketing mix whose major role is persuasive communication.”
According to Edward and Kelly, “Promotion is the co-ordination of
all sellers initiated efforts to set up channels of information and
persuasion to facilitate the sale of a goods or service or accept an
idea”.
Promotion can thus be defined as means of communicating a range
of information to the customer so as to attract them and to motivate
them to buy the product. It directly and indirectly facilitate the
exchange of goods through different tools like advertising, sales
promotion, personal sellingand publicity.
Q.58. What are the features of personal selling?
Ans. The essential features of personal selling are as
follows:
(i) Personal Selling Involves Persuasion of Customers:
A salesman must have the ability to convince the people to buy his
product. The customeris not to be pressurised, but influenced
favourably by the salesman. Thus, salesmanshipis the skill of
handling people and persuading them to buy a certain product or
service.
(ii) Personal Selling Involves Wining of Buyer’s
Confidence:
Modern salesmanshipaims at educating the customers and
providing a solution to his problems. This helps in winning his

46. confidence. Misrepresentation,cheating and dishonesty by the
salesman can’t help him to win the buyer’s confidence for ever.
(iii) Personal Selling Involves Providing Information:
Salesmanshipis an educative process. It tells people the ways in
which they can satisfy their needs. Salesman provides information
about products available, their broad features and their uses and
utility to the customers.
(iv) Personal Selling Aims at Mutual Benefit:
Salesmanshipis a two- way process. It results in benefits not only to
the sellers but also to the buyers. It helps in solvingthe problems of
the buyers and satisfyingtheir needs. Customersatisfaction leads to
increase the profitable sales volume for the salesman.
Q.59. What are the objectives of promotion:
Ans. i. To inform the customer about the nature and type of the
product; its benefits;its price; features and availability.
ii. To persuade the consumer to buy the product by encouraging
switching of brand; changing perception; attitude and brief about
product.
iii. To remind the consumer about their need and availability of the
product to satisfy their need.
iv. To counter competition through better product, better
availability and multiple uses of the product and differentiating it
from competitor.
v. To build favourable image about the organization through better
quality; technology and better service.
Marketing Management Question Bank With
Answers
Q.60. What is Labeling?
Ans. Package labeling is any written, electronic, or graphic
communications on the packaging or on a separate but associated
label. It includes certain information on the label of a product when
it is distributed in specific ways. For example, labels of food
products sold in retail outlets must contain information about its
ingredients and nutritional value.
Symbols Used on Packages and Labels:

47. Many types of symbols for package labeling are nationally and
internationally standardized. For consumerpackaging, symbols
exist for product certifications, trademarks, proof of purchase, etc.
Some requirements and symbols exist to communicate aspects of
consumeruse and safety. Examples of environmental and recycling
symbols include – Recycling symbol, Resin identification code, Bar
codes (below),Universal Product Codes, etc.
Q.61. Define marketing environment!
Ans. Organizations cannot exist in a vacuum. Every firm has to
operate in the environment which surrounds it. Each organization is
a part of larger system consisting of multiple forces which are
interrelated and interacting with each other.
This environment provides threats and opportunities to
organization, and it is the task of manages to continuously adjust to
these changing conditions, only then it can survive and grow in the
market. Environment can be described as everything that is external
or outside, the organization. It is also the sum-total of numerous
forces within which every enterprise has to operate. These forces
include both controllable and uncontrollable forces.
According to Philip Kotler “a company’s marketing environment
consists of the sectors and forces outside of the marketing that
affect marketing management’s ability to develop and maintain
successful transactions with its target consumers”.
Thus, an organization’s marketing environment includes all such
forces which have an impact on the firms marketing policies,
marketing decisions and marketing activities. Since the changes in
the environment are very fast, it is of utmost importance that firms
maintains strict vigil on its environment through marketing
research and that is why environmental study has become the first
step in strategic planning of many organization.
62. What are the limitations of product life cycle?
Ans. The following limitations of the concept of PLC may
be noted:
(i) It is very difficult to determine the particular stage in which a
product is.
(ii) The determination of length of each stage in the life cycle is a
complicated process.

48. (iii) It is not necessary that all stages can be applicable to every
product.
(iv) Product life cycle alone cannot be a device for marketing
success.
The life cycle model can lead marketers into thinking that products
are born with a predetermined life span – which they will sell for a
period of time and then inevitably go into decline. But well managed
products can live for decades. For example, Procter and Gamble’s
Ivory soap was introduced in 1879. By adapting the marketing mix
as market conditions changed, P&G kept the brand healthy for over
130 years.
63. What is product life cycle?
Ans. Products, like human beings, have a limited life. They are
created to fulfill a need. When a firm is able to fulfill a need better
than its rivals, it gains momentum and speed. Such products grow
quickly. Both profits and market share would improve quickly, and
begin to mature after a while when rivals begin to hit back.
Finally, products see the end of the road, when customers get
disenchanted. They stop buying the product and the product ceases
to exist. A new product, thus, progresses through a sequence of
stages from introduction to growth, maturity and decline. This
sequence is known as product life cycle (PLC).
To say that a product has a life cycle—according to Philip
Kotler is to assert three things:
a. Products have a limited life,
b. Product sales pass through distinct stages, each posing different
challenges,opportunities, and problems to the seller,
c. Products require different marketing, financing, manufacturing,
purchasing, and human resource strategies in each life cycle stage.
64. How are products classified?
Ans. (a) Durability and Tangibility:
(i) Durable Goods – Durable goods are tangible goods that normally
survive many uses such as refrigerators, TVs.
(ii) Non-Durable Goods – Non-durable Goods are tangible goods
normally consumedin one or a few uses, such as soft drinks or
soaps. Since these goods are frequently purchased, they need to be
heavily distributed and advertised to build a preference over
competition.

49. (iii) Services – Services are intangible, inseparable, variable and
perishable products, for example, a haircut, legal advice etc.
(b) Consumer Goods:
This classification is done on the basis of shopping habits.
(i) Convenience goods are purchased frequently,immediately and
with a minimum effort,for example, soft drinks, tissue rolls, soaps
etc.
(ii) Shopping goods are the goods that the consumer
characteristically compares on bases like suitability, quality, price,
style etc., for example, clothes,kitchen appliances etc.
(iii) Speciality goods have unique characteristics or brand
identification for which a sufficient numberof buyers are willing to
make a special purchasing effort, for example, Cars, men’s suitings
etc.
(iv) Unsought goods are those goods that the consumerdoes not
know about or does not normally think of buying, for example,
Encyclopedias, smoke detectors etc.
(c) Industrial Goods:
Classification is done on the basis of their relative cost and how they
enter the production process.
(i) Materials and parts are the goods that become a part of the
manufacturer’s product completely, for example, raw materials like
wheat, cotton, jute, petroleum etc., and manufacturedmaterials are
parts like iron, yarn, tyres, small motors etc.
(ii) Capital items are long-lasting goods that facilitate in developing
or managing the finished product, for example, factories, offices,
generators, drill presses.
(iii) Supplies and business services are short-term goods and
services that facilitate in developing or managing the finished
product, for example, paint, nails, brooms, coal, writing paper,
repair services etc.
65. What are the limitations of marketing research?
Ans. The marketing research is not without its share of
limitations:
1. Marketing Research cannot provide complete answer to the
problems because there are many intervening variables which are
difficult to control.

50. 2. Some marketingproblems do not lend themselves to valid
research conclusions due to limitations of tools and techniques
involved. There are many intangible and subjective variables
operating which are difficult to be measured.
3. In a fast changing environment,the data collected become
obsolete soon and the research findings based on them will become
little use.
4. It only provides a base for predicting future events; it cannot
guarantee with any certainty their happening.
5. Marketing research involves more time, effort and high cost. But
it is very often said that marketing research is cheaper than costly
marketing mistakes.
66. Explain the role of marketing!
Ans. Marketingwas considered as a societal, economic process
through which products and services were exchanged between
buyers and sellers and included activities that preceded the
existence of money and a market economy. While the underlying
meaning of marketing has remained the same, development of
institutional and centralised structures in the global market has
upgraded the role of marketing today.
The role of marketing can be further explained
considering its role in a firm and in an economy as
discussed below:
1. Role in a Firm:
Marketing ensures consistent level of revenue generation by
strategically determining target markets and customers. It attempts
to determine the nature and requirements of customers and
accordingly, enables a business to plan for production scheduling,
purchase of raw materials, inventory management, financing
sources, distribution, warehousing and delivery of
products/services to the final or end- consumer.
2. Role in an Economy:
With a customer in mind, marketing attempts to improve the
standard of living of people. Marketing encourages several
institutional systems,government or private sector, to adopt new
technologies,innovation, fostercreativity and information
dissemination systems.It also helps restore the resources of an
economy by maintaining healthy competition among citizens and

51. stakeholders without creating wastes. An economy that emphasises
less on marketing can be addressed as a weaker or an
underdeveloped economy.
67. What is relationship marketing?
Ans. RelationshipMarketing is defined as “an organizations efforts
to develop a long term, cost effective link with individual customer
for mutual benefit.” Rather than focusing on a shorter sale, the sales
representative tries to establish a long term bond, and rather than
just selling, the sales department works with marketing to use
techniques like data base marketing, message differentiation to
different target markets and tracking of promotional effects to
improve the relationship.
RelationshipMarketing is simply a method of selling products and
services by building up a relationshipwith customers.It begin with
the clear understanding of who your customers are, what are their
values, what they want to buy, how they prefer to interact with you
and how they expect to serve them.
The ultimate outcome of relationship, marketing is building a
strong marketing network. A marketing network consists of the
company and its supporting stake holders-customers,employees,
suppliers, distributors, retailers, ad agencies and others with whom
it has built mutually profitable business relationships.Today most
of the relationship marketing research is being done in services
marketing.
Relationshipmarketing was first defined as a form of marketing
developed from direct response marketing campaigns which
emphasizes customerretention and satisfaction,rather than a
dominant focus on sales transactions.
68. What is the importance of relationship marketing?
Ans. Importance of Relationship Marketing can be
summarized as follows:
(i) Customer relationships are the lifebloodof every good company.
Relationships between a company and their customers, distributors,
employees,referral sources, are vital to continued, sustainedgrowth
and stability.
(ii) Loyal relationships with these valued individuals make for a
strong bottom line. With well- planned relationshipmarketing