Hello Students. Are you Searching for Class 12 Business Studies NCERT Solutions of Chapter 11? If yes then you are in the right place. Here we have provided you with the Question and Answers of Chapter 11: Marketing. These solutions are written by expert teachers and are so accurate to rely on. These solutions can eliminate any lingering doubts you may have regarding the concepts.
NCERT Solutions for Class 12 Business Studies can be a great tool for the students who have taken Business Studies stream for higher studies. These NCERT Class 12 Business Studies solutions are written by expert teachers and faculties to make your practice and revision easier. On this page, we have provided you with the complete solutions of Chapter 11: Marketing.
NCERT Solutions for Class 12 Business Studies Chapter 11
Very Short Answer Questions
Q1) State any two advantages of branding to marketers of goods and services?
- It enables a firm in distinguishing their product from the competitor firm.
- A product when is provided branding will make it known among customers, it will attract new business. Branding makes advertising of the product easier.
Q2) How does branding help in differential pricing?
Answer) Brand name helps in creating an image among the consumers about the product quality. It helps customers in differentiating products of different firms. Marketers can charge different prices and having a good brand image the organisation can charge premium prices.
Q3) What is the societal concept of marketing?
Answer) Societal concept of marketing is the concept where needs of the market are identified by the organisation along with target customers. It helps in delivering the products and services efficiently. The businesses should meet the long-term requirements of the consumer and look after their wellbeing by their products.
Q4) List the characteristics of convenience products.
Answer) Products that can be bought immediately on a frequent basis and with minimum effort are referred to as convenience products. Following are the characteristics of convenience products:
- Products are easily available and there is minimum effort and time is required. Also, products are located at convenient places.
- These products are frequently consumed and have a ongoing demand. Essential commodities are classified as convenience products.
- The convenience goods are available in low price and in units of small products.
- These products have high competition and require a good amount of advertising.
Q5) Enlist the advantages of packaging of consumer products.
Answer) Packaging is the technique of designing container for a product. It has the following advantages:
- It enables differentiation and identification of a product from other products.
- It acts as a promotional tool. Use of colours, pictures, symbols in packaging helps in attracting the customers.
- Appropriate packaging contributes to the convenience in handling the product.
- It helps in protecting the quality of the product from any kind of damage. It helps in avoiding any kind of spoilage, breakage, etc. particularly at the time of storage and transportation.
Q6) What are the limitations of advertising as a promotional tool? Enlist.
Answer) The following are the limitations of advertising as a promotional tool.
- It lacks personal form of communication and thereby is less forceful.
- Evaluation regarding the effectiveness of the advertisement is very difficult to conduct.
- Advertisements come in standardised form and cannot be moulded as per the requirements of different consumer groups.
- Effectiveness of advertising is low as there can be numerous advertisement.
Q7) List five shopping products purchased by you or your family during the last few months.
Answer) Shopping products purchased are the following:
Short Answer Questions
Q1) What is marketing? What functions does it perform in the process of exchange of goods and services? Explain.
Answer) Marketing is the process where there is interaction of buyers and sellers for the purchase of goods and services. Marketing was having different approaches sometimes involving pre and post production processes. Marketing performs the following functions in exchange of goods and services:
- Designing of the product
- Support services
Q2) Distinguish between the product concept and production concept of marketing.
|Basis of Comparison||Product Concept||Production Concept|
|Belief||It believes that consumers favoured quality products and profit can be increased by increasing the product quality.||It believed that consumers will be favouring products that are readily available and are affordable. Therefore, profits can be maximised by increasing the production volume.|
|Focus of the business||The main focus areas were on improving product quality and addition of new features to the product.||The primary focus was on improving the production quantity and also reducing the production cost.|
|Methodology||Product quality and improvement of features was the primary emphasis.||Production efficiency was the primary point of emphasis.|
Q3) Product is a bundle of utilities? Do you agree? Comment.
Answer) When a customer decides to buy a product, his/her main focus lies on the utility which he/she receives while consuming it. A customer seeks different types of satisfaction from the product. Benefits derived from a product can be of three types- functional benefits, psychological benefits and social benefits. For instance, when a consumer purchases a car, it provides him functional utility as a means of transport. Besides, he also receives a psychological benefit in the form of pride and self-esteem that he has bought a car. Along with it comes the social benefit in the form of acceptance by the peers. Thus, a product is said to be a bundle of utilities and a buyer while buying a product values all such kinds of utilities.
Q4) What are industrial products? How are they different from consumer products? Explain.
Answer) Industrial products refer to those products that are used as inputs for the production of other goods. Such goods are not meant for final consumption rather they are used as raw material and inputs by the manufacturers for the production of consumer goods. For example, machines, tools etc. are industrial products. As against this, consumer products refer to those products that are used by the ultimate customers for their personal consumption purposes. For example, toothpaste, edible oil, furniture, etc. are consumer goods. The following points highlight the difference between industrial products and consumer products.
|Basis of Comparison||Industrial Products||Consumer Products|
|Number of Customers||The number of customers is limited.||The number of customers is higher.|
|Channel of Distribution||Such products require shorter channels of distribution such as direct selling or one level channel.||These products require both short and long distribution channels, depending upon product type, before reaching the end user.|
|Location||It remain concentrated only in those areas where the industries producing these goods are located.||These products are easily available through local retailers.|
|Demand||Its demand is based on consumer product demand.||It set the requirement for the industrial products|
|Role of Technical Features in Decision Making||Important role of technical features||Technical features do not have a role in decision making as consumer products do not have technical complexity.|
Q5) Distinguish between convenience product and shopping product.
|Basis of Comparison||Convenience Product||Shopping Product|
|Demand||It have a continuous and frequent demand.||It have a relatively less frequent demand.|
|Nature of Products||Essential commodities come under the category of convenience goods.||Generally, such goods are durable in nature|
|Unit of Purchase and Price||These products are available in small units and have low unit price.||These products are available in bigger units with high prices for unit|
|Nature of Purchase||These products are bought impulsively and without any time and effort||Consumer spend considerable time on purchasing these products|
|Example||Ice-creams, Stationary items,||Car, Jewellery|
Q6) Describe the functions of labelling in the marketing of products.
Answer) In the marketing process, labelling plays an important role in packaging of the product. Labelling basically provides the information about the product in the form of a tag (in cases of local unbranded products such as rice, wheat, etc.) or graphics (such as a lady applying cream on face for a face-cream).
- It provides a small description about the product where it mentions the application, warnings, directions of use etc.
- It helps to identify the product easily. It helps consumers to differentiate between products.
- It helps in easy classification into different categories of the same product.
- It helps the businesses to promote the product. Attractive labelling is a great way for promoting any product.
- It provides the necessary information as mandated by law regarding the product.
Q7) Discuss the role of intermediaries in the distribution of consumer non-durable products.
Answer) Intermediaries play an important role in the distribution of consumer non-durables. They facilitate the transfer of goods from the place of production to the place where they are consumed.
The following are the different functions performed by the intermediaries in case of non-durables:
- Arrangement: An intermediary receives the supply of goods from various sources. He then sorts these goods into homogeneous groups based on their characteristics such as size, quality, etc.
- Collection: An intermediary maintains large stock of the goods so as to ensure easy flow of supply. For instance, the electronic goods seller maintains large stock of each type of the electronic item.
- Allocation and Packing: This function includes breaking the larger stock into smaller units. For instance, each electronic item as well as their spare parts are packed separately.
- Building Variety: An intermediary acquires various goods from different sources and assembles them at a single place. Thus, it maintains a variety of goods. He procures the products and then sells them in different combinations as desired by the consumers. For instance, a television and a video player are preferred together by most of the people. Thus, the retail can sell a combination of both.
- Promotion of Product: They assist in the promotion activities undertaken by the manufacturers. For example, the manufacturers use advertising for the promotion of their product. The intermediaries can aid this process by putting banners and displays. For example, an electronic goods retailer puts up banners for various products highlighting their features.
- Mediation: Middle men perform the function of setting a deal that can satisfy both the producers and the consumers. They negotiate the price, quality, quantity, etc. for efficient transfer of ownership so as to satisfy the need of both the parties.
- Bearing Risk: Intermediaries acquire goods from the producers and keep them in their possession till the final sale. In the process they bear the risk of fluctuations in demand, price, spoilage, etc. For example, suppose a retailer acquires large quantities of air conditioners. However, after a few months winter sets in and the demand for air conditioners falls. Thus, the stock remains unsold and retailer would suffer a loss.
Q8) Explain briefly the components of physical distribution.
Answer) The movement of products from place of production to place of consumption is called physical distribution. The components of a physical distribution are:
- Processing of Order: Processing of order comprises of a number of steps such as placement of order, transmission of the order by the intermediaries to the manufacturer, maintenance of inventory as per the requirement, delivery of goods, etc. As all such processes take time, a physical distribution system should be such that it should ensure speedy and proper order processing. Generally, there exists a direct relationship between speed and accuracy of order processing and customer satisfaction. Fast and accurate order processing results in greater consumer satisfaction.
- Transportation of Products: Transportation of products refers to the physical movement of goods from the place where they are manufactured to the place where they are consumed. To make the goods physically available to the consumers they must be transported from the place of production to the place of consumption.
- Warehousing: Warehousing refers to the process of storing the produced goods before the final act of sale. If a company has a larger number of warehouses, it will be able to readily provide the goods on time at different locations. However, maintaining warehouses involves its own cost. Thus, a company must weigh the relative benefits and costs associated with warehousing and maintain a balance between the two as per the requirement.
- Maintenance of Inventory: The firms maintain inventory so as to ensure timely supply of products. Similar to warehousing, maintenance of inventory also shares a positive relation with customer service. However, maintenance of inventory involves a cost as a huge amount of capital remains tied up in the stock unless it is sold. Thus, the firms must strike a balance between customer service and cost.
Q9) Define advertising. What are its main features? Explain.
Answer) Advertising is a technique used for promotion of a product. Through advertising the companies attract customers towards their product and induce them to purchase it. Some of the common modes of advertising are newspapers, magazines, television, etc. The following are the important features of advertising.
- Advertising is a paid form of promoting products or services. The sponsor bears the cost of advertising.
- It is an impersonal mode of communication. It involves no face to face communication between advertiser and customer. It is devoid of personal touch.
- There are some sponsors who like to design an advertisement and also bear the costs that are involved.
Q10) Discuss the role of ‘sales promotion’ as an element of promotion mix.
Answer) Sales promotion refers to the incentives that are offered to the buyers so as to encourage them to purchase the product. It included activities such as offering discounts, gifts, free samples, etc. Such activities supplement other promotional activities undertaken by the company such as advertising and direct selling. They increasingly attract the customers and induce them to immediately purchase the product. Such activities are especially useful at the time of launch of a new product. They bring an initial boost to sales. For example, discounts are given in the form of offering the product at a lower price than the listed price. Free gifts are offered in the form of quantity gifts (such as 20% extra or buy 2, get 1 free). Free samples are provided in the form of small packets when launching a new brand. Such incentives are opted by the companies to attract more customers and boost its sales.
As marketing manager of a big hotel located at an important tourist destination, what societal concerns would be faced by you and what steps would you plan to take care of these concerns? Discuss.
Answer) The marketing manager will face these societal concerns:
- The activities that are carried out by the businesses should not cause environmental pollution.
- The facilities offered in the hotel should be pocket friendly.
For resolving these concerns, the manager can take the following steps:
- For solving the pollution issue, the manager can check that wastes from hotel are managed in a proper way. Wastes should be disposed of as per its characteristics such as dry and wet waste.
- The prices for the items that are sold inside the hotel premises must not be more than the maximum retail price of the item.
Q12) What information is generally placed on the package of a food product. Design a label for one of the food products of your choice.
Answer) The most common information provided in food packages are:
- Product name
- Manufacturer name and address of plant
- Logo of the product
- Ingredients of the products
- Directions of use/ How to prepare
- Product features
- Caution (if needed to be taken)
- Customer care or grievance cell number
Long Answer Questions
Q1) What is marketing concept? How does it help in the effective marketing of goods and services?
Answer) Marketing concept of marketing management lays emphasis on customer satisfaction. It believes that customer satisfaction plays a vital role in the success of any organisation. In the long run, any organisation can survive and maximise profits only if it identifies customer needs and effectively works towards fulfilling them. This concept identifies the fact that people purchase a product for satisfaction of a specific need (such as functional need, social need, psychological need, etc.). Any organisation must aim towards identifying such needs and satisfy them in an effective manner. That is, it must take all decisions based on needs and requirements of the customers. An organisation works and sells not according to what it has, but according to what the customer wants. The marketing concept is based on the following points.
- The efforts of all marketing activities must be directed towards a particular segment of market or group of customers.
- The organisations must clearly identify the needs and requirements of the target customer.
- It should develop such products and services that satisfy the needs of the customers.
- It should not just independently work towards customer satisfaction, but should also aim at satisfying the customers better than its competitors.
- The crux of all efforts of marketing is profit.
Marketing concept helps in effective marketing of goods and services. If all marketing activities are directed towards customer satisfaction, marketing of goods and services would take place in an effective and smooth manner. If decisions of production, pricing, designing, etc. are based on the needs of the customers, selling would not be a problem. For example, if customers want dual sim mobile phones, high pixel camera, GPS, etc. the company produces mobile phones with such features. Similarly, other decisions of the company such as pricing, branding, etc. are also based on the requirements of the customers.
Q2) What is marketing mix? What are its main elements? Explain.
Answer) Marketing mix is a set of marketing tools that company uses to promote their product or brand in the market. Marketing tools are factors that determine the outcome of the business. Marketing mix consists of 4 P’s which are product, price, place and promotion. The following are described in detail.
- Product: A product is any good or service that offers the customer value and satisfies their needs. The product must satisfy the requirements of the customer then only it will be successful. It should also contain proper sales support and services.
- Price: Price is the second factor of marketing mix. It refers to the money customers pay to obtain any service or goods. Price is very essential factor for consumers. It affects the demand of a product. With rise in price the demand reduces and vice versa. The business organisations should analyse the various factors that will be suitable to determine the price of the product. The pricing should be determined by taking into consideration target customers, the pricing policy followed by competitors. Price fixed for a product must make the customer feel that it is adequate for the product.
- Place: In addition to product and pricing, a firm must also decide on the place where it will be making the product available to the customers. A firm must find the appropriate distributors and dealers for the goods. Other important decisions that can be taken are location of warehousing, inventory storage, transportation of goods.
- Promotion: Promotion refers to those activities where consumers are made aware of the product availability utilising various strategies such as sales, advertising, banners, online promotion etc. The medium of promotion should be carefully decided by the organisation in order to derive maximum reach.
Q3) How does branding help in creating product differentiation? Does it help in marketing of goods and services?
Answer) Branding is the process of giving a totally unique name, symbol, logo for the product so that it is easy to identify by the customer. By using branding firms bring about differentiation (based on name, symbol, logo) in their product from other similar products available in the market.
Branding in addition to helping in product differentiation also helps in marketing of goods and services. Following points highlight the importance of branding towards marketing of goods and services.
- Branding helps a firm to advertise their product. Unless branding is not done a product cannot be advertised. Advertisement for a generic product can only create awareness about the category of product as a whole. It cannot attract customers towards a specific product. On the other hand, advertisement for a branded product helps in highlighting the specific qualities and features of the product.
- Good branding helps in creating a loyalty of the consumers towards the product. The firms can benefit from this loyalty and charge a different price for their product from that of their competitors. For example, if consumers become habitual of using a particular product they would not mind paying a slightly higher price for it.
- Good branding helps in establishing a base for the introduction of a new product. If a new product is launched under an established and reputed brand then, it gets an initial boost and benefits from the brand name. Nowadays, many companies such as Samsung, Cadbury, etc. have multiple products under a single brand name.
Q4) What are the factors affecting the determination of the price of a product or service? Explain
Answer) Price refers to the money paid by the customers to obtain a product and this price affects its demand. Thereby, pricing plays an important role in the marketing of goods. The price charged by a firm for its product affects it revenue and profits as well. In addition to this, pricing also acts as a competitive tool. Firms producing similar substitutable products compete with each other on the basis of price. Thus, the firms must pay due emphasis on proper pricing of their products. The marketers must analyse properly the various factors that determine the price and decide a suitable price for the product.
The following are the factors that affect the determination of the price of a product or a service:
- Product cost plays an important role in determining the final price of the product. The product cost will involve cost related to production, distribution and the sale of the product. The type of cost associated with a product can be either fixed, variable or semi variable in nature. Fixed costs are those costs that are one-time cost and do not change with the output while variable costs vary with the production and these include labour cost, raw material etc. Semi variable costs vary with the level of output but the proportion is not the same. Therefore, before determining the price of a product a firm has to make a note of all these costs so that profit can be obtained by selling the product.
- To determine the pricing of a product a firm has to also check the demand of the product in the market. To determine the demand the concept of elasticity of demand is important. It refers to the proportion of change in the demand of an item due to corresponding change in the price of the product. The demand can be said as elastic if due to small change in price the demand gets changed by a large margin. In such a situation a firm is unable to charge high price as it will result in the reduction in the demand for the product. If the demand is inelastic, the change in price will not affect the demand that much.
Q5) Explain the major activities involved in the physical distribution of products.
Answer) The movement of products from place of production to place of consumption is called physical distribution. The major activities involved in physical distribution of products are:
- Order processing: Order processing consists of steps such as order placement, order transmission, inventory maintenance, goods delivery etc. As such processes are time consuming, a physical distribution system must ensure proper order processing. Customer satisfaction can be achieved by fast and accurate order processing.
- Product Transportation: Product transportation is the physical movement of goods from the production unit to the consumers.
- Warehousing: It is the process of storing of the goods obtained from manufacturers before being introduced for sale to the customers. Warehouses provide ready stock of goods that can be made available in the market.
- Inventory Maintenance: Inventory is maintained to provide timely supply of goods; it promotes customer satisfaction. Inventory maintenance is cost intensive therefore a firm must find the balance between inventory and customer satisfaction.
Q6) Expenditure on advertising is a social waste’ Do you agree? Discuss
Answer) Advertising expenditure is considered as social waste due to multiple factors such as it adds to cost of the production of the company, and also increases customer requirements for more such products. Following points will help in determining whether advertising is a social waste or not.
- Higher Cost: Advertisement expenses add to the cost of the company. The companies in turn, pass this increased cost to the consumers in the form of higher prices. However, the supporters of advertisement argue that advertisement in fact brings down the per unit cost of production. This is because through advertisement greater number of customers can be attracted towards the product which in turn implies an increase in the demand for the product. In response to the increased demand, the manufacturers increase production. With increased production the per unit cost of production comes down. Thus, it can be said, that even though advertisement expenses add to the cost, this increase in cost can be compensated through fall in the per unit cost due to increased demand and production.
- Weakens Social Values: One of the major criticisms to advertising is that it weakens social values and instead promotes materialism in the society. Advertisement attracts customers towards new products and induces them to purchase it. With increased knowledge about the availability of new products, the customers feel dissatisfied about what they currently have. In the process, often they end up buying what they don’t even require. However, such a process of discontentment and purchase of new products is never ending and materialism increases.
- Creates Confusion: It is argued that a large number of advertisements on similar products confuse the customers. For example, advertisements of different hair oil claim for healthy and long hair by the use of their product. With numerous advertisements the consumer gets confused as to the product of which of the brand should be purchased. .
- Promotes Inferior Goods: It is argued that products of both superior quality as well as inferior quality are advertised. Through advertisement, demand for inferior goods can also be induced. However, such a claim is only partially true. This is because quality is a relative concept. What is inferior to one consumer can be superior to another. Advertisements promote all kinds of products and the consumer purchases them if it suits their requirements.
- Objectionable Advertisements: It is said that often advertisement undermine social values and are in bad taste. Sometimes the language, images and the content of the advertisement may not appeal to the society at large. For example, women in men cantered products (such as, shaving creams, deodorants, etc.) are often criticised.
Q7) Distinguish between advertising and personal selling.
|Basis of Comparison||Advertising||Personal Selling|
|Personal v/s Impersonal||It is an impersonal form of communication where the seller communicates with customers through various medium such as television, newspapers, etc.||It is a personal form of communication where the seller directly interacts with the potential customers.|
|Reach||Advertising has a broader reach as the advertisement reaches a large number people simultaneously.||It has a narrower reach as only a few people can be contacted directly.|
|Flexibility||It is inflexible as advertisements are standardised and cannot be adjusted as per the requirements of different customers.||It is flexible as the seller can adjust the message as per the requirements of different customers.|
|Target Group||It is more suitable where marketing is to be done to large number of consumers. For example, advertising is suitable if, marketing is to be done for ultimate customers.||It is more suitable when marketing is to be done for a few selected consumers. For example, if marketing is to be done for intermediaries and retailers, personal selling is more useful.|
|Cost Involved||As advertising reaches the masses simultaneously, the cost per person is low.||Personal selling is relatively costly.|
|Time Involved||Advertising reaches a large number of people simultaneously. Thus, it can cover the entire market in a short period of time.||As through personal selling only a few people can be contacted, it takes a lot of time and effort to cover the entire market.|
|Customer Feedback||Through advertising, feedbacks and reactions of the customers cannot be judged.||As the seller directly contacts the customers, he get feedback from the customers and judge their reactions|
|Medium of Communication||It involves communication through mass media such as television, newspapers, radio, etc.||It personal communication through sales persons.|
|Objective||The basic objective of advertising is to create interest of the customers towards the product.||The basic objective of personal selling is to create awareness about the product and induce decision making.|
Q8) Explain the factors determining choice of channels of distribution.
Answer) One of the important decisions of marketing involves the choice regarding which channel of distribution to opt for. The following factors determine the choice of channels.
1. Product Type
The choice of channel of distribution is based on the type of the product that is produced. It is important to check whether the product is perishable or non-perishable, whether it is an industrial or a consumer product, whether its unit value is high or low and also, the degree of complexity of the product. For instance, if a good is perishable then short channels should be used rather than the long ones. Similarly, if a product has a low unit value then longer channel are preferred. In a similar manner, consumer products are distributed through long channels while industrial products are distributed through short channels.
2. Characteristics of the Company
The two important characteristics of a company that affect the choice of channel are its financial strength and the degree of control that the company wishes to hold on the intermediaries. Shorter channels require greater funds than longer channels and also offer greater control over the members of the channel (intermediaries). Thus, companies that are financially strong or wish to command greater control over the channel of distribution opt for shorter channels of distribution.
3. Competitive Factors
The degree of competition and the channels opted by other competitors affect the choice of distribution channel. Depending on its policies a company can adopt a similar channel as adopted by its competitors or opt for a different channel. For example, if competitors of a company opt for sale through retail store, it may also do the same or it can opt a different channel such as direct selling.
4. Environmental Factors
Environmental factors such as economic constraints and legal policies play an important role in the choice of channel of distribution. For example, requirement of complex legal formalities at each step of distribution induces the companies to opt for shorter channels.
5. Market Factors
Various other factors such as size of the market, geographical concentration of buyers, quantity demanded, etc. also affect the choice between the channels. For instance, if potential buyers are concentrated in a small geographical area then, shorter channels are used. As against this, if the buyers are dispersed in a larger area then longer channels of distribution may be used.
That’s it. These were the solutions of NCERT Class 12 Business Studies Chapter 11 – Marketing. Our team hopes that you have found these solutions helpful for you. If you have any doubt related to this chapter then feel free to comment your doubts below. Our team will try their best to help you with your doubts.