BIM 5th Sem-Exam Question Solution 2024 – Marketing
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1.) State the core concepts of marketing.
The core concepts of marketing are:
- Needs, Wants, and Demands
- Market Offerings
- Value and Satisfaction
- Exchange and Transactions
- Markets
2.) Differentiate between proactive and reactive marketing.
3.) Point out the components of the marketing information system.
The components of the Marketing Information System (MIS) are:
- Internal Records
- Marketing Intelligence
- Marketing Research
- Marketing Decision Support System
4.) What are the major types of buying situation?
The major types of buying situations are:
- New Task Buying: Buying a product for the first time.
- Straight Rebuy: Routine repurchase of an existing product.
- Modified Rebuy: Reordering with some changes to specifications or suppliers.
5.) State the process of market segmentation.
The process of market segmentation includes:
- Identifying the market
- Segmenting the market
- Evaluating segments
- Selecting target segments
- Positioning
6.) Write down the factors influencing business buyer behavior.
Factors influencing business buyer behavior include:
- Environmental factors
- Organizational factors
- Interpersonal factors
- Individual factors
7.) What are the objectives of branding?
Objectives of branding are:
- To identify products and distinguish them from competitors.
- To build customer loyalty and trust.
- To create a strong brand image and reputation.
- To support marketing efforts by making products recognizable.
- To add value and justify premium pricing.
8.) Define the concept of value-based approach of pricing.
Value-based pricing sets the product price based on the customer’s perceived value rather than on the cost of production. It focuses on what customers are willing to pay given the benefits they expect.
9.) Describe briefly about warehousing and inventory management.
- Warehousing: The process of storing goods safely until they are needed for sale or production.
- Inventory Management: Controlling stock levels to maintain sufficient supply without overstocking or stockouts.
10.) State the nature of personal selling.
Personal selling is a direct, face-to-face communication between a salesperson and a potential buyer, aimed at persuading the buyer to make a purchase.
- Personal interaction
- Flexible and adjustable
- Feedback-oriented
- Relationship-based
Short Answer Questions:
11.) Describe about the micro environment.
Micro Environment is the internal and controllable forces or factors within the organization(intra-Organization) which has the potential to affect organization’s marketing performance.
- It creates either strengths or weakness. Strength means competitive advantage and Weakness means competitive disadvantages.
Components of Micro Environment:
- Customers
- Competitors
- Suppliers
- Marketing Intermediaries
- Publics
a.) Customers:
Customers are the most crucial part of the micro environment because businesses exist to meet their needs and wants. Companies must analyze customer preferences, buying behavior, and market trends to develop effective marketing strategies.
b.) Competitors:
Businesses operate in a competitive environment where multiple firms sell similar products or services. Understanding competitors’ pricing, marketing strategies, strengths, and weaknesses helps a company differentiate itself.
c3.) Suppliers:
Suppliers provide raw materials, equipment, and services necessary for production. A company must maintain good relationships with suppliers to ensure quality, timely delivery, and cost-effectiveness.
d.) Marketing Intermediaries:
These are firms or individuals that help businesses promote, distribute, and sell their products to customers. They include:
- Wholesalers (buy in bulk and resell to retailers)
- Retailers (sell directly to consumers)
- Distributors (manage logistics and supply chains)
- Advertising agencies (promote products through marketing campaigns)
e.) Publics:
Publics refer to any group that has an actual or potential interest in a company’s success. They include:
- Media (news channels, social media influencers, blogs)
- Government (regulatory bodies, tax authorities)
- Financial institutions (banks, investors, shareholders)
- Local communities (people living near business operations)
12.) “The marketing can be more accurate and relevant through marketing research.“ Based on this statement, explain the different steps that the marketers follow for research in various areas of marketing.
Marketing research helps marketers make informed decisions by providing reliable data and insights. It makes marketing more accurate and relevant by minimizing guesswork and reducing risks. To achieve this, marketers follow a systematic process consisting of the following steps:
- Define the Problem and State Research Objectives
- Research Design and Selection of Information Sources
- Information Collection
- Analysis of Information
- Reporting Results and Findings
1.) Define the Problem and State Research Objectives:
The first step in any research process is to clearly define the problem that needs to be addressed. Understanding the issue is crucial to finding the right solution. This could be related to customer behavior, market trends, product performance, or competitors.
Once the problem is identified, specific research objectives must be set. These objectives outline what the research aims to achieve. For example, a company may want to understand why customer satisfaction is declining or which marketing channels are most effective for promoting a new product.
2.) Research Design and Selection of Information Sources:
Research Design: The research design outlines the overall approach to solving the problem. It involves deciding whether the research will be exploratory, descriptive, or causal in nature.
Selection of Information Sources: Information can be gathered from primary sources (direct data from surveys, interviews, or observations) or secondary sources (existing data from reports, databases, or industry publications). The selection depends on the research objectives, budget, and time constraints.
3.) Information Collection:
This step involves gathering the required data from the selected sources. Depending on the research design, data can be collected through various methods:
- Surveys/Questionnaires: Asking specific questions to a sample group.
- Interviews: One-on-one interactions with customers or experts.
- Observations: Watching and recording consumer behavior.
- Secondary Data: Analyzing existing research, reports, and statistics.
4.) Analysis of Information:
After the data is collected, it needs to be processed and analyzed to derive meaningful insights. Various statistical techniques and tools may be used for analysis, such as:
- Descriptive Statistics: Summarizing data, such as averages and percentages.
- Inferential Statistics: Making predictions or inferences based on sample data.
- Trend Analysis: Identifying patterns in the data over time.
5.) Reporting Results and Findings:
After analyzing the data, the research team must present the findings in a clear and actionable format. The report should include:
- Executive Summary: A brief overview of the research objectives, methodology, and key findings.
- Detailed Findings: A comprehensive discussion of the data, including graphs, charts, and tables to support the analysis.
- Conclusions and Recommendations: Based on the findings, the report should provide clear, actionable insights and recommendations for decision-making.
13.) What do you mean by segmentation? Describe the essential requirements to make the segmentation effective.
Market segmentation is the process of dividing a broad, heterogeneous market into smaller, homogeneous groups of consumers or organizations that share similar needs, characteristics, or behaviors.
Essential Requirements for Effective Segmentation:
To be effective, market segmentation must meet the following criteria:
a.) Measurability:
- The segment’s size, purchasing power, and characteristics must be measurable.
- Example: A company must know how many potential customers fall within a specific income group.
b.) Accessibility:
- The segment must be reachable and serviceable through marketing and distribution efforts.
- Example: Targeting urban youth through social media platforms.
c.) Substantiality:
- The segment must be large and profitable enough to serve.
- Example: A segment of only a few people may not justify a separate marketing strategy.
d.) Differentiability:
- The segments must be distinct and respond differently to different marketing mixes.
- Example: Teenagers may respond better to influencer marketing than older adults.
e.) Actionability:
- The company must be able to design effective programs to attract and serve the segment.
- Example: A business should have the resources to promote and distribute products to a rural segment if targeted.
14.) Briefly explain the product line and mix strategies.
A product line refers to a group of related products that are offered by a company under a single brand or category.
Product Line Strategies:
1.) Line Stretching:
- Involves expanding the product line beyond its current range.
Types:
- Upward Stretching – Adding higher-end products (better quality or premium priced).
- E.g., A budget smartphone brand introduces a flagship model.
- Downward Stretching – Adding lower-end products to attract budget-conscious customers.
- E.g., A luxury car brand offers an affordable compact version.
- Two-way Stretching – Adding both lower and higher-end products.
2.) Line Filling:
- Adding more items within the existing product range (same price and quality level) to fill market gaps.
- Purpose is to target niche segments, block competitors, or improve shelf presence.
The product mix (or product assortment) is the complete set of products and services that a company offers to its customers.
Product mix Strategies:
1.) Width:
- Refers to the number of different product lines a company offers.
- E.g., A company offering personal care, food, and electronics has a wide product mix.
2.) Length:
- The total number of products in all the lines.
- If a company has 3 product lines with 5 products each, the length is 15.
3.) Depth:
- The number of variations offered for each product.
- E.g., A toothpaste product may come in 3 sizes, 4 flavors – that’s depth.
4.) Consistency:
- Refers to how closely related the product lines are in terms of use, production, and distribution.
- E.g., A company selling only food items has high consistency; a firm selling clothes, electronics, and food has low consistency.
15.) Give the concept of pricing and describe the factors affecting the pricing decisions.
Pricing refers to the process of determining the appropriate price for a product or service. It involves setting a value that balances profitability with customer satisfaction and market competitiveness.
Factors Affecting Pricing Decisions:
Pricing is a crucial part of the marketing mix that directly impacts revenue and profitability. Businesses must carefully analyze both internal and external factors when deciding the price of their products or services.
A. Internal Factors
These are factors within the control of the company and directly related to its operations and goals.
1.) Cost of Production:
- This refers to the total cost incurred in manufacturing, packaging, and distributing a product, including fixed costs (e.g., rent, salaries) and variable costs (e.g., raw materials, labor per unit).
- To ensure profitability, the product must be priced above the break-even point (total cost = total revenue). A company must also account for desired profit margins.
Example:
If a jacket costs Rs. 500 to produce, the price must be set above Rs. 500 to earn a profit.
2.) Marketing Objectives:
- The pricing strategy depends on what the business aims to achieve—such as maximizing profit, gaining market share, discouraging competition, or building customer loyalty.
- If the goal is market penetration, prices may be kept low initially.
- For premium branding, higher prices may be set to indicate exclusivity.
Example:
A new mobile brand may use low prices to gain users quickly, while Apple maintains high prices to preserve its premium image.
3.) Product Characteristics:
- The nature and features of the product—such as quality, uniqueness, durability, or technological advancement—can influence the pricing.
- Innovative or high-quality products justify higher prices due to their value proposition.
Example:
An eco-friendly water bottle made with advanced insulation may cost more than a regular one.
4.) Company Image and Brand Equity:
- A company’s reputation and brand strength in the market affect how much customers are willing to pay.
- Strong, well-known brands can charge premium prices because of the trust and perceived value they hold.
Example:
Nike shoes cost more than generic brands due to brand value and emotional appeal.
5.) Pricing Strategy of Other Products (Product Line Pricing):
- Pricing decisions are influenced by how other products in the same product line are priced.
- A company may use a strategy where basic versions are cheaper and advanced versions are costlier (tiered pricing).
Example:
A car company may offer multiple models of the same brand at different price points—standard, mid-range, and luxury.
B. External Factors:
These are outside the control of the company but have a significant impact on pricing decisions.
1.) Market Demand:
- The relationship between the price of a product and the willingness/ability of customers to buy it.
- High demand = Opportunity to charge higher prices.
- Low demand = May require lower prices or discounts.
Example:
Umbrellas are priced higher during monsoon season due to high demand.
2.) Competition:
- The pricing strategies of rival companies in the market affect how a business sets its own prices.
- To remain competitive, a company may match or beat competitors’ prices, or offer added value.
Example:
If one telecom company reduces its data charges, others may follow to avoid losing customers.
3.) Consumer Perception of Value:
- How customers perceive the quality, brand image, or benefits of a product relative to its price.
- If customers view the product as valuable, they are willing to pay more. If not, price resistance occurs.
Example:
Customers may pay more for organic food because they believe it’s healthier.
4.) Government Regulations and Taxes:
- Government-imposed price controls, import duties, GST/VAT, subsidies, and other regulations influence pricing.
- These may increase the cost of production or limit how much a company can charge.
Example:
Heavy taxation on alcohol and tobacco raises their final retail price.
5.) Economic Conditions:
- The overall state of the economy—including inflation, recession, unemployment, interest rates—affects pricing strategies.
- In a recession, customers are more price-sensitive, prompting businesses to lower prices or offer discounts.
Example:
During an economic downturn, restaurants may offer combo deals to retain customers.
16.) Define distribution. Explain the channel design for consumer products.
Distribution refers to the set of decisions and activities involved in delivering the product from the producer to the end customer through various intermediaries like wholesalers, retailers, and agents.
17.) Discuss the nature and objectives of sales promotion.
Sales promotion refers to a variety of short-term marketing activities designed to encourage immediate customer response, such as making a purchase, trying a product, or increasing brand engagement.
- It is usually temporary and intended to boost sales quickly, complementing advertising and personal selling efforts.
Nature:
- Short-term focus: Aimed at quick results.
- Incentive-based: Offers added value like discounts, freebies, or rewards.
- Stimulates demand: Encourages customers to act now.
- Supports other promotional tools: Enhances the effectiveness of advertising or personal selling.
Example: A supermarket offering a “Buy 1 Get 1 Free” deal for a weekend.
Objectives of Sales Promotion:
1.) Encourage Trial or Purchase:
- To motivate customers to try a product for the first time or make an impulse buy.
2.) Attract New Customers:
- To draw new buyers by offering something extra or reducing the perceived risk of trying the product.
3.) Clear Excess Inventory:
- To help companies sell off old or excess stock, especially during off-seasons or before launching new versions.
4.) Reinforce Other Promotional Activities:
- To complement advertising, personal selling, or direct marketing by giving customers an additional reason to purchase.
Long Answer Questions:
18.) The business in Nepal generally fail due to less study and analysis of market situation and environment. Considering this statement, describe the marketing environment in Nepal.
The marketing environment refers to the external and internal factors that affect an organization’s ability to develop and maintain successful marketing relationships with customers. In Nepal, many businesses fail due to inadequate understanding and analysis of these factors.
Marketing Environment in Nepal:
The marketing environment in Nepal can be classified into two main categories:
A. Micro Environment (Internal/Immediate Environment):
These are forces close to the company that affect its ability to serve customers.
- Company Itself: Lack of marketing research, poor planning, and weak organizational structure in Nepalese firms.
- Customers: Nepalese consumers are price-sensitive and demand quality and value.
- Competitors: Increasing local and foreign competition (especially with open markets and e-commerce).
- Marketing Intermediaries: Weak supply chains and distribution networks, especially in remote areas.
- Suppliers: Fluctuations in supply and poor logistics due to geography and infrastructure.
- Publics: Media, pressure groups, and local communities influencing business decisions.
B. Macro Environment (External/Uncontrollable Environment):
These are larger societal forces that affect the microenvironment.
- Demographic Environment: Young population, growing urbanization, and diversity in culture.
- Economic Environment: Low per capita income, high unemployment, and income inequality affect purchasing power.
- Technological Environment: Growing digitalization, but digital divide in rural vs. urban areas.
- Political and Legal Environment: Frequent political instability, bureaucracy, and policy inconsistency.
- Socio-cultural Environment: Traditional beliefs, religious values, and cultural diversity heavily influence consumption patterns.
- Natural Environment: Geographic challenges, natural disasters, and environmental sustainability concerns.
19.) Buying decisions become complicated based on high and low involvement of buyers. Considering these, clarify the different factors that impact the buying decisions of final consumers along with their buying process.
The buying decisions of final consumers (individuals or households purchasing goods for personal use) are influenced by the level of involvement—whether the purchase is of high importance (high involvement) or low importance (low involvement). The complexity of the decision-making process depends on several internal and external factors.
A. Factors Influencing Consumer Buying Decisions:
- Cultural Factors:
Culture: Beliefs, values, and customs learned from family and society.
Sub-culture: Religious, regional, and linguistic influences.
Social class: Income, education, and occupation level affect buying behavior.
- Social Factors:
Reference groups: Friends, co-workers, influencers.
Family: Family members heavily influence buying decisions.
Roles and status: A person’s role in society (e.g., parent, student) influences preferences.
- Personal Factors:
Age and life-cycle stage: Youth, newly married, retired people buy differently.
Occupation and income: Impacts purchasing power and product choices.
Lifestyle: Activities, interests, and opinions shape buying decisions.
Personality and self-concept: Buyers choose products that reflect their personality.
- Psychological Factors:
Motivation: Inner drive (e.g., safety, love, esteem) leads to purchases.
Perception: How consumers interpret information and ads.
Learning: Experience from past purchases affects future behavior.
Beliefs and attitudes: Pre-established views toward brands or products.
B. Consumer Buying Decision Process:
- Need Recognition:
Buying process begins when the buyer recognizes a need or problem (e.g., hunger, broken phone). - Information Search:
Consumer seeks information from personal, commercial, public, and experiential sources. - Evaluation of Alternatives:
Different brands or products are compared based on features, quality, price, and reputation. - Purchase Decision:
The consumer decides what to buy based on preference, affordability, and convenience. - Post-Purchase Behavior:
Buyer evaluates satisfaction or dissatisfaction, which affects future buying decisions and brand loyalty.
20.) Explain the new product development process.
New Product Development is the process of bringing a new product to the market, starting from the generation of an idea to the final product launch.
- It involves a systematic series of steps to reduce risks and ensure the product meets customer needs and business goals.
Steps in the New Product Development Process:
1.) Idea Generation:
- This is the first stage where companies actively generate a pool of new product ideas.
- Ideas can come from customers, employees, competitors, R&D departments, or market trends.
- Goal: Gather as many innovative and potentially useful ideas as possible.
2.) Idea Screening:
- This step involves evaluating and filtering ideas to select those with the highest potential.
- Weak, unrealistic, or unprofitable ideas are discarded.
- Goal: Avoid wasting resources on poor ideas.
3.) Concept Development and Testing:
- The selected idea is turned into a detailed product concept, including features, benefits, and target market.
- Then it is tested with a sample of potential customers to get feedback.
- Goal: Understand customer reactions and make improvements.
4.) Business Analysis:
- At this stage, the business evaluates the financial feasibility of the product.
- Forecasts are made for sales volume, costs, break-even point, and profit margins.
- Goal: Ensure the product is commercially viable.
5.) Product Development:
- The actual product is designed, engineered, and produced in prototype form.
- Technical and manufacturing aspects are tested.
- Goal: Develop a working product that meets expectations.
6.) Test Marketing:
- The product is introduced in a limited market or region to monitor performance and gather consumer responses.
- Helps test marketing mix (product, price, promotion, place) in real-life settings.
- Goal: Reduce the risk of full-scale launch failure.
7.) Commercialization:
- This is the final step, where the product is launched on a full scale in the target market.
- It includes mass production, promotion, and distribution.
- Goal: Make the product available to the general public and begin generating revenue.
21.) Describe the components of the marketing mix for products and services.
The Marketing Mix refers to a set of controllable marketing tools that a business uses to promote and sell its products or services to target customers.
- It is often called the 4Ps of Marketing—Product, Price, Place, and Promotion. These elements help businesses create effective marketing strategies to satisfy customer needs and achieve business goals.
- In modern marketing, additional 3Ps (People, Process, and Physical Evidence) have been added, expanding it to the 7Ps of Marketing Mix, especially for service industries.
Components of the Marketing Mix (4Ps + 3Ps):
1.) Product (What to Offer?)
The Product refers to the goods or services that a company offers to fulfill customer needs. It includes physical products (like electronics, clothing) and services (like banking, education).
Key Considerations:
- Product quality, design, and features
- Branding and packaging
- Product life cycle (introduction, growth, maturity, decline)
- Differentiation from competitors
2.) Price (At What Cost?)
Price is the amount a customer pays for a product or service. It directly influences demand, profitability, and market competition.
Key Considerations:
- Pricing strategies (cost-plus pricing, penetration pricing, premium pricing)
- Discounts, offers, and payment options
- Perceived value of the product
3.) Place (Where to Sell?)
Place refers to the distribution channels used to deliver the product to customers. It ensures that the product is available at the right time and location.
Key Considerations:
- Distribution channels (retail stores, e-commerce, direct sales)
- Warehousing and logistics
- Market coverage (local, national, global)
4.) Promotion (How to Communicate?)
Promotion involves marketing activities that communicate the value of the product to customers and persuade them to buy.
Key Considerations:
- Advertising (TV, social media, print ads)
- Sales promotions (discounts, coupons, special offers)
- Public relations and sponsorships
- Personal selling and direct marketing
5.) People (Who Delivers the Service?)
In service-based industries, People (employees, customer service, sales representatives) play a crucial role in delivering value to customers.
Key Considerations:
- Customer service quality
- Employee training and motivation
- Brand reputation and customer experience
6.) Process (How is the Service Delivered?)
Process refers to the procedures and systems that ensure smooth product or service delivery. It affects customer satisfaction and efficiency.
Key Considerations:
- Service delivery process
- Customer interaction and experience
- Technology and automation
7.) Physical Evidence (What Customers See?)
Physical Evidence refers to tangible elements that enhance customer trust and experience, especially for services.
Key Considerations:
- Store layout, ambiance, and cleanliness
- Packaging and branding elements
- Online presence and website design