Question Paper Marketing Management – I (MB221): January 2008

1. Satish Kumar was a computer wizard. While he could work almost anywhere as a production engineer, Satish
enjoyed his work at Xenon where he went from department to department helping different specialists create
new software for their particular areas. In terms of the generic value chain, Satish is involved in which
activity?
(a) Firm infrastructure
(b) Marketing and sales
(c) Operations
(d) Technology development
(e) Procurement.

2. Marketing can be defined as “the process of planning and executing the conception, pricing, promotion and
distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals.”
In this context, marketing affects
(a) Some individuals, all organizations, all industries, and all countries
(b) All individuals, all organizations, some industries, and all countries
(c) All individuals, some organizations, all industries, and all countries
(d) All individuals, all organizations, all industries, and all countries
(e) All individuals, all organizations, all industries, and some countries.

3. For effective segmentation, segmentation variables need to exhibit certain characteristics. Which of the
following is/are true regarding the characteristic of substantiality?
I. A marketer should take enough care to see that each segment consists of an adequate number of
customers worth catering to while segmenting the market.
II. Each segment should be big enough to make economic sense.
III. If a product is manufactured for the customers, the company should be able to make profit by targeting
them.
IV. Each segment requires different marketing strategies because it responds to different strategies
differently.
(a) Only (II) above
(b) Both (I) and (II) above
(c) Both (II) and (IV) above
(d) (I), (II) and (III) above
(e) All (I), (II), (III) and (IV) above.

4. According to which generic strategy suggested by Michael E Porter does a firm tend to serve a specific
segment instead of catering to the entire market?
(a) Cost leadership
(b) Differentiation
(c) Focus
(d) Homogeneous
(e) Linear.

5. Which of the following is/are the conditions in which obsolescence occurs as a result of marketing myopia as
described by Theodore Levitt?
I. If the market for a product expands automatically, companies do not think imaginatively about how to
expand the market.
II. The belief that by producing in large quantities, per unit output cost can be significantly reduced.
III. The belief that there are substitutes for the industry’s major products.

IV. Preoccupation with a product that lends itself to carefully controlled scientific experimentation,
improvement, and manufacturing cost reduction.
(a) Only (I) above
(b) Only (III) above
(c) Both (II) and (III) above
(d) (I), (II) and (IV) above
(e) All (I), (II), (III) and (IV) above.
6. A sales representative calls on a prospective business customer only to find that the customer has an
established relationship with another supplier that seems to be working well. The customer is not interested in
considering other suppliers as there is no change in the purchase specification and thus he does not want to
spend more time on the purchase process. In which of the following buying situations is the customer engaged?
(a) Straight rebuy
(b) Modified rebuy
(c) New-task
(d) System buying
(e) Extensive problem-solving.

7. The evolution of marketing has seen various eras’. The marketing era gave rise to the ‘marketing concept’.
Which of the following is/are true about the marketing era?
I. Companies focused on selling their products.
II. Companies embraced the concept of coordinated marketing management.
III. Companies goal was to satisfy customer needs and wants.
IV. Product features were given importance in this era.
(a) Only (I) above
(b) Only (II) above
(c) Both (II) and (III) above
(d) (I), (II) and (III) above
(e) (II), (III) and (IV) above.

8. The organization’s purchasing approaches and its company philosophy gives an insight to the marketer to
segment industrial markets. Which of the following is/are the factors that are considered in the purchasing
approach?
I. Organization’s purchasing function.
II. Power structures.
III. Product application.
IV. General purchasing policies.
(a) Only (I) above
(b) Only (II) above
(c) Both (I) and (II) above
(d) (I), (II) and (IV) above
(e) All (I), (II), (III) and (IV) above.

9. In United States of America, the market for the fast cars, which have so much horsepower that handling
becomes an issue, is decreasing. People are more interested in buying SUVs and pickups. As a result, General
Motors is stopping production of its Camaro, a fast car that has had limited sales recently. Since the Camaro
can no longer generate enough cash to sustain its manufacturing, the BCG portfolio would classify it as a
(a) Cash cow
(b) Dog
(c) Question mark
(d) Star
(e) Cat.

10. Crypt is a company that makes and sells coffins and grave stones. The company adopts hard selling techniques
and functions on the presumption that consumers, if left alone will ordinarily not buy enough of the company’s
products. This orientation or approach would make sense if
(a) Consumers are primarily interested in product availability

(b) Crypt wants to expand the market
(c) Consumers consider quality and performance of the product as a key purchase influencing factor
(d) Consumers show buying inertia
(e) Crypt follows the ‘sense and respond’ philosophy.
11. Companies devise several strategies to sustain themselves in the market, earn profit and gain a competitive
advantage over competitors. Which of the following is/are true regarding a market leader?
I. A market leader has to constantly guard itself from other competing firms as they will always try to
attack the leader at its weak spot or challenge in its strong area.
II. A market leader usually focuses all his resources to efficiently serve a small market segment and thus
gain the loyalty of customers in this segment.
III. The market leader can adopt strategies to attack competitors by offering the market all benefits and
features provided by its competitors.
(a) Only (I) above
(b) Only (II) above
(c) Only (III) above
(d) Both (I) and (III) above
(e) Both (II) and (III) above.

12. Videos is a company that sells videos on exercises for weight management. Its slogan is "Get a Beautiful Body
with the Right Exercise Videos for You." Which of the following segmentation is used by the company?
(a) Geographic
(b) Personality-based
(c) Multi attribute
(d) Behavioral
(e) Demographic.

13. There are various levels of relationship marketing. Which of the following describes partnership marketing
level?
(a) A sales person sells the product but does not contact the customer again
(b) A sales person sells the product and encourages the customer to call if he has any
complaints
(c) Sales person calls the customer after a small time period to check whether customer is satisfied with the
product
(d) Sales person contacts the customer from time to time with suggestions about product usage
(e) Companies work in tandem with their customers to provide better services, etc.

14. The various steps in the marketing planning process are, analyzing the marketing opportunities, developing
marketing strategies, planning marketing programs and managing the marketing efforts. Which of the
following statements pertain/s to managing marketing effort?
I. Any fault at any stage of the product development process, will affect the sales badly.
II. Due care has to be taken while selecting the raw materials, stocking them, processing, etc.
III. Manager should interfere and control any deviations that occur at any stage of the marketing process.
(a) Only (I) above
(b) Only (II) above
(c) Only (III) above
(d) Both (I) and (II) above
(e) All (I), (II) and (III) above.

15. Simon Technologies manufactures computer accessories, such as modems and network cards. Even though the
company has several purchasing managers, the company President has final authority on all purchases over
$500, including the selection of the supplier. In the typical buying process, the company President would have
the primary role of
(a) User
(b) Buyer
(c) Influencer
(d) Decider
(e) Gatekeeper.


16. Which of the following consists of the factors that affect consumer purchasing power and spending patterns?
(a) Political environment
(b) Legal environment
(c) Economic environment
(d) Cultural environment
(e) Natural environment.
17. Mr. Karan Malhotra had just bought a new car and was a bit uncertain about whether or not he had done the
right thing in buying it. Two days after he purchased it, he decided to take it back to the dealer so that the
dealer could install some additional optional equipment. When Karan went to the dealer to pick up the car after
the installation, the salesman who sold the car to Karan said, "You know, in the last two hours three different
customers told me how much they liked the looks of your new car. One of them even wanted to know if it was
for sale!" This attempt by the salesman to confirm the wisdom of Karan’s purchase decision seems to be aimed
at reducing
(a) Involvement
(b) Perception
(c) Adoption
(d) Learning
(e) Cognitive dissonance.

18. The macro environment affect/s the company in the long run. Which of the following does not reflect the
natural environment?
I. A shortage of raw materials.
II. Changing consumer spending patterns.
III. The increased cost of energy.
IV. Increased pollution.
(a) Only (II) above
(b) Both (I) and (II) above
(c) (II), (III) and (IV) above
(d) (I), (II) and (III) above
(e) All (I), (II), (III) and (IV) above.

19. Cinema Ltd. defines itself as being a company in the film making business rather than providing entertainment.
This is an example of
(a) Modern marketing
(b) Product positioning
(c) Pure competition
(d) Reactive marketing
(e) Marketing myopia.

20. Which of the following statements is/are correct regarding causal research?
I. The cause and effect relationships between two variables are analyzed.
II. It is carried out with a detailed questionnaire and with clearly defined objectives.
III. This will help managers to select a particular strategy.
IV. It helps the management identify the presence of potential opportunities and threats for the company.
(a) Only (I) above
(b) Both (I) and (II) above
(c) Both (II) and (III) above
(d) (I), (II) and (III) above
(e) All (I), (II), (III) and (IV) above.

21. The socio-cultural environment is made up of individuals, institutions and other forces that affect
(a) The natural resources that are needed as inputs by marketers
(b) A society's basic values, perceptions, preferences and behaviors
(c) The laws and government agencies limiting individual behavior in society
(d) The characteristics of populations

(e) Consumer purchasing power and spending patterns.
22. Prof. Theodore Levitt differentiated the products into various levels of hierarchy based on the value they
provide to customers. Amongst these levels, which of the following is/are not true regarding generic products?
I. They are unbranded, plainly packaged products and are less expensive than branded products.
II. They represent the basic requirements a customer finds essential to buy a product.
III. They usually exist in mature markets or where the customers are reasonably sophisticated and
experienced.
IV. They help in attracting and retaining customers.
(a) Only (II) above
(b) Only (III) above
(c) Both (I) and (III) above
(d) (I), (II) and (IV) above
(e) (II), (III) and (IV) above.

23. Coca-Cola runs an advertising campaign on morning radio shows encouraging current customers to "have a
Coke in the morning" instead of their morning coffee. This is an example of
(a) Market development
(b) Product development
(c) Diversification
(d) Market penetration
(e) Customization.

24. A textile company consumes input such as labor, cotton, machinery, capital, building, electricity, water, etc.
and produces output in the form of fabrics. This is an example of
(a) Effectiveness
(b) Production
(c) Efficiency
(d) Experience effect
(e) Learning.

25. In its performance review, the Department of Telecommunications (DoT) noted that while private operators
have to constantly upgrade their networks to accommodate their increasing subscriber base for fixed line and
mobile services, MTNL has a surplus capacity in its networks which it is dying to fulfill on account of a
negative demand for its services. While other operators have been logging in customers by flocks, MTNL has
faced a "net negative increase" in its subscriber base. In other words, people who are surrendering their fixed
lines and mobile connections are much more than those who are acquiring new connections from MTNL.
Which of the following would be the best marketing task that MTNL can apply to deal with the negative
demand?
(a) Analyze reason for customers discontinuing with MTNL connections, and redesigning service offerings
and positive promotion can change customer beliefs and attitudes
(b) Raise prices and reduce promotion
(c) Measure the size of the potential market for developing service offerings to satisfy the demand
(d) Maintain its quality
(e) Reduce demand temporarily.

26. The social factors that influence the consumer buying behavior include various classes in society. Which of the
following is/are true regarding lower class?
I. It consists of white collar workers like junior executives, sales people, academicians, small business
owners, etc.
II. Their families are usually male dominated.
III. They are more family oriented and depend on their family for economic and emotional support.
IV. They live in reasonably smaller houses and seek to buy products, which give more value for money.
(a) Only (I) above
(b) Only (IV) above
(c) Both (I) and (II) above
(d) Both (II) and (III) above
(e) All (I), (II), (III) and (IV) above.

27. A person can satisfy his needs and wants by producing the goods himself, stealing them, coercing someone to
provide them, or through exchanges with other persons. In order for exchange to occur
(a) A complex societal system must be involved
(b) Each party must have something of value to the other party
(c) A profit-oriented organization must be involved
(d) Money or other legal tender is required
(e) Organized Marketing activities must also occur.

28. Which of the following is not an advantage of mail interviews as a method of quantitative research?
(a) Ability to do extensive questioning
(b) Ability of the respondent to complete the survey at his/her convenience
(c) Greater willingness of the respondent to provide personal information
(d) High response rates
(e) Low cost relative to personal interview surveys.

29. A “product” is best described as
(a) A purely physical entity
(b) An image in the mind of the consumer
(c) A need satisfying offering of a firm
(d) An intangible service
(e) All of the technical aspects of production.

30. Sameera, in deciding which camera to purchase, goes through reading material, seeks information by calling
up friends, and looks at various advertisements. In the buying process, Sameera is said to be involved in
(a) Problem recognition
(b) Information search
(c) Routinized buying
(d) Evaluation of alternatives
(e) Post purchase dissonance.

31. Which of the following companies is least likely to view existing product substitutes as a barrier to entry?
(a) An artist who makes stained glass windows
(b) A restaurant featuring Thai food
(c) A women's retail clothing store
(d) A doll specialty store
(e) A cell-phone service provider.

32. Strategic business planning should be proactive rather than reactive. Which of the following statements is/are
true regarding the specific steps that help a manager effectively develop a business plan for the organization?
I. Develop a mission statement.
II. State the premises on which the plan is based.
III. Develop a guide to manage day-to-day operations.
IV. Evaluate the impact of changes taking place in the market.
(a) Only (I) above
(b) Only (II) above
(c) Both (I) and (III) above
(d) (I), (II) and (IV) above
(e) All (I), (II), (III) and (IV) above.

33. A consumer who realizes the need for a product will try to gather information regarding the product from
several sources. An example of a public source of information for an external information search is
(a) Advertising
(b) Consumer reports magazine
(c) Sales personnel
(d) Friends and relatives
(e) Point of purchase displays.

34. Which of the following is the best example of an organizational buyer?

(a) A mother buying milk for her young son
(b) A computer programmer buying the latest game for his play station
(c) A store owner buying hand-painted slate signs to sell in her store
(d) A botanist buying a rose bush for his home garden
(e) A baseball player buying a t-ball set for his daughter.
35. Companies have their unique set of structures, policies and culture. While the organizational structure and
policies can be specified easily, it is difficult to define the culture of an organization. Which of the following
statements are true regarding organization culture?
I. Organization culture refers to the values, norms, artifacts, assumptions, etc., of an organization, its
employees and their behaviour.
II. Organizational culture is influenced by the personality of its leader or CEO.
III. The culture of an organization is reflected in its interiors, the way people greet each other, the way people
work, etc.
IV. Organization culture is indistinctive in nature.
(a) Both (II) and (III) above
(b) Both (II) and (IV) above
(c) Both (III) and (IV) above
(d) (I), (II) and (III) above
(e) All (I), (II), (III) and (IV) above.

36. A newly established milk dairy has a large base of satisfied customers as the dairy provides excellent quality
products at a comparatively lesser price. Which of the following would be the benefit(s) to the dairy by
satisfying its customers?
I. Repeat business and increase in profit volume.
II. Great publicity through customers.
III. Increases the probability of customers switching to other brands.
IV. Increased chance to capture wide market area.
(a) Only (I) above
(b) Only (II) above
(c) Both (I) and (II) above
(d) (I), (II) and (IV) above
(e) All (I), (II), (III) and (IV) above.

37. After the liberalization of Indian economy in 1991, many foreign companies including PepsiCo entered the
Indian market. In a short span of two years, Pepsi managed to bag 25% of the market share. The market leader
then was a local player Parle with 60% of the market share. Coca-Cola a major rival of Pepsi also wanted to reenter
the market and take the advantage of the growing economy. But the major problem for Coca-Cola was
that Pepsi by then was able to build a good network chain in the country. It would take a lot of time for Coca-
Cola to build its own network, in which time there was a possibility that Pepsi would capture more market
share and also it had to compete with the local players like Parle. What would have been the best option
available to Coca-Cola to enter the market overcoming the hurdles mentioned above?
(a) To build its own distribution network in the country and then enter the market aggressively
(b) To invest heavily in advertisements and promotional activities and then enter the market
(c) To buy out local competitors like Parle and take advantage of their network and also their market share
(d) To appoint distributors in the country and supply them the product from the nearest country where they
already had a presence
(e) To enter into the market directly and take the advantage of its strong brand awareness.

38. A Hewlett-Packard "all-in-one" printer that serves as a computer printer, fax machine, copier, and scanner
would fall into which of the following industrial product classes?
(a) Accessories
(b) Components
(c) Installations
(d) Raw materials
(e) Consumable supplies.

39. The fact that organizational customers purchase products to be used directly or indirectly in the production of
goods and services to satisfy customers' needs means that demand for industrial products is

(a) Joint
(b) Economically stable
(c) Derived
(d) Inelastic
(e) Fluctuating.
40. Febreeze is an odor-controlling spray manufactured by Procter & Gamble (P&G). When Febreeze was
introduced, it was rumored to be a pet killer. P&G had to spend lots of money debunking the false claim and
requests help from the American Society for Prevention of Cruelty to Animals (ASPCA), before consumers
would purchase the product in the numbers expected. This promotion to debunk a false claim changed
consumers' attitudes by
(a) Changing beliefs about the extent to which a brand has certain attributes
(b) Adding a new attribute to the product
(c) Changing the basic product
(d) Re-positioning the product
(e) Identifying the innovative uses of the product.

41. Which of the following is the correct sequence of steps in the marketing research process?
(a) Designing an effective research plan; data collection techniques; developing objectives of the research;
defining the problem; evaluating the data and preparing research report
(b) Developing objectives of the research; data collection techniques; defining the problem; designing an
effective research plan; evaluating the data and preparingresearch report
(c) Defining the problem; designing an effective research plan; data collection techniques; developing
objectives of the research; evaluating the data and preparing research report
(d) Defining the problem; developing objectives of the research; designing an effective research plan; data
collection techniques; evaluating the data and preparing research report
(e) Developing objectives of the research; defining the problem; data collection techniques; designing an
effective research plan; evaluating the data and preparing research report.

42. Which of the following is/are true regarding consumer markets?
I. The quantity of products or services needed by individual customers is less than the organizational
buyers.
II. Consumer markets are segmented on the basis of geographic, demographic, and psychographic factors.
III. Individual buyers are less in number when compared to organizational buyers.
(a) Only (I) above
(b) Only (III) above
(c) Both (I) and (II) above
(d) Both (I) and (III) above
(e) All (I), (II) and (III) above.

43. The magazine Military History is targeted at consumers who enjoy studying all types of military history from
around the world. The magazine uses which of the following segmentation?
(a) Geographic
(b) Ethnographic
(c) Psychographic
(d) Demographic
(e) Values-based.

44. The competitors’ reaction patterns to a firm’s competitive strategies vary and there are four types of
competitors based on their reaction patterns. The unpredictable competitor is
(a) A competitor who reacts very slowly to the competition
(b) A competitor who reacts only to certain types of strategies
(c) Strongly retaliates to the straight move of his competitors
(d) A competitor who may or may not respond to the strategies of his competitors
(e) A competitor who reacts quickly to the competition.

45. Which of the following is/are true regarding the value analysis stage of the organizational buying process?
I. Value analysis helps the manger to cut the costs of the components that are not adding any value to the
final product.

II. Value analysis involves the process of specifying the quantity of goods required by the company.
III. The manager first analyzes the value and quality specification given by the users of the product.
(a) Only (I) above
(b) Only (III) above
(c) Both (I) and (II) above
(d) Both (I) and (III) above
(e) All (I), (II) and (III) above.
46. PepsiCo initially marketed Mountain Dew with the countrified tag line “Yahoo Mountain Dew”! its tickle
innards”. After an unsuccessful attempt in the early 1980’s to bring urban teenage drinkers to the brand by
advertising on MTV, the company switched its focus to using outdoor action scenes. Mountain Dew up-dated
this outdoor image in the 1990’s by using extreme sports as skydiving, skateboarding and snowboarding. The
brand’s aggressive pursuit of young soda drinkers helped Mountain Dew’s market share to rise in comparison
to 1980s. Which of the following best explains the strategy adopted by PepsiCo?
(a) PepsiCo is encouraging extreme outdoor sports
(b) PepsiCo is targeting the young adults through advertisements that induce enthusiasm
and match their personalities
(c) PepsiCo is trying the new technique since the old one failed
(d) PepsiCo is attacking competitor’s through its promotion
(e) PepsiCo has changed its advertising strategy.

47. Which of the following is/are the questions that marketers must analyze before opting for product
differentiation?
I. Does the difference provide a relatively higher value to a sufficient number of buyers?
II. Is it profitable for the company to introduce a new product based on differentiation?
III. Is it vulnerable to imitation by the competitors?
IV. Can the buyer afford to pay for the difference?
(a) Only (I) above
(b) Only (II) above
(c) Both (I) and (III) above
(d) (I), (II) and (IV) above
(e) All (I), (II), (III) and (IV) above.

48. When Zierer GMBH, a German manufacturer of amusement park rides began manufacturing gravity rides such
as the runaway mine train ride, it studied a ride built by a U.S. competitor, which was the best in this field, to
learn how its braking system worked and to use this information in its own design. It was engaging in
(a) Benchmarking
(b) Demarketing
(c) Coping the competitor’s strategy
(d) Resourcing
(e) Outsourcing.

49. Ramana & Co. is a newly established steel company and it has thirty shareholders, three hundred employees,
and twelve suppliers for the supply of prime raw materials. Who would constitute the stakeholders of Ramana
& Co?
I. Shareholders.
II. Employees.
III. Suppliers.
IV. Customers.
(a) Only (I) above
(b) Only (II) above
(c) Both (II) and (III) above
(d) (II), (III) and (IV) above
(e) All (I), (II), (III) and (IV) above.

50. Which of the following is/are not true regarding organizational markets?
I. Time spent in organizational buying process is less.

II. Organizational buyers are more in number, compared to individual buyers.
III. Organizational markets are usually segmented on the basis of geographic, demographic and
psychographic factors.
(a) Only (I) above
(b) Only (III) above
(c) Both (I) and (II) above
(d) Both (I) and (III) above
(e) All (I), (II) and (III) above.
51. The concept of 4Ps of a marketing mix was introduced by Jerome McCarthy and developed by Philip Kotler.
In this regard, the creation of a product is the starting point for the marketing mix because
(a) The production department must know what to produce first
(b) The product is the first of the four P's in the marketing mix
(c) The product does not have to be the starting point--distribution or promotional
strategies could also be the starting point
(d) Product development takes the longest amount of time to complete
(e) Determination of the price, promotional campaign, and distribution network cannot
begin until the product has been specified.

52. California has the greatest number of manufacturers of automotive mechanical parts in the United States with
more than 400 operations. Ohio and Michigan both have over 150 factories. Since there are only about 800
such companies that manufacture automotive mechanical parts in the United States, this illustrates how
business markets differ from consumer markets by��
(a) The use of a buying center��
(b) Geographic concentrations��
(c) Whether value added is an important consideration��
(d) Creating derived demand��
(e) Situational factors.

53. Leonard L.Berry and A.Parasuraman, in their book ‘Marketing Services: Competing through Quality’ have
suggested customer value building approaches. Which of the following statements are true with regard to his
approaches?
I. Customer value building approach lays emphasis on adding financial benefits to the customer
relationships.
II. Customer value building approach add social as well as financial benefits.
III. Customer value building approach add structured ties to their relation apart from financial and social
benefits.
IV. Customer value building approach programs cannot be imitated by competitors and often succeed to
differentiate the company’s offer in the long run.
(a) Both (I) and (II) above
(b) Both (II) and (III) above
(c) Both (III) and (IV) above
(d) (I), (II) and (III) above
(e) All (I), (II), (III) and (IV) above.

54. Hero Honda buys tyres from other companies to fit into their motorcycles. Hero Honda is a/an
(a) Industrial dealer
(b) Reseller market
(c) Institutional market
(d) Government market
(e) Original equipment manufacturer.

55. Karunya has been instructed to prepare a short paper on his ancestors' demographics. He has asked some of his
friends to explain what the topic means. Which of the following would best explain ‘demographics’?
(a) Karunya is supposed to write about his family's customs
(b) Karunya is supposed to describe the personalities in his family
(c) Karunya is supposed to write about the ethnic composition of his family
(d) Karunya is supposed to write about any geographical shifts his family has made and

how it changed them
(e) Karunya is supposed to write about his family's attitude towards life in the United
States.
56. The Mintz family is having its weekly family meeting. The older son Tad begins the meeting by announcing,
"This family needs a dog. We could play with it. It could help protect the house at night." His sister Megan
responded, "It would be great fun, and I promise that Tad and I will take care of it." The younger son Alex
started crying, "I'm afraid of big dogs." When all three children began talking simultaneously, the father ended
the meeting by saying, "Let me think about it. I agree that this family could use a dog, but we need one that
will not scare Alex." In terms of roles played by members of the family in the decision making process, Alex
played the role of
(a) Influencer
(b) Gatekeeper
(c) Information gatherer
(d) Decision maker
(e) Purchaser.

57. Titan the country’s largest watchmaker and the world’s sixth largest brand manufacturer of watches. Titan
previously targeted the upper class and the mid-segment with a range of models such as Edge, Raga, Nebula,
Steel, Classique, Royale, Dash and Fast Track for its consumers. Titan also entered the lower segment with its
Sonata brand. Titan has an effective and strong after sales service network with a distribution chain of 120
watch stores, 56 jewellery boutiques and 65 distributors handling 6000 dealers countrywide. However, the
watch market is dynamic with cut throat competition, presence of multiple brands, low growth rates, high
manufacturing costs and low capacity utilisation. The total demand for watches in India is estimated to be
about 25 million pieces every year, out of which the organised sector supplies around 11 million. Low growth
rates and availability of a variety of brands have intensified competition. Imported watches and foreign brands
too are slowly catching up to set up exclusive showrooms, though in very small numbers. Their geographical
presence is restricted to the metros. Given this competition, how can Titan expand its market?
(a) Titan should count on its strong distribution network to tap the potential of the rural market
(b) Titan should manufacture new models of watches to counter the competition
(c) Focus more on the jewelry market selling watches that work as decorative jewellery
(d) Enter the communications industry
(e) Titan should reformulate its strategies for the urban market.

58. Although organizations differ significantly from each other in their purchase process, most buying processes
pass through certain stages. Which of the following is/are true regarding product specification stage?
I. The firm starts negotiating with the suppliers by giving the technical specifications of the products.
II. Methods such as product value analysis are adopted.
III. The purchase department searches for external information to issue product specifications.
(a) Only (II) above
(b) Only (III) above
(c) Both (I) and (II) above
(d) Both (I) and (III) above
(e) All (I), (II) and (III) above.

59. Which of the following refers to a group of closely related product items that are considered to be a unit
because of marketing, technical, or end-use considerations?
(a) Product consistency
(b) Product width
(c) Product depth
(d) Product line
(e) Product mix.

60. Common competitive structures in an industry are monopoly, oligopoly, monopolistic competition and pure
competition. Which of the following are the statements true with regard to oligopoly?
I. Companies operating in an oligopoly structure usually sell private labelled products.
II. Marketing and advertising are the key features of oligopoly markets.
III. Entry barriers in such industry structures are low.
IV. The actions of one player affect other players significantly.

(a) Both (I) and (II) above
(b) Both (II) and (III) above
(c) Both (II) and (IV) above
(d) Both (III) and (IV) above
(e) All (I), (II), (III) and (IV) above.
61. Which of the following techniques determines the sales system by developing sets of equations that describe a
system, and proceeding to fit parameters statistically?
(a) Econometric analysis
(b) Exponential smoothing
(c) Demand analysis
(d) Test marketing
(e) Sales quota.

62. BCG, competitive advantage matrix, contains four quadrants that maps strategic business units as question
marks, stars, cash cows and dogs. According to this matrix which is the exact characteristic of a question
mark?
(a) High relative market share and high market growth rate
(b) High relative market share and low market growth rate
(c) High market growth rate and low relative market share
(d) Low market growth rate and low relative market share.
(e) Moderate market growth rate and moderate relative market share.

63. Which of the following is a system that collects and processes information using computer software programs,
advanced statistics tools and other such techniques to obtain a scientific solution for marketing problems and
also stores and retrieves data?
(a) Marketing intelligence system
(b) Marketing decision support system
(c) Managerial decision makers
(d) Ethical marketing research
(e) Marketing information system.

64. For purchasing which of the following products would an organization most likely engage in new task buying?
(a) A small portable welding machine for use in making repairs
(b) A new desktop copying machine
(c) Dishwashing detergent powder for use in a restaurant
(d) A new desk chair to replace one that had broken
(e) A 10,000 square foot prefabricated steel building for use as a warehouse.

65. According to Bonoma and Shapiro, organizational markets can be segmented on the basis of demographics,
operating variables, purchasing approaches, situational factors and personal characteristics. Which of the
following is/are the operating variables used for segmenting organizational markets?
I. Company technology.
II. Product and brand use status.
III. Customer capabilities.
IV. Company size.
(a) Only (IV) above
(b) Both (I) and (II) above
(c) Both (II) and (III) above
(d) (I), (II) and (III) above
(e) All (I), (II), (III) and (IV) above.

66. Which of the following is the best example of a marketing research objective?
(a) Determining why sales have decreased over the past three years
(b) Creating a print advertisement emphasizing customer service
(c) Determining what role children have in influencing family decisions about vacation destinations
(d) Increasing sales by 10 percent
(e) Developing a method to track consumer attitudes.

67. A retail chain hires a company to design and install a computer network that would allow each store in the

chain to check the inventory of others in the chain for customer-requested items. The retail chain has purchased
a
(a) Support good
(b) Production good
(c) Convenience good
(d) Fabricating good
(e) Specialty good.
68. One of the steps in the consumer buying decision process is the ‘purchase decision’. Which of the following
statements is/are not the sub-decisions of purchase decision?
I. Promotion of the product.
II. Time of purchase.
III. Delivery and warranty.
IV. Payment method like credit arrangements.
(a) Only (I) above
(b) Only (II) above
(c) Both (I) and (II) above
(d) Both (II) and (III) above
(e) All (I), (II), (III) and (IV) above.

69. A salesperson tells a safety engineer that his company needs to buy a mercury clean-up kit. The engineer
however promptly tells the salesperson that his company does not need such a thing and refuses to introduce
the salesperson to the company's purchasing agent. In this instance, the safety engineer
(a) Identifies the need for a product in the organization
(b) Influences the purchase decision of purchase department
(c) Controls the flow of information into the organization
(d) Authorizes the purchase process
(e) Act as potential influencer as well as initiator.

70. The expected goals in terms of sales volumes assigned to an individual salesperson is called
(a) Sales forecast
(b) Territory sales forecast
(c) Allocation of sales effort
(d) Scheduling the salesperson
(e) Sales quota.

71. Life Insurance Corporation of India is a government enterprise. During the current year LIC has increased its
market share to nearly 70% from 63%. After losing market share to private insurance companies for several
years, LIC has made a big come back. It has done this by aggressively pushing its Unit Linked Insurance Plan
(ULIP) an instrument which private players had effectively used to beat LIC so far. LIC has mobilized its huge
agent force for pushing the unit linked insurance plan. As per this situation, which of the following statements
is not true?
(a) Product strategy of LIC is dynamic
(b) LIC is taking advantage of its sales force
(c) LIC has taken on private companies aggressively
(d) ULIP is the major driving force for LIC
(e) LIC is complacent about its marketing strategies.

72. Estimation of future demand is an essential part of any business activity. Which of the following is/are future
demand forecasting techniques?
I. Survey of buyers intentions.
II. Expert opinion.
III. Past-sales analysis.
IV. Marketing audit.
(a) Only (II) above
(b) Both (I) and (II) above
(c) (II), (III) and (IV) above
(d) (I), (II) and (III) above

(e) All (I), (II), (III) and (IV) above.
73. Strengths are the distinctive competencies that give the firm a comparative advantage in the marketplace.
Which of the following is/are the strength(s) of an organization?
I. Infrastructure.
II. Cost advantages.
III. Marketing team.
IV. Entering new businesses.
(a) Only (I) above
(b) Only (IV) above
(c) Both (II) and (III) above
(d) (I), (II) and (III) above
(e) All (I), (II), (III) and (IV) above.

74. When consumers use a problem-solving process to make purchase decisions, what is the next step in the
process after they become aware of, or interested in, a problem?
(a) Evaluating alternative solutions
(b) Recalling and gathering information about possible solutions
(c) Deciding on the appropriate solution
(d) Evaluating the decision
(e) Making the commitment to purchase a particular product or service.

75. Which of the following statements is/are true regarding strategic planning?
I. Strategic planning involves framing corporate and divisional strategies.
II. The strategic planning process will suffer, if there is an increased resistance to change within the
organization.
III. Companies which have business units undertake corporate planning.
IV. The corporate plan has to be developed in such a way that it adds value to the organization.
(a) Only (I) above
(b) Both (I) and (III)above
(c) Both (III) and (IV) above
(d) (I), (III) and (IV) above
(e) All (I), (II), (III) and (IV) above.

76. There are certain considerations for choice of markets to target. Which of the following considerations implies
that marketers should take adequate care not to promote harmful products by adopting enticing marketing
strategies to lure potentially vulnerable customers?
(a) Segment inter-relationships and supersegments
(b) Ethical choice of market targets
(c) Segment-by-segment invasion plans
(d) Intersegment co-operation
(e) Single segment concentration.

77. The evolution of marketing has passed through various eras. Which of the following statements is the most
appropriate characteristic of the production era?
(a) “If we sell harder, we will sell more”
(b) “We need to cater to the diverse needs of consumers”
(c) “There is no limit on what we can sell if we produce efficiently”
(d) “The more options we offer consumers, the better”
(e) “Advertising is the key to our success”.

78. Maruthi Udyog Limited (MUL) opened ‘true value’ outlets to market second hand cars, where the company
acts as an intermediary to bring sellers and buyers together. MUL is using which of the following
differentiation techniques?
(a) Product differentiation
(b) Service differentiation
(c) Personnel differentiation
(d) Channel differentiation

(e) Image differentiation.
79. Revlon Cosmetics expresses that: “In the factory, we make cosmetics; in the store we sell hope.” Hope is the
(a) Expected product
(b) Augmented product
(c) Core feature
(d) Generic product
(e) Associated feature.

80. Organizational markets comprise organizational users or producers, who normally purchase goods or services
to use them as raw materials for producing other goods and services. They are classified into producer markets,
reseller markets, government markets and institutional markets. Which of the following statements are true
with regard to institutional markets?
I. Institutional markets are a combination of government and private organizations.
II. The purchasing process in institutional markets is quite same as the purchasing process in other markets.
III. A marketer trying to cater to customers in these markets must adopt marketing strategies that suit both
government markets and private commercial markets.
IV. Generally, non-profit organizations such as schools, colleges, universities, hospitals and museums
comprise institutional markets.
(a) Both (I) and (II) above
(b) Both (II) and (III) above
(c) Both (III) and (IV) above
(d) (I), (III) and (IV) above
(e) All (I), (II), (III) and (IV) above.

81. Rita is a big fan of the Los Angeles Clippers, a professional basketball team who play in the National
Basketball Association (NBA). She lives in Buffalo, New York, and was unable to buy team merchandise
unless she traveled to Los Angeles. She recently learned that the NBA team had a catalog from which she
could purchase team-related merchandise. For Rita, the catalog for Los Angeles Clippers merchandise created
(a) Form utility
(b) Place utility
(c) Possession utility
(d) Time utility
(e) Promotion utility.

82. Which of the following statements are true with regard to secondary data collection?
I. Secondary data is collected from the company’s internal and external resources.
II. Compared to primary data, the collection of secondary data is more time consuming.
III. As information in the secondary sources is readily available, it can be compiled quickly by researchers.
IV. The reliability of secondary sources is an aspect that the researchers should always look into before
selecting them.
(a) Both (I) and (II) above
(b) Both (II) and (III) above
(c) Both (III) and (IV) above
(d) (I), (III) and (IV) above
(e) All (I), (II), (III) and (IV) above.

83. Ford has transformed itself from being mainly a car manufacturer to being mainly a car assembler. Ford has
substantially reduced the number of supplier and relies primary on a few major supplier. Suppliers have
increasingly recognized the requirement of a purchaser and then try to supply the entire range of raw materials
as per the specifications provided by the company. This example refers to which of the following?
(a) System buying
(b) System selling
(c) Buying process
(d) Organizational selling
(e) Organization buying.

84. Finding a focus on what product offerings will be directed toward which customers and addressing the
marketing mix strategies is essential for developing an effective

(a) Marketing program
(b) Marketing audit
(c) Marketing database
(d) Product demonstration
(e) Product warranty.
85. Encyclopedia Britannica dating back to 1768 in Edinburgh, Scotland, has come a long way. Initially created by
printer Colin Macfarquhar and engraver Andrew Bell, it was intended to serve a new era of enlightenment and
scholarship. Other products include dictionaries and thesauruses, a World Atlas, timelines, a Web site and
more. Recent advances in information technology and the rise of electronic encyclopedias such as Encarta have
reduced the demand for print encyclopedias. To remain competitive, Encyclopedia Britannica has stressed the
good reputation of the Britannica, reduced its price and production costs. But the print edition has never
recovered from digital assaults. It has also been criticized in its earlier editions for inaccuracy, bias and unauthoritative
contributors. Which of the following strategies should Encyclopedia Britannica adopt?
(a) To re-innovate its editions by proper language, grammatical accuracy and with authoritative contributors
(b) Develop encyclopedia in many other languages
(c) Encyclopedia Britannica should develop its editions’ electronic versions on CD-ROM, DVD and the
world wide web
(d) Encyclopedia Britannica should sell its print editions using online method advertising
methods like forums, webcommunities, bulletin boards, newgroups and emails
(e) Encyclopedia Britannica should sell its editions through various sales promotions.

86. Converse started selling its “high-top” canvas basketball shoes in colors such as hot pink, lime green, and
purple, to accompany their traditional colors of black and white. Which of the following strategies, does
Converse seem to be pursuing?
(a) Market penetration
(b) Market development
(c) Product development
(d) Diversification
(e) Breakthrough.

87. Which of the following is not true about the value chain?
(a) Value chain contains nine strategic activities
(b) Value chain consists of both primary activities and secondary activities
(c) Primary activities are those which are involved in the physical creation of a product
(d) Secondary activities assist primary activities by providing infrastructure
(e) Value chains of all organizations are same.

88. Marketing plan involves the development of a logical process to establish goals and plans to achieve these
goals. Experts have identified some barriers to the development and implementation of marketing plan. Which
of the following is/are the barriers?
I. Separating the marketing function from the business processes.
II. Confusion between the marketing function and the marketing concept, between operations and output,
and between tactics and strategy.
III. Absence of structured approach and unfavorable corporate environment.
IV. Unfavorable personnel.
(a) Only (IV) above
(b) Both (I) and (II) above
(c) Both (III) and (IV) above
(d) (I), (II) and (III) above
(e) (II), (III) and (IV) above.

89. Organizational markets comprise organizational users or producers, who normally purchase goods or services
to use them as raw materials for producing other goods and services. They are classified into producer markets,
reseller markets, government markets and institutional markets. Which of the following statements are true
regarding reseller markets?
I. Resellers are the marketers who purchase products for converting them into finished products or for
personal use.
II. Wholesalers and retailers form a part of the resellers market.

III. Resellers normally bargain with the manufacturers for heavy price discounts.
IV. Resellers buy products on the basis of a logical approach rather than by following a psychological or
instinctive purchase pattern.
(a) Both (I) and (II) above
(b) Both (II) and (III) above
(c) Both (III) and (IV) above
(d) (II), (III) and (IV) above
(e) All (I), (II), (III) and (IV) above.
90. A laptop manufacturer adds a metal case and shock mountings to the laptop computers to make them more
durable. It has not changed its prices. This is an example of which modification?
(a) Quality
(b) Style
(c) Functioning
(d) Repositioning
(e) Minor.

91. Which of the following is/are the reason(s) for the failure of the diversification process?
I. Management thinks in terms of related areas of business, which are normally saturated and do not offer
any business potential.
II. Diversification opportunities in an industry become a target for group evaluation.
III. Companies devise customized strategies for diversification.
(a) Only (I) above
(b) Only (III) above
(c) Both (I) and (II) above
(d) Both (II) and (III) above
(e) All (I), (II) and (III) above.

92. A segment should be such that marketers can develop effective marketing programs to attract and serve
potential customers effectively. For effective segmentation, variables need to exhibit certain characteristics.
Which characteristic implies that?
(a) Measurable
(b) Substantial
(c) Accessible
(d) Differentiable
(e) Actionable.

93. Maruthi Udyog Limited produces different types of cars such as sports utility vehicles, family cars etc. These
cars can be an example of
(a) Product class
(b) Product form
(c) Product quality
(d) Brand
(e) Product durability.

94. Water Side is a restaurant situated on the bank of a lake. The restaurant has excellent view, great menu and a
live band to play music to customers. Over a period of time Water Side now faces overfull demand i.e.,
demand is above supply and the restaurant has no desire or ability to increase supply. Which of the following
would be the best strategy a marketer can adopt in this case?
(a) Cater only to the needs of profitable customers
(b) Cut down the offerings on the menu
(c) Raise prices and reduce promotion
(d) Find ways to induce fear in people’s mind about visiting the restaurant
(e) Set up another restaurant.

95. Buying behaviour of consumers is largely influenced by the reference group to which they belong or aspire to
belong to. Reference groups can be of two types: primary reference groups and secondary reference groups.
Which of the following statements is/are true with regard to secondary reference groups?
I. Secondary reference groups include religious groups, professional associations and trade unions.

II. Disclaimant reference group is the group to which an individual does not hold any membership.
III. Opinion leaders who are also a secondary reference group are perceived as people with special skills,
knowledge, personality, etc.
IV. Opinion leaders will influence the actions or attitudes of others informally.
(a) Only (I) above
(b) Both (I) and (IV) above
(c) Both (II) and (III) above
(d) (I), (III) and (IV) above
(e) All (I), (II), (III) and (IV) above
96. Strikes throughout Nigeria almost led to the country's financial ruin. For a company trying to do business in
Nigeria during this time, the strikes would be an example of a(n)
(a) Strength
(b) Weakness
(c) Threat
(d) Opportunity
(e) Strategy.

97. Which of the following is/are true about the societal marketing concept?
I. Organizations must help maintain and improve the society’s well being.
II. Customers react unfavorably to companies which they do not perceive as good corporate citizens.
III. Societal marketing concept overlooks the conflict between short-term wants and long-term welfare.
(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.

98. Hewlett-Packard is the major company which produces different hardware items. Its printer range starts from
Rs.3000 (approx) for home and small office segments to heavy duty color printers which cost more than
Rs.1,00,000. Which type of target market selection strategy has Hewlett- Packard adopted?
(a) Product specialization
(b) Market specialization
(c) Selective specialization
(d) Full market coverage
(e) Financial specialization.

99. The significance of ethics in marketing research has increased significantly in the recent past because the scope
of marketing activities has also increased tremendously. The American Marketing Association had set up
guidelines for ethical standards in marketing research. Consumers have rights and they must not be violated to
collect information. Under which circumstance(s) the “Right to safety” is violated?
I. Right to safety is violated if promised anonymity is not protected.
II. Right to safety is violated if the research procedure may induce stress and anxiety in respondents.
III. Right to safety is violated if the subjects are unaware of their right to refuse.
IV. Right to safety is violated if they lack sufficient knowledge to make an informed choice.
(a) Only (I) above
(b) Only (III) above
(c) Both (I) and (II) above
(d) Both (II) and (IV) above
(e) All (I), (II), (III) and (IV) above.

100. An individual’s attitude, value and behavior are influenced by different groups. An aspiration reference group
is a group
(a) To which a person belongs, including fraternities and social clubs
(b) That a person wishes to be a member of or wishes to be identified with
(c) That a person wishes to maintain a distance from because of differences in values or behaviors
(d) That a person knows he or she can never really fit into because of basic cultural differences

END OF QUESTION PAPER
(e) That a person feels is excessively high above him or her socio-economically.
Suggested Answers
Marketing Management – I (MB221): January 2008
ANSWER REASON
1. D Support activities assist primary activities by providing infrastructure that allows them to take place
on an ongoing basis. Support activities such as procurement, hiring the personnel, technology
development (R&D), infrastructure i.e., general management, planning, government, hiring the
activities and quality management, accounting, and legal activities, etc., are handled by various
departments.
<>
2. D Marketing effects all individuals, all organizations, all industries and all countries. <>
3. D Each segment requires a different marketing strategy because it responds to different strategies
differently is characteristic of differentiable variable of effective segmentation.
<>
4. C A firm pursuing a focus strategy tends to serve a specific segment instead of catering to the entire
market.
<>
5. D The belief that there are no substitutes for the industry’s major products is a condition for
obsolescence as a result of marketing myopia.
<>
6. A Straight rebuy is a process of buying a product that has been purchased frequently and regularly.
The buyer orders from an approved supplier and the terms and conditions remain the same as they
were for previous orders.
<>
7. C In the marketing era, companies identified the importance of consumer needs and wants in the
exchange process between the buyer and seller. Companies focused on marketing rather than on
selling.
<>
8. D Statement (III) is not a factor that is considered in purchasing approaches. It is a situational factor.
All the other statements (I), (II) and (IV) are the correct statements.
<>
9. B A dog has a low market share in a low-growth industry. The market for fast car is declining and the
sales of Camaro have also declined. Hence Camaro can be classified as a dog.
<>
10. D Crypt followed a sales orientation as its products are unsought products and consumers need to be
coaxed to purchase products or they show buying inertia.
Option (a) and (b) would be correct for a production orientated company.
Option (c) would hold good for companies that have a product orientation.
Option (e) would hold good for products that follow the modern marketing orientation.
<>
11. A Statement (I) is true in case of market leader. Statement (II) is true in case of market nicher.
Statement (III) is true in case of market challenger.
<>
12. D In behavioral segmentation, buyers are divided into groups on the basis of their knowledge of,
attitude toward, use of, or response to a product.
<>
13. E In partnership marketing companies work in tandem with their customers to provide better services. <>
14. E All the statements are correct . Any fault at any stage of the product development process, will
affect the sales badly and managers should efficiently control any deviations that occur at any stage
of the marketing process. Due care has to be taken while selecting the raw materials, stocking them,
processing, etc. Manager should interfere and control any deviations that occur at any stage of the
marketing process.
<>
15. D A person who decides where, when, why and how to buy the products. Decider makes the final
decision about the contemplated purchase.
<>
16. C The economic performance of a country is measured by its gross domestic product. Purchasing
power parity is used to compare the incomes across nations.
<>
17. E When a customer is not satisfied with a product purchase, and if the competitor’s brands have the
features that the customer was originally looking for, he goes through cognitive dissonance.
<>
18. A Organizations consume natural resources for the production of goods and services. Sometimes,
companies locate their production plants near the natural resources because the transportation costs
may increase the overall cost of their products. Companies now realize that natural resources are
limited and they need to be consumed judiciously. Otherwise, they will deplete fast. Changing
consumer-spending patterns does not reflect the natural environment.
<>
19. E Marketing myopia occurs when a marketer is excessively preoccupied with product development,
manufacturing or selling and ignores customer needs, wants and interests. (a) The modern
marketing concept evolved due to lack of trust and coordination between the marketing and sales
functions of organizations. As per this concept, the sales department could be brought under the
purview of the marketing department. (b) Product positioning pertains to the consumers’ perception
of the product, particularly with respect to competitor’s products. (c) Pure competition is an ideal
competitive structure in which many marketers compete to sell the same undifferentiated product.
(d) Reactive marketing is a marketing style in which the marketers view environment forces as
uncontrollable and try to adjust to them.
<>
20. D Regarding casual research the following statements are correct I .The cause and effect relationships
between two variables are analyzed, II. It is carried out with a detailed questionnaire and with
clearly defined objectives, III. This will help managers to select a particular strategy.
<>
21. B The socio-Cultural environment refers to the attitudes, beliefs, norms, values and lifestyles of
individuals in a society. (a) Natural resources refer to the natural environment. (c) Laws and
government agencies refer to the legal environment. (d) Characteristics of populations refer to the
demographic environment. (e) Consumer purchasing power and buying patterns are related to
consumer buying behavior.
<>
22. E Statement (II) is not true since expected product represent the basic requirements a customer finds
essential to buy a product. Statement (III) is not true since augmented products usually exist in
mature markets or where the customers are reasonably sophisticated and experienced. Statement
(IV) is not true since potential products help in attracting and retaining customers. Therefore
statements (II), (III) and (IV) are not true regarding generic products.
<>
23. A Market development strategy is the strategy for growth in the new markets for existing products. <>
24. B Production is a function that transforms input into output. <>
25. A There is negative demand when customers have a dislike for a company’s product. In this case the
discontinuing with MTNL’s offerings is a sign of dislike for its services probably due to
availability of better alternatives. In case of negative demand, marketers must analyze cause for
dislike and whether any marketing program consisting of product redesign, lower prices and more
positive promotion can change beliefs and attitudes. Hence, option (a) is the answer.
<>
26. D Lower class consists of blue-collar workers like factor laborers, semi-skilled and unskilled laborers
in the unorganized sector. They are more family oriented and depend on their family for economic
and emotional support. Their families are usually male dominated. They live in smaller houses in
less desirable neighborhoods.
<>
27. B An exchange arises when one person gives something of value, in return for something of value
from another person.
<>
28. D Mail interviews are widely used for the collection of information, since the cost is relatively low.
Respondents in a mail interview can be anonymous if they wish to. The advantage of the mail
interview is that the respondent can respond to the questionnaire at his convenience. One of the
biggest problems in mail interviews is the low response rate.
<>
29. C A marketer can satisfy the needs and wants of his customers by ‘offering something’ in exchange
for money. And this ‘offering’ is basically a product.
<>
30. B Information search involves the customer gathering information on the product from various
sources – personal. Commercial, public, and experiential.
<>
31. A An artist who crafts stained glass windows will make each one unique. Thus existing manufacturers
of windows (a possible product substitute) will not be seen as a barrier to entry because the stained
glass windows are completely different.
<>
32. D All the statements are true except statement (III). Develop a guide to manage day-to-day operation
is not a step to develop a business plan.
<>
33. B Public sources include various product-rating organizations such as Consumer Reports, government
agencies, and radio and T.V. consumer programs.
<>
34. C A store-owner buying hand-painted slate signs to sell in her store is an ideal example of
organizational buying patterns.
<>
35. D Statement (IV) is wrong statement because organization culture is distinctive in nature, as each
organization has its own management philosophy, mission and objectives etc. The correct
statements are Organizational culture is influenced by geographical location of an organization and
is also sometimes influenced by the personality of its leader or CEO.
<>
<>
36. D Customer satisfaction brings I. Repeat business and increases the profit volume II. Great Publicity
through customer’s .IV. Creates chance to capture wide market area.
37. C In this scenario the best option that Coca-cola had was to buy out Parle, a local player and take the
advantage of its strong network chain and also enjoy its market share. By doing this they also have
the other advantage of eliminating competitors from the market and become market leader
overnight. The other options are also available for Cola but they will take lot of time to get itself
placed in a comfortable position, by then the market may be captured by its major rival Pepsi and
local player Parle. Having presence in many countries across the world buying out a local company
will not be a major problem for Coke. So, option (c) will be the best option available.
<>
38. A Accessories are those products that help in production or office activities. They do not become a
part of the final product.
<>
39. C Derived demand is based on the consumers demand for the products produced by an organization. <>
40. A A belief is a descriptive image or thought that an individual holds about something. People acquire
beliefs and attitudes through experience as well as learning.
P&G had to change consumers' beliefs that the spray was deadly to their pets before consumers
could see the value of its odor controlling capabilities.
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41. D The correct sequence of steps in the marketing research process is as follows :
Defining the problem; developing objectives of the research; designing an effective research plan;
data collection techniques; evaluating the data and preparing research report.
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42. C Organizational buyers are fewer when compared to individual buyers. <>
43. C Psychographics seeks to describe the human characteristics of consumers that may have bearing on
their response to products, packaging, advertising and public relations efforts. Such variables may
span a spectrum from self-concept and lifestyle to attitudes, interests and opinions, as well as
perceptions of product attributes. Psychographic segmentation helps marketers understand buyer
behavior better and design communication programs, which will appeal to the target audience. It
includes personality factors of individuals.
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44. D Unpredictable competitor is a competitor who may or may not respond to the strategies of his
competitor.
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45. D Order routine specification involves the process of specifying the quantity of goods required by the
company.
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46. B Since initially the Mountain Dew was launched keeping in mind the young adult. The company
came out with the advertisement which matches with the enthusiasm of the young adults and taking
the concept which suit with the personality of the young adults.
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47. E The following are the aspects that marketers must analyze before opting for product differentiation
I. Does the difference provide a relatively higher value to a sufficient number of buyers?
II. Is it profitable for the company to introduce a new product based on differentiation?
III. Is it vulnerable to imitation by the competitors?
IV. Can the buyer afford to pay for the difference?
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48. A Benchmarking is discovering how others do something better than you do so your firm can imitate,
or leapfrog, their techniques.
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49. E The stakeholders of a business firm consist of its shareholders, employees, suppliers, distributors
and customers. A company must identify the needs of its stakeholders and then develop strategies
to satisfy their needs and wants. The stakeholders act like the spokes of a wheel of an organization.
So, its prosperity depends on their collective efforts.
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50. E Time spent in organizational buying process is more than time spent by an individual customer.
Organizational buyers are fewer when compared to individual buyers. Organizational markets are
segmented on the basis of factors such as operating variables, purchasing approaches, situational
factors and personal characteristics
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51. E The product is the first decision around which the others are based. Marketing begins with the
identification of consumer needs and wants, and culminates with successfully fulfilling those needs
through the 4Ps of marketing. Among the 4Ps of marketing product is important and it is starting
point for remaining three Ps.
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52. B In the above situation, the geographical concentration of producers helps to reduce selling costs. At
the same time, business marketers need to monitor regional shifts of certain industries.
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53. D Statements (I) , (II) and (III) are the correct statements. The last statement or statement (IV) is not <>
true. Customer value building approach programs can be easily imitated by competitors and often
fail to differentiate the company’s offer in the long run.
54. E Original equipment manufacturers buy industrial products and incorporate them into their final
products.
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55. C Demographics refer to several variables like infants, young adults, senior citizens, women, singles,
occupation and literacy, location and cultural diversity. So Karunya has to write the ethnic (group
of people in his family) composition of his family.
Demographic does not mean or concentrate on one single aspect like family customs. Therefore
option (a) cannot be the answer.
Similarly, demographics does not concentrate only on personalities of a family or geographical
shifts or the attitudes.
Hence option(c) is the correct answer.
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56. A A person whose views and advice influence the buying decision. The range of influencers becomes
broad when major purchase decisions have to made.
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57. A As only one-fourth of the population owns a watch, there is huge untapped potential. How much of
this will actually turn into demand depends entirely on the creative capabilities of the various
companies. Most brands such as Titan and Timex currently focus on the urban markets. Only HMT
has a presence in rural segment. Its hand-wound, or non-automatic, watches are still popular in the
rural areas. None of the other brands has been able to penetrate this market. Titan can penetrate this
untapped rural potential market with the help of its strong sales service network. Therefore option
(a) is the correct answer.
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58. E All the statements are true. <>
59. D A group of closely related product items that are considered to be a unit because of marketing,
technical, or end-use considerations is a product line.
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60. C Statements (II) and (IV) are the correct statements. Entry barriers are high but not low in olipolistic
markets. Companies operating in an oligopoly structure usually sell branded products but not
private labeled products. Therefore statements (I) and (III) are not true.
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61. A Econometric analysis is a past sales analysis technique that determines the sales system using
statistical tools by developing sets of equations. (b) Exponential smoothing looks at the weighted
average of past sales giving a higher weightage to more recent sales. (c) Demand analysis
(statistical) determines the effect of factors such as marketing expenditure and the price of the
product on its sales. Options (d) and (e) are not past sales analysis techniques.
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62. C Question marks are characterized by low market share and high growth rate. <>
63. B Managerial decision support system have the flexibility to represent data using advanced graphic
tools and be able to provide possible solutions to different inputs. It collects and processes
information using computer software programs, advanced statistical tools and other such
techniques to obtain a scientific solution for marketing problems.
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64. E New task involves a situation wherein a product is purchased for the first time. A 10,000 square
foot prefabricated steel building for use as a warehouse is an example of new task buying situation.
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65. D All the statements are true except statement (IV) i.e., company size is a demographic variable. <>
66. C Marketing research is the process of defining a marketing problem and opportunity, systematically
collecting and analyzing information, and recommending actions to improve an organization's
marketing activities. Objectives are specific measurable goals the decision maker seeks to achieve
in solving a problem.
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67. A Supporting products are products that facilitate the process of production. They are further divided
into capital equipment, accessory equipment, consumable supplies and business services. The
design and installation are services. Services are a classification of support goods.
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68. A Purchase decision accounts for a large number of sub decisions about purchasing a product like
1. Seller and location of the store
2. Time of purchase
3. Size of the product, colour and attractiveness of the package
4. Price of the product.
5. Delivery and warranty
6. Payment method like credit arrangements
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7. Ancillary services offered, like installation and maintenance arrangements.
Therefore statement (I) is the wrong stage of subdecision in purchase decision. Therefore option (a)
is not a correct statement.
69. C In many cases, the gatekeeper is a technical expert. Here the safety engineer acted as gatekeeper
and control the flow of information into the organization.
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70. E Quotas are quantitative goals established in terms of sales volume, and are assigned to individual
sales personnel. Quotas specify the desired level of performance expected from a specified
marketing unit. Sales quotas are effective for strategic planning, directing, controlling and
evaluation of a marketing unit’s sales effort. Option (a) is incorrect as sales forecast is prediction of
how much of a company’s particular product can be sold over a future period. Option (b) is
incorrect as territory sales forecast is prediction of how much a company’s particular product or
product line can be sold in a particular territory over a future period. Option (c) is incorrect as
allocating of sales effort is an iceberg pattern of sales, which states that only a small part of the
total situation is above the surface and known while the submerged part is beneath the surface and
unknown. Option (d)) is incorrect as scheduling sales person is a process where salesperson
designates the customers to be called upon every day and determines the time of day to make each
call.
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71. E LIC is not complacent about its marketing strategies since it is aggressively using marketing
strategies to push its unit linked insurance plan.
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72. D Demand forecasting done for survey of Buyer’s intentions. Sales person’s view of the
market. Opinion of experts from the industry. Past-sales analysis involves using past
sales information to project future sales patterns.
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73. D The strength of an organization can be its infrastructure, its marketing team, its latest product
innovation, cost advantages, its international quality standards, or even its closeness to the market.
The strength can be anything that adds value to its business. Entering new businesses is an
opportunity .
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74. B Consumers exhibit extensive problem solving type of behavior when they indulge in buying
expensive, infrequently purchased and unfamiliar products. Consumers gather a lot of data
regarding the various brands available in the product category.
This type of decision-making process calls for marketers to develop strategies that assist the
customers to learn more about the product and the distinct features of their (company's) particular
brand. Tying up with various stores for promoting the product and motivating the sales personnel
can also be an effective tool in this regard.
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75. E Strategic planning involves framing corporate and divisional strategies, Companies which have
business units under take corporate planning and The corporate plan has to be developed in such a
way that it adds value to the organization. The strategic planning process will suffer, if there is an
increased resistance to change within the organization. So (e) is the answer.
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76. B Whenever a marketer tries to target a specific segment, he should not take undue advantage of
vulnerable segments, like children. Though children have now become potential influencers in the
family decision-making process, they should not be influenced by marketers to consume products,
which are not good for them. Encouraging children to consume high fat foods, promoting lotteries
and cheap liquor to poor people and trying to cash in on their vulnerabilities is unethical. These
groups of individuals are less likely to make informed choices. Therefore, marketers should take
adequate care not to promote harmful products by adopting enticing marketing strategies to lure
potentially vulnerable customers.
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77. C The industrial revolution of the seventeenth century brought about the production era, which
continued till the late 1920’s. Say’s law — supply creates its own demand — was truly applicable
in this era. The market was a sellers’ market, as the demand for the products was more than the
supply. Companies focused on manufacturing processes and they looked for ways and means to
produce the goods fasster, more efficiently and at low prices. Product features were not given any
importance because it was felt that customers were concerned only about the availability of the
product, and not about its features.
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78. D Companies can achieve a distinct differentiation for their products on the basis of the distribution
channels they use. A firm’s choice of distribution channel, its coverage, expertise and performance
helps it to differentiate itself from its competitors.
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79. C Core feature is the basic component of a product that offers a core benefit. All other components
are superimposed on the core product to form the personality of the product.
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80. D Statement (II) is a wrong statement, as the purchasing process in institutional markets is quite
different from the purchasing process in other markets.
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81. B Place utility is provided when a marketer provides the product at locations preferred by the
customer. In the above case, the catalog for Los Angeles Clippers merchandise created place utility
for Rita.
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82. D Statement (II) is a wrong statement, as the collection of secondary data is cheaper and less time
consuming. All the other statements are true.
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83. B System selling is a process in which a seller himself sells all the raw materials needed by a
purchaser (customer).
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84. A Finding a focus on what product offerings will be directed toward which customers is essential for
developing an effective marketing program. Every company, while planning the marketing
programs, should consider the marketing mix variables. Each marketing mix variable in turn has
several factors that have to be focused upon.
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85. C It will be better for Encyclopaedia Britannica to sell its editions or versions by using advanced
information technologies and software programs like JAVA on DVD, CD ROM etc….as its main
drawback is with unable to launching an electronic versions of its editions.
Some or the other language, grammatical mistakes will be seen in any of the other dictionaries. The
question does not discuss about its coverpages or the attractiveness etc.
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86. C The strategy for growth in the existing market for new product is known as product development
strategy. A new product is an extension of product line and can be considered as a new product
development.
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87. E Value chain of different organizations is not same. It is because of different activities performed by
each and the nature of the business. The activities performed by a manufacturing company are
different from a services providing company
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88. D The barriers to the development and implementation of marketing plan are separating the marketing
function from the business processes. Confusion between the marketing function and the marketing
concept, between operations and output, and between tactics and strategy. Absence of structured
approach and unfavorable corporate environment. So (d) is the answer.
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89. D Statement (I) is a wrong statement because resellers are marketers who do not purchase products
for converting them into finished products or for personal use. They purchase them for selling them
to other customers for a monetary gain. Other than statement (I) all the other three statements are
correct statements.
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90. A Quality of a product refers to the characteristics of the product that unable it to perform according
to expectations of customers and meet customer needs. Quality modifications entail changing a
product's dependability or durability.
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91. C The reasons for the failure of diversification process are management think in terms of related areas
of business, which are normally saturated and do not offer any business potential and
diversification opportunities in an industry become a target for group evaluation. Statement (III)
Companies devise customized strategies for overcoming the reasons for failure of diversification
process.
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92. E According to actionable segment variable a segment variable should help marketers develop
effective marketing programs to attract and serve potential customers effectively.
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93. B Product form means different forms of a product like sports car and family car. <>
94. C When demand is overfull, marketers must adopt a demarketing strategy to reduce demand
temporarily or permanently. Amongst the options, raising prices and reducing promotion would
bring down the demand. Option (a) and (b) will not necessarily balance the demand and supply.
Option (d) is suitable when there is demand is unwholesome i.e., for products such as cigarettes etc.
Option (e) is not applicable because as per information in the question, the Water Side has no
desire or ability to set up another restaurant.
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95. D All the statements are true except statement (II). Disclaimant reference group is a primary reference
group.
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96. C A threat is an external unfavorable influence on organizations. <>
97. C The pure marketing concept overlooks the conflict between short-term wants and long-term
welfare. All other statement s are true about societal marketing concept.
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98. D Here, the company targets the full market rather than any specific segment. For example, Hewlett-
Packard targets the full market for its printers. Its printer range starts from Rs 3,000 (approx) for
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home and small office segments to heavy duty color printers which cost more than Rs. 1,00,000.
Therefore no segment is left untargeted by it.
99. C Statements (III) and (IV) are the violations for “right to choose". <>
100. B An aspiration reference group is the group to which the individual does not hold any membership
but desires to belong to that group. He tries to copy the attitudes and behavior, including buying
behavior of the members of this group.
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