Marketing Aptitude

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Chapter -1
Marketing and Its Concepts
The term marketing may be interpreted in the traditional sense and the modern sense.
Traditional Meaning of Marketing

According to this concept, marketing consists of those activities which are concerned with the
transfer of ownership of goods from producers to consumers. Thus, marketing means selling of goods
and services. In other words, it is the process by which goods are made available to ultimate consumers
from their place of origin. The traditional concept of marketing corresponds to the general notion of
marketing, which means selling goods and services after they have been produced. The emphasis of
marketing is on sale of goods and services. Consumer satisfaction is not given adequate emphasis.
Viewed in this way, marketing is regarded as production/sales oriented. This concept has the following
implications:
1. The main focus of this concept is on product, ie, we have a product and it has to be sold. So, we
have to persuade the consumers to buy our product.
2. All efforts of the marketing people are concentrated on selling the product. They adopt all means
like personal selling and sales promotion to trust the sales.
3. The ultimate goal of all marketing activity is to earn profit through maximization of sales.
Traditional Meaning of Marketing
Focus on
Means
Ends
Product
Selling
Profits through maximization of sales
Modern Meaning of Marketing

According to the modern concept, marketing is concerned with creation of customers. Creation
of customers means identification of consumer needs and organizing business to satisfy these needs.
Marketing in the modern sense, involves decisions regarding the following matters:
1.
2.
3.
4.
Products to be produced.
Prices to be changed from customers.
Promotional techniques to be adopted to contact and influence existing and potential customers.
Selection of middlemen to be used to distribute goods and services.
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Modern concept of marketing requires all the above decisions to be taken after due consideration
of consumer needs and their satisfaction. In other words, the products and services are planned
according to the needs of the customers rather than according to the availability of materials and
machinery. Not only that, all activities (manufacturing, research and development, quality control,
distribution, selling etc) are directed to satisfy the consumers. Thus, the main implications of the
modern concepts are :
a. The focus of this concept is on customer orientation. The marketing activity starts with an
assessment of the customers needs and plan the production of items that satisfy these needs must
effectively. This also applies to all other marketing activities like pricing, packaging, distribution
and sales promotion.
b. All marketing activities like product planning, pricing, packaging, distribution and sales
promotion are combined into one as co-ordinated marketing efforts. This is called integrating
marketing. It implies.
i.
developing a product that can satisfy the needs of the consumers.
ii.
taking promotional measures so that consumers come to know about the products, its
iii.
features, quality, availability etc.

pricing the product keeping I mind the target consumers purchasing power and
iv.
willingness to pay.
Packaging and grading the product to make it more attractive and undertaking sales
promotion measures to motivate consumers to buy the product. And

v.
taking various other measures (eg, after sales service) to satisfy the consumers needs.
c. The main aim of all efforst is to earn profit through maximization of customer satisfaction. This
implies that, if the customers are satisfied, they will continue to buy and many new customers
will be added. This will lead to increase sales and also the profit.
Modern Meaning of Marketing
Focus on
customers needs
Means
Co-ordinated marketing efforts
Ends
profit through customers satisfaction
It may be noted that with growing awareness of the social relevance of business, marketing has to
take into account the social needs and ensure that while enhancing consumer satisfaction, it also aims at
societys long term interest.
Definitions of Marketing
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1. Marketing is the process of planning and executing the conception, pricing, promotion and
distribution of ideas, goods and services to create exchanges that satisfy individual and
organizational objectives. American Marketing Association.
2. Philip Kotler defines marketing as Satisfying needs and wants through an exchange process.
3. The Charted Institute of Marketing defines marketing as The management process responsible
for identifying, anticipating and satisfying customer requirements profitably:.
4. Marketing is essentially about marshalling the resources of an organization so that they meet the
changing needs of the customer on whom the organization depends. Palmer
5. Marketing is the process whereby society, to supply its consumption needs, evolves distributive
systems composed of participants, who, interacting under constraints technical (economic) and
ethical (social) create the transactions or flows which resolve market separations and result in
exchange and consumption. Bartles
Marketing Concepts
Marketing is based on many concepts as per the orientation and perception of the forms about the
business and market place. Those concepts are given here below
Marketing Concepts
Exchange
Concepts
Production
Concept
Product
concepts
Sales Concept
Phenomenon
Marketing
of marketing
concept
myopia
1. Exchange concept : This concept of marketing indicates that the exchange of a product between
the seller and buyer is necessary.
2. Production Concept : According to the production concept, production dominates the thinking
process of the consumers. In this concept consumers support those products which are produced
in a great volume at a low unit cost. Those organizations which believe in this concept, focus on
production. They believe that lower cost will attract the consumer automatically.
3. Product concept : Under this philosophy, the organizations focus on the quality of the product.
The organizations try to provided good quality of products to its customers. They try to make
their presence in the market place by providing good quality of products, new products to its
customers.
4. Sales concept: In this concept, organization believes in large sales promotion to maximize their
selling. They do heavy advertising, high power personal selling, heavy price discounts and strong
publicity to get the higher volume of sales. Again, the customer is being neglected in this
concept.
5. Phenomenon of marketing myopia The term marketing myopia is given by Prof Theodore
Levitt in his article Marketing Myopia which was published in the Journal of Harvard Business
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Review. He has mentioned in the article that when an organization gives excessive attention to
production or the product or selling at the cost of the customers actual needs then marketing
myopia is created.
6. Marketing concept According to this concept organization focuses on consumer. They start their
business with determination of consumers wants and with the satisfaction of those wants. In this
concept, consumer is at both the beginning and the end of business cycle. It stipulates that a
company should try to meet the customers requirements. The customers need becomes the focal
point of the business.
Features of Marketing Concept

1. Consumer orientation This feature of marketing concept enables the firm to look at its business
from the point of view of the consumer. All attentions are given to the requirements of the
consumers.
2. Integrated management: Integrated management means that all the different functions of the
business must be integrated and aligned in such a way that fulfils the objectives of the firm.
3. Consumer satisfaction The marketing concept does not believe only to find out the needs of the
consumers but to provide them satisfaction as well.
4. Realisation of all organizational goals including profits: The marketing concept never says
that a firm should only generate the requirements of consumer and satisfy them and forget to
achieve its own goal of getting profit. Instead, it says that consumer satisfaction is the pathway to
the attainment of the goals of the organization. It is quite obvious that if a firm has succeeded to
generating consumers satisfaction, then the firm has given a quality of product, offered at
competitive price and prompts services and has succeeded to creating a good image. Hence, for
achieving these results, firm has alone its best and in this process, organizational goals including
profit are automatically realised.
Holistic Marketing Concept

The holistic marketing concept is based on the development, design and implementation of
marketing programmes, processes and activities that recognizes their breadth and interdependencies.
Holistic marketing recognizes that everything matters with marketing and that a broad, integrated
perspective is often necessary.
Components of Holistic Marketing
Relationship marketing
Integrated marketing
Internal Marketing
Social
marketing
responsibility
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1. Relationship Marketing
Relationship marketing is basically building mutually satisfying long term relationships
with key parties like customers, suppliers, distributors, and other marketing partners in order to
earn and retain their business. Relationship marketing builds strong, economic, technical, and
socialites among the parties. An ultimate outcome of relationship marketing is the building of a
unique company asset called marketing network.
2. Integrated Marketing
The marketers task is to devise marketing activities and assemble fully integrated
marketing programmes to create, communicate, and deliver value for consumers. The marketing
programmes consist of numerous decisions on value enhancing marketing activities to use.
3. Social Responsibility Marketing
Holistic marketing incorporates internal marketing, ensuring that everyone in the organization
embraces appropriate marketing principles, especially senior management. Internal marketing is the
task of hiring. Training and motivating able employes who want to serve customers well. Smart
marketers recognise that marketing activities within the company can be as important as, or even
more so than, marketing activities directed outside the company. It makes no sense to promise
excellent service before the companys staff is ready to provide it.
4. Social Responsibility Marketing
Holistic marketing incorporates social responsibility, marketing and understanding
broader concern and the ethical, environmental, legal and social content of marketing activities
and programmes. The causes and effects of marketing clearly extend beyond the company and
the consumer to society as a whole. Social responsibility also requires that marketers carefully
consider the role that they are playing and could play in terms of social welfare.
The social marketing concept calls upon marketers to build social and ethical
considerations into their marketing practices. They must balance and juggle the often conflicting
criteria of a company profits consumer want satisfaction and public interest.
Nature of Marketing
1. Need, want and demand The process of marketing helps individuals and groups in obtaining
what they need and want. Thus, the primary reason or motivation for people to engage in the
process of marketing is to satisfy some of their needs or wants. In other words, the focus of the
marketing process is on satisfaction of the needs and wants of individual and organization. A
need is a state of felt deprivation or feeling of being deprived of something. If unsatisfied, it
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leaves a person unhappy and uncomfortable.
For example, on getting hungry, we become
uncomfortable and start looking for objects that are capable of satisfying our hunger.
Needs are basic to human beings and do not pertain to a particular product. Wants, on the
other hand are culturally defined objects that are potential satisfiers of needs. In other words,
human needs shaped by such factors as culture, personality and religion are called wants. A basic
need for food, for example, may take various forms such as want for dosa and rice for a South
Indian and Chapati and vegetable for a North Indian person. A marketers job in an organization
is to identify needs of the target customers and develop products and services that satisfy such
needs.
Demands are wants for specific products backed by an ability to pay. Many people want
a Mercedes, only a few are willing and able to buy one. Companies must measure not only how
many people want their product but also how many would actually be wrilling and ale to buy it.
2. Creating a market offering On the part of the marketers, the effort involves creation of a
market offering, market offering refers to a complete offer for a product or services, having given
features like size, quality, taste, etc, at a certain price, available at a given outlet or location and so
on let us say the offer is for a cell phone
Available in four different version on the basis of
certain feat uses such as size of memory, television viewing internet, camera, etc, for a given
price, say between Rs.5000 and Rs.20000 (depending on the model selected) available for sale at
say firms exclusive shops in and around all metropolitan cities in the country. A good market
offer is the one which is developed after analyzing the needs and preferences of the potential
buyers.
3. Customer Value The process of marketing facilitates exchange of products and services between
the buyers and the sellers. The buyers however, make buying decisions of their perceptions of the
value of the product or service in satisfying their need, in relation to its cost. A product will be
purchased only if it is perceived to be giving greatest benefit or value for the money. The job of a
marketer, therefore is to add to the value of the product so that the customers prefer it in relation
to the competing products and decide to purchase it.
4. Exchange mechanism : The process of marketing works through the exchange mechanism. The
individuals (buyers and sellers) obtain what they need and want through the process of exchange.
In other words, the process of marketing involves exchange of products and services for money
or something considered valuable by the people. Exchange refers to the process through which
two or more parties come together to obtain the desired product or service from someone,
offering the same by giving something in return. For example, a person feeling hungry may get
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food by offering to give money or some other product or services in return to someone who is
willing to accept the same for food. In the modern world, goods are produced at different places
and are distributed over a wide geographical area through various middlemen, involving
exchanges at different levels of distribution. Exchange is, therefore referred to as the essence of
marketing. For any exchange to take place it is important that the following conditions are
satisfied
i.
Involvement of at least two parties viz, the buyer and the seller.
ii.
Each party should be capable of offering something of value to the other. For example,
iii.
the seller offers a product and the buyer money.

Each party should have the ability to communicate and deliver the product or service. No
exchange can take place if the buyers and sellers are not able to communicate with each
iv.
other or if they cannot deliver something of value to the other.

Each part should have freedom to accept or reject other partys offer.
Thus, the
acceptance or rejection of the offer takes place on voluntary basis rather than on the bases
v.
of any compulsion.
The parties should be willing to enter into transaction with each other.
The points listed above are the necessary conditions for an exchange to take place. Whether the
exchange actually takes place or not depend on the suitability of the act of exchange to both the parties,
whether it makes the parties betters off or at least not worse off.
Another important point to be noted is that marketing is not merely a business phenomena or
confined only to business organizations.
Marketing activities are equally relevant to non-profit
organizations such as hospitals, schools, sports, clubs and social and religious organization. It helps these
organizations in achieving their goals such as spreading the message of family planning, improving the
literacy standards of people and providing medication to the sick.
What can be marketed?

The question commonly coming to the mind is what can be marketed. It is a product or service or
something else. Let us first understand what is a product? A product is a bundle of utilities or source
of satisfaction that can be used to satisfy human needs and wants. It is not confined to physical objects,
such as motor cycle, biscuit, bulb and pencil but also refers to other things of value such as services,
ideas, places, etc, that can be offered to the potential buyers for their use. in the marketing literature,
anything that can be of value to the buyer can be termed as a product. It can be tangible, ie, which can be
felt, seen and touched physically such as a pencil, a cycle or an intangible such as services rendered by a
doctor, hair dresser or a lawyer. Apart from the product, what can be marketed is a service or a person
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(say political parties persuading to vote for a particular candidate) or an ideal (say red Cros persuading to
donate blood) or a place 9 say Kerala Tourism persuading people to visit Kerala for health tourism).
Thus, anything that is of value to the other can be marketed. It can be a product or a service or a person
or a place or an idea or an event or an organization or experience or properties.
Who is a Marketer?
Marketer refers to any person who takes more active part in the process of exchange. Normally it
is the seller who is more active in the exchange processes as he/she analysis the needs of the potential
buyers, develops a market offering and persuades the buyers to buy the product. However, there may be
certain situations where the buyer may be taking more active role in the exchange process. Let us say in
situations of rare supply, the buyer may be taking extra efforts in persuading the seller to sell the product
to him/her. This may be happening in defence deals or take a situation where a country having installed a
nuclear plant needs the supply of nuclear fuel or heavy water It may need to convince the supplier of
the products to supply the same to it, by promising that it will be used for peaceful purposes only. In this
case, the buyer will be treated as the marketer. Thus, anybody, who takes more active role in the
exchange process, will be taken as the marketer.
Scope of Marketing
The scope of marketing has been increased a lot in this modern time. The following are included
under the study of scope of marketing.
1. Decision relating to product In marketing product related decisions are being taken after taking
the customer related decisions. Generally, we decide that Which product is to be produced how
much is to be produced All the decisions related to product like size, colour, design, packaging,
etc, are taken under this.
2. Decisions relating to consumers Marketing starts from study of requirements of consumers.
Under this heading, we study about needs of the consumers, at what price the consumers will buy
the product and which type of product they buy etc. A separate market research department is
establishing to accomplish this task.
3. Promotional decisions Promotional decisions are also being taken under marketing like
advertisement is to be done or not? What media should be adopted? How, when and where
promotions is to be done?
4. After sale service decision Marketing never ends with selling but it is the function of marketing to
find out whether customer is satisfied with that product or not hence, the customer will use that
product again. Therefore, it is to be decided that which type of services should be provided to the
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customer after sale of the product and upto how many days and which type of service after sale is
to be given to the customer.
Difference between Marketing and Selling

The term marketing and Selling are related but not synonymous. Marketing as stated
earlier, emphasizes on earning profits through customer satisfaction. In marketing, the focus is on the
consumer needs and their satisfaction. Selling on the other hand, focuses on product and emphasizes on
selling what has been produced. In fact it is a small part of the wide process of marketing wherein
emphasis in initially on promotion of goods and services and eventually on increase in sales volume.
Marketing has long term perspective of winning over consumer loyalty to the product by
providing him maximum satisfaction. However, selling has short term prospective of only increasing the
sales volume.
In marketing, the consumer is the on king whose needs must be satisfied. In selling, the product is
supreme and the entire focus is its sale. Marketing starts before production and continues even after the
exchange of goods and services has taken place. It is so because provision of after sale service is an
important component of marketing process. Selling starts after the production and ends as soon as the
exchange of goods and services has taken place.
Difference between Marketing and Selling

Marketing
Marketing includes selling and other activities like
Selling
Selling is confined to persuasion of consumers to
various promotional measures marketing research,
buy firms goods and services.
after sales services etc.

It starts with research on consumer needs, wants,
Selling starts after the production process is over
preference, likes, dislikes, etc and continues even
and ends with the handing over the money to the
after the sales have taken place

Focus in on earning profit through maximization of
seller by the buyer.

Focus is on earning profit through maximization of
customers satisfaction
Customers need is the central point around whom
sales.
Fragmented approach to achieve short-term gain.
all marketing activities revolve

It is an integrated approach to achieve long term
All activities revolve around the product that has
goals like creating, maintaining and retaining the
been produced
customers
Stresses on needs of buyer
stresses on needs of the seller.
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Importance of Marketing
Marketing is important to the business, consumer as well as the society. This is evident from the
following points:
a) Marketing helps business to keep pace with the changing tastes, fashions, preference of the
customers. It works out primarily because ascertaining consumer needs and wants is a regular
phenomenon and improvement in existing products and introduction of new product keeps on
taking place.
Marketing thus, contributes to providing better products and services to the
consumers and improve their standard of living.

b) Marketing helps in marketing products available at al place and throughout the year. We are able
to get Kashmir shawls and Assam tea all over India and get seasonal fruits like apples and
oranges round the year due to proper ware housing or proper packaging. Thus, marketing creates
time and place utilities.
c) Marketing plays an important role in the development of the economy. Various fuctions and subfunctions of marketing like advertising, personal selling, packaging transportation, etc, generate
employment for a large number of people and accelerate growth of business.
d) Marketing helps the business in increasing its sales volume, generating revenue and ensuring its
success in the long run.
e) Marketing also helps the business in meeting competition most effectively.
Objectives of Marketing
Marketing activities are organized to achieve the following objectives :
a) Provide satisfaction to customers All marketing activities are directed towards customers
satisfaction. Marketing starts with ascertaining consumer needs and produce goods that satisfy
those needs most effectively. Not only that the pricing and distribution functions of marketing are
also planned accordingly.
b) Increase in demand Through advertising and other sales promotional efforts, marketing aims at
creating additional demand for their products. Satisfied customers also help in creating new
customers. For example, if you buy a gel pen and feel satisfied, next time also you will buy the
same pen and obviously when you tell others about it they will also feel like giving it a try.
c) Provide better quality product to the customers This is a basic objective of marketing. The
business houses try to update and upgrade their knowledge and technology to continuously
provide better products. If they do not do so, they will be phased out through competition.
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d) Create goodwill for the organization Another objective of marketing is to build a good public
image and create goodwill for the organization. This helps is maintaining loyalty to the product
and accepting new products of the same company
e) Generate profitable sales volume The ultimate objective of all marketing efforts is to generate
profitable sales volumes for the business.
Taking care of customers needs and wants by
providing the required goods and services at prices they can afford and at places and timing that
are convenient to them ultimately lead to increased sales and profits.
Role of Marketing
1. Role of marketing in business Marketing plays an important role in business. It is an important
factor in the success of business. Those firms which have ignored the importance of marketing have
suffered in the long run. Marketing involves ascertaining the needs and requirements of customers.
This enables the firms to produce goods and services accordingly. Demand for goods and services is
created through the techniques of advertising and personal selling. Goods and services are distributed
among consumers to meet the demand. Prices are fixed at a level which customers can afford to pay.
Goods are distributed at the place and time convenient to customers. All these activities have to be
performed systematically to let business earn profits. The role of marketing in business success has
become vital because of the following reasons.
1. Technological changes are taking place at fast pace
2. Competition has become intense in the market.
3. Consumer tastes and preferences are changing very fast.
4. Production is organized on a large scale.
A business firm is required to remain familiar with market development and adjust its
activities according to changing conditions due to the reasons mentioned above. Marketing plays
an important role in making these adjustments.
2. Role of marketing in society: Marketing has also an important role in society. It makes new and
better products available to people, increasing their standard of living. It helps in creation of new
jobs. It bridges the gap between production and sale of goods, making economic activity possible. It
integrates agricultural and industrial sectors.
country.
Functions Performed in marketing
Overall it leads to economic development of the
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Marketing involves distribution of goods producers to ultimate consumers.
A number of
operations need to be performed while carrying. out the function of distribution of goods. These
operations are termed as functions of marketing and have been discussed below.
1. Marketing research Marketing research involves collection and analysis of facts relevant to
various aspects of marketing. It is a process of collection and analyzing information regarding
customer needs and buying habits, the nature of competition in the market, prevailing prices,
distribution network, effectiveness of advertising media etc. Marketing research gathers records
and analysis facts for arriving at rational decisions and developing suitable marketing strategies.
2. Product planning and development As you know marketing starts much before the actual
production. The marketers gather information regarding what are the needs of the consumers and
then decide upon what to produce. So, the task of marketing begins with planning and designing
a product for the consumers. It can also be done while modifying and improving an already
existing product. For example, now-a-days we find much better soaps and detergent powders
than we used to get earlier. Similarly, we have many new products introduced almost on a regular
basis.
3. Buying and assembling Buying and assembling activities as a part of marketing refer to buying
and collection of required goods for resale. This function of marketing is primarily relevant to
those business organization that are engaged in trading activities. In the content of manufacturing
organizations, buying and assembling involves buying raw materials and components required for
production of finished goods.
4. Packaging Packaging involves putting the goods in attractive packets according to the
convenience of consumers. Important considerations to be kept in view in this connection are the
size of the package and the type of packaging material used. Goods may be packaged in bottles
(Plastic or glass), ones (made of tin, glass, paper, plastic), cans or bags. The size of the package
generally varies from a few grams to a few kilograms.
One piece to a number of pieces of a product, or in any other suitable quantity in terms of
weight, count, length, etc. Packaging is also used as a promotional tool as suitable and attractive
packages influences the demand of the products. It may be noted that packaging in different from
packing, which refers to putting goods in suitable containers for transportation purposes.
5. Standardisation and grading Standardisation refers to development of standards for production
of goods with respect to shape, design, colour and other characteristics.
If products are
standardized, customers are able to identify a product and its characteristics very well. So goods
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can be sold by sample or description. Standardisation helps in promoting the sale of the product
by increasing consumers confidence in the product quality.
Grading involves separating products into different classes on the basis of certain predetermined
standards relating to size and quality. Grading is required in case of agricultural, forest and
mineral products such as cotton, sugarcane, iron ore, coal, timber, etc.
6. Branding Branding means giving an attractive name, symbol or identity mark to the product to
make a product different from others so that it is known by that name or symbol or mark. For
example, Surf is the brand name of a detergent powder produced by Hindustan Unilever Limited
(HUL) Similarly, you must be familiar with brands like Colgate for toothpaste, Lux for soap and
so on.
7. Pricing the product Pricing involves decisions regarding fixation of product prices, keeping in
view the product costs, the capacity of customers to pay and the prices of the competitive
products. It is an important decision as it influences the sales and so also the profits. So pricing
has to be done very carefully.
8. Promotion of the product: Promotional activities include advertising, personal selling, sales
promotion and publicity. All promotional activities involve communication with the existing and
prospective customers whereby they are made aware of the product, its distinctive features, price,
availability, etc. The objectives of promotional activities is to motivate the customers to buy the
product.
9. Distribution Distribution refers to those activities that are undertaken for sale of products to the
customers and the physical transfer there-of. The first aspect, ie, sale o product involves use of
middleman such as wholesalers and retailers whose services are used for making the products
available at convenient points and helping in their sale to the ultimate consumers. The second
aspect, ie, physical transfer involves warehousing and transportation of goods from the point of
production to the point of sale or the consumer. The objective of distribution activities is to
ensure that consumers get the goods and services at the place and time most convenient to them
and in the desired quality.
10. Selling Selling is an important function of marketing whereby the ownership of goods and
services is transferred from the seller to the buyer for a consideration known as price. To initiate
and complete the process of selling the seller has to inform the prospective buyer about
availability of goods, the nature and uses of products their prices and the needs of the customers
that may be effectively satisfied by the product. In the process, he arouses customers; Interest in
the product and persuades them to buy it.
11. Storage and warehousing Storage refers to holding and preserving goods from the time of their
procurement or production till the time of this sale. In other words, storage involves making
suitable arrangements for preserving the goods till they are bought by the consumers and
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delivered to them. Warehousing is synonymous to storage but is normally used for large scale
storage but is normally used for large scale storage facility for goods and commodities. You must
have seen cold storage where vegetables like tomato, cabbage, potato, etc, are stored to be
consumed throughout the year. In marketing, it is essential to store raw material and finished
goods to be used later by the company for production or for resale.
12. Transportation Transportation refers to the physical movement of goods from one place to
another. In marketing, transport as an activity refers to physical moment of raw materials as well
as finished goods from the place of production to place of consumption. Goods are transported
through various means like railways, roadways waterways and airways. For heavy and bulky
goods, the railways and waterways are the best. For other goods, it depends upon the demand,
const involved, urgency, nature of the goods, etc, to decide about a suitable means of
transportation.
Objective Questions
1. One
2.
3.
4.
5.
of
the
methods
for
market
monitoring is
(a) to watch TV Serial
(b) to discuss with other sales persons
(c) to monitor media outlets
(d) All of the above
(e) None of the above
Market expansion means
(a) hiring more staff
(b) firing more staff
(c) buying more products
(d) buying more companies
Effective marketing helps in
(a) developing new products
(b) Creating a competitive environment
(c) building demand for products
A call in marketing means
(a) developing new products
(c) Building demand for products
Market survey means
(a) market research
(b) market planning
(c) marketing strategies
(d) market monitoring

(e) All of the above
6. If done through .
the
rural
marketing would be more effective.

(a) fairs
(b) village fairs
(c) door- to-door campaign
7. The rural marketing is not required
because
(a) rural people do not understand
marketing
(b) it is not practical from the cost point
of view
(c) it is sheer wastage of time
(d) All are wrong
(e) All the correct
8. The aim of successful marketing is
(a) to increase the sale
(b) to increase the profit
(c) to increase the output of sellers
9. When was the Reserve Bank of India
established?
(a) 1935
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(b) 1920
(c) 1928
(d) 1947
(e) None of these
10. Which is the largest commercial bank in
India?
(a) Reserve Bank of India
(b) State Bank of India
(c) ICICI Bank
(d) Bank of India
11. Buying and selling in the marketing
functions are categorized as
(a) exchange functions
(b) facilitating functions
(c) distribution functions
12. Which among the following come under
facilitating category
of
marketing
functions?
(a) Standardising and grading
(b) Standardising
and
grading,
financing and risk taking
(c) Standardising
and
financing,
risk
taking,
grading,
securing
market information
13. Which among the following is the most
basic concept underlying marketing?
(a) Product
(b) Market
(c) Needs, wants and demands
14. The need or want for a particular
product becomes a demand, when.
(a) the product/service is available
(b) it is backed by buying power
(c) a product represents that particular
need
(e) None of the aove
15. Which among the following is called

like blood of business?
(a) Marketing
(b) Product
(c) Finance
(d) All of these
(e) None of these
16. Which among the following is included
in marketing decisions?
(a) Promotion decision
(b) Project cost decision
(c) Finance decision
17. Among which of the following is related
to bank risks?
(a) Deposits
(b) Bank funds
(c) NPA
(d) All of these
(e) None of these
18. Which among the following is a
customer oriented concept?
(a) Selling concept
(b) Marketing concept
(c) Production concept
19. Social marketing concept is based upon
(a) large target market with active
buyers
(b) customer satisfaction and customer
welfare
(c) realization
of
maximum
profit
through service of society

20. Which among the following may be
called a pillar of marketing concept?
(a) Customer orientation
(b) Product planning
(c) Cost budgeting
21. What is the full form of ECB?
(a) Extra Commercial Banking
(b) Extra commercial borrowings
16
(c) External Commercial Borrowings
22. A lead means
(a) a prospect who is more likely to
23.
24.
25.
26.
avail of the banks product

(b) a political leader
(c) a religious leader
(d) a bank chairman
The traditional marketing style involves
(a) telemarketing
(b) digital marketing
(c) indirect marketing
(d) direct marketing
Modern methods of marketing include
(a) publicity on the net
(b) advertisement on the net
(c) soliciting business through e-mails
(d) telemarketing
Bank marketing means
(a) selling of banks
(b) merger of banks
(c) selling banks products and services
(d) selling various items in banks
Find the true statement
(a) Marketing is a waste of the
employees time
(b) Marketing is not required in India
due to its vast population
(c) Marketing involves additional work
(d) Marketing involves team work
(e) Marketing is not required today due
to IT advancement
27. Market information means
(a) knowledge of shops and bazaars
(b) knowledge of shopping malls
(c) knowledge of customer profile and
product mix
(d) knowledge of various languages
28. If marketing is done effectively which
of the following is not required?
(a) Advertisement
(b) Publicity
(c) Market research

(d) Market segmentation
29. Payment of a cheque cannot be made on
a cash counter of bank if the cheque is
(a) bearer
(b) cross
(c) order
30. What is the full form of LIC?
(a) Life Insurance Corporation
(b) Life Insurance Commission
(c) Life India Corporation
31. Marketing concept is based on
(a) profit
(b) Loss
(c) customer oriented
(d) product oriented and centred
32. Which is centre point of marketing
concept?
(a) Large scale organisation
(b) Production on large scale
(c) Profit
(d) Customer
33. Customerisation means
(a) goods offer on various conditions
(b) sales
(c) promotion
34. Profit by customer satisfaction is a tool
of
(a) old concept of marketing
(b) new concept of marketing
(c) production
(d) Price
35. Nature of marketing involves
(a) promotion decision
(b) determination
of
distribution
channel
(c) after sale service
17
36. Full form of PAN is
(a) Product Account Number
(b) Permanent Account Number
(c) Payment Account Number
37. which among the following may be

38. Marketing is successful when
(a) demand exceeds supply
(b) supply exceeds demand
(c) Salesman are effectively trained
39. Global marketing is a result of
(a) domestic charge
(b) globalization
(c) privatization
(d) None of the above
called a pillar of marketing concept?

(a) Customer orientation
(b) Product planning
(c) Cost budgeting
Answers
1.
11.
21.
31.
(c)
(a)
(b)
(c)
2.
12.
22.
32.
(e)
(c)
(a)
(d)
3.
13.
23.
33.
(d)
(c)
(c)
(a)
4.
14.
24.
34.
(d)
(b)
(e)
(b)
5.
15.
25.
35.
(a)
(c)
(c)
(d)
6.
16.
26.
36.
(b)
(a)
(d)
(b)
7.
17.
27.
37.
(d)
(c)
(c)
(a)
8.
18.
28.
38.
(d)
(b)
(b)
(c)
9.
19.
29.
39.
(a) 10. (b)

(b) 20. (a)
(b) 30. (a)
(b)
Explanations
2.
Market expansion is term used in trade area analysis to estimate an areas potential for
creating new demand.
5.
Market survey is one of the most widely used marketing research techniques. It is a method
of collecting marketing information required for a given marketing research assignment.
9.
Reserve Bank of India was established in 1935 and its headquarters is in Mumbai.
15.
In any organisation, finance is like blood of that organisation.
17.
NPA means Nonperforming assets.
18.
Modern marketing concept is based on welfare of customer.
19.
Social marketing is the systematic application of marketing, along with other concepts and
techniques, to achieve specific behavioural goals for a social good.
22.
A lead, in a marketing context, is a potential sales contact an individual or organisation that

expresses an interest in goods or services.
27.
Marketing Information System (MIS) A set of procedures and methods for the regular,
planned collection, analysis, and presentation of information for use in making marketing
decisions.
18
32.
Firms vary in their perceptions about business and their orientations to the market place. This
has led to the emergence of many different concepts of marketing. Important of them are:
1. Exchange concept
2. Production concept
3. Product concept
4. Sales concept
5. Marketing concept
34.
Profit by customer satisfaction is a tool of new concept of marketing.
39.
Global marketing is a marketing strategy that consciously address global customers, markets
and competition in formulating a business strategy.
Chapter 2
Marketing Planning
In the words of Philip Kotler, Planning is deciding in the present what to do in the future. It
comprises both the determination of a desired future and the steps necessary to bring it aout. It is the
process whereby companies reconcile their objectives and opportunities. The American Marketing
Association has defined the Marketing Planning in these words Marketing Planning the work of setting
up objectives for marketing activity and of determining and scheduling the steps necessary to achieve
such objectives.
Thus, the first step in the Marketing Planning is the setting up of marketing objectives and then
marketing activities like purchase-sale, product planning and development, advertisement, sales
promotion, after sale services etc, are determined and scheduled, policies and programme to carry out
these activities are prepared.
Marketing Planning is done by the marketing department. Various sub-divisions or sections
under the marketing department submit their proposals to the marketing department and then the
marketing department prepares the plan for the whole marketing division.
Elements of Marketing Planning

The
main
elements
of
Planning are :
1. Determination of objectives
Marketing
2.
3.
4.
5.
6.
7.
8.
Forecasts for the future

Policies
Procedures
Programmes
Schedules
Rules
Strategies
19
9. Budget
(d) Organisation
of
the
enterprise
(e) Technical knowledge available with
Importance of Marketing Planning

1.
2.
3.
4.
structure
the enterprise
(f) Channels of distribution
2. National factors There are some national
To offset future uncertainties

Economy in operation
Helpful in co-ordination
Helpful in control
factors which affect the long-term

Marketing Planning of an enterprise.
Factors Affecting Marketing Planning

A large number of factors affect the
long-term Marketing Planning.
These factors
are :
1. Internal factors Internal factors are those
factors which arise in the enterprise
itself. These factors are :
(a) Size of the Company
(b) Risk bearing capacity
of
the
enterprise
(c) Financial resources of the enterprise
These factors are :

(a) Population of the country and its
regional distribution
(b) National income of the country
(c) Distribution of national income
(d) Sectoral distribution of national
income
(e) Price trends in the country
(f) Industrial Policy of the country
(g) Trade Policy
3. International factors
(a) International monetary system
(b) International stability and peace
(c) Scientific
and
technical
developments in the world.
Objective Questions
1. Which of the following is the element of
marketing plan?
(a) Marketing programme
(b) Completion schedule
(c) Statement of goals
2. Adhoc planning is suitable for
(a) capital budgeting
(b) set up of a new firm
(c) market and plant development
(d) issuing shares
(e) renewal of a patent
3. Which of the following is not the type of
market planning?
(a) Back wash planning
(b) Short range planning
(c) Adhoc planning
(d) Long range planning

4. Marketing planning is concerned with
(a) the identification of resources that
are available and their allocation to
meet specified objectives
(b) Selling
(c) financing
(d) managing
5. Which of the following is the stage of
marketing planning?
(a) Analysis of problem
(b) Setting the goal or objectives
(c) Preparation of programmes
6. A marketing programme is
20
(a) a set of policy decisions on the
level,
allocation
and
mix
of
marketing efforts
(b) a structure of production
(c) a plan of purchasing
(d) a plan of accounting
7. Market potential is based on
(a) future trading
(b) production and market planning
(c) award
(d) profit
8. Which of the following factors affecting
the size of sales territory?
(a) Policies and practices
of
the
business
(b) Method of distribution
(c) Advertising
(d) Sales promotion
9. Full form of EOQ is
(a) Economic on Quality
(b) Economic order Quality
(c) Even on Quality
(d) Evolution on Quality
10. Which system may be involved in bank?
(a) Internal Check System
(b) Internal Control System
(c) Internal Audit System
11. One of the following is a target group
for the marketing of educational loan
(a) all the customers
(b) students
(c) only poor students
for the marketing of internet banking
(a) all the customers
(b) all the educated customers
(c) all the computer educated customers
(d) only creditors
13. Delivery channel means
(a) maternity wards

(b) handing over the products to the
buyers
(c) Places where products are made
available to the buyers
14. Transporting and sharing come under
which category of marketing functions?
(a) Facilitating functions
(b) Physical distribution functions
(c) Financial functions
15. Opening of maximum number of ATMs
is a
(a) indirecting marketing
(b) direct marketing
(c) adhoc marketing
16. After sales service adds to which of the
following?
(a) Product utility
(b) Extra sales
(c) Production
(d) All of these
(e) None of these
17. Loan and advances of a bank come
under which of the following category?
(a) Assets
(b) Liabilities
(c) Costs
(d) All of these
(e) None of these
18. Bulk breaking comes at which part of
the marketing channel?
(a) Wholesaler
(b) Distributor
(c) Retailer
(d) All of these
(e) None of these
19. Which among the following media has
most effective usual impact on a
customer?
(a) Newspaper
21
(b) TV
(c) Radio
(d) All of these
(e) None of these
20. Which among the following is the
smallest retailing unit?
(a) Departmental stores
(b) Specialty stores
(c) Convenience stores
21. Which among the following is the
largest retailing unit?
(a) Cash and carry store
(b) Super market
(c) Hyper market
22. The following offering is not a service
(a) fixed deposit receipt
(b) postage stamp
(c) gift coupon of a chain store
(d) insurance policy
(e) all of the above
23. The act of obtaining a desired object
from someone by offering something in
return is called
(a) transaction
(b) exchange
(c) relationship
(d) value
24. Goods that are typically bought by a
consumer based on a comparison of
suitability, quality, price and style are
called ..goods.
(a) industrial
(b) specialty
(c) shopping
(d) convenience
(e) All of these
25. A target market is
(a) entire country
(b) entire city
(c) entire globe
(d) that which consists of customers
who need to the identified product
26. A good salesman should be
(a) aggressive
(b) Pushy
(c) Polite
(d) All of these
(e) None of these
27. For effective marketing the salesman
should have which of these qualities?
(a) Creativity
(b) Team spirit
(c) Motivation
(d) Effective communication skills
28. Market research is needed for
(a) Checking the market area
(b) checking the right product to be sold
(c) making proper marketing decisions
(d) deciding right time to sell
29. Marketing plan helps is
(a) better lead generations
(b) better systems
(c) better results
(d) improve balance sheet
(e) better customer service
30. Marketing creates .. for goods and
services
(a) demand
(b) supply
(c) value
(d) all of these
(e) None of these
Answers
1. (d) 2. (e) 3. (a) 4. (a) 5. (d) 6. (a) 7. (a) 8. (e) 9. (b) 10. (d)
11. (b) 12. (c) 13. (c) 14. (b) 15. (b) 16. (a) 17. (a) 18. (c) 19. (b) 20. (c)
21. (c) 22. (c) 23. (b) 24. (c) 25. (d) 26. (c) 27. (e) 28. (e) 29. (c) 30. (a)
22
Explanations
4. Marketing Planning is concerned with the identification of resources that are available and their
allocation to meet specified objectives.
6. According to Mccarthy, A marketing programme is a set of marketing strategies which seeks to
reach the firms goals by making the most effective possible use of the firms resources.
7. Market potential is an estimate of the maximum possible sales of a commodity, a group of
commodities, or a service for an entire industry in a market during a stated period.
11. Students are a target group for the marketing of educational loan.
14. Important activities involved in the physical distribution include transportation. Ware-housing,
material handling and inventory control.
16. Loan and advances of a bank come under the assets of bank.
21. Hyper market is the largest retailing unit of retail business.
25. Target marketing involves breaking a market into segments and then concentrating marketing
efforts on one or a few key segments.
30. Demand for particular goods and service is created by marketing.
Chapter -3
Marketing Mix
The Process of marketing involves creating a market offering, to satisfy the needs and wants of
the present and potential buyers. The real question is how to create a market offering. Let us say a
profitable business opportunity is seen by some firm in the field of producing soft drinks a number of
important decisions will have to be taken for example whether to go for any collaboration with a foreign
manufacturer of soft drinks whether to produce for the local market or for a wider market, what will be
the features of the new product and so on.
There are large numbers of factors affecting marketing decisions. These can broadly be divided
into two categories:
(i) Controllable factors, and
23
(ii) Non-controllable factors.
Controllable factors are those factors which can be influenced at the level of the firm for example,
whether the drink will be packed in glass bottles or plastic cans; what will be the name (brand name) of
the drink; at what price it will be sold, (at par with the price at which other competitive brands are sold or
below it or above it); what distribution network will be used to make the product available (eg, hotels,
restaurants, groceries, shops, kiosks selling cigarette, paan, etc) to the buyers whether the new soft drink
will be promoted by putting up advertisements in newspaper or magazine or on radio or television; or say
if newspaper, whether in a local newspaper or a national daily, whether in a paper of regional language or
an English daily, etc, is decided at the level of marketing manager of the firm.
However, there are certain other factors which affect the decision but are not controllable at the
firms level. These are called environmental variable. For example, the political factors such as the
government policy on whether to allow any technical or financial collaboration in the area of soft drinks,
production or economic factors such as rate of inflation prevailing in a given period or a credit policy of
the central bank affecting the total availability of money in the market, all of which affect the sale of a
particular product but cannot be controlled or influenced by the decisions at the level of a firm. To be
successful, the decisions regarding controllable factors are to be taken keeping the environmental
variables into consideration. The controllable variable become marketing tools which are constantly
shaped and reshaped by marketing managers, to achieve marketing success. For example, a firm can
reshape a market offering by bringing in a change in any of the variable under its own control say
introducing a change in the price or promotion offer or product features or channel used to make the
product available to buyers. Thus, from a number of alternatives available a firm chooses a particular
combination to develop a market offering.
The combination of variables chosen by a firm to prepare its market offering is also called
marketing mix. Thus, marketing mix is described as the set of marketing tools that a firm uses to pursue
its marketing objectives in a target market.
Definition
The process of marketing or distribution of goods requires particulars attention of management of
business because production has no relevance unless products are sold. Marketing mix, simply stated, is
the process of designing and integrating various elements of marketing is such a way as to ensure the
achievement of enterprise objectives.
According to Philip Kotler, Marketing mix is the set of
24
controllable variables that the firm can use to influence the buyers response. The controllable variables
in this content refer to the 4 Ps [product, prie, place (distribution) and promotion).
The elements of marketing mix have been classified under four heads-product, price, place and
promotion. That is why marketing mix is said to be a combination is 4 Ps. Decisions relating to the
product include product designing, packaging and labeling and varieties of the product. decision on
Price is very important because sales depend to a large extent on product pricing whether uniform price
will be charged or different prices will be changed for the same product in different markets are examples
of decisions regarding the market where products will e offered for sale. Promotion involves decisions
bearing on the ways and means of increasing sales. Different tools or methods may be adopted for this
purpose. The relative importance to be attached to the various methods is decided while concentrating on
the element of Promotion in marketing mix, lastly, the marketing manager has to take into account the
impact of external factors like consumer behavior, competitors strategy and Government policy on each
element of marketing mix.
In short, marketing mix involves decisions regarding products to be made available, the price to
be charged for the same, the incentives to be provided to the consumers in the the markets where
products would be made available for sale. These decisions are taken keeping in view the influence of
marketing forces outside the orgaisation.
Characteristics of Marketing Mix

1. Marketing mix is the crux of marketing process marketing mix involves many crucial decisions
relating to each element of the mix. The impact of the mix would be the best when proper
weightage is assigned to each element and they are integrated so that the combined effect leads to
the best results.
2. Marketing mix has to be reviewed constantly in order to meet the changing requirements. The
marketing manager is required to constantly review the ix and conditions of the market and make
necessary changes in the marketing mix according to change in the conditions and complexing of
the market.
3. Changes in external environment necessitate alterations in the mix changes keep many industries,
customers is the most fluctuating variable of environment. Customers tastes and preferences
change very fast. Brand loyalty and purchasing power to change over a period of time. The
marketing manager has to carry out marketing manager has to carry out market analysis
constantly to make necessary changes in the marketing mix.
4. Changes taking place within the firm too necessitate changes in marketing mix changes within
the firm may take place due to technological changes, or changes in the product line, or changes
25
in the size and scale of operation. Such changes call for correspondent changes in the marketing
mix.
Elements of Marketing Mix

As mentioned earlier the elements or constituents of marketing mix may be grouped broadly
under four heads:
(1)
(2)
(3)
(4)
Product
Price
Place
Promotion
Product
1.Product
Elements of Marketing Mix

Price
Place
Promotion
Product refers to the goods and services offered by the organization. A pair of shoes, a plate of
dabi-vadaha. a lipstick, all are products. All these are purchased because they satisfy one or more of our
needs. We are paying not for the tangible product but for the benefit it will provide. So, in simple words,
product can be described as a bundle of benefits which a marketer offers to the consumer for a price.
While buying a pair of shoes, we are actually buying comfort for our feet, while buying lipstick we are
actually paying for beauty because lipstick is likely to make us look good. Product can also take the form
of a service like an air travel, telecommunication, etc. Thus, the term product refers to goods and services
offered by the organization for sale. The decisions concerning products may relate to :
(a)
(b)
(c)
(d)
(e)
Product attributes
Branding
Packaging and labeling
Product support service
Product mix
2. Price
Price is the amount charged for a product or service. It is the second most important element in
the marketing mix. Fixing the price of the product is a tricky job. Many factors like demand for a
product, cost involved, consumers ability to pay, prices charged by competitors for similar products,
government restrictions, etc, name to be kept in mind while fixing the price. In fact, pricing is a very
crucial decision area as it has its effect on demand for the product and also on the profitability of the firm.
Pricing decisions of a company are affected by both internal as well as external factors.
26
3. Place
Goods are produced to be sold to the consumers. They must be made available to the consumers at a
place where they can conveniently make purchase. Woolens are manufactured on a large scale in
Ludhiana and you purchase them at a store from the nearby market in your town. So, it is necessary that
the product is available at shop in your town. This involves a chain of individuals and institutions like
distributors, wholesalers and retailers who constitute firms distribution network (also called a channel of
distribution). The organization has to decide whether to sell directly to ghe retailer or through the
distributors/Wholesalers, etc. It can even plan to sell it directly to consumers
Price
Product
Target Customer
Promotion
Place
(Distribution)
4. Promotion
If the product is manufactured keeping the consumer needs I mind, is rightly priced and made
available at outlets convenient to them but the consumer is not made aware about its price. features,
availability, etc, its marketing effort may not be successful.
Therefore, promotion is an important
ingredient of marketing mix as it refers to a process of informing, persuading and influencing a consumer
to make choice of the product to be bought. Promotion is done through means of personal selling
advertising, publicity and sales promotion. It is done mainly with a view to provide information to
prospective consumers about the availability, characteristics and uses of a product.
Objective Questions
1. Marketing is a
(a) Quantitative process
(b) Logical process
(c) Mathematical process
(d) Managerial process
2. Rural Marketing is related to
(a) Village
(b) Town
(c) Capital
(d) State
(e) All of these
3. Which of the following is the element of
Marketing Mix?
(a) Selling
(b) Costing
(c) Creating
(d) Product
(e) All of these
4. What is Market Aggregation?
(a) Just like segmentation
(b) Just opposite of segmentation
(c) Target market
5. Capital goods market deals with
(a) Non-durable goods
(b) Goods
27
6.
7.
8.
9.
10.
11.
12.
13.
(c) Products
(d) Durable goods
What are the different types of market?
(a) Commodity market
(b) Industrial market
(c) Services market
Convenience goods are those which
(a) Consumed easily
(b) Distributed easily
(c) Purchase frequently
Service market is related with
(a) Tangible
(b) Intangible
(c) Both (a) and (b)
(d) All of these
(e) None of these
A sales territory is a
(a) Product
(b) Service
(c) Technique of sales
(d) Particular grouping of customers
and prospects, assigned to an
individual salesman
Which of the following is not the factor
of sales territory?
(a) Government policy
(b) Nature of product
(c) Economic condition
Personal selling is a part of
(a) Promotion
(b) Place
(c) Price
(d) Product
(e) All of these
Which of the following is an intangible
feature of a product?
(a) After sale services
(b) Performance of product
(c) Goodwill of product
First P of 4 Ps is
14.
15.
16.
17.
18.
19.
20.
21.
(a) Product
(b) Price
(c) Place
(d) Promotion
(e) None of these
4 Cs of marketing theory was
propounded by
(a) Philip Kotler
(b) Robert Lauterborn
(c) Clark
Retailer is a sub-element of
(a) Place
(b) Product
(c) Price
(d) Promotion
(e) All of these
Distribution is also known as
(a) Product
(b) Place
(c) Promotion
(d) All of these
(e) None of these
Product line means
(a) Product technology
(b) Expansion of product mix
(c) Pricing
Who propounded the theory of 4 Ps of
marketing?
(a) Stanton
(b) Philip Kotler
(c) Mccarthy
(d) All of these
(e) None of these
Full from of DSA is
(a) Direct Selling Agent
(b) Division Sales Act
(c) Direct Sales Association
DSA of a bank is a sub-element of
(a) Price mix
(b) Distribution mix
(c) Promotion mix
(d) All of these
(e) None of these
Innovation means
28
22.
23.
24.
25.
26.
(a) Product designing

(b) New ideas
(c) Impulse
(d) Both (a) and (b)
Effective marketing helps in
(a) Developing new products
Promotion in marketing means
(a) Passing an examination
(b) Elevation from one grade to another
(c) Selling the products through various
means
(d) Selling the product in specific area
IT stands for
(a) Information Technology
(b) Integrated Technology
(c) Intelligent Technology
(d) Interesting Technology
Production and consumption takes place
at about the same time. This is a
characteristic of
(a) Manufacturing sector
(b) Agriculture sector
(c) Service sector
Selling iron ore to a steel manufacturer
comes under which of the following
category?
27.
28.
29.
30.
(a) Product Marketing

(b) Industrial Marketing
(c) Consumer Marketing
Which among the following can be an
example of non-profit marketing?
(a) Disney setting up a park in Hong
Kong
(b) Setting up an Ayurvedic massage
centre
(c) AIDS awareness campaign
The correct 4 Ps of marketing are
(a) Product, place, promotion, profit
(b) Product, price, place, promotion
(c) Product, promotion, price, place
Who among the following is not a part
of place in the Marketing mix?
(a) Wholesalers
(b) Retailers
(c) Customers
(d) All of these
(e) None of these
In the Banking Environment, which
among the following is the internal
factor?
(a) Customer
(b) Staff
(c) Market
Answers
1. (d) 2. (a) 3. (d) 4. (b) 5. (d) 6. (d) 7. (c) 8. (b) 9. (d) 10. (a)
11. (a) 12. (d) 13. (a) 14. (b) 15. (a) 16. (b) 17. (b) 18. (c) 19. (a) 20. (b)
21. (d) 22. (d) 23. (c) 24. (a) 25. (c) 26. (b) 27. (c) 28. (b) 29. (c) 30. (b)
Explanations
2. Rural marketing is related to village
3. The component of marketing mix involves:
(i) product (ii) Price (iii) Place (iv) Promotion
4. Market aggregation is the just opposite of market segmentation
29
8. Service is a intangible good.
11. Personal selling is a part of promotion mix.
13. Product is the first P of 4 Ps.
14. 4 Cs are
(i) Customer wants and needs
(ii) Cost of satisfy
(iii) Convenience to buy
(iv) Communication
17. Product line is a set of related products sold by a single company.
19. DSA is a direct selling method
25. In service sector, production and consumption takes place at about the same time
29. Customers are not a part of place in the marketing mix. Place are related with distribution channels.
30. Staff of the bank is the internal factor of that bank.
Chapter -4
Marketing Environment
The market environment is a marketing term and refers to all of the forces outside of marketing
that affect marketing managements ability to build and maintain successful relationship with target
customers. the market environment consists of oth the macro environment and the micro environment.
Micro environment
Macro environment
Micro Environment
The micro environment refers to the forces that are close to be company and affect its ability to
serve its customers, it includes the company itself, its suppliers, marketing intermediaries, customer
markets, competitors and publics.
30
The company aspect of micro environment refers to the internal environment of the company.
This includes all departments, such as management, finance research and development have input as to
the features a product can perform and accounting approves the financial side of marketing plans and
budgets.
The supplies of a company are also an important aspect of the micro environment because even
the slightest delay in receiving supplies can result in customer dissatisfaction. Marketing managers must
watch supply availability and other trends dealing with suppliers to ensure that product will be delivered
to customers in the time frame required in order to maintain a strong customer relationship.
Marketing intermediaries refers to resellers, physical distribution firms, marketing services
agencies, and financial intermediaries. These are the people that help the company promote, sell, and
distribute its products to final buyers. Resellers are those that hold and sell the companys product. They
watch the distribution to the customers and include places such as wal-Mart, Target, and Best Buy.
Physical distribution firms are places such as warehouses that store and transport the compays product
from its origin to its destination. Marketing services agencies are companies that offer services such as
conducting marketing research, advertising, and consulting. financial intermediaries are institutions such
as banks, credit companies and insurance companies.
Another aspect of micro environment is the customers. They are different types of customer
markets including consumer markets, business markets, government markets, international market, and
reseller markets. The consumer market is made up of individuals who buy goods and services for their
own personal use or use in their household. Business markets include those that buy goods and services
for use in producing their own products to sell. This is different from the reseller market which includes
businesses that purchase goods to resell as is for a profit. These are the same companies mentioned as
market intermediaries. The government market consists of government agencies that buy goods to
produce public services or transfer goods to others who need them. International market includes buyers
in other countries and includes customers from the previous categories.
Competitors are also a factor in the micro environment and include companies with similar
offerings for goods and services. To remain competitive a company must consider who their biggest
competitors are while considering its own size and position in the industry. The company should develop
a strategic advantage over their competitors.
The final aspect of the micro environment is any group that has an interest in or impact on the
orgaisations ability to meet its goals. For example, financial publics can hinder a companys ability to
31
obtain funds affecting the level of credit a company has.
Media publics include newspapers and
magazines that can publish articles of interest regarding the company and editorials that may influence
customers opinions. Government publics can affect the company by passing legislation and laws that put
restrictions on the companys actions. Citizen-action public includes environmental groups and minority
groups and can question the actions of a company and put them in the public spotlight. Local publics are
neighborhood and community organizations and will also question a companys impact on the local area
and the level of responsibility of their actions. The general public can greatly affect the company as my
change in their attitude, whether positive or negative, can cause sales to go up or down because the
general public is often the companys customer base. And finally, the internal public includes all those
who are employed within the company and deal with the organization and construction of the companys
product.
Macro Environment
The macro environment refers to all forces that are part of the larger society and affect the micro
environment. It includes concepts such as demography, economy, natural forces, technology, politics, and
cultures. A brief discussion of the various factors constituting the macro environment of marketing is
given below
1. Demographic environment Business depends on people consumers.
It is obvious that
demographic is a major element to be studied in environmental analysis. As a matter of fact,

several factors relating to population, such as size, growth rate, age distribution, religious
composition and literacy levels, need to be studied. Aspects such as compositions of workforce,
household patterns, regional characteristics population shifts, etc, also need to be studied, as they
all are part of the demographic environment.
2. Political environment Political environment is a major component of the macro environment for
an industrial firm.
In fact, economic environment is often a by-product of the political
environment. Moreover, developments on the political front keep affecting the economy all the
time, industrial growth depends to a great extent on the political configuration.
Political
environment has several aspects. Form of government adopted by the country is the first.
Political stability as such as another, for whatever be the form of government adopted, stability
government is an essential requisite of economic growth. Elements like social and religious
organizations, media and pressure groups and lobbies of various kinds are also part of the
political environment.
3. Socio-cultural environment Socio cultural is another important component of the macro
environment. Culture, traditions, beliefs, values and life styles of the people in a given society
32
constitute the socio-cultural environment. These elements decide to a large extent, what the
people will consume and how they will buy.
Culture
Culture is the combined result of factors like religion, language, education and upbringing. In
any society, some cultural values are deep-rooted; they do not change easily and are termed core cultural
values. There are also values and practices, which constitute secondary cultural values; they are more
amenable to change and can be moulded and manipulated relatively more easily. Meaningful information
on the consumption habits, life styles and buying behaviour of the people can be obtained through a
survey of the socio-cultural environment. Cultural shifts carry with them marketing opportunities as well
as threats. That is why, close monitoring of the cultural environment becomes important.
Social Class
Social class is one of the important concepts in socio-cultural environment. Any society is
composed of different social classes. A social class is determined by income, occupation, location of
residence etc, of its members. Each class has its own standards with respect to life style. behaviour etc.
they are known as the class values or class
norms.
These values have a strong bearing on the
consumption pattern and buying behaviour of the members of the class. Shift in class values do take
place over time owing to several factors. And, the study of socio-cultural aspects should include the study
of such shifts as well.
4. The economic environment Economic environment is a vital component of macro environment.
The factors to be considered under economic environment are given here below:
1. General economic conditions
2. Economic conditions of different segments of the population; their deposable income,
purchasing power. etc.
3. Rate of growth of the economy, rate of growth of each sector of the economy like as follows;
4.
5.
6.
7.
Agriculture
Industry
Consumer goods
Capital goods
Services
Infrastructure
Imports
Exports
Income, prices and consumption expenditure (size and pattern)
Credit availability and interest rate
Saving rate / capital formation
Inflation rate
33
8. Behaviour of capital markets
9. Foreign exchange reserves
10. Exchange rates
11. Tax rates
12. prices of important materials
13. Energy scene (Cost, availability, etc)
14. Labour scene (Cost, skill availability, etc)
5. The natural environment The analysis of the macro environment must also cover aspect like
extent of endowment of natural resources n the country, ecology, climate, etc. These constitute
the natural environment.
Natural Resources
Business firms depend on natural resources. The extent to which the country/region under
reference is endowed with these resources has an impact on the functioning of the firms. Raw
materials is one major part of these resources and firms are concerned with their availability. They
need to know whether there will be a shortage in any of the critical raw materials; they also need to
know the trends governing their costs. Besides raw materials, they also need to know the trends
governing their costs. Besides raw materials, they are also concerned about energy, its availability as
well as cost. Escalations in energy cost is of particular concern to any business firm.
Ecology
Firms are also concerned with ecology. In modern times all societies are very much concerned
about ecology, especially about issues like environmental pollution, protection of wild life and ocean
wealth. And governments are becoming active bargainers in environmental issues. Business firms
have to know the nature and dimensions of environmental regulations and to what extent these factors
will affect their business prospects. They also need to know the role of environmental activities in the
region.
Climate
Climate is another aspect of the natural environment that is of interest to a business firm. Firms
with products whose demand depends on climate, and firms depending on climate dependent raw
materials will be particularly concerned with this factor. These firms have to study the climate in
depth and decide their production locations and marketing territories appropriately.
6. Technological environment Today, technology is a major force which industry and business have
to reckon with. Technology leads practically all the forces that shape peoples lives. For a
34
business firm, technology affects not only its final products but also its raw materials, processes
and operations as well as its customer segments. And in the present times, rapid changes are
taking place in the realm of technology. The IT industry is one example and telecom is another.
Options Available in Technology

The firm has to analyse carefully over all the technology environment and the technology options
available in the given industry. The level of technology prevailing generally in the country is also a
concern for the firm.
It has to assess the relative merits and cost-effectiveness of alternative
technologies. It has also to analyse technology change taking place in its industry at the international
level. In addition, it has to assess the scope of substitute products emanating from new technologies.
Governments Approach in Respect of Technology

Regulations by the government in matters relating to technology often restrict the freedom of
operation of business firms. There may be areas where the governments may support the use of
modern technology. There may be areas where they may ban technologies that are potentially unsafe.
All such factors demand careful investigation. In modern times, much of the business opportunities
are embedded in technology and firms desiring growth have to harness technologies, of course with
necessary adaptations.
Technology Selection
It is possible that several levels of technologies are floating at the same time in an industry. Firms
have to see the technology environment and select technologies that will be appropriate for the term
and the given product-market situation. They have to forecast technological trends, assess current
and emerging technology import is also a concern in this regard. India is adopting a fairly liberal
approach to technology import. It also supports, at the same time, efforts at internal technology
development.
7. Legal environment (Business legistration)

Business have to operate within the frame work of the prevailing legal environment. They
have to understand the implications of all the legal provisions relating to their business. In recent
times, the world over, legislation regulating business has been steadily increasing.
And it is
particularly true for India. Over the past four or five decades, a great deal of legislation concerning
books. Though a reversal of this trend has commenced with the recent reforms and liberalisation,
business firms operating to India are still required to grapple with a heavy load of legistration.
35
Business legislation can be classified into the following broad categories based on the are
covered by them:
Corporate affairs
Consumer protection
Employee protection
Sectoral protection
Corporate protection (protecting companies from each other, preventing unfair competition)
Protection of society as a whole against unbridled business behaviour
Regulation on products, prices and distribution
Control on trade practices
Protecting national firms against the onslaught of foreign firm.
Business firms have to understand these legislations and adapt to them. Multinational companies
which operate across several countries, face a particularly tough problem in this regard. They
have to assess the legal environment prevailing in several countries and make their choice of
entry into them. To cite an illustration, in the 1990s both india and China liberalised their
economies and spread out a red carpet for foreign investment. Some MNCs found China more
attractive and chose to setup their industrial projects there. Some others, however, turned to
India, despite of it not matching China in attractiveness as per their own perception. They chose
India essentially because they found its legal system more helpful.
SWOT Analysis
SWOT analysis is a tool for auditing an organisation and its environment. It is the first stage of
planning and helps marketers to focus on key issues. SWOT stands for strengths and weaknesses,
opportunities and threats, strengths and weaknesses are internal factors. Opportunities and threats are
external factors.
PEST Analysis
The macro environment includes political forces, economic forces, socio-cultural forces and
technological forces. These are known as PEST factors.
P Political Factors
E-Economic Factors
S Socio Cultural factors
T Technological Factors
Objective Question
36
1. Which among the following is not a
direct factor of Marketing Environment?
(a) Policy of the firm
(b) Marketing distribution channel
(c) Labour policy of the government
2. Which among the following does not
come under social environment and
marketing?
(a) Life Style
(b) Caste system
(c) Size of population
3. In the Banking Environment, which
among the following is the internal
factor?
(a) Customer
(b) Staff
(c) Market
(d) All of these
(e) None of these
4. Which among the following is correct
regarding call option and put option in
currency markets?
(a) Call option is for sellers and put
option is for buyers
(b) Call option is for buyers and put
option is for sellers
5. All of the foreign exchange of the
country ultimately goes to which of the
following?
(a) Ministry of Finance
(b) Reserve Bank of India
(c) Finance Secretariat
6. Which among the following is not a
controllable factor of Marketing
Environment?
(a) Policy of the firm
(b) Organisational structure
(c) Government policy
7. Consumer of a Bank comes under which

of the following environment?
(a) External environment
(b) Internal environment
(c) Indirect environment
8. A value chain in marketing is
(a) an operator of discount stores with
many branches
(b) a factory outlet store
(c) a process by which goods gain value
as they pass through different levels
of intermediaries
(d) a process by which companies target
value conscious customers
9. Which of the following is not part of an
organisations micro environment?
(a) Study of the changing birth rate
(b) Analysis of household savings ratios
(c) A new staff incentive scheme
(d) Cultural convergence
10. Which of the following represents the
most important reason why firms
monitor their demographic
environment?
(a) To explain historical trends
(b) To predict political change
(c) To predict the size of market
segments
(d) To predict business cycles
11. Which of the following is not a part of
an organisations micro environment?
(a) Customers
(b) Suppliers
(c) Competitors
(d) Government legislation
12. Tax structure includes
(a) Tradition
(b) Custom tax
(c) Brand
(d) Price
(e) All of these
13. Full from of R and D is
(a) Rate and Division
(b) Research and Development
37
14.
15.
16.
17.
18.
19.
20.
21.
(c) Research and Department

Political environment of marketing
includes
(a) Foreign policy
(b) Public welfare and social justice
(c) Democracy
Occupation is a element of
(a) Demographic environment
(b) Socio-cultural environment
(c) Economic environment
Which of the following is marketing
intermediaries?
(a) Wholesaler
(b) Advertisement
(c) Government
(d) All of these
(e) None of these
In SWOT analysis, S stands for
(a) Strengths
(b) Strategies
(c) Smart card
(d) All of these
(e) None of these
PEST analysis related with
(a) Micro environment
(b) Macro environment
In PEST analysis P represents
(a) Political
(b) Place
(c) Promotion
(d) All of these
(e) None of these
Micro environment includes
(a) Market demand
(b) Consumer
(c) Competition
(d) All of these
(e) None of these
Macro environment includes
(a) Demography
(b) Economy
22.
23.
24.
25.
26.
27.
28.
29.
(c) Technology
(d) All of these
(e) None of these
Element of natural environment is
(a) Climate
(b) Ecology
(c) Natural resources
Motivation means
(a) Sales coaching
(b) Market research
(c) Better communication skills
(d) Inspiring employees to perform
better
Relationship selling means
(a) Preparing a list of relatives
(b) Cross selling
(c) Selling to relatives
(d) Tele marketing
In Double win strategy
(a) Customer gets an additional benefit
(b) Customer gets price debate
(c) Both customers and the sales
persons come out with sense of
satisfaction
Marketing of services is resorted in
(a) Manufacturing concerns
(b) Insurance business
(c) Hotels
(d) Both (b) and (c)
Good marketing requires one of the
following
(a) Proper planning
(b) Good team work
(c) Good communication skill
(d) Knowledge of products
A DSA helps in
(a) Boosting direct sales
(b) Boosting sales through the net
(c) Strengthening indirect marketing
(d) Strengthening tele marketing
The target group for a car loan is
38
(a) All auto drivers
(b) All auto dealers
(c) All car owners
(d) Any individual needing a car
30. Cross selling means
(a) Selling with a cross face

(b) Cross country marketing
(c) Selling other products to existing
customers
(d) Selling to friends
(e) Selling to employees
Answers
1. (c) 2. (c) 3. (b) 4. (b) 5. (b) 6. (c) 7. (a) 8. (c) 9. (c) 10. (c)
11. (d) 12. (b) 13. (b) 14. (d) 15. (a) 16. (a) 17. (a) 18. (b) 19. (a) 20. (d)
21. (d) 22. (d) 23. (d) 24. (b) 25. (b) 26. (d) 27. (e) 28. (a) 29. (d) 30. (c)
Explanations
S- Socio Cultural Factors
1. Labour policy of the government is not a

direct factor of marketing environment
T Technological Factors
21. Factors of macro environments are
5. RBI is the central bank of India
(i) demographic
6. Government factor is not a controllable factor

of marketing environment
(ii) Socio-cultural
(iii) economic
9. Micro environment refers to the forces that

are close to the company and affect its ability to
serve its customers
(iv) political
12. Custom duty is a type of tax structure.
(v) natural
14. Political environment includes all laws,

government agencies and groups, that influence
or limit other organisations and individuals
within a society.
(vi) technology
17. SWOT analysis is a tool for auditing an

organisation and its environment.
18. P Political Factors
E- Economic Factors
(vii) legal
24. Cross selling a consumer sales promotion
technique in which the manufacturer attempts to
sell the consumer products related to a product
the consumer already uses or which the marketer
has available.
29. Any individual needing a car is a target
group for a car loan.
Chapter 5
Consumer Behaviour
39
A Consumers buying behaviour is influenced by cultural social, personal and psychological
factors.
Cultural Factors:
Culture, subculture and social class are particularly important influences on consumer buying
behaviour. Each culture consists of smaller subcultures that provide more specific identification and
socialisation for their members.
Subcultures include nationalities, religions, racial groups and
geographic regions. When subcultures grow large and affluent enough, companies often design
specialised marketing programmes to serve them.
Influencing Factors of Consumers Buying Behaviour
Cultural
Traditions
Nationalities
Religions
Racial groups
Social
Reference groups
Family
Social class
Caste
Personal
Age
Life style
Personality
Life cycle stage
Occupation
Self concept
Economic
circumstances
Psychological
ePerception
Attitude
Learning
Beliefs
Social Factors :
In addition to cultural factors, a consumers behaviour is influenced by such social factors as
reference groups, family and social roles and statues.
Personal Factors :
A buyers decisions are also influenced by personal characteristics. These include the buyers
age and stage in the life cycle, occupation and economic circumstances; personality and self concept;
and life style and values. Because many of these characteristics have a very direct impact on
consumer behaviour, I is important for marketers to follow them closely.
Psychological Factors :
Motivation, Perception, learning and beliefs and attitudes are psychological factors.
40
Stages of Buying Process:
The purchaser or consumer takes his buying decision, for some commodities immediately
without much consideration such as items of daily use while for some other commodities mainly
luxury or durable items, he thinks much before taking a decision to purchase it. Sometimes, he
consults others. Generally, the purchases pass through five distinct stages in taking a decision
purchasing a particular commodity. These stages are:
Problem recognition
Information search
Evaluation of alternatives
Purchase decision
Post purchase behaviour
Objective Questions
1. Which of the following statement best
(b) Need recognition > Evaluation>
describe concept of involvement in the
Information search > Decision>
context of buyer behaviour ?

(a) The length of time involved in the
buying process
(b) The potential impact of a product in
an individuals self-identity
(c) The number of people involved in
the decision-making unit
(d) The complexity of an order
2. Buying decisions generally follow a
pattern of overlapping stages. Which of
the following best describes the typical
stages of the buying process?
(a) Need recognition> Information
search> Evoluation > Decision>
Post purchase evaluation

(c) Information search> Need
recognition> Evaluation> Decision>
3. Needs differ from w because
(a) wants are socialized manifestation
of underlying needs
(b) needs and historical wants are about
the future
(c) needs and wants are exactly the
same
4. Which of the following levels of
Maslows hierarchy of needs is most
likely to be associated with consumers
41
purchase of goods which appeal to their
inner sense of peace of mind?

9. Preservation of species is
(a) Self actualisation
(a) buying motive
(b) Love
(b) product
(c) security
(c) design
(d) Physiological
(d) cost
(e) All of these
(e) a tool of sales management
5. Which of the following is not associated
10. Economic model of motivation is
with a role in a buying decision-making
developed by
unit?
(a) Rath
(a) Supplier
(b) Marshal
(b) Gatekeeper
(c) Clark
(c) Decision-maker
(d) Staton
(d) Buyer
(e) Philip Kotler and Armstrong
(e) None of these

6. Which of the following is buying
11. Learning model of motivation is

developed by
motivates?
(a) Clark
(a) Reset and recreation
(b) Stanton
(b) Sociability and striving
(c) Hansion
(c) Pride
(d) Pavlovian
(e) Peter
(f) Drucker, Philip Kotler and Rath
7. Which is psychological buying motives?
12. The psycholoanalytic model of
(a) Sleeping
motivation is developed by
(b) Hungry
(a) Fried
(c) Thirst
(b) Clark
(d) Rest and Recreation
(c) Stanton
(d) Rath
8. Which is the element of psychology of

consumer?
(e) None of these

13. Which of the following is buying
(a) Knowledge of the customer
motives technique?
(b) Intention
(a) Projective Technique
(c) Attitudes
(b) Interview Technique
(d) Motive
42
(c) Experience and Knowledge
Technique
including decision processes that

precede and determine these acts.
(a) product planning and development
(b) Market segmentation
14. Which is the maturity product of a
(c) Consumer behavior
bank?
(d) Risk
(a) Fixed term deposits
(e) Brand
(b) Senior citiszen deposit scheme
19. The personal consumer of a bank is
(c) House loan
(a) Mr. Shyam
(d) Car loan
(b) a firm
(c) a corporate body
15. Which of the following is prestige

product of a bank?
(a) International debit and credit card
(d) a person who is a servant of bank

20. Which of the following is the type of
(b) Credit card
consumer?
(c) ATM card
(a) Active personal consumer
(b) Personal consumer
(c) Risk taker
16. In India, who plays a vital role in buying

decision?
(a) Man with their friends

21. Which of the following is the nature of
(b) Man with their boss
consumer behavior?
(c) Staff
(a) It is psychological activity
(d) Woman
(b) It is a physical activity
(c) It is buying process decision
17. Which of the following is feature of

buying behavior of Indian consumer?
(a) Changing consumption pattern
(d) all of the above

22. Organisational consumer of the bank is
(b) Trademark consciousness
(a) a firm
(c) Bargaining
(b) a corporate body
(c) an industry or trust or school
18. . consists of the acts of individuals in

obtaining and using goods and services,
43
23. In case of organizational customer,
27. The social factor of the bank customer
liquid assets includes
includes
(a) saving certificates
(a) social class and caste class
(b) additional bank balance
(b) motivation
(c) debenture
(c) beliefs
(d) shares
(d) attitude
24. The Economic Factor of a bank
28. Reference group includes
customer involves
(a) market sector
(a) personal income
(b) satisfied customer
(b) family income level
(c) producer
(c) future income expectation
(d) research and developments

25. The factor determining consumer
techniques
29. Which is the types of family as per
behavior is
purchase decision-marker?
(a) information factor
(a) Wife-dominated family
(b) economic and social factors
(b) Husbank-dominated family
(c) psychological factors
(c) Syncretic family
(d) Autonomic family
26. Need hierarchy theory of motivation is
30. Which is the psychological factor of a
developed by
banks customer?
(a) Abraham Maslow
(a) Perception of customer
(b) Philip Kotler and Armstrong
(b) Learning
(c) Clark
(c) Beliefs
(d) Stanton
(e) Rath
Answers
1. (a) 2. (a) 3. (a) 4. (a) 5. (b) 6. (d) 7. (e) 8. (e) 9. (a) 10. (b)
11. (d) 12. (a) 13. (e) 14. (e) 15. (d) 16. (d) 17. (d) 18. (d) 19. (a) 20. (b)
21. (d) 22. (d) 23. (e) 24. (d) 25. (d) 26. (a) 27. (a) 28. (b) 29. (e) 30. (d)
Explanations
44
3. Needs are basic to human beings and do not pertain to a particular product. Wants, on the other hand,
are culturally defined objects that are potential satisfiers of needs.
6. According to D.J. Durian, Buying motives are those influences or consideration which provide the
impulse to buy, induce action or determine choice in the purchase of goods or services.
12. Psycholoanalytic model of motivation is developed by Fried.
16. Woman plays a vital role in buying decision.
20. Personal consumer is the particular type of the consumer.
26. Need hierarchy theory of motivation was developed by Abraham Maslow.
28. Satisfied customers are reference group.
30. Perception, learning and beliefs are psychological factor of a banks customer
45
Chapter 6
Market Segmentation
The market for any product is normally made up of several segments. A market after all is the
aggregate of consumers of a given product. It is thus natural that many different segments occur within a
market. Marketers usually divide the heterogeneous market for any product into segments with relatively
more homogeneous characteristics, since this helps in tapping it. And, this process of disaggregating a
market into a number of sub-marketers is known as market segmentation.
To put it in a nutshell market segmentation rests n the recognition that :
1) Any market is made up of several sub-markets or sub-groups of consumers, distinguished from
one another by their varying needs and buying behaviour, and
2) It is feasible to disaggregate the consumers into segments in such a manner that in need,
characteristics ad buying behaviour, the members would vary significantly among segments, but
would be homogeneous within each segment.
Major Bases for Segmentation:

The major bases that marketers use for segmenting the market are :
1.
2.
3.
4.
Geographic segmentation
Demographic segmentation
Psychographic segmentation
Price segmentation
Geographic segmentation:
Segmentation of markets based in geographic factors like climatic zone, region, state, district and
urban/ rural area, constitute geographic segmentation.
Demographic segmentation:
Segmentation of markets based on demographic factors like age, sex, family size, race, religion,
community, language, occupation, income, educational level, social status constitute demographic
segmentation.
Psychographic Segmentation:
In psychographic segmentation, elements like personality traits, attitudes, life style and value
system forms the base.
46
Price segmentation:
Price segmentation is common and widely practiced, Variation in household incomes creates an
opportunity for segmenting some markets along a price dimension.
Market Targeting:
Market targeting simply means choosing ones target market. It needs to be classified at the
outset that market targeting is not synonymous with market segmentation. Target market signifies only
those segments that it wants to adopt as its market. A selection is thus involved in it.
Product Positioning:
Product differentiation and product positioning are related concepts and together constitute a
major decision area in product management. Positioning is a platform for the brand. It facilitates the
brand to get through the target consumer.
Positioning is the act of fixing the locus of the product offer in the minds of the target consumers.
In positioning, the firm decides how and around what parameters, the product offer has to be placed
before the target consumer. The significance of product positioning can be easily understood from David
Ogilvys words: The results of your campaign depends less on how we write your advertising than on
how your product is positioned.
Objective Questions:
1) Market segmentation is
a) Method
b) The strategy of dividing markets in
order to conquer them
c) The allocation of product
d) The allocation of policy
e) The allocation of service
2) Sub-market is known as
a) Origin of market
b) Merging of market
c) Process
d) Market segment or market
segmentation
e) Plan
3) The basis for consumer market
segmentation includes
a) Age of consumer
b) Location of consumer
c) Income of consumer
d) Sex of consumer
e) All of the above
4) Which is a benefit of market
segmentation/
a) In allocation of marketing budget
b) In effective marketing programme
c) In meeting the competition
effectively
d) All of the above
e) None of the above
5) Who is prospect customer?
a) Assets
b) Staff
c) Potential Customer
d) Present customer and manager
e) All of the above
6) Homogeneous group is related with
47
a) Promotion
b) Sales planning and control
c) Market segmentation
d) Cost
e) Wages
7) The benefits or market segmentation
includes
a) To search attractive marketing
options
b) To determine the product mix
c) To select the targeted market
d) All of the above
8) Target customer means
a) Cost centre
b) Profit centre
c) New and present customer and staff
d) New customer
e) All of the above
9) The objective of market segmentation
B. Geographical
C. Behavioural
D. Psychographic
a)
b)
c)
d)
e)
13) Match the following

List I
(Basis of Market
Segmentation)
a. Geographicl
basis
b. Psychographic
prospects customers of the company

c) To make customer oriented to
segmentation as per Philip Kotler ?

a) Psychographic basis
b) Behavioural basis
c) Geographical basis
d) Demographic basis
e) All of the above
12) Match the following
of customers
Climate
Brand loyal
Life value
Sales
promotion
Codes:
includes
a) To find out the new markets
b) To make real customers to the
marketing activities of the firm

d) All of the above
10) Cash is ---------assets of a bank.
a) Fictitious
b) Current
c) Fixed
d) Current and fixed
e) All of the above
11) Which is the basis of market
2.
3.
4.
5.
c. Demographic
d. Behavioural
List II
(Elements)
1. Country
2. Age of customer
/ consumer
3. Life Style
4. User rate
5. Cost
Codes:
A
a)
b)
c)
d)
e)
14. Who may be prospects for a bank?

List I
(Basis of Market
Segmentation)
A. Demographic
List II
(Elements)
(a) Student
(b) Manager of other bank
1. Income level
48
(c) Administrator of government
department
(d) first time depositor

20. In case of car loan, the user status
will be of a bank?
15. Occupation involves
(a) Sometime user
(a) Administrator
(b) Regular user
(b) Trader
(c) First user
(c) Chartered Account
(d) Past customers
(e) None of these

16. Who may be customer of a bank?
21. Which is the factors relating to

target market
(a) Teacher
(a) Goals of the firm
(b) Professor
(b) Image of the firm
(c) Advocate
(c) Company resources
(d) Retired person form ary
(d) product characteristics and

17. Life style of a customer includes
(a) Social status
product variety
22. Which is the basis of psychographic
(b) cultural value of customer
segmentation?
(c) perception of customer
(a) Personality
(d) motivation
(b) Values in life
(c) Life style of the customer
18. Behavioural basis of market

segmentation includes
(a) loyalty or brand loyalty

23. Social responsibility of bank does
(b) attitude
not includes
(c) buying occasions
(a) pollution control
(b) to provide job
(c) to open saving account
19. In case of saving deposits in a bank,

the user
(a) second customer
(d) support facility

(e) public development programme
24. Non-banking assets includes
(b) regular customer
(a) cash
(c) potential investor
(b) bank building
49
(c) auction sales of the customers
(d) Bank building and furniture
property
(d) property seized by the bank

26. Which is the banks product?
(e) Both (a) and (b)

25. Which is banking assets?
(a) Employee
(b) Bank overdraft
(a) Cash
(c) Non-performing assets
(b) Loan and advance
(d) Fixed assets of a bank
(c) ATM
Answers
1. (b) 2. (d) 3. (e) 4. (d) 5. (c) 6. (c) 7. (d) 8. (d) 9. (d) 10. (b)
11. (e) 12. (b) 13. (b) 14. (d) 15. (d) 16. (e) 17. (e) 18. (b) 19. (b) 20. (a)
21. (e) 22. (d) 23. (c) 24. (e) 25. (e) 26. (b)
Explanations
1. Market segmentation refers to dividing the heterogeneous market into smaller customer divisions
having certain homogeneous characteristics that can be satisfied by the firm.
3. Basis for segmenting the consumer market are
1. Income
2. Age
3. Sex
4. Location
5. Education
5. Potential customer is a prospect customer.
8. Target customer includes new customer of a particular product.
11. As per Philip Kotler, the bases for segmenting the market are
(i) Geographic
(ii) Demographic
(iii) Psychographic
(iv) Behavioural
18. Some behaviouralistic variable includes
(i) Brand loyalty
(ii) User status
(iii) Readiness to buy
50
(iv) Buying occasions
23. Opening of saving account is not a social responsibility of bank
25. Assets of the bank are property of that bank.
26. Bank overdraft is the example of banks product
Chapter 7
Sales Forecasting
Sales forecasting is a prediction of the future sales of a particular product over a specific period of
time based on past performance of the product, inflation rates, unemployment, consumer spending
patterns, market trend and interest rates. In the preparation of a comprehensive marketing plan, sales
forecasts help the marketer develop a marketing budget, allocate marketing resources and monitor the
competition and the product environment.
By providing estimates of market trends and company sales possibilities, sales forecasting serves
as the starting point for all activities of the firm and gives direction to all activities. It helps the firm to
decide which products are to be continued, which ones are to be added and which need modification.
Sales forecasting forms the backbone of marketing. It provides not only the numbers regarding
sales, but also vital clues regarding customers tastes, preferences and needs. The sales forecast is the
foundation for all marketing decisions on physical distribution, promotion, sales force and pricing. Only
with proper sales forecasting the firm can meaningfully handle its marketing planning and marketing
strategy formulation.
Period Range of Sales Forecasts

On the basis of time frame of the forecast, sales forecasts can be grouped into three types:
1. Short-range forecast
2. Long-range forecast
3. Perspective planning forecast
Methods Used for Sales Forecasting

A great variety of methods are available for forecasting market demand and sales of a company. They
are :
1. Jury method/executive opinion method, This method includes:
51
2.
3.
4.
5.
6.
7.
8.
9.
(a) Top jury method

(b) Percolated jury method.
Survey of experts opinions
The Delphi method
Sales force composite method
End-use method
Market share method
Substitution /replacement method
Analytical and statistical methods
(a) Simple projection method
(b) Extrapolation method
(c) Moving Average method
(d) Time series analysis
(e) Regression analysis
Market survey method
Objective Questions
1. Sales forecast implies
(a) An estimate of the maximum
possible sales opportunities present
in a particular market segment.
(b) An estimate of sales, in physical
units in a future period
(d) Only (a)
(e) Neither (a) nor (b)
2. Sales forecasting involves
(a) Sales pricing
(b) Sales planning
(c) Distribution channels
3. Which of the following is not a post
testing technique of advertisement?
(a) Sales test
(b) Focus group
(c) Enquiry test
(d) Attitude test
(e) All of these
4. Demonstration is an exercise to
(a) Attractively pack and display the
goods
(b) Prove the characteristic of the
product
(d) Only (a)
5. Sales forecasting means
(a) To sale product
6.
7.
8.
9.
(b) To storage product

(c) The quantity of sales that to be sold
in future
Sales quota is a
(a) control activity of sales management
(b) product
(c) service
(d) department
Which of the following is the element of
sales management?
(a) Selling
(b) Maximisation sales
(c) Management of sales force
(d) Reduction in expenses
Which of the following is the factors of
sales organisation?
(a) Marketing area
(b) Sales policy
(c) Price of the product
(d) Nature of the product
The department of sales is
(a) Retailing sales department
(b) Wholesale sales department
(c) Export department
(d) Product planning and development
52
10. The departmentalisation of a sales
organisation
(a) Accounts department
(b) Sales department
(c) Wage
(d) Cost
11. Which of the following is the form of
sales organisation?
(a) Functional organisation
(b) Line type sales organisation
(c) Line and staff
12. Which of the following is the part of
sales department?
(a) Accountant or clerk of sales
department
(b) Production manager
(c) Purchase manager
(d) HRM manager
13. Which of the following is the
department of a sales organisation?
(a) Sales promotion department
(b) Training department
(c) Credit department
14. In which type of sales organisation all
the powers are centred in
(a) High class authority
(b) Manager
(c) Customer and employee
(d) Staff
organisation?
(a) Line and staff type sales
organisation
(b) Retailer
(c) Quota sales
(d) Agent
(e) Wholesaler
16. The sources of salesman recruitment
includes
(a) From the inside of business
(b) Employment exchange
(c) Employees of customers
17.
18.
19.
20.
21.
22.
23.
(d) Former salesman

Which of the following is the type of
interview?
(a) Final interview-rating basis
(b) Group interview
(c) Stress interview
(d) Patterned interview
Which of the following is group training
(a) Sales training conferences
(b) Sales demonstration
(c) Sales dramatization
(d) Lectures
Method of motivation of salesmen
includes
(a) Sales contests
(b) Honour award and recognition
(c) Motion pictures
Which of the following is responsible
for supervision in case of marketing or
sales?
(a) Branch manager of the organisation
(b) Sales supervisor
(c) Crew manager
Sales control involves
(a) Selling expenses activities
(b) Volume of sale
(c) Cost of sale
(d) Profit
Marketing management is a separate
branch from
(a) Product mix
(b) Branding
(c) Advertising
(d) Sales management
(e) Sales planning and product planning
Which of the following is not the
method of motivation of salesmen?
(a) Sales conference
(b) Effective communication
(c) Sales contests
(d) Accounting
53
24. Basis for control of salesmen includes
(a) Sales quota
(b) Advertisement
(c) Wage policy
(d) Commission
(e) Sales planning and production
25. Salesmens performance can be

evaluated by
(a) Report on future activities
(b) Report on lost business
(c) Report on expense
Answers
1. (c) 2. (d) 3. (d) 4. (b) 5. (c) 6. (a) 7. (e) 8. (e) 9. (e) 10. (b)
11. (d) 12. (a) 13. (d) 14. (a) 15. (a) 16. (e) 17. (e) 18. (e) 19. (d) 20. (d)
21. (e) 22. (d) 23. (d) 24. (a) 25. (d)
Explanations
2.Sales pricing, sales planning and distribution channels are included in sales forecasting.
5.The sales forecasting is a prediction of a businesss sales for some period of time
7. Sales management is a sub-system of marketing management. It is sales management that translates
the marketing plan into marketing performance.
11.All of these are part of the sales organisation.
14. A sales territory is a geographical grouping of customers. Operationally, it is a grouping of customers
assigned to an individual salesman.
18. Aims of sales training are:
(i) Increasing sales
(ii) Improving sales presentation and sharpening sales skills.
(iii) Improving customer relations and dealer relations
20. All are responsible for supervision of marketing work.
21. Instruments of sales control are
(i) Sales targets and sales reports.
(ii) Sales expenditure budget
(iii) Travel plans and hour reports
(iv) Watching the salesmen in the field
(v) Inspection of depots/warehouses
(vi) Sales conferences
54
Chapter 8
Products
Concept of Product
Product refers to a physical product or a service or an idea which a consumer needs and for which
he is ready to pay. Physical products include tangible goods like grocery items, garments etc. Services
are intangible products which are offered and purchased by consumers. Services may involve also an
innovative idea on any aspect of operation. Product is the key element of any marketing mix. In other
words, product refers to the goods and services offered by the organisation for sale. Here the marketers
have to recognize that consumers are not simply interested in the physical features of a product but a set
of tangible and intangible attributes that satisfy their wants. For example, when a consumer buys a
washing machine he is not buying simply a machine but a gadget that helps him in washing clothes. It
also needs to be noted that the term product refers to anything that can be offered to a market for
attention, acquisition as use. Thus, the term product is defined as anything that can be offered to a
market to satisfy a want. It normally includes physical objects and services. In a broader sense,
however, it not only includes physical objects and services but also the supporting services like brad
name, packaging accessories, installation, after sales service, etc.
Product is a set of tangible and intangible attributes including packaging colour, price,
manufacturers prestige, retailers prestige and manufacturers and retailers services which buyer may
accept as offering satisfaction of wants and services. William J Stanton
A product is more than just a physical product with its related functional and aesthetic features. It
includes accessories, installation on use, the package perhaps a brand name, which fulfils some
psychological needs and the assurances that services facilities will be available to meet the customer
needs after the purchase. Terome McCarthy
A product is anything that can be offered to a market for attention, acquisition user or
consumption. It includes physical objects, services, personalities, place, organisation and idea. Philip
Kotler
The decisions concerning product may relate to:
1.
2.
3.
4.
Product attributes
Branding
Packaging and labeling
Product support service
55
5. Product mix
Product attributes refers to the quality, features and design of the product. A product should serve
the purpose for which it is made, in terms of utility and quality. In a competitive market, products are
differentiated on the basis of certain features or design. For example, in the Whirpool washing
machine, Agitate wash is the distinctive feature. Branding is a crucial decision. In a competitive
market, many products are sold by brand names. You might have come across Indian brand names,
like Maruti, HMT, Godrej, TATA. Amongst foreign brand names Sony, Samsung are well known.
Brand is an identification of product. It plays an important role is creation of demand while branding
a product, it should be ensured that the name is simple, easy to read and pronounce and if possible, it
should have an appeal.
Packaging and labeling of product are quite important decisions packaging means putting the
products in suitale containers or packets such as tin, plastic jar or card board box, etc. Packaging
should be such that product is protected and easily handles. Sometimes, the container may have its
own usefulness. For instance Baiyanath Chyawanprash (pack) is available in a plastic jar which can
be reused after consuming the Chyawanprash. Certain polythene and plastic are not considered good
as packaging material from the environment point of view. Their wage should be avoided.
Labeling serves the purpose of indicating the contents, weight or measures, instructions for use,
price, name of the producer, date of manufacture and expiry etc. The information on the label is
essential for various reasons. For example, the date of expiry in case of medicines, and date of
manufacture in the case of eatables prevent the sale of products which may prove harmful.
Product support service is another important element of product decision. It includes decision
pertaining to the type of service and availability of the service. Service may be by way of installation
service, training in product use, after sale service, credit and financing service, etc. It should be
decided whether services would be provided free or against separate charge. Secondly, how the
services would be made available by the producers or agencies are also important decisions to be
made particularly with respect to durable consumer goods like TV, washing machines, electric fans,
etc.
The markets in which products will be offered is yet another important decision. A company may
decide to a single or a variety of products add new products, or withdraw certain products. Relevant
decisions are made keeping in view the scope of marketing. Such decisions are called product line or
product mix decisions. Product life cycle is a guiding factor while decisions are made.
56
Product Classification
Product can be broadly classified on the basis of:
1. Use
2. Durability
3. Tangibility
Based on Use
Based on use the product can be classified as:
(a) Consumer goods, and
(b) Industrial goods
Consumer goods Goods meant for personal consumption by the households or ultimate
consumers are called consumer goods. This includes items like soiletries, groceries, clothes etc. Based
on consumers buying behaviour the consumer goods can be further classified as:
(h) Convenience goods
(i) Shopping goods
(j) Speciality goods
Convenience Goods
Those consumer products, which are purchased frequently, immediately and with least time and
efforts are referred to as convenience goods. Examples of such products are cigarettes, ice creams,
medicines newspaper, stationery items, toothpaste etc. These products have low unit-value and are
bought in small qualities. Some of the important characteristics of such products are:
(a) These products are purchased at convenient locations with least efforts and time.
(b) Convenience products have a regular and continuous demand as these generally comes under the
category of essential products.
(c) These products have small unit of purchase and low prices. For example, the eggs are sold at
Rs.28 per dozen and the customers purchase them in small numbers.
(d) Convenience products have standardized price as most of these products are branded products.
(e) The competition in these products is high as the supply is greater than the demand. The
marketers have therefore, to heavily advertise for these product , and
(f) Sales promotion schemes or short term incentives such as sales contests, discount offers etc play
an important role in the marketing of such products.
Shopping Goods
57
These are goods which are purchased less frequently and are used very slowly like clothes, shoes,
household appliances. In case of these goods, consumers make choice of a product considering its
suitability, price, style, quality and products of competitors and substitutes, if any. In other words, the
consumers usually spend a considerable amount of time and effort to finalise their purchase decision as
they lack complete information prior to their shopping trip. It may be noted that shopping goods involve
much more expenses than convenience goods. The important characteristics of shopping products are as
below:
(a) The shopping products are generally of durable nature, ie, they normally survive many uses.
(b) The unit price as well as profit margin of shopping product is generally high.
(c) As these products have high unit price, customers compare the products of different companies
before making selections.
(d) Purchase of shopping products are generally preplanned and there is little degree of impulse
buying in these products, and
(e) Retailers generally play an important role in the sale of shopping products as lot of peruasive
effort is needed to convince the buyers to purchase them.
Speciality Goods
Because of some special characteristics of certain categories of goods people generally put
special efforts to buy them. They are ready to buy these goods at prices at which they are offered and also
put in extra time to locate the seller to make the purchase. Then nearest car dealer may be ten kilometers
away but the buyer will go there to inspect and purchase it. In fact, prior to making a trip to buy the
product he/she will collect complete information aout the various brands. Examples of speciality goods
are cameras, TV sets, new automobiles etc. Some of the important characteristics of the specialty
products may be summed up as follows:
(a) The demand for specialty products is limited as relatively small number of people buys these
products.
(b) These products are generally costly and their unit prices is very high.
(c) These products are available for sale at few places as the number of customers is mall and are
willing to take extra efforts in the purchase of these products.
(d) An aggressive promotion is required for the sale of speciality products in order to inform people
about their availability features etc, and.
(e) After sales services are very important for many of the speciality products
Industrial Goods
58
Goods meant for consumption as use as inputs in production of other products or provision of
some service are termed as industrial goods. These are meat for non-personal and commercial use and
include (i) raw materials (ii) machinery (iii) components and (iv) operating supplies (such as lubricants,
stationery etc)
The buyers of Industrial goods are supposed to be knowledgeable, cost conscious and rational in
their purchase and therefore the marketers follow different pricing distribution and promotional strategies
for their sale. The important characteristics of Industrial products are given below:
1. Number of buyers As compared to the consumer products, the number of buyers of industrial
products are limited. For example, sugarcane is purchased by few producers of sugar, but sugar,
which is a consumer product, is purchased by crores of people in our country.
2. Channel levels Because of limited number of buyers, the sale of industrial products is generally
made with the help of shorter channels of distribution, ie, direct selling or one level channel.
3. Geographic concentration Because of location of industries at certain points or regions,
industrial markets are highly concentrated geographically. For instance, the demand for power
loom comes from Mumbai, Sholapur, Bangaluru etc, where the textile industry is concentrated in
our country.
4. Derived demand The demand for industrial products is derived from the demand for consumer
products. For example, the demand for leather will be derived from demand for shoes and other
leather products in the market.
5. Role of technical considerations Technical considerations assume greater significance in the
purchase of industrial products because these products are complex products bought for use in
business operations.
6. Reciprocal buying Some big companies from basic industries like, oil, steel, rubber and
medicines resort to the practice of reciprocal buying. For example, Ashok Leyland may buy tyres
and tubes from MRF. Which in turn may buy trucks from Leyland, whenever it feels the need for
the same.
7. Leasing out A growing trend in industrial product market is to lease out rather than to purchase
the products on outright basis because of the heavy price of these products.
It may be noted that the same product may be classified as consumer goods as well as industrial
goods depending upon its end use. Take for example, the case of coconut oil. When it is used as hair oil
or cooling oil, it is treated as consumer goods and when used for manufacturing a bath soap it is termed as
industrial goods. However, the way these products are marketed to these two groups are very different
because purchase by industrial buyer is usually large in quantity and bought either directly from the
manufacturer or the local distributor.
59
Based on durability the products can be classified as:
(a) Durable goods,
(b) Non-durable goods
Durable goods Durable goods are products which are used for a long period. Examples of such
goods are refrigerator, car, washing machine etc. Such goods generally require more of personal selling
efforts and have high profit margins. In case of these goods, sellers reputation and presale and after-sale
service are important determinants of purchase decision.
Non-durable goods Non-durale goods are products that are normally consumed in one go or last
for a few uses. Examples of such products are soap, salt, pickles, sauce etc. These items are consumed
quickly and we purchase these goods more often. Such items are generally made available by the
producer through large number of convenient retail out lets. Profit margins on such items are usually kept
low and heavy advertising is done to attract people towards their trail and use.
Based on Tangibility
Based on tangibility, the product can be classified as:
(a) Tangible goods,
(b) Intangible goods.
Tangible goods Most goods, whether these are consumer goods or industrial goods and whether
these are durable or non-durable fall in this category as they have a physical form, that an be touched
and seen. Thus all items like groceries, cars, raw-materials, machinery etc., fall in the category of
tangible goods.
Intangible gods Intangible goods refer to services provided to the individual consumer or to the
orgaisational buyers (industrial, commercial, institutional, government etc).
Services are essentially
intangible activities which provide want or need satisfaction. Medical treatment, postal banking and
insurance services etc, all fall in this category.
Product Planning
Product planning has been defined by AMA as the act of marking out and supervising the search,
screening development and commercialization of new product, the modification of existing lines; and the
discontinuance of marginal or unprofitable items. Simply stated, product planning decides the nature and
60
other related aspects of the article produced and sold. The following are the usual functions undertaken
by product planning.
1.
2.
3.
4.
5.
6.
7.
Evaluation of the idea, market and the product

Evaluation of company resources
Finding out customer specifications
Developing the product
Testing the product
Marketing the product
Evaluating the result
in the words of Stanton product planning consists of All activities which enable products and
middlemen to determine what should constitute a company line of products. Ideally product planning
will ensure that full complement of a firms products is designed to strengthen the companys product
position.
Significance of product Planning
Product planning provides the following benefits;
1.
2.
3.
4.
5.
6.
Basic of marketing programme

for survival
To face competition
To minimize risk
Instrument of growth
To discharge social responsibility
Product Mix
Product mix is a combination of products manufactured by the same business house to rein force
their presence in the market, increase market share and increase the turnover for more profitability.
Nationally the product mix is within the synergy of other products for a medium size organisation.
However, large groups of industries may have diversified products within core competency. carsen
and Taubro Ltd, Godrej, Reliance in India are some of the examples. One of the realities of business
is that most firms deal with multi-products. This helps a firm diffuse its risk across different product
groups. Also, it enables the firm to appeal to a much larger group of customers or to different needs
of the same customer group. So when Videocon chose to diversify into other consumer durales like
music systems, washing machines and refrigerators, it sought to satisfy the needs of the middle and
upper middle income group of consumers.
61
Likewise, Bajaj electrical a household name in India, has almost ninety products in its portfolio
ranging from low value items like bulbs to high priced.
Consumer durables like mixers and
luminaries and lighting projects. The number of products carried by a firm at a given point of time is
called its product mix. This product mix contains products lines and product items. in other words
its a composite of products offered for sale by a firm.
Product Line and Product Depth

Product like group of products manufactured by a firm that are closely related in use and in
production and marketing requirements. The depth of the product line refers to the number of
different products offered in a product line. Taking Hindustan Unilever as an example bath soap
constitute one product line of the company fabric wash another beverages a third and cosmetics yet
another line. In the product line of bath soaps, HUL has several items/brands like Dove, Liril, Lux,
Lifebuoy and Hammam. In the product line of fabric wash, there are washing soaps, detergent
powders and detergent bars and each carries several brand. All the product lines of HLL together
constitute the product mix of HuL.
Objective Questions
1. Product is refer as
(a) tangible and intangible item
(b) tangible item
(c) anything
2. A product represents a markets offering
as it is perceived by
(a) present customers
(b) potential customers
(c) company
3. Products that are marketed include
(a) physical goods an services
(b) experiences and events
(c) persons
(d) places
4. Which of the following is/are tangible
product?
(a) House and TV
(b) car or Scooter
(c) Furniture
(d) All of these

(e) None of these
5. Which is the characteristic of product?
(a) Anything that can be utilized or
consumed
(b) Special features
(c) Tangible product
(d) Generic name
6. Which is service aspect of a product?
(a) Basic benefits or advantages
(b) Service
(c) Facility
7. Which is consumable item?
(a) Cold drink or milk
(b) Newspapers
(c) Petrol
(d) Gas (LPG)
8. They type of consumer product is/are
(a) shopping product
(b) convenience product
62
9.
10.
11.
12.
13.
14.
15.
16.
(c) unsought product

(d) speciality product
Which is intangible services?
(a) Entertainment
(b) Health club
(c) Hospital
(d) Banking and insurance
.. is raw material for a sugar industry.
(a) Machine
(b) Storage of sugarcane
(c) Coal
(d) Sugarcane
MRO is
(a) Money Rate Over
(b) More Rate Over
(c) Maintenance Repair and Operating
In product development stage
(a) high profit policy is required
(b) high product price policy is required
(c) marketing strategy is not required
is a initial stage of banking service.
(a) Introduction stage
(b) Maturity stage
(c) Growth stage
(d) Product development stage
(e) product decline stage
The factors of PLC includes
(a) risk
(b) legal protection
(c) competition level
(d) product regulatory system
What is not product attributes?
(a) packaging
(b) Brand and labeling
(c) Colour
(d) Design
Commercialisation product is based on
(a) production
(b) Pricing
(c) wages
(d) test marketing of product
(e) plan
17. Innovation means

(a) new idea
(b) new raw material
(c) new product or production style
18. Test marketing means
(a) test the product before commercial
production
(b) vouching
(c) valuation
(d) concept
19. Product simplification organisation is
(a) Union Bank of India
(b) Hindustan Unilever Ltd.
(c) Peter England
20. Union Kissan Card is . of the Union
21.
22.
23.
24.
Bank of India
(a) Production style
(b) production item
(c) expenses
(d) Pricing policy
(e) controlling tools
BEP stands for
(a) Book even page
(b) Book-even item
(c) expenses
(d) pricing policy
(e) controlling tools
Legal protection includes
(a) patent of product
(b) Planning and product style
(c) wage
The right of patents use is known as
(a) Commission
(b) royalty
(c) assets
(d) cost
(e) wage and salary administration
A brand is a
(a) liability and research
(b) symbol or a word
(c) service
(d) cost
63
25. Product identification involves
(a) warranty / guarantee
(b) branding / brand
(c) packaging
(d) labeling
26. Which is the example of product
diversification?
(a) Pepsi foods
(b) DCM Ltd
(c) SBF
(d) Union Bank of India and UTI Bank
27. Which is/are the principle of product
development?
(a) Principle of specialization
(b) Principle of simplification
(c) Principle of standardization
28. The characteristics of product includes

(a) product mix
(b) product life cycle
(c) symbol meaning
(d) price
29. Which is a product as per Philip Kotler?
(a) Goods and services
(b) Experience and properties
(c) Information
30. . is bundle of utilities consisting of
various products features and containing
services
(a) Cost
(b) Risk
(c) Plan
(d) Product
1. (d) 2. (b) 3. (e) 4. (d) 5. (e) 6. (d) 7. (e) 8. (e) 9. (e) 10. (d)
11. (c) 12. (c) 13. (a) 14. (e) 15. (e) 16. (d) 17. (d) 18. (a) 19. (c) 20. (b)
21. (d) 22. (a) 23. (b) 24. (b) 25. (e) 26. (e) 27. (d) 28. (e) 29. (d) 30. (e)
Explanations
1. Product refers to a physical product or service or an idea which a consumer needs and for which he is
ready to pay.
4. Tangible product cannot be touched and seen.
8. Products meant for personal consumption by the households or ultimate consumers are called consumer
products.
10. Sugarcane is the raw material for a sugar industry.
12. Product development is the process of designing. Creating and marketing an idea or product
14. Product Life Cycle is the full form of PLC.
21. Break-even-Point is the no profit no loss point.
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22. Patents are public documents conferring certain rights, privileges, titles or offices. A patent confers
the right to use of technical invention
28. Product mix denotes the complete set of all products offered for sale by a company. The product mix
is composed of several product lines.
Chapter 9
Product Life Cycle
The Product Life Cycle (PLC) is the life span of a product from development, through
testing, promotion, growth and marketing, to decline and perhaps regeneration. A new product is first
developed and then introduced to the market. Once the introduction is successful, a growth period
follows with wider awareness of the product and increasing sales. The product enters maturity when
sales stop growing and demand stabilizes. Eventually, sales may decline until the product is finally
withdrawn from the market or redeveloped. In the words of Arch Paton-A Products life-cycle is
very much similar to human like-cylce. A product is produced, increases speedily on demand, and
reaches maturity and then results in to decline. According to Stanton A product has to pass
through various stages and different competitive environments from its introduction to decline. Its
success of life is determined by the fact that how best it fits in such an environment and conditions.
According to Philip Kotle, The Product Life Cycle is an attempt to recognize distinct stages in
the sales history of the product.
Thus, Product Life Cycle means the various situations by which a goods moves. It may be that
life-cycle of different goods may differ because few goods are perishable whereas others may be
stable. For example, fashionable clothes, which suddenly becomes outdated because of change in
fashion. As against this machine, telephone, fan and other industrial products continue their life-cycle
for decades.
In addition these are few products which take years only in completion of their
introduction stage, whereas there are few which complete their introductory stage in few weeks.
Characteristics of PLC
Following characteristics can be seen in the Product Life Cycle concept.
1. Each product or goods has a life-cycle like human beings, plants and animals.
2. The life-cycle of each product begins from in presentation in the market and passes through
market development, maturity becomes leader and ultimately declines.
3. The speed of movement through various stages of life-cycle, cannot be the same for all goods.
65
4. Many profits in the business enterprise, grow quickly in the introduction stage and
decline/decrease in the maturity stage due to competitive conditions. However, there is overall
increase in sale during the maturity stage.
5. With the change to profits in the maturity stage change in the life-cycle of product like
Engineering and research, production, marketing and financial control activities etc essential.
Stages in Product Life Cycle (PLC)
The Product Life Cycle comprises four stages
Decline
Maturity
Growth
Introduction
Introduction
Growth
Maturity
Decline
Sales & Profit
1.
2.
3.
4.
Product Life Cycle
Introduction Stage
Sales generally are low and somewhat slow to take off.
Production costs tend to be high on a per unit basis because the firm has yet to experience any
significant scale economies.
Profits, because of low sales and high unit costs, tend to e negative or very low.
Competitors tend to be few in number, indeed there may be only one major player in the market
place the innovating firm.
Growth Stage
Sales increase rapidly during the growth stage.

Costs reduced due to economies of scale
Profits rise significantly and rapidly during this stage.
Competition continues to grow throughout this stage.
Maturity Stage
66
Sales continue to grow during the early part of maturity, but at a much slower rate than
experienced during the growth phase. At some point, sales peak. This speak may last for
extended periods of time. In fact, the maturity phase of the life-cycle is the longest phase for
most products.
Costs continue to rise during maturity because of market saturation and continually in testifying
competitions.
At this point the market reaches saturation. Producers begin to leave the market due to poor
margins. Promotion becomes more widespread and use a greater variety of media.
Profit starts to decline in this stage.
Decline Stage
At this stage, there is a downturn in the market.
Profit margins touch a low level, completion becomes severe and customers start using newer and
better products.
Objective Questions
1. Which of the following is the durable
5. The importance of product life Cycle
product?
(a) Washing machine
(b) Furniture
(c) Car
2. MRO stands for
(a) Money Rate Over
(b) More Rate Over
(c) Maintenance Repair and Operating
(d) Money Retailer Operation
3. Characteristics of introduction stage of
includes
(a) help in promotional decision
(b) help in product control
(c) facilitates sales forecasting
6. Physical features of product is
(a) colour and size of product
(b) packaging
(c) brand
7. In introduction stage of PLC
(a) advertisement is required
(b) Sales promotion is required
(c) R and D is required
8. Micro finance of banking services falls
PLC is
(a) lower demand
(b) limited customer
(c) low growth rate in demand
4. Products that are marketed include
(a) experiences and events
(b) physical goods and services
(c) Persons
in
(a) growth stage of PLC
(b) maturity stage of PLC
(c) introduction stage of PLC
9. PLC stands for
67
(a) Product Life Cycle
(b) Product Life Cost
(c) Product Long Cost
(d) Price Long Cost
10. Example of non-durable product is
(a) Computer
(b) Mobile
(c) Salt
11. Which of the following is not the
product line policy?
(a) Contraction of product mix
(b) Development of new uses for
existing products
(c) Alteration of existing products
(d) Costing
12. Which of the following is the example
of staple product?
(a) Television
(b) Fruits
(c) Computer
(d) All of these
(e) None of these
13. Which of the following is trademark
List- I
(Type of products)
A. Speciality
List II
(Examples)
1. Credit card or
B.
product
Unsought
2.
car loan
Insurance
C.
product
Shopping
3.
Loan on TV
D.
product
Emergency
4.
Medical loan
5.
Retailer
product
Codes
(a)
(b)
A
1
4
B
3
3
C
4
2
D
2
5
(c)
(d)
name of a product?
(a) Maruti-suzuki - Maruti-800
(b) Tata - India
(c) Union Kisan Card
(d) SBI Golden Card
14. An augmentable benefits aspect is/are
(a) maintenance of product or services
(b) establishment
(c) replacement
15. Which of the following is the shopping
(e)
4
3
2
1
17. product is/are
(a) intangible product
(b) durable product
(c) non-durable product
18. MRO applies for
(a) consumable supplies items
(b) research and development
(c) shares
(d) bond
19. Assembly industry is related to
(a) main or primary parts
(b) component parts
(c) production
(d) finance
(e) insurance
20. Which of the following is the stage of
product?
(a) Motor cycle and scooter
(b) Furniture and television
(c) Car
(d) AC
16. Match the following
Product Life Cycle?

(a) Research and development of price
(b) Production development stage
(c) Introduction stage
(d) Production
21. Product planning means
68
(a) The
act
of
making
out
and
supervising the search, screening,

development and commercialization
of new products the modification of
existing lines and the discontinuance
of marginal or unprofitable items.
(b) innovation of company
(c) pricing
(d) selling
(e) marketing
22. A fashion is always based on
(a) product or service pricing method
(b) some style
(c) cost
(d) brand
(e) sales
23. product development includes
(a) guarantee and condition on of the
product
(b) brand
(c) packaging
(d) label
24. An organisation should be
(a) consumer oriented
(b) product oriented
(c) profit oriented
25. Which of the following is the reason for
product innovation?
(a) Competition and market change
(b) Market strategy
(c) Risk

26. Which of the following is the product
test concept?
(a) Product development research
(b) Product pricing research
(c) Product concept testing
of product diversification of bank?
(a) International credit card
(b) Credit card
(c) Debit card
(d) ATM card
28. Trickle-across theory is concerned with
(a) trademark
(b) patent
(c) brand
(d) fashion
(e) salary and wage determination
29. Which of the following is the brand
testing mode?
(a) Association test
(b) Learning test
(c) Memory test
(d) Preference test
(e) All of the these
30. Product simplification is required due to
(a) uses of special plant
(b) Cost reduction
(c) effective marketing
Answer
1. (d) 2. (c) 3. (d) 4. (d) 5. (d) 6. (d) 7. (d) 8. (c) 9. (a) 10. (c)
11. (d) 12. (b) 13. (e) 14. (d) 15. (e) 16. (c) 17. (d) 18. (a) 19. (b) 20. (b)
21. (a) 22. (b) 23. (e) 24. (a) 25. (d) 26. (d) 27. (e) 28. (d) 29. (e) 30. (d)
Explanations
1. Durable products are that products which are used for a long period.
4. All are the kinds of product.
69
5. A new product progresses through a sequences of stages from introduction to growth, maturity and
decline.
7. In introduction stage of PLC sales are low.
10. Non-durable products are products that are normally consumed in one go or last for a few uses.
13. All are the trademark names of the product.
15. Those products, which are purchased less frequently and are used very slowly like clothes, shoes,
household appliances are referred to as shopping products.
17. Product can be broadly classified on the basis of:
21. The planning, direction and control of all stages in the life of a product from the time of its creation to
the time of its removal from the companys line of product is known as product planning.
Chapter 10
Pricing
Price is the amount charged for a product or service. In other words, price is the consideration in
terms of money paid by consumers for the bundle of benefits he derives by using the product or service.
In simple terms, it is the exchange value of goods and services in terms of money. Pricing (determination
of price to be charged) is another important element of marketing mix and it plays a crucial role in the
success of a product in the market. If the price fixed is high, it is likely to have an adverse effect on the
sales volume. If, on the other hand, it is too low, it will adversely affect the profitability. Hence, it has to
be fixed after taking various aspects into consideration.
Price is the only element in the marketing mix of a firm that generates revenue. All else generates
only cost. Price and sales volume together decide the revenue of any business.
Factors Influencing Pricing

Pricing decisions of a company are affected by both internal as well as external factors.
External Factors
External factors are also known as environmental factors. Nature of demand, competitors costs,
price offers and government policy are very important factors to be considered while fixing prices. The
70
relationship between price and demand should be analysed property. Economic factors, like rate of
interest, state of industry (boom or recession) inflation etc, affect the price-fixing decision. In case of
certain products, eg, products which fulfil basic needs, government may impose price control. External
factors are:
1.
2.
3.
4.
5.
6.
7.
Nature of market
Buyers behaviour in respect of the product
Bargaining power of major customers
Bargaining power of major suppliers
Competitors pricing policy
Government controls/regulations on pricing
Societal considerations
Internal Factors
Internal factors are :
1.
2.
3.
4.
5.
6.
7.
Corporate and marketing objectives of the firm

The image sought by the firm through pricing
The characteristics of the product
Price elasticity of demand of the product
The stage of the product in its life cycle
Cost of the product
Other elements of the marketing mix of the firm and their interaction with pricing.
Internal factors
Cost of the product

Marketing objectives
Stage of the product in its
life-cycle
Price elasticity
External factors
Pricing Decision
Pricing Objectives
The various objectives sought by firms in pricing are given
1.
2.
3.
4.
5.
6.
7.
Profit maximization
Achieving a particular sales volume
Achieving a particular market share
Deeper penetration of the market
Keeping competition out
Fast turn around and early cash recovery
Entering new markets
Buyers behavior
Competitors pricing policy
Government controls
Other relevant legal aspects
71
Pricing Methods
By pricing method, we mean the route taken by the firm in fixing the price. Evidently, the
methods must be appropriate for achieving the desired pricing objectives. There are several methods of
pricing. Each of them may be appropriate for achieving a particular pricing objective, or a particular
combination of pricing objectives. For example, skimming pricing is suited for achieving the objective of
short term profit maximization. The different methods of pricing can be grouped into a few broad
categories as given, here below;
1. Cost based pricing:
(a) Mark up pricing/Cost plus pricing
(b) Absorption cost pricing
(c) Target rate of return pricing
(d) Marginal cost pricing
2. Demand based pricing;
(a) Skimming pricing
(b) Penetration pricing
3. Competition based pricing
4. Value pricing
5. Product line-oriented pricing
6. Tender pricing
7. Differentiated pricing
Skimming Pricing
In this strategy, the company charges a high price in the beginning and then gradually lowers its
prices over a period of time. This method is generally used by the early adopters, where the product
demand is relatively inelastic.
Penetration Pricing
Penetration pricing, as the name indicates, seeks to achieve greater market penetration through
relatively low prices. It is the opposite of skimming pricing.
Psychological Pricing
Marketers often try to get around consumers psychological barrier in respect of price through
psychological pricing. For example, they put on price tag of Rs.999 instead of Rs.1000, or a tag of
Rs.9999 instead of Rs.10000.
Objective Questions
1. Planned-cost service means
(a) Costly products
72
2.
3.
4.
5.
(b) Extra profit on the same cost

(c) Extra work by seller
The Bank of Calcutta, Bank of Bombay
and Bank of Madras were merged in
1921 to form
(a) Reserve bank of India
(b) Imperial Bank of India
(c) Bank of India
(d) Union Bank of India
What does devaluation of a currency
mean?
(a) Decrease in the internal Value of
money
(b) Decrease in the external Value of
money
(c) Decrease both in the external and
international values of money
Which of the following is known as
plastic money?
(a) Bearer cheques
(b) Credit cards
(c) Demand drafts
(d) Gift cheques
(e) None of these
Which among the following affect
pricing strategy a firm?
(a) Profit and Volume
(b) Profit, volume and competition
(c) Profit, volume, competition and
prestige
6. Mark-up pricing is an example of

(a) Cost based approach
(b) Buyer based approach
(c) Competition based approach
7. Which pricing approach is used to avoid
the problem of over pricing and under
pricing?
(a) Cost based approach
(b) Buyer based approach
8.
9.
10.
11.
12.
13.
(c) Competition based approach

Which among the following is an
example of competition based pricing?
(a) Firms bidding for a particular
project
(b) 9% mark up on cost exfactory
(c) Higher price of a highly popular
brand of shoe
In case of prestige goods the demand is
(a) Price sensitive
(b) Not price sensitive
(c) Not price sensitive till a level
If you are a marketing manager of a firm
you would prefer the customers who are
(a) Less price sensitive
(b) More price sensitive
(c) Depends upon the marketing mix
Some people will be happy to pay a high
price for anything that is new and
unique. Companies use what kind of
pricing strategy for this?
(a) Penetration pricing
(b) Skimming pricing
(c) Cost plus pricing
While introducing a new product into
the market, a company will use low
price (penetration pricing) which
enables the firm to
(a) Getting established as the market
share champion
(b) Discouraging market entry by
competitors
(c) Creating broad-based demand for
the product
Which among the following is not the
objective of capital budgeting?
(a) Maximise profitability
73
14.
15.
16.
17.
18.
19.
(b) Optimum rationing of the available

funds
(c) Increase sales
Maximise profits and minimise costs is
a
(a) Marketing function
(b) Finance function
(c) Production function
Which among the following is a
component of customer satisfaction?
(a) Fair price
(b) Profitability
(c) Brand
(d) All of these
(e) None of these
Out of the following. Is not an
objective of pricing
(a) Profit
(b) Stabilising demand and sales of the
product
(c) Improvement in product quality
(d) Expansion of business
Of the following pricing strategies,
..is not ideal for new products.
(a) Skimming pricing
(b) Discriminatory pricing
(c) Promotional pricing
In market skimming pricing strategy
(a) Initially price is lower and then it is
increased
(b) Initially price is higher and then it is
reduced
(c) Initially price is high and is
maintained high
With pricing, the products are
priced below list price (or even below
cost) for a temporary period to create
buying urgency
(a) Reference
(b) By-product
(c) Promotional
(d) Market penetration
20. Of the following pricing methods, . Is
not cost-based method.
(a) Value-pricing
(b) Target return pricing
(c) Marketing pricing
(d) Marginal cost pricing
21. Cost that do not vary with production or
sales levels are called
(a) Fixed costs
(b) Variable costs
(c) Standard costs
(d) Independent costs
(e) All of these
22. Relationship selling means
(a) Preparing a list of relatives
(b) Cross selling
(c) Selling to relatives
(d) Selling to strangers
(e) telemarketing
23. ATM are
(a) Branches of banks
(b) Manned counters of banks
(c) Unmanned cash dispensers
24. Home loans are granted to
(a) Individuals
(b) Institutions
(c) Builders
(d) All of these
(e) None of these
25. Credit cards are used for
(a) Cash withdrawals
(b) Purchase of air tickets
(c) Purchase of consumable item form
retail outlets.
26. Cross selling means
(a) Identifying customer needs
(b) Matching the products to customers
needs
(c) Convincing the customers of
product benefits
74
(d) Responding to questions and
objections of customers
27. In which type of account, banks
generally dont pay interest?
(a) Saving account
(b) Current account
(c) Fixed deposit account
(d) Interested is always payable in all
type account
28. Which of the following is not
commercial bank?
(a) RBI
(b) SBI
(c) Canara Bank
(d) Oriental Bank of commerce

29. Increase in bank rates generally is
followed by
(a) An increase in market rate of
interest
(b) A fall in market rates of interest
(c) A rise only in the deposits rates but
not the lending rates
(d) A rise only in the leading rates
30. Which of the following are included in
legal tender money in India?
(a) Coins and currency notes
(b) Coins and bank drafts
(c) Currency notes and SDRs
(d) Currency notes issued by RBI
Answers
1. (b) 2. (b) 3. (b) 4. (b) 5. (c) 6. (a) 7. (c) 8. (a) 9. (c) 10. (a)
11. (b) 12. (d) 13. (c) 14. (b) 15. (a) 16. (c) 17. (b) 18. (b) 19. (d) 20. (a)
21. (a) 22. (b) 23. (c) 24. (a) 25. (d) 26. (e) 27. (b) 28. (a) 29. (a) 30. (a)
75
Explanations
2. The Bank of Calcutta, Bank of Bombay and Bank of Madras were merged in 1921 to form the Imperial
Bank of India.
3. Devaluation decreases the external value of a currency.
4. Credit cards, debit cards and smart cards are example of plastic money.
6. Cost based pricing includes
(i) Mark up pricing
(ii) Absorption cost pricing
(iii) Target rate of return pricing
(iv) Marginal cost pricing
8. Competition based pricing includes
(i) Premium pricing
(ii) Discount pricing
(iii) Parity pricing
14. Profits and costs are related with finance function of marketing.
18. In skimming pricing strategy, initially price is higher and then it is reduced.
20. Value pricing is not the type of cost-based method of pricing
24. Home loans are granted to individuals.
27. On current account, banks dont pay interest.
28. RBI is not the example of commercial bank.
Chapter 11
Channels of Distribution
A channel of distribution or trade channel is the path or route along which goods move from
producers to ultimate consumers or industrial users. In other words, it is the distribution network through
which a producer puts his product in the hands of actual users. Stanton has defined it as A distribution
channel consists of the set of people and firms involved in the transfer of title to a product as the product
moves from producer to ultimate consumer or business user. Basically it refers to the vital links
76
connecting the manufacturers and producers and ultimate consumers/users. It includes both the producer
and the end user and also the middlemen/agents engaged in the process of transfer of title of goods.
Types of Channels of Distribution

The various channels used for distribution of consumer goods can be described as follows:1. Zero stage channel of distribution Zero stage distribution channels exists where there is direct sale of
goods by the producer to the consumer. This direct contact with the consumer can be made through doorto-door salesmen, own retail outlets or even through direct mail. Also in case of perishable products and
certain technical household products, door-to-door sale is an easier way of convincing consumer to make
a purchase.
2. One stage channel of distribution In this case, there is one middleman, ie, the retailer. The
manufacturers sell their goods to retailers who in turn sell it to the consumers. This type of distribution
channel is preferred by manufacturers of consumer durables like refrigerator, air conditioner, washing
machine, etc. It is also used for distribution through large scale retailers such as departmental stores (Big
Bazaar, Vishal Mega Mart) and super markets.
3. Two stage channel of distribution This is the most commonly used channel of distribution for the sale
of consumer goods. In this case, there are two middlemen used, namely, wholesaler and retailer. This is
applicable to products where markets are spread over a large area, value of individual purchase is small
and the frequency of purchase is high.
4. Three stage channel of distribution When the number of wholesalers used is large and they are
scattered throughout the country, the manufacturers often use the services of mercantile agents who act as
a link between the producer and the wholesaler.
Factors Affecting the Choice of Distribution Channel

Choice of an appropriate distribution channel is very important as the pricing as well as
promotion strategy are dependent upon the distribution channel selected. not only that, the route which
the product follows in its journey from the manufacturer to the consumer also involves certain costs. This
in turn, affects not only the price inappropriate channels of distribution may result in lesser profits for the
manufacturer and higher price from the consumer. Hence, the manufacturer has to be careful while
finalizing the channel of distribution to be used. He should pay attention of distribution to be used. He
should pay attention to the following factors while making his choice.
77
1. Product considerations The nature and type of product have an important bearing on the choice
of distribution channels. For examples, perishable goods need speedy movements and hence
shorter channel or route of distribution. For durable goods, longer and diversified channels may
be used. Similarly, for technical products requiring specialist selling and serving talents, the
shortest channel should be used.
2. Market considerations There are many aspects of market which determine the choice of channel
of distribution. Say for example, where the number of buyers is limited, they are concentrated at
few locations and their individual purchases are large as is the case with industrial buyers, direct
sale may be the most preferred choice. But in case where number of buyers is large with small
individual purchase and they are scattered then need may arise for use of middlemen.
3. Company considerations The nature size and objectives of the business firm also play in
important role in the selection of distribution channel. It includes financial resources, market
standing, volume of production, desire for control of channel, services provided by
manufacturers etc. For example, a company with substantial financial resources need not rely
too much on the middlemen and can afford to reduce the levels of distribution. Similarly, a
company desiring to exercise greater control over channel will prefer a shorter channel.
4. Middlemen considerations The cost and efficiency of distribution depend largely on the nature
and type of middlemen. It includes characteristics of middlemen such as availability. Attitudes,
services, sales potential, cost, etc.
For example, if the terms and conditions of engaging
wholesalers are unfavourable, a manufacturer may like to chanelise his products through semiwholesalers or retailers, thereby, by passing wholesalers.
Designing the Channel of Distribution

Channel design is a strategic marketing tool.
Four decisions can be help a firm design a
distribution channel.
1.
2.
3.
4.
What role distribution is to play in achieving objectives?

What type of channel is needed?
What level of intensity of distribution?
Which specific intermediaries to use?
Steps Involved in Designing a Channel System

1.
2.
3.
4.
5.
6.
Formulating the channel objectives.

Identifying the function to be performed by the channels.
Analysing the product and linking the channel design to the product characteristics.
Evaluating distribution environment, including legal aspects.
Evaluating competitors channel design.
Evaluating company resources and matching the channel design to the resources.
78
7. Generating alternative designs, evaluating them and selecting the one that suits the firm best.
Objective Questions
1. Distribution channels are
(a) systems of economic institution
through which a producer of goods
delivers them into hands of their
users
(b) System of pricing
(c) Costing system
(d) Branding
2. Which is the channel
3.
4.
5.
6.
of
direct
distribution?
(a) Own sales showrooms
(b) Own salesmen
(c) Own sales shops
(d) Mail order
Vending machine is
(a) a pricing system
(b) distribution channel
(c) Cost planning
(d) management system
Inventory control technique is
(a) ABC analysis
(b) Marketing mix
(c) FIFO method
(d) Cost
(e) All of these
Direct distribution channel is
(a) Producer consumer
(b) Producer Wholesaler agent
(c) Producer agent retailer
(d) Producer retailer
Marketing channels are
(a) distribution network through which
(b)
(c)
(d)
(e)
7. Which is the factor of distribution

channel?
(a) Number of customer
(b) Size of the manufacturer
(c) Product weight
(d) Perish ability
8. Indirect distribution channel is
(a) producer consumer
(b) Producer agent
(c) Producer retailer
(d) Producer agent wholesaler
retailer consumer
9. The function of distribution channel
includes
(a) managing finances
(b) Promotional activities
(c) fixing prices
(d) servicing the consumer
List I
(Marketing policy)
A. Selling policy
B. Transportation
policy
C.
Advertising
policy
D. Inventory policy
Codes
List II
(Elements)
1. Effective sales
force
2. Railway
3. Ratio
4. EOQ
5.Cost price
(a)
(b)
producers products flow to the
(c)
market
the channel of storage
channel of production
All the above
None of the above
(d)
(e)
11. Marketing programme affected by

(a) Promotion
(b) Market expansion
79
(c) Physical distribution
(d) Product planning and pricing
12. Physical distribution means
(a) the actual handling and moving of
goods within individual and along
13.
14.
15.
16.
17.
channel systems
(b) the action for financing
(c) grading
(d) dividing
Consumer stores are established for
(a) banking groups
(b) Government of India
(c) Ultimate consumer
(d) Wholesaler
(e) Agent
Physical distribution includes
(a) materials handling
(b) size of inventory
(c) warehousing
(d) transportation
Inventory decision is based on
(a) economic order quantity
(b) order lead time
(c) service standard
(d) usage rate
The channel of product and consumer is
(a) agent, retailer or wholesaler
(b) product or service
(c) producer
(d) government
(e) price
Marketing channels are sets of
interdependent organization involved
(a) production activity
(b) financing activity
(c) training activity
(d) in the process of making a product
available for use or consumption

18. Which is the service of channel of
distribution?
(a) Helps in pricing
(b) Helps in market expansion
(c) Financing

List I
(Factors affecting to
channel of
distribution)
A.
Customer
consideration
B.
Product
considerations
C.
Institutional
considerations
D.
Middlemen
considerations
List II
(Nature of
factors)
1.
Buyer
of
product
2. Weight of the
product
3. Reputation
4.
Cost
of
distribution
5. Policy
Codes
A
B
C
D
(a)
1
3
2
4
(b)
2
3
4
1
(c)
1
2
3
4
(d)
1
4
3
2
(e)
4
3
2
1
20. The type of distribution channel is
(a) producer consumer agent
wholesalerretailer
(b) produceragentwholesalerreta
ilerconsumer
(c) agentconsumerwholesalerpro
ducerretailer
(d) retailerconsumerproducerwh
olesaleragent
(e) consumerproducerwholesaler
agentretailer
21. Which is the channel of producer and
consumer?
(a) Middlemen
(b) Cost
(c) Market
(d) System
(e) all of these
22. Which is the type of distribution channel
in the bank?
(a) Bankcustomer
80
(b) BankDSACustomer
(c) Head
office
27. A channel of distribution for a product is

of
the route taken by the title to the goods
bankbranchcustomer
23. Which is/are factor related to product?
(a) Product perish ability
(b) Product weight
(c) Nature
24. Who are the users of industrial goods?
(a) Agents
(b) Ultimate consumers
(c) Retailer or wholesaler
(d) Producer or manufacture of
as they move from the producer to the

(a) ultimate consumer or industrial user
(b) company
(c) producer
(d) staff
(e) cash
28. Which is the latest distribution system?
(a) Telephonic distribution
(b) E Commerce
(c) E mail
(d) Mobile
29. Which is/are the channels of distribution
consumer goods.
25. Which is the marketing policy?
(a) Pricing policy
(b) Advertising policy
(c) Transportation policy
(d) Selling policies and inventory policy
26. Direct sales is a part of
(a) producer consumer
(b) produceragentconsumer
(c) producerretailerconsumer
(d) producerwholesalerconsumer
of consumer goods?
(a) Producer WholesalerRetailer
Consumer
(b) ProducerAgents
Retailer
Consumer
(c) ProducerAgentsConsumer
(d) ProductWholesalersRetailers
Consumer
30. Costs of carrying the stock includes
(a) storage cost
(b) cost of capital
(c) insurance
(d) depreciation and obsolescence
Answers
1. (a) 2. (e) 3. (b) 4. (a) 5. (a) 6. (a) 7. (e) 8. (d) 9. (e) 10. (a)
11. (e) 12. (a) 13. (c) 14. (e) 15. (e) 16. (a) 17. (d) 18. (d) 19. (c) 20. (b)
21. (a) 22. (d) 23. (d) 24. (d) 25. (e) 26. (a) 27. (a) 28. (e) 29. (e) 30. (e)
Explanations
1. Channel of distribution refers to the vital links connecting the manufacturers and producers and
ultimate consumers/users.
3. Vending machine is an example of distribution channel.
4. A very important decision in respect of inventory is decision in respect of inventory is deciding about
the level of inventory
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5. In direct channel, goods are made directly available by the manufacturers to customers without
involving any intermediary.
8. When a manufacturer employs one or more intermediary to more goods from the point of production to
the point of consumption, the distribution network is called indirect.
11. According to McCarthy, A marketing programme is a set of marketing strategies which seeks to rich
the firms goals by making the most effective possible use of the firms resources.
14. Physical distribution is the process delivering the product to the marketing channels and consumers,.
20. A channel of distribution consists of producers, consumers or users and the various middlemen.
24. Producers are the users of industrial goods.
30. Components of physical distribution are:
(i) Transportation
(ii) Warehousing
(iii) Inventory management
Chapter 12
Middlemen
Both wholesalers and retailers act as a link between producers and consumers in the chain of
distribution of products. They are called middlemen as they come in the middle, ie, between the chain of
distribution of products.
Producers Wholesalers Retailers
Consumers
Chain of distribution
The middlemen provide useful services to both producers and consumers. For producer, they free
him of the consumers. For the producer, the free him of the complevities of arranging for transport,
warehousing, financing and marketing of his producer to a large extent. The responsibility of the
producers gets limited to producing the product. Largely all efforts to sell and distribute the same is taken
up by these middlemen. For the consumers too, these middlemen are beneficial as they make the products
available at the place and time of convenience to them.
Wholesale Trade
82
Wholesale trade refers to buying of goods in large quantity from producers or manufacturer too
sale to other traders or buyers in small quantities. Those who are engaged in wholesale trade are called
wholesalers. They act as a link between the manufactures or producers and the small traders. Generally
they specialize and deal in one or a few products.
Characteristics
Following are the characteristics of wholesale trade:
(a) The wholesaler generally deals in one or few variety of items. He is a specialist trader in a
particular line, eg, machinery, textiles, medicine, etc.
(b) Wholesalers buy goods from the manufactures and products in bulk and sell them to the retailers
and sometimes to consumer directly.
(c) Wholesale trade requires a large amount of capital to be invested. This is because purchase are
made in bulk, advances are given to manufactures and the goods are generally sold on credit.
Besides it also requires large storage space.
(d) Generally people who engaged in wholesale trading of similar goods have their business premises
located in the same area for the convenience of the retailers. For example, wholesale grain
market, wholesale paper market, etc. these are wholesale markets dealing in one particular
product.
(e) Besides selling, wholesale traders are also involved in some other activities like packaging,
grading, advertising, market research etc.
Retail Trade
Retail trade refers to buying goods from the manufactures or wholesalers and selling the same to
the ultimate consumers. The retail trader generally deals in a variety of goods. Those who are engaged in
retail trade are called retailers. Retailers sell goods in small quantities as per the requirement of consumer.
Characteristics
Following are the characteristics of retail trade:
(a) Retail trade generally involves dealing in a variety of items.
(b) A retailer makes purchases from producer or wholesalers in bulk for sale to the consumers in
small quantities.
(c) Retail trade is normally carried on in or near the main market area.
(d) Generally retail trade involves buying on credit from wholesalers and selling for cash to
customers.
(e) A retailers has indirect relation with the manufacturer (through wholesalers) but a direct link with
the consumers.
Role of Middlemen in the Distribution of Goods
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Role of Wholesalers
The wholesalers through their services offer a number of benefits its to the producers and
retailers. They save the time and effort of the producers and allow them to concentrate on production of
goods while distribution is taken care of by the wholesalers. They deal with goods in bulk and reap the
benefit of economies of scale. They provide goods in relatively small quantities to retailers and provide
them with facility of credit purchase. They provide information to the producers about the consumers
preferences, changing taste and fashion market, demand, etc. wholesales also bear the risk invalued in
holding of stock of goods and its transportation.
Role of Retailers
Retailers are engaged in selling the product to the end-users or the customers. They cater to the
demand of the consumers by providing a variety of products collected from different locations. The
retailers may offer credit facility to customers.
They also offer pre and after sales services and
communicate to consumers the technique of usage of the products. They act as salesmen of the product
and persuade buyers to purchase goods and services. They provide information to the manufactures or
wholesalers about the feedback on consumers response to the product.
Differences between Wholesale and Retail Trade
Following are the differences between wholesale trade and retail trade:
S.No
1.
2.
3.
4.
Basis
Number of items
Quantity of goods bought and
Wholesale Trade
Deals in a few items
Large
Retail Trade
Deals in variety
Small
sold
Source of purchase
Main activity
Manufactures
Sells goods for resale
Wholesalers/producers
Sells goods for consumption or
final use
5.
6.
7.
Amount of capital required

Nature of relationship with
Large
Direct link with the
Small
Indirect link with the producers
producers/consumers
producers and indirect link
and direct link with the consumers
Location
with the consumers

Located in the same area
Located near residential areas.
along with other

wholesalers dealing in
8.
Display
similar product
Does not require elaborate
Requires display of products
display of goods
attractively
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Evaluation of the Role of Middlemen in the Chain of Distribution

As seen above, the middlemen provide a number of services in the process of distribution. Do
they charge any money for their services? Yes, these services of middlemen do not come free of cost.
They do charge their share of profit margin for the product, in return for the services they provide. This
increases the sale price of the product considerably, as compared to the cost incurred in producing it. For
example, a pen that costs Rs5 to produce may be sole by the producers to the wholesalers for Rs 6. In
term the wholesaler may sell it to the retailer for Rs 7 who in turn may sell it to the ultimate consumer for
Rs 8.50. The middlemens share of profit here is Rs 2.50 (Re1+Rs1.50) that has added considerably to the
price of the product.
Producers Wholesalers Retailer
Rs 5
Rs 6
Rs 7
Consumers
Rs 8.50
Price of the product in the chain of distribution

It is often debated that the middlemen do not serve any useful purpose, but only escalate the price
of a product unnecessarily. However, we must not forget that they render useful services to producers and
consumers. To that extent they are justified to get their share of profit in the sale of the product. But it
should be a reasonable and not too high to become a burden on the consumers. We must also given a
thought to some of the problems that stem from the presence middlemen in the chain of distribution. If
there are too many middlemen between manufactures and consumers, each charging his share of profit or
commission, the ultimate consumer ends up paying a very high price for the goods. Some middlemen
indulge in unfair trade practices like hourding and adulteration to increase their gains from the business.
They, at times, promote the sale of inferior quality goods and exploit the consumers to get a high profit
margin for themselves. The middlemen do not bear risk such as loss due to strikes, lockouts, changes in
fashion and consumption habits. These have to be primarily borne by the producer. Sometimes the
transfer of goods from one middleman to another causes delay in the smooth flow of goods, instead of
facilitating it.
None the less, when we compare the benefits of middlemen with the problems they pose, their
benefits definitely outweigh the problems. In conclusion, one can clearly say that the middlemen play the
role of a vital link between producers and consumers in the chain of distribution.
Types of Retail Trade
1. Itinerant Retailing
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2. Fixed shop Retailing
Types of Retail Trade
Itinerant retailing
Fixed shop retailing
Peddlers and hawkers

Market traders
Street traders
Small scale
Large scale
General store
Departmental stores
Single line store
Multiple shops
Speciality store
Super market
Second hand
Consumer cooperative store
Goods shop
Mail order retailing

Franchise
Types of retail trade

Itinerant Retailing
Itinerant retailing is a type of small-scale retail trade in which retailers move around and sell a
variety of items directly to the consumers. They do not have a fixed shop where they can sell. You must
have seen them distributing newspapers early in the morning selling peanuts, bangles, toys, etc, in buses
and trains, selling fruits and vegetables in your locality using a cart, selling ice-cream, namkeens, etc, on
a cycle, selling rice, earthen pots or even carpets by using a cart, etc. you can also see them on pavements
in your locality.
In towns and cities we come across different types of itinerant retailers. There are traders who sell
their articles on fixed days at different market places. In villages these markets places are called Haut
and in towns or cities they are called weekly bazars. The itinerant retailing also includes persons selling
products from door to door. In most cases, the price of items is not fixed and mostly settled through
bargaining. Moreover, in most cases the items sold are not branded products.
86
Fixed Shop Retailing
Here, the retailers sell goods and services from a fixed place known as shop. They do not have
to move from place to place to serve their customers. These shops are usually located at market places or
commercial areas or near residential localities. These shops normally deal with a limited variety of goods.
On the basis of the volume of transaction or size of their operation, fixed shop retailing can be classified
as:
(a) Small scale fixed shop retailing, and
(b) Large scale fixed shop retailing
Fixed Shop Retailing Small Scale
In every locality you find shop retailers dealing with goods and services on a small scale. They
deal with limited variety and limited quantity of goods and cater to the needs of a local area. They require
less capital and provide goods to a limited number of customers. The grocery shops come under the
category of small scale fixed shop retailing. On the basis of the nature of goods they deal in, we can
Classify these retailing businesses as:
1.
2.
3.
4.
General store or variety store

Single line store
Speciality store
Second-hand goods shop
General Store and Variety Store

These stores, the name suggest deal with a variety of items of general use. They sell products
mostly required by people for their daily use. For example, in a variety store you can find different items
of toiletry, hosiery biscuits and snacks items, grocery, cosmetics, gift items and stationary, etc. Normally
these retailers may give discount, provide credit facility and also free home delivery of goods.
Single Line Store
These stores deal with a specific line of goods, examples are: medicine shops, book shops, toy
shops, ready-made garment shops, etc. these are all single line stores. They sell goods of different size,
brands, designs, styles and quality of the same product line.
Speciality Store
These store deal with products of a specific brand or company. All varieties of any particular
brand or manufacturer are made available in these stores, ie, woodland and shoe shops where products
starting from shoes to apparel produced by woodland company are made available to the customers.
Second-hand Goods Shop
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Now-a-days in cities and towns we find shops selling second-hand goods or used goods. These
shops generally sell goods like books, furniture, clothes, and other household items.
Fixed Shop Retailing-Large Scale
Apart from small-sized outlets, as discussed above, there a number of large-sized retail shops that
sell products on the large scale. They come under large scale fixed shop retail trading category. Large
scale retail trade is the type in which single type of goods or a variety of goods is made available to a
large number of consumers either in a big shop under a single roof or in various shops at the convenience
of customers or directly delivered at the place of the customers.
Types of Large Scale Retail Trade
In India generally we find the following types of large scale retailing business:
i.
ii.
iii.
iv.
v.
vi.
Departmental store
Multiple Shop
Super Market
Consumer Co-operative Store
Mail Order Retailing
Franchise
Departmental Store
A Departmental Store is a large retail shop where a large variety of goods are sold in a single
building. The entire building is divided into a number of departments or sections. In each department
specific type of goods like stationary items, books, electronic goods, garments, jewellery, etc, are made
available. All these departments are centrally controlled under one management. To encourage people to
do all their shopping in one store, these stores also provide facilities like restaurant, telephone, toilet,
ATM, etc, for the conveniences of customers. These stores also provide the facility like free home
delivery of goods, execution of telephonic order for the goods, credit facility, etc, it is generally located at
the main commercial centres of the cities and towns, so that customers from different localities can easily
come to buy goods as per their convenience. Big Bazsar, Vishal-Mega Mart, Ebony, Shoppers shop are
some of the leading departmental stores in our country.
Merits of departmental stores
1. They sell a large variety of good to consumers, under one roof. So it saves time and effort of the
consumer
2. Departmental store offer wider variety of goods product by different manufacturers.
3. They buy large volumes of goods, at a time directly from manufacturers and get good amount of
discount from them. They are able to reap the benefits of economies of large scale operations.
4. Since these stores are organised on the large scale basis they can afford to employ efficient
services.
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5. Each department that is a port of the departmental store in a way advertises for the other
department while visiting. One department customer are attracted to see and even buy the goods
displayed in other departments.
Limitations of Departmental Stores
1. Large amount of capital investment is required to start and run a departmental stores.
2. They are generally located at place far from residential areas so they are not very convenient for
buying goods of daily goods.
3. The operation cast of the departmental stores is very high since it includes cast of location (in the
form of rent or purchase price of building decoration of building salary of large numbers of
employees and provision of various facilities for the conveniences of customer.
4. There is no contract between owners and customers in departmental stores. It is the employees of
the store who interact whit customers. To owner do not get first hand information about the taste,
preference, like and dislike of the consumer.
Multiple shops
Under Multiple shops which big manufacturers approach customers by setting up shops near the
customers Raymonds, Nirulas Mc Donalds, etc, are multiple shops. They sell similar range of
commodities at the same prices in all their shops. These shops usually owned and run by big
manufacturers/producers. They open the number of branches at different localities in a city or in different
cities and towns in a country. These shops are also called chain stores. Multiple shops deal with similar
types of goods mostly of everyday use, eg, shoes, textiles, watches, automobile product, etc. The price is
uniform for similar items in all the shops. These shops are usually conveniently located in the main
market place or in busy shopping centers.
Merits of Multiple Shops
1. All multiple shops are often built alike, that helps customers to recognize the shops easily. They
have similar window display, interior decoration of the shop and arrangement of the counter,
furniture, sing boards, etc.
2. They facilitate elimination of middlemen (wholesalers and retailers) in the process of distribution.
3. These shops enjoy the benefits of large scale purchase or production of goods (centralized
purchase production). Also, due to common advertisement these shops are able to save on the
cost of advertising.
4. The customers can get the goods at a cheaper rate because of low operating cost and elimination
of middlemen in the process of distribution.
5. Since the customers get genuine and standardized goods directly from the manufactures
possibility of duplications of goods and cheating does not arise in these shops. Also, standard
quality and uniform price of products helps in winning the confidence of customers.
89
Limitation of Multiple Shops

1. These shops deal in a limited variety of products and restrict the choice offered to customers.
2. Sales are made on each basis only and the customer cannot avail of credit facilities from these
steps.
3. Customers cannot bargain with sales person while buying the product. The prices of the product
are fixed by the head office and individual shops have no control over it.
4. Each of the multiple shops is generally managed by the branch managers and they strictly follow
the instruction of the head office. Often, they do not take initiative or special interest in satisfying
the customers.
Super Markets
Super Market is a large scale retail store that sells a wide variety of products like food items,
vegetables, fruits, groceries, utensils, clothes, electronic appliances, household goods, etc, all under one
roof. It is formed with the objective of selling goods of daily necessity to general public at a reasonable
price by eliminating the middlemen in the process of distribution. These stores are centrally located and
also establish their branches near the residential areas. As compared to departmental stores, super markets
do not offer free home delivery facility, credit facilities, etc.
Merits of Super Market
1. Super market deal with a wide range of goods of daily household needs.
2. It provides standard quality items to the customers chances of adulteration and duplication are
minimal/almost nil.
3. Due to economics of large scale purchase avoidance of middlemen the goods are available a
cheaper price in super market.
4. In a super market normally services of salesmen and shop assistants are not available. These
reduce the cost of operation.
5. A customers can find goods of different brands at one place. This makes comparison and
selection easy.
Limitation of Super Market
1. Super markets require large amount of capital to start and run them.
2. Because of insufficient funds benefits or professional management are not available to the super
bazaar.
3. Goods are sold to the customers only on cash basis, credit facility is not available to them.
4. Super markets follow of the principle of self service. So the items which require the service of
sales-persons are normally not dealt by super market.
Consumer Co-operative Stores
90
Consumer co-operative stores is another form of large scale retail trade which is owned by the cooperative society. When the consumers of a particular area or group find it difficult to get the items of
daily necessity they usually form a co-operative society and runt the retailing business. The consumer cooperative store purchase the goods directly from manufactures or dealers and make them available at a
cheaper price.
Mail Order Retailing
As the name suggests, this form of retailing makes use of the mail system (postal and couriers) to
communicate with and deliver the goods to the customers. The mail order retailers place the
advertisements in newspapers, magazines, etc, or publicise about their products in booklets, catalogues,
brochures, etc, handouts. These advertisement, leaflets, brochure, etc, contain an order form or other
details on how to order the product apart from a detailed description of the product being sold. On seeing
the advertisement the interested customers can place an order by post and the retailer on receiving the
order, dispatches the goods by post or couriers. The payment for the same is either made by the customer
through the money order or demand draft (at the time of ordering the goods) or through cash-ondelivery/VPP (Value Payable Post) arrangement (ie, payment is made by the customers on receiving
delivery of goods, not in advance.
This method of sale can be conveniently used by the buyer to order goods of his choice while
sitting at home and the seller can sell his products even to customers living in very remote areas.
However, this system is not suitable for all types of goods. Goods that do not need personal inspection
and whose use can be understood by description only (books, plants seeds, cutlery) and light weight, nonperishable products (certain medicines, cosmetics, readymade garments, relatively low-valued electronic
gadgets, cameras, etc) that occupy less space are suitable for mail order retailing. Goods having high
demand in the market and those having delivery charges relatively lower than their price are also suitable.
Franchise
Franchise is a form of retailing where in two parties enter into an arrangement in which one party
authorizes others to sell or produce and sell specified goods and services. The party that develop a
product/service or is the owner of an called the franchiser. The other unit that buys the right to sell the
product/service amount of money. The franchisee function as a retailers. He operates in certain
geographical areas that he is permitted to, as per his agreement with the franchiser. Franchising has
gained popularity in our country, especially in the past decade. There are many business like fast-food
points and restaurants (eg, McDonalds, Wimpys) gifts and greeting card shops (Hallmark Archies)
readymade garments (Benettor Numero Uno, Petals) computer education (NIIT, Aptech) that have grown
nation-wide and are flourishing with the help of franchise arrangements.
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Features of Franchise
1. It is based on an arrangement between the franchiser and the franchise, where in they enter into a
commercial relationship, generally force specific period of time.
2. Under this agreement, the franchisee gets the right to use a particular brand name process or
product owned by the franchiser, for the purpose of retailing in return of a fee.
3. The fee is generally paid partly as an initial payment at the time of entering into the contract and
partly on regular payments, either in monthly, quarterly or annually. This regular payment may be
paid by the franchisee as a percentage of his sales volume or profit or a fixed amount agreed up
on in the contract.
4. The franchiser may also be required to invest money in arranging a large space in prime location,
in furnishing it and in procuring stock for the outlet. In most cases all franchise outlets are
required to maintain uniform pre-determined decoration method of serving customers, type of
products etc.
5. Franchise as a system of retailing is suitable for brands that have earned a name for themselves in
the market. Only then can a franchisee benefit from using that name over a new brand.
Recent Trends
With the advancement in the information technology (ie, use of computers, telephone, internet,
etc, methods of distribution of goods from producers to consumers have witnessed new developments.
Today consumer can conveniently buy products of their choice without learning their home or office, any
time during the day or night. Certain channels of distribution eliminate the long and expensive chain of
middlemen. Manufactures are directly approaching consumers, either through their websites using
internet or through their agent (direct selling) some of the recent trends in distribution are discussed
below:
Direct Marketing
Under this method of distribution the manufactures bypass the chain of middlemen and approach
the consumers directly and sell them the goods and services, without the help of wholesalers and retailers.
The manufactures inform them prospective customers about their
products and its uses through
advertisements (in newspapers, television, radio) or catalogues, letter and brochures. If the customer
wants to buy the product; he/she may place an order to the manufactures one the telephone or through a
letter sent by pest or e-mail. The product get delivered to the customers through courier, post or by sales
persons.
The benefit of direct marketing to the producer as well as consumer is in the form of doing away
with the profit margin of middlemen. The manufacturer is able to supply goods to the consumer at a lower
price, even after keeping a larger share of profit margin as compared to the situation of distribution
through middlemen. Also, the time consuming process of the product changing hands from the producer
92
to the wholesaler, then to the retailer and finally to the consumers is avoided. Transaction are faster when
the producer is face-to-face with the consumer. Also, the producer gets direct feedback from the
customers for improvement in the products. Direct marketing may be classified into different types, based
on the mode of communication used by the manufactures to approach the customers. The manufacturers
may use.
Printed catalogues to inform the customers about the products called Catalogue Retailing.
Television advertisements called televised shopping.
Brochures, letters, etc, sent by mail called Direct Mail Retailing.
Products that can be conveniently and safely sent to the customers by post/courier and whose
utility and description can be easily communicated through a catalogue, letter or television advertisement
are generally sold using the method of direct marketing. This includes books, magazines physical exercise
equipments, certain types of furniture, etc.
Internet Marketing
With the widespread use of computers and Internet, today it is possible to buy and sell products
over the internet through websites maintained by producers. Product can be ordered instantly from
anywhere in the world 24 hours of the day from the convenience of ones home or a nearby cyber caf.
On the website we can see the picture of the product, read about it and then order it, just with the click on
the mouse of the computer. They payment for the product may be made using a credit card or by bank
draft etc.
Internet marketing makes it convenient to do shopping anytime, anywhere and it is easy to
compare prices of the same product charged by different producers. The only thing we to do is to open
different websites on the interest. There is to need to physically go from one shop to the other, or one
market to the other. We can buy all types of products from flowers to the foods clothes to computers, from
producer located even at a far-off place in some other country or continent. The producer is able to cater
to a larger number of customers sitting anywhere in the world, efficiently and speedily using Internet
marketing.
But a drawback of this means of distribution is that the consumer can only see the image of the
product. He/she cannot see the actual product nor touch it, try it nor witness a live demonstration of its
use. Full information about the product may not be available on the website.
Telemarketing
Some producers/manufactures approach the consumers over the telephone, to tell them about the
product and its uses and ultimately persuade them to buy the product. This method is often used to sell
credit cards, subscription to certain books and journals and also membership of certain clubs, etc. a
marketing representative of the concerned producer calls up prospective customers over the telephone and
93
tells them about the product and its uses. While interacting the caller can gauge the interest level of the
customer towards the product and influence his decision to buy the product, it is delivered to him by
courier or post.
Now-a-days if a large number of customer are to be approached through telemarketing,
computerized calling system is used instead of a person calling up customers. The desired telephone
numbers are dialed. Mechanically and the computer plays a pre-recoverd voice message for the consumer.
The consumer is given the option, after hearing the message that may be query about the product or the
order to purchase the product.
Objective Questions
1. Which is/are middlemen?
(a) Factor or Broker
(b) Auctioner
(c) Importing Agent
(d) Del-credere agent
2. Which is the type of middlemen?
(a) Warehousing agent
(b) Clearing agent
(c) Experting agent or forwarding agent
3. Merchant Middlemen is/are
(a) Agent
(b) Factor
(c) Auctioner
(d) Wholesaler or retailer
4. Which is the channel of producer and
consumer?
(a) Middlemen (Agent, Wholesaler or
Retailer)
(b) Market
(c) System
(d) Cost
5. Large scale retailers is/are
(a) Departmental stores
(b) Consumer co-operative stores
(c) Chain shops
6. In EOQ Q means
(a) Operating
(b) Order of the goods
(c) Quality
(d) Quantity of goods to be purchased

7. More for you is
(a) Wholesaler
(b) Retailer
(c) Agent
(d) Producer or manufacturer
8. One member one volte is element of
(a) Consumer co-operative stores
(b) Super market
(c) Departmental store
9. Wholesaler includes those agencies
taking part in buying and selling
activities that operate between the local
market and
(a) The producer and manufacturer of
product
(b) Wholesaler
(c) Retailer
(d) Agent
10. Consumer co-operative stores is based
on
(a) Democracy system
(b) Companies system
(c) Partnership system
11. Which is the function of wholesaler?
(a) Selling and buying the products
(b) Dividing the goods
(c) Storing
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12.
13.
14.
15.
16.
17.
18.

Agencies involved in wholesaling is/are
(a) Agent
(b) Distributors
(c) Stockiest or collector of the goods
Which is the type of wholesaler?
(a) National wholesaler
(b) Local wholesaler
(c) Drope shiper wholesaler
(d) Cash and carry wholesaler
The channel of product is
(a) Agent, retailer or wholesaler
(b) Product or service
(c) Producer
(d) Government
(e) Price
Manufacuturers wholesaler includes
(a) Sale branches
(b) Sales office
(c) Godowns
(d) Depots
(e) All of these
Retailing includes
(a) Financial management
(b) Manufacturing activity
(c) Production
Costs of carrying the stock includes
(a) Cost of capital
(b) Storage cost
(c) Insurance
(d) Depreciation and obsolescence
Which is the type of distribution channel
in the bank?
(a) Head office of bank Branch
Customer
(b) Bank DSA Customer
(c) Bank Customer
19. Which factors affecting choice of
channel of distribution?
(a) Size of order
(b) Buyers of product

(c) Buying habits of customers
(d) Number of potential customer
20. Which is the essential or Retail Trade?
(a) Business education
(b) Credit facilities
(c) Selection of right trade
(d) Shop display
21. A . Is a large food store the
warehouse type of food store and large
cash and carry selt service store
handling groceries meats and product.
(a) Direct selling agent
(b) Departmental stores
(c) Super market
22. Retailing consists
(a) Managerial activity
(b) Accounting
(c) Auding
(d) Of those activities involved in
selling directly to ultimate
consumers
(e) Branding
23. The function of wholesaler are
(a) Assembling of goods
(b) Distribution of goods
(c) Financing
(d) Grading
24. is selling final consumer products
to householders.
(a) Retailing
(b) Financing
(c) Storing
(d) Producing
(e) Planning
25. Type of retailer is/are
(a) Mail order retailer
(b) Consumer stores
(c) Contract chain
(d) Independent stores
26. Assembling of goods means
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(a) Collecting the goods from various
(d) Whole selling and agency

31. Retailer is/are
(a) Departmental stores and speciality
(b) Large retailer
(c) Wholesaler
32. Which is type of retailer?
(a) Full service retailer
(b) Discount retailer
(c) Vending machine
(d) Super market
33. Which is large retailer?
(a) Departmental store and corporate
producer
(b) Grading
(c) Storing
(d) Financing of goods
27. Direct sales is a part of
(a) Producer consumer
(b) Producer retailer consumer
(c) Producer wholesaler
consumer
(d) Producer agent consumer
28. Wholesaler sell to
(a) Merchant/industrial users
(b) Institutional users
(c) Retailers
29. Retailing is
(a) Super market
(b) Bank
(c) Wholesaler
(d) All of these
(e) None of these
30. includes all activities directly
chain store
(b) House
(c) Producer
(d) Wholesaler
34. Which is/are the function of retail
marketing?
(a) Selling of products to consumer
(b) Estimating demand
(c) Credit selling
35. Retailing by manufactures includes
(a) Mail order retailing
(b) Own retail stores
(c) House to house selling
related to the sale of goods or services to

the ultimate consumer for personal, nonbusiness use.
(a) Retailing
(b) Producing
(c) Manufacture
Answers
1. (e)
2. (d)
3. (d)
4. (a)
5. (d)
6. (d)
7. (b)
8. (a)
9. (c)
10. (a) 11. (d) 12. (d)
13. (e) 14. (a) 15. (b) 16. (d) 17. (e) 18. (d) 19. (e) 20. (e) 21. (d) 22. (d) 23. (e) 24. (a)
25. (e) 26. (a) 27. (a) 28. (e) 29. (a) 30. (a) 31. (d) 32. (e) 33. (a) 34. (e) 35. (d)
Explanation
1. Middlemen are come in the middle of
the chain of distribution.
5. All are the examples of large scale
retailers.
7. Those who are engaged in retail trade

are called retailers.
11. Wholesalers act as a link between the
manufactures or producers and the small
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traders. Generally they specialize and
25. All are the kinds of retailer.

26. Assembling of goods means collecting
deal in one or a few products.

19. Factors affecting the choice of
the goods from various producer.

29. Super market is the example of retail
distribution channel are:

(i)
Product consideration
(ii)
Market consideration
(iii)
Company consideration
(iv)
Middlemen consideration
23. The wholesalers through their services
business.
33. A departmental store is a large scale
retail shop where a large variety of
goods are sold in a single building.
offer a number of benefits to the

producers and retailers.
Chapter 13
Promotion-Mix
Promotion refers to the process of informing and persuading the consumers to buy certain
product. By using this process, the marketers convey persuasive message and information to its potential
customers. In the absence of communication consumers may not be aware of the product and its potential
to satisfy their needs and desires. Various tools of communication form part of promotion-mix.
Companies must decide which tools should be used for larger sales and in what proportion. These
decision are known as promotion-mix decisions.
Objective of Promotion-Mix
The main objective of promotion-mix is to seek buyers attention towards the product with a view
to:
Arouse his interest in the product
Inform him about its availability
Inform his as how is it different from others
Elements of Promotion-Mix
Advertising, personal selling, sales promotion and publicity are the major elements of PromotionMix.
The marketing manager must recognize the characteristics of each component and costs involved
while deciding on the promotion-mix.
Elements of Promotion Mix
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Advertising personal selling sales promotion publicity

Advertising
Advertising is the most commonly used tool for informing the present and prospective consumers
about the product, its quality, features, availability, etc. it is a paid form of non-personal communication
through different media about a product, idea, a service or an organisation by an identified sponsor. It can
be done through print media like radio, television, etc. it is very flexible and comparatively low cost tool
of promotion.
Personal Selling
Personal selling is a personal communication with one or more prospective buyers for the
purpose of selling a product or service. These days, personal selling is considered to be the most effective
tool because of various characteristics which are listed below:
1. It involves personal interaction, hence feedback is received immediately.
2. It is quite flexible, salesman can adjust communication according to the level of customers
understanding.
3. It is more persuasive; buyers can be convinced about the utility of the product.
4. Impressive salesman leaves an impression on the prospective buyer, it may increase sales in the
future.
Personal selling suffers from a few drawbacks too. It is the most expensive tool of promotion.
Secondly, it requires too much dependence on sales force.
Sales Promotion
Sales promotion refers to short term and temporary incentives to purchase or induce trails of new
goods. The tool include contests, games, gifts, trade shows, discounts, etc, sales promotional activities are
often carried out at retail levels.
Publicity
This is a non-paid process of generating wide range of communication to contribute a favourable
attitude towards the product and the organisation. People believe more on such news than in advertising,
it covers people who do not entertain personal selling and sales promotion approaches. The tools of
publicity are articles in newspapers, press conference, publication and news in the electronic media, etc. it
is published or broadcasted without charging any money from the firm. Marketers often spend a lot of
time and effort in getting news items placed in the media for creation of a favourable image of the
company and its products.
Factors Governing Promotion-Mix
1. Type of the market If the number of customers is quite large and they are spread over a vast area,
advertisement is more helpful because it can reach everywhere. However, if number of customers is not
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very large and they are concentrated geographically, personal selling and sales promotion may be more
effective.
2. Nature of product Different types of products require different promotion-mix. In case of
customers goods, advertisement is considered to be the most important because the goods are nontechnical and produced on a large scale. But for industrial goods personal selling regarded as the most
important tool because the products are technical in nature, costly and persuasion is considered essential
for their for their sale.
3. Stage of the product life cycle The promotion-mix depends upon the stage of the product in
product life cycle. During introduction, heavy expenditure is incurred on advertisement followed by
personal selling and sales promotion. During the growth stage, customers are aware of the benefits of
product. Hence advertisement along with personal selling will be more effective. At the maturity stage,
competition is more intense. Sales promotion becomes the most important tool to boost the sales.
4. Budget Funds available for promotion also decide promotion-mix, eg, advertisement is a costly
tool. If sufficient funds are not available this tool may not be adopted. Personal selling involves
continuous spending. Thus, budget is a deciding factor for promotion-mix.
5. Push vs Pull strategy When the firm pushes the product to the middlemen they in turn push it to
the consumers. It is known as push strategy. In this case, personal selling or display should be more
effective. Pull strategy refers to the policy of a company to strive to build up consumer demand without
recourse to middlemen. Generally advertising is considered more important in case of pull strategy.
Flature of product
Push vs pull strategy
Type of the market
Factors Governing
Promotion-Mix
Budget
stages of product life cycle

Determining factors of promotion-mix
Objective Questions
1. Promotion-mix includes
(a) Direct marketing
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(b) Sales team
(c) Advertisement
(d) Public relation or publicity
2. Which is a part of promotion-mix?
(a) Advertisement
(b) Personal selling
(c) Packaging
(d) Quality or standardization or a
product
3. Marketing mix can be changed due to
(a) Law and regulation of government
(b) Economic policies of respective
countries government
(c) Climate
4. Which is/are activities of promotion-
5.
6.
7.
8.
mix?
(a) Direct sales
(b) Telemarketing
(c) Internet marketing
Promotion-mix includes
(a) Personal selling or salesmen ship
(b) Price
(c) Policy
(d) Programme
Publicity is a
(a) Production and development tool
(b) Advertising devices
(c) Promotional mix
(d) Pricing
(e) Service
Personal selling is a
(a) Promotional tool
(b) Cost technique and planning tool
(c) Gift
(d) Packaging
(e) Sales
Which is/are the elements of promotionmix?
(a) Advertising
(c) Sales promotion
(d) Publicity
(e) All of these

9. A name, term, sign, symbol or design
used to identify the products of one firm
and to differentiate them from
competitive offerings is commonly
called as
(a) Brand
(b) Trade mark
(c) Class
(d) Label
(e) All of these
10. Nike is the first thing which comes to a
customers mind in running shoe
product category. This is because of
(a) Quality
(b) Cost
(c) Brand awareness
(d) All of these
(e) None of these
11. Which is among the following is true
about packing of a product?
(a) Packaging helps in branding and
promoting brand loyalty
(b) Packaging is a major expense in
marketing
(c) Packaging increases marketing cost
them reducing the profits
12. Which among the following are most
essential aspects of labeling?
(a) Statutory obligations
(b) Product promotions
(c) Aesthetics
13. Negotiation flow in the marketing
channel does not involve
(a) Wholesaler
(b) Transporting company
(c) Retailer
14. The tertiary sector of economy is called
as
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(d) Selling the product in specific areas
18. Full form of FDR is
(a) Fix Date Rate
(b) Fixed Deposit Receipt
(c) Full Date Rate
19. Direct mail includes
(a) Letter hands
(b) Printed envelops
(c) Folder and catalogues
20. Call center is an example of
(a) Telemarketing
(b) Teleshopping
(c) Database marketing
(a) Service sector

(b) Primary sector
(c) Manufacturing sector
15. Business analysis includes
(a) Estimating future profit
(b) Estimating future costs
(c) Estimating future sales
16. Market research includes
(a) Product survey
(b) Market survey
(c) Survey of customers
17. Promotion in marketing means
(a) Passing an examination
(b) Elevation from one grade to another
(c) Selling the products through various
means
Answers
1. (e)
2. (e)
3. (d)
4. (d)
5. (a)
6. (c) 7. (a)
8. (e)
9. (a)
10. (c) 11. (a) 12. (a)
13. (b) 14. (a) 15. (d) 16. (d) 17. (c) 18. (b) 19. (d) 20. (a)
Explanation
1. Promotion-mix is a communication process that takes place between a business and its various publics.
3. The marketing mix principles are used by business as tools to assist them in pursuing their objectives.
5. Advertising, personal selling, sales promotion and publicity are the major elements of promotion-mix.
7. Personal selling is a personal communication with one or more prospective buyers for the purpose of
selling a products or service.
14. Service sector is the tertiary sector of economy.
16. Market research is a systematic problem analysis, model building and fact finding for the purposes of
decision making and control in the marketing of goods and services.
Chapter 14
Advertising
Advertising is an impersonal communication of message regarding ideas, products and services
from manufacturers, wholesalers and retailers (called sponsors) to a targeted group of existing and
potential customers, with a view to educate and influence them to act in a manner desired by the sponsor
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of the message. The message may be oral or in writing, may be audio or visual or both and is paid for by
the sponsor. According to American marketing association. Advertising is any paid form of non-personal
presentation and promotion of ideas, goods and services by an identified sponsor.
Characteristics of Advertising
The characteristics of advertising may be as follows:
1. Impersonal Advertising is an impersonal communication of message. It involves sending messages
through one or more media such as television, radio, newspapers and magazines, etc. it is called
impersonal because the message is conveyed through some media rather than a person.
2. The idea is to promote goods or services Advertising is done with a specific objective of
promoting a product or service and increase their sale. The message generally, contains information
regarding product characteristics, price, used and important needs that may be satisfied by use of the
product
3. Sponsorship The message is sent by manufacturers, wholesalers and retailer who are called
sponsors of the advertisement
4. Paid form of communication Advertisements appearing in the newspapers, television, cinema
halls etc, are duly paid for. The firms have to pay huge amounts for use of space in newspapers or time
slot in television and radio etc.
Objective of Advertising
The main objectives of advertising are:
1. Introduction of new product Business firms keep on introducing new products in the market and
have to inform the prospective customers about its features, price, usage, availability etc. advertising not
only attracts their attention but also helps them informing an opinion about the product and marketing the
best purchase decisions.
2. Increase in sale Advertising helps in increasing the sale of firms products. It also helps in turning
non-users of products to users of products and also in attracting the consumers of competutitors products.
3. Maintaining existing buyers Now-a-days new products keep on entering in the market at a fast
pace and consumers tend to switch over to the new products. Advertising is used to remind the consumers
about how good their products or services are and that they are still in the market as old ad reliable ones.
The idea is to prevent decline in the sale of their product in the market.
4. Create and enhance goodwill of the firm Advertising helps in building reputation of the business
house. Through advertising, the firms can consumers and clarify any misconception or doubts in the mind
of the public about themselves or their products, if any.
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5. Create and enhance brand image Advertising is also used for creating a brand image which helps
in building customers loyalty.
6. Helps in personal selling Advertising facilitates the process of personal selling. The salesperson
job is made easier if the customer has familiarity with the product.
Advertising objectives
S.No
Inform
1.
New product introduction
2.
Build firm image
Persuade
Persuade to purchase now
Aid to sales force
Reminder
Keep the awareness intact
Maintain product and
company image when sales
3.
4.
Suggest new uses of the product
Persuasion through
person is not available

Reminding users when to
Inform changes in marketing
demonstration
Build brand preference
buy the product

Remind users that the
mix eg, price

5.
Explain how the product works
product will be needed in

Attempt to offset competitors
the near future

Maintain image during off
advertising
seasons
Media of Advertising
Advertising media are the means through which messages regarding products and services are
transmitted from the advertising firm to people at whom that product is targeted. Many types of media are
available for the purpose. They are:
1. Press advertising
(a) Newspapers
(b) Magazines and journals
2. Redio
3. Television
4. Films
5. Outdoor advertising Advertisements on the walls, billboards, outside and inside the buses
and trains, vehicular displays.
Advantages of Advertising
Advertising plays an important role in business and society. The advantages of advertising is
explained below:
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1. Benefit to consumers Advertising helps the consumers to gain useful information about the
products, prices, quality, terms of sale, after sales services, etc. Besides providing such information
advertising also guides the customers about the right use of the product. This helps them to make a
comparative analysis and make their choice.
2. Benefits to manufactures Advertising helps the manufacturers in introducing new products,
maintaining customers of existing products and in increasing their sales by attracting new customers. It
also helps the business houses in creating and enhancing their goodwill. Advertising is an important tool
for fighting competition in the market effectively by giving the customers a comparative picture of its
products vis--vis the competitors products.
3. Benefits to society The enhanced competition resulting from advertising motivates the
producers to make improvements in their existing products and find out better alternative through
Research and Development (R and D) activity. So it helps in providing more convenience, comfort, better
life style to the people. It generates employment for thousands of people who are connected with
advertising world in different capacities. Not only that, advertising generates huge revenue for both print
and electronic media. This helps the availability of newspapers, magazines and television programmes at
affordable price.
Advantages of Advertising
Benefits to
Benefits to
Benefits to
Manufacturing
consumers
society
Limitation of Advertising
The limitation of advertising are:
1. Add to cost Money spent on advertising eventually results in increased cost of the product,
which is passed on to the consumers through increase prices.
2. Undermines social values Advertising may introduce ideas or concepts alien to our culture.
These new values generated or propagated by advertising may affect our social, moral and ethical values
104
adversely. Objectionable appeals like sex, horror etc, are sometimes used in advertisement to attract
attention.
3. Creation of monopoly Business firms which can spend heavily on advertising are usually the
ones who grab a bigger share of the market. Such firms generally have a which results in unequal
opportunity for small producers to make a place for themselves in the market. They do not get a fait
opportunity to complete.
4. Encourages sale of inferior products Advertising does not distinguish between superior and
inferior products persuade people to purchase even the inferior products.
5. Advertising may not increase overall demand Advertising does not always increase demand.
In many cases, a number of firms manufacturing similar products may advertise vigorously. This may not
result in an increase in the total demand for the product but simply shift demand from one brand to
another.
Differences between Advertising and Publicity
S.No
Base
1.
Payment
2.
3.
4.
Advertising
It is paid form dissemination of information.
Publicity
The sponsor does not make any
The firm has to pay for the use of space and
payment to the media as the
time.
Identified There is an identified sponsor, that is, the
information is published voluntarily.

There is no identified sponsor. Media
sponsor
business firm which wants to advertise its
communicates the information as it
Control
products or services.
The advertising firm has full control over the
considers it newsworthy.
The concerned firm has no control
content, type, size, duration and frequency of
over the contents, type and size of
the message.
It is intended to give favourable and positive
the information.
This may have favourable or
impression about the company and its
unfavourable impression on the
products.
public about the company and its
Purpose
products.
Objective Questions
1. When developing an advertising
campaign, benchmarks should be
included in the
(a) Campaign platform

(b) Statement of advertising objectives
105
(c) Evaluation of the advertising
effectiveness
(d) Media plan
(e) Budget
2. A marketer that wanted to include
detailed explanation in advertisement
would be most likely to use
(a) Television
(b) Radio
(c) Magazines
(d) Outdoor display
3. The final stage in the development of an
advertising campaign is
(a) Developing the media plan
(b) Creating the advertising platform
(c) Creating the advertising message
(d) Evaluating the advertising message
(e) Evaluating the effectiveness of
advertising
(f) None of the above
4. A marketer uses pioneer advertising to
(a) Promote established brands
(b) Promote a product in the
introductory stage of the life cycle
(c) Compare brand names
(d) Introduce a competitive version of
the product
5. Recognition and recall tests are post-test
methods to evaluate advertising
effectiveness based on
(a) Memory
(b) Mail surveys
(c) Customer preferences
(d) In-depth interviews
(e) Inquires
6. Advertising is a major promotion mix
ingredient that is a
(a) Non-paid form of non-personal
communication
(b) Non-paid form of personal
communication
(c) Paid form of personal

communication
(d) Paid form of non-personal
communication
7. Advertising that promotes organisational
images, ideas and political issues is
advertising
(a) Product
(b) Defensive
(c) Competitive
(d) Comparative
(e) Institutional
8. If a pull policy is to be used in
promoting a product, the firm
(a) Promotes the product to wholesalers
only
(b) Promotes the product to retail stores
only
(c) Promotes directly to consumers
(d) Promotes only to the next marketing
institution down the marketing
channel
9. A paid form of non-personal
communication about an organization
and/or its products that is transmitted to
a target audience through a mass
medium is
(a) Advertising
(b) Publicity
(c) Personal selling
(d) Sales promotion
(e) All of these
10. Why is the headline of a print
advertisement such a critical component
of the copy?
(a) It determines the final layout design
(b) It is often the only part of the
advertisement that is read
(c) It takes up the most space
(d) It links the copy to the signature
(e) It links the artwork to the signature
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11. Types if advertising includes
(a) Product advertising
(b) Competitive advertising
(c) Pioneering advertising
(d) Institutional advertising
12. Which is the type of advertising
(a) Direct advertising
(b) Indirect action advertising
(c) Primary demand advertising
13. Advertising derived from
(a) Credere
(b) Adre
(c) Advertere
(d) Ad-hoc-not-with-joy
(e) Net
14. Which is means of outdoor advertising
(a) Sand witch board advertising
(b) Advertising board
(c) Electric display
(d) Posters
15. Mural advertising includes
(a) Bus tram and train advertising
(b) Sticker advertising
(c) Sky advertising
16. Which means of bank advertising
(a) Newspapers of magazines
(b) Poster
(c) Internet
(d) Television
17. Which is the latest means of bank
19. Mail advertising includes

(a) Price list
(b) Booklets
(c) Novelty gift
(d) Business reply envelope
20. Which is the means of advertising?
(a) Cinema
(b) Gift
(c) Demonstration
(d) Radio and television
21. Promotional advertising includes
(a) Showroom and exhibition
(b) Window advertising
(c) Interior display
22. Which is the factors of media selection
advertising?
(a) Internet or e-mail
(b) Post card
(c) Price list or business reply envelope
18. Which is the best means of bank
25.
advertising?
(a) Circular
(b) Sky advertising
(c) Satisfied bank customer
(d) Bank employee or their manager
23.
24.
26.
decision?
(a) Object or aim of the advertising
(b) Advertisers usage
(c) Message
Recall test includes
(a) Gallup and Robinson test
(b) Association test
(c) Radio recall test
Utility of advertising includes
(a) Price stability
(b) Good effect on firms personnel
(c) Permanent demand
Demerits of advertising includes
(a) Changing fashion
(b) Expensive or instability
(c) Misleading advertising
(d) Extravagance of money
Advertising is a business force, which
through the printed words, sells or helps
sale, build reputation and fasters
goodwill who said?
(a) Wheeler
(b) Sheldon
107
(c) Winston Churchil
(d) American Market Association
27. VAT stands for
(a) Value After Tax
(b) Value Added Tax
(c) Value After Technique
28. Advertising is any form of paid nonpersonal presentation of ideas, good or
29.
30.
31.
32.
33.
services for the purpose of

(a) Brand
(b) Newspaper
(c) Advertising
(d) Inducing people to buy
Which is the element of advertising?
(a) Public presentation
(b) Pervasiveness
(c) Identified sponsors
The function of advertising involves
(a) To introduce new products
(b) To explain causes of shortage
(c) To aid salesman
Advertising may be
(a) Personal presentation
(b) Non-personal presentation
(c) Positive
(d) Negative
Publicity may be
(a) Oral
(b) Written
(c) Personal and non-personal
Which is true about advertising?
(a) It is a paid basis
(b) It may be non-personal
(c) It is not a critical presentation
Answers

34. Which is the drawback of advertising?
(a) Wastage of money
(b) Reduction of ethics
(c) Mis-statement presentation
35. The steps in scientific advertising
campaign includes
(a) Decision to advertise
(b) Marketing research
(c) Determining advertising budget
(d) Determining advertising objective
36. The principle of effective advertising
37.
38.
39.
40.
includes
(a) Know your prospects
(b) Attractive headline
(c) Stress quality
Type of advertisement media is/are
(a) Purchase point advertisement
(b) Outdoor advertisement
(c) Press advertisement
Which is the evils of advertising?
(a) Advertising adds to the cost
(b) Improve quality of life
(c) Price stability
(d) Advertising adds to the cost
helps people to buy intelligently.
(a) Product-mix and cost pricing
(b) Advertising
(c) Brand
(d) Price
(e) Quality
Which is true about advertising?
(a) Advertisement is an investment
(b) It pays to advertise
(c) Advertisement is a waste of money
108
1. (b) 2. (c)
3. (d)
4. (b)
5. (a)
6. (d)
7. (e)
8. (c)
9. (a)
10. (b) 11. (e) 12. (d)
13. (c) 14. (e) 15. (d) 16. (e) 17. (a) 18. (c) 19. (e) 20. (e) 21. (d) 22. (d) 23. (d)
24. (d) 25. (e) 26. (b) 27. (b) 28. (d) 29. (d) 30. (d) 31. (b) 32. (d) 33. (d) 34. (d)
35. (e) 36. (e) 37. (d) 38. (d) 39. (d) 40. (d)
Explanations
2. Magazines are example of print
27. VAT is the short form of Value
media
Added Tax.
6. Advertising is an impersonal
30. Objectives of advertising are:
communication of message regarding

ideas, products and services from
manufacturers, wholesalers and retailers
to a targeted group of existing and
potential customers.
i.
ii.
iii.
iv.
Introduction of new product

Increase in sale
Maintaining existing buyers
Create and enhance goodwill of
v.
vi.
the firm
Inhance brand image
Helps is personal selling
8. In pull policy, the firm promotes

33. Advertising is the paid form of
directly to consumers.
communication.
11. All are the types of advertising
34. money spent on advertising
14. Medias of advertising are:
i.
ii.
iii.
iv.
v.
eventually results increased cost of the

product, which is passed onto the
Press advertising
Radio
TV
Films
Outdoor advertising
consumers through increased prices.

37. Advertisement on the walls,
billboards, outside and inside the buses
17. Internet or e-mail is the latest means
and trains are examples of outdoor
of bank advertising.
advertising.
24. Advertising plays an important role

in business and society.
Chapter 15
Personal Selling
109
Personal selling involves oral presentation of message in the form of conversation with one or
more prospective customers for the purpose of making sales. It is a personal form of communication.
Companies appoint salespersons to contact prospective buyers and create awareness about the product
and develop product preferences with the aim of making sales. Personal selling is one of the most
important methods to contact the prospective buyers personally and to persuade him or her permanent
customer. This can be achieved by putting the thing to the prospective buyer in such a way that he or she
is convinced that the products being presented for sale can well satisfy his or her needs. This art and skill
of presentation of goods and persuasion to buy the products is called personal selling. In other words,
personal selling simply means selling through personal communication. For successful selling the
salesperson usually goes through a selling process which involves the seven steps (given in figure).
Prospecting refers to identifying the prospective buyers in his area of operation. Having done this,
he has to obtain the necessary information about the customers, his capacity to pay, choice and
preferences etc. After this, in pre-approach activity he approaches the customers to gain his attention,
greats him and makes his presentation, ie, inform the customer about the product, its qualities, price etc,
and demonstrates its use, if required. Then he handles the customers queries persuades him to make his
final decision and ends the process of sale with receiving his order and thanking him. Finally he ensures
the delivery of goods and provides the necessary after sales service.
Prospecting
Pre approch
Approach
Presentation and demonstration
Answering the queries/objections and their clarification
Action or ending the process of sale
Follow up or after sales service

Selling process of personal selling
Significance of Personal Selling
110
The ultimate objective of producing goods and services is to sell them to the consumers. Sales are
the major source of revenues to a business. A salesman introduces the goods to the customers, arouses
their interest and persuades them to purchase the goods and finalizes the deal. He plays a very significant
role in selling the products. Indeed, personal selling is the major factor underlying the success of most
business houses. Following benefits of personal selling show its significance.
Importance of Personal Selling
Benefits to the consumers
Benefits to the business
Benefits to the society
Importance of Personal Selling

Benefits to the business
Personal selling helps a business in increasing its sales. Identification of new customers and
persuading them to buy can be done effectively through personal selling. Since, the salesperson comes in
direct contact with the customers, understands the needs and preferences of the customers and thus, can
help the businessman in planning for the right type of products and effecting the necessary improvements
therein. In case of products of technical nature the role of salesmanship is very important as the
salesperson can personally explain the functioning of the product, its use and precaution to be taken in its
use. This ensures proper handling of the products and boosts customers confidence in his choice of the
products.
Benefits to the consumers
A salesperson acts as a friend and guide to the consumers. By making conversation with
salesperson. By making conversation with salesperson, the customers gets help in identifying the product
of his need and the price range that suits him. The salesperson explains to the customers the uses and the
operational aspects of a product. By giving the requisite information about the company and the product,
the salesperson provides confidence to the customers to try something new which might be better and/or
cheaper.
Benefits to the society
111
Personal selling facilitates the process of production, distribution and consumption. Salespersons
help in collecting market information, credit information, delivering goods and collecting payments. It
helps in matching demand with supply because they know what the consumers want. They also inform
the consumers about the introduction of new products, it any. By increasing sales, they help in the growth
of business.
Differences between Personal Selling and Advertising
Advertising and personal selling are two most important methods creating and increasing demand
for goods and services. These are widely demand for goods and services. These are widely used
throughout the world to introduce the products to the prospective buyers and pushing the sales. But the
two are different from each other in many ways. The points of difference between the two are as follows:
1. Personal selling involves direct interaction of salesman with individuals. Advertising is nonpersonal and is addressed to the customers in general.
2. Personal selling is confined to a particular area; advertisement is generally found to cover a
larger number of people.
3. In personal selling there is a two way of communication. The salesman explains his
viewpoint to the potential buyer and knows about his/her reaction. In advertisement there is
one way communication; the targeted persons reactions cannot be known immediately.
4. In personal selling there is only one channel of transmission of messages, ie, personal talk of
the salesman with the potential buyers; advertisement offers a wide choice of channels,
visuals, audio such as radio and audiovisual such as television.
Difference between Personal Selling and Advertising
S.No
1.
2.
3.
4.
5.
6.
7.
8.
Personal selling
Personal
Confined to particular area
Two-way communication
Only one channel of transmission
Used only for promotion and sale of products
Advertising
Non-personal
Generally covers larger number of people
One-way communication
Wide choice of channels
Used for various other purposes such as seeking
Aims at selling existing products

Salesman get salary or commission or both
Effectiveness depends upon qualities of
jobs, offering services

Aims at enhancing goodwill
It involves one time of expenditure
Effectiveness depends upon design of
salesman
Qualities of Good Salesperson
advertisement
Salesmanship is a tough and challenging job which requires a mixture of physical and mental
qualities. Some of the common qualities which a salesperson must possess are as follows:
112
1. Impressive personality Personality is a mixture of many traits like physical appearance,
dressing-up, way of talking, manners, pitch of voice, habits, etc. personality of a salesperson
should be such that the moment he/she comes in contact with the customer, he/she looks
amiable with whom the customer is at least ready to start a conversation.
2. Good behavior A salesperson should be a well behaved person having ability to interact with
people comfortably. He/she should be a well co-operative so that he/she can help people in
making up their minds by patiently answering all their questions. Patience and humility will
help him/her is not only holding the attention of the customer but also in getting them
interested in purchasing the product.
3. Ability to communicate and persuade If a salesman can communicate properly and
effectively then he/she will be able to clear the biggest hurdle of making the prospective
customers listen to him/her. The salesperson must speak confidently, clearly and audibly.
Good communication ability coupled with good knowledge about the product helps the
salesperson in persuading the customer of buy.
4. Persistence The salesperson must know the art of persistence. It requires a sense of
determination to convince the customers to buy. He/she must not give up easily. Without
being offensive, he/she must persuade the customer to finalise the purchase with a sense of
satisfaction.
5. Mental qualities A good salesman should posses certain mental qualities like imagination,
initiative, self-confidence, sharp memory, alertness etc. he should be able to understand the
needs and preference of customer.
6. Sound health A salesman has to work hard. He is to travel a lot. He should possess sound
health.
7. Knowledge of the product and the company A salesman should have full knowledge of the
product and the company he is representing. He should be able to explain each and every
aspect of the product, ie, its qualities, how to use it, what precautions to be taken, etc.
8. Integrity of character A good salesman should posses the qualities of honesty and integrity.
Objective questions
1. Personal selling consists
(a) Personal communication and
advertising
(b) Individual relation
(c) Sales promotion
2. Which is the kinds of personal salesman
(a) Supporting salesman
(b) Order tacking salesman
(c) Order getting salesman

113
List-I
(steps of selling
List-II
(nature)
process)
a. Follow up
1. Follow the
7. Which is the element of contract of sale?

(a) Two parties
(b) Transfer of property
(c) Competency of the parties
suggestion
2. Body
b. Dramatization
presentation
3. Introduction
c. Approach

8. A contract of sale includes
of salesman
4. Order
5. negative
d. Trial close
(a) A sale
(b) An arrangement to sell
(c) Transfer of gift and guarantee
Codes
(a)
(b)
(c)
(d)
(e)
A
1
1
1
1
2
B
3
3
2
4
4
C
2
4
3
3
1
D
4
2
4
2
3
4. Which are the parties of sale?

(a) Seller and buyer
(b) Seller and producer
(c) Seller and suppliers
5.
The subject matter of contract of sale is

(a) Goods
(b) Bank building
(c) ATM machine
(d) Employees of marketing organisation
6.
A sale is a
(a) Tool of marketing management
(b) Contract
(c) Concept
(d) Product
(e) Service

9.
Where under a contract of sale the transfer

property in the goods is to take at a
place a
future time or subject to some
condition
thereafter to be fulfilled,
the contract is
called
(a) A sale
(b) Gift
(c) Tax
(d) Agreement to sell
(e) Contract to transfer of property
10. Where under a contract of sale, the
property in the goods is transferred from
the seller to the buyer, it is called
(a) A property
(b) A sale
(c) Gift
(d) Tax
(e) Transaction of product with gift
11. . consists of contracting prospective
buyers of product personally.
(a) Product-mix or marketing-mix
114
(c) Sale
(d) Product
(e) Style
12. Which is the function of personal selling?

17. Selling is
(a) Impersonal activity
(b) Personal activity
(a) Making effective sales
(c) Impersonal and personal activity
(b) Executive function
(c) Service to customer

13. The sale of Goods Act was introduced in
18. comparises all those personal and

impersonal activities involved in finding,
securing and developing a demand for
(a) 1830
given producer or service and in
(b) 1930
consummating the sale of it.
(c) 1940
(a) Product planning and control
(d) 1932
(b) Selling
(e) None of these
(c) Exchange
14. A contract of sale may be

(a) Absolute or conditional
(b) Unauthorised
(d) Promotion
(e) Cost
19. Selling includes
(c) Unconditional
(a) Essence of marketing
(b) Function of promotion
(c) Basis of exchange
15. A of goods is a contract whereby

the seller transfer or agrees to transfer the
property in goods to the buyer for a price.

20. Selling is based on
(a) Contract of property
(a) Perpetual function
(b) Contract of sale of goods
(b) Productive function
(c) Advertisement
(c) Personal and impersonal activity
(d) System
(e) Brand
16. Merit of personal selling includes
21. Selling is a . Function
(a) Pinpoints prospects
(a) Perpetual
(b) Helps close of the sale
(b) Product of service pricing
(c) Time co-ordination
(c) Production
(d) Demonstrates the product
(d) Demand
115
(e) Supply
22. Which is a part of pre-planning?
(a) Profit and expenses of the organisation
(b) Marketing programme
(c) Production
(d) Management
(e) Research
27. Personal and impersonal activity of selling
(c) Sales
includes
(d) Market
(a) Advertisement or sales promotion
(b) Publicity
23. Which is the variable of marketing
(c) Public relation
programme?
(a) Distribution system and its role
(b) Size of product
28. Function of selling includes
(c) Demand variable
(a) Sale contract
(d) Price
(b) Contractual function
(c) Customers services
24. Marketing effort includes

(a) Level of the budgeted expenses
(b) Financing

29. What is true about selling?
(c) Trading
(a) The starting point of selling is factory
(d) Selling
(b) The selling is product oriented activity
(c) Promotional and personal selling are
25. Which is the factor of bank demand

variable?
(a) Cost of lighting
(b) Price of the product
(c) Payment facility
main meant of selling

(d) Selling and merchandising are part of
marketing
30. Sellings benefit is/are
(d) Attitude of the consumer
(a) Satisfaction
(b) Security
26. Selling is activity.
(c) Development of personality
(a) Wealth producing activity
(b) Money or time wastage
Answers
116
1. (e)
2. (e)
3. (c)
4. (a)
5. (a)
6. (b)
7. (d)
8. (d)
9. (d)
10. (b) 11. (b) 12. (d)
13. (b) 14. (a) 15. (b) 16. (e) 17. (c) 18. (b) 19. (d) 20. (d) 21. (a) 22. (b) 23. (e)
24. (d) 25. (c) 26. (a) 27. (a) 28. (d) 29. (e) 30. (d)
Explanation
1. Personal selling involve oral presentation of message in the form of conversation with one or
4.
12.
16.
19.
24.
27.
more prospective customers for the purpose of making sales.

In selling process, seller and buyer are involved.
Personal selling is used for promotion and sale of products.
A salesman plays a very significant role in selling the products.
The ultimate objective of producing goods and services in to sale them to the consumers.
Effectiveness of personal selling depends upon qualities of salesman.
Salesmen ship is a tough and challenging job which requires a mixture of physical and mental
qualities.
28. All are the functions of selling.
Chapter 16
Sales Promotion
Sales promotion consists of all promotional activities other then advertising, personal selling and
publicity that help to increase sales through non-respective and one time communication. In other words,
it includes marketing activities other than personal selling, advertising, and publicity that simulate
consumer purchasing and dealer effectiveness, such as point of purchase display shows and exhibition,
demonstration and various non-recurring selling efforts not in the ordinary routine.
According to American Marketing Association, sales promotion includes those marketing
activities, other than personal selling, advertising and publicity that stimulate consumer purchasing and
dealer effectiveness such as displays, shows and exhibitions, documentation and various non-recurrent
selling effort not in the ordinary routine.
All elements of a promotion-mix such as personal selling, advertising, publicity are used to
inform people about the availability of a product, its characteristics and features and to create desire in the
mind of the people to buy the product. Sales promotion is an efforts in the same direction and is another
important element of the promotion-mix which includes displays, free sample, trade fair, exhibitions,
discounts coupons, deferred payment plans etc.
Objective of Sales Promotion
Different sale promotional tools have different objectives. For example, while a free sample may
motivate a consumer to buy a product for the first time, a free check-up for existing durable product like
117
television, refrigerator etc, may affect future purchase decision of the buyer. Some of the objectives of
sales promotion are listed below:
1. Information to customers Sales promotion activities inform the potential buyer about the
availability, features, use etc, of the product. Thus, it offers additional support to promotional activities
like advertising, publicity and personal selling (salesmanship).
2. Persuades customers Sales promotion activities aim at arousing customers interest in the
product and persuading them to buy.
3. Increase in sales volume It aims at increasing sales. It is specially done during the periods
when customer may not buy the product because it may not have immediate use, like a room-cooler in
winter, and a room-heater in summer. The sales promotion schemes are a big help in making off-season
sales and also in tempting the buyer to make quick decision to purchase.
4. Incentive to retailers The main objective of sales promotional activities is to offer
promotional support to retailers. Sales promotion schemes make sales easier. Incentive schemes help in
getting shelf space for such products in new retail outlets.
5. Create product identity A number of brands of a particular product are available in the market
and it is very difficult to distinguish one from the other as all have similar features, prices, variety etc.
under sales promotion programme, product identity is established by offering additional features and
incentives. This helps in building consumers preference for the specific products and brands.
Sales Promotion Tools and Programmes
Sales promotion techniques are known as promotion tools and the mode of their application is
known as sales programme. These tools and programmes are divided under two heads:
1. Tools and programmes for consumers sales promotion.
2. Tools and programmes for consumers for dealer/distributor sales promotion.
Tools and Programmes for Consumers Sales Promotion
These tools and programmes are as follow:
Sample Usually called consumer sample, free samples are given to consumers to introduce a new
product or to expand the market. The consumers can try the product.
Demonstrations or instructions These instructions are given to educate the consumers about
using the product. This methods may be used in products like vacuum cleaner.
Coupon It is a certificate that reduces the price. When a buyer gives a coupon to the dealer or
retailer he gets the product at lower price. For example, in DCM coupon system it regular price is Rs 20
with a coupon it is Rs 18. These are also known as discount coupons. Coupons are also accepted as cash
by retailers.
118
Money-refund orders The technique indicates refund of full purchase price if the buyer so
wants. It is helpful in the introduction of a new product. Refund offer creates additional interest and
increase sales considerably. It is a good device for creating new user and to strengthen the brand loyalty.
Premium (gift) offers These are temporary price reduction, which appeal to bargain instinct, eg,
instant coffee sold in carafes by one company was very successful. Towels, dinner ware, hair-brushes, key
chains, artificial flowers, ball pens, toilet soaps, blades, were given as in pack premiums. Attractive
reusable jars costing separately say Rs 12 may be given as at an extra charge of Rs 4 only.
Price off The price off label is printed on the package, eg, Rs r off on a Brooke Bond tea pack of
500 gram. It gives a temporary discount to the consumers.
Contests of quizzes These are held to stimulate consumers interest in the product. In these
contests, and quizzers, participants complete for prizes on the basis of their skill or creative ideas. In
sweepstakes, they submit their names to be included in a draw of prize winners. This types of sales
promotion is not a lottery because there is chance or luck prizes are offered and a payment to participant
is there.
Trading Stamps
Trading or Bonus stamps are issued by retailers to customers who buy goods from there. The
number of stamp gives to a buyer depends upon the amount of purchases made by him. For instance, in
India Roman Bonus stamps are issued at the rate of 2-1/2 percent of the purchases amount. These stamps
are given free of charge and the customers can redeem them to obtain products out of the specified list.
This technique induces customer to buy their requirements from the retailers who offer such stamps. The
purpose is to increase customer loyalty.
Fair and Exhibitions
Trade shows, fashion shows or parades, fairs and exhibitions are important technique/tools of
sales promotion. They provide a forum for the exhibitions or demonstration of products. Free literature
can be distributed to introduce the firm and its products to the public. Fairs and exhibitions have wide
appeal as several people visit there. Customer can be attracted through gifts, special concessions and free
demonstrations of technical and speciality and free products. They provide an opportunity to the visitors
to observe the competing products and help to promote sales. For instance, the trade fail authority of India
organizes trade fairs of various type in New Delhi. The National Book Trust organizes world book fair,
where publishers of all over the world are invited to display their publications. Sometimes sales
conventions or conferences of dealers are held. Producers of garments often fashions shows to promote
their products.
Public Relation Activities
119
These include greeting or thanks in newspapers, donating space for noble causes, offer of
privileged citizen card etc. Their purpose is not create immediate demand or to increase sales. They are
designed to create a good image of the firm in the society.
Exchange Scheme
This technique offers to exchange the old product with new in payment of a fixed amount which
is less than the original price. For example, exchange of old black and white television for colour
television by paying Rs 8000 only (original price is Rs 10000) was offered by a particular producer of
colour Tv sets.
Tools and Programmes for Dealers/Distributions Sales Promotions
These tools and programmes are:
1. Free display There is provision of free display of material either at the point of purchase
(POP) or at the point of sales (POS) depending on ones view point. Display reaches consumers when
they are buying and actually spending their money.
2. Retail demonstrations These are arranged by manufactures for preparing and distributing the
products as a retail sample. For example, Nescafe instant coffee was served to consumers for trying the
sample on the spot of demonstration regarding the methods of using the product.
3. Trade deals These are offered to encourage retailers to give additional selling support to the
product, eg, toothpaste sold with 30% to 40% margin.
4. Buying allowance Sellers give buying allowance of a certain amount of money for a product
bought.
5. Buy-back allowance It is offered to encourage repurchase of a product immediately after
another trade deal. A buy back is a resale opportunity.
6. Free goods Seller gives free goods, eg, one piece free with two, pieces free with 10 are
common free deals.
7. Advertising and display allowance These are also offered to retailers to popularise the
product and brand name of the manufacturer.
8. Contests Sales contests are held for salesman.
9. Training for salesman Dealer and distributor training for salesman, which may be provided to
give them a better knowledge of a product and how to use it. Dealer sales promotion devices at the point
of purchase inform, remind, and stimulate buyers to purchase products. People who see these devices are
in a buying mood and thus, they can be easily persuaded to buy those products. Till tags are informative
labels affixed on the product describing in detail. The features of the product and its unique selling points
counter, top racks, posters, mechanised sings are other points of purchase displays.
120
Difference between Advertising and Sales Promotion
S.No
1.
Basis
Objectives
Advertising
Objectives of advertising is to
Sales promotion
The objective of sales promotion is
create a favourable consideration
to stimulate the consumers to buy
2.
Effect
for the product

It has a long term effect
the product.
It has a short term effect and useful
3.
Nature
Advertising is recurring in nature
for increasing
It is non-recurring and one time
communication process
Objective Questions
1. Sales promotion means
(a) Any steps that are taken for the
purpose of obtaining or increasing
sales
(b) Pricing
(c) Profit
(d) Production cost
(e) Loss
2. Communications stages include
(a) Decoding
(b) Receiver
(c) Message media
(d) Sender media
3. Promotion includes
(a) Personal selling and other selling
tools
(b) Advertising
(c) Sales promotion
4. Final consumer is
(a) Government of India
(b) Manufacturer of the goods
(c) Users of the goods
(d) Retailers
(e) Wholesalers
5. Marketing communications mix
involves
(a) Personal selling and advertising
(b) Sales promotion
(c) Public relations
(d) Publicity
6. Sales promotion consists of those

activities that are designed to bring a
companys goods or services to the
favorable attention of
(a) Manager
(b) Customer
(c) Tax
(d) Staff of the organisation
7. Promotion encompasses all the tools in
the marketing mix whose major role is
(a) Research and development
(b) Persuative communication
(c) Market
(d) Sales
(e) Gift
8. .. any paid from of non-personal
presentation and promotion of ideas,
goods or services by an identified
sponsor.
(a) Sales promotion and public relation
(b) advertising
(c) Packaging
(d) Style
9. Sales promotion as a tool of market
promotion gives rise to increase in
product usage as well as expansion of
markets for new staff.
(a) Introduction of new staff
(b) Introduction of new product
121
(c) Tax
(d) Price
(e) Cost
10. The objectives of promotion are to
inform, persuade or remind consumers
of the companys
(a) Wage and salary administration
(b) Marketing mix
(c) Product mix
(d) Style
(e) Gift
11. Which is/are the function of sales
promotion?
(a) Stimulation of consumers
(b) Help to middlemen
(c) Aid to salesman
12. Free sample as a sales promotion device
in the actual offering of a free trail of a
product to
(a) Manager
(b) Consumer
(c) Staff
(d) All of these
(e) None of these
13. A contest is sales promotion device in
which the participants complete for a
prize on the basis of their skill in
fulfilling a certain requirement usually
analytical or
(a) Low cost base production
(b) Price or promotion
(c) Creative
(d) Avoid
(e) Sale
14. Merchandise allowance is given to the
(a) Manufacture or producer
(b) Consumer of product or services
(c) Middlemen
(d) Staff
15. Buying allowance is given to the
(a) Producer or manufacturer of product
(b) Middlemen
(c) Consumer
(d) Staff
16. Push money or premium is
(a) Sales promotion device for
middleman
(b) Advertising device
(c) Production style
(d) Share
(e) Bond
17. Sales promotion devices for sales force
is/are
(a) More commission for more selling
(b) Bonus
(c) Contests
18. Sales promotion has grown out of its
step child status and today is treated as
an equal partner with
(a) Advertising and selling
(b) Production technique
(c) Fashion
(d) Style
(e) Tax
19. Which is the benefit of sales promotion?
(a) Thrill in life due to contests
(b) Skill development of the users
(c) Low price product
(d) Social life changed
20. Defective product is for social angle
(a) Power wastage machine
(b) Eco-friendly product
(c) Better quality product
List-I (types of
List-II (nature)
sales promotion)
a. Consumer
1. Exchange offer
b. Industrial
2. Financial
customer
assistance
c. Trade promotion
3. Store displays
d. Sales team
4. Contests
5. Job promotion
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Codes
(a)
(b)
(c)
(d)
A
B
C
D
(a)
1
2
4
3
(b)
1
2
3
4
(c)
2
4
3
1
(d)
1
4
3
2
(e)
2
4
3
1
22. Sales promotion may be effective, when
Manager
Staff
Producer
Consumer of the product or user of
the product
27. Which is the mean of sales promotion
for the consumer?
(a) Coupons
(b) Premium
(c) Demonstration
(d) Free sample and free trails
28. A . Is an item of merchandise that
.. technique are used.

(a) Advertising and salesmanship
(b) Pricing
(c) BEP
(d) EOQ
23. Sellers market is
(a) Monopoly market
(b) Modern market
(c) Production and style market
24. ATM card is given with opening a
is offered at cost or at relatively low cost

as a bonus to purchasers of a particular
product.
(a) Price off promotion or coupon
(b) Premium
(c) Sweepstakes
(d) Brand
29. Trading stamp is a/an
(a) Advertising device
(b) Sales promotion device
(c) Stock valuation
(d) Product
(e) Service
30. Which is/are tools of sales promotion?
(a) Bonus
(b) Coupon
(c) Premium
(d) Additional commission or purchase
saving A/c, it is a
(a) Short term price reduction
(b) Inventory assistance
(c) Premium
(d) Gift
25. Contest promotion device is available
for
(a) Staff
(b) Bank
(c) Worker
(d) Consumer of the product
26. Exchange offer is for
allowance
Answers
1. (a)
2. (e)
3. (d)
4. (c)
5. (e)
6. (b)
7. (b)
8. (b)
9. (b)
10. (c) 11. (d) 12. (b)
13. (c) 14. (c) 15. (b) 16. (a) 17. (d) 18. (a) 19. (e) 20. (a) 21. (b) 22. (a) 23. (a)
24. (c) 25. (d) 26. (d) 27. (e) 28. (b) 29. (b) 30. (e)
Explanation
1. Sales promotion is an important component of the marketing.
3. Elements of promotion-mix are personal selling advertising and publicity
123
7. Objectives of sales promotion are:
i.
Information to consumers
ii.
Increase in the sales volume
iii.
Create product identity
12. Free samples are given to consumers to expand the market or to introduce a new product.
13. The contests are held to stimulate consumers interest in the product.
15. Producers give buying allowance of a certain amount of money for a product bought by dealers.
23. In sellers market, demand exceeds supply.
25. Contests Is the tool of sales promotion.
26. Exchange offer is available to the consumer of the product.
27. All are the effective tools of sales promotion.
Chapter 17
Branding and Packaging
Brand
A brand is a name, term, symbol or design or a combination of them which is intended to identify
the goods or services of one seller or a group of sellers and to differentiate them from these of
competitors. For example, Lux, Hamam, or any other branded soap.
Brand name
According to American Marketing Association, Brand name is part of a brand consisting of a
word, letter, group of words or letters comprising a name which is intended to identify the goods or
services of a seller or a group of sellers and to differentiate them from those of competitors.
Branding
Branding is the management process by which a product is branded. It is a general term covering
various activities such as giving a brand name to a product, designing a brand mark and establishing and
popularising it.
Trade Mark
When a brand name or brand mark is registered and legalised it becomes a trade mark.
Thus, registered brands are trademarks. In that sense all trademarks are brands but all brands are
not trademarks. Trade mark is defined as A brand or a part of a brand that is given legal protection
because it is capable of exclusive appropriation. Thus, the trade mark is essentially a legal term
protecting the manufacturers right to use the brand mark.
Patents
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Patents are public documents conferring certain rights, privileges, titles or offices. A patent
confers the right to use of technical invention. It is applicable in the case of new inventions such as a new
process, a new product or a new machine.
Copyright
This is applicable in the case of books and is used in the same meaning as that of patents. It is a
sole right to reproduce literary, dramatic, musical or artistic work.
Function of Branding
Following are the major function of the branding:
1.
2.
3.
4.
5.
6.
7.
It helps in product identification and gives distinctiveness to a product.

Indirectly it denotes the quality or standard of a product.
It eliminates imitation products.
It ensures legal right on the product.
It helps in advertising and packaging activities.
It helps to create and sustain brand loyalty to particular products.
It helps in price differentiation of products.
Thus, brand names serve to create identify to distinguish one product from another. Identity is
essential to competition, because without a means for identification there is no way of making a choice.
Brand names definitely facilitate in making a choice.
Brand Image and Product Image
Every brand image is partially derived from a product image. The product image relates to the
fundamental aims and satisfaction which the consumers find in a particular product. Therefore, it is not
wrong to say that the brand image relates to the specific versions of the product image.
Kinds of Brands
Thomas F. Schutte in The Semantics of Branding classified the brand into two broad
categories:
1.
(a)
(b)
(c)
(d)
Manufacturers brands
National brands The same brand used on a national level.
Regional brands Brand for particular region.
Advertising brands Brands stressing symbols.
Blanket brands or single brands or family brands One brand name for all the products of a
manufacturer, eg, Godrej products.

(e) Multiple brands or individual brands Brand name given for each variety of product, eg,
2.
(a)
(b)
(c)
(d)
various brand soaps of TATAs.

Distributors brands
Private brand
Store brand
Dealer brand
House brand
Distributors brands stress the identity of the retailer.
125
Advantages of Brand Names
The advantages of using brand names could be easily recognised for each group of participants in
the marketing viz, manufactures, consumers, distributors, as follows:
To the manufactures
1. It identifies the product and distinguishes it from other competing products. Thus, it protects
the interests of the manufacturer.
2. It saves advertising cost if the brand name is popular.
3. If properly promoted, brand name creates confidence in and goodwill for the products.
4. It widens the work for products.
To the consumers
1. It affords an easy way for purchase by easily identifying a product.
2. The brand name indirectly assures certain quality by identifying the manufacturer behind the
product.
To the distributors
1.
2.
3.
4.
5.
Widely popular brands ease the selling process and lead to large sales.
It helps in advertising and sales promotion programmes.
The distributor can easily find out the quick moving products.
Branding reduces prices flexibility. Thus, in turn, reduces the risk in business.
Special selling efforts need not be undertaken. This reduces the cost of distribution and hence
the final price.
Characteristics of a Good Brand Name

At the time of choosing a brand name, various aspects require careful consideration. Very often,
manufacturers invite brand name from the consumers, dealers and agencies. The following are some of
the general considerations through no hard and fast rule can be laid down.
1.
2.
3.
4.
5.
The name should reality come to the minds of the customers. It should be easy to pronounce.
The name should be easy to read and understand.
The name should be appropriate for the product.
It should be easy to remember.
It should as far as possible, be most descriptive in nature.
The brand name is ancillary thing and the consumer is really influenced by the quality and
performance of the product. In the end, therefore, the success or failure of a product is determined
primarily, by the worth of the product in relation to those it competes with.
Packaging
Packaging means putting the products in suitable containers or packets such as tin, plastic jar or
card board box, etc. packaging should be such that product is protected and easily handled. Sometimes,
the container may have its own usefulness. For instance, Dabur chyawanprash is available in a plastic jar
which can be reused after consuming the Chyawanprash. Certain polythene and plastic are not considered
good as packaging material from the environment point of view. Their usage should be avoided.
126
Function of Packages
Packaging has two dimensional functions. First, it must protect the product. It also has
promotional role which has become more important. But the basic function of any package is to protect
its contents in transit, in storage and in use. Some of the important functions are:
1. To assemble and arrange the contents in the desired form.
2. To identify the contents, the brand and the maker (product differentiation is perfected through
this function).
3. To facilitate transporting, storing and warehouse handling.
4. To enable the display of contents.
5. To encourage repurchase.
According to Philip Kotler, Protection, convenience and economy were the three traditional
purposes attached to package.
Kinds of Packaging
On the basis of nature, packaging is classified into:
1. Family packaging The product of a particular manufacturer when packed in an identical
manner is known as family packaging. The shape, colour, size, etc, of packaging will be similar for all his
products.
2. Re-use packaging Packages that could be used for some other purpose after the packed goods
have been consumed is known as re-use packaging. This aspect increases the sales value of the product
considerably.
3. Multiple packaging It is the practice of placing several units in one container.
Labelling
Labelling serves the purpose of indicating the contents, weight or measure, instructions for use,
price, name of the producer, date of manufacture and expriy, etc. The information on the label is essential
for various reasons. For example, the date of expriy in case of medicines, and date of manufacture in the
case estables prevent the sale of products which may prove harmful.
Objective Questions
1. Which one of the following is not a
2. A secondary use package can best be
benefit of multiple packaging?

(a) Increases consumer acceptance of
defined as one as one that

(a) Facilitates transportation, storage
the product
(b) Provides an overall image of the
and handling for middlemen

(b) Can be re-used for purpose other
firm
(c) Makes handling or shortage easier
(d) Facilities special price offers
(e) Increases demand
than its initial use

(c) Can be used as a promotional tool
(d) Is recyclable can environmentally
safe
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3. In packaging a new line of fabric
8. One distinguishing factor between a
conditioner, Proctor and Gamble would
brand name and a brand mark is that a
be wise to avoid the use of which
brand name
(a) Creates customer loyalty
(b) Implies an organisations name
(c) Consists of words
(d) Identifies only one item in the
colour?
(a) Blue
(b) Black
(c) Pink
(d) Green
(e) Yellow
4. Labeling is important for three reasons,
including promotional and legal reasons,
what is the third reason?
(a) Informational
(b) Branding
(c) Strategic
(d) Marketing
(e) None of these
5. The UPC also known as the
(a) Product label
(b) Product code
(c) Price label
(d) Bar code
(e) All of these
6. .. brands usually require a producer
to become involved in distribution,
promotion and pricing decision.
(a) Retailer
(b) Wholesaler
(c) Manufacturer
(d) Own label
(e) All of these
7. A brand is best defined as a
(a) Name of the manufacturer of the
product
(b) Name, symbol, design, or
combination of these that identifies
a sellers products
(c) Registered design or symbol that is
displayed on the product
(d) Related group of words that
described the product
(e) None of these
product-mix
(e) None of these
9. Labeling is important for informational,
legal and reasons.
(a) Branding
(b) Strategic
(c) Marketing
(d) Promotional
(e) All of these
10. The label on a pack of frozen pears
soap, packed within an hour of picking.
These words are used
(a) For promotional reasons
(b) To encourage multiple purchaser
(c) To satisfy legal requirements
(d) To provide information
11. The warning label on a pack of silk cut
cigarettes is included most directly to
(a) Promote the product
(b) Satisfy legal requirements
(c) Encourage the proper use of the
product
(d) Positions the product as being
socially responsible
12. Which of the following is not a desirable
feature for a brand name?
(a) It can help develop brand loyalty
amongst buyers
(b) It can facilitate the introductions of
new products
(c) It can make it possible for the firm
to engage in non-price competition
(d) It can become used as the generate
name for all products in the category
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13. The major characteristic of own label
brands is that
(a) Only retailers imitate and own brand
(b) Producers become involved with the
marketing mix
(c) Producers are identified on the
product
(d) Manufactures are not identified on
the product
14. Marketers should view packaging as a
major strategic tool, especially for
(a) Consumer convenience products
(b) Consumer shopping products
(c) Industrial products
(d) Specially products
15. Multiple packaging is
(a) The most expensive type of
packaging
(b) The most effective type of
packaging
(c) The same as family packaging
(d) Likely to increase demand
16. The label on a soft drink can reads cool
(d) (a), (b) and (c)

(e) None of these
19. Product identification involves
(a) Branding
(b) Packaging
(c) Labelling
(d) (a), (b) and (c)
(e) None of these
20. Characteristics of good packaging is
(a) Convenient
(b) Interesting
(c) Attractive and protective
21. A .. provides written information
22.
23.
and refreshing. For what reason are

these words used?
(a) To promote the product
(b) To encourage multiple purchases
(c) To satisfy legal requirements
(d) To provide information
17. The package design of a bag of flour
would most likely be criticised for being
(a) Unsafe to the environment
(b) Well suited for multiple unit
packaging
(c) Unsafe to the user
(d) Functionally deficient
(e) Deceptive
18. Grade labels identify by
(a) Letter
(b) Number
(c) Quality
24.
25.
26.
about the product

(a) Branding
(b) Packaging
(c) Label
(d) Costing
(e) None of these
Main decision areas in packaging is
(a) Package materials
(b) Package size and convenience
(c) Package aesthetics
The main objective of packaging is
(a) Identification of product
(b) Maintaining the quality of product
(c) Protection of product
Marketing includes
(a) Branding
(b) Packing
(c) Packaging
(d) Standardisation and grading
Which is the branding of bank?
(a) Fixed deposits or term deposits
(b) Mutual fund
(c) Personal loan
Innovation means
(a) Management
(b) Budgeting
(c) Cost
(d) Introduction of new product
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27. Who said, The marketing is the set of
(c) Size of product

(d) Packaging of product
32. Which is/are controllable factor of
human activities?
(a) Borch
(b) Philip Kotler
(c) Still
(d) Cundiff
(e) Philip Kotler and Stanton
28. Who is the channel of distribution?
(a) Retailer
(b) Wholesaler
(c) Distributor agent or agent
(d) Sales traveller
29. Uncontrollable factor of marketing mix
marketing mix?
(a) Wages policy of worker
(b) Product related factor
(c) Fixed budget
(d) Job
33. Which is factors of price of a product or
service?
(a) Aim of pricing
(b) Level of competition
(c) Demand of product or service
(d) Profitability
34. Consumer behaviour includes
(a) Marketing system
(b) Tax policy
(c) Place
(d) Need and requirement of consumer
35. Which is factor of pricing?
(a) Cash discount and allowances
(b) Period of credit
(c) Condition of period
is/are
(a) Competition
(b) Market system
(c) Consumer behaviour
30. Competition involves
(a) Quality of product or service
(b) Price level
(c) Marketing policy
31. Which is a physical feature of product?
(a) Colour of product
(b) Taste of product
2. (b)
Answers
2. (b)
3. (b)
4. (a)
5. (d)
6. (c)
7. (b)
8. (c)
9. (d)
10. (a) 11. (b) 12. (d)
13. (d) 14. (a) 15. (c) 16. (a) 17. (d) 18. (d) 19. (d) 20. (d) 21. (c) 22. (d) 23. (d) 24. (e)
25. (d) 26. (d) 27. (b) 28. (e) 29. (d) 30. (e) 31. (e) 32. (b) 33. (e) 34. (d) 35. (d)
Explanation
1. Packaging means putting the products in
suitable containers.
5. Lanelling helps the buyer to understand
7. In marketing, the brand name is a major

selling tool.
12. That part of a brand which can be
the nature of the product, its distinctive
spoken is called a brand name. In other
features, its
words, brand name is the verbal
performance.
composition and its
component of a brand.
15. Multiple packaging is the practice of
placing several units in one container.
130
18. An important function performed by
26. Innovation means introduction of new
labels is to help grading the products
product.
31. Colour, taste and size are the physical
into different categories.

21. A label provides written information
features of product.
about the product.
Chapter 18
Consumer Production
Meaning of Consumer
Consumer is a person who buys goods or hires services to be used or consumed by
himself/herself or by someone on behalf of the buyer. Under the Consumer Production Act, 1986, The
word consumer has been defined separately for the purpose of goods and services.
(a) For the purpose of goods, a consumer means (i) one who buys any goods for consideration;
and (ii) any user of such goods other than the person who actually buys it, provided such use
is made with the approval of the buyer. The expression consumer does not include a person
who obtains such goods for resale or for any commercial purpose.
(b) For the purpose of services, a consumer means (i) one who hires any service or services for
consideration; and (ii) any beneficiary of such services provided the service is availed with
the approval of such person.
Concept of Consumer Protection
Consumer protection means safeguarding the interest and rights of consumer. In other words, it
refers to the measures adopted for the protection of consumers from unscrupulous and unethical
malpractices by the business and to provide them speedy redressal of their grievances. The most common
business malpractices leading to consumer exploitation are given below:
1.
2.
3.
4.
5.
6.
7.
8.
Sale of duplicate goods

Sale of sub-standard goods
Sale of spurious goods
Sale of adulterated goods
Use of false weights and measures leading to underweight
Hoarding and back-marketing leading to scarcity and rise in price
Charging more than the Maximum Retail Price (MRP) fixed for the product
Misleading advertisement, ie, advertisements falsely claiming a product or service to be of
superior quality, grade or stand

9. Supply of inferior services, ie, quality of service lower than the quality agreed upon
Rights of Consumers
John F. Kennedy, the former USA president, in his message to consumer had given six rights to
consumers. These rights are:
131
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Right to safety
Right to be informed
Right to choose
Right to be heard
Right to seek redressol, and
Right to consumer education
These rights had paved the way for organised consumer movement in the USA and later it spread
all over the world. Right of a consumer as given in the Consumer Production Act, 1986 are:
1. Right to safety It is the right of the consumers to be protected against goods and services
which are hazardous to health or life. For example, defective vehicles could lead to serious accidents.
Only recently, there were mass protests hazardous pesticides beyond permissible limits. Thus, right to
safety is an important right available to the consumer which ensures that the manufactures shall not
produce and sell sub-standard and dangerous products.
2. Right to be informed The right to be informed is an important component of consumer
protection. The consumer must be provided with adequate and accurate information about quality,
quantity, purity, standard and the price of the goods and services. Such information helps the consumers
in their buying decision and use of the product.
3. Right to choose The right to choose provides that the consumer must be assured, whenever
possible, access to a variety of goods and services at competitive prices.
4. Right to be heard The rights to safety, information and choice will be frivolous without the
right to be heard. This right has three interpretations. Broadly speaking, this right means that consumers
have a right to be consulted by government decision and policies are made affecting consumer interests.
Also consumers have a right to be heart by manufacturers, dealers and advertisers about their opinion on
production, marketing decisions and any grievances of the consumers. Now-a-day most of the top
manufacturers and firms have set up consumer service cells to attend to consumers complaints and take
appropriate steps for their redressal. Thirdly, consumers have the right to be heart in legal proceeding, in
law courts dealing with consumer complaints
5. Right to seek redressal The consumers have been given the right of redressal of their
grievances relating to the performance, grade, quality etc of the goods and services. The consumer
protection Act has duly provides for a fair settlement of genuine grievances of the consumers. It has also
setup a proper mechanism for their redressal at district, state and national levels.
6. Right to consumer education It means the right to receive knowledge and skill to become
informed consumer. In this direction the consumer association, educational institution and policy makers
can play an important part.
Ways and Means of Consumer Production
The following are the various ways and means of consumer production followed in India:
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Lok Adalat
Lok Adalats are the effective and economical system for quick redressal of the public grievances.
The aggrieved party can directly approach the adalats with his grievances, and his issues are discussed on
the spot and decisions are taken immediately.
Public Interest Litigation (PIL)
Public Interest Litigation (PIL) is a scheme under which any person can move to the court of law
in the interest of the society. It involves efforts to provide legal remedy to un-represented groups and
interests. Such group many consist of consumers, minorities, poor person, environmentalist and others.
Any person or organization though not a party to a grievance, can approach the court for remedial action
in case of any social atrocities.
Redressal Fourums and Consumers Protection Councils
Under the consumer production act, 1986, a judicial system has been setup to deal with the
consumer grievances and disputes as district level. There are known as district forum, state consumer
disputed redressal commission (state commission) and national consumer disputed redressal commission
(national commission). Any individual consumer or association of consumer can lodge a complaint with
the district state or national level forum, depending on the value of goods and claim for compensation .
The act as amended in 2002 also provides or setting up of consumer production council at district
state and national level for promotion and production of the right of the consumer as laid down in section
6 of the act.
Awareness Programme
To increase the level of awareness among the consumer the government of India has initiated
various publicity measures. It regularly brings out journals, brochures, booklets and responsibilities of
consumers, redressal machineries etc. it observes World Consumer Right Day on 15 March and National
Consumer Day on 24 December.
Legislative Measures
A number of laws have been enacted in India to safeguard the interest of consumers and protects
them from unscrupulous and unethical practices of the businessmen. Some of these acts are as follows:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Drug Control Act, 1950

Agricultural Products (grading and marketing) Act, 1937
Industries (development and regulation) Act, 1951
Prevention of Food Adulteration Act, 1954
Essential Commodities Act, 1955
The Standards of Weights and Measures Act, 1956
Monopolies and Restrictive Act, 1969
Prevention of black-Marketing and Maintenance of Essential Suppliers Act, 1980
Bureau of Indian Standard Act, 1986
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Consumer Protection Act, 1986
The consumer Protection Act was passed in 1986 and it came into force from 1 july 1987. The
main objectives of the Act are to provide better and all round protection to consumers and effective
safeguards against different types of exploitation such as defective goods, deficient services and a simple,
speedy and in expensive machinery for redressal of consumers grievances.
Salient Features
The salient features of Consumer Protection Act (CPA), 1986 are as follows:
1. It applies to all goods, services and unfair trade practice unless specifically exempted by the
Central Government.
2. It covers all sectors-private, public or co-operative.
3. It provides for establishment of consumer protection councils at the central, state and district
levels to promote and protect the rights of consumers and a three-tier quasijudicial machinery
to deal with consumer grievances and disputes.
4. It provides a statutory recognition to the six rights of consumers.
Right of consumers
Right to safety
Right to be informed
Right to choose
Right to be heard
Right to seek redressal
Right to consumer education
Goods and Services Covered Under CPA, 1986
The term goods under this Act has the same meaning as under the sale of goods Act.
Accordingly it covers all types of movable property other than money and includes stocks and shares,
growing crops etc. the term service means service of any descriptions made available to potential users
and includes banking, financing, housing construction, insurance, entertainment, transport, supply of
electrical and other energy, boarding and lodging, amusement, etc. the services of doctors, engineers,
architects, lawyers etc are to included under the provisions of Consumer Protection Act.
Machinery for Settlement of Grievances
The judicial machinery set up under the Consumer Protection Act, 1986 consists of consumer
courts at the district, state and national levels.
District Consumers Forums
This is established by the state government in each of its districts. The district forums are headed
by the person of the rank of a district judge. A written complaint can be fixed before the district consumer
134
forum where the value of goods or services and the compensation claimed does not exceed Rs 20 lakh. If
a consumer is not satisfied by the decision of the district forum, he can challenge the same before the state
commission, within 30 days of the order.
State Commission
This is established by the state governments in their respective states. The commission is headed
by a person of the level of high court judge. A written complaint can be filed before the State Commission
where the compensation claimed exceeds Rs 20 lakh but does not exceed Rs one crore. In case, the
aggrieved party is not satisfied with the order of the State Commission. He can appeal to the national
commission within 30 days of passing of the order.
National Commission
The National Commission was constituted in 1988 by the central government. It is the apex body
in the three-tier judicial machinery set up by the government for redressal of consumer grievances. The
National Commission is headed by a sitting or retired judge of the Supreme court. All complaints
pertaining to those goods or services and compensation whose value is more than Rs one crore can be
filed directly before the National Commission. An appeal can be filed against the order of the National
Commission to the Supreme Court within 30 days from the date of order passed.
Objective Questions
1. Consumer Protection Act came into
existence in
(a) 1946
(b) 1966
(c) 1976
(d) 1986
(e) 1996
2. Effect of part delivery is described
under section . Of this Act.
(a) 15
(b) 18
(c) 28
(d) 34
(e) 45
3. Which of the following is not included
in the term person under Consumer
Protection Act, 1986?
(a) Hindu undivided family
(b) A co-operative society
(c) Frim
4. Under the Consumer Protection Act,

1986 Goods means
(a) Every kind of movable property
only
(b) Every kind of immovable property
only
(c) Every kind of movable property
other than
5. In case are purchase for resale, these
goods under the Consumer Protection
Act, 1986 are
(a) For business
(b) For commercial purpose
(c) For sale
6. Which of the following can be the
subject matter section 6 of Sale of
Goods Act, 1930?
135
(a) Either existing or future goods
(b) The existing goods only
(c) The future goods only
7. The term of the central consumer
protection council under the Consumer
Protection Act, 1986 is
(a) 3 years
(b) 4 years
(c) 5 years
(d) 6 years
(e) None of these
8. Which of the following is described by
the distinction between sell an
agreement to sell?
(a) Right and liabilities of the parties to
contract
(b) Nature the subject matter of the
contract
(c) Nature of property
9. Sections 5 of the sale of Goods Act,
1930 describes
(a) Sale and agreement to sell
(b) Contract of sale how made
(c) Exhausting or future goods
10. Under which type of agreement for a
contract, the buyer has a right to return
the goods at any time?
(a) Hiring
(b) Agency
(c) Bailment
(d) Sale
(e) None of these
11. If transfer of title or registration is not
created, in such condition, which of the
following treatment the purchaser have?
(a) Cannot claim damage for breach of
conditions and warranties
(b) Can claim damages for breach of

conditions or warranties
(c) Either (a) or (b)
12. Which of the following is provided
under Section 9 of the Sale of Goods
Act, 1930?
(a) Ascertainment of price
(b) Conditions and warranties
(c) Agreement to sell
13. Which of the following Acts deals with
quasi contract?
(a) The English Sale of Goods Act,
1893
(b) The Indian Contract of Goods Act,
1873
(c) The Sale of Goods Act, 1930
14. In which of the following the property in
goods transferred in future?
(a) Contract of sale
(b) Contingent contract of sale
(d) Agreement to sell
15. The term property used in section 2(11)
of the Sale of Goods Act, 1930 means
(a) A special property
(b) All types of property
(c) The general property in goods and
not merely a special property
16. Section 2 (14) of the Sale of Goods Act,
1930 defines the term
(a) Prices
(b) Goods
(c) Seller
(d) Specific goods
(e) None of these
136
17. Mercantile agent is defined under

22. Under the Sale of Goods Act, 1930 the
Section
(a) 2(6)
(b) 2(7)
(c) 2(8)
(d) 2(9)
(e) None of these
18. The nature of a bill of landing is as a
(a) Branders cheque
(b) Promissory note
(d) Only (a)
(e) None of these
19. Which of the following is included in
delivery can be
(a) Symbolic only
(b) Actual only
(c) Constructive only
23. The term goods under Section 2(7) of
this Act does not includes
(a) Stock and share
(b) Growing crops
(c) Actionable claims and money
(d) Things attached to or forming part
document of title to goods?

(a) Railway receipt
(b) Bill of landing
(c) Warrant or order for the delivery of
of the land
24. Which of the following sections of the
goods
20. Under the Sale of Goods Act the term
Sale of Goods Act, 1930 defines

delivery
(a) Section 2(3)
(b) Section 2(5)
(c) Section 2(6)
(d) Section 2(7)
(e) None of these
25. Under the Sale of Goods Act, the term
seller means
(a) Salesman
(b) A person who buy goods
(c) A person who sells or agrees to sell
goods
21. Document of title to goods under
property means
(a) A special property
(b) Immovable property
(c) Immovable and movable properties
Section 2(4) of the Sale of Goods Act,
both
(d) The general property in goods and
includes
(a) Wharfingers certificate only
(b) Bill of landing only
(c) Dock warrant only
Answers
1. (d) 2. (d)
13. (b)
3. (e)
4. (c)
5. (b)
not merely a special property

6. (a)
7. (a)
8. (a)
9. (b)
10. (a) 11. (a) 12. (a)
14. (e) 15. (c) 16. (d) 17. (d) 18. (e) 19. (d) 20. (c) 21. (d) 22. (d) 23. (c)
24. (e) 25. (d)

Explanation
1. Consumer Protection Act was
passed in 1986 and it came into
force from 1 july, 1987.
4. Goods under CPA-1986 covers all

types of movable property other
137
than money and also includes stocks
and shares, growing crops etc.
7. National Commission is the apex
for redressal of consumer

grievances.
10. A contract of sale of goods is a
body in the three-tier judicial
contract whereby the seller transfers
machinery setup by the government
are agrees to transfer the property in

goods to the buyer for a price.
Chapter 19
Marketing in Banking
Deposit Accounts
Bank offer the facility of opening various types of accounts where a depositor can deposit money
saved by him. Depending upon the nature of accounts deposit money can also be withdrawn to suit the
convenience of the depositor.
Classification of Deposit Accounts
On the basis of purposes served, the deposit accounts can be classified as follows
1.
2.
3.
4.
Saving Bank Accounts

Fixed Deposit Accounts
Current Account
Recurring Deposit Account
Saving Accounts
Saving bank account is primarily meant for people with limited mean who want to save some
money for future. In a saving bank account there are normally no restrictions on the amount to be
withdrawn as well as on the frequency of withdrawal. The pass book issued to the saving bank account
holder contains the rules regarding its operation. Saving bank account can be opened with a minimum
amount of Rs 500, if cheque book facility is not availed. In case cheque book facility is availed, then the
minimum balance required to be maintained is Rs 1000. The allows interest at the rate of about 3.5%. But
the rate of interest keeps changing dependly upon the instructions of RBI.
Pay-in-slip
138
Pay-in-slip are printed forms with perforated counter foils used for depositing cash or cheque. It
contains information in respect of the name or account holder, amount deposited, and the signature of the
person depositing it.
Fixed Deposit Account
It is also known as term deposit account. Money deposited in fixed deposit account ranges for a
period starting from 30 days to more than 3 years. At the end of the specified period, the depositor may
either withdrawn the money or renew the deposit further for a specified period. Banks pay interest on
fixed deposit dependly upon the period for which the deposit is kept with the bank.
Payment of Fixed Deposits before the Date of Maturity
Fixed deposits are normally payable on maturity. In case the depositor requires the money before
the due date, he or she makes a request to the bank for its payment. The bank may consider such a request
and make payment of fixed deposit. When the payment of fixed deposit is made before the date of
maturity, the depositor loses interest.
Current Account
In current account, a customer can withdraw or deposit money any number of times he desires.
Current account is suitable to those persons who either deposit or make payments frequently. It is thus
suitable for business people and institutions which have frequent dealing with the bank. Bank permits
overdraft facility on current account. In view of this facility, the banks do not pay any interest on current
accounts. Sometimes, banks charge some account from the current account holder as fees for the services
extended.
Some features of the current accounts are:
1. It provides convenience of operation as certain facilities are associated with current account. The
objective is not to mobilise saving through such accounts.
2. The current account has an operating cost. There are bank charges for the services provided to the
holder of current accounts.
3. Banks do not pay any interest on such accounts.
Recurring Deposit Account
The procedure for opening a recurring deposit account is the same as in the case of saving bank
account. Normally the withdrawal from such account is not permitted. However, the depositor can take
139
loan from the bank against the security of recurring deposit account. The interest earned on recurring
account is higher than on the saving account. It varies with the duration of deposit.
Distinction between Current Account and Saving Bank Account
S.No
Basis of difference
1.
Operation of accounts
2.
3.
4.
5.
Withdrawals
Interest
Overdraft
Service charges
Current account
Current account is mainly opened
Saving account
Saving bank account is mainly
and operated by business firms
opened by individuals and salaried
and institutions.
Deposits and withdrawals can be
period.
Withdrawals are not permitted as
made frequently. There is no limit
frequent as in case of current
to its frequency.
No interest is paid by bank on
account.
Interest is paid on saving bank
such account.
account though the rate of interest
Overdraft facility is available

Service charges are payable
happens to be low.
No such facility is allowed
Service charges are not payable.
Financial Market
Financial market is the market that facilitates transfer of funds between investors/lenders and
borrowers/users. It deals in financial instruments like bills of exchange, shares, debentures, bonds, etc. it
provides security to dealings in financial assets, liquidity to financial assets for investors and ensures low
cost of transaction and information.
Function of Financial Market

The main function of financial market are
(a) It provides facilities for interaction between the investors and the borrowers.
(b) It provides pricing information resulting from the interaction between buyers and sellers in the
market when they trading the financial assets.
(c) It provides security to dealing in financial assets.
(d) It ensures liquidity by providing a mechanism for an investor to sell the financial assets.
Types of Financial Markets
140
Financial markets can be classified as
(1) Money Market and
(2) Capital Market.
Money Market
The money market is a market for short-term funds, which deals in financial assets whose period
of maturity is up to one year. It should be noted that money market does not deal in cash or money as such
but simply provides a market for credit instruments such as bills of exchange, promising notes,
commercial paper, treasury bills etc. these financial instruments are close substitute of money. These
instruments help the business units, other organisation and the government to borrow the funds to meet
their short-term requirement.
Instruments of Money Market
Following are some important instruments of the money market:
1. Call money Call money is mainly used by the banks to meet their temporary requirement of
cash. They borrow and lend money from each other normally on a daily basis. It is repayable on demand
and its maturity period varies in between one day to a fortnight. The rate of interest paid on call money
loan is known as call rate.
2. Treasury bill A treasury bill is a promissory note issued by the RBI to meet the short-term
requirement of funds. Treasury bills are highly liquid instruments that means, at any time holder of
treasury bills can transfer of or get the discounted from RBI. These bills are normally issued at a price less
than their face value; and redeemed at face value. So the difference between the issue price and the face
value of the Treasury bill represents the interest on the investment.
3. Commercial Paper (CP) Commercial Paper (CP) is a popular instrument for financing
working capital requirements of companies. The CP is an unsecured instrument issued in the form of
promissory note. This instrument was introduced in 1990 to enable the corporate borrowers to raise shortterms fund. The highly reputed player of commercial paper market.
4. Certificate of deposit Certificate of Deposit (CDs) are short-term instruments issued by
Commercial Banks and Special Financial Instruments (SFIs), which are freely transferable from one party
to another. These can be issued to individuals co-operatives and companies.
141
5. Commercial bills bill of exchange are drawn by the seller (drawer) on the buyer (drawee) of
the value of goods delivered to him. Such bills are called trade bills. When trade bills accepted by
Commercial Banks they are called commercial bills. This commercial bull can now be discounted with a
bank before its maturity. On maturity the bank gets the payment. From the drawee, ie, the buyer of goods.
Composition of the Organised Market
The organised money market includes
1. Call Money Market
2. Bill Market
3. Collateral Loan Market
Collateral loan market Forms, by and large the largest and the best developed section of the
money market. In this market, loans are given against the security of government bonds, shares of first
class companies, agriculture and manufactured commodities and jewellery.
Capital Market
Capital market is a institutional arrangement for borrowings medium and long-term funds and
which provides facilities for marketing and trading of securities. So it constitutes all long-term
borrowings from banks and financial institutions, borrowings from foreign markets and raising of capital
by issue various securities such as shares, debentures, bonds, etc.
Securities Market
The market where securities are traded known as Securities Market. It consists of two different
segments namely primary and secondary market. The primary market deals with new or fresh issue of
securities and is, therefore, also known as new issue market; whereas the secondary market provides a
place for purchase and sale of existing securities and is often termed as stock market or stock exchange.
Difference between Primary Market and Secondary Market
S.No
1.
2.
Points of
difference
Function
Participants
Primary market
Secondary market
To raise long-term funds through
To provide continuous and ready
fresh issue of securities.
market for existing long-term
Financial instruction, mutual funds,
securities.
Stock brokers who are the members
underwriters and individual
of the stock exchange and mutual
142
3.
4.
investors.
funds, financial instruction and
Listing
Listing is not required for dealing in
individual investors.
Listing in stock exchange is required
requirement
the primary market.
to deal in s security in the stock
Determination of
Prices and determined by the
exchange.
Price are determined by forces of
prices
company/institutions management,
demand and supply and keep on
with due confirmation with SEBI.
fluctuating.
Difference between Capital Market and Money Market

S.No
Point of distinction
1.
Time period/term
2.
Instrument dealt in
3.
4.
Participants
Regulatory body
Capital market
Deals in long-term funds
Deals in shares, debenture, bonds
Money market
Deals in short-terms funds
Deals in securities like treasury
and government securities
bills, commercial paper, bill of
Stock brokers, underwriters,
exchange, certificate of deposits etc.

Participants are commercial banks
mutual funds, financial
non-banking finance companies,
instructions and individual
chit funds etc.
investors.
SEBI (Securities and Exchange
RBI (Reserve Bank of India)
Board of India)
Stock Exchange
Stock exchange is the term commonly used for a secondary market, which provide a place where
different types of existing securities such as shares, debentures and bonds, government securities can be
bought and sold on a regular basis. A stock exchange is generally organised as an association, a society or
a company with a limited number of members.
The securities contract (regulation) act has defined stock exchange as an association,
organisation or body of individuals, whether incorporated or not, established for the purpose of assisting,
regulating and controlling business of buying, selling and dealing in securities.
Characteristics of Stock Exchange
The main characteristics of a stock exchange are:
143
1.
2.
3.
4.
5.
If is an organised market.
If provides a place where existing and approved securities can be bought and sold easily.
In a stock exchange, transaction takes place between its members or their authorized agents.
All transaction are regulated by rules and by laws of the concerned stock exchange.
If makes complete information available to public in regard to prices and volume of transaction
taking place every day.
Stock Exchanges in India

The first organised stock exchange in India was started in Mumbai known as Bombay Stock
Exchange (BSE). It was followed by Ahmedabad Stock Exchange in 1894 and Kolkata Stock Exchange
in 1908. The Security Contracts (Regulation) Act was passed in 1956 for recognition and regulation of
Stock Exchange in India. At present we have 23 stock exchanges in the country. Of these, the most
prominent stock exchange that camp up is National Stock Exchange (NSE). It is also based in Mumbai
and was promoted by the leading financial institutions in India. It was incorporated in 1992 and
commenced operations in 1994.
Another stock exchange that needs special mention is Over the Counter Exchange of India
(OTCEI). It was also promoted by the financial institutions line UTI, ICICI, IDBI, IFCI, LIC, etc., in
September, 1992 specially to cater to small and medium sized companies with equity capital of more than
Rs 30 lakh and less than Rs 25 crore. It helps intrepreneurs in raising finance for their new projects in a
cost effective manner.
SEBI (Established in April 1988)
As part of economic reforms programme started in June 1991, the Government of India initiated
several capital market reforms, which included the abolition of the office of the Controller of Capital
Issues (CCI) and granting statutory recognition to Securities Exchange Board of India (SEBI) in 1992 for
1. Protection in interest of investors in securities.
2. Promoting the development of securities market.
3. Regulating the securities market.
Loans and Advances
Bank rate When the Reserve Bank of India lends money to commercial banks, the rate of interest
it charges for lending is known as bank rate.
Lending rate The rate of which commercial banks make funds available to people is known as
lending rate.
144
Demand loan A demand loan is a loan which is repayable on demand by the bank. In other
words, it is repayable at short-notice. The entire amount of demand loan is disbursed at one time and the
borrower has to pay interest on it. The borrower can repay the loan either in lumpsum (one time) or as
agreed with the bank.
Term loan Medium and long term loans are called term loans. Terms loans are granted for more
than a year and repayment of such loans is spread over a longer period. The repayment is generally made
in suitable installments of a fixed amount. These loans are generally secured against the mortage of land,
plant and machinery, building and the like.
Cash credit Cash credit is a flexible system of lending under which the borrower has the option
to withdraw the funds as and when required and to the extent of his needs. Under this arrangement the
banker specifies a limit of loan for the customer (known as cash credit limit) up to which the customer is
allowed to draw.
Mutual Funds
Mutual funds collect the savings from small investors, invest them in government and other
corporate securities and earn income through interests and dividends besides capital gains. It works on the
principle of small drops of water make a big ocean.
To get funds from investors, the find adopts a simple technique. Each fund is divided into a small
fraction called units of equal value. Each investors is allotted units in proportion to the size of his
investment.
Money Stock in India
In 1979 the RBI classified money stock is India in the following four categories.
M1 = currency with the public, ie, coins and currency notes + Demands deposits of the public
Known (known as narrow money)
M2 = M1 + Post office savings deposits
M3 = M1 + Time deposits of the public with bank (known as broad money)
M4 = M3 + Total post office deposits
145
The basic distinction between between narrow money (M 1) and broad money (M3) is in the
treatment of time deposits with banks. Narrow money excludes time deposits of the public with the
banking system which board money includes it.
Function of Commercial Banks
1. Receipt of deposits
2. Lending of money
3. Agency services
(a) Collection of bills, promissory notes and cheques
(b) Collection of dividends, interest premiums
(c) Purchase and sales of shares and securities
(d) Acting as trustee
(e) Making regular payment such as insurance premium
4. General services
(a) Issue of letters of credit, travellers cheques, bank draft, circular notes.
(b) Safe keeping of valuable in safe deposits value.
(c) Supplying trade information and statistics conducting economic survey.
(d) Preparation of feasibility studies, project report etc.
Nationalisation of Banks
On July 19, 1969 fourteen commercial banks with deposits worth Rs 50 crore or more were
nationalised. On April 15, 1980 six more private owned commercial banks were nationalised. In 1993,
New Bank of India merged with Punjab National Bank. As a result, the number of public sector banks
other than the State Bank of India and its associate declined to nineteen.
State Bank of India and its Associate Bank
The Imperial Bank was established in the year 1921 by merging three Presidency Banks (Bank of
Bengal, Bank of Madras & Bank of Bombay). On the recommendation of the Rural Credit Survey
Committee the Imperial Bank of India was converted in to the State Bank of India in July 1, 1955.
In 1959 the State Bank of India (Associate Banks) Act was passed and this paved the way for
creating the State Bank Group. Originally, the then seven banks that became the associate banks belonged
to princely states until the government nationalised them between October, 1959 and May, 1960.
In time with First Year Plan, emphasizing the development of rural India, the government
integrated these banks into State Bank of India to expand its rural outreach. There has been a proposal to
merge all the associate banks into SBI to create a Mega Bank and streamline operation. The first step
along these lines occurred on 13 August 2008 when State Bank of Saurashtra merged with State Bank of
146
India, which reduced the number to state banks from seven to six. Further more on 19 th June, 2009 the SBI
board approved the mergen of its subsidiary, State Bank of Indore with itself.
Associate Banks of SBI
1.
2.
3.
4.
5.
6.
State Bank of Hyderabad

State Bank of Bikaner and Jaipur
State Bank of Indore
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
Scheduled and Non-scheduled Banks

Scheduled Banks in India constitute those banks which have been included in the second
schedule of Reserve Bank of India (RBI) Act, 1934 RBI in turn includes only those banks in this schedule
which satisfy the criteria laid down vide section 42(6) (a) of the act. The banks included in this schedule
list should fulfill two conditions:
1. The paid up capital and collected funds of bank should not be less than Rs 5 lac.
2. Any activity of the bank will not adversely affect the interest of depositors.
Every scheduled bank enjoys the following facilities:
1. Such bank becomes eligible for debts/loans on bank rate from the RBI.
2. Such bank automatically acquire the membership of clearing house
Non-scheduled banks are those which are not included in the second schedule of the RBI Act
1934.
Reserve Bank of India (RBI)
The Reserve Bank of India (RBI) was established as a shareholders bank on April 1, 1935, under
the Reserve Bank of India Act 1934. The bank was leter nationalised in January 1, 1949. RBI is the
Central Bank of India.
Function of RBI
1.
2.
3.
4.
5.
6.
Issue of currency (using the minimum reserve system for issuing currency notes).
Banker to the government
Bankers bank
Controller of credit
Custodian of foreign exchange reserves
Collection and publication of data
147
Cash Reserve Ratio (CRR)
Cash reserve ratio to that portion of total deposits which a commercial bank has to keep with the
central bank in the form of cash reserves. The Cash Reserve Ratio (CRR) is an effective instrument of
credit control. Under the RBI (Amendment) Act 1962, the RBI is empowered do determine CRR for the
commercial banks in the range of 3 percent to 15 percent for the aggregate demand and time liabilities.
Statutory Liquidity Ratio (SLR)
Statutory liquidity ratio refers to that portion of total deposits (demand and time) which a
commercial bank has to keep with itself in the form of liquid assets, viz, cash, gold or approve
government securities.
The Banking Regulation (Amendment) Act 1962 provides for maintaining a minimum Statutory
Liquidity Ratio (SLR) of 25 percent by the bank against their net demand and time liabilities. The
Amendment Act also empowers the RBI to raise the SLR up to 40 percent if it is considered necessary to
control liquidity.
Open Market Operation
Open market operations imply deliberate direct sales and purchase of securities and bills in the
market by the Central Bank (RBI) on its own initiative to control the volume of credit.
Some Financial Institutions and their year of Establishment
S.No
1.
2.
3.
4.
5.
Institutions
Industrial Credit and Investment Corporation of India
Industrial Finance Corporation of India
Unit Trust of India (Head office-Mumbai)
National Bank for Agricultural and Rural Development
Year of establishment
1955
1948
1964
12 July, 1982
(NABARD)
Small Scale Industries Development Bank of India (SIDBI)
1990
[Head office-Lucknow)
6.
EXIM Bank
7.
Regional Rural Bank (RRB)
8.
life Insurance Corporation of India (LIC) [Head office-Mumbai]
Objective Questions
1. The RBI calls M1 as
(a) Narrow money
(b) Broad money
(c) Liquid money
1 Jan, 1982
1975
1956
(d) Legal money

(e) None of these
2. The supreme monetary and banking
authority in India is
148
(a) EXIM bank
(b) Reserve fund
(c) Deposits from the public
3. Commercial bank gets its funds from
(a) Share capital
(b) Reserve fund
(c) Deposits from the public
4. The RBI issue currency on the basis of
the minimum of
(a) Rs.200 crores of gold and foreign
exchange reserves, of which at least
Rs 115 crores worth o gold must be
there.
(b) Rs 300 crores of gold and foreign
exchange reserves, of which at least
Rs 100 crores worth of gold must be
there
(c) Only Rs 400 crores of gold
5. The main function of commercial bank
is
(a) Lending function
(b) Agency services
(c) General services
6. The Reserve Bank of India is
responsible for overall
(a) Credit and fiscal policy of the
economy
(b) Debit and fiscal policy of the
economy
(c) Credit and monetary policy of the
economy
7. The lender of last resort means
(a) The government coming to the
rescue of poor farmers
(b) Central bank coming to the rescue

of other banks in times of financial
crisis
(c) Commercial banks coming to the
rescue of small industrial units
8. Open market operations performs
(a) Direct sales of securities
(b) Direct purchase of securities
(c) Purchase and sales of bills
9. M3 is defined as
(a) Currency with the public + demand
deposits with banks
(b) M1 + savings deposits with banks
(c) M2 + time deposits with banks
(d) M1 + time deposits with banks
10. Banks create credit
(a) Out of nothing
(b) On the basis of their securities
(c) On the basis of their total assets
(d) On the basis of their cash deposits
(e) None of these
11. Essentially, the money market is a
market for
(a) Long term loans
(b) Short term loans
(c) Second hand securities
(d) Overseas government securities
12. In a multi-bank system
(a) One bank alone multiplies deposits
(b) Some banks multiply deposits
(c) All banks together multiply deposits
13. The gilt-edged market deals in
(a) Worn and torn currency notes
(b) Bullion
(c) Government securities
(d) Corporate bonds
14. When the Central Bank (RBI) sells
securities, as a result
149
(a) The cash resources at the disposal of
the commercial banks increase
(b) The cash resources at the disposal of
the commercial banks get
diminished
(c) The cash resources of the
commercial banks remain
unchanged
15. Which one of the following is not a
liability of a commercial bank?
(a) Time deposits
(b) Security holding
(c) Borrowings from the Central Bank
(d) Deposit of other banks with it
(e) None of these
16. The most liquid asset, next to cash,
which the banks possess is
(a) Advances to customers
(b) Money at call
(c) Treasury bills
(d) Inland bills
17. Which one of the following is not an
instrument of monetary policy?
(a) Tariffs
(b) Moral suasion
(c) Open market operation
(d) Credit rationing
18. Which state has maximum branches of
public sector commercial banks?
(a) UP
(b) Maharashtra
(c) Karnataka
(d) Gujarat
19. OTCEI is
(a) Atomic Submarine of China
(b) Economic Policy of USA
(c) A Indian Share Market
(d) A Defence Research Organisation
20. Which is the most liquid measure of
money supply?
M1
M2
(b)
M3
(c)
M4
(d)
All of these
(e)
21. Note using department of RBI should
(a)
always possess the minimum gold stock

of worth
(a) Rs 85
(b) Rs 115 crores
(c) Rs 200 crores
(d) All of these
(e) None of these
22. SEBI was established in
(a) 1993
(b) 1992
(c) 1988
(d) 1990
(e) None of these
23. The working of SEBI includes
(a) To regulate the dealings of share
market
(b) To check the foul dealings in share
market
(c) To control the inside trading of
shares
24. Which bank in India performs duties of
Central Bank?
(a) Central Bank of India
(b) SBI
(c) RBI
25. NABARD was established in
(a) Fourth Plan
(b) Fifth Plan
(c) Sixth Plan
(d) Eighth Plan
(e) None of these
26. The first type of co-operative societies
established in India was
(a) Credit Societies
(b) Marketing Societies
(c) Agriculture Societies
(d) Housing Societies
150
27. The number of approved share markets
28.
29.
30.
31.
in India is
(a) 19
(b) 20
(c) 23
(d) 24
(e) None of these
RBI was nationalised in
(a) 1959
(b) 1947
(c) 1945
(d) 1949
(e) None of these
Individual cannot open his account in
(a) Regional Rural Bank
(b) RBI
(c) Scheduled Commercial Banks
Narsimham committee was related to
(a) High Education Reforms
(b) Tax Structure Reforms
(c) Banking Structure Reforms
Cheque which is crossed can be
encashed only
(a) Through SBI
(b) Through the payee
(c) Through any bank
32. Which pair is not correct?
(a) EXIM Bank Financing for export
import
(b) RBI Bankers Bank
(c) IDBI Industrial Finance
(d) FCI Financial Assistance to
Commercial Institutions
(e) All are correct
33. The nationalization of the major 14
commercial banks look place in
(a) 1947
(b) 1956
(c) 1969
(d) 1980
(e) None of these

34. The headquarter of RBI is in
(a) Delhi
(b) Kanpur
(c) Mumbai
(d) Nasik
(e) None of these
35. LIC of India was established in
(a) 1897
(b) 1950
(c) 1956
(d) 1965
(e) None of these
36. Scheduled bank is that bank which is
(a) Nationalsied
(b) Not nationalised
(c) Based at foreign country
(d) Included in the second schedule of
RBI
37. Which bank is limited to the needs of
agriculture and rural finance?
(a) SBI
(b) IFC
(c) NABARD
(d) RBI
(e) All of these
38. According to banking regulation Act,
RBI can fix SLR upto the ceiling of
(a) 40%
(b) 50%
(c) 30%
(d) 45%
(e) 15%
39. Which is the largest commercial bank of
the country?
(a) United Commercial Bank
(b) Punjab National Bank
(c) State Bank of India
(d) Canara Bank
40. The main aim of UTI is
(a) To promote small savings
(b) To give loans to small units to
(c) To impose taxes
(d) To declare support price of crops
151
Answers
1. (a) 2. (d)
3. (d)
4. (a)
5. (d)
6. (c)
7. (b)
8. (d)
9. (d)
10. (d) 11. (b) 12. (c)
13. (c) 14. (b) 15. (b) 16. (b) 17. (a) 18. (a) 19. (c) 20. (a) 21. (b) 22. (c) 23. (d) 24. (c)
25. (c) 26. (a) 27. (c) 28. (d) 29. (b) 30. (c) 31. (c) 32. (d) 33. (c) 34. (c) 35. (c) 36. (d)
37. (c) 38. (a) 39. (c) 40. (a)
Explanations
2. RBI is the Indias Central Bank
1956. The exchange was setup to aid
5. All are the function of commercial
enterprising promoters in raising finance
banks.
8. Open market operation are instrument of
for new project in a cost effective
credit control policy of RBI.

9. M3 is also known as broad money.
11. The many market is a market for shortterm funds, which deal in financial
assets whose period of
maturity is up
to one year.
13. The gilt-edger market refers to the
market for government and semigovernment securities, backed by the
Reserve Bank of India (RBI).
14. Open market operational are the means
of implementing monetary policy by
which a Central Bank (RBI) controls
money supply by buying the selling
government securities or other financial
instruments.
19. OTCEL was incorporated in 1990 as a
manner and to provide investors with a

transparent all efficient mode of trading.
23. Securities and exchange Board of India
(SEBI) was first established in the year
1988 as a non-statutory body for
regulation the securities market. If
become an autonomous body in 1992
and more powers were given through its
independent powers.
25. NABARD was established in 1982.
40. The Unit Trust of India is a statutory
public sector investment established
under the Unit Trust of India Act, 1963.
It began functioning on 1st July, 1964.
The UTI is an investment trust. It
mobilises the saving of people through
sale of units. The savings as collected
section 25 company under the
are invested in the shares and debentures
companies Act 1956 and is recognized
of profit-making companies. The small
as a stock exchange under section 4 of
serves gate benefit by participation in
the securities contracts regulation Act,
the investment schemes of UTI.
Model Practice Set 1

1. Liberal credit policy may enhance the
sales but will lead to
(a) Faster collection
(b)
(c)
(d)
(e)
Higher turnover
Increase in bad debts
None of the above
All of the above
152
2. The term marketing may be described as
the performance of business activities
8.
that
(a) Gives profit to the organisation
(b) Directs flow of goods from producer
to consumer
(c) Directs selling
(d) Aims at satisfying the consumers
(e) None of above
3. In Marketing Myopia the tendency of
firms is to take a
(a) Broad view of the market
(b) Narrow view of the market
(c) Narrow view of MIS
(d) Broad view of MIS
4. Marketers can do on-line marketing by
creating an electronic presence on
(a) The interest, placing ads on-line
(b) Participating in forums,
newsgroups, web communities
(c) Using webcasting and e-mail
5. Green marketing principles relates to
(a) Agriculture marketing
(b) Preservation of environment
(c) Social marketing environment
(d) Organic product marketing
6. Which one of the following is not
9.
10.
11.
12.
13.
coming under principles of personal

selling?
(a) Prospecting
(b) Presentation and demonstration
(c) Promoting
(d) Follow-up and maintenance
7. A company is said to be multinational, if
(a) Production and marketing are done
in many countries
(b) Domestically produced items are
sold globally
(c) Raw materials are procured from
many countries
14.
(d) Workers are hired globally

TRIP covers the aspects related to
(a) Patents
(b) Trade in services
(c) Globalisation of business
(d) Labour practices
Market share means
(a) Market price of shares
(b) Sensex
(c) Share market
(d) Share of business among peers
Internal marketing means
(a) Selling to oneself
(b) Selling to the employees
(c) Selling samples
(d) Selling to foreign markets
A Call means
(a) A profession
(b) Teletalk
(c) Calling on a product
(d) A call centre
A DSA means
(a) Directly Selling Authority
(b) Directly Selling Agent
(c) Directly Selling Agent
(d) Direct Selling Agent
CRM means
(a) Customer Relationship Management
(b) Customer Retention Manager
(c) Customers Relatives Meet
(d) Channel Route Market
Cross selling means
(a) Selling with a cross face
(b) Selling to red cross members
(c) Selling to blue cross members
(d) Selling other products to existing
customers
15. Advertisement are required for
(a) Boosting the production levels
(b) Motivating the employees
(c) Boosting the sales
153
16. Sales forecasting involves study of
(a) Proper selling price
(b) Sales planning
(c) Distribution outlets
(d) Consumer needs and demands
(a) Choosing the right sales persons
(b) Choosing the right products
(c) Making proper marketing decisions
(d) Deciding the sales incentives
18. The target group for credit cords is
(a) All card holders
(b) All existing borrowers
(c) Individuals with taxable income

19. ATM means
(a) Any Time Marketing
(b) Any Time Money
(c) Any Time Machine
(d) Automatic Teller Machine
(e) Automatic Teller Money
20. Marketing in Banks is required for
(a) Getting new customers
(b) Retaining existing customers
(c) Lending
(d) Accepting of deposits

1. Benchmark means
(a) Benches for customers to sit
(b) Benches for salesman to sit
(c) Products displayed on a bench
(d) Set standards
2. The sequence of a sales process is
(a) Lead generation, call, presentation
and sale
(b) Sale, presentation, lead generation
and call
(c) Presentation, lead generation, sale
and call
(d) Lead generation, call, sale and
presentation
(e) There is no sequence required
3. Customisation means
(a) Tailor-made products for each
customers
(b) Customers selling goods
(c) Tailor make product for each Staff
(d) A selling process
(e) None of these
4. A marketing survey is required for
(a) Deciding marketing strategies
(b) Deciding product strategies
(c) Deciding pricing strategies

5. The target group for saving deposit
accounts is
(a) Newborn babies
(b) Students
(c) Parents
(d) Businessman
(e) All of these
6. The target group for a car loan is
(a) All auto drivers
(b) All auto dealers
(c) All cars owners
(d) Any individual needing a car
7. The target group for agricultural loans is
(a) Any farmers
(b) Forms labourers
(c) Any individual dealing in
agricultural or related activity
(d) Farmers societies
8. The target group for credit card is
(a) Existing card holders
(b) All graduates
(c) All minors
(d) Individuals with taxable income
9. Market segmentation means
(a) Segmenting the salesmen
154
(b) Segmenting the employees
(c) Segmenting the customers as per
their needs
(d) Segmenting the products
10. Target group means
(a) A group of sellers
(b) A group of buyers
(c) A group of products
(d) A group of persons to whom sales
should be focused
11. Of the 4 Ps of marketing, three are
Product, Place and Promotion, which is
12.
13.
14.
15.
the 4th P?
(a) Price
(b) Pricing
(c) Purpose
(d) Pride
(e) Pursuit
Innovation in marketing means
(a) Good communication skills
(b) Good negotiation skills
(c) Spirited motivation
(d) Novel methods of selling
(e) Tired of marketing
Telemarketing involves
(a) Good communication skills
(b) High level of motivation
(c) Door-to-door compaigns
(d) Event management
Online marketing is
(a) Same as face-to-face marketing
(b) Easier than traditional marketing
(c) Boring, as customers are not visible
(d) Voluminous task
Market segmentation means
(a) Dividing the sales team in to small
groups
(b) Dividing the marketing process into
(c) Dividing the territory in to small

areas
(d) Dividing the target groups in to
homogeneous groups
16. Market segmentation is required
(a) For avoiding cold calls
(b) To increase production
(c) For territory allocation
(d) For focused marketing
(e) For increasing profits
17. Motivation for sales person can be
achieved through
(a) High success rate of conversions
(b) Better sales incentives
(c) Continuous training and updation of
knowledge
(d) Support from operation staff
18. Marketing of educational loans can be
done by
(a) Approaching eligible students
(b) Approaching the parents
(c) Approaching colleges
(d) Having tie-ups with educational
institutes
19. Diversification means
(a) Dividing the market into small
segments
(b) Dividing energy of the sales persons
(c) Marketing of diverse products
20. One of the following is not a function of
retail banking
(a) All individuals
(b) All corporates
(c) NRIs
(d) Government bodies
small steps
1. Retail banking means
(a) Retail shopkeepers
155
(b)
(c)
(d)
(e)
Banks financing to retail traders

Same as universal banking
Giving loans to corporates
Giving consumer loans to various
public
2. Education loans can be more effectively
(a) Door-to-door compaigns
(b) E-mail contacts
(c) Diversification
(d) Tie-up with colleges
3. Marketing is the art of
(a) Buying more
(b) Paying more
(c) Selling more
(d) Talking more
4. Marketing of services is resorted in
(a) Manufacturing concerns
(b) Insurance business
(c) Hotels
(e) Both (b) and (c)
5. Marketing is a
(a) One day effort
(b) Team effort
(c) One man effort
(d) All of these
6. Good marketing requires one of the
following
(a) Proper planning
(b) Good team work
(c) Good communication skills
(d) Knowledge of products
7. Marketing in banks is a necessity today,
due to
(a) Liberalisation
(b) Nationalisation
(c) Fashion
(d) Urbanization
(e) Marketing in banks is not necessary
as banking in India is more than 200
years old
8. Marketing is influenced by
(a) Product demand
(b) Public taste
(c) Buyer behaviour
9.
10.
11.
12.
13.
14.
(d) Trand emage

Market share means
(a) Share market
(b) Share prices
(c) IPOs
(d) Scope for marketing
Marketing helps in
(a) Boosting production
(b) Getting new clients
(c) Interacting with strangers
A DSA helps in
(a) Boosting direct sales
(b) Boosting sales through the net
(c) Strengthening indirect marketing
(d) Strengthening telemarketing
Lead in marketing means
(a) A metal
(b) A leash
(c) A likely consumer
(d) A team leader
Good selling skills involve
(a) Patience
(b) Perseverance
(c) Empathy
(d) Knowledge
(e) All of these
Which of the following statements is
correct?
(a) Marketing is not required due to
globalization
(b) Marketing causes higher expenses
and losses
(c) Marketing is not required in profitmaking companies
(d) Marketing sharpens the minds of the
employees
(e) Marketing is a waste of time in
established companies
(a) Inspiration
(b) Enthusiasm
(c) Compensation
156
(d) Creativity
(e) All of these
16. Internal marketing means
(a) Marketing to self
(b) Marketing to family members
(c) Marketing to the staff members
(d) Marketing inside India
(e) Marketing outside India
17. Modern styles of marketing are
(a) Telemarketing
(b) Web marketing
(c) Advertisements on the net
(d) E-mails
18. Full form of USP in marketing
(a) Useful Sales Procedures
(b) Useful Selling Propositions

(c) Useful Sales Persons
(d) Used Sales Plans
(e) Unique Selling Propositions
19. Leads can be provided by
(a) Friends and relatives
(b) Websites
(c) Directions
(d) Colleagues
20. Conversion in sales language means
(a) Converting a buyer into a seller
(b) Converting a seller into a buyer
(c) Converting a prospect into a client

1. Skimming price for a new product is
(a) Low initial price
(b) Average price
(c) High initial price
(d) Moderate price
(e) All of these
2. Under monopoly market structure, the
degree of freedom in pricing decision is
(a) Very low
(b) Quite good
(c) Very high
(d) Zero
(e) All of these
3. Which one is not the pre-requisite of a
perfect market?
(a) Existence of large number of buyers
and sellers in the market
(b) Free flow of market information
among the players
(c) Free entry and free exit
(d) Intervention of the government
4. Two-factor theory was propounded by
(a) Fredrick Herzberg
(b) David Mc Clelland
(c) Mc Cardhy
(d) Philip Kotler
5. Grape wine is the term used in relation

to
(a) Formal communication
(b) Informal communication
(c) Horizontal communication
(d) Vertical communication
6. Dramatic reduction of manpower is
called
(a) Termination
(b) Retrenchment
(c) Downsizing
(d) Rightsizing
7. When a consumer derives more
satisfaction from a produced/service
than his expectation, it is known as
(a) Consumer satisfaction
(b) Consumer delight
(c) Consumer dazzling
(d) Consumer dissatisfaction
8. Under which concept of marketing
customer remains focused?
(a) Marketing
(b) Production
(c) Product
(d) Selling
157
9. Segmentation of consumers based on
factors like climatic conditions and
regions are known as
(a) Demographic segmentation
(b) Cultural segmentation
(c) Geographic segmentation
(d) Administrative segmentation
10. Which city is more favourable for
selling electric blankets?
(a) Mumbai
(b) Chennai
(c) Shillong
(d) Pune
(e) None of these
11. Which one of the following is not the
social responsibility of business?
(a) Adopting villages for development
(b) Setting up educational institutes
(c) Opening research and development
department
(d) Construction of temples
12. Price elasticity of demand for luxury
goods will be
(a) Relatively elastic
(b) Relatively inelastic
(c) Infinitely elastic
(d) Infinitely inelastic
13. In the typical demand schedule, quantity
demanded
(a) Varies directly with price
(b) Varies indirectly with price
(c) Varies inversely with price
(d) Is independent of price
14. Shut down point is that point where
price is
(a) Less than variable cost
(b) Equal to variable cost
(c) Equal to average cost
15. State which one is not a function of

marketing
(a) Identification of customers needs
and wants
(b) Product planning and development
(c) Guiding the funding agencies
(d) Communicating
16. Marketing mayopia is based upon
(a) Current product offerings
(b) Forecasting the future product
offering
(c) Dropping a product
(d) Adding a product
17. Marketing in Formation System (MIS)
is the system of information that flows
to assist
(a) Promotional programmes
(b) Sales personnels development
(c) Marketing planning and decision
making
(d) Marketing mix
(e) None of these
18. SWOT analysis is analytical tool for
having
(a) Comparative advantage
(b) Competitive advantage
(c) Comprehension of current overall
situation of a firm
19. Consumers are aware of damages
caused by packaging, product process,
so they prefer
(a) Social marketing concept
(b) Green marketing concept
(c) Direct marketing concept
(d) Organic marketing concept
20. Which among the following is not an
example of direct marketing?
(a) Tele-marketing
(b) Sales on interest
(c) Mail order sales
158
(d) Retail stores
Model Practice 5
1. The demand curve facing the pure
monopolist is
(a) Positively sloped
(b) Negatively sloped
(c) Horizontal
(d) All of these
(e) None of these
2. Supply creates its own demand is
known as
(a) Keynesian law
(b) Vablen law
(c) Says law
(d) All of these
(e) None of these
3. Marketing concept emphasises on
(a) Customer-oriented products
(b) Value creation
(c) Sales orientation
(d) Production orientation
(e) None of these
4. Impulse buying implies
(a) Purchasing with lattle or no advance
planning
(b) Purchasing involving all family
members
(c) Purchasing involving relatives
5. The first commandment in marketing is
(a) Know your customer
(b) Know your product
(c) Know your markets
(d) Know your price
6. A brand is a means of
(a) Naming the products
(b) Packaging of the products
(c) Contents of the products
(d) Identifying and differentiating the
comapanys products
7. When Average Cost (AC) is at its
minimum, then
(a) Marginal cost equal to average cost

(b) Marginal cost is less than average
cost
(c) Marginal cost is more than average
cost
8. Output under price discrimination will
(a) Generally be larger than under
simple monopoly
(b) Be indeterminate because, we
cannot know what prices be charged
(c) Usually be the same as under perfect
competitions
(d) Be produced at higher average cost
than under simple monopoy
9. Market expansion means
(a) Hiring more staff
(b) Firing more staff
(c) Buying more products
(d) Buying more companies
10. Effective marketing helps in
(a) Developing new products
(a) Maternity wards
(b) Handing over the products to the
buyers
(c) Places where products are made
available to the buyers.
for the marketing of interest banking
(a) All the customers
(b) All the educated customers
159
(c) All the computer educated
13.
14.
15.
16.
customers
(d) Only creditors
Innovation mean
(a) Product designing
(b) New ideas
(c) Impulse
(e) None of these
Service after sale is not the function of
(a) Marketing staff
(b) Seller
(c) Director of the company
(d) Employees of the company
(e) All of the above are wrong
Market survey means
(a) Market research
(b) Market planning
(c) Marketing strategies
(d) Market monitoring
The rural marketing is not required
because
(a) Rural people do not understand
marketing
(b) Its not practical from the cost point
if view
(c) It is sheer wastage of time
(d) All are wrong

(e) All are correct
(a) Costly products
(b) Extra profit on the same cost
(c) Extra work by seller
18. Which of the following statements is
correct concerning the relationship
among the firms functions?
(a) TC = TFC TVC
(b) TVC = TFC TC
(c) TFC = TC TVC
(d) TC = TVC TFC
(e) None of these
19. In perfect competition in the long run
there will be no
(a) Normal profits
(b) Supernormal profits
(c) Production
(d) Costs
20. The meaning of digital marketing is
(a) Selling digital goods
(b) Selling calculators
(c) Selling through interest

1. Statement I Penetration price covers all
costs.
Statement II The objective of skimming
price police is to penetrate the market
with the lowest possible price.
(a) Both correct
(b) Both wrong
(c) I correct, II wrong
(d) I wrong, II correct
2. E-business means
(a) Doing business through electronic
media
(b) Ordering for goods through

telephones
(c) Buying and selling of goods and
services through electronic media
3. In vertical communication, the
communication flows
(a) Upward only
(b) Downward only
(c) Upward as well as downwards
160
4. The most important component of
promotion mix to be used for industrial
goods is
(a) Personal selling
(b) Advertisement
(c) Sales promotion
(d) Publicity
(e) All of these
5. The most appropriate concept to be
adopted for physical distribution of
goods is
(a) Marketing concept
(b) Total cost concept
(c) Selling concept
(d) System concept
6. The process of dividing a potential
market into distinct sub sets of
consumers and selecting one or more
segments as a target to be reached with a
distinct marketing mix is
(a) Marketing
(b) Positioning
(c) Targeting
(d) All of these
(e) None of these
7. According to the marketing concept, the
different functional areas of the firm
should blend their efforts in order to
maximize
(a) Profit
(b) Sales
(c) Market share
(d) Customer satisfaction
8. State Bank of India is a
(a) Public Sector Bank
(b) Private Sector Bank
(c) Joint Sector Bank
(d) Non-nationalised Bank
9. On which of the following banks, the
Reserve Bank of India depends largely
for the success of its monetary policy
(a) Co-operative Banks

(b) Regional Rural Banks
(c) Commercial Banks
(d) Development Banks
10. Which of the following is not the
method of forecasting demand?
(a) Collective opinion method
(b) Total outlay method
(c) Expert opinion method
(d) Controlled opinion method
11. When goods in the domestic market are
sold at a high price and in the foreign
market at a low price, it is a situation of
(a) Dumping
(b) Perfect competition
(c) Oligopoly
(d) Duopoly
12. Marketing concept means
(a) Firms should produce only what
their pre-determined consumers
would be willing to buy
(b) Firms should persuade customers to
buy what they have produced
(c) The consumers will buy the
products which offer them the
highest quality
13. A card is basically a payment
mechanism which allows the holder of
the card to make purchases without any
immediate cash payment.
(a) ATM
(b) CREDIT
(c) DEBIT
(d) KISAN CREDIT
(e) All of these
14. Branding decisions are based on
(a) Market research
(b) Assessment of customer needs
(c) Cost of the product
161
15. E-banking is synonymous with
(a) Tele-banking
(b) Interest banking
(c) Euro banking
(d) All of these
(e) None of these
16. Match the following.
Part A
(Market
Part B
(Factors if
segmentation)
A. Psychographic
segmentation)
1. Personality
B. Demographic
C. Behavioural
D. Geographical
groups
2.
Occupation
3.
Brand loyalty
4.
Population
size
Code
(a)
(b)
(c)
A
1
2
1
B
2
1
2
C
3
3
4
D
4
4
3
(d)
4
3
2
1
17. ATMs are
(a) Branches of banks
(b) Manned counters of banks
(c) Unmanned cash dispensors
18. Bank marketing means
(a) Selling of banks
(b) Buying of banks
(c) Merger of banks
(d) Selling banks products and services
(e) Selling various items in banks
19. If marketing is done effectively which
of the following is not required?
(a) Advertisement
(b) Publicity
(c) Market Research
(d) Market Segmentation
20. Marketing plan helps in
(a) Better lead generation
(b) Better systems
(c) Better results
(d) Improved balance sheet
(e) Better customer service
Model Practice 7
1. In the short period, monopolist firms
equilibrium is at
(a) Break-even point
(b) AR>AC
(c) AR<AC
(d) All of this
(e) None of this
2. Price discrimination is profitable and
possible if the two markets have
(a) Equal elasticity of demand
(b) Different elasticity of demand
(c) Inelastic demand
(d) Highly elastic demand
3. A firm producing a large number of
products will follow the pricing strategy
know as
(a) Cost-plus pricing
(b) Different pricing

(c) Product-line pricing
(d) Price leadership
4. Which of the following is known as
plastic money
(a) Bearer cheques
(b) Credit card
(c) Demand drafts
(d) Gift cheques
(e) All of this
5. Entrepreneurs find direct marketing the
attractive because of
(a) Investment is low
(b) It dosent required specialist skills
(c) Return are quick
162
6. In banking services, marketing can be
segmented on the basic of
(a) Density
(b) Customer
(d) Neither (a)nor (b)
(e) Staffs
7. Media planning include
(a) Assessing lost
(b) Selecting the right medium
8. Casual research is basically concerned
12. A prospect means

(a) A person likely to work in bank
(b) College syllabus
(c) Areligious head
(d) A likely buyer
13. Which of the following is not a channel
14.
with
(a) Establishing cause and effect
relationship
(b) Arriving at a forecast or prediction
of interest
(c) Measuring and estimating the
15.
frequencies with which of things

occur
9. Which of the following is not a post
testing technique of advertisement
(a) Sales test
(b) Focus group
(c) Enquiry test
(d) Attitude test
10. Sales forecast implies
(a) An estimate of the maximum
possible sales opportunities present
in a particular market segment
(b) An estimate of sales, in physical
units, in a future period
(d) Cost of sales
11. Successful Marketing Strategies needs
(a) Knowledge of customer tastes
(b) Good leadership
(c) Proper direction and guidance
(d) Knowledge of peers
16.
17.
for bank marketing?

(a) Telemarketing
(b) Internet banking
(c) Mobile banking
(d) Existing satisfied customers
Marketing is not required for
(a) Boosting production
(b) Boosting sales
(c) Boosting profits
(d) Improving customer sales
Which is product of a bank?
(a) Demat account or current account
(b) Bank building
(c) Auto lone
(d) Used car lone
Green marketing incorporates
(a) Product modification
(b) Packaging changes
(c) Changes to the production process
The ethical aspect of marketing
involves
(a) Standard quality of advertisement
(b) Customer service
(c) Social value
(d) Ethical value
18. Service is a
(a) Tangible
(b) Intangible
(c) Product
(d) Tool of planning and consumption
19. Cyber marketing is known as
(a) On-line marketing
(b) Internet marketing
(c) E-commerce
163
20. EOS stand for
(a) Economic-on-Quality
(b) Economic Order Quality
(c) Even-on-Quality
(d) Evaluation-on-Quality
Model Practice 8
1. A sale territory is a
(a) Particular grouping of customers
and prospects, assigned to an
individual salesman
(b) Technique of sales
(c) Product
(d) Service
2. Which of the following is the internal
3.
4.
5.
6.
factor of Organisation?
(a) Production knowledge and skill
(b) Fund available
(c) Status of raw material
(d) Organizational structure
Prince policy is related with
(a) Pricing of product and services
(b) Purchasing
(c) Investment
(d) Accounting
The promotional policy includes
(a) Advertisement
(b) Personal sales
(c) Sales promotion
Selling is a
(a) Negative aspect
(b) Persuasive communication
(c) Product
(d) Marketing structure
Which is the element of sales
management?
(a) Selling
(b) Management of sales force
(c) Maximisation of sales
(d) Reduction in expenses
7. The media of advertising is affected by
(a) Cost of advertising media

(b) Quality of product
(c) Sales
(d) Production
(e) All of these
8. Advertising budget is based on
(a) Media of advertising
(b) Scope or area of advertising
(c) Period of advertising
9. Advertising can be described as the art
10.
11.
12.
13.
14.
of the creating a demand for

(a) Article or a service
(b) Research and development
(c) Tax
(d) Sales
(e) Rent
TAC means
(a) Total Average Cost
(b) Tax At Cost
(c) Total Apply Cost
(d) Total Apply Centre
Pricing decision is affected by
(a) Objectives of the manufacturer
(b) Cash recovery
(c) Product-line promotion
Skim the cream is related with
(a) Maximization of profit
(b) Cash recovery
(c) Product-line promotion
Which is cost based pricing method?
(a) Cost plus method
(b) Mark-up method
(c) Target return method
Product innovation is a part of
164
(a) Product pricing
(b) Product modification
(c) Cost
(d) Sales
(e) Publication
15. Good package includes
(a) Attractive and protective
(b) Convenient
(c) Interesting
(d) Memorable
16. Which is the state of product
development process?
(a) Generation of ideas
(b) Screening of the ideas
(c) Business analysis
(d) Product development
17. Which is the product line of the bank?
(a) Car loan
(b) Home loan
(c) Personal loan

(d) All of these
(e) None of these
18. Product attributes includes
(a) Guarantees and warranties
(b) Production
(c) Sales
(d) Goodwill of company
19. Legal protection includes
(a) Patent of product
(b) Planning and product style
(c) Wage
(d) Salary
20. In introduction stage of PLC
(a) Lower demand
(b) Low profit
(c) Limited customer
(d) All of these
(e) None of these

1. Which of the following is true about
marketing
(a) Marketing is a human activity
(b) Marketing is a product
(c) Marketing is a knowledge
2. In bank sovereignty word may be used
for
(a) Banks employees
(b) Banks managing directors
(c) Banks customer
(d) Banks law
(e) Rules
3. Full form of CRM is
(a) Central Role Money
(b) Customer relationship management
(c) Customer rate money
4. Old concept of marketing comprises
(a) Buying and selling activities
(b) Only buying
(c) Only selling
(d) Only price

5. Which of is following is the product line
policy?
(a) Expansion of product max
(b) Production technology
(c) Pricing
6. Which is intangible features of a
product?
(a) Goodwill of product
(b) Performance of product
(c) After sale service of product
7. Distribution mix is known as
(a) product mix
(b) Place mix
(c) Price mix
8. DSA of bank is a part of
(a) Product mix
(b) Distribution mix
(c) Price mix
165
9. Which is a private bank?
(a) HDFC Bank
(b) SBI
(c) UBI
(d) UCG Bank
10. Which is the component of marketing
11.
12.
13.
14.
environment?
(a) Legal environment
(b) Political environment
(c) Social & cultural environment
Full form of NPA is
(a) Net Par Assets
(b) Non-Performing Asserts
(c) Net Performing Asserts
Put option is available for
(a) Buyer
(b) Seller
(d) Regulated authority of bank
Market demand is affected by
(a) Nature of demand
(b) Size of demand
(c) Changes in demand
Grouping of buyers is described as
(a) Customer planning
(b) Market segmentation
(c) Product
(d) Buyer
(e) Cast
15. Psychology of customer includes

(a) Consumer attitudes
(b) Intentions
(c) Desires
16. The consumer is the ..of market
(a) Staff and owner
(b) Innovator and developer
(c) King
17. Example of non-durable product is
(a) mobile phone
(b) face cream
(c) building of bank
(d) ATM
brand
(a) Individual brand
(b) Family brand
(c) National brand
(d) Regional brand
19. Which is the example of psychological
pricing?
(a) Rs 99
(b) Rs 9990
(c) Rs 999
20. MOS means
(a) Marginal Operation System
(b) Margin of Safety
(c) Margin on sale
Model practice Set 10

(a) Entire country
(b) Entire city
(c) Entire globe
(d) That which consists of customers
who need the identified product

2. Among which of the following is related
to bank risks?
(a) Deposits
(b) Bank funds
(c) NPA
166
(d) All of these
(e) None of these
3. Micro credit started form
(a) USA
(b) India
(c) Bangladesh
4. PLR stands for
(a) Product Low Rate
(b) Prime Lending Rate
(c) Permanent Lock Number
of middlemen?
(a) Whole saler
(b) Customer
(c) Producer
(d) All of these
(e) None of these
6. Which of the following is the source of
bank advertising?
(a) Television
(b) Posters
(c) Magazine
(d) All of these
(e) None of these
7. Which of the following is the source of
print media?
(a) News papers
(b) Magazine
(c) Trade journals
8. At break-even-point
(a) No profit no less
(b) Maximum sales
(c) Maximisation profit
9. Tele marketing is an example of
(a) Direct marketing
(b) Conventional marketing
(c) Retailing
10. Big Bazer is an example of
(a) Producer
(b) Retailer
(c) Agent
(d) All of these
(e) None of these
11. SEM stands for
(a) Search Engine Marketing
(b) Sales Even method
(c) Sales even organisation
12. is the values or the worth of the
brand.
(a) Logo
(b) Brand equity
(c) Trade mark
13. A logo is a
(a) Symbol or a word
(b) Service
(c) Cost
(d) All of these
(e) None of these
14. Bata shoe is an example of
(a) Product mix
(b) Product line
(c) Product planning
15. Delphi method is one of the important
methods of
(a) Sales forecasting
(b) Sales promotion
(c) Product mix
16. Warehousing is a component of
(a) Physical distribution
(b) Price
(c) Promotion
17. Which is centred point of bank?
(a) Staff
(b) Profit
(c) Loans
(d) Present and potential customer of
bank
167
18. BPO stands for
(a) Budget Product Online
(b) Balance of Payment
(c) Business Process Outsourcing
19. Mails is an example of
(a) Wholesaler
(b) Retailer
(c) Producer
20. Call centre is an example of
(a) Telemarketing
(b) Teleshopping
(c) Database marketing
Answers
1. (c) 2. (d)
3. (c)
4. (d)
5. (b)
6. (d)
7. (a)
8. (a)
9. (d)
10. (a) 11. (c) 12. (d)
9. (c)
10. (d) 11. (a) 12. (d)
9. (e)
10. (d) 11. (a) 12. (c)
9. (c)
10. (c) 11. (b) 12. (d)
9. (e)
10. (d) 11. (c) 12. (c)
9. (c)
10. (e) 11. (a) 12. (d)
13. (a) 14. (d) 15. (d) 16. (a) 17. (c) 18. (c) 19. (d) 20. (e)
1. (d) 2. (a)
3. (a)
4. (d)
5. (b)
6. (d)
7. (a)
8. (d)
13. (a) 14. (b) 15. (d) 16. (d) 17. (e) 18. (e) 19. (c) 20. (b)
1. (a) 2. (d)
3. (c)
4. (e)
5. (b)
6. (d)
7. (a)
8. (e)
13. (e) 14. (d) 15. (d) 16. (d) 17. (e) 18. (e) 19. (e) 20. (c)
1. (c) 2. (c)
3. (d)
4. (a)
5. (b)
6. (b)
7. (a)
8. (a)
13. (b) 14. (b) 15. (c) 16. (b) 17. (c) 18. (d) 19. (b) 20. (d)
1. (b) 2. (c)
3. (a)
4. (a)
5. (a)
6. (d)
7. (a)
8. (a)
13. (d) 14. (a) 15. (a) 16. (d) 17. (b) 18. (c) 19. (b) 20. (c)
1. (b) 2. (c)
3. (c)
4. (b)
5. (a)
6. (c)
7. (d)
8. (a)
13. (b) 14. (d) 15. (b) 16. (a) 17. (c) 18. (d) 19. (b) 20. (c)
168
1. (b) 2. (b)
3. (d)
4. (b)
5. (d)
6. (c)
7. (c)
8. (a)
9. (d)
10. (c) 11. (e) 12. (d)
9. (a)
10. (a) 11. (d) 12. (a)
9. (a)
10. (d) 11. (b) 12. (c)
9. (a)
10. (b) 11. (a) 12. (b)
13. (d) 14. (e) 15. (b) 16. (d) 17. (e) 18. (b) 19. (d) 20. (b)
1. (a) 2. (e)
3. (a)
4. (d)
5. (b)
6. (e)
7. (a)
8. (d)
13. (d) 14. (b) 15. (e) 16. (e) 17. (d) 18. (a) 19. (a) 20. (d)
1. (a) 2. (c)
3. (b)
4. (a)
5. (a)
6. (d)
7. (b)
8. (b)
13. (d) 14. (b) 15. (d) 16. (c) 17. (b) 18. (e) 19. (d) 20. (b)
1. (d) 2. (c)
3. (c)
4. (b)
5. (a)
6. (d)
7. (d)
8. (a)
13. (a) 14. (a) 15. (a) 16. (d) 17. (d) 18. (c) 19. (b) 20. (a)
Previous Years Questions of
Marketing Aptitude
(Question asked in various Banking Sectors Recruitment Exam)
SBI 22/11/2009 (Ist shift)
1. Service Marketing is the same as .
(1) Transaction Marketing
(2) Relationship Marketing
(3) Internal Marketing
(4) Outdoor Marketing
(5) All of the above
2. Good marketing requires one of the
following
(1) Proper planning
(2) Good team work
(3) Good communication skills
(4) Knowledge of products
3. Marketing in banks is a necessity today,
due to
(1) Liberalization
(2) Nationalization
(3) Fashion
(4) Urbanization
(5) Marketing in banks is not necessary,

as banking in India is more than 200
years old
4. Antivirus software is a example of ..
(1) Business software
(2) An operating system
(3) A security utility
(4) An office suite
(5) None of these
5. Computer programs are written in a
high-level programming language;
however, the human-readable version of
a program is called ..
(1) Cache
(2) Instruction set
(3) Source code
(4) Word size
(5) None of these
169
6. Marketing is influenced by ..
(1) Product demand
(2) Public taste
(3) Buyer behaviour
(4) Brand image
(5) All of these
7. Market Share means
(1) Share market
(2) Share prices
(3) IPOs
(4) Scope for marketing
(5) Share of business among peers
8. Marketing helps in .
(1) Boosting production
(2) Getting new clients
(3) Interacting with strangers
(5) None of the above
9. A (n) . Backup contains a copy of
every program, data, and system file on
10.
11.
12.
13.
a computer.
(1) Restoration
(2) Bootstrap
(3) Differential
(4) Full
(5) None of these
A DSA helps in ...
(1) Boosting direct sales
(2) Boosting sales through the net
(3) Strengthening Indirect Marketing
(4) Strengthening Telemarketing
A DSA (Direct Selling Agent) is one ..
(1) Who sells through the Internet
(2) Who sells direct to the client
(3) Who works on the bank counters
(4) Who works in back office set up
Selling is
(1) Different from Marketing
(2) A sup-function of Marketing
(3) Same as Marketing
(4) More than Marketing
A Lead in marketing jargon,
means
(1) A metal
(2) A leash
(3) A likely consumer
(4) A team leader

(5) None of these
14. Good selling skills involve .
(1) Patience
(2) Perseverance
(3) Empathy
(4) Knowledge
(5) All of these
correct?
(1) Marketing is not required due to
globalization
(2) Marketing causes higher expenses
and losses
(3) Marketing is not required in profitmaking companies
(4) Marketing sharpens the minds of the
employees
(5) Marketing is a waste of time in
established companies
16. A true marketing mindset requires .
(1) Control mindset
(2) Command mindset
(3) Passive mindset
(4) Active mindset
(5) Inert mindset
17. Innovation means .
(1) Inspiration
(2) Enthusiasm
(3) Compensation
(4) Creativity
(5) All of these
(1) Marketing to self
(2) Marketing to family member
(3) Marketing to the staff members
(4) Marketing inside India
(5) Marketing outside India
19. Modern styles of marketing are
(1) Telemarketing
(2) Web marketing
(3) Advertisements on the net
(4) E-mails
20. A good and effective DSA should
(1) Copy the competitor company
(2) Criticize the competitor company
(3) Join the competitor company
170
(4) Be passive
(5) Be more effective than the

competitor company

21. benchmark means
(1) Benches for customer to sit
(2) Benches for salesmen to sit
(3) Product display on a bench
(4) Set standards
22. A call center is
(1) a meeting place for DSAs
(2) a draining center for DSAs
(3) a meeting place for customer
(4) data center
(5) a back office set up were customer
queries answered
23. the sequence of a sale process is
(1) lead generation, call, Presentation &
sale
(2) sale, Presentation , lead generation
& call
(3) presentation, lead generation, sale &
call
(4) lead generation, call, sale &
presentation
(5) there is no sequence required
24. value-added service means
(1) Better value at a premium
(2) Costlier services
(3) Additional services
(4) Better value at a discount
(5) At par service
25. To close a call means
(1) To end the conversation
(2) To put the phone down
(3) To close the doors
(4) To clinic the sale
(5) To close the business
26. customisation means
(1) Tailor-made product for each
(2)
(3)
(4)
(5)
customer
Customer selling good
Tailor-made product for each staff
A selling process
None of the above
27. A call is marketing language means

(1) Calling on a salesperson
(2) Calling on a customer
(3) Making a phone-call
(4) Telemarketing
28. Computers manipulate data in many
ways, and this manipulation is cllled
(1) Upgrading
(2) Processing
(3) Batching
(4) Utilizing
29. A marketing Survey is required for
(1) Deciding marketing strategies
(2) Deciding product strategies
(3) Deciding pricing strategies
30. The target group for education lone
(1) All colleges
(2) All parents
(3) Research scholars
(4) Meritorious student seeking higher
education
31. Cross-selling means
(1) Selling with a cross face
(2) Cross country marketing
(3) Selling other product to existing
customer
(4) Selling to friends
(5) Selling to employs
32. Market segmentation is useful for
(1) Preferential marketing
(2) Targeting existing clients
(3) Identifying prospect
(4) Knowing customers taste
33. The target group for savings deposit
account is
(1) Newborn babies
(2) Student
171
(3) Parent
(4) Businessman
34. Market segmentation can be resorted yo
38. The target group for agricultural loan is

(1) Any farmer
(2) Farm labourers
(3) Any individual dealing in
by means of
(1) Segmenting by age
(2) Segmenting by incomes
(3) Segmenting geographically
35. The target group for a car loan is
(1) All auto drivers
(2) All auto dealers
(3) All car owners
(4) Any individual needing car
(1) Knowledge of industries
(2) Knowledge of household
(3) Knowledge of peers
(4) Knowledge of customers taste
37. Bancassurance means
(1) Bank promising to gives lone
(2) Bank promising to pay interest
(3) Bank selling insurance products
(4) Assurance to repay lone
agriculture or related activity

(4) Farmers societies
39. The target group for credit card is
(1) Existing cardholders
(2) All graduates
(3) All minors
(4) Individual with taxable income
(1) Segmentation the salesmen
(2) Segmentation the employers
(3) Segmentation the customers as per
their needs
(4) Segmentation the products
41. A target group means
(1) A group of sellers
(2) A group of buyers
(3) A group of products
(4) A group of persons whom sales
should be focused
SBI 15/11/2009 (Ist Shift)

42. Relationship in marketing means
(1) Relation between sales person
(2) Relation between buyer and seller
(3) Relation between company and
customer
43. Marketing iof service is known as
(1) Transaction marketing
(2) Door-to-door marketing
(3) Relationship marketing
(4) Internal marketing
(5) none of the above
44. Referrals means
(1) Reference books
(2) Leads provided by operation staff
(3) Sales persons
(4) Front-office staff
(5) Management
45. Conversion in sales language means
(1) Converting a buyer into seller
(2) Converting a seller into a buyer
(3) Converting a prospect into a client
46. Bank marketing is same as
(2) Service marketing
(3) Indoor marketing
47. Leads can be provided by
(1) Friends and relatives
(2) Websites
(3) Directors
(4) Collegagues
172
48. One of the following is not a sales
(3) Not required as no one understands
activity. Find the same,

(1) Identifying leads
(2) Making a call
(3) Presentation
(4) Negotiation
(5) After-sales service
49. Selling is a function understand by
(1) All the sales persons
(2) All the employees
(3) Entire organisation
(4) Outsourced agencies
50. Find the correct statement
(1) Selling is same as marketing
(2) Selling is more than marketing
(3) Selling is part of marketing
51. You can start Microsoft Word by using
them
(4) A long term inspiration
Effective Bank Marketing requires
(1) Proper pricing
(2) Customised products
(3) Simple procedures
(4) Market research
Direct Marketing means
(1) Face-to-face marketing
(2) Meals
(3) Seminars
(4) Indoor marketing
(5) Online marketing
Indirect Marketing means
(1) Marketing by non-sales persons
(2) Market Survey
(3) Market Research
(4) Advertisement
Marketing is . Find the wrong
button
(1) New
(2) Start
(3) Program
(4) Control Panel
(5) None of these
52. In Excel, Charts are created using which
option?
(1) Chart Wizard
(2) Pivot Table
(3) Pie Chart
(4) Bar Chart
(5) None of these
53. Marketing is a function undertaken by
(1) All DSAs
(2) All front-office staff
(3) Whole organisation
54. Non-product selling means
(1) Selling variety of products
(2) Selling only one product
(3) Selling seasonal products
(4) Selling services
55. A vision statement is
(1) Not required for established
companies
(2) Not required due to competition
56.
57.
58.
59.
options.
(1) An ancient concept
(2) A modern need
(3) A continuous affair
(4) A team affair
(5) A desire need for survival
60. Customers Relationship with the Bank
is influenced by
(1) Customers attitudes
(2) Attitudes of bank staff
(3) Interest rates of the Bank
(4) Attitudes of sales persons
61. Marketing is best suited in
(1) Buyers market
(2) Sellers market
(4) Direct marketing
62. Delivery channels other than Bank
counters are
(1) ATMs
(2) Internet banking
(3) Mobile bank
(4) Tele banking
(5) All of these
173
SBI 15/11/2009 (IInd shift)
63. Innovation in marketing means .
(2) Good negotiation skills
(3) Spirited motivation
(4) Novel methods of selling
(5) Tired of marketing
64. Telemarketing involves ..
(2) High level of motivation
(3) Door-to-door campaigns
(4) Event management
65. Online Marketing is
(1) Same as face-to-face marketing
(2) Easier than traditional marketing
(3) Boring as customers are not visible
(4) Voluminous task
66. A Mission Statement is
(1) Same as a vision statement
(2) Same as target
(3) Part of the marketing plan
67. A set of instructions telling the computer
what to do is called .
(1) Mentor
(2) Instructor
(3) Complier
(4) Program
(5) None of these
68. Market Research is required for
(1) Deciding sales volume
(2) Deciding production levels
(3) Deciding marketing strategies
(4) Deciding sales team numbers
(1) Dividing the sales team into small
groups
(2) Dividing the marketing process into
small steps
(3) Dividing the territory into small
areas
(4) Dividing the target groups into
homogeneous groups

70. Market segmentation is required
(1) For avoiding cold calls
(2) To increase production
(3) For territory allocation
(4) For focused marketing
(5) For increasing profits
71. Softcopy is the intangible output, so
then what hardcopy?
(1) The physical parts of the computer
(2) The printed parts of the computer
(3) The printed output
(4) The physical output devices
72. Motivation for sales persons can be
achieved through .
(1) High success rate of conversions
(2) Better sales incentives
(3) Continuous training and updation of
knowledge
(4) Support from operation staff
73. Marketing of Education Loans can be
done by .
(1) Approaching eligible students
(2) Approaching the parents
(3) Approaching colleges
(4) Having tie-ups with Educational
Institutes
74. Diversification is useful for
(1) Attaching more customers
(2) Retaining existing customers
(3) Increasing sales volume
75. Diversification means
(1) Dividing the market into small
segment
(2) Dividing energy of the sales persons
(3) Marketing of diverse products
76. One of the following is not a function of
Retail Banking
174
(1) Accepting fixed deposits
(2) Giving Home loans
(3) Giving Educational loans
(4) Joint ventures
77. The target group for Fixed Deposits is

80. Data warehouse is ..
(1) A godown
(2) A shop selling computers
(3) A showroom
(4) A system where data on customers
(1) All individuals

(2) All corporates
(3) NRIs
(4) Government bodies
78. Data mining means
(1) Same as database
(2) Same as date warehouse
(3) Market survey
(4) Analyzing the data on customers
79. Customer database is ..
(1) Useful for lead generation
(2) Useful for cross selling
(3) Useful for CRM
(4) Useful for customization of products
is stored
81. Retail Banking means ..
(1) Retail shopkeepers
(2) Banks financing to Retail Traders
(3) Same as Universal Banking
(4) Giving loans to corporate
(5) Giving consumer loans to various
public
82. Education Loans can be more
effectively canvassed by
(1) Door-to-door campaigns
(2) E-mails contacts
(3) Diversification
(4) Tie-up with colleges
SBI 08/11/2009 (Ist Shift)

83. Marketing is the combined study of
.
(1) Buyers behaviour and consumer
tasks
(2) Product demand and Product supply
(3) Brand building and Publicity
(4) Sales force abilities and customer
resposes
84. Effective Marketing helps in ..
(1) Boosting the sales
(2) Boosting the purchases
(3) Boosting the demand and supply
85. Market size means .
(1) Size of the sales team
(2) Size of the company
(3) Scope for profit
86. Market share means
87.
88.
89.
90.
(1) Share market

(2) Sensex
(3) Market changes
(4) Market demand
(5) Share of business among pears
Direct Marketing means .
(1) Face to face marketing
(2) Over the counter marketing
(3) Door to door marketing
A Lead means .
(1) A buyer
(2) A seller
(3) Employee
(4) Employer
(5) None of these
DSA means .
(1) District Sale Authority
(2) Direct Selling Agent
(3) Distributor and Sales Agent
(4) Distributor and State Agent
A DSAs main function is ..
175
(1) To boost customer contacts
(2) To boost emails
(3) To boost telemarketing
91. A Propect means ..
(1) Companys Prospects
(2) Companys Memorandum of
92.
93.
94.
95.
96.
Association
(3) A likely buyer
(4) A likely seller
To Close a call means ..
(1) To clinch the sales
(2) To abandon the sales
(3) To lose the business
(4) To annoy the customers
(5) To exit from the sales team
Good selling skill calls for ..
(1) Patience
(2) Perseverance
(3) Persuasion
(4) Pursuit
(5) All of these
Marketing channels means .
(1) Delivery time
(2) Delivery period
(3) Sales outlets
(4) Purchase outlets
(5) All of these
Value added services means
(1) Additional cost
(2) Additional production
(3) Additional staff
(4) Additional services
A Target Group means
(1) Group of salesmen targeting the
(2)
(3)
(4)
(5)
customers
Likely buyers
Group of products
Group of companies
All of the above
97. USP in marketing means ..

(1) Useful Sales Procedures
(2) Useful Selling Propositions
(3) Useful Sales Persons
(4) Used Sales Plans
(5) Unique Selling Propositions
98. ATM stands for .
(1) Anywhere Marketing
(2) Any Time Marketing
(3) Any Time Money
(4) Automated Teller Machine
(5) Automatic Timely Machine
99. Market plan is a .
(1) Selling process
(2) Year-end-budget
(3) Calendar
(4) Business document for marketing
strategies
100. Market segmentation means dividing
(1) The market group into homogenous
groups
(2) The market process into easy steps
(3) The sales teams into small groups
101. HNI means ..
(1) Highly Non-interested Individuals
(2) Highly Needy Individuals
(3) High Net worth Individuals
(4) Highly Negative Individuals
102. Digital Marketing includes. Find the
incorrect answer .
(1) Web advertisement
(2) E-mail canvasing
(3) Blogs
(4) SMS campaigns
(5) Mobile alerts

103. Market innovation means .
(1) Design new products
(2) New styles of marketing
(3) New ideas in sales steps

(4) 1 and 2
(5) All 1, 2 and 3
176
104. Market Penetration connotes
(1) Converting a wide area of the
Market for sales
(2) Entering the buyers houses
(3) Entering the sellers houses
(4) Entering all shops and business
houses
105. Market Penetration can be possible
through .
(1) More calls to the same buyers
(2) More calls to many buyers
(3) Surrogate marketing
(4) Alternate marketing
106. Cross selling means .
(1) One salesman selling to another
salesman
(2) Selling across territories
(3) Selling across countries
(4) Selling additional products to
existing
107. Cross selling can be resorted to, by
.
(1) All sales persons
(2) All employees
(3) All employers
(4) Outsourced agencies
(5) All service provides
108. Cross selling is very effective in the
sale of one of the following ..
(1) Debit cards
(2) Credit cards
(3) Internet Banking
(4) Auto loans
(5) All of these
109. Target market for Debit Card is .
(1) All existing account holders
(2) All sales persons
(3) All NRIs
(4) All HNIs
110. Target market for Home Loans is .
(1) All builders
(2) All housing societies
(3) Agriculturists
(4) All of these

111. SME means .
(1) Small And Medium Enterprises
(2) Small Marketing Enterprises
(3) Small Scale Marketing Entities
(4) Small And Medium Establishment
112. One of the following is not a target
group for SME loans
(1) All professionals
(2) Large industries
(3) Truck operation
(4) Beauty parlours
(5) Hotels and restaurants
113. Financial Inclusion means
(1) Opening Accounts of Finance
Companies
(2) Financial Analysis of Balance Sheet
figures
(3) Opening Accounts of HNIs
(4) Opening Accounts of NRIs
(5) Opening Accounts of
underprivileged persons
114. Saving Accounts with zero balance can
be opened for .
(1) Persons below BPL
(2) Under Financial Inclusion scheme
(3) Students
(4) As per Banks Policies
115. Lead generation is ..
(1) A pre-sales function
(2) A function of the customer
(3) A function of the manufacturing
department
(4) A post sales function
116. Team building is required
(1) Only for lead generation
(2) Only for after sales service
(3) For cross selling
117. For successful marketing
(1) Only the sales person sells
(2) Only finance department sells
(3) Only front office persons sell
177
(4) Only back office persons sell
(5) The whole organisation sells
118. In modern day marketing, the benefits
of selling extend to .
(1) Only products and service
(2) Only after sales services
(3) Lifelong relationship with the buyer
119. For sustained relationship with the
buyer, one of the following is necessary
..
(1) Continuity
(2) Consistency
(3) Understanding
(4) Empathy
(5) All of these
120. Out sourcing means service rendered by
.
(1) Outside agencies
(2) Other department of the company

(3) Employees, other than the sales
persons
(4) Marketing department
121. The performance of a sales person can
be enhanced by
(1) Increasing the sales incentives
(2) Increasing the number of products
to be sold
(3) Appropriate training
122. Sales promotion involves find the
incorrect options
(1) Building Product Awareness
(2) Creating Interest
(3) Providing Information
(4) Designing new products
PNB 20/09/2009
123. Marketing in bank is required for
(1) Getting new customers
(2) Reataining exiting customers
(3) Lending
(4) Accepting of deposits
124. Service marketing is the same as
(1) Relationship marketing
125. Market size means
(1) Size of marketing staff
(2) Size of the organisation
(3) Scope for profit
126. Market share means
(1) Market price of share
(2) Sensex
(3) Share market
(4) Share of business among peer
(5) Market volatility
(1) Selling to oneself

(2) Selling to the employees
(3) Selling to the samples
(4) Selling to the foreign market
128. A call means
(1) A professing
(2) Teletalk
(3) Calling on a prospect
(4) A call centre
129. A call center is
(1) A place where salesmen meet
everyday
(2) A training centre
(3) A back office set up where
customer queries are answered
(4) Customer meeting place
130. A presentation means
(1) Display of product
(2) Explain the utility of a product
(3) A gift
(4) Display of communication skill
178
131. A DSA means
(1) Directly Selling Authority
(2) Directly Selling Agent
(3) Direct Selling Authority
(4) Direct Selling Agent
(5) Distributors & Selling Agencies
132. Benchmark means
(1) Product lines up on a bench
(2) Salesmen setting on a bench
(3) Set standards
(4) Marks on a bench
133. Value added service means
(1) Giving full value of money
(2) Better value for the higher price
(3) Costlier service
(4) Additional service
134. CRM means
(1) Customer Relationship
Management
(2) Customer Retention Manager
(3) Customers Related Meat
(4) Channel Route market
(5) Chanel Representative Manager
135. A Target Group in marketing means
(1) To whom the sales should be
directs
(2) A group of sellers
(3) A group of buyers
(4) A group of product
136. The target group for credit cart is
(1) All cart holders
(2) All existing borrowers
(3) Individual with taxable income
(1) Assurance given by bank to loanees
(2) Assurance to bank with one bank
(3) Assurance to replay loans
(4) Assurance to give good service
(5) Selling insurance product through
bank
138. Cross-selling means
(1) Selling with a cross face
(2) Selling to red cross members
(3) Selling to blue cross members

(4) Selling across countries
(5) Selling other product to exiting
customers
139. ATM means
(1) Any time marketing
(2) Any time money
(3) Any time machine
(4) Automatic teller machine
(5) Automatic teller money
140. Digital marketing is
(1) A way of Direct Marketing
(2) A way of Indirect Marketing
(3) A strategy of the DSAs
141. Market segmentation helps in
(1) Identifying the target group
(2) Focused marketing
(3) Improved lead generation
(4) (1)&(2)
(5) All(1),(2)&(3)
142. Only one of the following is true. Find
the same.
(1) Marketing is not required in a
monopolistic situation
(2) Market is not required in public
enterprises
(3) Marketing depends on competitors
performance
(4) Marketing has no role to play in
production level
(5) Motivated employees do not
required sales incentives
143. Price is an important factors for
effective marketing. What are the other
Ps?
(1) Product, promotion & place
(2) Place, persuasion &promotion
(3) Pride, person & place
(4) Product, paper & person
144. Advertisement are required for
(1) Boosting the production sales
(2) Motivating the employees
(3) Boosting the sales
179
145. Sales forecasting involves study of
(1) Proper selling price
(2) Sales planning
(3) Distribution outlets
(4) Consumers needs and demands
(1) Choosing the right sales person
(2) Choosing the right production
(3) Making proper marketing decisions
(4) Deciding the sales incentives
147. Marketing is termed as successful,

when
(1) There is a rise in the number as
salesmen
(2) There is no need for post-sale
service
(3) There is no need to give discount
(4) There is rise in the sale through
more clients
(5) Marketing is an ongoing process
and hence can never be successful

148. Marketing is a required banks due to
(1) Globalization
(2) Computerization
(3) Increase in the population
(4) Government dictates
149. Marketing is
(1) A day-to-day function
(2) A one-off affair
(3) A one-man show
(4) A collective process
(5) A means to earn extra income
150. Qualities needed by a good marketing
staff are
(1) Aggressiveness
(2) Pushy
(3) Perseverance
(4) Politeness
(5) 3 and 4
151. Marketing should be resorted
(1) Only among rich person
(2) Only among the poor
(3) Only in crowded areas
(4) Depends on the product
(5) Depends the banks
152. HNI means
(1) High Income Individual
(2) Honest marketing staff
(3) High Networth individual
(4) Honest Neutral individual
153. Marketing strategies mean
(1) Plan for effective marketing
(2) Type of marketing style

(3) Market demands
154. Market plan is
(1) An action plan for day-to-day
marketing
(2) Effective selling steps
(3) Effective buying steps
(4) A comprehensive document for
marketing strategies
155. Digital marketing means
(1) Selling digital goods
(2) Selling calculators
(3) Selling through internet
156. Target group means
(1) All employees
(2) Short-listed group
(3) All the marketing staff
(4) Sales representatives
(5) Group of people likely to buy the
identified product
157. The target group for home loans are
(1) Individual
(2) Salaried person
(3) Businessmen
(4) Professional
158. Customer service
180
(1) Is an integral part of marketing
(2) Has no role in marketing
(3) Is required only by salesmen
(4) Is not required by salesmen
159. Public relations is
(1) Part of customer service
(2) Part of marketing
(3) Part of image building
(1) Assuring to repay bank loan
(2) Assuring to repay credit cart dues
(3) Assuring to repay home loan dues
(4) Insurance of bank
161. Relationship marketing means
(1) Selling to relatives
(2) Selling by relatives
(3) After sales service
(4) Cross-selling
162. Motivation means
(1) Keeping the salesmen happy
(2) Keeping the staff happy
(3) More enthusiasm
(4) More team work
163. Effective communication is
(1) Not required if demand exceed

supply
(2) A sine-qua-non for marketing
(3) Good vocabulary
164. Customization means
(1) Products for specific customers
(2) Good customer service
(3) Bad customer service
(4) After-sales service
165. Marketing can be attractive it
(1) Salesmen are attractive
(2) Customer are attractive
(3) More customer are attractive
166. Buyer resistance means
(1) Buyer fighting with the salesmen
(2) Reluctant salesmen
(3) Indifferent salesmen
(4) Hesitant buyers
167. Closing the sales mean
(1) Close down marketing function
(2) Stop selling
(3) Successful completion of a call
168. Market expansion means

(1) Hiring more staff
(2) Firing more staff
(3) Buying more product
(4) Buying more companies
(5) Growth in sales through existing
and new products
169. A series of instruction that tell a
computer what to do and how to do is
called a
(1) Program
(2) Command
(3) User response
(4) Processor
170. Effective marketing helps in
(1) Developing new product
(2) Creating a competitive environment
(3) Building demand for product
171. Which is the part of a computer that
one can touch and feel?
(1) Hardware
(2) Software
(3) Programs
(4) Output
172. A call in marketing means
(1) To phone the customer
(2) To visit the customer
(3) To visit the marketing sit
(4) To call on prospective customers
(1) Maternity warts
(2) Handing over the product to the
buyer
(3) Places where the products are made
available to the buyer
174. Processing involves
(1) Inputting data into a computer
system
(2) Transforming input into output
(3) Displaying output in a useful

manner
(4) Providing relevant answers
for the marketing of internet banking
(1) All the customer
(2) All the educated customer
(3) All the customer educated customer
(4) All creditor
(1) Product designing
(2) New ideas
(3) Impulse
(4) Both (1) & (2)
177. One of the following is a great group
for the marketing of education loan
(1) All the customer
(2) Student
(3) Only poor student
(4) Student having promising
educational track record
178. Service after sale is not the function of
(1) Marketing staff
(2) Seller
(3) Director of the company
(4) Employee of the company
(5) All of the above are wrong
179. If done through the rural
marketing would be more effective
(1) Fairs
(2) Village fairs
(3) Door to door campaign
180. Market survey means
(1) Market research
(2) Market planning
(3) Marketing strategies
(4) Market monitoring
181. ..can be done through digital
banking
(1) Mobile phone
(2) Internet
(3) Telephone
182. A good seller should have the following
quality/qualities?
(1) Devotion to the work
(2) Submissive
(3) Sympathy
183. The rural marketing is not required
because
(1) Rural people do not understand
marketing
(2) Its not practical from the cost point
of view
(3) It is sheer wastage of time
(4) All are wrong
(5) All are correct
(1) Costly products
(2) Extra profit on the same cost
(3) Extra work by seller
185. Internet marketing means
(1) Self-marketing
(2) Core Groups monitoring
(3) Employees marketing
186. The aim of successful marketing is
(1) To increase the sale
(2) To increase the profit
(3) To increase the output of sellers
187. The networking becomes ..
through networking
(1) Very difficult
(2) Dull
(3) Easy
(4) Has no role in marketing
188. Bank marketing means
(1)
(2)
(3)
(4)
Selling of banks
Buying of banks
Merge of banks
Selling banks products and
services
(5) Selling various item in banks
189. Proper pricing is needed for
(1) Extra charges for extra services
(2) Levy of VAT
(3) Good customer service
(4) Putting burden on the customer
(5) Service with extra facilities
190. A lead means
(1) A banks marketing staff
(2) A religious leader
(3) Bankss chairman
(4) Target customer
(5) Leash tied to a dog
191. A good salesman should be
(1) Aggressive
(2) Pushy
(3) Fierce
(4) Polite, but firm
(5) Talkative
192. Relationship Selling means
(1) Preparing a list of relative
(2) Cross-selling
(4) Selling to strangers
(5) Telemarketing
193. Find the incorrect statement
(1) Marketing has no relevance in
Public Sector Banks
Private Sector Banks
Foreign Banks
194. Marketing is not required in one of the
following products
(1) Sale of Credit/Debit Cards
(2) Sale of Net Banking
(3) Sale of Corporate Loans
(4) Sale of Retail Loans
195. HNI means
(1) Highly Negative Individual
(2) High Networth Individual

(3) High Neutral Individual
(4) Highly Necessary Individual
196. Digital Banking means (find the correct
option)
(1) Banking with calculators
(2) Banking with digital instruments
(3) Internet Banking and Telebanking
(4) Export finance
197. Home Loans are granted to
(1) Individual
(2) Institution
(3) Builders
(4) All of these
(5) None of these
198. Credit Cards are used for
(1) Cash withdrawals
(2) Purchase of air tickets
(3) Purchase of consumable items from
retail outlets
199. ATMs are
(1) Branches of banks
(2) Manned counters of banks
(3) Unmanned, cash dispensers
200. Internet Banking means
(1) Meeting of Banks on the Net
(2) Net Practice
(3) Banking transactions through
Internet
(4) Transaction with foreign countries
201. Customer Loyalty means
(1) Shifting of customers from one
bank to another
(2) Customers banking with one bank
exclusively
(3) Customers returning lost items
(4) Customer giving gifts to banks
202. A marketing Plan in necessary for
(1) Having a focused approach to
marketing
(2) To decide marketing strategies

(3) To decide product strategy
(4) To decide advertising strategy
203. Public Relations is required for
(1) Improving customer service in the
company
(2) Improving marketing function in
the company
(3) Better atmosphere in the company
204. One of the following qualities is not
required for effective marketing
(1) Self-motivation
(2) Effective communication skills
(3) Team work
(4) Perseverance
(5) Sympathy
205. Gift of the gap means
(1) Distributing gifts
(2) Collecting garbage
(3) Multi-linguist
(5) Short-tempered
206. Rural marketing involves
(1) Selling to farmers and agriculturists
(2) Selling to rural households
(3) Selling to rural industries
(4) Arranging meals
207. Find the incorrect statement
(1) Marketing is redundant in
computerized banks
(2) Marketing is redundant in foreign
countries
(3) Marketing is redundant in private
establishment
(4) Marketing is redundant in
government establishment
208. Proper Marketing requires
(1) Planning
(2) Sympathy
(3) Knowledge of products

(4) (1) and (2)
(5) (1) and (3)
(1) Knowledge of companies
(2) Cross-country information
(3) Knowledge of related markets
(4) Selling to existing customers
210. Relationship Selling means
(1) Preparing a list of relatives
(2) Cross-selling
(4) Selling to strangers
(5) Telemarketing
211. Qualities of a good salesman are
(1) Patience and Politeness
(2) Empathy and Perseverance
(3) Steadfast Committed
(4) (1) and (2)
(5) (1) and (3)
212. A lead is useful for
(1) A marketing staff
(2) A team leader
(3) Banks Chairman
(4) An industry making lead products
(5) Not useful, as it is poisonous
213. Market research is needed
(1) For extra service charges
(2) For levy of VAT
(3) For good customer service
(4) For effective selling
(5) There is no need for market
research
214. Marketing and Selling are
(1) Not required if profit is high
(2) Not required if sales are high
(3) Not required in monopolistic
conditions
215. 4 Ps of Marketing means
(1) Primary Marketing techniques
(2) Person, Place, Product and
Promotion
(3) Promoting Authority
(4) Purpose, Place, Passion and
Product
216. Market Segmentation means

(1) Dividing the market into various
groups
(2) Segmentation by age
(3) Segmenting by tastes
(4) Segmenting geographically
217. Digital marketing means (find the
correct option)
(1) Selling with calculators
(2) Marketing of digital instrument
(3) Marketing through internet and
telephones
(4) Export finance
218. Customer Database means
(1) Customers biodata
(2) Customer loyalty
(3) Customers loans details
(4) Export finance
219. Bank Marketing is necessary due to
(1) Globalisation
(2) Recession
(3) Merger of banks
(4) Shortage of resources
(5) Selling various different items in
banks
220. Marketing Plans are used for
(1) Doing Research by Marketing
students
(2) Planning Department
(3) Purchase of consumable items from
retail outlets
221. Customization means
(1) Designing products to suit the
Company
(2) Designing strategies to suit the
Company
(3) Designing products to suit
individual customers
222. Product mix means
(1)
(2)
(3)
(4)
Distributing a mix of products

Collecting ideas to sell better
Satisfying the customers
Bundle of products required by the
customer
(5) Various products designed by the
Company
223. Selling skills are judged by
(1) Number of goods sold
(2) Amount of profit earned
(3) Number of customers converted
224. Rural marketing involves
(1) Selling to rural banks
(2) Selling by rural banks
(3) Selling to rural customers
(4) Arranging industrial exhibitions
225. Direct Marketing is necessary for
(1) Having of focused approach to
marketing
(2) Boosting sales
(3) Better customer contacts
226. Marketing of Internet Banking means
(1) Meeting of Banks on the Net
(2) Net Practice
(3) Marketing the usage of Banking
transactions through Internet
(4) Transaction with foreign countries
227. Customer Database is used by
(1) Individuals
(2) Institutions
(3) Builders
(4) Marketing experts
228. Cross selling covers
(1) Identifying customer needs
(2) Matching the products to customer
needs
(3) Convincing the customers of
product benefits
(4) Responding to questions and
objections of customers

229. A prospect means
(1) Any customer who walks into the
bank
(2) An employee of the bank
(3) A customer who is likely to be
interested in banks product or
service
(4) A depositor of the bank
(5) A borrower of the bank
230. A lead means
(1) A prospect who is more likely to
avail of the banks product
(2) A political leader
(3) A religious leader
(4) A bank chairman
(1) Compensation
(2) Inspiration
(3) Additional perquisites
(4) Implementing new ideas or new
methods
232. A call means
(1) Calling on friends
(2) Calling on bank employees
(3) Calling on prospective customers
(4) To make telephone calls
(5) Calling on relatives
233. The traditional marketing style involves
(1) Tele Marketing
(2) Digital Marketing
(3) Indirect Marketing
(4) Direct Marketing
234. Modern methods of Marketing includes
(1) Publicity on the net
(2) Advertisement on the net
(3) Soliciting business through e-mails
(4) Tele Marketing
235. A true marketing mindset requires
(1) Command and order mindset
(2) Control mindset
(3) Active mindset
(4) Passive mindset
236. What of the following sentence is true?

buyers market
sellers market
globalization
competitions
liberalization
237. For effective marketing, the salesman
should have which of these qualities
(1) Creativity
(2) Team spirit
(3) Motivation
(4) Effective communication skills
(1) Knowledge of shops and bazaars
(2) Knowledge of shopping malls
(3) Knowledge of customer profile and
product mix
(4) Knowledge of various languages
(1) Deciding the market area
(2) Deciding the right product to be
sold
(3) Making proper marketing decisions
(4) Deciding right time to sell
true?
(1) Marketing makes the company to
go into loss due to higher expenses
(2) Marketing is not required in profitmaking companies
(3) Marketing sharpens the minds of
the employees
(4) Marketing is a time-bound seasonal
function
(5) Marketing is a waste of time
241. Marketing plan helps in
(1) Better lead generation

(2) Better system
(3) Better results
(4) Improved balance sheet
(5) Better customer service
242. If marketing is done effectively, which
of the following is not required
(1) Advertisement
(2) Publicity
(3) Market research
(4) Market segmentation
243. Motivation means
(1) Inspiring employees to perform
better
(2) Better communication skills
(3) Sales coaching
(4) Market research
244. In a selling process in todays world
(1) Only standard products are sold
(2) No customizations required
(3) The seller need not have product
knowledge
(4) The seller should aim at customer
satisfaction
(5) Only quantum of sales matters
245. Find the true statement
(1) Marketing is a waste of the
employees time
(2) Marketing is not required in India
due to its vast population
(3) Marketing involves additional work
(4) Marketing involves team work
(5) Marketing is not required today due
to IT advancement
(1) Entire country
(2) Entire city
(3) Entire globe
(4) That which consists of customers
who need the identified product
247. Sales forecasting involves
(1) Sales Planning
(2) Sales Pricing
(3) Distribution Channels
(4) Consumer tastes


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Traditional Meaning of Marketing

Modern Meaning of Marketing

features, quality, availability etc.

promotion measures to motivate consumers to buy the product. And

Features of Marketing Concept

Holistic Marketing Concept

For example, on getting hungry, we become

Available in four different version on the basis of

the seller offers a product and the buyer money.

other or if they cannot deliver something of value to the other.

Marketing activities are equally relevant to non-profit

What can be marketed?

Difference between Marketing and Selling

Difference between Marketing and Selling

various promotional measures marketing research,

buy firms goods and services.

after sales services etc.

Selling starts after the production process is over

preference, likes, dislikes, etc and continues even

and ends with the handing over the money to the

after the sales have taken place

seller by the buyer.

all marketing activities revolve

All activities revolve around the product that has

goals like creating, maintaining and retaining the

stresses on needs of the seller.

Marketing thus, contributes to providing better products and services to the

consumers and improve their standard of living.

Taking care of customers needs and wants by

Functions Performed in marketing

Overall it leads to economic development of the

(d) market monitoring

marketing would be more effective.

15. Which among the following is called

through service of society

avail of the banks product

(c) Market research

(e) None of the above

called a pillar of marketing concept?

(a) 10. (b)

In any organisation, finance is like blood of that organisation.

NPA means Nonperforming assets.

Modern marketing concept is based on welfare of customer.

A lead, in a marketing context, is a potential sales contact an individual or organisation that

Profit by customer satisfaction is a tool of new concept of marketing.

Elements of Marketing Planning

Forecasts for the future

Importance of Marketing Planning

To offset future uncertainties

factors which affect the long-term

Factors Affecting Marketing Planning

These factors are :

(e) All of the above

(a) maternity wards

According to Philip Kotler, Marketing mix is the set of

Characteristics of Marketing Mix

Elements of Marketing Mix

Elements of Marketing Mix

Therefore, promotion is an important

(a) Product designing

(a) Product Marketing

Media publics include newspapers and

demographic is a major element to be studied in environmental analysis. As a matter of fact,