Chapter 8: Marketing

Select the correct option and rewrite the statement.

1. The term market is derived from the ____________ word 'Mercatus'

French
Latin
Italian

Solution: The term market is derived from the Latin word 'mercatus'.

2. In the ____________ concept of market, the emphasis is given on 'buying and selling of goods or services'.

Place
Exchange
Customer

Solution: In the Exchange concept of market, the emphasis is given on 'buying and selling of goods or services'.

3. Perishable goods such as vegetables, fruits, milk products, etc. are sold in Market

Very Short Period
Short Period
Long Period

Solution: Perishable goods such as vegetables, fruits, milk products, etc. are sold in the Market - Very Short Period.

4. The retail market is the market where the retailer sells goods directly to the____________in small quantities.

Producer
Wholesaler
Consumer

Solution: The retail market is the market where the retailer sells goods directly to the Consumer in small quantities.

Match the pair

Question Table:

Group A	Group B
Market	Single Seller
Registered brands	Stock Market
Monopoly	Distinct Name
Branding	Mercatus
Digital Marketing	Single Buyer
	ISI
	Trademark
	Use of traditional media
	Multiple sellers
	Use of digital media

Solution:

Group A	Group B
Market	Mercatus
Registered brands	Trademark
Monopoly	Single seller
Branding	Distinct Name
Digital Marketing	Use of digital media

Write a word/term/phrase for the following sentence.

1. The market for the commodities which are produced in one country and sold in another countries.

Solution: International Market

2. Type of market where durable commodities that are generally non-perishable in nature are sold.

Solution: Long-period market

3. The market where goods are sold to the ultimate consumers or the users of the product.

Solution: Retail Market

4. Two sellers, selling either a homogeneous product or a differentiated product.

Solution: Duopoly

5. Giving of distinct name to one's product.

Solution: Branding

State whether the following statement is true or false.

1. The term market is derived from the Latin word 'Mercatus'.

Solution: True

2. The market may be defined as aggregate demand by potential buyers for a product or service.

Solution: True

3. The market for the commodities which are produced in one country and sold in other countries is known as the national market.

Solution: False

4. In the wholesale market, sellers are known as retailers and buyers are known as a wholesaler.

Solution: False

5. Regulated Market operates according to forces of demand and supply.

Solution: False

Find the odd one.

1. Primary Market, Secondary Market, Retail Market, Terminal Market

Solution: Retail Market

2. Stock Exchange, Foreign Exchange, Bullion Market, Manufactured Goods Market

Solution: Manufactured Goods Market

3. Price, People, Promotion, Product

Solution: People (The others are part of the 4Ps, People is part of 7Ps)

4. People, Promotion, Physical Evidence, Process

Solution: Promotion (The others are the additional 3Ps of Service Marketing)

Complete the sentence.

1. ____________ is the place where transactions of buying and selling of goods and services take place in exchange for money or money's worth.

Solution: Market

2. ____________ refers to a market situation when there is a single buyer of a commodity or service.

Solution: Monopoly

3. ____________ is a slip which is found on the product and provides all the information regarding the product and its producer.

Solution: Label

Select the correct option and complete the table.

(Mercatus, Industrial goods, Oligopoly, E. Jerome McCarthy, Booms & Bitner)

Group 'A'	Group 'B'
Commodity Market	(1) __________________
(2) __________________	A few sellers
(3) __________________	To trade merchandise
4Ps	(4) __________________
(5) __________________	3Ps

Solution:

Group 'A'	Group 'B'
A) Commodity Market	1) Industrial Goods
B) Oligopoly	2) A few sellers
C) Mercatus	3) To trade Merchandise
D) 4Ps	4) E. Jerome McCarthy
E) Booms & Bitner	5) 3Ps

Answer in one sentence.

1. What do you mean by 'Local Market'?

Solution: The market for the commodities which are sold within local geographical limits of a region is known as a local market.

2. What do you mean by 'Regulated Market'?

Solution: The regulated market refers to the markets regulated by statutory provisions of the country. For example, Commodity Exchanges, Stock Exchanges, Foreign Exchanges.

3. Define Market.

Solution: In simple words, a market is the place where two or more parties are involved in buying and selling. These two parties involved in the transactions are called buyers and sellers.

4. What do you mean by standardization?

Solution: Standardization means to determine standards related to process, size, quality, design, weight, color, etc. of the product. It helps in ensuring uniformity in the quality of the product.

5. What do you mean by Branding?

Solution: Branding is a process of giving special identity to a product through a unique brand name to differentiate it from competitor's products.

Correct the underlined word and rewrite the following sentence.

1. Commodity Market refers to the market for borrowing and lending long term capital required by the business.

Solution: Capital market refers to the market for borrowing and lending long term capital required by the business.

2. In a duopoly, there is a single seller.

Solution: In Monopoly there is a single seller.

3. Pricing bridges the time gap between the production and sale of goods.

Solution: Warehousing bridges the time gap between the production and sale of goods.

4. Branding is the process of classification of products according to similar characteristics and/ or quality.

Solution: Grading is the process of classification of products according to similar characteristics and/ or quality.

5. Grading helps in avoiding breakage, damage and destruction of the product.

Solution: Packaging helps in avoiding breakage, damage and destruction of the product.

Arrange in proper order

1. Local market, international market, national market.

Solution: Local market, national market, international market.

2. Grading, Market Planning, Distribution.

Solution: Market Planning, Grading, Distribution.

Explain the following term/concept.

1. Market

Solution: The term market is derived from the Latin word 'Mercatus', which means 'to trade', 'to trade merchandise' or 'a place where the business is transacted'. In simple words, market is the place where two or more parties are involved in buying and selling. These two parties involved in the transactions are called buyers and sellers.

2. Place Concept of Market

Solution: The term market is commonly understood as the place where the transaction of buying and selling of goods and services takes place in exchange for money or money's worth. It is the place where buyers, sellers, and other intermediaries come together and exchange goods or services. In the age of information technology, the term 'market' has a wider meaning than just a place.

3. Commodity Concept of Market

Solution: In the commodity concept of the market, the emphasis is given on 'buying and selling of goods or services'. In this concept, the process of buying and selling of goods or services is important and not the place of exchange.

4. Digital Concept of Market

Solution: Digital Market can be defined as a "Market which uses Information Technology for buying and selling of the products or services and facilitate communication of quality, features, price, and terms of exchange among them". E-Commerce portals and mobile apps are examples.

5. Product

Solution: Product refers to the goods or services that are offered to the customers for sale and are capable of satisfying the need of the customer. The product can be intangible or tangible, as it can be in the form of services or goods.

6. Price

Solution: The price of the product is basically the amount that a customer pays for the product. Price plays an important role in creating demand for the product. The cost of the product and willingness of the customer to pay for the product plays an important role in pricing.

7. Promotion

Solution: Promotion is a tool of marketing communication that helps to publicize the product to the customer. It helps to convey product features to the potential buyer and inducing them to buy it. It includes advertising, direct marketing, sales promotion, etc.

8. Marketing Mix

Solution: Marketing Mix is the combination of different marketing variables that the firm blends and controls to achieve the desired result from the target market. It involves the 4Ps (Product, Price, Place, Promotion) and for services, the additional 3Ps (People, Process, Physical Environment).

9. Packaging

Solution: Packaging means designing the package for the product. It helps to avoid breakage, damage, and destruction of the product. Packing material includes bottles, containers, plastic bags, etc.

10. Labeling

Solution: A label is a slip which is found on the product and provides all the information regarding the product and its producer. The process of attaching this slip is called labeling.

Study the following case/situation and express your opinion

Case 1: Mr. X purchases goods from the nearest shop. Mr. Y purchases mobiles from Tokyo. Mr. Z of Nandurbar purchases electronic goods from Delhi.

From which type of market does Mr.X purchase?
Name the type of market from where Mr.Y deals?
State the type of market from where Mr.Z purchases goods?

Solution:

Mr. X purchases goods from the local market.
Mr. Y deals in the International market (foreign market).
Mr. Z purchases goods from the National market.

Case 2: Mr. X deals in import and export business so he needs different foreign currencies. For the expansion of his business, he borrows money from the bank. He invests his funds in the equity shares.

Name the market from where does Mr.X borrow money?
Name the market where does Mr. X invests his funds?
Which type of currency is required for the international market?

Solution:

Mr. X borrows money from the Capital market.
Mr. X invests his funds in the Regulated market (Stock Exchange).
The different Foreign currency is required by Mr. X for the international market.

Answer in Brief

1. Explain in detail the significance of marketing to society.

Solution:

The significance of marketing to society is explained as follows:

1) Increase in Standard of Living:

The prime objective of marketing is to provide goods and services to customers to satisfy their needs. Paul Mazur defined marketing as, "The delivery of standard of living to the society". Marketing helps to identify the needs of the customers and take an initiative to provide quality goods at cheaper prices.

2) Provides Employment:

Modern marketing covers almost all functions of an organization such as buying, selling, financing, transport, warehousing, etc. To run this system there is a need for people. Thus, marketing gives job opportunities.

3) Decreases Distribution Costs:

Effective utilization of channels of distribution can help in reducing the cost prices of the products and services. The reduction of cost will help to increase the potential consumers for the products or services.

4) Consumer Awareness:

Marketing helps society by informing and educating consumers. Marketing helps consumers to know about new products and services available in the market and its usefulness.

5) Increase in National Income:

Every economy revolves around marketing, production, and finance to the industry. The scientifically organized marketing activities help in the economic development of the country.

6) Managing Consumer Expectations:

Marketing research helps organizations to understand the needs of the consumers. It helps in developing the products which fulfill customer's expectations.

2. Explain the 4Ps of the product marketing mix.

Solution:

1) Product:

Product refers to the goods or services that are offered to the customers for sale and are capable of satisfying the need of the customer. The product can be intangible or tangible.

2) Price:

The price of the product is basically the amount that a customer pays for the product. Price plays an important role in creating demand for the product.

3) Place:

The place is also known as a distribution channel. Business needs to distribute the product in a place that is accessible to potential buyers.

4) Promotion:

Promotion is an important element of marketing as it creates brand recognition and sales. It helps to convey product features to the potential buyer and inducing them to buy it.

3. Explain 3Ps in the marketing of services.

Solution:

1) People:

People comprise of all the human beings that play an active role in offering the product or service to the customer. The right people in the right place add value to the business.

2) Process:

Process refers to the steps involved in delivering products and services to the customer. Processes are important to deliver a quality service.

3) Physical Environment:

Physical Environment refers to the marketing environment wherein the interaction between customer and firm takes place. In the service market, physical evidence is important to ensure that the service is successfully delivered (e.g., location, interior design, branding).

4. Explain types of the market on the basis of the area covered.

Solution:

a) Local Market:

The market for the commodities which are sold within local geographical limits of a region is known as a local market.

b) National Market:

The market for the commodities which are sold within the country is known as the national market.

c) International Market:

The market for the commodities which are produced in one country and sold in other countries is known as the international market.

5. Explain types of the market on the basis of time.

Solution:

a) Very Short Period Market:

This type of market has a very short time existence viz., for a few hours or for a day. Perishable goods such as vegetables, fruits, milk products, etc. are sold.

b) Short Period Market:

This type of market has existed for a short period viz. weekly markets, festival market, etc. Perishable or semi-durable goods are sold.

c) Long Period Market:

This type of market has existed for long period. In this type of market durable commodities that are generally non-perishable in nature are sold.

Justify the following statement.

1. Marketing is significant to consumers.

Solution:

Promotes Product Awareness: Helps consumers know about different products and services available.
Provides Quality Products: Competition creates moral pressure to provide quality goods.
Provides Variety of Products: Creates options for consumers.
Helps in Selection: Helps the consumer to choose the best products from different options.
Consumer Satisfaction: Leads to satisfaction through honest advertising and quality assurance.
Regular supply of goods: Maintains balance between demand and supply, resulting in stable prices.

2. Promotion plays an important role in marketing.

Solution:

Promotion informs and persuades potential buyers to buy products.
It increases brand awareness and recognition in the market.
Promotional strategies depend on budget and target market.
It helps attract consumers, increase sales, and consequently increase profits.
It creates a brand image and helps build a loyal customer base.

3. The market can be classified on the basis of competition.

Solution:

(1) Perfect market: Large numbers of buyers and sellers selling homogeneous products at a single uniform price.

(2) Imperfect market: Characterized by market imperfections. Sub-divided into:

Monopoly: Single seller selling a unique product.
Duopoly: Two sellers dominating the market.
Oligopoly: Few sellers selling homogeneous or differentiated products.
Monopsony: Single buyer controlling the market.

4. Marketing helps in increasing consumer awareness.

Solution:

Marketing activities promote products and services, making consumers aware of features and usefulness.
It educates consumers, helping them make informed decisions.
Consumers can compare products based on price, quality, and availability.
It informs consumers about major changes like mergers or new product launches.

5. There is a need for branding to get recognition among consumers.

Solution:

Branding gives a distinctive identity to a product (e.g., name, symbol).
Effective brands increase business value and ensure customer loyalty.
Branding facilitates advertising and price control.
It creates trust and a professional image in the market.

Attempt the following.

1. Give classification of the market in detail on the basis of 'Volume of Transaction'

Solution:

a) Wholesale Market:

Buying and selling goods in large quantities at cheaper prices. Goods are sold to retailers. Sellers are wholesalers and buyers are retailers.

b) Retail Market:

The market where the retailer sells goods directly to the consumer in small quantities.

2. Give classification of the market on the basis of 'Time'

Solution:

a) Very Short Period Market:

Exists for a few hours/day. Selling perishable goods (vegetables, milk).

b) Short Period Market:

Exists for a short period (weekly markets, fairs). Selling perishable or semi-durable goods.

c) Long Period Market:

Exists for a long period. Selling durable commodities.

3. Explain packaging and labeling

Solution:

Packaging: Designing the package to avoid breakage and damage. Includes bottles, containers, etc. It acts as a marketing tool.

Labeling: A slip on the product providing information about the product and producer. It creates the first impression on the consumer.

4. Explain standardization and grading.

Solution:

Standardization: Determining standards related to size, quality, design, etc., ensuring uniformity.

Grading: Classification of products according to similar characteristics (size, shape, quality). Common in agricultural products.

5. Explain the importance of marketing to the firm.

Solution:

Increases Awareness: Creates brand image among consumers.
Increases Sales: Attracts customers, leading to profit generation.
Creates Trust: Builds customer loyalty and reputation.
Basis for Making Decisions: Helps in solving complex business problems (what/how/when to produce).
Source of New Ideas: Feedback helps improve existing products.
Tackling the Competition: Helps create a brand image in a competitive market.

Answer the following.

1. Define Marketing and explain in detail the concepts of marketing.

Solution:

Definition: According to American Marketing Association, "Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large."

Concepts of Marketing:

Place concept: Market as a place where buying and selling happens.
Commodity Concept: Emphasis on the buying and selling process of goods/services, not the place.
Exchange concept: Emphasis on free consent, mutual trust, and voluntary exchange.
Area concept: Related to exchange; buyers and sellers fix prices within a certain area (not necessarily meeting in person).
Demand/Customer concept: Market defined by aggregate demand of potential buyers.
Digital concept: Using IT (E-Commerce, Apps) for buying and selling.

2. Explain different types of markets in detail.

Solution:

1) On the Basis of Area Covered

Local Market: Within local geographical limits.
National Market: Within the country.
International Market: Produced in one country, sold in others.

2) On the Basis of Time

Very Short Period: Few hours/day (Perishable goods).
Short Period: Weekly/festivals (Semi-durable/perishable).
Long Period: Durable commodities.

3) On the Basis of Volume of Transaction

Wholesale Market: Bulk purchase/sale.
Retail Market: Direct sale to consumers in small quantities.

4) On the Basis of Importance

Primary Market: Agricultural/forest products.
Secondary Market: Semi-processed goods (yarn, iron ore).
Terminal Market: Goods sold to ultimate consumers.

5) On the Basis of Nature of Goods

Commodity Market: Consumer and industrial goods.
Capital Markets: Borrowing/lending long term capital.

6) On the Basis of Regulation

Regulated Market: Controlled by statutory provisions (Stock Exchange).
Unregulated/Free Market: Operates on demand and supply.

7) On the Basis of Competition

Perfect Market: Large buyers/sellers, homogeneous products, single price.
Imperfect Market: Monopoly, Oligopoly, etc.

3. Explain in detail the 7Ps of Marketing.

Solution:

Product: Goods/services offered to satisfy customer needs. Can be tangible or intangible.
Price: Amount paid by customer. Determines demand and profitability.
Place: Distribution channel. Making product available to potential buyers.
Promotion: Marketing communication (Advertising, Sales promotion) to persuade buyers.
People: Human beings playing an active role in service delivery (employees).
Process: Steps involved in delivering products/services. Ensures efficiency and quality.
Physical Environment: Tangible elements in service marketing (location, layout, decor) that enhance customer experience.

4. Explain the functions of marketing in detail.

Solution:

Marketing Research: Collecting and analyzing information to identify customer needs.
Buying and Assembling: Collecting raw materials from different sources.
Market Planning: Organizing marketing objectives and strategies.
Product Development: Designing products to suit consumer needs (quality, shape, design).
Standardisation and Grading: Ensuring uniformity and classifying products by quality/size.
Packaging and Labelling: Designing packages for protection and labels for information.
Branding: Giving a special identity/name to the product.
Customer Support Service: Providing after-sales support to gain loyalty.
Pricing of Product: Deciding the price based on cost and utility.
Promotional Channels: Informing consumers through ads, personal selling, etc.
Distribution: Movement of finished goods to consumers.
Transportation: Physical movement creating place utility.
Warehousing: Storing goods to create time utility.

5. Explain the importance of marketing to society and consumers.

Solution:

Importance to Society:

Increase in Standard of Living: Delivering better living standards.
Provides Employment: Jobs in buying, selling, transport, etc.
Decreases Distribution Costs: Makes goods cheaper.
Consumer Awareness: Educates consumers.
Increase in National Income: Boosts economic development.
Managing Consumer Expectations: Fulfills needs through research.

Importance to Consumers:

Promotes Product Awareness: helps in buying decisions.
Provides Quality Products: Moral pressure on businesses.
Provides Variety of Products: More options for consumers.
Helps in Selection: Choosing the best from competitors.
Consumer Satisfaction: Through honest advertising and quality.
Regular supply of goods: Stabilizes prices.

Saturday, October 3, 2020