Marketing FAQ

General Questions

Q1. Why do you want to get into marketing?

Ans. Emphasis your interest in areas like- you like working in tight deadlines, working under
pressure, meeting targets, focusing on getting the job done, selling, making deals, being
competitive and like to travel and make friends. You can also highlight why this company is
attractive to you.

Q2. How well do you cope under pressure?

Ans. Give examples of situations you faced.

Q3. What would be your first action if we were to appoint you?

Ans. Try to answer this question in an accurate and realistic way. If the company has a structured
training program, you can suggest that your first action will be to familiarize yourself with it.
You can also suggest that you meet your immediate superior and take charge of your
responsibilities.

Q4. Which of our product/services most appeal to you and why?

Ans. Prior to coming for a interview familiarize your self with the company and its
product/services.

Q5. What makes you think that a degree in Marketing will get you a job with us?

Ans. A simple response is that a degree alone will not get you the job. Your other skills,
activities and interest should count just as much as the subject you have studied.

Marketing Basics

Q6. What are customer needs, wants and demand?

Ans. A need is a basic requirement that an individual wishes to satisfy.

People have basic needs for food, shelter, affection, esteem and self-development. Many of these
needs are created from human biology and the nature of social relationships. Customer needs are,
therefore, very broad and basic in nature.
A want is a desire for a specific product or service to satisfy the underlying need. Consumer
wants are shaped by social and cultural forces, the media and marketing activities of businesses.

Consumer demand is a want for a specific product supported by an ability and willingness to pay
for it.

For example, many consumers around the globe want a Mercedes. But relatively few are able
and willing to buy one.

Businesses therefore have not only to make products that consumers want, but they also have to
make them affordable to a sufficient number to create profitable demand.

Q7. What is the difference between a customer and a consumer?

Ans. A customer purchases and pays for a product or service. A consumer is the ultimate user of
the product or service; the consumer may not have paid for the product or service

Consider the following example A food manufacturing business makes own-label, Italian ready
meals for the major supermarkets. So far as the business is concerned, the customer is the
supermarket to whom it supplies meals. The consumer is the individual who eats the meal.

Q8. What are the difference between Marketing and Sales?

Ans. Very often selling and marketing are presumed to be the same – but they are not. Marketing
is a process which includes all of the following:

1. Discovering what product, service or idea customers want.

2. Producing a product with the appropriate features and quality.
3. Pricing the product correctly.
4. Promoting the product; spreading the word about why customers should buy it.
5. Selling and delivering the product into the hands of the customer.

Selling is one activity of the entire marketing process. Selling is the act of persuading or
influencing a customer to buy (actually exchange something of value for) a product or service.

Marketing activities support sales efforts. Actually, they are usually the most significant force in
stimulating sales. Often, marketing activities (like the production of marketing materials and
catchy packaging) must occur before a sale can be made; they sometimes follow the sale as well,
to pave the way for future sales and referrals.

Q9. Explain the 4P’s and 7P’s of the marketing mix.

Concept first proposed by prominent marketer, E. Jerome McCarthy, in the year 1960

Marketing decisions generally fall into the following four categories

Product→ offers a solution for the consumers
Promotion→ is used to inform and persuade the target segment to buy
Price→ is designed to offer value to the consumers
Place→ increasing products accessibility through distribution channels results in higher sales.

Now a days three more Ps have been added to the marketing mix namely People, Process and
Physical Evidence. This marketing mix is known as Extended Marketing Mix.

People:- All people involved with consumption of a service are important. For example workers,
management, consumers etc

Process:- Procedure, mechanism and flow of activities by which services are used.

Physical Evidence:- The environment in which the service or product is delivered, tangible are
the one which helps to communicate and intangible is the knowledge of the people around us.

Q10. What is a product?

Ans. A product is defined as: "Anything that is capable of satisfying customer needs"

This definition includes both physical products (e.g. cars, washing machines, DVD players) as
well as services (e.g. insurance, banking, private health care).

The process by which companies distinguish their product offerings from the competition is
called branding.

Q11. What is a product life cycle?

Ans. The stages through which individual products develop over time is known as the "Product
Life Cycle". The product life cycle has four stages: introduction; growth; maturity and decline.

Q12. What is the difference between a customer and a consumer?

Ans. The following distinction should help:

A customer purchases and pays for a product or service

A consumer is the ultimate user of the product or service; the consumer may not have paid for
the product or service

Consider the following example A food manufacturing business makes own-label, Italian ready
meals for the major supermarkets. So far as the business is concerned, the customer is the
supermarket to whom it supplies meals. The consumer is the individual who eats the meal.

Marketing Planning

Q13. Differentiate between Goal, Objective and Aim.

Ans. Goals

Goals concern what an organization is trying to achieve. Goals provide the “intention” that
influence the chosen actions

Example: A company’s goal can be to achieve market leadership in existing markets

Objectives

Objectives are goals that can be quantified

Examples:

- We want to achieve a market share of 20% in our existing markets

- We wish to penetrate new markets by achieving a market share of at least 5% within 3 years

- We want to achieve sales of growth of 15% per annum with our existing products

Aims

Aims are goals that cannot be measured in a reliable way. However, they remain important as a
means of providing direction and focus.

Examples: We aim to delight our customers

Q14. What is a BCG Matrix?

The BCG matrix is a chart that had been created by Bruce Henderson for the Boston Consulting
Group in 1968 to help corporations with analyzing their business units or product lines. This
helps the company allocate resources and is used as an analytical tool in brand marketing,
product management, strategic management, and portfolio analysis. The matrix has four cells:-

Dogs: These are products with a low share of a low growth market. They do not generate cash
for the company, they tend to absorb it. These products should be eliminated from the product
portfolio.

Cash Cows: These are products with a high share of a low growth market. Cash Cows generate
more than is invested in them. These products should be kept in the portfolio of products for the
time being.

Question mark: These are products with a low share of a high growth market. They consume
resources and generate little in return. They absorb most money as the company attempt to
increase market share.
Stars: These are products that are in high growth markets with a relatively high share of that
market. Stars tend to generate high amounts of income. The company should keep and continue
to build the stars.

Example- For ITC Cigarette is a cash cow, Hotels and agri-business fall in star category, the
FMCG products like biscuit is in the question mark and the match box (brand name AIM) can be
said to be in dogs.

Branding

Q15.What is a brand?

Ans. A name, term, sign, symbol or design, or a combination of these, that is intended to identify
the goods and services of one business or group of businesses and to differentiate them from
those of competitors.

There are two main types of product brand:

(1) Manufacturer brands

(2) Own-label brands

Manufacturer brands are created by producers and use their chosen brand name. The producer
has the responsibility for marketing the brand, by building distribution and gaining customer
brand loyalty. Good examples include Microsoft, Panasonic and Mercedes.

Own-label brands are created and owned by distributors. Good examples include Tesco and
Sainsbury's.

The main importance of branding is that, done well, it permits a business to differentiate its
products, adding extra value for consumers who value the brand, and improving profitability for
the company.

Businesses should manage their products carefully over time to ensure that they deliver products
that continue to meet customer wants.

Q16. What is portfolio planning?

Ans. The process of managing groups of brands and product lines is called portfolio planning.
Two models of product portfolio planning are widely known and used in business:

• The Boston Group Growth-Share Matrix, and

• GE Market Attractiveness model

Q17. Explain Brand extension

Ans. Brand extension refers to the use of a successful brand name to launch a new or modified
product in a new market. ITC is perhaps the best example of how brand extension can be applied
into quite diverse and distinct markets.

Q18. Differentiate between Brand equity and Brand image.

Brand equity refers to the value of a brand. Brand equity is based on the extent to which the
brand has high brand loyalty, name awareness, perceived quality and strong product associations.
Brand equity also includes other “intangible” assets such as patents, trademarks and channel
relationships.

Brand image refers to the set of beliefs that customers hold about a particular brand. These are
important to develop well since a negative brand image can be very difficult to shake off.

Q19. What is a product line and product width?

A product line is a group of brands that are closely related in terms of their functions and the
benefits they provide. A good example would be the range of desktop and laptop computers
manufactured by Dell. A product mix relates to the total set of brands marketed by a business. A
product mix could, therefore, contain several or many product lines. The width of the product
mix can be measured by the number of product lines that a business offers.

Q20. What factors are important in building brand value?

Quality

Quality is a vital ingredient of a good brand. Remember the “core benefits” – the things
consumers expect. These must be delivered well, consistently. The branded washing machine
that leaks, or the training shoe that often falls apart when wet will never help in developing brand
value.

Positioning

Positioning is about the position a brand occupies in a market in the minds of consumers. Strong
brands have a clear, often unique position in the target market.

Positioning can be achieved through several means, including brand name, image, service
standards, product guarantees, packaging and the way in which it is delivered. In fact, successful
positioning usually requires a combination of these things.

Repositioning

Repositioning occurs when a brand tries to change its market position to reflect a change in
consumer’s tastes. This is often required when a brand has become tired, perhaps because its
original market has matured or has gone into decline.

Communications

All elements of the promotional mix need to be used to develop and sustain customer
perceptions. Initially, the challenge is to build awareness, then to develop the brand personality
and reinforce the perception.

Long-term perspective

This leads onto another important factor in brand-building: the need to invest in the brand over
the long-term. Building customer awareness, communicating the brand’s message and creating
customer loyalty takes time. This means that management must “invest” in a brand, perhaps at
the expense of short-term profitability.

Internal marketing

Finally, management should ensure that the brand is marketed “internally” as well as externally.
By this we mean that the whole business should understand the brand values and positioning.
This is particularly important in service businesses where a critical part of the brand value is the
type and quality of service that a customer receives.

Think of the brands that you value in the restaurant, hotel and retail sectors. It is likely that your
favourite brands invest heavily in staff training so that the face-to-face contact that you have with
the brand helps secure your loyalty.

Q21. what are the basis for choosing brand name?

Ans. There are three main types of brand name:

(1) Family brand names:

A family brand name is used for all products. By building customer trust and loyalty to the
family brand name, all products that use the brand can benefit.

Good examples include brands in the food industry, including Kellogg’s, Heinz and Del Monte.
Of course, the use of a family brand can also create problems if one of the products gets bad
publicity or is a failure in a market. This can damage the reputation of a whole range of brands.

(2) Individual brand names:

An individual brand name does not identify a brand with a particular company.

For example, take the case of Heinz. Heinz is a leading global food manufacturer with a very
strong family brand. However, it also operates many well-known individual brand names.
Examples include Farleys (baby food), Linda MacCartney Foods (vegetarian meals) and Weight
Watcher’s Foods (diet/slimming meals and supplements).

Why does Heinz use individual brand names when it has such a strong family brand name?
There are several reasons why a brand needs a separate identity – unrelated to the family brand
name:

(3) Combination brand names:

A combination brand name brings together a family brand name and an individual brand name.
The idea here is to provide some association for the product with a strong family brand name but
maintaining some distinctiveness so that customers know what they are getting.

Examples of combination brand names include Microsoft XP and Microsoft Office in personal
computing software and Heinz Tomato Ketchup and Heinz Pet Foods.

Q22. What are the features of a good brand name?

Brand names should be chosen carefully since the name conveys a lot of information to a
customer. The following list contains considerations that should be made before making a final
choice of brand name:

A good brand name should:

• Evoke positive associations

• Be easy to pronounce and remember

• Suggest product benefits

• Be distinctive
• Use numerals when emphasizing technological features

• Not infringe existing registered brand names

Promotion

Q23. What are the constituents of the promotion mix

Ans. Advertising, Direct Marketing, Personal selling, Sales Promotion and Public relation.

Q24. What are the primary objectives marketing promotion aim to achieve?

Inform

Management may need to make their audience aware that their product exists, and to explain
exactly what it does. This is a particularly important objective for new products

Persuade

An important stage in creating favourable attitudes towards the business and its brands. Through
persuasive promotion, management will seek to persuade customers and the trade that their brand
has benefits that are superior to competitors

Image creation

Sometimes, promoting a brand image is the only way to create differentiation in the mind of the
consumer (e.g. lager advertising)

Reassurance

Much promotion (particularly advertising) is about reassuring customers that they have made the
right choice and encouraging them to stay loyal to a brand.

Advertising

Q25: What's the difference between advertising and sales promotion?

Ans: Kotler and Armstrong defines advertising as:-

"Advertising is any paid form of non-personal presentation and promotion of ideas, goods and
services through mass media such as newspapers, magazines, television or radio by an identified
sponsor".

Advertising is generally targeted at end consumer. It can be used for many purposes, including
establishing awareness, providing information for knowledge, and creating brand loyalty. In its
knowledge role, advertising can communicate a positioning (or modify a positioning) and even
promote new uses of a product.
Sales promotions are short-term techniques to persuade members of a target market to respond or
undertake certain activity. As a reward, marketers offer something of value to those responding
generally in the form of lower cost of ownership for a purchased product (e.g., lower purchase
price, money back) or the inclusion of additional value-added material (e.g., something more for
the same price).

Sales promotions can be directed at either the customer, sales staff, or distribution channel
members (such as retailers). Sales promotions targeted at the consumer are called consumer sales
promotions. Sales promotions targeted at retailers and wholesale are called trade sales
promotions.

Q 26: Does advertising really increase sales?

Answer: General findings from advertising studies include the following:

Decreases in the level of advertising do not lead to an immediate decrease in sales. An increase
in the level of advertising by itself does not lead to an increase in sales.

On average, half of all ongoing ad campaigns are ineffective.

Changes in the creative, medium, target segment or product itself sometimes lead to change in
sales, even though increases in the level of advertising alone do not.

When advertising is effective, it is effective either early on or never.

When advertising does affect sales, its impact is not large and is much smaller than that of price.
In fact, research shows that the elasticity of sales to advertising is .1, while the elasticity of sales
to price is –2.5.

Q27: Does humor really work in ads?

Answer: Actually, as you'd expect, people really like humorous ads. But, they have proven more
appropriate in ads for products that people are not really involved in (that is, products that they
don't spend a lot of time thinking about. In those situations, customers get a lot of positive
feelings due to the humor in the ad.

Humor is also good at getting attention - which is a precursor of generating a positive attitude
(remember, don't confuse attention and attitude - these are totally different things).

Having said all of this, the most important thing to remember if you are going to use humor in
your ad is to make sure that what you are selling is intimately tied to the humor. Else, people will
only pay attention to the humor and ignore your product. So, in essence, don't use humor for the
sake of the humor.

Q28. How can you evaluate the effectiveness of an advertisement?

Ans. Evaluate the results of the Advertising Campaign

The evaluation of an advertising campaign should focus on two key areas:

(1) The Communication Effects - is the intended message being communicated effectively and to
the intended audience?

(2) The Sales Effects - has the campaign generated the intended sales growth. This second area is
much more difficult to measure.

• Stimulate an increase in sales - Number of enquiries generated from advert, number of

enquiries converted into sales

• Remind customers of the existence of a product - Test customer awareness both before
and after the advertising campaign, number of enquiries

• Inform customers - Test customer awareness, number of requests for further information
Sales

• Build a brand image -Test customer awareness of brand recognition and perceived values

• Build customer loyalty and relationship - Levels of repeat purchase, levels of customer
retention, measure demographic profile of purchases

• Change customer attitudes - measure type of goods ordered by new purchasers, compare
with previous data

Q29. Why should a company advertise?

Ans.

• To create awareness, customer interest or desire

• To boost sales

• To build brand loyalty (or to maintain it at the existing level)

• To launch a new product

• To change customer attitudes – perhaps trying to move a product more “upmarket” or to

dispel some widely held perceptions about the product.

• To support the activities of the distribution channel (e.g. supporting a “pull” strategy)

• To build the company or brand image

• To reminds and reassure customers

 • To offset competitor advertising

• To boost public standing through campaigns such as care for the environment

• To support the sales force

Distribution

Q30. Why does a business give the job of selling its products to intermediaries?

Ans. Intermediaries are specialists in selling. They have the contacts, experience and scale of
operation which means that greater sales can be achieved than if the producing business tried run
a sales operation itself.

Q31. What are the basic functions of distribution channel?

Ans. The main function of a distribution channel is to provide a link between production and
consumption. Organisations that form any particular distribution channel perform many key
functions:

• Information Gathering and distributing market research and intelligence - important for
marketing planning

• Promotion Developing and spreading communications about offers

• Contact Finding and communicating with prospective buyers

• Matching Adjusting the offer to fit a buyer's needs, including grading, assembling and
packaging

• Negotiation Reaching agreement on price and other terms of the offer

• Physical distribution Transporting and storing goods

• Financing Acquiring and using funds to cover the costs of the distribution channel

• Risk taking Assuming some commercial risks by operating the channel (e.g. holding
stock)

Q32. Who are Franchises and Agents?

Ans. Franchises: Franchises are independent businesses that operate a branded product (usually a
service) in exchange for a license fee and a share of sales.

Agents: Agents sell the products and services of producers in return for a commission (a
percentage of the sales revenues)
Pricing

Q33. Explain the strategy of prestige pricing.

Ans. Prestige pricing refers to the practice of setting a high price for an product, throughout its
entire life cycle – as opposed to the short term ‘opportunistic’, high price of price ‘skimming’.
This is done in order to evoke perceptions of quality and prestige with the product or service.

For products for which prestige pricing may apply, the high price is itself an important
motivation for consumers. As incomes rise and consumers become less price sensitive, the
concepts of ‘quality’ and ‘prestige’ can often assume greater importance as purchasing
motivators. Thus advertisements and promotional strategies focus attention on these aspects of a
product, and, not only can a ‘prestige’ price be sustained, it also becomes self-sustaining.

Q34. What is Pre-emptive pricing?

Ans. Pre-emptive pricing is a strategy which involves setting low prices in order to discourage or
deter potential new entrants to the suppliers market, and is especially suited to markets in which
the supplier does not hold a patent, or other market privilege and entry to the market is relatively
straightforward.

By deterring other entrants to the market, a supplier has time to

• Refine/develop the product

• Gain market share

• Reduce costs of production (through sales/ experience effects)

• Acquire name/brand recognition, as the ‘original’ supplier

Q35. Explain the term Extinction pricing.

Ans. Extinction pricing has the overall objective of eliminating competition, and involves setting
very low prices in the short term in order to ‘under-cut’ competition, or alternatively repel
potential new entrants.

The extinction price may, in the short term, be set at a level lower even than the suppliers own
cost of production, but once competition has been extinguished, prices are raised to profitable
levels.

Only firms dominant in the market, and in a strong financial position will be able survive the
short-term losses associated with extinction pricing strategies, and benefit in the longer term.

The strategy of extinction pricing can be used selectively by firms who can apply it either to
limited geographical markets (making up any losses by increasing prices in other geographical
markets), or to certain product ‘lines’. In the latter case, the low price of a product at one end of
the product range might attract new purchasers to the product line, and sales of different, more
profitable items might increase.

Segmentation

Q36. Why market segmentation is done?

Ans. Better matching of customer needs: Customer needs differ. Creating separate offers for
each segment makes sense and provides customers with a better solution.

Enhanced profits for business: Customers have different disposable income. They are, therefore,
different in how sensitive they are to price. By segmenting markets, businesses can raise average
prices and subsequently enhance profits.

Better opportunities for growth: Market segmentation can build sales. For example, customers
can be encouraged to "trade-up" after being introduced to a particular product with an
introductory, lower-priced product

Retain more customers: Customer circumstances change, for example they grow older, form
families, change jobs or get promoted, change their buying patterns. By marketing products that
appeal to customers at different stages of their life ("life-cycle"), a business can retain customers
who might otherwise switch to competing products and brands

Target marketing communications: Businesses need to deliver their marketing message to a

relevant customer audience. If the target market is too broad, there is a strong risk that (1) the
key customers are missed and (2) the cost of communicating to customers becomes too high /
unprofitable. By segmenting markets, the target customer can be reached more often and at lower
cost.

Q37. What are the bases for market segmentation?

Ans. Bases of segmentation: The key task is to find the variable, or variables that split the market
into actionable segments. There are two types of segmentation variables:

(1) Needs (2) Profilers

The basic criteria for segmenting a market are customer needs. To find the needs of customers in
a market, it is necessary to undertake market research.

Profilers are the descriptive, measurable customer characteristics (such as location, age,
nationality, gender, income) that can be used to inform a segmentation exercise.

The most common profilers used in customer segmentation include the following:

Profiler Examples
Geographic

• Region of the country

• Urban or rural

Demographic

• Age, sex, family size

• Income, occupation, education

• Religion, race, nationality

Psychographic

• Social class

• Lifestyle type

• Personality type

Behavioural

• Product usage - e.g. light, medium, heavy users

• Brand loyalty: none, medium, high

• Type of user (e.g. with meals, special occasions)

Q38. What is Demographic segmentation?

Ans. Demographic segmentation consists of dividing the market into groups based on variables
such as age, gender family size, income, occupation, education, religion, race and nationality.

Personal Selling

Q39. What are the different steps in the personal selling process?

Ans. Ans.

1. Prospecting and Evaluating: Seek names of prospects through sales records, referrals etc.,
also responses to advertisements.

2. Preapproach (Preparing)

Review key decision makers esp. for business to business, but also family

-assess credit histories

-prepare sales presentations

-identify product needs.

Helps present the presentation to meet the prospects needs.

3. Approaching the Customer

Manner in which the sales person contacts the potential customer. First impression of the sales
person is Lasting and therefore important.Strive to develop a relationship rather than just push
the product.

4. Making the Presentation

Need to attract and hold the prospects Attention to stimulate Interest and stir up Desire in the
product so the potential customer takes the appropriate Action (AIDA).Try to get the prospect to
touch, hold or try the product. Must be able to change the presentation to meet the prospect
needs.

During and afterwards customers can raise questions regarding the product, these objections
should be handled very intelligently-

Overcoming Objections

-Seek out objections and address them.

-Anticipate and counter them before the prospect can raise them.

-Try to avoid bringing up objections that the prospect would not have raised.

-Price objection is the most common

-Need to provide customers with reasons for the $s, build up the value before price is mentioned

-Must be convinced of price in own mind before you can sell to customer.

-Get budget info. of buyer before you try to sell, and must know what they want.

5.Closing: Ask prospect to buy product/products. Use trial closes, Discuss about financial
terms, preferred method of delivery.

6. Following Up: Must follow up sale, determine if the order was delivered on time,
installation OK etc. Also helps determine the prospects future needs. Accomplishes four
objectives:

-customer gain short term satisfaction

-referrals are stimulated

-in the long run, repurchase

-prevent cognitive dissonance

Q40. What are the benefits of Personal Selling?

Ans.

The greatest freedom to adjust a message to satisfy customers informational needs.

•Most precision, enabling marketers to focus on most promising leads. vs. advertising,
publicity and sales promotion
• Give more information
• Two way flow of information, interactivity.
• Discover the strengths and weaknesses of new products and pass this information on to
the marketing department.
• Highest cost. Businesses spend more on personal selling than on any other form of
promotional mix.
• Goals range from
o finding prospects
o convincing prospects to buy
o keeping customers satisfied--help them pass the word along.

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