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Question No: 29 ( Marks: 3 )
Describe the characteristics of early majority customers.
Early Majority. They are very careful people and take time to adopt things. They tend to
collect information about the change or the product, study carefully and then adopt on the
basis of their merits.
Question No: 30 ( Marks: 3 )
Psychological pricing is gaining importance day by day with the changing views of
customers. In your own sense what are the different hypothesis that lead to the
building the process of psychological pricing?
Psychological pricing or price ending is a marketing practice based on the theory that
certain prices have a psychological impact. The retail prices are often expressed as "odd
prices": a little less than a round number, e.g. $19.99 or $2.98. The theory is this drives
demand greater than would be expected if consumers were perfectly rational.
Psychological pricing is one cause of price points. It is a method to show price in less
value figures to customers like if price is 100 then you will not enter into 3 digit price you
just make it round about like 99.90.
Question No: 32 ( Marks: 5 )
List any five characteristics of a good brand name.
A good brand name should:
• Be legally protectable
• Be easy to Pronounce
• Be easy to Remember
• Be easy to Recognize
• Attract Attention
• Suggest product Benefits (e.g.: Easy-Off) or suggest usage
• Suggest the company or product Image
• Distinguish the product's Positioning relative to the competition.
Question No: 29 ( Marks: 3 )
While developing a new product companies can use many sources to generate ideas
for new product. Explain how competitors can be a good external idea source?
Competitors can be an external source of idea generation. For example competitors can
be kept from seeing new product ideas generated by customers. You can get information
and ideas about the customer response to the competitor’s product and you can know
what customer is demanding in this way you can get the idea of new product. Observe
competitors ads and other communications to get clues about their new products.
Competitors sales must be considered while decided whether to develop the product or
Question No: 30 ( Marks: 3 )
Retailing is the dead end of product distribution. Explain it?
Retailers are at the end of distribution chain as they sell to end users in this way they end
the distribution of a product. They directly interact with the end users of the product and
end the distribution process.
Question No: 31 ( Marks: 5 )
Describe product type of all the followings & give logical reasons to support your
· Furniture
· Cars
· Soap
· Mango
· Rice
Furniture = Durable Goods: goods that survive multiple use occasions, often further
subdivided into `white goods'
• (refrigerators and cookers, for example) and `brown goods' (such as furniture, as well as
electrical/electronic devices)
Cars = specialty,
Consumer goods with unique characteristics and brand identification. Customers make
special efforts to buy such products.
Soap = convenience
Low price and mass promotion, widespread distribution in convenient locations.
Mango = perishable. . m not sure about this one
Rice = Commodities: undifferentiated goods (e.g., wheat, gold, sugar)
Question No: 32 ( Marks: 5 )
What types of discounts are given by the company to the distributors and retailers
as trade promotion discounts?
Trade discounts (also called functional discounts) –
These are payments to distribution channel members for performing some function .
Examples of these
functions are warehousing and shelf stocking. Trade discounts are often combined to
include a series of
functions, for example 20/12/5 could indicate a 20% discount for warehousing the product,
an additional
12% discount for shipping the product, and an additional 5% discount for keeping the
shelves stocked.
Trade discounts are most frequent in industries where retailers hold the majority of the
power in the
distribution channel (referred to as channel captains).
Question No: 29 ( Marks: 3 )
Why price war is not beneficial for small companies?
Price was is state of intense competition over the price of product
One competitor reduce the price other will lower its price to match and then a cycle of
price reduction starts. Which can leads of selling of product below the cost.
Normally smaller companies cannot compete and shut down.
Typically the smaller more marginal firms will be unable to compete and will shut down.
The remaining firms absorb the market share of the terminated ones. The main losers
then, are the marginal firms and the People that invested in them.
Question No: 30 ( Marks: 3 )
Explain how Marketers can prolong the lives of many products in the maturity or
decline stages of the PLC? Also how can they move those products back to their
growth stage?
In the decline stage of the marketing product development cycle, owners reduce or stop
marketing efforts and expenses. The plan is to lower the marketing efforts while your
competitors discontinue theirs.
If you keep selling the product while your competitor stops selling, then you can get the
market share which your competitor left.
Question No: 31 ( Marks: 5 )
Describe quantity discounts and its types.
Quantity discounts - These are price reductions given for large purchases. The rationale
behind them is to obtain economies of scale and pass some (or all) of these savings on to the
customer. In some industries, buyer groups and co-ops have formed to take advantage of
these discounts. Generally there are two types:
•Cumulative quantity discounts (also called accumulation discounts). These are price
reductions based on the quantity purchased over a set period of time. The expectation is that
they will impose an implied switching cost and thereby bond the purchaser to the seller.
•Non-cumulative quantity discounts. These are price reductions based on the quantity of
a single order. The expectation is that they will encourage larger orders, thus reducing billing,
order filling, shipping, and sales personal expenses.
Question No: 32 ( Marks: 5 )
The first step in the product development process is generation of ideas. Discuss
what are the internal and external sources of ideas? Why external sources are
considered to be the more important than internal source?
Every new product development starts with idea generation. Idea generation is process to
produce large number of idea are produce. It should be ongoing process.
During idea one should not criticize the ideas of others.
Following are few ways for idea generation
Brainstorming session: In this whole team participate and everyone can give any idea
there will b no criticism on any idea.
Idea can be obtained by basic research and SWOT analysis
Idea can be obtained from customers, Retailer’s & Focus groups
Question No: 41 (Marks: 10)
What is conjoint analysis? Why it is often used by marketers while introducing new
Conjoint Analysis and Reason of Why Marketers Use This While Introducing New
It is a statistical technique hat is originated in mathematical psychology. It is used in
many of the social sciences and applied sciences like marketing, operations research and
product management.
The main objective of conjoint analysis in marketing is to determine what combination of
a limited number of attributes is mostly preferred by the public.
It is often used in testing customer acceptance of a new product designs and assessing the
appeal of advertisements used in product positioning. There are few steps for conducting
conjoint analysis.
The basic steps are:
1. Select feature to be tested.
2. Show these features combination to the potential customers.
3. Input data from a representative sample of potential customers into the statistical
software and select the conjoint analysis procedure; the software will produce the
utility functions for each feature.
4. Incorporate the most preferred features into a new product and advertisement.
It is very useful market analysis as we can determine the customer needs and their
interest their liking and disliking and will lead to success of the product to be launched.
That is why it is mostly used by the marketers while introducing a new product.
Question No: 29 ( Marks: 3 )
Explain the psychology behind a price of Rs9.99 instead of Rs10.00.
The psychology in figures is that how customer perceives these figures if you set price as
10.00 as it is in double digits so customer will think that price is high and if you show
price in odd figures such as 9.99 the customer will perceive it as 9.
Question No: 30 ( Marks: 3 )
Mandatory labeling is still a debatable issue yet in the labeling of product. What
should you say to in favor of mandatory labeling?
Mandatory labeling is the requirement of consumer products to state their ingredients or
Moral purchasing and avoidance of health problems like allergies are two things which are
enabled by labeling. It is mandated in most developed nations, and increasingly in
developing nations, especially for
food products.
Mandatory labeling must be compulsory for eatables and medicines and new invented
products so that user can know the side effects of the usage of the product and also some
instructions that how to use the product.
Question No: 31 ( Marks: 5 )
List any five characteristics of a good brand name.
A good brand name should:
• Be legally protectable
• Be easy to Pronounce
• Be easy to Remember
• Be easy to Recognize
• Attract Attention
• Suggest product Benefits (e.g.: Easy-Off) or suggest usage
• Suggest the company or product Image
• Distinguish the product's Positioning relative to the competition.
Question No: 32 ( Marks: 5 )
Suppose a new detergent has been introduced in the market. List down the stages
after which it will enter in the customer’s buying preference list?
Idea generation
Idea testing or market test
Technical implementation
Question No: 41
( Marks: 5 )
Suppose Nokia is a market leader in Pakistan and Sony Ericsson is a market
Challenger. What principles Sony Ericsson should follow to target Nokia to gain
market share?
Market Challenger
A market challenger is a firm in a strong, but not dominant position that is following an
aggressive strategy of trying to gain market share. It typically targets the industry leader (for
example, Pepsi targets Coke), but it could also target smaller, more vulnerable competitors.
The fundamental principles involved are:
• Assess the strength of the target competitor. Consider the amount of support that the
target might muster from allies.
• Choose only one target at a time.
• Find a weakness in the target?? Position. Attack at this point. Consider how long it will take
for the target to realign their resources so as to reinforce this weak spot.
• Launch the attack on as narrow a front as possible. Whereas a defender must defend all
their borders, an attacker has the advantage of being able to concentrate their forces at one
• Launch the attack quickly, and then consolidate.
Some of the options open to a market challenger are:
• price discounts or price cutting
• line extensions
• introduce new products
• reduce product quality
• increase product quality
• improve service
• change distribution
• cost reductions
• intensify promotional activity
Question No: 42 ( Marks: 5 )
Why is price considered to be one of the most flexible elements of the marketing
mix? Explain what are the factors influencing the price of a product?
Price is considered as most flexible element of the marketing mix because it can be
increased or decreased even fixed for a particular product and increase or decrease in
price have great impact on the demand of the product and demand have effect on the
Factors that influence the price of a product are:
Product itself
Demand of the product
Time period (in case of seasonal product)
Price is considered the most flexible thing in marketing mix because it helps to achieve
strategic as well as business goals and objectives like
1- Profitability (to achieve business/financial objectives)
2- To adjust price according to customer purchasing power(are customers able to
purchase at this price)
3- For market positioning VU Askari (http://www.vuaskari.com)
Factors that can influence the price of any product:
Following factors influence the price decisions
1- Marketing strategic objectives
2- Current Market/economic situation
3- Customer’s purchasing power
4- Cost of the product
5- The decision of what pricing strategy you want to adopt e.g. cost plus profit,
premium price etc.
6- The objectives of the product or brand
7- Available resources
8- Distribution channels and their relative cost
( Marks: 5 )
"The key to customer retention is customer satisfaction". Why it is important
for the marketers to retain the customer?
It is important to retain customers to capture more market share and increase sales,
customers create value for the firm so firms have to retain existing customers by
satisfying them. Customer life value must be considered. Customers are the key for the
success of organization regular customers create more worth for the organization. So
that’s why it is important to retain the customers.
Question No: 42 ( Marks: 5 )
The first step in the product development process is generation of ideas.
Discuss what the internal and external sources of ideas are. Why external
sources are considered to the more important than internal source?
Internal sources:
New products ideas can come from several sources. They may come from internal
sources marketing managers, researchers, sales personnel, engineers, or other
organizational personnel. Brainstorming and incentives or rewards for good ideas are
typical intrafirm device for stimulation the development of products ideas.
External sources:
Direct observation of competitors' products, customers' evaluations of their product
features, and the grapevine of suppliers and other who serve competitors often
contributes ideas.
External sources are more important as compare to internal sources as internal sources
are only based on employees and external sources are based on information from market
situation , external idea sources are highly valued in new product development literature.
Q = Packaging can increase the sales of products but it can act vice versa as well.
Explain it with examples.
Packaging is very important element in marketing mix. The objectives and goals of
packaging are many.
Mostly good packaging enhance product sale. But if packaging is not done with planning
or care then it can sabotage all the effort. Because mostly packaging is done for the safety
of the product and its transportation purposes. Suppose if the box or carton in which a
perishable product is enclosed it leaks then what will be the impression of that product on
customers. It will defame the product and company/brand.
The objectives that are gotten by packaging and labeling are
1- Safety
2- Agglomeration
3- Information
4- Advertising through labeling
5- Marketing by attractive packaging
Q = Discuss any five features of market oriented firms
Creating a spirit of open-mind inquiry;
Carefully analyzing rivals’ actions;
Listening to staff on the front lines;
Seeking out latent needs;
Active scanning of the periphery of the market;
Encouraging continuous experimentation”
Demonstrate leadership commitment;
Understand the need for change;
Mobilize commitment at all levels;
Shape the vision;
Align structures, systems and incentives; and
Sustain the change
The market driven organisation has increased capability for creating and maintaining
relationships with customers: the market relating capability. Such a relationship
orientation pervades all parts of the organisation’s mind set, values and norms.
Q = Define horizontal integration and explain the possible advantages of
horizontal integration?
Horizontal Integration
In microeconomics and strategic management, horizontal integration is a theory of
ownership and
control. It is a strategy used by a business or corporation that seeks to sell one type of
product in numerous
markets. To get this market coverage, several small subsidiary companies are created.
Each markets the
product to a different market segment or to a different geographical area. This is
sometimes referred to as
the horizontal integration of marketing. The horizontal integration of production is where
a firm has plants
in several locations producing similar products. Horizontal integration in marketing is
much more common
than horizontal integration in production
Q = Companies try increase their liquidity. Why companies use cash discounts?
What are different options available to offer cash discount?
1) Cash discounts for prompt payment - These are intended to speed payment and
thereby provide
liquidity to the firm. They are sometimes used as a promotional device.
•2/10 net 30 - this means the buyer must pay within 30 days, but will receive a 2%
discount if they pay
within 10 days.
•3/7 EOM - this means the buyer must pay by the end of the month, but will receive a 3%
discount if they
pay within 7 days.
Marketing Management-(MKT-501) VU
© Copyright Virtual University of Pakistan 44
•2/15 net 40 ROG - this means the buyer must pay within 40 days of receipt of goods, but
will receive a 2%
discount if paid in 15 days.