Unit 8 Marketing Management PYQ’s 6th Dec 2019 Shift 2

The following are the explanation for the correct match:

Key Points

Assertion (A): If the firm is prepared to incur increased costs on transportation, it may be in a position to reduce its inventory cost

Explanation:

1. Inventory Turnover is a measure of the number of times inventory is sold and replaced in a time period. This ratio is calculated by dividing Sales by Inventory. The time period is typically a year but can be shorter.
2. Analyzing inventory churn helps a business to plan at all levels of its income statement. It allows one to better forecast the cash likely to be required to reinvest in inventory in the coming months based on past performance.
3. It allows one to identify underperforming sales lines and products so that those products can be moved more quickly, either via specials or a focus on those products which may have previously been neglected.
4. This, in turn, will free up cash flow and shelf space for higher volume or better-performing products. It can also improve inventory logistics and supplier relationships.
5. The cost of transportation can be reduced if proper attention is paid to this ratio and, finally, it allows one to consider inventory storage capacity requirements as the business expands.
6. Similarly, if the firm is prepared to incur an increased cost of transportation, it may be in a position to reduce its inventory cost.

Therefore, the Assertion (A) is correct.

Reason (R): As in such a case, the firm can use the fastest mode of transport and rush the goods/stocks to the desired warehouse, unmindful of the cost of transportation

Explanation:

1. Inventory cost is not only the price that was paid to purchase an item but also the cost of storing and maintaining that item for however long it takes it to sell.

2. It can be broken down into three categories: ordering costs, carrying costs, and shortage costs.
3. These costs can be reduced if there is an increase in frequency in the transportation of goods.
4. Thus in such case, the firm can use the fastest mode of transport and rush the goods/stocks to the desired warehouse, unmindful of the cost of transportation

Therefore, Reason (R) is correct, and R) is the correct explanation of A)

Marketing Logistics: From the point of view of management, marketing logistics has been described by Philip Kotler as “planning, implementing and controlling the physical flows of materials, final goods and related information from point of origin to point of consumption to meet customer’s requirements at a profit “. In short, it involves getting the right product in the right quantity to the right customer in the right place at the right time.

Key Points

Market Logistic Planning has the following four steps:

1. Decide on the company’s value proposition to its customers
2. Select the best channel design and network strategy for reaching the customers
3. Develop operational excellence in sales forecasting, warehouse management, transportation, and material management
4. Implement the solution with the best information systems, equipment, policies, and procedures

Thus, the correct sequence is d) → b) → a) → c)

The correct answer is – Everyone who drinks carbonated soft drinks and competitors

Key Points

• Let’s have a look at the 3rd sentence from the paragraph:
• “Market definitions of a business, however, describe the business as a customer – satisfying process.”
• Moreover, PepsiCo, Inc. is American multinational food, snack and beverage corporation headquartered in Harrison, New York, in the hamlet of Purchase.
• Upon perusal of the above statement, it can be concluded everyone who drinks carbonated soft drinks and competitors are Pepsi’s target market.

The correct answer is – We supply energy

Key Points

• Bharat Petroleum Corporation Limited (BPCL) is an Indian public sector oil and gas company headquartered in Mumbai, Maharashtra.

• As per the passage, the market definition needs to be customer-oriented.
• Of the given options, only the 3rd option i.e. We supply energy, has an innate appeal and the rest of the options are too straightforward.

The correct answer is – We make air conditioners

Key Points

• Blue Star Limited is an Indian Multinational company specializing in designing, developing, manufacturing and marketing a wide variety of products in the air conditioning and commercial refrigeration industry and is headquartered in Mumbai, India.
• As per the description of the company Blue star given above, the 3rd option i.e. We make air conditioners, is the correct choice.

The correct answer is – They have very limited words

Key Points

• Let’s have a look at the last sentence from the paragraph:
• “To define its mission, a company should address Peter Drucker’s classic question: What is our business?”
• Upon perusal of the above statement, it can be concluded that limited words is not a major characteristic of a good mission statement.

The correct answer is – Product Definition – We make copying equipment
Market Definition – We help improve office productivity

Key Points

• A Xerox company may be defined as the one that manufactures Xerox machines.
• As per the passage, the product definition needs to be product-specific i.e. We make copying equipment.
• As per the passage, the market definition needs to be customer-oriented i.e. We help improve office productivity.

Assertion (A): Auto companies and other consumer goods companies offer cash rebates to encourage the purchase of the manufacturer’s products within a specified period.

Explanation:

1. Cash rebate is an offer given to consumers for a cash discount when they purchase a consumer good.
2. Hence a cash rebate can be thought of as a discount coupon.
3. Usually, the rebate is offered by either the manufacturer of the product or the retailer.
4. Cash rebate is a sales promotion strategy adopted by marketers to provide incentives in order to entice consumers into buying the product.

5. Thus, the assertion is correct.

Reason (R): The same product is priced differently at different times.

Explanation:

1. Automobile products have a highly elastic demand.
2. Thus, the consumer will wait for the price to fall if the product is priced differently at different times.
3. Consumer goods are generally priced at the Maximum Retail Price (MRP).

4. A Maximum Retail Price is a manufacturer calculated price that is the highest price that can be charged for a product sold in India and Bangladesh.

5. Thus, the reason is incorrect.

Web Marketing:

1. Web marketing refers to a broad category of advertising that takes many different forms, but generally involves any marketing activity conducted online.
2. Marketers have shifted their efforts online because it tends to be significantly less expensive.
3. Many online advertising spaces are free to use.
4. Web marketers usually try to attract prospects to their site through email, advertisements in newspapers
5. Companies can upload videos to Youtube or start a blog for no cost at all.
6. Other outlets like official websites or paid search marketing cost a fraction of what a major television advertising campaign would.
7. The web also presents exciting new opportunities for companies to profile their customers. They use attractions like discounts, gifts, and contests, and they also give a lot of publicity to the discount schemes.
8. The interactive space of the Internet simplifies a company’s ability to track, store, and analyze data about a customer’s demographics, personal preferences, and online behavior without asking the customers to mandatorily give their personal data.
9. This data allows the advertiser to provide a more personalized and relevant ad experience for the customer.

Therefore, from the above explanation, asking customers to give their personal data mandatorily is NOT true about web marketers.

Logistical efficiency pertains to the process of how effectively a business conducts operations. This relates to all areas of the operation that include transportation, warehousing, and overall distribution in general. A business with good logistics can keep track of product shipments and move products or information quickly to the correct locations.

Key Points

1. A customized information management system has maximum contribution in an efficient logistical system as it benefits the business in a range of areas including warehouse management, supply chain management, order tracking, inventory management, and accurate delivery of customers’ orders.
2. Automating the business process using proficient software technologies helps to increase the efficiency of business management and helps to achieve higher productivity and it also reduces the overall cost of running a company. In logistics management, the business process software plays a major role.
3. It not only provides real-time updates regarding the procurement, delivery, and availability of the goods but also helps to maintain the accounts and employee details using the software.
4. This saves a great amount of time because manual interference is reduced.

Therefore, In recent years – the major gain in logistical efficiency has come from advances in Information Technology.

Electronic commerce:

1. Electronic commerce or e-commerce is a term that conceptualizes commerce or trading using the internet.
2. Electronic commerce or E-Commerce is a term for any type of business, or commercial transaction that involves the transfer of information across the Internet.
3. It covers a range of different types of businesses, from consumer-based retail sites, through auction or music sites, to business exchanges trading goods and services between corporations.
4. It is currently one of the most important aspects of the Internet to emerge.
5. E-Commerce allows consumers to electronically exchange goods and services with no barriers of time or distance.

Key Points

The 7C Framework: The 7C Framework looks specifically at customer interface elements – what the user sees. In this sense, the interface elements encapsulated by the 7Cs represent the method through which businesses communicate with customers to deliver the core value proposition each company wishes to convey.

The 7C framework includes seven elements, each representing a component of the interface:

1. Context – website design
2. Content – information on the website

3. Community – communication between users

4. Customization – the extent to which the site can be customized
5. Communication – site to user communication
6. Connection – the relationship between this and other sites
7. Commerce – e-commerce functionality

Thus, option 2 is correct.

Customer Relationship Marketing (CRM):

1. Customer Relationship Marketing (CRM) refers to all marketing activities directed towards establishing, developing, and maintaining successful relationships with their customers.
2. The theories and concepts of CRM draw upon a number of distinct areas including service quality, services marketing, customer retention economics, and issues related to interpersonal and social interaction.
3. However, the practice of relationship marketing is as old as marketing and selling.
4. CRM, Customer Relationship Management is a business strategy that enables organizations to get closer with their customers, to better serve their needs, improve customer service, enhance customer satisfaction and thereby maximize customer loyalty and retention.

Key Points

1. Though all of the above options help to maintain good relationships with customers, the core of CRM lies in marketing activities a business undertakes like developing various promotional programs to attract and retain customers and meet the individual needs of valued customers.