0901 Mm-Ii (MB1C2)

Question Paper
Marketing Management – II (MB1C2): January 2009

 Answer all 100 questions.
 Each question carries one mark.
<Answer>
1. Various strategies can be used to manage channel conflicts. Which of the following is a problem solving strategy
used to manage channel conflict wherein, channel members identify a middle path as opposed to their initial
positions?
(a) Climate management
(b) Compromise strategy
(c) Logrolling
(d) Aggressive strategy
(e) Negotiation.
<Answer>
2. To ensure success in marketing through internet, which of the following efforts should be combined along with
online marketing strategies?
(a) Conventional marketing
(b) Direct marketing
(c) Individual marketing
(d) Personal marketing
(e) Relationship marketing.
<Answer>
3. Traditionally, firms sold their goods and services without branding, but, with a lot of players entering the market and
thereby increasing the competition, firms started focusing on branding their products. Which of the following
decisions are to be considered by a marketer while branding a product?
I. It is becoming increasingly difficult for brand managers to differentiate their brands.
II. The important decisions are whether to brand the product or not.
III. At what intervals the company should come out with line extensions or brand extensions.
IV. The company should also consider when to reposition the brand.
(a) Both (I) and (II) above
(b) (I), (II) and (III) above
(c) (I), (II) and (IV) above
(d) (II), (III) and (IV) above
(e) All (I), (II), (III) and (IV) above.
<Answer>
4. A firm doing business needs to strictly adhere to the law of land and has to focus its attention on ethical issues. A
firm which contributes some of its resources for the betterment of the society is said to be performing a/an
(a) Ethical act
(b) Philanthropic act
(c) Responsible act
(d) Intuitive act
(e) Innovative act.
<Answer>
5. Kastrov, a European based gas company is known for its efficient Research and Development (R&D) and
innovative products. The company developed a new automobile fuel that performs much like gasoline except that it
doubles a car's miles-per-gallon. The company launched the fuel in the European market with a cost two and half
times as much as gasoline. The product eventually failed in the market. Which of the following would best attribute
to the failure of the product in the market?
(a) Poor product quality of the new automobile fuel when compared to the gasoline
(b) Insignificant point of difference between the new automobile fuel and gasoline
(c) Little scope for attracting market when compared to market of the gasoline
(d) Poor execution of the marketing mix for the new automobile fuel
(e) Consumer resistance to change from gasoline to the new automobile fuel.
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<Answer>
6. Which of the following is a trade sales promotion method aimed specifically at retail outlets?
(a) Trade show
(b) Buyback allowance
(c) Scan back allowance
(d) Merchandise allowance
(e) Free merchandise.
<Answer>
7. Which of the following is a type of wholesaler who purchases the goods on cash, and arranges own transportation
facility to transport the purchased goods?
(a) Limited line wholesaler
(b) General merchandise wholesaler
(c) Limited service merchant wholesaler
(d) Full service merchant wholesaler
(e) Specialty line wholesaler.
<Answer>
8. Pricing the products and services might be a routine job for most producers and retailers, but involves thorough and
deep understanding of the principles and practices which governs business environment. Which of the following
statements are true regarding the different methods of pricing?
I. In value pricing, firms fix a selling price on the products they produce, which normally exceeds the costs
incurred in producing these products.
II. In perceived rate pricing, marketers set the prices of the products on the basis of their perceived value in the
minds of customers.
III. In target return pricing, marketers set the prices of the product to achieve specified rate of return on their
investments.
IV. In mark-up pricing, a company simply follows the prevailing pricing patterns in the market.
V. In differentiated pricing, marketers set low price for high quality products or services.
(b) Both (II) and (III) above
(c) (I), (III) and (V) above
(d) (I), (II), (IV) and (V) above
(e) All (I), (II), (III), (IV) and (V) above.
<Answer>
9. The foremost role of a marketing channel is to fill gaps between the production and consumption process. Space
gaps occurs when
(a) A considerable time difference between the production and consumption of goods exists
(b) Production takes place at one or relatively small number of locations
(c) Manufacturers produce products in much larger quantities than the individual customer would purchase
(d) Consumers desire a greater variety of products than a manufacturer can produce
(e) Area of production is not sufficient for the production process.
10. Grains of Royal Brand basmati rice are extraordinarily long and replete with exquisite aroma and flavor, which <Answer>
evoke the enigma of taste that one identifies with royal cuisine. This brand identifies
(a) Product attributes
(b) Emotional and functional benefits
(c) Some values with itself
(d) User segments
(e) Personality status.
11. In which of the following methods of inventory allocation, orders are processed at periodic intervals, such as, at the <Answer>
end of the day or shift?
(a) Real time replenishment
(b) Batch method
(c) Product focused method
(d) Continuous method
(e) Job shop method.
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12. Rakesh Sharma has been promoted as sales manager at a new company and is trying to come up with an effective <Answer>
compensation package for the sales personnel. He feels that a good compensation would act as a motivational drive
for a sales person. Therefore, he plans for the compensation to be a percentage of the sales generated by the sales
person, as most of the sales persons are experienced and have the confidence of achieving the target. Which of the
following sales force compensation method would best meet his requirements?
(a) Salary plus commission
(b) Straight salary
(c) Straight salary plus generous fringe benefits
(d) Straight commission
(e) Salary plus a bonus.
13. Organizing by geographic territory is the simplest and the most commonly used method of structuring the sales <Answer>
force. A particular geographic area is assigned to a salesperson to sell the products and services of the company.
The following are the advantages of this method except
(a) Sales person can familiarize himself and learn more about a particular market
(b) Salesperson can minimize the travel time by operating from the center of the territory
(c) This method helps the salesperson to build and maintain relationships with his customers
(d) The geographic division of the market is very much suitable for complex products
(e) Salesperson can minimize expenditure by operating from the center of territory.
<Answer>
14. Which of the following is a reason for manufacturers to use advertising to reach individual customers?
(a) Attracting wholesalers and retailers to stock the products and then promote them to end users
(b) Attaining sales for the product, brand or service
(c) Attracting retailers’ continuous patronage
(d) Selling individual property, used vehicles, matrimonial, etc.
(e) Creating awareness about social, environmental, health and family issues.
15. Marketers resort to regrouping activities to avoid quantity and assortment discrepancies. The regrouping activities <Answer>
involve four steps. Which of the following is the correct sequence of steps?
I. The process of collecting the same products in large quantities.
II. The exact requirement of the customers is ascertained for a target group of customers.
III. The process of breaking larger quantities of homogenous products into smaller quantities.
IV. Sorting the products for easy identification and fast delivery.
(a) (I), (III), (IV), (II) above
(b) (I), (IV), (II), (III) above
(c) (II), (I), (III), (IV) above
(d) (IV), (I), (III), (II) above
(e) (IV), (III), (I), (II) above.
16. The appearance of the production facilities and the interpersonal skills of actual service providers are critical in <Answer>
which of the following services?
(a) Low-contact
(b) Equipment-based
(c) Industrial
(d) High-contact
(e) Non-professional.
17. American Express customized its credit cards in Japan where people prefer to pay in cash. Japanese feel <Answer>
embarrassed if they go out for dinner and do not pay in cash. Therefore, American Express modified its product in a
way that its customers in Japan were allowed to withdraw $2200 every month apart from other facilities, which were
already available. American Express has adopted
(a) Technical changes to survive in competitive market
(b) Promotional program to change the mindset of Japanese
(c) Cultural changes quickly to survive in competitive market
(d) Interest adjustment techniques to gain additional profit
(e) Economic changes of the country.
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<Answer>
18. A Brazilian NGO Reciclar-t3 makes clothes out of recycled clothes. This is an example of
(a) Blue marketing

(b) Green marketing
(c) Community relations
(d) Value added engineering
(e) Global warming.
19. In product assortment decisions, a retailer decides which categories of products he would like to display in his store. <Answer>
Once a retailer decides his product assortment strategy, the next step would be to
(a) Decide the quantity of products to keep in stock and the duration for which the stock would have to be
displayed on the shelves
(b) Decide the frequency at which the inventories need to be replenished and the minimum level of inventory
that would have to be maintained at all times
(c) Allocate enough store space to stock these items
(d) Estimate the sales that the proposed retail outlet can generate
(e) Assess the current position of his business and what direction it must take.
20. In the product management organization, a product manager controls all the activities pertaining to a particular <Answer>
product. Which of the following is/are the disadvantages of this organization?
I. It is feasible for industrial products and not suitable for consumer products.
II. It is very costly to maintain a product manager.
III. The product manager claims that he is overburdened with the increase in the number of products and brands,
and requests additional support.
(a) Only (I) above
(b) Only (II) above
(c) Both (I) and (II) above
(d) Both (II) and (III) above
(e) All (I), (II) and (III) above.
21. The members of a product venture team who are instrumental in organizing new product development process in an <Answer>
organization grouped together from
(a) The marketing department
(b) The research and development department
(c) The production and finance departments
(d) Different functional areas of an organization
(e) The sales department.
22. Modern logistics management is based on serving the customer in an efficient manner. Which of the following is/are <Answer>
the aspect(s) of marketing that form the basis of customer service?
I. Customers must be given more importance than the goods and services that have to be delivered.
II. Products and services are of significance to the customers only when they are available to them exactly when
customers need them.
III. Organizations should focus more on profitability than on sales volumes.
IV. Companies should charge a premium price from the customers to increase the profit margins.
(a) Only (I) above
(b) Both (I) and (II) above
(c) (I), (II) and (III) above
(d) (I), (III) and (IV) above
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23. Onida relied to a great extent on the 21 inch Color Television (CTV) segment, due to major sales revenues <Answer>
generated from this segment. Market competitiveness affected Onida’s performance in the CTV market. Onida
made comeback after a considerable time lag. In order to tap market share across all categories, Onida entered the
14 inch TV segment, with a fancy nickname ‘Onida Candy’. Which of the following best reflects Onida’s above
mentioned strategy?
(a) Onida wanted to develop the market for televisions
(b) Onida wanted to extend its brand reaching out to a new category
(c) Onida wanted to penetrate its product in to the market
(d) Onida wanted to change its segmentation strategy
(e) Onida wanted to diversify into other product categories.
<Answer>
24. A marketing channel is defined as
(a) The process of maximizing long-term profitability while integrating marketing with other parts of the
company and meeting customers needs and wants
(b) The process of reviewing marketing plans and modifying them as market conditions change
(c) The general atmosphere in which marketers operate and are influenced by external elements
(d) An established series of procedures and methods to collect, sort, analyze, store and distribute marketing
information on an ongoing basis
(e) A group of exchange relationships, which create customer value in acquiring, consuming and disposing of
products and services.
<Answer>
25. Marketing channels typically perform all the following functions except
(a) Facilitating the exchange process between a firm and an individual customer
(b) Alleviating discrepancies while delivering goods and services to the customers
(c) Matching the needs of buyers and sellers
(d) Providing efficient service to the customers to improve credibility in the market
(e) Providing universal way to classify marketing of services.
26. The social and cultural environment differs from one country to another and it has a significant impact on the <Answer>
consumption patterns of consumers. Therefore, while designing global marketing strategies, companies should take
into consideration the differences in cultures and societies. These differences may occur due to differences in
I. Language.
II. Technology.
III. Demographics.
IV. Education.
(a) Only (I) above
27. A Japanese electronics firm has launched a new CD player in the competitive American market. The firm priced its <Answer>
product very low in order to gain a foothold in the market. The pricing objective of the firm is to
(a) Increase market share
(b) Maximize ROI
(c) Attain satisfactory profits
(d) Survive
(e) Increase product quality.
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28. The right selection of brand name is very important if the product is meant for international markets. Which of the <Answer>
following is/are the factor(s) that have to be considered before the brand name is selected for products, meant for
international markets?
I. Marketers have to select appropriate brand names that convey the right meaning in those markets.
II. Marketers have to analyze the meaning of the brand name in local languages.
III. Marketers have to evaluate whether the name is easily identified and pronounced.
IV. Marketers have to evaluate whether it will confuse the audience with unintended references.
(a) Only (I) above
29. Prior to designing a channel, marketer first analyze why target customers buy their products. Such an analysis helps <Answer>
marketers to categorize the buying decisions of customers into four types of channel output utilities. Which of the
following statements are true with regard to the utilities?
I. Lot size refers to the total number of units of a product that a customer acquires during a transaction period.
II. Service utility of a channel member refers to the value added services offered by the channel member.
III. Spatial convenience takes consideration of time for which the customer must wait to receive the product or
service.
IV. Temporal convenience refers to the ease of location or the ease with which customers can acquire the products.
V. Convenience utility of a marketing channel refers to the likelihood that the needs of the customer will be
exactly satisfied.
(c) (I), (II), (III) and (IV) above
(d) (I), (II), (IV) and (V) above
(e) All (I), (II), (III), (IV) and (V) above.
30. In the new product development process, which of the following stages give useful information like customer’s first <Answer>
impression about the product and provide early use experiences of the customers and their further expectations?
(a) Idea screening
(b) Test marketing
(c) Business analysis
(d) Concept testing
(e) Product testing.
31. Stark Brothers nursery has patented a group of miniature fruit trees that can grow and produce full-sized fruit in <Answer>
containers as long as they are able to get full sunlight. The catalog of the nursery containing details of products is
sends to prospective customers is a part of which of the following elements of the marketing mix?
(a) Promotion
(b) Price
(c) Place
(d) Product
(e) Process.
32. Godrej is having a considerable market presence in fairness cream with the name ‘Fair Glow Fairness Cream’. It <Answer>
launched toilet soap under the same brand name with an assurance to cater to the customers who wished to use soap
bars rather than cream. This is an example of
(a) Line extension
(b) Brand extension
(c) Brand rejuvenation
(d) Brand proliferation
(e) Co-branding.
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33. Transystem, a sole logistics service provider for Toyota Motors in India is excelling in its job. Right from producing <Answer>
raw materials for Toyota’s manufacturing to delivering the completed vehicles to the dealers across the country, the
company is performing heavy-duty tasks with minute precision. For instance, the Transystem vehicles picks up
weathered beading (used for the windows and doors of the car) everyday at 8.30 am from Metzeler Automotive
Profiles India plant at Sahibabad in Uttar Pradesh (UP) to deliver them to Toyota Kirloskar Motor’s manufacturing
plant at Bidadi 50 kms from Bangalore. Transystem delivers vehicle components to Toyota from 83 suppliers spread
across 20 different states using 261 trucks traveling lakhs of kilometers everyday. These components are delivered
for immediate production in the plant. A delayed shipment runs the risk of delayed production for Toyota. Which of
the following is the reason for Toyota to adopt this type of inventory management system?
(a) To deliver the required quantities of raw materials to the production plant when they are needed without
any delay
(b) To maintain a lot of inventory to overcome the delays in transportation
(c) To reduce the average rate of the raw materials used in the production process of Toyota
(d) To maintain extra stock in the inventory at any given point of time as a buffer to meet unexpected
customer demands
(e) To meet the replenishment orders of the manufacturers.
34. The product or brand management organization has a product manager, who controls all activities pertaining to a <Answer>
particular product. Which of the following is/are the function(s) of a product manager?
I. Developing effective long-term strategies for the product.
II. Developing an effective marketing plan.
III. Coordinating with various functional departments.
IV. Collecting relevant information about the products from customers and markets.
(a) Only (I) above
(b) Only (II) above
(d) (I), (II) and (III) above
35. Which of the following methods for solving and managing channel conflicts is defined as the act of exchanging <Answer>
favors for mutual gains?
(a) Compromising
(b) Negotiation
(c) Arbitration
(d) Cooperation
(e) Logrolling.
<Answer>
36. Which of the following statements is referred to as retro-marketing?
(a) It is a paid form of non personal presentation of goods or services by an identified sponsor
(b) It is a form of attracting consumers by offering them various benefits in the form of incentives or by adding
value to the products
(c) It is non-paid form of communicating information about the company or the product
(d) It is a form of selling a product or a service directly to the consumer by explaining or demonstrating the
features
(e) It is a form of marketing where the consumers are delicately teased by the deliberate holding back of
supplies.
37. While setting prices, it is very important for a marketer to assess the competitive environment. The price changes <Answer>
made by a company influence how competitors price their products. Which of the following are the ways that
competitors may react to price changes?
I. Maintain the status quo of not reacting in anyway to the price changes.
II. Set the prices equal to that of the company.
III. To attack the price changes by setting their prices lower than that of the company.
IV. To attack the price changes by setting their prices higher than that of the company.
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38. The political system of a country (socialistic or capitalistic) influences the economic environment of the company. <Answer>
Allocation of resources in capitalistic systems depends on
(a) Government decision
(b) Demand
(c) Gross domestic product
(d) Gross national product
(e) Number of companies operating in the system.
39. Blue Pox is a company that sells specialty products to allergy sufferers through its website and also through various <Answer>
retail stores. Blue Pox uses
(a) Bilateral distribution strategy
(b) Dual distribution strategy
(c) Vertical integration strategy
(d) Unilateral distribution strategy
(e) Franchising strategy.
40. Market share analysis is an ideal process to judge a company’s performance against its competitors. Relative market <Answer>
share method is one of the techniques for measuring the market share. This is a process of considering the sales of
the company as a
(a) Percentage of the combined sales of the top three competitors
(b) Percentage of the overall market sales
(c) Percentage of the total sales in its served market
(d) Percentage of sales of a leading competitor
(e) Percentage of all the customers purchasing the products of the company.
<Answer>
41. Which of the following is/are true regarding two-part pricing?
I. It is normally followed in services where a company charges a fixed price for an initial service and subsequent
charges for over and above the minimum service consumed.
II. The sales of one product with a two-part pricings in the product line may affect others.
III. It is done for the accessories that come along with a product.
(a) Only (I) above
(b) Only (II) above
(d) Both (I) and (III) above
<Answer>
42. Introduction of products with new brand names in the same product category is know as
(a) Brand relaunch

(b) Multibranding
(c) Co-branding
(d) Brand rejuvenation
(e) Brand proliferation.
43. Hyundai, manufactures and sells different types of cars with multiple brands. It advertises its small car Santro by <Answer>
comparing its features with those of other small models in the market. This is an example of
(a) Implicit comparitive advertising
(b) Inoculative advertising
(c) Refutation advertising
(d) Explicit comparitive advertising
(e) Reminder advertising.
44. Which of the following approaches of advertising involves, companies aiming at retaining their customers by <Answer>
enhancing their resistance to withstand competitors’ appeals?
(a) Inoculative advertising
(b) Institutional advertising
(c) Comparative advertising
(d) Reminder advertising
(e) Product advertising.
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45. Motorola placed its bets on Iridium. The Iridium Phone was projected as a phone system that would make <Answer>
communication possible between any two points in the world. Motorola planned to use satellites to pick up signals
from cellular phones and relay conversation from satellite to satellite till the signal could be transmitted to the
ground. Motorola estimated that around 1.8 million people would use the technology by 2002. The project was
highly complicated, requiring more than 60 satellites, but Motorola managed to place 66 satellites in earth’s orbit by
November 1998. The handset was priced at US$ 3000 and calling charges were over US$ 5 a minute. The project
ran into several problems with CEO Edward Staiano resigning in 1999 and Motorola refusing to provide additional
support. In 2000, Iridium was liquidated. Motorola eventually lost heavily to the tune of US$ 2.6 billion in this
project. Which of the following can be cited as the most appropriate reason behind the failure of Iridium Phone?
(a) Lack of proper leadership after resignation of CEO Edward Staiano
(b) The cost of owning a satellite phone was very high for the people
(c) Failure in communicating the benefits of the satellite phone
(d) Complicated project, requiring many satellites for the working
(e) Lack of proper support from Motorola for the Iridium project.
46. In a service firm, the emphasis on productivity is high, while ensuring that the costs remain at minimum. Service <Answer>
organizations can adopt various approaches to enhance the productivity of their personnel. Which of the following
is/are the approach(es)?
I. Helping employees in better utilization of their skills.
II. Designing more effective service.
III. Proper market demand analysis.
IV. Standardizing service delivery procedures.
(a) Only (I) above
(b) Only (II) above
(c) Both (III) and (IV) above
(d) (I), (II) and (IV) above
47. Sun Country Airlines was set up in 1983 as a low-cost alternative to Northwest Airlines to cater to the needs of <Answer>
Minnesotans traveling to sunny vacation spots. Sun Country Airlines was unable to develop a suitable pricing
strategy and this ultimately led to its closure. It charged its prices by blindly following the pricing strategies of its
competitors, without realizing its objectives, costs, and organizational structure. Which of the following pricing
strategies cannot be stated to be a reason for the closure of Sun Country Airlines?
(a) Sun Country Airlines followed the going rate pricing method
(b) Sun Country Airlines lost its strength in the market due to importance given for price change according to
market leader
(c) Sun Country Airlines fails to establish a link between cost of services sold to pricing strategy
(d) Sun Country Airlines changed the prices according to the demand patterns of the company’s product in
the market
(e) Sun Country Airlines was unable to find a suitable pricing strategy.
48. Concept testing is one of the crucial stages of new product development process. But companies often do not take <Answer>
this stage seriously or omit it completely. Which of the following is/are the activity(ies) to be performed at this
stage?
I. Recording customers’ initial reaction towards the product before it invests further in product development.
II. The firm makes a plan for developing, producing and marketing the new product.
III. A prototype is developed which reveals all tangible and intangible attributes of the product.
IV. The R&D, manufacturing, marketing and finance departments estimate the cost.
(a) Only (I) above
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49. Direct marketing is similar to traditional marketing activities, but it has some additional features than traditional <Answer>
marketing. Which of the following is/are the additional feature(s) it has compared to traditional marketing?
I. Marketers invite customers to respond to their marketing efforts through the telephone, email, etc.
II. It is very difficult to measure the effectiveness of direct marketing like traditional marketing.
III. In direct marketing a database of customers is maintained.
(a) Only (I) above
(b) Only (II) above
(d) Both (I) and (III) above
50. Ram and Sham, owners of Krishna Farm, were growing apples and blueberries and selling them at a fruit stand. In a <Answer>
particular year they had a bumper crop and were unable to sell all they grew. They decided to use the excess fruit to
make jam and jelly. This project was so successful that they sell only jam and jelly now. They sell under the brand
name of Krishna through mail order and also at their old fruit stand. What kind of a distribution channel are Ram
and Sham using?
(a) Indirect channel
(b) Three level channel
(c) Two level channel
(d) One level channel
(e) Zero level channel.
51. Which type of wholesaler not only provides transportation and delivers products to retailers, but also provides the <Answer>
service of placing products on retailers' shelves?
(a) Truck wholesaler
(b) Cash-and-carry wholesaler
(c) Rack jobber
(d) Drop shipper
(e) Mail-order wholesaler.
52. Companies normally adopt their pricing pattern on the basis of several aspects like geographical factors, demand <Answer>
patterns of the customers, service levels that have to be delivered etc. Some times companies need pricing to
improve short term sales, so they adjust prices. In this regard which of the following statements are true regarding
approaches to price adjustment?
I. Promotional pricing cannot counter the introduction of new product by competitors.
II. In discriminatory pricing, companies charge different customers differently for the same product on the basis
of their pricing capacity and the value of the customers.
III. In uniform delivered price, the customers bear the transportation costs of the goods being delivered.
IV. Experience curve pricing is normally followed in services in which a company charges a fixed price for an
initial service and subsequent charges for over and above the minimum service consumed.
(c) (I), (III) and (IV) above
53. An intermediary wants to carry ‘Tide’ detergent of Procter & Gamble, but the company agrees if the intermediary <Answer>
purchases other detergents produced by the manufacturer along with Tide. Which of the following channel
management practices is adopted by Procter & Gamble?
(a) Exclusive dealing
(b) Dual distribution
(c) Tying agreement
(d) Refusal to deal
(e) Restricted sales territories.
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54. People who create a positive impact on the mind set of customers and motivate them to buy the products are called <Answer>
as
(a) Approvers
(b) Media people
(c) Endorsers
(d) Introducers
(e) Marketers.
55. Taj Group of hotels and the ITC Welcome group differentiate themselves from others by providing hi-tech rooms <Answer>
and suites to their customers. Their customers get access to computers, fax machines and electronic mail. Taj and
ITC have differentiated their service on the basis of the
(a) Offer
(b) Delivery
(c) Image
(d) Place
(e) Promotion.
<Answer>
56. Which of the following statements are true regarding business format franchise?
I. Franchiser allows the franchisee to use his trade name or license for the products manufactured at the
franchisee’s plant.
II. Franchisee has the freedom to modify or make changes to the franchiser’s product or, produce a new product
under the license of the franchiser.
III. The franchisee uses the trademark of the franchiser along with his methods of production, quality control
mechanisms, marketing plans and operational standards.
IV. The franchisee operates in a designated market area.
57. Which of the following is/are the reason(s) behind the failure of outsourced projects in companies and the resulting <Answer>
dissatisfaction with outsourcing?
I. Companies’ failure to achieve the expected cost reductions from outsourcing.
II. Breach of service agreements.
III. Lack of trust between employer and employees in the outsourcing firm.
(a) Only (I) above
(b) Only (II) above
58. The objective of pricing the products of an organization is to either increase or maintain the market share. The <Answer>
growth rate of the organization’s market share
I. Is independent of the industry’s performance in which the firm is operating.
II. Is useful when absolute sales volume of a company decreases as relative market share is decreasing.
III. Is useful when total market for a product increases.
(a) Only (I) above
(c) Both (I) and (III) above
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59. Reliance Money and the Andhra Pradesh government have launched the first phase of ‘Safar’ initiative that aims to <Answer>
promote road safety in Hyderabad. They proposed to install electronic display systems at public locations that will
contain important road safety messages and would act towards preventing road accidents. They will set up 30 Road
Transport Authority (RTA) display systems across major public places. So, the marketing program launched by the
Andhra Pradesh Government is known as
(a) Value marketing to the customers
(b) Idea marketing for the society
(c) Innovative marketing to the customers
(d) Company marketing
(e) Societal marketing.
60. If Amstrad, a consumer durables company wants to focus its marketing efforts on price competition, which of the <Answer>
following is/are not the criteria for the long-run success of the firm?
I. Higher prices than its competitor.
II. Lower prices than it has historically charged.
III. Promotional campaign for lower prices.
IV. Lower cost structure than its competitors.
(a) Only (I) above
61. Environmental factors such as economical, legal, political, social and technological affect the marketing channel <Answer>
performance of a company. Therefore, channel members need to develop certain characteristics in response to the
changes in the environment. Which of the following are these characteristics?
I. Channel members should understand each channel member in the environment will get affected by the changes
in the environment.
II. Channel members should completely rely on market intelligence reports.
III. Channel members should maintain a healthy relationship with each other to succeed in the market.
IV. Channel members should be flexible enough to adapt to the market changes.
(c) (I), (III) and(IV) above
<Answer>
62. With respect to brand extension in downscale markets, which of the following are true?
I. Price reduction may have serious repercussions on consumers’ perceptions about the brand’s ability to offer
superior value.
II. It increases the sales volume by leveraging on the economies of scale.
III. An entirely new brand shouldn’t be launched.
IV. A price reduction in the brand can be adopted under any circumstances, if it gives the company a cost
advantage.
(b) Both (III) and (IV) above
<Answer>
63. William buys Colgate toothpaste and gets a toothbrush free. This is an example of
(a) Price promotion

(b) Premium promotion
(c) Frequent user incentive
(d) Consumer sweepstakes
(e) Money refunds.
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64. The Manikchand group of companies is most popularly known for its popular “Manikchand Pan masala or gutka”. <Answer>
The company, however, has a presence in many other product categories across industries such as tea, tobacco,
lamination, packaging etc. The company eventually also forayed into the product category of wheat flour with the
launch of ‘Manikchand atta’. However, the product failed as people could not associate a popular pan masala or
gutka brand with wheat or flour. Therefore Manikchand had to withdraw its atta brand from the market. Which of
the following would have been the best branding strategy that Manikchand could have adopted for its wheat flour or
atta?
(a) Brand rejuvenation whereby it can revitalize its ailing brand manikchand atta by repositioning the brand
(b) Launch its brand ‘manikchand atta’ again after a time gap
(c) Relaunch its brand ‘manikchand atta’ again with a new brand name
(d) Tie up with another company and adopt co-branding
(e) Acquire an atta brand from some other company and introduce into the market with some modifications.
65. Which of the following is/are the issue(s) to be considered while going in for brand extension as suggested by David <Answer>
Aaker?
I. Competitor analysis.
II. Organizational synergies.
III. Product category similarity.
IV. Perceptual mismatch.
(a) Only (I) above
66. Which of the following methods of online advertising is an electronic notice board where mails can be sent, <Answer>
discussions can be held between individuals and groups and even files can be exchanged?
(a) Bill board
(b) Bulletin board
(c) Invoice board
(d) Sign board
(e) Check board.
67. Logistics is the process of getting products and services where they are required and when they are required. Which <Answer>
of the following are the significant objectives of market logistics?
I. To meet customer expectations on time with maximum accuracy and without damage to the products being
delivered.
II. To cut down distribution costs to the maximum extent possible, either by building an internal distribution
process, or by hiring outside expertise.
III. To reduce the time from which requisition is placed with the vendor to the time the product reaches to the final
customer.
IV. To deliver the goods and services to the customers and match the needs of buyers and sellers.
68. During the purchase of a car, accessories such as seat covers, floor mats, metal guards, air-conditioner, music <Answer>
system, etc., are priced separately. This is an example of
(a) Captive product pricing
(b) Two-part pricing
(c) Optional feature pricing
(d) By-product pricing
(e) Product bundling pricing.
Page 13 of 31
69. Which of the following relates to many large companies employing marketing controllers, whose responsibility is to <Answer>
determine the various marketing expenditures of the company and provide necessary training for the marketing
personnel on the financial dimensions of the marketing activities?
(a) Tactical control
(b) Profitability control
(c) Efficiency control
(d) Strategic control
(e) Annual-plan control.
70. When a firm decides to internationalize or globalize its operations, the first step is to select potential markets. A firm <Answer>
generally selects a potential market by screening out less lucrative markets. Companies divide the screening of
potential markets into four phases. Which of the following is the correct sequence of these phases?
I. Analyze the market size, product acceptability and customer perceptions.
II. The firm analyses different markets on the basis of macro environmental factors such as political, legal,
geographic, economic environment.
III. Ranks the potential markets on the basis of profit potential, market share, level of investment, margins,
expected sales, etc.
IV. Analyzes micro environmental factors such as the barriers to entry, exit in a particular industry, the cost of exit
etc.
(a) (I), (II), (III), (IV) above
(b) (I), (III), (II), (IV) above
(c) (II), (I), (III), (IV) above
(d) (II), (I), (IV), (III) above
(e) (III), (I), (II), (IV) above.
71. When two or more companies combine their brands to generate greater exposure to their brands, which otherwise <Answer>
would have not been possible individually is called co-branding. If Coca Cola recommends Kinley mineral water
and Georgia coffee, the type of co-branding refers to
(a) Same company co-branding
(b) Ingredient co-branding
(c) Joint venture co-branding
(d) Multiple sponsor co-branding
(e) Partnership co-branding.
<Answer>
72. Total estimated sales are the sum of
I. Estimated first time sales.

II. Replacement sales.
III. Repeat sales.
IV. Post purchase repair sales.
73. Franchising has several advantages and disadvantages for both the franchiser as well as the franchisee. Which of the <Answer>
following statements are true regarding limited freedom, which is a disadvantage to a franchisee?
I. A franchisee has to operate according to the standards set by the franchiser.
II. The standards may sometimes cover all aspects of the business right from business hours to book-keeping
methods.
III. Any negligence or failure in maintaining quality standards on the part of the franchisee will have an adverse
impact on the franchiser's business or brand image.
IV. The necessity to abide by the standards restricts the franchisee's creativity and flexibility.
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74. Sales personnel provide information regarding the features of a product and its usage and the service support to the <Answer>
customer, and persuade them to purchase it. In this regard, telemarketing personnel, retail sales clerks, real estate
agents, check-out counter clerks, etc., are the examples of
(a) Field order takers
(b) Order getters
(c) Trade sales people
(d) Inside order takers
(e) Support personnel.
75. ‘Beach Bums’ is a new trendy store that specializes in swimwear and beach accessories. The store is decorated with <Answer>
neon colors, is full of potted palm trees, has sand on the floor, and plays beach music in the background. These
factors are used to create the
(a) Store’s image
(b) Store’s merchandise mix
(c) Store’s target strategy
(d) Store’s cultural impact
(e) Store’s promotional strategy.
<Answer>
76. Which of the following issues is/are not included under the Social Regulations in Marketing?
I. Board of Industrial Finance and Restructuring.

II. Bureau of Indian Standards.
III. Consumer protection Act.
IV. Competition policy.
(a) Only (I) above
77. Customers are less price sensitive, when the cost incurred on the product is too less compared to the total cost of the <Answer>
end product. This is known as
(a) Unique value effect
(b) Substitute awareness effect
(c) End benefit effect
(d) Shared cost effect
(e) Sunk investment effect.
78. American NRIs, approximately 1.7 million, account for over a third of global NRIs. Merrill Lynch estimated that <Answer>
NRI’s in the US made up 10% of the wealth market and 2,00,000 of them were millionaires with estimated assets of
US $78 billion. The community is prosperous with an average household income of $67,000 annually and education
rate of 57%, which is well above the US average. Marketers who could hardly distinguish an Indian from any other
Asian have realized the buying power of Indians and are targeting this group. Metlife, an insurance company also
did not want to lose the opportunity. Thus, it opened branches in areas where the Indian population is more. For
each branch the company decided to recruit between 10-20 salespersons depending upon the size of the market.
What kind of salesperson should Metlife recruit to tap this market?
(a) Local salespersons, who know the area very well
(b) Sales people, who are of Indian origin
(c) Sales persons, who are well qualified and experienced
(d) Fresh graduates from the colleges as sales persons and train them
(e) Sales persons on the first come first served basis.
79. A company provides online solutions such as database software and server suites to e-commerce companies. This is <Answer>
an example of
(a) Business-to-consumer services
(b) Business-to-business services
(c) Government-to-consumer services
(d) Government-to-government services
(e) Consumer services.
Page 15 of 31
80. In which of the following methods, customers are divided into groups based on the volume of purchases made by <Answer>
them and the sales manager calculates the number of sales calls required to satisfactorily serve the customers in each
group?
(a) Formulate approach
(b) Canned sales approach
(c) Equalized workload method
(d) Incremental productivity method
(e) Silent approach.
81. Economic Order Quantity (EOQ) is the replenishment order quantity that minimizes the overall cost of inventory <Answer>
i.e., the sum of ordering and carrying. Which of the following is/are the assumption(s) on which EOQ model is
based?
I. All the demand will be satisfied.
II. The price of inventory is dependent on the order quantity.
III. There is huge inventory in transportation.
IV. There is no interaction between the multiple components of inventory.
(a) Only (III) above
(b) Both (I) and (IV) above
82. Brand Sponsorship is a form of publicity, which is done by supporting and linking the organization's name with a <Answer>
particular event, most commonly, sporting events or an activity that involves a large public gathering. For making
any sponsorship effective, which of following are the important factors that should be considered?
I. The company should be clear about the benefits it is trying to derive out of sponsoring a particular event.
II. It is better to sponsor a new event every time rather than to have a long term relationship with a particular
event.
III. Opportunities have to be identified and utilized for the maximum publicity.
IV. Companies should consider these sponsored events as platforms for launching product awareness campaigns.
83. Manufacturers use number of methods such as trade shows, premiums, sales contest, etc., to attract the middlemen. <Answer>
Free merchandise is a sales promotion technique where
I. Additional amount of the product is offered without any additional cost, as an incentive to purchase a
minimum quantity.
II. Manufacturer agrees to pay the reseller certain amount of money for promoting the company’s product through
advertising or displays.
III. A part of the display kit is given to the retailer as gift or reward to encourage him to display the merchandise.
IV. A temporary price reduction is offered to the retailer for purchasing a specific quantity or units of the product.
(a) Only (I) above
<Answer>
84. Fast Moving Consumer Goods (FMCGs) are usually sold along
(a) Zero-level channel route

(b) One-level channel route
(c) Two-level channel route
(d) Three-level channel route
(e) Four-level channel route.
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85. Pradeep Kumar, a graduate from Andhra University realized that now-a-days people are very busy with their work <Answer>
life, and find very less time for their routine house hold works like paying their telephone or electricity bills, calling
plumbers, booking cinema tickets on weekends etc. With the help of some of his friends started a small business
named ‘Paragon Services’ in Visakhapatnam. People can become members of the company by paying a fee of just
two hundred rupees and monthly charges of hundred rupees. The customers can then be offered services like
payment of electricity/telephone bills, calling plumbers/electricians/carpenters, booking of movie and train tickets
etc. Executive would go to the customer, collect the bills, pay them and later collects the amount from the customer.
The company charged 25 more rupees on the train tickets and 10 rupees more on the newly released movies.
Pradeep mainly concentrated on middle class and upper middle class people. Which of the following would be the
most suitable way for Pradeep to gain more customers?
(a) Sending catalogs containing details about the services to the target customers
(b) Appointing telemarketing people to promote their services to the target customers
(c) Placing kiosks near the shopping malls, which provide information about the services
(d) Communicating the details about the services through television and accepting memberships through
phone calls or mails
(e) Placing advertisements in local edition of newspapers providing details about the services.
86. Service providers try to attract their customers by setting flexible prices. Which of the following is/are the factor(s) <Answer>
which affect the pricing strategies of the service firm?
I. Demand for the service.
II. Season and time of the year, day, etc.
III. Age of the service consumer.
IV. The customers’ ability to pay.
(a) Only (I) above
(b) Only (II) above
(d) Both (II) and (IV) above
87. While designing marketing channels, firms must first develop objectives. Which of the following is/are the area(s) <Answer>
of consideration when setting the channel objectives for a new channel system?
I. Consumer characteristics.
II. Characteristics of intermediaries.
III. Size of the firm.
IV. Environmental factors.
(a) Only (I) above
(c) Both (I) and (III) above
88. Strategic issues in retailing involve an overall set of plans that help the retailer to conduct his business effectively. A <Answer>
retail strategy has six major elements. Which of the following statements are true regarding situation analysis?
I. Developing an organizational mission.
II. Evaluating the ownership and management alternatives.
III. Selecting a product or service type to engage in retailing.
IV. Developing an overall strategy considering the controllable and uncontrollable variables.
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89. In the US telecommunications market, the three major players –Sprint, AT&T and MCI are offering long-distance <Answer>
services to the citizens, but the price options offered by each ended up in confusing the customer. AT&T priced its
services at 15 cents for a minute, with out any monthly rental and another option was 10 cents per minute with a
monthly fee of $4.95. MCI charged 5 cents per minute during night time and 25 cents per minute during day time,
with a monthly fee of $1.95. Sprint charged 5 cents per minute during nighttime and 10 cents per minute during day
time, with a monthly fee of $5.95. It was very difficult and costly for customers to choose the best plan. According
to this situation which of the following statement is not true?
(a) MCI has differentiated its services from its competitors on price front
(b) Sprint competing with its competitors on price front
(c) AT&T engaged in price competition will loose its strength in the market as they constantly reduce their
prices to outstay competitors
(d) MCI focus on factors such as service features, quality of service, promotion etc
(e) Sprint may win larger part of the market share.
90. Advertisers have a wide variety of advertising media to choose from. Which of the following questions is/are to be <Answer>
asked by a firm before selecting an appropriate medium?
I. Who should be reached?
II. Where are they located?
III. When do we run the advertising campaign?
IV. What is the advertising cost?
(a) Only (I) above
<Answer>
91. Which of the following is not an example of non-goods service retailing?
(a) Stockbrokers
(b) Tutors
(c) Personal trainers
(d) Real-estate brokers
(e) Car rental company.
92. Clooney, a physical distribution manager is developing and maintaining assortments of products that are adequate <Answer>
for customer demand. In which stage of market logistic decisions is Clooney currently involved?
(a) Order processing
(b) Manufacturing
(c) Inventory management
(d) Transportation
(e) Warehousing.
93. The selection of pricing policy is vital for an organization as it is the single most important factor on which the <Answer>
existence of the organization depends. There are several pricing policies that companies adopt. In this regard, which
of the following is/are the pricing policy(ies) adopted by the companies?
I. The price charged for the goods when one division of an organization transfers or sells goods or services to
another division.
II. Marketers divide the target market into different zones depending on popular density, transportation
infrastructure, shopping costs etc. for pricing.
III. Introduction of new products at a low price.
IV. A procedure where the manufacturer provides a set of related products at a price.
(a) Only (I) above
Page 18 of 31
94. Regional free trade zones are formed to help nations in a region to engage in free trade within the region. Which of <Answer>
the following is/are the objective(s) of regional free trade zones?
I. Ensuring economic growth of members.
II. Increasing trade relations with other countries.
III. Increasing foreign capital inflows.
IV. Member countries formulating separate economic policies.
(a) Only (I) above
(b) Only (II) above
(d) (I), (II) and (III) above
(e) (II), (III) and (IV) above.
<Answer>
95. Which of the following conditions will make a message effective in communication process?
(a) Sender should send the information according to his perception

(b) Sender should send the information slowly
(c) Sender should not have his own perception
(d) Sender and receiver perceptions should match
(e) Sender should design the message according to receiver’s perception.
96. The first and foremost role of a marketing channel is to fill the gaps between the production and consumption <Answer>
process. Which of the following arise when there is a considerable time difference between the production and
consumption of goods?
(a) Space gaps
(b) Time gaps
(c) Quantity gaps
(d) Variety gaps
(e) Quality gaps.
97. In 1999, Eureka Forbes Ltd. (Eureka Forbes), the leading vacuum cleaner and water/air purifier equipment <Answer>
company, announced a major policy change that came as a surprise to the Indian corporate world. The company
regarded as the pioneer of direct marketing in India, was planning to focus more on the retailing business in the
future. The company planned to make its products available in retail outlets through its dealer network, comprising
2,600 dealers. With this move, Eureka Forbes’ also planned to increase the sales revenue generated by the retail
division. Which of the following reasons forced Eureka Forbes to opt for store based retailing?
I. The company couldn’t cover total market through direct marketing.
II. Direct marketing has become very expensive compared to retailing.
III. The significance of store based retailing is increasing.
IV. The company was unable to increase the visibility of its product through direct marketing.
(a) Both (I) and (IV) above
98. Which of the following resource allocation methods give maximum preference to customers and the goods and <Answer>
services that are produced according to the choice of the customers?
(a) Command allocation
(b) Market allocation
(c) Mixed system
(d) Personnel allocation
(e) Product allocation.
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99. Automatic vending is a type of non-store retailing. Which of the following is/are the primary advantage(s) of <Answer>
automatic vending as a form of retailing?
I. It provides continuous service to customers.
II. It eliminates the need for sales personnel.
III. Vending machines require little maintenance.
IV. It offers a low cost, personal method of selling.
(a) Only (II) above
100. The Indian government has specified to set up a value to the quality of goods and services being produced in the <Answer>
country by issuing certifications to those companies that meet the minimum requirements laid down by it from time
to time. These principles come under the
(a) ISI- Indian standard institution
(b) SP- Special Provisions
(c) BIS- Bureau of Indian Standards
(d) MRTP-Monopolies and Restrictive Trade Practices
(e) BIFR- Board of Industrial Finance and Restructuring.
END OF QUESTION PAPER
Page 20 of 31
Suggested Answers
Marketing Management – II (MB1C2): January 2009
ANSWER REASON
B Compromise strategy is a problem solving strategy where a middle path is < TOP >
1.
identified by the channel members as opposed to their initial positions.
A < TOP >
2. To ensure success in marketing through the internet, online marketing
strategies should be combined conventional marketing efforts.
E Branding poses many challenges. A marketer trying to brand a product has to < TOP >
3.
consider certain decisions. The important decisions are whether to brand the
product or not, and if it should be branded, whether it should be' a
manufacturer's brand or a distributor's brand or a licensed brand.
Subsequently, a decision has to be taken on whether the company should adopt
a blanket family brand name like Tata, or individual brand names as used by
HLL, and then, at what intervals the company should come out with line
extensions or brand extensions. The company should also consider when to
reposition the brand. These challenges associated with branding are, however,
only one side of the picture. In the present global competitive market, almost
all the companies are branding their products and services, and as a
consequence, it is becoming increasingly difficult for brand managers to
differentiate their brands.
B A firm which contributes some of its resources for the betterment of the < TOP >
4.
society is said to be performing a philanthropic act. A firm is considered as
responsible when it fulfills its economic, legal, ethical, and philanthropic
commitment.
(a) The characteristics that define acceptable conduct are called as ethics.
(c) A way of dividing large markets into smaller groups according to
consumer lifestyles, activities, opinions and beliefs.
(d) The personal beliefs, experiences and views of a marketer.
(e) A strategy of variable pricing that tries to restrict discounts and
allowances to only those customers who probably won’t buy without
them.
B It is not a significant difference between the new automobile fuel and gasoline. < TOP >
5.
New product should be innovative one and it should reduce the cost to the
consumer.
C A Scan back allowance is specifically aimed at retail outlets. Retailers are < TOP >
6.
rewarded on the basis of the number of units moved through their scanners
during a specific time. (a) Trade show is a consumer sales promotion method.
(b) In buyback allowance, the channel members are offered a monetary
incentive for each additional unit purchased after the initial deal. (d) In
merchandise allowance, a manufacturer agrees to pay the reseller certain
amount of money for promoting the company’s product. (e) In free
merchandise, additional amount of the product is offered to middlemen
without any additional cost as an incentive to purchase a minimum quantity.
C The merchant wholesalers are further divided into full service merchant < TOP >
7.
wholesalers and limited merchant wholesalers. Full service merchant
wholesalers are further classified into general merchandise wholesalers,
limited line wholesalers, specialty line wholesalers, and rack jobbers. Limited
service merchant wholesalers are involved in limited marketing functions.
They are wholesalers who purchase the goods on cash, and arrange their own
transportation facility to transport the purchased products.
Page 21 of 31
B In perceived rate pricing, marketers set the prices of the products on the basis < TOP >
8.
of their perceived value in the minds of customers. The target return pricing is
set by marketers to achieve specified rate of return on their investments. So (b)
is the answer.
B Space gaps occur when the production takes place at one or relatively small < TOP >
9.
number of locations.
A Brands usually highlight the product attributes to inform existing customers < TOP >
10.
and also to attract potential customers. (b) The attributes should eventually
transform into emotional and functional benefits, for the brand to be
successful. (c) Most of the brands associate some value with themselves. (d)
Brands clearly state their user segments. (e) Brands communicate personality
status.
B In Batch method, the orders are processed at periodic intervals, such as, at the < TOP >
11.
end of the day, or shift.
D Compensation paid for achieving specific targets in a given time is known as < TOP >
12.
straight commission compensation. (a) Salary plus commission provides a
guaranteed salary along with performance incentives. (b) Straight salary
compensation plan provides a fixed amount of salary to the sales personnel at
the end of the week or month. Options (c) and (e) are not applicable.
D The disadvantage is that geographic division of the market is not suitable in < TOP >
13.
case of complex products that demand more specialized knowledge by the
salesperson.
B Manufacturers of products and/or services have the objective of attaining sales < TOP >
14.
for the product, brand or service.
D The regrouping activities involve up to four steps – sorting, accumulating, < TOP >
15.
allocating, and assorting.
D The appearance of the production facilities and the interpersonal skills of < TOP >
16.
actual service providers are critical in high-contact services.
C American Express has adopted cultural changes quickly to survive in < TOP >
17.
competitive market. It has tried to adjust according to the culture of Japanese.
It has customized its product offer.
B Green marketing is a recent phenomenon in which manufacturers focus on < TOP >
18.
producing environment friendly products. Options (a), (c), (d) and (e) are
irrelevant.
A Once a retailer decides his product assortment strategy, the next step would be < TOP >
19.
to decide the quantity of products to keep in stock and the duration for which
the stock would have to be displayed on the shelves.
D The most important benefit of this model is that it makes it feasible for the < TOP >
20.
most important part of any business – the product to be taken care of by a
specialist.
D A venture team is defined as a “group brought together from various < TOP >
21.
departments and given the charge of developing a specific product or
business.” They can be instrumental in organizing new product development.
C The following aspects of marketing form the basis of customer service: < TOP >
22.
(i) Customers should be given more importance than the goods and services
that have to be delivered.
(ii) Products and services are of significance to the customers only when
they are available to them exactly when customers need them.
(iii) Organizations should focus more on profitability then on sales volume.
Hence option (c) is the answer.
Page 22 of 31
B Onida is focusing on brand extension to reach out to a new category. An old < TOP >
23.
brand which is losing its market share over a period of time has to be extended
through the adoption of several strategies like increasing the usage of the
brand and entering into new segments.
E Marketing channel is defined as a group of exchange relationships, which < TOP >
24.
create customer value in acquiring, consuming and disposing of products and
services.
E Marketing channels typically perform the following functions: < TOP >
25.
 Facilitating the exchange process between a firm and an individual
customer
 Alleviating discrepancies while delivering goods and services to the
customers
 Matching the needs of buyers and sellers
 Providing efficient service to the customers to improve credibility in the
market
Providing universal way to classify marketing of services is not a function of a
marketing channel. Hence option (e) is the answer.
D The social and cultural environment differs from one country to another and it < TOP >
26.
has a significant impact on the consumption patterns of consumers. Therefore,
while designing global marketing strategies, companies should take into
consideration the differences in cultures and societies. These differences may
occur due to differences in language, demographics, non-verbal
communication, education, values and beliefs.
A By pricing low to gain short-term unit sales volume, the firm is trying to gain < TOP >
27.
market share.
E The right selection of brand names is more important if the product is meant < TOP >
28.
for international markets. For products meant for international markets, it is
crucial to select appropriate brand names that convey the right meaning in
those markets. When marketers enter international markets with their brands
they have to analyze the meaning of the brand name in local languages.
Besides searching for any negative connotations, which the brand name might
have, marketers also have to evaluate whether the name is easily identified and
pronounced, whether it could confuse the audience with unintended
references, what kind of an image the brand name will project and what the
brand name would convey when it is pictorially represented.
A Lot size refers to the total number of units of a product that a customer < TOP >
29.
acquires during a transaction period. Service utility of a channel member
refers to the value added services offered by the channel member. So (a) is the
answer.
E Product testing is carried out to evaluate the product characteristics and < TOP >
30.
examine the functional performance of the product. It gives useful information
like customer’s first impression about the product and provides early use
experiences of the customers and their further expectations.
A The catalog by the nursery sends out to tell prospective customers about the < TOP >
31.
miniature trees is part of the promotion element of the marketing mix.
Therefore option (a) is the correct answer.
A Godrej had a face cream with the name Fair Glow Fairness cream and came < TOP >
32.
out with the Fair Glow toilet soaps to cater to the people who wished to use
soap bars rather than cream. This is an example of Line extension.
Page 23 of 31
A Toyota is one of the companies that is following just- in-time method. It is < TOP >
33.
based on the process of systematically controlling the supplies as well as
production systems of the organization. The concept of Just in time implies
that raw materials are delivered in required quantities to the production plant
as and when they are needed without any delay. Here the Transystem vehicles
transferring raw materials daily from Metzeler Automotive Profiles India
plant at Sahibabad in UP to Toyota Kirloskar Motor’s Manufacturing plant at
Bidadi 50kms from Bangalore. These components reach Toyota’s
manufacturing plant in Bangalore just-in-time for the operations.
E The product management organization has a product manager controlling all < TOP >
34.
activities pertaining to a particular product. A product manager has to perform
various functions like planning, implementing and controlling the product
strategies. Other functions include developing effective long-term strategies
for the product, forecasting its sales, developing an effective marketing plan,
coordinating with various functional departments, regularly collecting relevant
information about the products from markets and customers etc.
E Logrolling is the act of exchanging favors for mutual gain. < TOP >
35.
E Retro marketing is a form or marketing where the consumers are delicately < TOP >
36.
teased by the deliberate holding back of supplies or by teaser advertisements.
B Normally, the price changes made by the company influence how competitors < TOP >
37.
price their products. Competitors may react to price changes in three ways.
One way is to maintain the status quo, i.e, not react in any way to the price
changes. Another way is to set the prices equal to that of the company. A third
way for competitors to react is to attack the price changes by setting their
prices lower than that of the company. Apart from the above responses,
competitors' pricing patterns also depend on environmental factors such as the
types of markets they serve, the customers' requirements, presence of potential
competitive advantages, and so on. It is thus very important to analyze the
competitors' prices.
B The political system of a company (socialistic and capitalistic) influences the < TOP >
38.
economic environment of a company. Allocation of resources in capitalistic
systems depends on demand.
B In dual distribution, a manufacturer distributes his products through more than < TOP >
39.
one marketing channel.
A Market share analysis is an ideal process to judge a company’s performance < TOP >
40.
against its competitors. There are about four techniques available for
measuring the market share. Relative market share method is one of the
techniques for measuring. This is a process of considering the sales of the
company as a percentage of the combined sales of the top three competitors.
A Two-part pricing is normally followed in services in which a company charges < TOP >
41.
a fixed price for an initial service and subsequent charges for over and above
the minimum service consumed.
E Brand proliferation is the converse of brand extension. Introducing new < TOP >
42.
products in the market in different product categories with an existing brand
name is referred to as brand extension. Brand proliferation is the introduction
of products with new brand. Most companies increase their brand width by
resorting to brand proliferation.
D In comparative advertising, two or more brands of the same product category < TOP >
43.
are compared with each other on the basis of one or more product attributes.
The comparison can be implicit or explicit. Explicit advertising is one in
which the names of the competing brands are openly used in the
advertisement.
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A In inoculative advertising, companies aim at retaining their customers by < TOP >
44.
enhancing their resistance to withstand competitors’ appeal. A company can
highlight the weaknesses of a competitors’ product to convince the customers
that its product is superior to that of the competitor. (b) Institutional
advertising promotes a concept, idea, or philosophy. The objective of
institutional advertisements is to build goodwill or an image for an
organization, rather than to promote a specific good or service (c) When a
brand is directly or indirectly compared to a competitor, it is known as
comparative advertising. (d) The objective of reminder advertising is to
remind people about the brand. (e) Product advertising places a message to
promote a good or service.
B Motorola was known for its innovative technological products. Thus it relied < TOP >
45.
heavily on the latest technology (Iridium Project), and invested heavily on the
project. When developing the project they never cared for whether the product
will be accepted by the people or not. So, when the product was launched with
a high price, it was not accepted by the people since there was very less
significant difference between the satellite phone and the existing mobile
services when costs were compared. Thus, cost of the satellite phone was the
main reason for its failure.
D In a service firm, the emphasis on productivity is high, while ensuring that the < TOP >
46.
costs remain at minimum. Service organizations can adopt various approaches
to enhance the productivity of their personnel. These approaches include
helping employees in better utilization of their skills, designing more effective
service, increasing customer involvement in the service delivery process,
improved selection and training procedures to ensure better skilled personnel,
standardizing service delivery procedures and using modern technology to
provide better service to customers.
D The Sun Country Airlines did not change the prices according to the demand < TOP >
47.
patterns of the company’s product in the market. It followed going rate pricing
method for pricing its traveling services. The company adopted pricing
strategies similar to those adopted by the major players in the market.
D The activities performed in this stage are recording customers’ initial reaction < TOP >
48.
towards the product before it invests further in product development, the firm
makes a plan for developing, producing, and marketing the new product, the
R&D, manufacturing, marketing and finance departments estimate the cost. A
prototype is developed in product development stage which reveals all
tangible and intangible attributes of the product. So (d) is the answer.
D Direct marketing is similar to traditional marketing activities except that it has < TOP >
49.
three additional features.
1. In direct marketing, marketers invite customers to respond to their
marketing efforts through the telephone, email, etc.
2. The effectiveness of direct marketing can be measured easily because
direct feedback is available to marketers from customers.
3. In direct marketing, a database of customers is maintained. This helps
marketers understand customers and serve from better, and eventually
gives the marketer a competitive advantage.
E A zero level channel represents a manufacturer directly selling his products to < TOP >
50.
the final consumer. Here, Krishna Farm is selling jams and jellies directly to
consumers through mail order and at their old fruit stand.
C Rack jobbers not only provides transportation and delivers products to < TOP >
51.
retailers, but also provides the service of placing products on retailers' shelves.
A In discriminatory pricing, companies charge different customers differently for < TOP >
52.
the same product on the basis of their pricing capacity and the value of the
customers. Promotional pricing can not counter the introduction of new
product by competitors. So (a) is the answer.
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C Tying agreement is an agreement between a manufacturer and a distributor < TOP >
53.
that makes the distributor purchase other products produced by the
manufacturer along with his main line of product.
C Endorsers are people who create a positive impact on the mind set of < TOP >
54.
customers and motivate them to buy the products.
A Taj Group of hotels and the ITC Welcome group have differentiated their < TOP >
55.
services on the basis of service offer. They are offering a wide verity of
services to their customers than the basic level of service such as providing hi-
tech rooms and suits, giving access to computers, fax machines and electronic
mail etc.
D The second type of franchise is called business format franchise, where the < TOP >
56.
“franchisee has the freedom to modify or make changes to the franchiser's
product or, produce a new product under the license of the franchiser. The
franchisee uses the trademark of the franchiser along with his methods of
production, quality control mechanisms, marketing plans, operational
standards and so on. In this type of franchising too, the franchisees operate in a
designated market area. Fast food outlets such as McDonald's, and ice cream
parlors such as Baskin Robbin’s are examples of business format franchises.
E The key issues that result in the failure of outsourced projects include < TOP >
57.
companies’ failure to achieve the expected cost reductions from outsourcing,
poor service quality, breach of service agreements, lack of trust between the
employees and the employer in the outsourcing firm, failure of companies to
identify the exact reasons for outsourcing and neglect of the human relations
aspects involved in outsourcing.
A The objective of pricing the products and services of many organizations is to < TOP >
58.
either increase or maintain the market share. The growth rate of a firm’s
market share is independent of the industry’s performance in which the firm is
operating. Absolute sales volume of a company might increase though its
relative market share is decreasing.
B Reliance Money has adopted the concept of idea marketing as it is one of the < TOP >
59.
social welfare campaigns for the betterment of public.
C A marketer who resorts to price competition will compete with his competitors < TOP >
60.
on the price front by offering his product or services at the same price of at a
lower price than that of the competitor. In price competition, marketer who
can sell his products at the lowest cost will usually win a larger part of the
market share.
C Channel members should not completely rely on market intelligence reports, < TOP >
61.
as they are seldom perfect.
D < TOP >
62. With respect to brand extension in downscale markets, the following are true:
I. Price reduction may have serious repercussions on consumers’
perceptions about the brand’s ability to offer superior value.
II. It increases the sales volume by leveraging on the economies of scale.
IV. A price reduction in the brand can be adopted under any circumstances if
it gives the company a cost advantage.
Statement (III) is not true because entirely new brand can be launched. Hence
option (d) is the answer.
B “Gift with purchase” is a very common promotional technique. It is also < TOP >
63.
known as a “premium promotion” as the customer gets something in addition
to the main purchase.
Page 26 of 31
C If a firm decides to enter a new product category, then it will be better to have < TOP >
64.
a new brand name for its new product. When manikchand tried to introduce its
atta it did not succeed as people could not imagine or associate manikchand
a popular pan masla or gutka masala to be an atta manufacturer. But when it
entered the mineral water segment it realized that entering with the same brand
name would hamper its sales therefore manikchand has come up with the new
brand name “Oxyrich”, and was successful. Therefore option (c) is the correct
answer.
As other options like co-branding, brand relaunching , brand rejuvenation ,
product line extension does not remove the problem of people not associating
with the gutka manufacturer. As many house hold families treat gutka as a
harmful product and cannot imagine themselves using the atta with the same
brand’s name.
D David Aaker, has suggested several issues to be considered while going in for < TOP >
65.
brand extension. Organizational synergies, product category similarity, and
perceptional, match or mismatch need to be considered exhaustively.
B Bulletin boards are electronic boards where mails can be sent, discussions can < TOP >
66.
be held between individuals and groups and even files can be exchanged.
B The objectives of market logistics are < TOP >
67.
 To meet customer expectations on time with maximum accuracy and
without damage to the products being delivered,
 To cut down distribution costs to the maximum extent possible, either by
building an internal distribution process, or by hiring outside expertise.
 To reduce the time from which requisition is placed with the vendor to
the time the product reaches to the final customer. So (b) is the answer.
C Optional feature pricing is done for the accessories that come along with a < TOP >
68.
product.
C Efficiency control relates to many large companies employing marketing < TOP >
69.
controllers, whose responsibility is to determine the various marketing
expenditures of the company and provide necessary training for the marketing
personnel on the financial dimensions of the marketing activities.
D Companies divide the screening of potential markets into four phases. During < TOP >
70.
the first phase, the firm analyses different markets on the basis macro
environmental factors such as political, legal, geographic and economic
environment. The second stage involves analyzing the market size, product
acceptability and customer perceptions. The third stage of selection process
includes analyzing micro environmental factors such as the barriers to entry
and exit in a particular industry, the cost of exit, industry capacity etc. The
fourth and the last stage of the selection process involves ranking the potential
,markets on the basis of profit potential, market share, level of investment,
margins, expected sales, etc.
A There are several types of co-branding such as ingredient co-branding (Hero < TOP >
71.
Honda recommending MRF tyres), same company co-branding (Coca Cola
recommending Kinley mineral water and Georgia coffee). Joint Venture co-
branding and multiple sponsors are co-branding (Taligent, a technological
alliance of Apple, IBM and Motorola).
B Total estimated sales are the sum of estimated first time sales, replacement < TOP >
72.
sales and repeat sales.
C Limited Freedom: A franchisee has to operate according to the standards set < TOP >
73.
by the franchiser. These standards may sometimes cover all aspects of the
business right from business hours to book-keeping methods. The necessity to
abide by these standards restricts the franchisee's creativity and flexibility
which he could have otherwise used in an independent business.
Page 27 of 31
D Inside order takers are the salespersons who operate from within the store and < TOP >
74.
do not make any field calls. They help grow the business by interacting with
the customers and taking orders through phone or mail.
A The predominant aspect of the store's presentation is the atmosphere--how the < TOP >
75.
store's physical layout, decor, and surroundings convey an overall impression.
A The social regulations in marketing include customer rights, Consumer < TOP >
76.
Protection Act, consumer forums. Bureau of Indian Standards, competition
policy, environmentalism and public action to regulate marketing.
C Customers are less price sensitive, when the cost incurred on the product is too < TOP >
77.
less compared to the total cost of the end product. This is known as end benefit
effect.
B In this situation The option (b), i.e. recruiting sales people from the Indian < TOP >
78.
origin would be the most suitable strategy for Metlife to follow, in order to
make maximum use of the situation. Commonly the people feel much
comfortable with the people who are from the same origin. Also, there will be
a definite patriotic feeling when the people stay outside the country. They also,
would be interested to do some favor directly or indirectly, when they meet the
people from the same origin. So, the possibility of converting an Indian NRI to
a customer increases when a sales person of the same origin approaches him.
B Business-to-Business services are purchased by organizations. < TOP >
79.
C Equalized workload method is based on the assumption that every salesperson < TOP >
80.
should have the same amount of workload. In this method, the customers are
divided into groups based on the volume of purchases made by them. Then the
sales manager calculates the number of sales calls required to satisfactorily
serve the customers in each group.
B The EOQ model is based on certain assumptions given below: < TOP >
81.
 All the demand will be satisfied.
 The price of inventory is independent of order quantity.
 There is no inventory in transportation.
 There is no interaction between the multiple components of inventory.
 Demand is predictable and constant.
 Capital is available in abundance.
 Replenishment cycle time is known.
 Ordering cost is constant.
 The lead time for material delivery is known with certainty and it
remains constant.
Hence option (b) is the answer.
C For making any sponsorship effective, there are a few important factors that < TOP >
82.
should be considered.
 The company should be clear about the benefits it is trying to derive out
of sponsoring a particular event.
 From the options available the firm should choose the event that will help
it achieve its sponsoring objectives.
 The brand should be easily associated with the event it is sponsoring.
 It is better to have a long term relationship with an event rather than
sponsor a new event every time.
 Opportunities have to be identified and utilized for the maximum
publicity.
 Companies should consider these sponsored events as platforms for
launching product awareness campaigns.
 The sponsorship should be effectively planned and implemented to attain
maximum brand mileage.
Hence option (c) is the answer.
Page 28 of 31
A Free merchandise: additional amount of the product is offered without any < TOP >
83.
additional cost, as an incentive to purchase a minimum quantity. The incentive
is typically offered for a limited period of time.
(II) true in the case of ‘Merchandise allowance’
(III) true in the case of ‘Dealer loader’
(IV) true in the case of ‘Buying allowance’.
Hence option (a) is the answer.
C A two-level channel represents two intermediaries, such as a wholesaler < TOP >
84.
purchasing goods from a producer and selling them to a retailer, who in turn,
sells them to the final consumers. Fast moving consumer goods (FMCGs) are
usually sold along this route.
B The best option for Pradeep would be to appoint some experienced < TOP >
85.
telemarketing personnel and with the help of them brief the services provided
by the company and fix an appointment so that it becomes easy for the
executive to convert the prospect into the customer. As it is a small company it
can’t afford to spend on advertising at least in its early stages. Placing an ad in
the newspapers is a costly affair and also they cannot communicate about their
services better when compared to telemarketing. Also, the conversion rate in
telemarketing is high compared to other tools.
E Marketers use different strategies while setting the price according to < TOP >
86.
 Demand for the service.
 Season and time of the year, day, etc.
 Age of the service consumer.
 The customers’ ability to pay.
E While designing marketing channels, firms first develop objectives. These < TOP >
87.
objectives may vary with the size of the firms. The objectives of smaller firms
pertain to the markets these may want to serve and the level of service they
can offer. For a limited market with few intermediaries. A manufacturer,
whether big or small, has to conduct a SWOT analysis of the intermediaries in
terms of their strengths and weaknesses in the internal environment and
opportunities and threats in the external environment. Marketing channels
support the firms in effective delivery of customer value proposition.
Therefore, consumer characteristics also have to be considered when setting
channel objectives in designing new channel system.
B Situation analysis: This involves developing an organizational mission, < TOP >
88.
evaluating the ownership and management alternatives, and selecting a
product or service type to engage in retailing.
D MCI is competing with his competitors on the price front. The situation is < TOP >
89.
related to price competition. All the firms differentiated their offer from its
competitors through price. Factors like service features, quality of service,
promotions are related to non-price competition.
C Advertisers have a wide variety of advertising media to choose from. Before < TOP >
90.
selecting the appropriate medium, the firm wanting to advertise has to find
answers to four important questions. They are:
 Who should be reached?
 Where are they located?
 What is the message that has to be delivered?
 When do we run the advertising campaign?
E In non-goods service retailing, personal services are provided. No, physical < TOP >
91.
goods are involved; only the time and expertise of the person who is going to
provide the service is bought for a fee. Stockbrokers, tutors, personal trainers,
real-estate brokers, etc are examples of this category.
Car rental is an example of rented goods services.
Page 29 of 31
C < TOP >
92. Inventory management is a concerted effort to integrate the firm’s value chain
and its inventory policy. Clooney, a physical distribution manager is
developing and maintaining assortments of products that are adequate for
customer demand is currently in inventory management stage of market
logistic decision.
A When one division of an organization transfers or sells goods or services to < TOP >
93.
another division, the price charged for the goods is called transfer pricing. This
is one of the pricing policies. So (a) is the answer.
D The following are the objectives of regional free trade zone < TOP >
94.
– ensure economic growth of members
– increase trade relations with other countries
– increase foreign capital inflows.
(IV) Incorrect because the objective of regional free trade zone is to integrate
the economic polices of member countries. Or even if there are non- member
countries, by forming different blocs such as ASEAN, NAFTA, they
encourage integration of economic polices and free trade within these blocs.
D It is essential for the sender to communicate in such a way as to ensure that the < TOP >
95.
message is perceived by the receiver in the way it was intended to be. While
communicating, the sender might have his own perceptions about the message
but these may, not necessarily match the perception of the receiver. However,
for an effective message, the perceptions of sender and receiver should match.
This is especially important in marketing communication since a wrongly
communicated message may result in the failure of a product in the market
despite it being superior in terms of features and quality.
B Time gap arise when there is a considerable time difference between the < TOP >
96.
production and consumption of goods.
C In direct marketing there is no need to maintain high inventory so marketing < TOP >
97.
costs are very less. The company also need not share profits with the
middleman. Hence, direct marketing will always be cheaper. The other reasons
may had forced to enter into retailing.
B In market allocation method, the customer is given maximum preference and < TOP >
98.
the goods and services are produced according to the choice of the customers.
B Automatic vending is a type of non-store retailing in which vending machines < TOP >
99.
are used to dispense goods or services to customers without the involvement
of a salesperson. When customers insert a coin or cars in a vending machine, it
delivers the product or the service to the customer. It provides continuous
service to customers.
C The Indian Parliament enacted the Bureau of Indian Standards Act in 1986. It < TOP >
100.
was specifically set up by the government to standardize the quality of goods
and services being produced in the country by issuing certifications to those
companies that meet the minimum requirements laid down by it from time to
time. The Bureau of Indian Standards (BIS) issues certification under the
Indian Standards Institution (IS1) seal. The Bureau establishes standards
regarding products or services by constituting committees comprising of
consumers, manufacturers, technologists, scientists and other officials. These
standards are established after giving a fair chance to all the parties concerned
to voice their opinion. The Bureau also awards the Rajiv Gandhi National
Quality Award annually to companies on the basis of their leadership skills,
policies and strategies, human resource policies, resources, processes,
customer satisfaction, employee satisfaction, impact on environment and
society and business results.
< TOP OF THE DOCUMENT >
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Question Paper

Marketing Management – II (MB1C2): January 2009

(a) Blue marketing

(a) Brand relaunch

(a) Price promotion

I. Estimated first time sales.

I. Board of Industrial Finance and Restructuring.

(a) Zero-level channel route

(a) Sender should send the information according to his perception

END OF QUESTION PAPER

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