A. VERY SHORT ANSWER TYPE QUESTIONS
Question 1. What is meant by goal setting?
Answer. “Establishing short or long term objectives, usually incorporating deadlines and quantifiable measures.”
Question 2. What is marketing strategy?
Answer. Marketing strategy is defined by David Aaker as “A process that can allow an organization to concentrate its resources on the optimal opportunities with the goals of increasing sales and achieving a sustainable competitive advantage.”
Question 3. What are the components of marketing mix?
Answer.The 4Ps that make up a typical marketing mix are — Price, Product, Promotion and Place.
Question 4. Which is the shortest channel of distribution?
Ans. Producer-customer, Direct channel or zero level is the shortest channel of distribution.
Question 5. What are the components to a successful sales strategy?
Answer. Components of successful sales strategy are creating an effective sales strategy requires market knowledge, awareness of competitor activities, awareness of current trends and detailed business analysis.
Question 6. Define branding.
Answer. ‘Branding’ is a process, a tool, a strategy, an orientation whereby a name, a sign, or a symbol etc. is given to a product by the entrepreneur so as to differentiate his/her product from the rival products.
Question 7. Why is a logo important for a company?
Answer. Logo is important for a company as it imparts a distinct identity to entrepreneur’s own brand.
Question 8. Give the meaning of tagline with the help of an example.
Answer. Taglines are simple but powerful messages that help to communicate an enterprise’s goals, mission, distinct qualities and so much more. Balsara Hygiene products, launched their ‘Promise toothpaste in 1978 and took an aggressive stand against its competitors. It then secured the second highest market share. It was due to the tagline—“The unique toothpaste with time-tested clove-oil.”
Question 9. Explain the term packaging.
Answer. Processes and materials employed to contain, handle, protect, or transport any commodity. Packaging is done to attract attention, assist in promotion, provide machine identification (barcodes, etc.), impart essential or additional information, etc.
Question 10. What is labelling?
Answer. It is the display of information about a product on its container, packaging, or the product itself.
Question 11. Define advertising.
Answer. Advertising is a paid form of communication designed to attract or persuade potential customers to choose the product or service over that of a competitor.
Question 12. What is negotiation?
Answer. Negotiation is a process where two or more parties with different needs and goals discuss an issue to find a mutually common and acceptable solution.
Question 13. Explain the meaning of CRM.
Answer. CRM is the abbreviation for customer relationship management.
Question 14. When do we conclude that a business has failed?
Answer. We can conclude that a business has failed when it does not generate adequate cash flow to meet expenses.
Question 15. Explain the following term: ATL.
Answer. ATL refers to above the line which targets mass audience and aims at establishing brand identity.
Question 16. Give the meaning of BTL.
Answer. BTL refers to Below the line which targets identified small groups and aimed at leading to an actual sale.
Question 17. What is TTL?
Answer. “Through the line” or TTL refers to an advertising strategy which involves both above-and below-the- line communications in which one form of advertising points the target to another form of advertising thereby crossing the “line”.
B. SHORT ANSWER TYPE QUESTIONS-I
Question 1. What are the rules for goal setting?
Answer.The rules of goal setting are:
Question 2. What does the marketing strategy of a company include?
Answer. Marketing strategy includes:
Question 3. What is sales strategy?
Question 4. Explain the different types of sales strategies.
Answer. Following are the two types of sales strategies:
Question 5. Differentiate between trade mark and brand mark.
Question 6. What is the purpose of logo?
Question 7. Why should we advertise?
Answer. We should advertise to:
Question 8. What is employee management?
Answer. Employee management:
Question 9. Is vendor management different from employee management? Enumerate.
Answer. Employee relationship management is a process that is directed to effectively manage all interactions with employees, ultimately to achieve the goals of the organisation. Where as vendor management is used to describe the process of finding, qualifying and doing business with vendors.
Question 10. Differentiate between ATL and BTL.
C. SHORT ANSWER TYPE QUESTIONS-II
Question 1. Explain in detail SMART goals.
Answer. SMART is made from following words:
Question 2. Explain the disadvantages of skimming price method.
Answer. Disadvantages of skimming price method:
Question 3. What are the qualities of a good brand name?
Answer. A good brand name should have following qualities:
Question 4. What are the rules for advertising?
Answer. There are four rules for advertising:
Question 5. What is AIDA?
Answer. Developing effective advertising (AIDA): Good advertising elicits the following four responses:
Attention: It catches the eye or ear and stands out amid the clutter of competing advertisements.
Interest: It arouses interest and delivers sufficient impact in the message or offering.
Desire: It creates a desire to learn more or crave ownership.
Action: It spurs an action which leads to achievement of the ad’s original objective
Question 6. What are the different roles played by a salesperson?
Answer. A salesperson plays three different roles:
Question 7. What are Public Relations?
Answer. Public relations is the deliberate, planned and sustained effort to establish and maintain mutual understanding between an enterprise and their public. It is related to building good relations with the stakeholders of the business by having favourable publicity, building a goodwill and encouraging favourable informative system about the product and the enterprise.
Question 8. Who is a stakeholder?
Answer. Stakeholders are the different groups in a society which can affect the business decision: making and have an impact on its marketing performance. These groups include: Clients/customers, shareholders, media, financial institutions, community groups, etc.
Question 9. What are the main public relations tools?
Answer. The main public relations tools include:
Question 10. Explain the benefits of CRM.
Answer. The benefits of CRM are:
D. LONG ANSWER TYPE QUESTIONS
Question 1. What is penetration pricing method and enlist its advantages and disadvantages?
Answer. Penetrating pricing is the method of pricing in which the entrepreneur introduces its product in the market with low price compared to competitors. The low price increases the sale of the product tremendously. Normally for keeping low price, the profit margin is normally kept very low. The product thus captures the major part of the market e.g.
Hero Honda, CD Dawn motorbike was introduced with the same pricing method. The CD Dawn penetrated into the market and captured major part of the market. Recently Bajaj CT- 100 also followed the tactics.
Wheel active detergent powder kept the price of Rs. 20 per half kilogram. This also captured the market quickly.
Advantages: Following are the advantages of penetrating pricing method:
Disadvantages: Following are the disadvantages of penetrating pricing method:
Question 2. What are the various types of brand names from the entrepreneur’s perspective?
Answer. Various types of brands available are:
Question 3. What are the various factors which help in employee management?
Answer. Various factors which lead to effective employee relationship are as follows:
Question 4. How is vendor management done?
E. VERY LONG ANSWER TYPE QUESTIONS
Question 1. Explain in detail any three pricing strategies.
Answer. Following are the various pricing strategies:
Question 2. Explain the important factors affecting the choice of channels of distribution by the manufacturer.
Answer. While selecting a distribution channel, the entrepreneur should take into account the following factors:
Question 3. Explain promotional mix in detail.
Answer. Promotion refers to all the activities undertaken to make the product or service known to the user and trade. It is a method to spread the word about the product or service to customers, stakeholders and the broader public. This can include advertising, word of mouth, press reports, incentives, commissions and awards to the trade. It can also include consumer schemes, direct marketing, contests and prizes. Various approaches a company can use to promote its products are:
Question 4. Explain any six commonly used media options.
Answer. Commonly used media options are as follows:
Question 5. Enlist some typical sales promotion activities.
Answer. Following is the list of some typical sales promotion activities:
Question 6. Explain the methods of negotiation.
Answer. Methods of negotiation are as follows: Integrative or win-win: Here each side is working towards a solution where everyone wins something. They can make trade offs and look at multiple issues. The involved parties may try to expand the pie rather than divide it. This method fosters trust and good working relationships.
Distributive or win-lose: Here one party gets what it wants, and the other party has to give something up. This type of negotiation does not lead to lasting or positive relationships. Here one party remains unsatisfied and so it does not lead to a healthy relationship. Inductive: This method involves starting on small details and working upward until a settlement is reached. Here the solution is sought from the grass root level by understanding each and every minute detail. For example, an employer and labour union are negotiating the details of an employee pension and investment plan. Small details are addressed one at a time. Deductive: Deductive negotiations start with an agreed upon strategy. They rely on established principles and a formula to frame the negotiation while the parties work out the details. Here each parties is the gainer and jointly the result is met. It is based on the mutual agreement.
Mixed: Mixed negotiations are the most common, they are a blend of inductive and deductive methods.
Question 7. Explain the reasons for business failures. Or Satnam, an IIT-IIM graduate, started three chemists shops at Amritsar, Patiala and Chandigarh in the name of ‘Quality Medicines’. Encouraged with the success of these shops Satnam opened 50 more shops in different parts of Punjab. His strategy was to cut price, focus on lower and upper middle class and open shops near hospitals. He operated on very thin margins. But he was not able to maintain sufficient funds to meet the day-to-day expenses of the business. The staff at the shops did not give much attention to the customers and there was very poor system of control. Because of this mismanagement he started incurring huge losses and his business failed.Based on the above paragraph, identify and explain any four causes of business failure of Satnam. [Ml India 2015]
Answer. Following are the reasons of business failures:
F. HIGHER ORDER THINKING SKILL
Question 1. Varshini started her high end boutique in a posh locality, but she was not aware of how to make her boutique popular in the area. Suggest some measures for it.
Answer. Varshini is suggested the following:
G.APPLICATION BASED QUESTIONS
Question 1. Arvind has started his Italian food based restaurant. Does he have to register his trademark? And give the reasons for the same.
Answer.Trademark refers to words, names, symbols and product design features that are used to distinguish the products or services of one manufacturer or seller from another.
Arvind must go for registering as:
Question 2. Imagine that you have started selling FMCG goods then what kind of promotional strategies will you be using?
Answer.I can go for following promotional strategies:
Contests: It is commonly used promotional strategy. Many contests don’t even require a purchase. This will be done as people like to win prizes.
Mail Order Marketing: Customers who come into our business are not to be overlooked, such customers have already decided to purchase the product. These are customers who are already familiar with the product and represent the target audience.
Product Giveaways: Product giveaways and allowing potential customers to sample produce. This method will be used to introduce new food and household products.
Point-of-Sale Promotion: Point-of- sale is a way to promote new products or products a store needs to move. These items are placed near the checkout in the store and are often purchased by consumers on impulse as they wait to be checked out.
Branded Promotional Gifts: Giving away functional branded gifts can be a more effective promotional move than handing out simple business cards. These are gifts we can give to customers that they may use, which keeps our business in plain sight rather than in the trash.
After-Sale Customer Surveys: Contacting customers by telephone or through the mail after a sale is a promotional strategy that puts the importance of customer satisfaction first while leaving the door open for a promotional opportunity.
MORE QUESTIONS SOLVED
I.VERY SHORT ANSWER TYPE QUESTIONS
Question 1. What is the goal of business?
Answer. The goal of business is to make profit; which may be in terms of money, improved customer relations, goodwill, etc.
Question 2. Why is goal setting important?
Answer. Goal setting is important as:
Question 3. Goal setting isn’t enough. Why?
Answer. Goal setting isn’t enough because:
Question 4. To be successful, you need to do what?
Answer.To be successful, you need to make things happen, not just let things happen.
Question 5. What does marketing mix refer to?
Answer. The marketing mix refers to the ingredients or the tools on the variables which the marketing mixes in order to interact with a particular market.
Question 6. What are components of marketing mix in typical sense and also in the recent?
Answer. The 4Ps that make up a typical marketing mix are — Price, Product, Promotion and Place. But these days, the marketing mix includes several other Ps like Packaging, Positioning, People and Politics as vital mix elements.
Question 7. What are the factors related to Distribution Mix?
Answer. Distribution Mix is related to physical distribution and channels of distribution.
Question 8. What is another name of Distribution Mix?
Answer. Distribution Mix is also known as Price Mix.
Question 9. What is direct selling mode?
Answer. When the producer sells its goods or service directly to final consumers, it is known as direct selling mode.
Question 10. Mention two factors on which the channel of distribution depends.
Answer. Channel of distribution depends on nature of market, choice and preferences of consumers, types of competition, types of market, etc.
Question 11. What type of distribution would you adopt for consumable and perishable goods?
Answer.Direct selling mode will be preferred for consumable and perishable goods.
Question 12. Give two examples of enterprises having a monopolistic market.
Answer. Vegetables, vegetable oil.
Question 13. What are smart goals?
Answer. S.M.A.R.T. is an acronym for the 5 steps of specific, measurable, achievable, relevant, and time-based goals. It’s a simple tool used by businesses to go beyond the realm of fuzzy goal-setting into an actionable plan for results.
Question 14. Define marketing mix.
Answer. “Marketing mix is the term used to describe the combination of the four inputs which constitute the core of a company’s marketing system: the product, the price structure, the promotional activities, and the distribution system.”—W. J. Stanton Or
“A marketing mix is the mixture of controllable marketing variables that the firm uses to pursue the sought level of sales in the target market.”—Philip Kotler
Question 15. Define Branding.
Answer. ‘Branding’ is a process, a tool, a strategy, an orientation whereby a name, a sign, or a symbol etc. is given to a product by the entrepreneur so as to differentiate his/her product from the rival products.
Question 16. What do you mean by trademark?
Answer. A brand or part of it that is given legal protection against its use by other firms is called a trade mark. It is a legal term, protecting the seller’s exclusive right to use the brand name/mark.
Question 17. What must be done to safeguard a brand against imitation?
Answer. The entrepreneur should legally protect brand name or mark of the product through trade mark. Trade mark guard the product against ditto imitations.
Question 18. What can be done by an entrepreneur to impart a distinct identity to his own brand?
Answer.To impart a distinct identity, entrepreneur makes use of:
Question 19. Define logo.
Answer. ‘Logo’ is an identifying symbol design, mark, sign for a product or business which stands associated with the entrepreneur’s offering. ‘Logo’ is an important feature or part of branding.
Question 20. Give examples of the brand that are short, sweet and catchy and have earned a reputation for good quality.
Answer. Lux, Vim, Rin, VIP, Amul, Titan, Konica, Liv52, Quick fix, Band-aid, Sun flame,
Surf, Dalda and many more have earned a reputation for good quality.
Question 21. What does the industrial design protect?
Answer. Industrial design protects the visual design of objects that are not purely utilitarian.
Question 22. What is a trademark?
Answer. Trademark is a recognizable sign, design or expression which distinguished products or services of a particular trades from the similar products or services of other traders.
Question 23. What is a trade secret?
Answer. Trade secret is any confidential business information which gives an enterprise a competitive edge over its competitors. For example, Coca-Cola formula.
Question 24. What are the different elements of the Market Mix?
Answer. Market mix includes product mix, price mix, promotion mix and distribution mix.
Question 25. What areas are covered by Product Mix?
Answer. Product mix covers various aspects like, quality, quantity, design, features, warrantees, guarantees, brand, repairing services, etc.
Question 26. Name four elements that play a vital role in the realization of the Marketing Mix.
Answer.Product Mix, Price Mix, Promotion Mix and Distribution Mix are the four elements.
Question 27. Name some intangible things related with firms.
Answer. Transportation, maintenance, security, health services, entertainment etc. are the intangible things.
Question 28. Name some capital goods.
Answer. Capital goods include tools, machines, equipment, etc.
Question 29. Name some durable products.
Answer. Fans, coolers, air conditioners, fridges, furniture etc. are durable products.
Question 30. Name some speciality products.
Answer. Music systems, sports equipments, music instruments etc. are some speciality products.
Question 31. Give some examples of raw materials needed for industrial products.
Answer.. Screws, nuts, bolts, nails, iron sheets, pipes, steel rollings, various metals, etc.
Question 32. Name some convenience products.
Answer. Convenience products include toothpicks, newspapers, toothbrush, cases of small products, bags, etc.
Question 33. List some shopping products.
Answer. Shopping products include trousers, shirts, pants, frocks, furniture; small electronic items,
Question 34. Name some non-durable products.
Answer. Non-durable products include vegetables, milk, tobacco, cigarettes, shampoo, fruits, soaps, milk products, etc.
Question 35. Mention the various classes of Product Mix.
Answer. Product mix includes services, consumer product and industrial products.
Question 36. Name some products, which require after-sales services.
Answer. Scooters, cars, motorcycles, televisions, music systems, sewing machine, etc. require after sales service.
Question 37. What do you understand by the term Market Mix?
Answer.Market Mix is the aggregate of activities like product, distribution, etc., which are undertaken for attaining the predetermined goals in the marketing.
Question 38. Mention two factors affecting pricing of the commodity.
Answer. Cost of production, goals of firm, prevalent competition etc. affect the price of the commodity.
Question 39. An entrepreneur charges different prices from different categories of the customers. What type of pricing is it?
Answer. It is variable pricing.
Question 40. An entrepreneur introduces a new product with very low price. What type of pricing is it?
Answer. It is penetrating pricing.
Question 41. An entrepreneur launches a new product in the market with high price. Identify the type of pricing.
Answer. It is skimming price method.
Question 42. In which method of pricing bargaining plays an important role?
Answer.Variable Price Method.
Question 43. What is meant by ‘Employment’?[CBSE Delhi 2015]
Answer. An activity in which an individual works regularly for others and gets remuneration in return.
II. SHORT ANSWER TYPE QUESTIONS
Question 1. Distinguish between the direct selling mode and the indirect selling mode.
Answer.Direct selling mode and the indirect selling mode can be distinguished under following headings:
Question 2. What is meant by monopolistic market?
Answer.Monopolistic market is a form of market where there are large number of buyers and sellers selling differentiated products. There is presence of non-price competition. The sellers on the promotion of the product do large expenditure e.g., vegetable oil, tape recorders, etc.
Question 3. What is the significance of after sales service in a Product Mix?
Answer. Significance of after sale service in a Product Mix is as follows:
Question 4. Give the usefulness of brand.
Answer. Brand is used to:
Question 5. What are the qualities of a good brand?
Answer.A good brand name should possess:
Question 6. Describe a Logo of a famous brand.
Answer. McDonald’s golden arch (M) is a famous logo. By seeing this logo consumers expect fast service, inexpensive prices, and a specific type of food around the corner. This gives a competitive advantage over less recognizable restaurants.
Question 7. What do you mean by tag line?
Answer. Taglines are simple but powerful messages that help to communicate an enterprise’s goals, mission, distinct qualities and so much more.These have a small amount of text which serves to clarify a thought it is designed with a dramatic effect.
These can be in the form of questions, statements and exclamations.
Question 8. What is the importance of patents?
Answer. Patents grants inventor the right to exclude others from making, using, selling, offering to sell, and importing an invention for a limited period of time, in exchange for the public disclosure of the invention.
Question 9. What are the factors you would keep in mind for the distribution to a seasonal goods market?
Answer. Following factors would be kept in mind:
Question 10. Give some examples of generic name and their brand names.
So, the minute a brand name is used, identification of the product becomes easy.
Question 11. What is brand? Explain the components of brand.
Answer. ‘Brand’ is a comprehensive term used to denote a name, term, sign, symbol, design or combination of them. Brand has three components:
Question 12. How do we know that we’re setting the right business goals?
What are the rules for goal setting?
Answer. The rules of goal setting are:
Question 13. Enlist the various brands of Hindustan Unilever and also the impression that is made on the consumers.
Answer. Lifebuoy — It stands for ‘Good health’ Lifebuoy liquid, Lifebuoy Personal,
Lifebuoy Plus and Lifebuoy Gold to cover various price sub-segments in the health segment.
Liril — brand name with the “freshness” concept.
Lux — brand name for “beauty soap for film stars”.
Question 14. What do you mean by logo?
Question 15. Describe the tag line of Promise tooth paste.
Answer. Balsara Hygiene products, launched their ‘Promise’ toothpaste in 1978 and took an aggressive stand against its competitors. It then secured the second highest market share. It was due to the tagline “The unique toothpaste with time-tested clove-oil.”
Clove oil is a traditional herbal remedy for the prevention of dental ailments and toothaches. This captured the minds of the consumers.
Question 16. Describe the various terms related to tagline in the world.
Question 17. What does the following signify?
Amul’s message — “A gift for someone you love.”Rasna — “I love you, Rasna.”
“I’m lovin it” — McDonald Weekender — “Wear your attitude.” Raymond’s Suiting — “The complete man.”
“Yamaha Bike—“The rugged personality.”
Answer. These represent taglines. Taglines are simple but powerful messages that help to communicate an enterprise’s goals, mission, distinct qualities and so much more.
These are small amount of text which serves to clarify a thought. These are in the form of Questions, Statements, Exclamations, etc.
Question 18. What is importance of Intellectual Property for an entrepreneur?
Answer. Intellectual Property (IP) rights are the legally recognized exclusive rights to creations of the mind.By this, owners are granted some exclusive rights to a variety of intangible assets. For example, copyrights, trademark, patents, industrial design rights, trade secrets, etc.
Question 19. Give examples of patentable inventions.
Answer. Patentable inventions include Art, Process, Method or Manner of manufacture;
Question 20. What is the importance of Copyright?
Answer.Copyright gives the creator of the original work exclusive rights to it, usually for a limited period of time.
It is applicable to creative, intellectual or artistic forms or work. For example, musical composition, literary work such as poems, plays, etc.
Question 21. All the four elements of the market mix are interdependent. How will you support this statement?
Answer. Yes, all the four elements of the market mix are interdependent. For example, if the quantity of sale is to be increased then the distribution pattern needs to be effective and capable of covering larger area. Simultaneously more advertisement expenditure is required. This will require the introduction of new promotional schemes for the product.
Question 22. Give some methods of classifying the product.
Answer. Products can be classified as:
Question 23. Why do customers prefer enterprises with assured after sales service?
Answer. Customers prefer enterprises with assured after sales service because of following reasons:
Question 24. What is the cost plus pricing method?
Answer. In this method the cost of production of one unit of the product is calculated. This cost covers all the types of costs including explicit cost, variable cost, fixed cost, etc. to this is now added the preplanned profit margin.
Price = cost of production + profit
Here, costs of production as well as profit both are determined separately in advance. This is the most common method used by the entrepreneurs.
Question 25. How does packaging support the entrepreneur in enhancing the market?
Answer. Packaging supports the entrepreneur in the following ways:
Question 26. What is quantity discounting?
Answer. It is a type of discounting in which discount is offered by entrepreneur or seller on bulk sales. It can be referred as a reduction in price of the product or service that a seller offers to anyone who purchases more than a minimum quantity e.g. a company offers 1.0% discount on purchase of 150,000,15% on purchase upto ? 1 Lakh and 20% discount for the purchase of goods worth above 1 1,50,000.
Question 27. Market rate method is useful for new entrepreneurs. Why?
Answer. Market rate method is useful for new entrepreneurs because of following reasons:
Question 28. Why is pricing crucial in an entrepreneurial activity?
Answer.In an entrepreneurial activity pricing is crucial because of following reasons:
Question 29. How does the Penetrating Price Method of pricing facilitate in expanding the market?
Answer.Penetrating Price Method of pricing is one in which the price of the product is decided lower than the original price of the product with minimal of profit. This method facilitates in expanding the market because the main aim of enterprise to penetrate into the market covering large area by attracting as many customers as possible at the very outlet. The sale is expected to have a high turnover, bring high returns on investment and the necessary profit.
Example: Nirma washing powder.
Question 30. The total cost of a heater is Rs. 800. If the manufacturer wishes to have a margin of 20% on the sale price, what should be its selling price?
Answer. Let, Sale Price = Rs x
The margin of profit is x – 800 (as the total cost is Rs 800)
Profit margin required 20% of x i.e. 0.2 x. 0.2 x = x — 800 0.8 x = 800 x = 800/0.8 x = Rs 1000.
Thus, the selling price should be Rs 1000.
Question 31. How does the nature of products affect the Distribution Mix?
Answer.Nature of product plays an important role in Distribution Mix. This can be explained using following:
Question 32. Why is direct selling preferred for a monopolistic market?
Answer. Direct selling is preferred in monopolistic competition due to following reasons:
Question 33. What is business failure?
Answer. Business failure refers to a firm or business enterprise ceases its operations due to inability to make a profit or to bring in sufficient revenue to cover its expenses. The hidden and open reason for business failure is failure of the firm to generate adequate cash flow to meet its expenses.
Question 34. What is trade secret? Give examples.
Answer.Trade secret refers to any confidential business information which provides an enterprise a competitive edge may be referred as trade secret.
Question 35. What do you understand by Place Mix?
Answer. Place mix basically means distribution . of the product. It deals with the trade channel or channel of distribution i.e. movement of product from producer/ production unit to final consumers of the product. The channel of distribution comprises of wholesalers, selling agents,
retailers, dealers, who are intermediaries between producers and consumers. Time, place and possession utilities are created due to the linkage between point of production and point of consumption.
Question 36. Which are the types of flows of channel of distribution?
Answer.Channel of distribution as a part of place mix comprises of following types of flows—:
Question 37. What do you mean by promotion?
Answer. Promotion refers to all the activities undertaken by the producers to make the commodity known to the final users and trade.
It includes advertising, word of mouth, press reports, incentives, commissions, awards, etc.
Consumer schemes, direct marketing, contests, prizes, etc. also included in promotion.
Question 38. “Goals need action.” Explain.
Answer. Goals can only be achieved through series of actions. The series of actions or goal setting strategy if are absent then achieving the goals is a blind chance. For a successful business, entrepreneur has to make things happen and not just let things happen.
Setting business goals provide direction and motivation to the entrepreneur. Right goals keep the business on right track and so business moves in the right direction.
Thus, goals need action for achieving the desirable.
Question 39. What is a product?
Answer. Product reference to the item actually being sold by the firm or entrepreneur.
Question 40. What are the various aspects related to product/service?
Answer. Following are the various aspects or features related to product/service—:
Question 41. State any two points of importance of ‘Goal Setting’. [CBSE Delhi 2015]
Question 42. With its help the consumers are able to identify the products of a firm and are also able to differentiate them from those of the competitors. Identify the concept and state its components.[CBSE Delhi 2015]
Question 43. State any two rules for goal setting. [All India 2015]
Answer. Rules for goal setting are as follows:
Question 44. In U.K., they are called ‘end lines’, ‘endlines’, or ‘straplines’. Germans call them as ‘claims’, French refer them as ‘signatures’, while Belgians call them ‘base lines’. Identify the concept and name its forms. [All India 2015]
Question 45. State any two factors which lead to effective employee relationship.[CBSE Sample Paper 2016]
Answer. Factors which lead to effective employee relationship:
III. LONG ANSWER TYPE QUESTIONS
Question 1. While selecting a brand name, what care must be taken by a entrepreneur?
Answer. While selecting a brand name a entrepreneur should choose a name which is :
Question 2. Explain the various types of brands available.
Answer. Various types of brands available are:
Question 3. How will you show that market mix is dependent on the type of the product?
Answer. Market Mix is a set of activities. Contribution of each is essential. It can be explained using following example:
A toilet soap manufacturer can offer improved quality product at a lower price. He can keep such a low price that it can be penetrating pricing. In the competitive market he would be able to increase its sale by selecting adequate channel of distribution to reach maximum consumers. Promotion on TV and newspapers for timely information will be beneficial in raising his sales. He will have to keep shorter distribution channel for ensuring easy and quick reach of the product to the customers.
Question 4. Why do different entrepreneurs adopt different types of market mix for their products?
Answer.Different entrepreneurs adopt different types of market mix for their product because of following:
Question 5. What factors affect the policy of packaging?
Answer. Following factors affect the policy of packaging:
Question 6. What is trade marking? Why is it necessary?
Answer. The process of providing mark of trade by the enterprise to its product is trade marking. By this process a sign, symbol, word, asset of words, picture etc. is provided to the product. The trademark becomes identification mark of the product.
Trade marking is necessary because of following:
Question 7. What is variable pricing technique?
Answer. Variable pricing technique is the one in which different prices are charged from different categories of customers. There is price discrimination. Many factors are responsible for the variation in the price. If a customer is purchasing more quantity of the product, he will be offered lower price. If the demand for the product increases in the market then higher price can be charged. This method has both the objectives viz. selling more quality and also charging higher price but at different times, e.g. Indian railways charges different fares for AC 3 tier, AC 2 tier, second class and general compartment.
Question 8. What major considerations affect the variable price method?
Answer. Following are the major considerations which affect the variable price method:
Question 9. What is meant by base pricing and discount?
Answer.Base pricing and discount method is the method in which the entrepreneur fixes one price for its commodity. This price is calculated in advance considering the point that discount will be offered during the sale. Here, the discount offered is of various types. Depending on the type of customers the various rates of discount are fixed. Discount is offered to all the customers but at different rates.
The wholesaler discount may be different from, volume discount, discount for transaction and off-season discount. Base price and discount = predetermined price discount.
Question 10. What is trade discounting? Why is it done?
Answer.Trade discounting is the method of discounting in which the supplier offers a decent profit margin to retailer on the sale. Entrepreneur can also provide this to wholesaler. This can be done by deducting the percentage of discount from the wholesalers’ or retailers’ price. Mostly this type of discount is offered on volume purchase or for sales promotion. Such discount is mostly offered to the members of same trade and not to the final consumers.
Advantages of trade discounting:
Question 11. What is penetrating pricing?
Answer. Penetrating pricing is the method of pricing in which the entrepreneur introduces its product in the market with low price compared to competitors. The low price increases the sale of the product tremendously. Normally for keeping low price, the profit margin is normally kept very low. The product thus captures the major part of the market e.g. Hero Honda, CD Dawn motorbike was introduced with the same pricing method. The CD Dawn penetrated into the market and captured major part of the market. Recently Bajaj CT-100 also followed the tactics.
Wheel active detergent powder kept the price of Rs. 20 per half kilogram. This also captured the market quickly.
Question 12. When does an entrepreneur employ dealers for sales?
Answer. An entrepreneur can employ dealer for sales when:
Question 13. Why is packaging an important ingredient in the Product Mix?
Answer. Packaging is an important ingredient in the Product Mix because of following:
Question 14. How does market mix play an important role in enhancing the sale?
Answer. Marketing mix plays an important role in enhancing the sales of the enterprise. Its following components help in raising the sale:
Question 15. Will you, as an entrepreneur, use the base pricing method for consumable items? Justify your answer.
Answer. Yes, an entrepreneur, could use the base pricing method for consumable item.
This is because of following reasons:
Question 16. What are the advantages of penetrating pricing method?
Answer. Following are the advantages of penetrating pricing method:
Question 17. Mention the disadvantages of penetrating pricing method.
Answer.Following are the disadvantages of penetrating pricing method:
Question 18. State the advantages of‘Good Negotiations’.[CBSE Delhi 2015]
Answer. Following are the advantages of‘Good Negotiations’:
Question 19. ‘Pure Neer India Ltd.’ is the manufacturers of water purifiers. The company has developed a new water purifier that not only converts the hard water into soft water but also kills the bacteria and other harmful microorganisms present in it. The company has named this water purifier as ‘Nirmal Neer’ and for its marketing, appointed salesmen throughout the country. The company also trained the salesmen to provide information about the usefulness of the ‘Nirmal Neer’ water purifiers to the customers and motivate them to buy the same. [CBSE Delhi 2015]
Question 20. Differentiate between Standardized product and Customized product. Which channel of distribution is best suited for customized product/goods?[CBSE Sample Paper 2016]
Answer. Standardised products are those for which the cost is predetermined and there is no scope for alteration, it requires long distribution channel. Customized products are those which are made according to the discretion of the customer and there is a scope for alteration.
Direct Channel of distribution is best suited for customized product/goods.
Question 21. ‘Floral Art and Craft’ opened its first store in Mumbai in the year 2010 with the objective of providing its customers with fresh flowers creatively packed and value for money.
It procures fresh flower directly from the farmers. The organization makes sure that the farmers adopt organic means to nourish the soil and do not use chemical fertilizers as it degrades the soil fertility. Packaging material is procured from specially abled craftsman of I CAN.
Floral Art and Craft’s face book and twitter page encourages two way communication with its customers. These social media channels provide a platform through which it can interact with customers and access their opinion about the brand. The store also uses direct e-mails to their frequent customers to inform them about different schemes and other promotional messages. Its website promotes the store by organizing different flower decorating classes and competitions using the products of I CAN. [CBSE Sample Paper 2016]
IV. VERY LONG ANSWER TYPE QUESTIONS
Question 1. Give advantages and disadvantages of cost plus pricing method.
Question 2. What is skimming pricing method? What are its advantages and disadvantages?
Answer. Skimming price method is the method of pricing in which the product is introduced in the market with a very high price. High price is kept for recovering the cost of production quickly. Such entrepreneurs normally bring something new in the market with more utility value. Product is introduced with a lot of expenditure on advertisement. High price tends to bring back revenue quickly. High class people are the target of such method of pricing e.g. Philips introduces its new product with the same method, Rumalaya also follows the same trend.
Advantages of skimming price method:
Disadvantages of skimming price method:
Question 3. What do you mean by remote market? How would you arrange a distribution system for the same?
Answer. Remote market is the form of market where the product is sold to greater distances, and deep inside the country i.e., rural area. The shops of such market are not in direct touch with the producers; also it takes time in reaching the products up to consumers. Distribution system for a remote market: Following procedure can be adopted for arranging distribution system for a remote market:
Question 4. Raghav after doing his B. Pharma, degree from a reputed government college started two chemist shops in two different localities of his home town. Encouraged with the success of these shops, he started six more shops in different cities of the State. His strategy was to cut price, focus on lower and middle class patients and open shops near hospitals. He operated on very thin margins. But he was not able to maintain sufficient funds to meet the day to day expenses of the business. The staff of the shops did not give much attention to the customers and there was very poor system of control. Because of this mismanagement he started incurring huge losses and his business failed. Based on the above para identify and explain any four causes of business failure of Raghav. [CBSE Delhi 2015]
Answer.Causes of business failure of Raghav:
Question 5. ‘Sultan Trucks Ltd.’ are the manufacturers of commercial trucks for the last 20 years. The company had been doing good business but recently due to irregular supply of parts by its suppliers, the company could not make timely delivery of trucks to the parties who had booked their trucks. The customers cancelled their bookings and there were very few new bookings. The sales : of the company started declining that resulted into losses. The management of the company analyzed the problem and decided to take over those two firms because of whom the problem arose, one of them was supplying types for its trucks and another axles to the company. The company also extended credit facilities to the customers and started booking the trucks without charging any booking amount. It also decided to employ 100 unemployed youth, with 50% reservation for females to take up the cleaning operations, using the imported machines, inside the factories as well as the surrounding areas. [All India 2015]
Answer.The concept for enterprise marketing is sales promotion. Sales promotion is one level or type of marketing aimed either at the consumer or at the distribution channel (in the form of sales-incentives). It is used to introduce new product, clear out inventories, attract traffic, and to lift sales temporarily.
The concept for growth strategy is acquisition. Acquisition are often made as part of a company’s growth strategy whereby it is more beneficial to take over an existing firm’s operations and niche compared to expanding on its own. Acquisitions are often paid in cash, the acquiring company’s stock or a combination of both.
Values involed are Courtesy; fostering respect for differences; sensitivity to environment; good behaviour in human interaction; sharing, compassion, empathy; discipline; responsibility; respect for law and order; conflict resolution; team work; honesty and integrity.
V. VALUE BASED QUESTIONS
Question 1. An entrepreneur uses a name of famous brand of product for marketing his product. He uses a similar logo for this purpose. Is he correct? Suggest him a correct way.
Answer.No, he is not correct.Using a similar logo or name of the product for marketing is a crime. It is a violation of copyright/patent right. Also it leads to short term benefits but long term loss.
He should create his own brand name and unique logo. This will provide him long term benefit in his business. Also, being fair in the competition is a moral requirement of any enterprise.
Question 2. A firm is following a single window purchase system in his firm. The supplier is a relative of the owner. Comment on this decision of the entrepreneur.
Answer. Single window purchase leads to many problems like:
Question 3. A famous company started a promotion scheme of donating one Rupee from every sale of the product for the education of girls of primary class. Write the values associated with this effort of the firm.
Ans. Following values can be assigned for the decision of the firm:
This decision of the entrepreneur shows that the entrepreneur believes in returning back to the society as he is obtaining the resources and other things from the society.
VI. EVALUATION AND MULTI-DISCIPLINARY QUESTIONS
Question 1.(i)Liril — brand name with the “freshness” concept.
(ii) MAGGI, is brand name for noodles, sauces, masalas, etc.
Identify the type of brand name in each of the above case and give their features.
Answer. (i) Individual brand name: Here, every product is promoted by the entrepreneur on the basis of a separate brand name like:
Liril—brand name with the “freshness” concept.
Lux — brand name for “beauty soap for film stars”
(ii) Family brand name (Umbrella branding): Here, the entrepreneur’s name or the company’s name is used for all the products. Like:
MAGGI, is brand name for noodles, sauces, masalas, etc.
AMUL, has been used to market a large variety of dairy products viz. milk, ghee, butter, chocolates, etc.
Question 2. Amul’s message — “A gift for someone you love.”
Rasna — “I love you, Rasna.”
Tm lovin it” – McDonald Weekender — “Wear your attitude.” Raymond’s Suiting — “The complete man.”
Yamaha Bike—“The rugged personality.” Savdhan India – “India fights back.”
Question 3. Street vendors sell various types of small goods. Often, there is a standard price posted for each item on sale. If the vendor really wants to sell an item, and determines that a prospective buyer is not willing to pay the posted price, he or she may engage the individual in a negotiation of the sale price. Sometimes referred to as dickering, the buyer and seller make offers back and forth until they can settle on a price that both believe is fair.
Question 4. A company has incurred expenses of Rs 1000 and they want to earn profit margin of 10 % than the company will sell the product at Rs 1100.
Question 5. Subhiksha was founded in 1997 by R. Subramanian, an IIT-IIM graduate. It operated over 1600 outlets selling groceries, fruits, vegetables, medicines and mobile phones and positioned itself as value retail chain. It adopted strategy to cut price, focus on lower and upper middle class, and opened shops near catchment area of customers. It started with one store in Chennai and within a short span the count reached to 1600 outlets (2008). Still Subhiksha was a failure.
Describe the possible reasons behind the failure of Subhiksha.
Answer. Following are the reasons behind the failure of Subhiksha:
Question 6. Google Wave started out with a bang. An Internet giant like Google doesn’t need to market its product, because a lot of influential internet users are willing to do that for them and that too free of cost. The reason behind this is that Google has made a reputation of a company which makes products and services that revolutionise the way we use the internet. Google wanted to enter the booming social media market and wanted to compete with social media giants like Facebook and Twitter.
The concept behind Google Wave was to start a social form of G-mail, where a group of people can communicate with each other in a single thread and can post videos, images and files in real time. It was the amalgamation of chat, file sharing and social networking.
Months before being launched, articles from sites like Techcrunch and Mashable gave us a sneak peek to the new application and showed us what the application had in store for us. It was such an interesting concept that Twitter was flooded with tweets minutes after the news was out. Google Wave was launched with a lot of speculation. It started out as an invite only application and the first users who got an invitation were the ones using Sandbox. In the first few weeks, everybody was dying to get their hands on the new product by Google. Many weeks have gone by and Google Wave has opened their gates to everyone. But as the mystery of the Google Wave has unfolded, it has turned out that Google Wave has failed expectations.Mention the reasons why Google Wave failed?
Answer. Following are the main reasons behind failure of Google wave: