Test: Enterprise Marketing - 2 - CUET Commerce MCQ

A method of pricing in which a manufacturer's price is determined more by the price of a similar product sold by a powerful competitor than by considerations of consumer demand and cost of production is referred to as competition-based pricing or parity pricing.

Demonstration is explaining the actual use of the product. Its purpose is to generate the interest and desire of the customer in the product. For example a salesman of Maharaja Whiteline mixer-grinder explains its use and operation to the consumer.

Product line pricing is a product pricing strategy to be used when you have more than one product in a line.
Pricing techniques need to be balanced with demand elasticity and with our marketing mix product positioning strategy. It includes complementary goods pricing, spare parts pricing, and load factor pricing.

Price skimming is a pricing strategy in which a marketer sets a relatively high initial price for a product or service at first, then lowers the price over time. As the demand of the first customers is satisfied, the firm lowers the price to attract another, more price-sensitive segment.

After determining its pricing objectives, the next step is to determine the demand of the product of a company. Marketers will estimate the total demand for the product based on sales forecast, channel opinions and degree of competition in the market. Prices of comparable rival products can guide in pricing the products. Market potential can be determined by trying different prices in different markets.

Marketing mix is the process of making the product available from its origin to final customers. It is described as putting the right product, in right time, at right place and at right price. There are 4 pillars that govern the process of marketing mix i.e. product, price, place and promotion. Marketing communication strategy of marketing mix exclusively deals with personal selling, advertising, sales promotion and public relations because it involves the communication process with the customers and stakeholders that is possible through the promotion process.

Loss-leader pricing is an attempt by the company to attract customers to the store by selling the same items at near or below cost. This pricing strategy is utilized all over the world in almost every sector of retail and e-commerce.

Market concentration is used when smaller firms account for large percentage of the total market. It measures the extent of domination of sales by one or more firms in a particular market. The market concentration ratio is measured by the concentration ratio.
So, to attain market concentration, there is need to spend all the advertising budget in a single period.

Diversification is a form of corporate strategy that seeks to increase profitability through greater sales volume obtained from new products or new markets. It is the process of allocating capital in a way that reduces the exposure to any one particular asset or risk. A common path towards diversification is to reduce risk or volatility by investing in a variety of assets.

An amalgamation of advertising, public relations and personal selling can be called Promotion mix. The 4p's of promotional mix includes advertising, public relations, sales promotion and personal selling. These elements are important to meet the goals of a company in most of the industries.

Intermediate consumption is a national accounts concept which measures the value of the goods and services consumed as inputs by a process of production. Expenditure on advertisement and public relations by an enterprise is a part of its intermediate consumption as it adds to the value as inputs in process of production.

Penetration pricing refers to a marketing strategy used by businesses to attract customers to a new product or service. Penetration pricing is the practice of offering a low price for a new product or service during its initial offering in order to lure customers away from competitors.

Under the cost-based pricing, the following approaches are commonly used:
(A) Marginal cost pricing - Marginal-cost pricing, in economics, is the practice of setting the price of a product to equal the extra cost of producing an extra unit of output.
(B) Markup pricing - It refers to a pricing method in which the fixed amount or percentage of the cost of the product is added to the product's price to get the selling price of the product. Markup pricing is more common in retailing, in which a retailer sells the product to earn a profit.
(C) Absorption cost pricing - Absorption pricing is a method for setting prices, under which the price of a product includes all the variable costs attributable to it, as well as a proportion of all fixed costs.

Sales promotion activities that are designed to accelerate the purchase decision process and generate an immediate increase in sales but do little or nothing to communicate information about a brand and contribute to its identity and image are referred to as non franchise-building promotion.
Price-off deals, bonus packs, and rebates or refunds are examples of non FB sales promotion techniques. They are imperative for a marketer to understand when and which promo format is to use.

Personal selling is an activity which involves oral communication with customer on one to one basis with the aim to sell the product.
The seller's aim is to convince and encourage the buyer to use the product atleast once by passing on specialist product knowledge and also promote the product through their attitude and appearance.
An example of personal selling is a salesman in a department store who gives advice to the buyers about the products . There are products which are complex in nature and relatively high priced products like cars are often sold using personal selling.
Oral communication is the correct answer.