Short Answer Type Question- Enterprise Marketing | Entrepreneurship Class 12 - Commerce PDF Download

Marketing and Sales Strategy

Question.1: In U.K., they are called ‘end lines’, ‘end lines’ 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.

(i) Taglines.

(ii) Its various forms are questions, statements and exclamations.

Question.2: What are the three types of flows of a channel of distribution?

A channel of distribution consists of three types of flows:

(i) Downward flow of goods from producers to consumers.

(ii) Upward flow of cash payments for goods from consumers to producers.

(iii) Flow of marketing information in both downward and upward direction, i.e., flow

of information on new products new uses of existing products, etc. from producers to consumers. Flow of information is the form of feedback on the wants, suggestions, complaints, etc. from consumers/user to producers.

Question.3: What does the Marketing Strategy of a company include ?

A Marketing Strategy is composed of several strategies for growth as well as interrelated components called the Marketing Mix.

Question.4: Aarav, a small entrepreneur, is manufacturing portable electric iron for domestic use with the brand name ‘P-IRON’. This iron is in great demand. He finds that the cost of production per unit of iron is ₹1,000 and he can be sell the same at ₹1,200 per unit. The competitors in the market are selling this type of iron at the rate of ₹2,000. Aarav’s objective is not to earn profit in the short-run but to capture the largest market. His expectation is that the customers will be attracted towards the new brand because of low price. Identify the method of pricing adopted by Aarav to capture the substantial portion of the market. Also, state any two advantages of this method of pricing.

or
Lalit a small entrepreneur is manufacturing portable fans with the brand name ‘P-FAN’. These fans are in great demand. He finds that the cost of production per unit of the fan is ₹800 and he can sell the same at ₹1,000 per fan. The competitors in the market are selling this type of fan at the rate of ₹1,200. Lalit’s objective is not to earn profit in the short-run but to capture the largest market share. His expectation is that the customers will be attracted towards the new brand because of lower price.

Identify the method of pricing adopted by Lalit to capture the substantial portion of the market. Also state any two advantages of this method of pricing.

Pricing Method: Penetration Pricing.

Advantages:

1. Result in fast diffusion and adoption.
2. Creates goodwill among the early adopters.
3. Creates cost control and cost reduction from the start leading to greater efficiency.
4. Discourages the entry of competitors, low price acts as barrier to entry.
5. Create high stock turnover throughout the distribution channel.
6. Create critically important enthusiasm and support in the channel.

Question.5: Why are copyrights and patent important for an entrepreneur?

Copyright: It gives the creator of original work exclusive rights to it, usually for a limited time. It means apply to a wide range of creative, intellectual or artistic forms or work. For example, musical composition, literary work such as poems, plays etc.

Patents: It grants an 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.6: What are the advantages of brand name to customers?

1. Helps in identification of product: Branding helps the customers to select the products easily as the brand which is giving them satisfaction can be selected easily over the competitor product.
2. Ensures quality: Brand name gives quality assurance and customers can easily buy branded goods with no doubts about the quality of product.
3. Status symbol: Use of branded goods adds to the status symbol of customers and adds to their confidence level.

Question.7: Komal has started an herbal toothpaste manufacturing unit. She has decided about the logo, packaging format and labelling of the product. Her friend Neha asked her whether she has taken care of the legally recognised exclusive rights of other manufacturers in the industry before taking the above stated decisions ?

Identify and give the meaning of the concept about which Neha asked Komal.

Neha asked Kamal about Intellectual Property Rights. Intellectual Property Rights are the legally recognized exclusive rights to the creations of the mind. Under this, the owners are granted certain exclusive rights to a variety of intangible assets. E.g.– patent, copyrights, trademarks etc.

Question.8: Differentiate between Standardized product and Customized product. Which channel of distribution is best suited for customized product/ goods ?

Standardized 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.9: Rajesh was a chemical engineer working for a company selling insect killer spray. he was aware how this product could harm the health of the users and was constantly looking for ways to improve the product. Filled with innovative zeal, he worked hard and developed a mosquito repellent which produces sonic waves to drive away mosquitoes. It is nonsmoky and does not emit any kind of fragrance or odour. It was safe to use as the sonic waves do not affect human beings or plants. he decided to name his product as ‘Dengularia Free’. The product was to be packed in a corrugated box with an extension cord as free gift. Its price was fixed at `260 per unit. A replacement warranty for one year will be given as an introductory offer. he decided to sell this product through agents who will sell to both, the wholesalers and retailers depending upon the market to be catered. Quoting the lines from the above para, identify any three elements of marketing mix used by Rajesh.

1. Product: He decided to name his product as ‘Dengularia Free’.
2. Place: He decided to sell this product through agents who will sell to both, the wholesalers and retailers depending upon the market to be catered.
3. Promotion: The product was to be packed in a corrugated box with an extension cord as free gift or a replacement warranty for one year will be given as an introductory offer.
4. Price: Its price was fixed at ₹260 per unit.

Question.10: Differentiate between the two types of sales strategy.

The two strategies are:
Direct sales strategy: The sales people talk about each feature of the competitor’s product and compare it to theirs.
Indirect sales strategy: In this the approach is by demonstrating features and benefits not available with the competition’s products or services without ever mentioning them by name.

Question.11: Differentiate between direct selling mode and indirect selling mode.

Question.12: Given the same product and the same market, is it necessary to adopt different types of Marketing Mix by entrepreneur. State the factors determining Marketing Mix.

An entrepreneur adopt different types of Market Mix for their products because of following:

(i) Target Group: Market Mix is different for different income groups. Higher price is kept for the products meant for rich people. Also, the demands of the customers vary from place to place which ultimately depend on their paying capacity.

(ii) Promotional Method: Various types of promotional methods have varying effect in the same locality. Therefore, the selection of the method is guided by the locality.

(iii) Distribution: Mode of distribution is different for different areas. If it is city area, then road and air transport is preferable. If supply chain is longer, then it could be a mixture of air, water and land transport. Easily reachable mode is preferred and selected.

Question.13: With the help of any two examples give the meaning of intellectual property rights.

Intellectual property rights are the legally recognized exclusive rights to the creations of the mind. Under this law, owners are granted certain exclusive rights to a variety of intangible assets. For example:

1. Trade mark: It is a recognizable, sign, design or expression which distinguishes products or services of a particular trade from the similar products or services of other traders.
2. Patents: It grants an 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 public disclosure of the invention.

Question.14: Rohan after completing MBA from IIM Kolkata has joined a multinational company in the capacity of Marketing Manager. The company deals in diversified range of products. It deals with electronic items (like LED bulbs, blenders etc.) engineering goods, along with heavy machinery to be used in chemical industries. He has to decide the channels of distribution best suited for the company’s product. Therefore, Rohan decided to use wholesalers and retailers for electronic goods and engineering goods and direct selling for heavy machinery.

(i) Identify the element of marketing mix discussed above.

(ii) Specify the component of identified marketing mix element stated above.

(iii) Name the types of the identified components used by Rohan.

(i) The element of marketing mix discussed above is Place Mix.

(ii) In Place mix, the channels of distribution is stated here.

(iii) Rohan has used indirect or two level channel for electronic and engineering goods whereas direct or zero level channel for heavy machinery

Question.15: Explain any two components of Brand with example.

1. Brand Name: That part of a brand which can be vocalized, e.g., Mercedes, Mc Donald.
2. Brand Mark: That part of a brand which can be recognized but not vocalized, e.g., Girl of Amul.
3. Trade Mark: That part of brand that is given legal protection against its use by other firms. e.g. ^TM used by brands.

Question.16: Differentiate between price skimming and price penetration technique of pricing.

Question.17: Why is a logo important for a company ?

Logo is important for a company as it provides an identifying symbol for a product or business by anchoring company’s brand.

Question.18: State the factors affect the policy on packaging ?

Following factors affect the policy on packaging:

1. Quantity of a Product.
2. Quality of a Product.
3. Safety of a Product.
4. Choice of the Customers.
5. Environmental Factors.
6. Specific requirements of the Product.
7. Cost of Packaging Material.

Question.19: Shilpi Ltd., started the manufacturing of herbal toothpaste. They researched that large number of established enterprises were also manufacturing the similar type of products. The company fixed the price of their toothpaste on ‘cost plus method’ of pricing. After some time the company realized that they were not getting good response regarding their toothpaste from the customers and the market share of their toothpaste was less than 0.5%. Since their product was new, they decided to change the pricing method so that initially they could get more customers. 

1. Identify the new pricing method that was adopted by Shilpi Ltd. 
2. State any two advantages of the new pricing method identified in (i) above.

1. New Pricing method adopted by Shilpi Ltd. is Penetration Pricing method where the price of a product is initially Set at a price lower than the eventual market price to attract new customers.
2. Two advantages of Penetration Pricing method are:
   • If can result in fast diffusion and adoption. This can achieve high market rates quickly. This can take the competitors by surprise, not giving them time to react.
   • It discourages the entry of competitors. Low prices act as a barrier to entry.

Question.20: What is meant by ‘skimming pricing method’ ? State any two advantages and any two disadvantages of skimming pricing method.
or
What is Skimming Pricing Method ? What are its advantages and disadvantages?
or
Pure minds Ltd. was a company into manufacturing of water purifiers, water dispensers, packaged driving water and hand sensitizers. They do a lot of research and development and would update their product on a regular basis. They also encouraged feedback and suggestions from the customers.
Acting on one suggestion, they decided to manufacture a water bottle with a built-in water purifier called “Wonderpure”. They spent a lot of money on promoting the product with the tagline “Your child is secure with Wonderpure.” The target segment was quality conscious consumers. It was priced in such a way that the cost of investment of the original research gets recovered from the customer. The product was an instant hit.
(i) Identify and explain the pricing strategy to be used by Purem minds Ltd.
(ii) State two advantages and two disadvantages of the pricing strategy identified in part (i).
or

‘Smart Look Ltd.’ launched a ‘Smart Television’ in the market after lot of research and development. This television had many new features which distinguished it from the existing televisions in the market. To recover the investment a high price was determined for the television even then the demand was very high. The quality conscious customers were ready to pay the highprice as they understood the product’s value and its features.

(i) Identify and explain the ‘Pricing-Strategy’ used by ‘Smart Look Ltd’.
(ii) State two advantages and two disadvantages of this pricing strategy.

In case of Skimming price, goods are sold at higher prices so that fewer sales are needed to break even.

Advantages:

1. Price skimming helps the company in recovering the research and development costs which are associated with the development of a new product.
2. If the company caters to consumers who are quality conscious rather than price conscious, then this type of strategy can work in a great way for a company.

Disadvantages: 

1. This strategy can backfire if there are close competitors.
2. Price skimming is not a viable option when there are strict legal and government regulations regarding consumer rights.
3. If the company has history of price skimming then consumers will never buy a product when it is newly launched, they would rather wait for a few months and buy the product at lower price.

Question.21: Identify the channel of distribution:

(i) When the quantity of the product sold is very small, and
(ii) When the product has a reasonable value.

(i) Indirect channel / short channel.

(ii) Direct selling.

Question.22: With it’s 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.

(i) Brand.

(ii) It has the following components: brand name; brand mark; trade mark.

Question.23: “Branding plays an important role in Marketing.” How ? Explain.

Branding is useful in the following ways:

1. Identification: A product and its enterprise get its identification by its brand name. This reduces the advertising cost.
2. Differentiation: Brand name helps in differentiating one product with the another. Any particular brand can be easily differentiated from its competitors.
3. Better Understanding: Brands develop better understanding of customers with the product. This increases loyalty and consequently reduces Marketing efforts.

Question.24: Explain the term “Brand”.

“Brand” is a comprehensive term. It is used to denote a name, term, sign, symbol, design or combination of them to:

(i) Identify the products of one firm and

(ii) Differentiate them from those of the competitors.

Promotion Strategy

Question.1: An NGO after doing a laboratory test found that the soft drink produced by a MNC contains the ingredients which are very harmful to health but the company has not mentioned them anywhere in the label of the product package. That NGO called a press conference and revealed the reports of the test for the product claiming that it contains harmful preservatives and also beyond the permissible limits and regular intake of such drink can cause cancer. It was a breaking news on TV channels, news paper etc. As a result, people stopped consuming that drink. This gave a big shock to company’s sales and consequently its revenue decreased drastically in short time : This impaired and tarnished the company’s goodwill in the market and has also reduced the sale of other products under same brand. To overcome this situation, the top executive of the company decided to issue press release clarifying that the company has stopped using harmful stuff and label contains all the required information as per the law. The company also made multimedia presentation of its production process and future plans to promote its sales.
(i) Identify the concept used by the company to rebuild its image and to remove negative publicity.
(ii) Enlist the tools of such promotion technique. 

(i) The concept used is Public Relation.

(ii) The various tools of public relation are:
(a) News,
(b) Speeches,
(c) Events,
(d) Printed material,
(e) Public welfare programmes

Question.2: What are the disadvantages of advertising through the transport system ?

Though this mode of advertisement is a common type of advertisement but it has some demerits:

1. Long message cannot be conveyed through this mode.
2. It is useless for illiterate people.
3. If it is overlooked the entire value of advertisement is lost.

Question.3: Define advertising and explain its three features which can be identified through the definition.

Advertising is a paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor. 

Its three features which can be identified by the definition are:

1. Paid form: The sponsor has to pay for advertising. He has to bear a cost to communicate with others.
2. Impersonal: There is no face-to-face contact between customers and advertiser. It creates a monologue and not a dialogue.
3. Identified sponsor: Advertisement is given by an identified company or firm or individual.

Question.4: What is TTL ?

“Through-the-line” refers to an advertising strategy involving 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.

Question.5: Vector Ltd., is in the Fast Moving Consumer Goods industry. They introduced a new variety of biscuits in the market. It has high fibre content with different new flavours incorporating various multigrain. Create a tagline for the product and state which promotion strategy should be used by Vector Ltd.,

Tagline- Health One and for all

Promotion strategy used: Above the line as it focuses on advertising to a large audience through print, television etc.

Question.6: Advertising through television is favourable to big enterprise. But, indirectly it affects small emerging entrepreneurs. Do you agree ? Justify your answer.

Advertising generally means communicating the message of manufacturer or advertiser to the consumers. By advertising producer gives a detailed information about the product. The big enterprise invests huge amount of capital and produces in large scale with the severe competition in the market. For all these advertising is essential to attract the customer towards their product. Advertising through television is costly but it is easily affordable by big enterprise.

Question.7: What is meant by Public Relations?

It is the deliberate, planned and sustained effort to establish and maintain mutual understanding between an organization (or individual) and its (or their) public. Public relations is about building good relations with the stakeholders (public) of the business by obtaining favourable publicity, building a good corporate image and handling or heading off unfavourable rumours, stories and events.

Question.8: What are the advantages of advertising through the transport system ?

Transport advertisement is a common type of advertisement in which public transports like trains, buses, and autorickshaws are used for display of advertisement.

(i) It is economical and within the reach of all entrepreneurs.

(ii) It connects a wide range of mobile customers.

Question.9: What are the different roles played by sales person ?

A sales person plays three different roles: 

1. Being persuasive: By oral presentation of message, he persuades the consumers to buy a product clarifying their doubts, convincing them why they should buy their product only.
2. A service provider: A sales person goes to the doorstep of the customers to make available the products they need. He demonstrates the product, its performance before the buyers and if needed, provides them with after sale services to regular customer.
3. Being informative: A salesman possess detail information about the manufacturing company, about the range, features etc., related to product, about competitors products, inferior features, etc. He gives full, information required by the potential buyer to make buying decision.

Question.10: Various approaches may be used by a company to promote its products. One of them is the use of mass media methods by designing a promotion strategy that aims at establishing brand identity.
Identify and explain this approach.

Above-the-line: These promotions use mass media methods. This type of promotion focuses on advertising to a large audience. It includes conventional media like print, online, television and cinema advertising. The activities include advertisements in the press. They also produce online banner advertisements, place advertisements on billboards and use their website to meet the needs of their consumers.

Question.11: Mention any two techniques of sales promotion with example.

The two techniques are :

(i) On-pack offers: E.g., soap manufacturers offer 1 soap free on purchase of their 3 soaps that are packed together.

(ii) Workshops: E.g., workshops are arranged by vehicle manufacturers for display and promotion of their vehicles.

Question.12: What are the disadvantages of advertising through radio ?

Though radio is very popular media but it has some disadvantages too:

1. It cannot permit selective advertisement.
2. It has low memory value.
3. The message may be lost if radio is not tuned in.

Question.13: Explain the following terms:
(a) ATL (b) BTL

(a) ATL : Above-the-line promotions use mass media methods. These focus on advertising to a large audience.

(b) BTL: Below-the-line methods are very specific, memorable activities focused on  targeted groups of consumers.

Question.14: “Personal selling is a better method of sales promotion than advertising”. How ? Explain with the help of any three points.

(i) Effective Promotional Tool: Personal selling is a very effective promotional tool, which helps in influencing the prospective buyers about the merits of a product and thereby increasing its sales.

(ii) Two-way communication: Salesman functions as the “eyes and ears” of the producers. He helps in improving the products and sales policies by passing on the information about the likings and disliking of customers.

(iii) Consumer Attention: Through personal selling it is easy to get the attention of customer as there is face to face interaction between salesman and customers.

Negotiations, Customer Relationship Management, Vendor Management

Question.1:  What is the impact of technology on CRM?

Technology and the Web has changed the way companies approach CRM strategies because advancement in technology have also changed consumer buying behavior and offers new ways for companies to communicate with customers and collect data about them. With each new advancement in technology—especially the proliferation of self-service channels like the Web and smartphones, customer relationship is being managed electronically. Many aspects of CRM relies heavily on technology; however the strategies and processes of a good CRM system will collect, manage and link information about the customer with the goal of letting you market and sell services effectively.

Question.2: How does negotiation helps a business organization?

Good negotiations contribute significantly to business success as they:

1. Help in building better relationship.
2. Deliver lasting, quality solutions-rather than poor short-term solutions that do not satisfy the needs of either party.
3. Help in avoiding future problems and conflicts.

Question.3: Why is ‘Customer Relationship Management’ important for any business? Explain briefly.

(i) It can help to understand the customer in a better way.

(ii) It will retain customers through better customer experience.

(iii) It will help to attract new customers.

(iv) Helps in winning new clients and contracts.

(v) It will lead to increase profitability of the organization.

(vi) Helps in decreasing customer management costs.

Question.4: Identify the activities entailed in vendor management.

Researching vendors, negotiating contracts, obtaining quotes, evaluating performance, creating and updating vendor files and ensuring the payments.

Question.5: Explain briefly how ‘Quality’ is key to value creation and customer satisfaction.

Higher level of quality results in higher customer satisfaction which supports higher prices and lower costs. Thus quality enhances customer satisfaction and company profitability.