MP Board Class 12th Business Studies Important Questions Chapter 11 Marketing Management

MP Board Class 12th Business Studies Important Questions Chapter 11 Marketing Management

Marketing Management Important Questions

Marketing Management Very Short Answer Type Questions

Question 1.
What do you mean by marketing research ?
Marketing research is a systematic and intensive investigation of all phases of marketing on a continuous basis with a view to have better understanding and knowledge about the present and future marketing problems.

Question 2.
What do you mean by sales promotion ?
Sales promotion refers to all those activities which are undertaken to increase sales. These activities are besides advertising, publicity and personal selling. Sales promotion motivates both consumers and middlemen. Some common sales promotion measures are coupons, premium, bonus, offers, contests etc.

Question 3.
What do you mean by external advertisement ?
It is very economical and flexible. It quickly attracts all types of customers. Some examples of external advertisement are as follows: poster, advertisement board, hoarding, advertisement in newspaper and advertisement by loudspeaker, etc. It needs the place which is full by large number of peoples.

Question 4.
What do you mean by ‘product mix’ ?
Product mix involves the activities relating to the product, service or idea to be offered. The different products which are offered / produced by an origination, enterprise or a producer, the list of products is called as a product mix.

Question 5.
What are the advantages of advertisement in newspapers ?
Following are the advantages of advertisement in newspaper:

  1. These are comparatively cheaper.
  2. These leaves a long time effect on the consumers.
  3. These are more effective.
  4. These are reliable.

Question 6.
Write two functions of packaging.

(a) Safety -: By packaging goods are protected from dust, air, moisture, water, etc.
(b) Increase in sale : The function of packaging is to increase in sale because goods are sold in good conditions by packaging.

Question 7.
Write the names of the media of advertisement.
The names of the media of advertisement are as follows :

  1. Radio
  2. Television
  3. Newspaper
  4. Poster, leaflets and pamphlets
  5. Direct mail advertising
  6. Window display.

Question 8.
Make a list of characteristics of a good brand name.
Following are the characteristics of a good brand name :

  1. Brand should be small and general: It should be small and easy to pronounced For example : Tata, Dalda etc.
  2. Attractive : Brand should always be attractive so that product will be attracted. For example Uncle chips, ManMohini.

Question 9.
List the characteristics of convenience products.
Following are characteristics of convenience products :

  1. These goods are purchased at convenient location with least efforts and time.
  2. They hate regular and continuous demand.
  3. They are purchased in small quantities and per unit price is low.
  4. They are mostly branded and have standardized price.
  5. The competition is high as the supply is greater than the demand.
  6. Sales promotion schemes play an important role in the marketing of such prod

Question 10.
What do you mean by Market ?
By market we don’t mean any place but it is related to transaction of goods between seller and buyers.

Question 11.
What do you mean by pricing ?
The term price denotes the money value of product. It is the amount the money for which a product can be exchanged. He pays price his services done.

Question 12.
What do you mean by Trade Mark ?
Any brand or branded product when gets legal protection and is registered it is called‘Trade mark’.
Brand is an English word but in Hindi conversation also brand is mostly used. Brand refers to a special word, symbol, letter or mixture of all these. Branding is used for product differentiation, building distinct image of the product and to popularize the product and its producers.

According to American Marketing Association, “A brand is a name, term, sign, symbol or design or a combination of term which intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.” Thus brand is a type of design or identity.

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Question 13.
What is marketing ?
Marketing is such commercial process by which goods are produced according to the need of consumers (Markets). Marketing includes production, research transportation packing, advertisement, purchase and sale, etc.

Question 14.
What is publicity ?
Publicity is a type of non-personal communication in which message goes in the form of news from person to person.

Question 15.
Who is customer ?
By customer we mean those people or organisations who satisfy their needs and wants. .

Question 16. What do you mean by sales promotion ?
It refers to all activities which are undertaken to increase sales. Some common sales promotion measures are coupons, premium, bonus offers, etc.

Question 17.
When is demand considered elastic ?
Demand is considered to be elastic when demand changes highly with a slight change in price of product numerically price elating is more than unit 1.

Question 18.
What do you mean by product planning ?
Product planning implies all activities which enable a firm to determine what should constitute as line product.

Question 19.
What do you mean by packaging ?
Packaging means covering, wrapping, crafting, filling or compressing of products to protect from spoilage, breakage, leakage etc. Packaging refers to designing and producing suitable packages for goods. It involves determination of convenient size lots in which the goods are to put for marketing.

Question 20.
What do you mean by grading ?
When products are divided into various groups according to their quality, size and other characteristics. Grading ensures that products are of specific quality.

Marketing Management Short Answer Type Questions

What is marketing ? What functions does it play with process of exchange of of sand services ? Explain.
1. Transportation : Transportation involves physical movement of goods from one place to another. A marketer has to perform this function very efficiently keeping in mind the nature of product, cost, location of target market, etc.

2. Storage  housing : In order to maintain smooth flow of products in the market, there is nee d for proper storage of the products. Further, there is a need for storage of adequate stock o f goods to protect against unavoidable delays in delivery or to meet out contingencies in the; marinade. Wholesalers and retailers are playing an important role.

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Question 2.
Distinguish be tween the product concept and production concept of marketing.
Differences bet ween Product Concept and Production Concept:
Product concept

  1. The focus of the product concept is on quality of the product
  2. This concept works on the assumption the it customer  products of greater quality and price and availability does not influnte their purchase decision.
  3. Company devotes most of its time in developing a product, a grater quality and expensive goods

Production concept

  1. The focus here is on quantity of the product.
  2. This concept works on the assumption that consumers prefer a product which is in expensive and widely available.
  3. Companies focus on producing more of the product and making sure that it is easily available to the consumer very easily.

Question 3.
Product is a bundle of utilities. Do you agree ? Comment.
Yes, product is a bundle of utilities, which is purchased because of its capability
to provide satisfaction of certain need. A buyer buys a product or service for what it does or service for what it does for her or the ,benefits it provides. There can be three types of benefits, it provides to a customer.

  1. Functional benefits.
  2. Psychological benefits.
  3. Social benefits.

e.g., the purchase of a motorcycle provides functional utility of transportation, but at the same time satisfies the need for prestige and esteem and provides social benefit by the
way of acceptance from a group riding it.

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Question 4.
What are industrial products ? How are they different from consumer products ? Explain.
Industrial products are those products which are used as inputs in providing other products e.g., raw material, engines, tools, lubricants, etc.
The differences between consumer products and industrial products is based on their

Consumer Product:

  1. Consumer is the buyer.
  2. It is a purchased for personal consumption.
  3. Number of buyers of consumer products is large.
  4. The market of consumer product is broad.
  5. The number of consumer product is high.

Industrial Product

  1. Industries units and the processors are the buyers.
  2. It is bough and used for making other products.
  3. Number of Myers is limited in case of industrial products.
  4. The market of industrial product is narrow.
  5. The number of Industrial product is less.

Question 5.
Write the functions of marketing.
Following functions face under marketing :

1.The first function is buying and assembling of goods. Here assembling refers to the collection of goods and accumulation at convenient or centralization in order to facilitate distribution

2.After buying and assembling of goods, they upgraded and brought up under the condition of sale

3.Standardization and grading of; goods on the basis of quality, size, brands, etc.

4.Proper packing for safe transportation and storing them (Goods) before transportation in warehouses,

5.To improve the sales techniques and undertake sales promotion work like sample distribution demonstration, gift plans, etc.

6.After sale of goods, their dispatch (i.e., transportation) and proper handover of good is also fall under the preview of marketing

7.Marketing research, study of taste of consumers and pricing of goods.

Question 6.
Enlist the advantages of packaging of a consumer products.
Important of packaging:

  1. Helps in raising’ the standard of health and sanitation.
  2. Helps in self service outlets as consumer own what to buy, can easily decide on his.
  3. Innovation opportunity e.g., new types of package availability have made it easier to market the product,
  4. Product differentiation packaging is one of the very important means creating product differentiation.

Question 7.
Products is a mixture of tangible and inf tangible attributes. Discuss.
In marketing, product is a mixture of Tangier and intangible attributes which are capable of being exchanged for a value, with ability to , satisfy customer need’s. Beside physical objects, include services, ideas, persons and pi ace in the concepts of product. Thus, product may be defined as anything that can be offer ed i n a market to satisfy a want or need. It is offered for attention, acquisition, use or consumption.

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Question 8.
Describe the functions of labeling b a the marketing of products.
Label on a product provides detailed information about the product, its contents, methods of use etc. the various functions perform med by a label are as follows :

(i) Describe the product and specify its contents one of the most important functions
of labels in that it describe the product, its us age, cautions in the use, etc. and specify its contents.

(ii) Identification of the product or Br and a label helps in identifying the product or brand e.g., we can easily pick our favorite soap from a lumber of packages only because of its label.

(iii) Grading of products labels help grading the products into different categories. Sometimes, marketers assign different grades to indicate features or quality of the product e.g., different type of tea is sold by some brands under “Fellow, Red and Green label categories.

(iv) Help in promotion of products an important function of label is to aid in promotion of the products. A carefully designed label can a the customer to purchase. So, many labels provide promotional me usages, some shove discount or other schemes etc.

(v) Providing information required by law: Another important function of labelling is to provide information required by , law e.g., the statutory warning on the package of cigarette or pan masala Smoking is injuring to health’ or ‘Chewing tobacco causes cancer.

Question 9.
Discuss the role of intermediaries in the distribution of consumer non durable products.
The term channels distribution refers the facilitate to the movement of goods and services and their title bet ween the point of production and point of consumption, by forming a variety of marketing activities. Following are the functions performed by the channels of distribution.

(i) Accumulation : If aims at holding the stock to match between the consumer demand and supply condition warehousing helps in maintaining continuous flow of goods and services.

(ii) Promotion : The marketing channels also help in promoting the demand for the product by displaying demonstrating and participating in various promotional activities organized by the producers.

(iii) Negotiating: The marketing channels are the intermediaries between the producers and the consumers. They attempt to reach final’agreement on price and other terms of the offer, so that transfer of ownership is properly affected.

(iv) Risk taking : Risk taking is the basic responsibility of the intermediaries. It may arise out of physical deterioration, changes in price levels, natural calamities, change in fashion etc. These are unavoidable as they hold sufficiently large and variety of inventories till the sale of stock.

(v) Grading/Sorting : Grading is the process whereby they sort the products on the basis of different sizes, qualities, moisture contents and so on. It helps us realizing the time value for the product and at the same time ultimate consumer feels satisfied with the uniform quality of the product.

(vi) Packaging : The products are packed in the small gradable lots for the convenience of the consumer.

(vii) Assembling/Assortment: Marketing channels aim at satisfying the needs of the customers. The products desired by the consumer may not be a available in the market. They procure such goods from different sources, assemble or assort them as per the requirements of the consumers

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Question 10.
Explain the factors determining choice of channels of distribution.
The choice of channels depend on various factors, which are discussed as follows : .

(i) Product related Factors : The important product related considerations is deciding the channels. It includes whether the product is an industrial product or a consumer product. Industrial product require shorter channel and consumer products require longer channel.

(ii) Company characteristics : The important company characteristics affecting the choice of channels of distribution include the financial strength of the company and the degree of control, it wants to hold on other channel member. Direct selling involves lot of foods to be invested in fixed assets say starting own retail outlets or engaging large number at sales, force.

Similarly if the management want to have greater control on the channel number, short channels are used but if the management do not want more control over the middlemen, it can go in for longer channel or large number of intermediaries.

(iii) Competitive factors : The choice of channel is also affected by what the competitor has selected as its channel. Sometimes.

(iv) Market factors : Important market factors affecting the choice of channel of distribution include size of market, geographical concentration of potential buyers and quantity purchased.

(v) Environmental factors : Sometimes environmental factors also helps in deciding the channel of distribution e.g., in a depressed economy, marketers use shorter channels to distribute their goods in an economical way.

Question 11.
Explain briefly the components of physical distribution.
The main components of physical distribution are as follows :

(i) Order processing : If a firm takes more time to process the order, then the consumer remains dissatisfied. Therefore, order processing has to made faster by using information technology.

(ii) Inventory control : Inventories ensure availability of the product as and when consumer demand arises. There are various factors which influence a firm decision regarding the level of inventory e.g., degree of accuracy of sales forecast, cost of blocking of the working capital, etc.

(iii) Warehousing: It refers to the storage of goods from the time of production to the time of consumption, warehousing is important as it creates time utility.

(iv) Transportation : It creates place utility, it refers to the carrying of raw materials or finished goods from one place to another. The most important thing to be kept in mind is that the value addition by transportation should be greater than the cost of transportation.

Question 12.
Define advertising, what are its main features ? Explain.
Advertising is defined as the impersonal form of communication which is paid form by the marketer to promote some goods or services. It is commonly use as the promotional tool of the company, the important features of advertising are as follows :

(i) Paid from advertising : is a paid from the communication which means the sponsor has to bear the cost to communication with the prospects.

(ii) Impersonal : There is no direct face to contact between the prospect and advertiser. It is therefore, referred as the impersonal method of promotion.

(iii) Identified sponsor advertising is undertaken by some identified individual or company, who makes the advertising efforts and also bears the cost of it.

Question 13.
Discuss the role of ‘Sales Promotion’ as an elements of promotion mix.
Sales promotion includes those marketing activities other than personal selling, advertising and publicity that stimulate consumer purchasing and dealer effectiveness, such as display, shows and exhibitions, demonstrations and various non-current selling efforts not in the ordinary routine, the main objectives of sales promotion activities are :

  1. Creation of demand for the product
  2. Educating the consumers about new products or new uses of the old product
  3. Building the brand loyalty for the product among the consumers.

Question 14.
What do you mean by sales promotion ? Write any four objectives.
Meaning : Sales promotion refers to all those activities which are undertaken to increase sales. These activities are besides advertising, publicity and personal selling. Sales promotion motivates both consumers and middlemen. Some common sales promotion measures are coupons, premium, bonus, offers, contests, etc.
Objectives of Sales Promotion : The objectives of sales promotion are as follows :

  1. To provide information to new consumers about products and services and motivating them to purchase those products.
  2. To popularize the products among common people.
  3. 3. To make existing customers as permanent customers.
  4. To motivate intermediaries and traders to buy more goods.
  5. To increase sales in festive occasions like – Holi, Diwali, etc.
  6. To face the cut throat competition effectively.
  7. To provide detailed knowledge about the product to customers.
  8. To regain the old consumers and to increase the sale in slack period.
  9. To start the sales of products in a new market.
  10. To increase goodwill as well as profits.

Question 15.
Write the characteristics of a good packaging.
The characteristics of packaging are :

  1. Packaging is a science as well as an art.
  2. Packaging is related with product planning.
  3. The aim of packaging is to protect the product and make it convenient for the customers to use the product.
  4. La belling and Branding activities are included in packaging.
  5. There are differences between packing and packaging.

Question 16.
What are the essentials of a good brand ?
What points should be kept in mind while selecting a good brand ?
The essentials of a good brand are :

  1. Brand should be easily pronounceable
  2. It should be suggestive
  3. It should be distinctive
  4. It should be meaningful
  5. It should be simple and short
  6. It should be memorable
  7. Brand should be attractive
  8. It should be register able
  9. It should be economic.

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Question 17.
Discuss the following functions of marketing briefly :

  1. Marketing mix
  2. Branding
  3. Packaging.


(a) Marketing mix: “The policies adopted by manufacturing concerns to attain success in the market contribute the market mix”. —R.S. Davar
For achieving the objectives of business a marketing plan is prepared in which decisions regarding product price, channel of distribution, techniques of sales promotion, etc.are taken. The combination of these elements is called marketing mix.

(b) Branding : Branding refers to the process of assigning specific name of the product by which-it is to be known and remembered. A brand represents a word, symbol or a letter or a combination of all of them. A brand is the buyer’s expectation and seller’s promise to satisfy them consistently.

(c) Packaging : Packaging means covering, wrapping, crafting, filling or compressing of products to protect from spoilage, breakage, leakage, etc. Packaging refers to designing and producing suitable packages for goods. It involves determination of convenient size lots

Question 18.
Discuss the following function of marketing :

  1. Labelling
  2. Sales promotion
  3. Advertisement.

1. Labelling : Labelling refers to putting strip of paper or informative tag or metal in the package or the product. Label is the carrier of information which is attached to product package. It denotes the nature of product contents weight, ownership, destination, date of manufacture and necessary information for the users or consumers.

2. Sales promotion : Includes those activities stimulate market demand for product through short term incentives which are of non-recurring nature and temporary. These technique of sales promotion serve as bridge between the production of its consumer.

3. Advertisement: Advertising aims to committing the producer, educating the consumer supplementing the salesman, connecting the dealer to eliminate the competitor but above all its a link between producer and consumer. Advertising is the most widely used method of sales promotion.

Question 19.
Distinguish between Branding and Trade mark.
Differences between Branding and Trade mark :


  1. In it registration of name, symbol or design is not done.
  2. All types of brand do not possess trademark.
  3. Brand can be used by more than one manufacturer or seller.
  4. Scope of branding is limited.

Trade mark

  1. In it registration of name, symbol or design is done.
  2. All trade marks have branding.
  3. Trade mark can be used by only one manufacturer or seller.
  4. Scope of trade mark is large and unlimited.

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Question 20.
Write the characteristics of Advertising.
The following characteristics of Advertising are :

1.Economic growth: It acts as a barometer of a nations economic growth advertising promotion healthy competition and provides better quality goods at cheaper rates to the society.

2.Source of income : It provides a regular source of income to newspapers. It has been estimated that nearly 80% of the income to newspapers and magazines is secured through advertisements.

3.Standard of living : It uplifts the living standard of the people advertising acts an effective tool in raising standards of living.

4.Employment : It is generates employment opportunities directly it provides to many people who work as artists, painters, writers and experts in the field of advertising.

Question 21.
Write the differences between Advertisement and Sales promotion
Differences between Advertisement and Sales promotion :
MP Board Class 12th Business Studies Important Questions Chapter 11 Marketing Management image - 1
Question 22.
What is the marketing concept ? How does it help in the effective marketing of goods and services ?
Orientation of marketing implies that focus on the satisfaction of customers need, is the key to the success of any organisation in the market. All the decisions in the firm are taken from the point of view of the customers e.g., what product will be produced, with what features and at what price shall it be sold or where shall it be made available for sale will depend on what do the customer wants.
Marketing concept helps in effective marketing of goods and services by using the following:

  1. Identification of market or customer who are chosen e.s., the target of marketing effort,
  2. Understanding needs and wants of customers in the target market
  3. Development of products or services for satisfying needs of the target market
  4. Satisfying needs of target market better than the competitors
  5. Doing all this at a profit.

Question 23.
What are the essential conditions of exchange mechanism ?
Following are the conditions of exchange mechanism :

  1. There should be two parties :
  2. Customer and producers.
  3. Both the parties should have capacity to satisfy each other.
  4. Both the parties should have capacity to communicate each other.
  5. Out of these both the parties have full freedom of accepting each other
  6. Any one can become the member of exchange process.

Question 24.
What is the differences between trade mark and brand ?
Difference between Trade mark and Brand :

  1. Registration : Registration of brand is not necessary while trade mark should be registered.
  2. Statutory : Since brands are not registered that’s why they are not statutory while trade marks are statutory.
  3. Use : Brand can be used by the competitors or rival groups but trade mark cannot be used by the competitors or rival enterprises.
  4. Scope : Scope of brand is limited while scope of trade mark is wider.
  5. All brands are not mark : All brands are not trade marks but all trade marks are brands
  6. Legal action : If the competitors copy the brand then no legal action can be taken but if competitors copy trade mark then legal action can be taken against them.

Question 25.
What are techniques or methods of sales promotion ?

1. Samples : The best method of sales promotion is the free distribution of products. This sample is used by the consumers and if the consumer is satisfied than he gets attracted towards the product itself. Sales representatives distribute these samples door to door. This method is very useful in introduction of new product. This type of method is mostly used in case of products of daily use e.g.. Tooth paste, soaps, medicines etc.

2. Coupons : Some companies for sales promotion uses coupons. Coupon is a certificate written on paper in which some discount or services or gift is mentioned for the purchaser, e.g., for purchasing a pack of tea a discount of Rs. 5 is offered. If the cost of tea pack is Rs. 50 then customer will have to pay Rs. 45. Coupon method easily attracts the consumers.

3. Premium : A premium offer is the offer of an article at no cost or at a very nominal price on the purchase of a specified product e.g., on purchase of T.V. one watch free or a tape record at half of actual price.

4. Contests: It is an effective method of sales promotion with a view to popularity the products the producers organised various contests. In these type of contests the consumers participates and wins prizes and various services from companies. Contests are conducted for consumers as well as traders.


  1. To write and send a slogan for the concerned product
  2. Write a suitable name for the product
  3. Complete the sentence contest like, I use Lifebuoy soap because
  4. To solve the puzzles
  5. To explain the advantages and various uses of products
  6. Lucky draw contest.

5. Demonstrations : It involves activities which enables the consumers to know how to make operational use of products. The objective of demonstration is to provide an opportunity to the consumers to learn how to use the product and to explain the usefulness of the product.

6. Fairs and Exhibitions : Fairs and exhibitions are having an important place in increasing the sales. These are held at local, national and international level. In this method, seller displays their product attractively and consumers are attracted towards these products. Book sellers organised fairs called Book Fairs

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Question 26.
Explain the various strategies which are used in branding.

  1. Brand: For each product firm uses different types of brand. Brand is a specific type of identity.
  2. Brand name : The products are known by their brand name. It consists of a name, term or symbol.
  3. Brand mark : Each product is given brand mark along with the name.
  4. Trade mark : Registration of trade mark is compulsory.

Marketing Management Long Answer Type Questions

Question 1.
What are the concepts of marketing management philosophies.
1. Production concept : It works on an assumptions that consumers prefer a product which is expensive and widely available. Increase in the production of the product makes the companies get advantage of economies of scale. This decreased production cost makes the product inexpensive and more attractive to the customer. Low price may attract new customers, but focus is just on production and not on the product quality.

This may result in decrease in sales if the product is not up to the standards. This philosophy only works when the demand is more than the supply. Moreover, a customer not always prefers an inexpensive product over others. There are many other factors which influence his purchase decision.

2. Product concept : This concept works on an assumption that customers prefer products of ‘greater quality’ and ‘price and availability’ doesn’t influence their purchase decision. Hence company devotes most of its time in developing a product of greater quality which usually turns out to be expensive. Since the main focus of the marketers is the product quality, they often  or fail to appeal to customers whose demands are driven by other factors like price, availability, usability, etc.

3. Selling concept : Production and product concept both focus on production but selling concept focuses on making an actual sale of the product. Selling concept focuses on making every possible sale of the product, regardless of the quality of the product or the need of the customer.

The main focus is to make money. This philosophy doesn’t include building relations with the customers. Hence repeated sales are very less. Companies following this concept may even try to deceive the customers to make them buy their product. Companies which follow this philosophy have a short sighted approach as they ‘try to sell what they make rather than what market wants’.

4. Marketing concept: Selling concept cannot let a company last long in the market. It’s a consumers market after all. To succeed in the 23th century, one has to produce a product to fulfill the needs of their customers. Hence, emerged the marketing concept. This concept works on an assumption that consumers buy products which fulfill their needs. Businesses following the marketing concept conduct researches to know about customers’ needs and wants and come out with products to fulfill the same better than the competitors.

By doing so, the business makes a relation with the customer and generate profits in the long run. However this isn’t the only philosophy which should be followed. Many business still follow other concepts and make profits. It totally depends on the demand and supply and the needs of the parties involved.

5. Social marketing concept ; Adding to the marketing concept, this philosophy focuses on society’s well-being as well. Business focus on how to fulfill the needs of the customer without effecting the environment, natural resources and focusing on society’s well being.

This philosophy believes that the business is a part of the society and hence should take part in social services like elimination of poverty, illiteracy, and controlling explosive population growth etc. Many of the big companies have included corporate social responsibility as a part of their marketing activities.

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Question 2.
What are the functions of marketing research ?
1. Marketing Research : Under marketing research, data and/or information regarding the number of consumers and their purchasing power, their wants and fashion, habit, need etc. are collected so that goods could be produced according to wants and need of consumers.

2. Product Planning and Development: Goods produced in accordance with wants and fashion of consumers is called product planning and to effect changes in the products from time to time like size, color and quality comes under development. Both these activities are covered under marketing.

3. Standardization and Grading: There are many types of consumers. Standardization and grading of goods produced are done according to the need and purchasing power of consumers. This one of the function of marketing.

4. Packaging : According to the modem concept, a product is easily marketed and sold if packaging is of high standard. The consumer also wants every product well packed. Therefore, packaging is very important in marketing.

5. Storage : Storage is necessary for raw material and to maintain supply of goods according to demand as also to store raw material. Huge storage’s or warehouses are built for raw material.

6. Purchase Sale: Purchase and sale are two most important activities under marketing. It is for these activities that the other activities of marketing are undertaken.

7. Transportation : Due to the increase in distances between producer and the consumer, work of transportation has assumed greater importance. Sale and purchase of goods is impossible without transportation. Therefore, transportation is an important function of marketing.

8. Risk and Insurance : Marketing is full of risks. Sometimes, losses are incurred in marketing. To prevent losses in marketing, insurance is taken.

9. Advertisement: in the modem age of development, it is difficult to sell any product without advertising. Therefore, advertising is necessary to maintain the sales drive. It is an important function of marketing.

10. Pricing : Price is related to cost of production and profit. In the modem age of competition. Pricing is now being compared to price of other similar products and therefore pricing is a difficult job which is covered under marketing.

Question 3.
Difference between sales promotion and personal selling.
Differences between Sales Promotion and Personal Selling
MP Board Class 12th Business Studies Important Questions Chapter 11 Marketing Management image - 2
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Question 4.
What do you mean by personal selling ? What are its characteristics ?
Meaning: During the course of advertising the producer tells all about his product but cannot know the immediate reaction of customers. To make up this deficiency the producers adopted personal selling. It is a two tier system which establishes close relationship between salesman and buyers resulting in mutual satisfaction. Characteristics of Personal Selling:

1. Direct Sales : In personal selling the seller directly sells the product to consumers. There is face to face contact between seller and purchaser.

2. Personal Relation : Through personal selling a personal contact establishes between purchaser and seller. There is no chain between purchaser and seller. Personal selling is a mind to mind approach.

3. Knowledge of Product: In it seller is having complete knowledge about product. Thus, seller explains the uses and merits of product to consumers.

4. Two way communication : It is totally a two way communication. The purchaser and seller are free to give their opinions.

5. Oral conversation : There is oral conversations between the seller and buyer regarding characteristics of the product.

6. Part of Marketing Programmer : Marketing is a wide concept. Personal selling is a part of marketing.

7. Universal : Personal selling is a universal process. It can be utilized in different areas of life. In society whether he is leader or advocate, producer or labour, teacher or student, doctor or patient all of these can express their opinions to achieve their objectives.

8. Others : Apart from the above characteristics, other characteristics are as follows :

  1. Creative art
  2. Social character
  3. Long term relation
  4. Persuasive leadership.
  5. Slow speed of sales
  6. Quick solution of queries.

Question 5.
How does branding help in creating product differentiation ? Does it help in marketing of goods and services ? Explain.
Branding helps a firm of distinguishing its products from that of its competitors. This helps the firm to secure and control the market for its products. If products were sold by generic names, it would be very difficult for the marketers to distinguish their products from its competitors. Thus, most marketers give a name of their product, which helps in identifying and distinguishing their products from their competitors product. This process of giving a name or a sign or symbol etc. to a product is called Branding.

Question 6.
What are the factors affecting determination of the price of a product or service ? Explain.
There are number of factors which affect the fixation of the price of a product. Some of the important factors in this regard are discussed as below :

(i) Product Cost: The cost sets the minimum level or the floor price at which the product may be sold. There are broadly three types of cost-fixed costs, variable costs and semivariable cost. Total cost is the sum of all these three. Generally, all firms try to cover all their costs, at least in the log sun. In addition, they aim at earning a margin of profit over and above the costs.

(ii) The utility and Demand : The utility provided by the product and the intensity of demand of the buyer sets the upper limit of price. Which a buyer would be prepared to pay. Infect the price must reflect the interest of both the parties to the transaction the buyer and the seller. The buyer may be ready to pay up to the point, where the utility from the product is atleast equal to the sacrifice made in terms of the price paid. The seller would, however, try to cover the costs. According to the law of demand, consumers generally purchase more units at a low price than at a high price.

(iii) The Extent of Competition in the Market : The price is also affected by the nature and degree of competition. The price will tend to reach the upper limit in case there is less degree of competition while under free competition, the price will tend to be set at the lowest level.

(iv) Government and Legal Regulations : In order to profit the interest of public against unfair practices in the field of price fixing, Government can intervenes and regulate the price of commodities. Government can declare a product as essential product and regulate its price.

(v) Pricing objectives : Pricing objectives are another important factor affecting the fixation of the price of a product or a service. Apart from price maximization, the pricing objectives of a firm may include,

(a) Obtaining Market Share Leadership : If a firm objective is to obtain share of the market, it will keep the price of its products at lower level, so that greater number of people are attracted to purchase the products.

(b) Surviving in a competitive Market: If a firm is facing difficulties surviving in the market because of intense competition or introduction of a more efficient substitute by a competitor.

(c) Attaining Product Quality Leadership : Higher prices are charged to cover high in this case, normally quality and high cost of R & D (Research and Development)

(vi) Marketing Methods used Price Fixation : Price is also affected by other elements of marketing such as distribution system, quality of salesman employed, quality and amount
of advertising, sales promotion efforts, the type of packaging, product differentiation, credit facility and customer service provided.

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Question 7.
What do you mean by Channels of distribution’ ? What functions do they play in the distribution of goods and services ? Explain.
People, institutions, merchants and functionaries, who take part in the distribution of goods and services are called ‘Channels of distribution’. Channels of distribution are set of firms and individuals that take title or assist in transferring title, to particular goods or services as it moves from the producers to the consumers.
Channels of distribution smoothen the flow of goods by creating possession, place and time utilities. They facilitate movement of goods by overcoming various barriers the important function performed by middlemen are : –

(i) Sorting : Middlemen procure supplies of goods from a variety of sources which is often not of the same quality, nature and size. These goods are sorted into, homogeneous groups on the basis of the size or quality.

(ii) Accumulation : The function involves accumulation of goods into larger homogeneous stock which help in maintaining continuous flow of supply.

(iii) Allocation : Allocation involves breaking homogeneous stock into smaller, marketable.

(iv) Assorting : Middlemen build assortment of products for resale. There is usually a difference between the product lines made by manufactures and the assortment or combination desired by the users. Middlemen produce variety of goods from different sources and delivers them in combinations, desired by customers.

(v) Product Promotion : Middlemen also participate in some sales promotion activities, such as demonstration, special display, contests, etc. to increase the sales of products.

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

(vii) Risk Taking : In the process of distribution of goods, the merchant middlemen take title of the goods and thereby assume risks on account of price and demand fluctuations, spoilage, destinations, etc.

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Question 8.
Explain the major Activities involved in the physical distribution at products.
Physical distribution covers all the activities required to physically move goods from manufacture to the customers. Important activities involved in the physical distribution include transportation, warehousing, material handing and inventory control.

(i) Order Processing : In a typical buyer-seller relationship order placement is the first step. Products flow from the manufactures to customers via channel members while orders flow from customers to manufactures. Therefore, a good speedy and accurate system of order processing becomes a necessity.

(ii) Transportation : Transportation is the means of carrying goods and raw materials from the point of production to the point of sale. It is one of the major element in physical distribution Of goods. It is important because unless the goods are physically made available the sale can not be completed.

(iii) Warehousing : Warehousing refers to the act of storing and assorting products in order to create time utility in them. The basic purpose of warehousing activities is to arrange placement of goods and provide facilities to store them. The need for warehousing arises because there may be differences between the times, a product is produced and the time it is required for consumption. Generally, the efficiency of a firm in serving its customers will depend on, where these warehouses are located and where are these to be delivered.

(iv) Inventory Control: A very important decision in respect of inventory is deciding about the level of inventory. Higher the level of inventory, higher will be the level of service to customers but the cost of carrying the inventory will also be high because lot of capital

would be tied up in the stock. The decision regarding level of inventory involves prediction about the demand for the product. A correct estimate of the demand helps to hold inventor and cost level down to a minimum. The major factors determining inventory levels include.

(a) Finns policy regarding the level of customer service. Higher the level of service, greater will be need to keep more inventories.

(b) Degree of accuracy of the sales forecast. In case more accurate estimates are available, the need for keeping very high level of inventory can be minimized.

(c) Responsiveness of the distribution system i.e., ability of the system to transmit inventory needs back to the factory and get products to the market.

(d) Cost of inventory, which includes holding cost, such as cost of warehousing, tied up capital, etc. and the manufacturing cost.

Question 9.
Expenditure on advertising is a social waste. Do you agree ?
The opponents of advertising say that the expenditure on advertising is a social waste as it adds to the cost, multiplies the needs of the people and undermines social values. The proponents, however argue that advertising is very useful as it increases the reach, brings the per unit cost of production down and adds to the growth of the economy.
Following are the point of criticism :

(i) Adds to cost: The opponents of advertising argue that advertising unnecessarily adds to the cost product, which is ultimately passed on to the buyers in the form of high prices. It is line that advertisement of a product cost lots of money but it helps to increase the demand for the product as large number and potential buyers come to know about the availability of the products, its features, etc. and persuaded to buy it.

This increases the demand and therefore the production. As a result, the per unit cost of production comes down as the total cost is divided by larger number of units.

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

(iii) Confuses the buyers : Another criticism against advertisements is that so many products are being advertised which makes similar claims that the buyer gets confused as to which one is true and which should be relied upon, e.g., there are so many brands of soaps, shampoos, cars, Tvs, cell phones etc. which are advertised.

The supporters of advertisement, however argued that we are all rational human beings who make our decisions for purchase of products on factors, such as price, style, size etc. Thus the buyers can clear their confusion by analyzing the information provided on the advertisements and other sources before taking a decision to purchase a product.

(iv) Encourages Sales of Inferior Product: Advertising does not distinguish between superior and inferior products and persuade people to purchase even the inferiors products. The desired level of quality will depend on the economic states and preference of the target customers. Advertisements sell products of a given quality and the buyers will buy, if it suits their requirements.

(v) Some advertisements are in Bad Taste : Another criticism against advertising is that some advertisements are in bad taste. They show something which is not approved by some people. Some advertisement spoil the relationship between employer and employee, husband and wife etc.

From the above discussion, we have learnt that through advertisements are criticized but still they have their own advantages. It is not a social waste, rather it adds value of the social cause by giving a boost to production and generating employment.

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Question 10.
Write the differences between advertise and personal selling,
Differences between Advertising and Personal Selling :
MP Board Class 12th Business Studies Important Questions Chapter 11 Marketing Management image - 3
Question 11.
Differentiate between Marketing and Selling.
Differences between Selling and Marketing :


  1. Focus is on seller’s need.
  2. Product enjoys supreme importance.
  3. Concerned with selling the goods already produced.
  4. Presupposes existence of demand.
  5. It is fragmented approach to achieve immediate gains.
  6. Converting products into cash.
  7. Caveat import Let the buyer beware,beware, implies in selling.
  8. Profit through sales volume, is made in selling.


  1. Focus is done on customer’s need.
  2. Customer enjoys supreme importance.
  3. Product planning and development to match product with markets.
  4. Demand has to be created and main- trained.
  5. It is integrated approach to achieve long-term goals.
  6. Marketing is converting customer’s needs into products.
  7. Caveat vender Let the seller beware,implies in marketing.
  8. Profit through customer’s satisfaction,is made in marketing.

Question 12.
What do you mean by labelling ? Write its advantages.
Meaning :Label on a product provides detailed informaition about the product, its contents, methods of use etc. the various functions perform med by a label are as follows :

(i) Describe the product and specify its contents one of the most important functions
of labels in that it describe the product, its us age, cautions in the use, etc. and specify its contents.

(ii) Identification of the product or Br and a label helps in identifying the product or brand e.g., we can easily pick our favourite soap from a lumber of packages only because of its label.

(iii) Grading of products labels help grading the products into different categories. Sometimes, marketers assign different grades to indicate features or quality of the product e.g., different type of tea is sold by some brands under “Fellow, Red and Green lable categories.

(iv) Help in promotion of an important function of label is to aid in promotion of the products. A carefully deslgned label can a the customer to purchase. So, many labels provide promotional me usages, some shove discount or other schemes etc.

(v) Providing information required by law: Another important function of labelling is to provide information required by , raw e.g., the statutory warning on the package of cigarette or pan masala ‘Smoking is injuring to health’ or ‘Chewing tobacco causes cancer.

Advantages : Labelling has the following advantages :

  1. Useful Information : Labelling provides useful information regarding the name of product, address of manufacturer or dealer, contents, ingrediants, safety warning, etc.
  2. Helps in Identification : It helps to identify the product or brand.
  3. Helps in Grading : It enables the producer to grade his product into various categories. .
  4. Control Price Fluctuation : Since the price printed on the labels, variations in price are avoided.

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Question 13.
Explain the factors affecting marketing mix.
The factors affecting marketing mix are :

1. Planning and development of product: Planning and development of product is one of the important factors of marketing mix. An ideal enterprise makes an ideal plan for a product. Nowadays customer demands will designed, fashionable and high quality product. This is possible only when the factor of planning and development of product is included in the manufacturing of a product for an enterprise.

2. Pricing : The price of a product affect the marketing of any product. If the price is fixed high then product will be eliminated from market and if price is fixed less then enterprise will face losses. The ups and downs in prices directly affect the marketing. The prices are fixed after considering different factors in marketing.

3. Distribution channels : Channel of distribution refers to that path through which products reach ultimate consumers. Many people and firms participate in this path. In distribution channel it is seen that what should be the medium of sales, where it will take place, direct sales or through middle men, sales will be local or product will be sent to other places are important factors for marketing mix.

4. Sales promotion : Today in this marketing system* a good product cannot be sold without an effective advertisement. Apart from advertisement there are other methods of sales promotion. Thus an ideal sales promoter for. increasing the demand of products makes marketing programmes because without promotion a business cannot develop. The functions included in sales promotion are advertisement, publicity, public relations, etc.

5. Sales force : The complete management of sales force is performed as a factor of marketing mix. Under sales force fixation of sales limit, nature of sales, personal selling limit, consumer services are included in marketing mix.

6. Marketing research : Marketing research is having an important place as a factor in marketing mix. In this estimates are made after identifying the interest of consumers, demand of products is determined, knowing the reactions of consumers about products, etc. Tor all these activities research and survey is essential. It is also considered as a factor of marketing mix.

Question 14.
Describe the factors to be considered while selecting a medium of advertising.
The following factors must be considered while selecting a medium of a advertising:

1. Nature of market : Nature of market means the place where the customer lives. Advertising should be done through such medium that it reaches customers. If the market is in nations, it is better to advertise through radio, television, etc. But if the market is local, than it is better to advertise through local newspapers, magazines, etc.

2. Distribution system : While selecting the medium of advertisement the distribution system should be kept in mind. The place where proper channel of distribution is not present it is waste to advertise the product there. Advertising should be done where proper channel of distribution is managed.

3. Media cost: Media cost means what is the cost of advertisement ? The medium should be selected which is comparatively cheap, also properly covers. The customers and generates the demand of products.

4. Number of audience : Number of audience here means to whom the advertisement reaches and what is the number ? Audience are of various types like male, females, children, teenager, etc. If customers are females the medium of advertisement should be magazines, television, etc.

5. Level, of audience : The audience of advertisement are of different types and level like rich class people, middle class people or lower class people. If the advertisement is to reach rich class society then medium of advertisement will be television, internet, magazines,etc. For middle class medium of advertisement can be TV., Radio, etc.

6. Nature of goods : Goods are of various types like goods for consumption, industrial goods, office equipment, etc. For these types of goods there are different types of medium of advertisement.

7. Objectives of advertisement: It is necessary to know the objectives of advertisement before giving the advertisement. This is done to select the best possible medium of advertisement.

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Question 15.
what are the Qualities of good salesman ?
Essential qualities of an effective salesman are :

1. Personality : A good salesman should possess a good personality. What fragrance is to a flower is personality to an individual. It is the ability to impress others. A charming personality always creates a good impression. He should possess good health, attractive appearance and impressive voice. He should not suffer from physical handicaps like stammering and limping, etc.

2. Cheerful Disposition : He should have a smiling face. It is rightly said that ‘a man without a smiling face must not open a shop. In order to impress upon the customers he should always be cheerful and sweet tempered. He should be properly dressed as the dress greatly enhances the personality.

3. Mental Ingredients : An individual cannot be a successful salesman unless he possesses certain mental qualities like imagination, sound judgment, presence of mind, foresightedness, initiative and strong memory. These qualities are of great help to a salesman in dealing with customers having different nature and temperament. He can successfully tackle the customers. The mental qualities are very helpful in creating permanent customers for the product.

4. Courtesy: A salesman should always be polite and courteous towards his customers. It costs nothing but wins permanent customers for the product. He should help the customers in making the right choice or in selecting the products. This will definitely help in winning over the confidence of the customers.

MP Board Class 12 Business Studies Important Questions

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