Question Paper Marketing Management – I (MB1C1): October 2008

• Answer all 100 questions.
• Each question carries one mark.
1. A new edition of a marketing textbook has just released by S.Chand publishers. The Library Department of the
University of Mumbai has always liked the textbooks and authorizes the purchase of the new edition without
even looking at other publishers. This is an example of a/an
(a) Modified rebuy
(b) New task
(c) Straight rebuy
(d) Impulse purchase
(e) Purchase.

2. Likert’s summated rating scale which is a set of direct, close-ended questions on a continuous five point scale
can be used to study
(a) Motivation of the customers
(b) Perception of the customers
(c) Belief of the customers
(d) Buying behavior of the customers
(e) Attitude of the customers.

3. Financial measures are used to analyze the current situation of an organization and ratio analysis helps to analyze
the financial performance of a firm. Which of the following ratios are liquidity ratios?
I. Average collection period.
II. Long term capitalization.
III. Quick Ratio.
IV. Return on equity.
V. Dividend yield.
(a) Both (I) and (II) above
(b) Both (I) and (III) above
(c) Both (II) and (IV) above
(d) Both (II) and (V) above
(e) Both (III) and (V) above.

4. The income left with an individual after purchasing the basic necessities like food and clothing is called as
(a) Disposable income
(b) Taxable income
(c) Accounting income
(d) Discretionary income
(e) Credit.

5. Which of the following statements is/are true regarding the sales era in the evolution of marketing?
I. Manufacturers believed that the success of their business depended on outselling the competition.
II. Companies realized the need for product promotion and distribution.
III. Marketers focused their efforts only on selling their products to customers.
IV. Consumer orientation began placing the consumer at the beginning as well as the end of the business cycle.
(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.

6. Which of the following leads to an intense rivalry amongst firms in an industry?
I. When a few firms enjoy a large market share.
II. If a significant market share is enjoyed by a large number of small players.
III. Lack of differentiation among the products of the players in the industry.
IV. When switching cost for customers is low.
(a) (I), (II) and (III) above
(b) (I), (II) and (IV) above
(c) (I), (III) and (IV) above

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(d) (II), (III) and (IV) above
(e) All (I), (II), (III) and (IV) above.
7. According to Patrick.M.Lencioni, when a company sets social and behavioral standards for its employees, values
become
(a) Core values
(b) Desired values
(c) Values by chance
(d) Approved values
(e) Benefit values.

8. The three psychographic dimensions most commonly used in market segmentation are
(a) Personality, perception and learning
(b) Personality, perception and behavior
(c) Motives, attitudes and lifestyles
(d) Personality, motivation and lifestyles
(e) Values, occasions and lifestyles.

9. The loyalty status of a customer who uses two or three brands is categorized as
(a) Soft-core loyals
(b) Split loyals
(c) Shifting loyals
(d) Stretchers
(e) Hard-core loyals.

10. The 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 able to store and
retrieve data is referred as
(a) Marketing intelligence system
(b) Marketing decision support system
(c) Managerial decision process
(d) Ethical marketing research
(e) Marketing information system.

11. Which of the following analysis determines the sales system using statistical tools by developing sets of
equations?
(a) Econometric analysis
(b) Exponential smoothing
(c) Demand analysis
(d) Test marketing
(e) Sales quota.

12. Target Stores, a US based discount chain stores had 1330 retail stores in 47 states of the United States. Even
though it only had one fifth of the sales and profits of Wal-Mart, it had a loyal customer base that was looking
for trendy, yet, affordable range of merchandise. Target forged partnerships with designers to sell exclusive
designer wear in their store. Which of the following is the best suitable reason for Target Store to opt for these
partnerships?
(a) In US, customers prefer designer wear
(b) It helps the firm to price its products lower than that of its competitors
(c) It earns more profit on designer wear
(d) To reinforce its image and provide quality products to its customers
(e) This would be an inexpensive way to attract new customers.

13. After considering all the options worth buying, Sandy has decided to go to @home furniture shop because of the
discounts she will receive on buying the double cot bed. Which stage of the buying decision process is Sandy in?
(a) Problem recognition
(b) Post purchase
(c) Information search
(d) Purchase
(e) Dissonance.

14. Credit is obtained from financial institutions, banks, credit card providers and stores. Customers’ inclination to
use credit depends on their
I. Disposable income.
II. Interest rate.

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III. Size of down payments.
IV. Monthly installments.
(a) (I), (II) and (III) above
(b) (I), (II) and (IV) above
(c) (I), (III) and (IV) above
(d) (II), (III) and (IV) above
(e) All (I), (II), (III) and (IV) above.
15. Bairaju Foundation started by Satyam Computer Services Limited is empowering youth and providing free
education and pure drinking water in villages. Which of the following marketing concepts does this reflect?
(a) Marketing concept
(b) Selling concept
(c) Societal marketing concept
(d) Production concept
(e) Product concept.

16. Which of the following are unbranded, plainly packaged products and less expensive products?
(a) Expected products
(b) Branded products
(c) Generic products
(d) Augmented products
(e) Potential products.

17. DJ & C, a ready made trouser and shirt manufacturer in India identified an opportunity to increase the market
share by launching its products in Pakistan and Srilanka. Which of the following strategies DJ & C will adopt to
increase its market share?
(a) Market penetration strategy
(b) Product development strategy
(c) Market development strategy
(d) Diversification strategy
(e) Market Integration strategy.

18. Apna Bazar a super market chain in Delhi has a very good reputation in the city. They have a loyal customer
base. During 1st, 2nd and last weeks of every month the customer traffic in the store is very high and takes much
time for the billing for each customer. So the customers are dissatisfied and complaining against the billing.
Some times the printers are stuck. So the staff asked the management to replace the printers with Inkjet. Earlier
they used to purchase printers from Logitech, which supplies dot matrix printers only. Which of the following
would be most suitable buying decision for the management of Apna Bazar?
(a) Resubmit an order to Logitech only on the same conditions as before
(b) Ask the Logitech technicians to repair and maintain printers regularly
(c) Buy Dot matrix printers from other company
(d) Buy Inkjet printers from other company
(e) Ask Logitech to produce Inkjet printers for them.

19. Hyderabad House, a restaurant started in Hyderabad, Andhra Pradesh. It established by starting two chain
restaurants in Hyderabad. It increased its chain into 12 restaurants in Hyderabad by the end of 2007. When some
of its competitors set to enter Hyderabad market it took many strategic steps like giving price discounts, Big
meal offers and variety of food etc. In 2008 it planned to expand all over India, U.S and Arab countries. It
formed strategic alliance with those restaurants that have presence in those areas. Which of the following best
explains reason for Hyderabad House to form a strategic alliance?
(a) This would be an inexpensive way to enter into new markets
(b) As it cannot set up its own restaurants in all these countries
(c) The alliance partner would be well versed with the culture and have good knowledge about their market
(d) The alliance partner can take complete responsibility for success of Hyderabad House
(e) This would help Hyderabad House to prove its superiority over its competitors.

20. The target that has been assigned to a salesperson or other marketing entity for sales in a region and/or the sales
of a product range is called as
(a) Sales forecast
(b) Territory sales forecast
(c) Allocation of sales effort
(d) Scheduling the salesperson
(e) Sales quota.

21. Which of the following statements are true regarding “just in time” process of organizational buying?

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I. Raw materials are purchased on the basis of customer demand.
II. It maintains minimum inventory of raw materials and finished goods.
III. The firm forecasts its sales and develops its production schedule.
IV. The firm orders the goods according to its forecasts.
(a) Both (I) and (II) above
(b) Both (I) and (III) above
(c) Both (I) and (IV) above
(d) Both (II) and (III) above
(e) Both (II) and (IV) above.
22. Hero Honda created value in the form of better mileage and has been adapting to the latest technology as well as
the preferences of the customers. It initially introduced Hero Honda 100 CC, then the SS, Splendor, Passion,
CBZ, Splendor Plus and Karizma. It is continuously innovating, making it very difficult for a competitor to beat
it. Though TVS and other competitors entered into the market, they failed as compared to Hero Honda. Which of
the following best describes success of Hero Honda?
(a) Hero Honda is technologically strong when compared to its competitors
(b) Hero Honda has innovated value and is successful in sustaining and communicating it over a period of
time
(c) Competitors failed in communicating their products
(d) Hero Honda positioned itself as No. 1 bike of the country
(e) Competitors failed in understanding customer’s needs.

23. Which of the following buying behavior is exhibited when a customer buys high involvement, expensive and less
frequently purchased products?
(a) Routinized buying behavior
(b) Variety seeking behavior
(c) Extensive problem solving
(d) Post purchase dissonance
(e) Post purchase satisfaction.

24. The government of India controls the money supply as the Gross National Product (GNP) drops drastically. It is
forecasting the period of
(a) Recession
(b) Depression
(c) Recovery
(d) Growth
(e) Austerity.

25. Which of the following concepts is based on the belief that implies, determining target customers needs and
delivering desired satisfaction more effectively and efficiently than competitors?
(a) Marketing concept
(b) Selling concept
(c) Production concept
(d) Societal marketing concept
(e) Product concept.

26. Hindustan Lever Limited’s (HLL) product lines include consumer goods, distributed by the same channels of
distribution and are produced in similar manufacturing facilities. This best illustrates HLL’s product line
(a) Width
(b) Depth
(c) Length
(d) Volume
(e) Consistency.

27. Which of the following are runner-up companies that aggressively attack competitors to get more market share?
(a) Market leaders
(b) Market challengers
(c) Market followers
(d) Market nichers
(e) Market penetrators.

28. In order to communicate and deliver the company’s desired position to the consumer successfully, the company
I. Must emphasize advertising in support of its positioning strategy.
II. Must focus its promotional efforts on personal selling.

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III. Must place its greatest efforts on producing the desired product efficiently.
IV. Must focus the entire marketing program in support of the chosen positioning strategy.
(a) Only (I) above
(b) Only (IV) above
(c) Both (I) and (II) above
(d) (I), (II) and (III) above
(e) All (I), (II), (III) and (IV) above.
29. Which of the following are the strategies to be followed by the companies to succeed in Niche marketing?
I. The company should not introduce products that compete with its own products in the market.
II. It has to position their product in smaller markets.
III. It has to focus on individual customer.
IV. It has to provide specialized product offering.
(a) (I), (II) and (III) above
(b) (I), (II) and (IV) above
(c) (I), (III) and (IV) above
(d) (II), (III) and (IV) above
(e) All (I), (II), (III) and (IV) above.

30. Which of the following segmentation criteria focuses on customer capabilities as a factor for segmenting
organizational market?
(a) Demographic
(b) Operating variables
(c) Purchasing
(d) Situational factors
(e) Personal characteristics of the purchasers.

31. Which of the following information is obtained by scanning of information sources on a continuous basis and
includes information on industry, competitors, etc., obtained from newspaper articles, magazines, trade journals,
government reports and annual reports?
(a) Monitoring information
(b) Requested information
(c) Processing information
(d) Recurrent information
(e) Selective information.

32. Ajay Mathur works in an organization, where purchases are accountable to the public. His purchasing processes
are influenced by various levels and are also extremely complex. In this regard, the market type in which Ajay
Mathur works refer to
(a) Reseller market
(b) Producer market
(c) Government market
(d) Supplier market
(e) Monopoly market.

33. Which of the following is the reference group, that an individual does not hold any membership and tries to
resent values and beliefs of that group?
(a) Membership reference group
(b) Aspirational reference group
(c) Disclaimant reference group
(d) Avoidance group
(e) Secondary reference group.

34. Which of the following analysis provides marketers with an estimate of the extent of profits that each product
line brings to the company?
(a) Marketing cost analysis
(b) Customer profitability analysis
(c) Financial situation analysis
(d) Contribution analysis
(e) Ratio analysis.

35. Companies continually search for new customers in order to make profits and increase their sales volume. Which
of the following is not helpful to the companies in generating a lead to attract new customers?
(a) Developing advertisements

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(b) Mailing to prospective customers
(c) Participating in trade shows and fairs
(d) Making personal phone call to customers
(e) Measuring the defection rate.
36. Which of the following occurs when a company lengthens its product beyond its current range of products
offered to consumers?
(a) Line stretching
(b) Line filling
(c) Line pruning
(d) Line modernization
(e) Line proliferation.

37. Limitation of which of the following is not a source of weakness for a business?
(a) Facilities
(b) Financial resources
(c) Brand image
(d) Marketing skills
(e) Culture.

38. Consult-Me Consultants Inc., has been involved in several special meetings to discuss on issues such as business
mission, situation analysis, market and growth alternatives, and implementation approaches. Consult-Me is
apparently engaged in
(a) Value chain analysis
(b) Segmenting
(c) Strategic planning
(d) Business analysis
(e) Business process engineering.

39. Although marketer needs to concentrate on a super segment, it is better to go one step at a time. Competitors
should not get a clear picture of the direction in which the organization is moving. Which of the following
segmentation strategies best suits the above condition?
(a) Segment interrelationships and super segments
(b) Ethical choice of market targets
(c) Full market coverage
(d) Selective specialization
(e) Segment by segment invasion plan.

40. The risk taking and risk averting nature of a buyer influences in segmenting organizational market is an example
of
(a) Personal characteristics
(b) Operating variables
(c) Purchasing approaches
(d) Situational factors
(e) Demographics.

41. The competitors’ reaction patterns to a firm’s competitive strategies should be observed continuously, because it
is necessary to attack the competitors in their vulnerable areas. Normally, there are four types of competitors
based on their reaction patterns. One of the competitors is “Selective competitor”. Which of the following
statements is true regarding the “Selective competitor”?
(a) In this type of competitor’s reaction pattern, company may or may not respond to the strategies of his
competitor
(b) In this type of competitor’s reaction pattern, company strongly retaliates to the slightest move of his
competitors
(c) In this type of competitor’s reaction pattern, company reacts only to certain types of strategies, perhaps to
added product features or line extensions
(d) In this type of competitor’s reaction pattern, company reacts very slowly to the competition
(e) In this type of competitor’s reaction pattern, company retrieve the product from the market incase of strong
competition.

42. In which of the following functions of the marketing plan does the marketing manager analyze opportunities
available to the company in the market and threats to the company and also determines the issues related to
strengths and weaknesses of the company?
(a) Marketing analysis
(b) Action programs

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(c) Marketing strategy
(d) Opportunity and Issue analysis
(e) Controlling.
43. In organizational market segmentation, which method considers the variables like industry, company size and
customer location?
(a) Demographic segmentation
(b) Operating variables
(c) Purchasing approaches
(d) Situational factors
(e) Personal characteristics.

44. Segmenting the market by the degree of likelihood of repurchasing a brand would be an example of which type
of behavioral segmentation?
(a) Usage rate
(b) Loyalty status
(c) Benefits sought
(d) User status
(e) Occasion.

45. Which of the following statements is false regarding collection of secondary research data for a research need?
(a) It can be organized in-house or via a research agency
(b) It is collected after primary data
(c) It is collected quicker than primary data
(d) It is cheaper than primary data
(e) Its internal sources include the company’s literature, annual reports, sales report, etc.

46. What are the four main categories of factors that influence organizational buying decisions?
(a) Environmental, organizational, psychological and social
(b) Environmental, psychological, social and technological
(c) Environmental, organizational, personal and social
(d) Technological, organizational, environmental and interpersonal
(e) Environmental, organizational, technological and social.

47. Mr. Rakesh’s wife wants to present a bicycle to her son on his 7th birthday. So she informs the same thing to Mr.
Rakesh. He is also convinced to buy a bicycle for his son. He goes to a cycle shop and buys a BSA cycle for his
son. In this example, What are the roles played by Mr.Rakesh?
I. Initiator.
II. Buyer.
III. Influencer.
IV. Decider.
(a) Both (I) and (II) above
(b) Both (I) and (III) above
(c) Both (I) and (IV) above
(d) Both (II) and (IV) above
(e) All (I), (II), (III) and (IV) above.

48. Which of the following statements is not true regarding the concept of the Experience Curve?
(a) It states that as the firm produces more products, it gains experience in the production methods over a
period of time
(b) It helps big organizations to realize economies of scale
(c) It helps to decrease the initial costs of production
(d) It helps the firm in gaining the strategic advantage of pricing its products lower than that of its
competitors
(e) The experience curve works well when a product is in the last stages of its life cycle.

49. Which of the following is considered as a significant ‘demographic’ environmental factor that marketers need to
monitor the way people live, spend money and consume?
(a) Lifestyle
(b) Population age mix
(c) Inflation
(d) Family dependency ratio
(e) Persistence of core cultural values.

50. Which of the following strategies is used by the companies to redesign the process when they perform poorly in

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financial terms, face intense competition or erosion of market share, or discover emerging marketing
opportunities?
(a) Benchmarking
(b) Decentralization
(c) Outsourcing
(d) Reengineering
(e) Customization.
51. Coca-Cola realized that it had major competition from substitutes such as tea, coffee and fruit juices which were
available at cheaper prices. Therefore, it came out with smaller bottles so that the price of its product became
competitive. Which of the following competitions was faced by Coca-Cola from tea, coffee and fruit juices?
(a) Generic competition
(b) Brand competition
(c) Form competition
(d) Industry competition
(e) Product competition.

52. Which of the following is the first step in the marketing planning process?
(a) Developing marketing strategies
(b) Planning marketing programs
(c) Managing the marketing effort
(d) Analyzing the marketing opportunities
(e) Evaluating target market.

53. Reliance is starting its ornaments chain store named “Reliance Jewels”. It is not acquiring the business of any of
its competitors. Which strategy is Reliance adopting?
(a) Concentric diversification strategy
(b) Conglomerate diversification strategy
(c) Horizontal diversification strategy
(d) Backward integration strategy
(e) Horizontal integration strategy.

54. Which of the following is not a characteristic of variables used in effective market segmentation?
(a) Quality
(b) Actionable
(c) Measurable
(d) Accessible
(e) Substantial.

55. What is a Penetrated market?
(a) The number of prospects who are likely to become customers and buy a product
(b) The set of buyers interested in buying a product
(c) The number of buyers who have an interest in the product as well as purchasing capacity and access to the
market
(d) The number of unqualified and inaccessible buyers who have an interest in the product
(e) The market that comprises of customers who have already purchased the product.

56. What is the suitable reason behind the fact that “it becomes easier for marketers to offer specialized marketing
services to organizational buyers”?
(a) Organizational buyers spend more time to buy
(b) More people are involved in organizational buying
(c) Organizational buying involves bulk quantity
(d) Organizational buyers are fewer compared to individual buyers
(e) Organizational buying depends on operational variable, purchasing approaches and situational factors.

57. Which of the following possible aspects of consumer buying decisions is least likely to lead to an organizational
buying decision?
(a) Comparison of product performance with expectations
(b) Decision based on highest overall evaluation
(c) Alternatives evaluated on important criteria
(d) Information gathered from internal and external searches
(e) Problem recognition triggered by self-actualization motives.

58. In consumer behavior, cognitive dissonance
(a) Occurs when the performance of a product bought, exceeds customers expectations

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(b) Cannot be alleviated once it has occurred
(c) Typically occurs during the information search stage of the purchase decision process
(d) Refers to post-purchase psychological tension
(e) Happens more with low-involvement products than with high-involvement products.
59. The market for packaged foods and readymade garments has increased significantly because of the increase in
the number of women earning. Which of the following macro environment factors explains the above condition?
(a) Demographic
(b) Legal
(c) Political
(d) Socio-cultural
(e) Technological.

60. Nike concentrates on its core competencies such as shoe design, marketing and shoe merchandising and has its
manufacturing base in Asian countries. The strategy adopted by Nike is referred to as
(a) Customization
(b) Outsourcing
(c) Benchmarking
(d) Reengineering
(e) Partnership marketing.

61. Which of the following strategies is not employed by a firm in the decline stage of the product life cycle?
(a) Increase the firm’s investment to strengthen its competitive position and dominate the market
(b) Maintain the firm’s investment level until the market uncertainty passes by
(c) Introducing new advertising campaigns, new packaging and even product re-launches
(d) Selectively decrease the firm’s investment level by dropping unprofitable customer groups
(e) Harvest the firm’s investment to recover the cash quickly.

62. A method of comparing the internal capabilities of an organization with the demands and challenges of its
external environment is referred as
(a) SHOT analysis
(b) SWOT analysis
(c) Stakeholder analysis
(d) Shareholder analysis
(e) Ratio analysis.

63. “Zero”, a sugar substitute product is a tough competitor to “Sugar Free”, which is a market leader in the sugar
substitutes. Sugar Free is the only product from the company. Zero is one of the components of the product mix
of Reliance Foods. It has product lines in wheat, salt and beverages. It supplies all its product line to all over
India. Which of the following will be the best strategy for Zero to attract and tap customers in this scenario?
(a) It has to guard itself from other competitors
(b) It has to enter new markets
(c) Make alliances with small players in the market
(d) Distribute free samples to the target market
(e) Utilize its wide network all over India and provide incentives to distributors to push their product.

64. The process of dividing a market into distinct groups of buyers with different needs, characteristics or behavior
who might require separate products or marketing programs is called
(a) Market share
(b) Positioning
(c) Market evaluation
(d) Market segmentation
(e) Marketing audit.

65. The major disadvantage of a mail interview versus a telephone or personal interview is
(a) Having to offer incentives
(b) The low response rate
(c) The elimination of interview bias
(d) The lack of open-ended questions
(e) The cost involved.

66. Ms. Ellen was the marketing research director for the local mall. She decided to conduct an experiment in the
mall’s car park to find out whether shoppers would respond to a lower parking price to park in some of the
under-utilized sections of the car park. Which type of market research was used by Ms. Ellen?
(a) Exploratory

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(b) Causal
(c) Descriptive
(d) Investigative
(e) Observational.
67. The buying process stage follows methods such as product value analysis by means of which the firm will search
chances of reducing the price of the products and alternately identify ways and means of producing those
products through cheaper methods. Which stage of buying process is this?
(a) Problem recognition
(b) Product specification
(c) Product supplier search
(d) Product selection
(e) Product purchase.

68. Which of the following statements about consumer involvement in the purchase decision process is true?
(a) Limited problem solving typically lends to low consumer involvement
(b) Extended problem solving is used when purchasing low-involvement products
(c) A consumer making a low involvement purchase will typically consider many sellers
(d) There will be no external information sources consulted when making a high involvement purchase
(e) Minimal time will be spent searching for a low-involvement product.

69. Which of the following statements is false regarding Purchasing Power Parity (PPP)?
(a) PPP is used to compare incomes across nations
(b) The PPP takes into account the cost of standard basket of products for each country
(c) PPP cannot determine the relative value of two currencies
(d) PPP does not consider the subsidies provided by a government for essential goods like food, agriculture,
utilities and medical care
(e) The higher the PPP of a country, the more buying power it enjoys.

70. Which of the following does refer as value to a customer?
(a) A technical measure of a company’s selling price relative to its production costs
(b) A measure of the mark-up charged by companies
(c) The lowest prices available to consumers
(d) The difference between the benefits derived from the product and the cost of acquiring the product
(e) The quality offered to customers.

71. Vaartha, one of the leading telugu newspapers in Andhra Pradesh is trying to survive in the market on account of
negative demand for its subscription. While other newspapers have been logging in readers in flocks. Vaartha has
faced a ‘net negative increase’ in its subscriber base. In other words, people who are cancelling their subscription
are much more than those who are acquiring new subscriptions from Vaartha. Which of the following would be
the best marketing task that Vaartha could apply to deal with the negative demand?
(a) Analyze reason for customers discontinuing subscription with Vaartha newspaper and take necessary
action
(b) Raise prices for the advertisements to be printed in the newspaper
(c) Measure the size of the potential market for developing new look to satisfy the demand
(d) Maintain its quality of news and decrease the price of paper
(e) Reduce demand temporarily.

72. Iodex launched its green colored pain reliever to fight the competition from Moov. This action was, however late
as Moov by then had already become an established brand. This is an example of
(a) Selective competitor
(b) Slow reactor
(c) Tough competitor
(d) Unpredictable competitor
(e) Form competitor.

73. Which of the following judges a company’s performance vis-à-vis its competitors?
(a) Sales analysis
(b) Marketing audit
(c) Market share analysis
(d) Financial analysis
(e) Marketing expense-to-sales analysis.

74. Hewlett-Packard manufactures printers ranging from Rs.3,000 for home and small office segments to heavy duty
color printers which costs Rs.1,00,000. Which of the following segment is concentrated by Hewlett-Packard?

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(a) Market specialization
(b) Product specialization
(c) Full market coverage
(d) Single segment concentration
(e) Selective specialization.
75. Which of the following approaches of organizational purchasing, segments industrial market on the basis of level
of impact of influential units of organization?
(a) Nature of existing relationships
(b) Purchasing function
(c) General purchasing policies
(d) Power structure
(e) Company size.

76. Which of the following is/are the components of Marketing Information System?
I. Internal record system.
II. Automatic identification system.
III. Marketing intelligence system.
IV. Marketing decision support system.
(a) Only (IV) above
(b) Both (II) and (III) above
(c) Both (III) and (IV) above
(d) (I), (II) and (III) above
(e) (I), (III) and (IV) above.

77. Hero Honda buys tyres from MRF Tyres Ltd., to fit their motorcycles. This is an example of
(a) Industrial dealer
(b) Reseller market
(c) Institutional market
(d) Government market
(e) Original equipment manufacturer.

78. Which of the following refers to a strong urge that drives a person’s activities towards unfulfilled needs and
wants?
(a) Perception
(b) Belief
(c) Attitude
(d) Motivation
(e) Cognitive dissonance.

79. The decrease in the average cost incurred in the production of goods in large numbers is referred to as
(a) Economies of scale
(b) High capital requirements
(c) Low asset salvage value
(d) Proprietary products
(e) Learning curve.

80. Brigade technologies, a Mumbai based financial services company planned to start its offices in Hyderabad,
Chennai, Bangalore, New Delhi and Calcutta. So it took around 20,000 Sq. ft. flats in all the cities for its offices.
It published a tender notice in leading newspapers for the interior decoration and furniture. Wise Decors, a
Hyderabad based interior decorating firm came up with a proposal of building cubicles for individual employees,
centralized air-conditioning, window screens, decoration flowers, safes and telephones. Another bid was from
Transformations, a Mumbai based firm having a nation wide network and it also offered the same features but
the price was more than Wise decors. In addition to that they provide maintenance and security services at a very
nominal cost for those who would opt their interior decorations. Finally Transformations won the contract,
though it was a costly proposal. Which of the following reasons best explains regarding the contract won by the
Transformations?
(a) Wise Decors viewed proposal just as interior decoration only
(b) Transformations proposal was more profitable than Wise Decors
(c) Transformations followed a true system selling approach by taking the total view of customer’s needs
(d) Transformations is also a Mumbai based firm
(e) Transformations was better equipped than Wise Decors.

81. World-one music, an organization started its satellite music due to the people’s affluence to the world wide
music. It supplies a set top box and small speakers which can be kept in house, car, office, and restaurants. For

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this it charges Rs.2,500 initially and a monthly charge of Rs.200. They believe that there are no substitutes for its
product. It conducted a market research in metros regarding people tastes, interest in different kinds of music,
and people showed interest in listening to world music. In the research they didn’t mentioned any price for the
services. Though the production of set top box and transmission of programs is costly, it started producing large
quantities believing that per unit output cost can be significantly reduced. But it failed due to less orders. Which
of the following aspects might make the company successful?
(a) It had spent more on advertising
(b) They need to strike balance between the value and the cost
(c) The organization must be customer led not product oriented
(d) They might conduct market research on the basis of demographics
(e) The production might be according to the orders.
82. Customers perceive the Tanishq jewelry brand as very high priced, while the reality is quite the opposite as
Tanishq offers jewelry that suits every budget. Which of the following conditions made the customers to
perceive Tanishq as high priced brand?
(a) Over positioning
(b) Under positioning
(c) Doubtful positioning
(d) Confused positioning
(e) Unique selling proposition.

83. Differentiation achieved through having better-trained people is a type of
(a) Services differentiation
(b) Personnel differentiation
(c) Channel differentiation
(d) Image differentiation
(e) Product differentiation.

84. In which of the following strategies do marketers continue to depend on the old, low priced products for the bulk
of their sales and promote the old product heavily?
(a) Trading down strategy
(b) Repositioning strategy
(c) Trading up strategy
(d) Product mix contraction strategy
(e) Product mix expansion strategy.

85. Hershey Foods Corp. offers a line of candy that includes Kit Kat, Mr. Goodbar, Krackel, Hershey’s Kisses, New
Trail, Reese’s Peanut Butter Cups, Rolo, Twizzlers, and Nibs in different assortments. This example best
illustrates Hershey’s product mix
(a) Width
(b) Depth
(c) Length
(d) Volume
(e) Consistency.

86. GTO Inc., a security device manufacturer was performing poorly after the death of the CEO Mr. Alex. Their
financial statements are showing huge losses. Earlier it used to be a monopoly in the market. It is very strong in
technology and it is the first entrant in the market. Now it is facing intense competition and the market share is
eroding every month. The competitors are giving tough competition in every front. It has a very good distribution
channel network. Which of the following strategies is most suitable for GTO Inc., to improve on business
performance?
(a) It has to focus on activities in which they are strong and outsource the remaining activities
(b) It has to set their own benchmarks and has to monitor its performance continuously
(c) Employees need to be given more autonomy and encourage to take initiative
(d) It has to redesign the organization structure, business process and associated systems
(e) It has to offer services like selling and delivering online through internet.

87. Which of the following is the process of establishing and maintaining a distinctive place in the market for an
organization or its specific product offers?
(a) Profiling
(b) Profiling segmentation
(c) Segmentation
(d) Positioning
(e) Targeting.


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88. The use of symbols to provide strong brand recognition is used in which of the following types of
differentiation?
(a) Product
(b) Services
(c) Personnel
(d) Image
(e) Channel.
89. Anita buys carpets for use in an office area. Which of the following statements determine the carpets to be
consumer or industrial product?
(a) The price of the carpet
(b) The type of selling organization
(c) The terms of the sale
(d) The buyer’s intended use of the product
(e) Whether the carpet is a replacement item.

90. Which of the following strategies demand the launching of a product at a lower price and with heavy promotion?
(a) Rapid skimming
(b) Rapid penetration
(c) Slow skimming
(d) Slow penetration
(e) Medium penetration.

91. Value Research is a custom research agency which conducts market research for the companies on the demanded
objectives by the company according to their budget. Mr. Raghu is starting a new youth reality show in MTV. So
he approached Value Research and asked them to conduct research to gather information regarding the consumer
viewing habits of T.V. programs, how often they watched earlier reality shows of Raghu. He had a limited
budget from the MTV. Which of the following would be the best way for Value Research to gather information?
(a) Sending mails to the target audience and asking them about their tastes and preferences
(b) Interviewing the targeted audience about their tastes and preferences through telephones
(c) Conducting personal interviews in shops and big malls
(d) Using their personnel to observe college students and youth discussions about the T.V programs
(e) Conducting a survey by using questionnaires.

92. A differentiated product may be unique in the market place, but it will only be successful under which of the
following circumstances?
(a) It satisfies customers’ needs
(b) If the price differential is minimal
(c) If the brand can be classified as aspirational
(d) If the brand ambassador is popular
(e) If its promotion is less.

93. It becomes very difficult to differentiate the product of one producer from that of its rival. Thus in order, to
achieve a competitive advantage, companies have to look for alternative ways of differentiating their products
from those of the competitors. In addition to product differentiation, marketers have also begun to differentiate
their products on the basis of the service they offer along with their products. Which of the following aspects
does not relate to service differentiation?
(a) Ordering ease
(b) Delivery
(c) Installation
(d) Durability
(e) Guarantees.

94. Insurance products are the examples of
(a) Convenience products
(b) Specialty products
(c) Unsought products
(d) Shopping products
(e) Industrial products.

95. In maturity stage of product life cycle, competition is characterized by
(a) Few sellers can afford the technological know-how
(b) Entry of new firms due to promising opportunities
(c) Intensity due to many brands competing at the same time

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Suggested Answers
Marketing Management – I (MB1C1): October 2008
(d) Firms withdrawing in case of lower exit barriers
(e) Firms adopting aggressive pricing strategies.
96. Virgin mobile a U.K based telecom company wants to start its mobile services in India. As Indian mobile
industry is already cluttered by giants like Airtel, BSNL, Idea and Vodafone, it is planning to target segments
which can generate a good business for them. It is offering value added services such as payment for receiving
calls, one touch Value Added Services (VAS) access, call more for less etc., Of the following strategies which
one strategy can generate most revenues to Virgin mobile?
(a) Buy out any of the existing competitors
(b) Targeting corporate market
(c) Targeting youth of age between 15-25
(d) Targeting people of age group between 25-40
(e) Promote their product by giving new attractive offers to attract the customers.

97. Indiaplaza.com is one of the India’s largest customer-to-customer online trading communities. It offers one-toone
trading format in an auction format on the web. Individuals can trade in thousands of categories: paintings,
stamps, coins, toys, dolls, etc. Each day over 500 new items are offered and more than 1000 auctions are in
progress. Which of the following would be the primary advantage for Indiaplaza.com in extending its business
online?
(a) It has the option of turning its website into a sales as well as an information channel
(b) It can meet customer needs better
(c) It can send trade related auctions’ advertisements to customers
(d) It can speed up internal communication
(e) It can collect fuller and richer information about customers, prospects and competitors.

98. Which of the following refers to the comfort with which the customer can place the order for the product?
(a) Delivery
(b) Installation
(c) Ordering ease
(d) Guarantee
(e) Disposal.

99. Which of the following forms of differentiation advantages is reduced if the technology used in a product
becomes obsolete fast?
(a) Product form
(b) Product design
(c) Product features
(d) Product quality
(e) Product durability.

100.A specialty product
(a) Requires minimal effort to purchase
(b) Is purchased frequently
(c) Requires purchase planning, and the buyer will not accept substitutes
(d) Is generally less expensive than other items in the same product class
(e) Prompts the purchaser to make comparisons among alternatives.

Answer Reason
1. C The straight rebuy is characterized by the routine purchase of familiar products
from regular suppliers. It is common for suppliers to set up automatic ordering
systems to ensure that buyers continue to order from them and to make the process
more convenient. (a) In a modified rebuy, the buyer requires additional information
or a change to the original product. (b) New task buying is a situation in which a
buyer purchases a product for the first time.
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2. E A person’s attitude is a set of his feeling and the way in which he reacts to a given
idea or thought. Attitudes can be positive, negative or neutral. Customer attitudes
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are based on their past experiences with the products and through their interaction
and relationship with their respective reference groups. Marketers can use several
methods like observation, personal interview and direct questionnaires to study the
attitudes of the customers. The simplest method would be to phrase a set of direct,
close-ended questions on a continuous five point scale (likert’s summated rating
scale).
3. B Liquidity ratios are current ratio, quick ratio, average collection period, Inventory
turnover ratio. Long term capitalization is a debt ratio, return on equity is a
profitability ratio and dividend yield is a market value ratio.
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4. D The income left after purchasing basic needs is known as discretionary income.
Customers use this for savings or purchasing non-essentials like consumer durables.
(a) The income left to consumers after tax is called disposable income. All other
options are not applicable.
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5. D In sales era, marketers focused their efforts only on selling their products to the
customers. Manufacturers believed that the success of their business depended on
outselling the competition. Marketers focused their efforts only on selling their
products to the customers.
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6. D Any firm tries to gain an advantage over its competitors. The industry concentration
or the number of business units operating within a particular industry indicates the
amount of rivalry. When a few firms enjoy a large market share, rivalry among
them will be less. On the other hand, if significant market share is enjoyed by a
large number of small players, the rivalry among them will be high mainly because
of equality in size. When rivalry among firms is high, it leads to price wars,
advertising battles, launches of new products and increased customer services and
warranties. A lack of differentiation among the products of the players in the
industry also leads to intense competition. Similarly, when the switching costs for
customers are low, rivalry among firms is high.
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7. D According to Patrick.M.Lencioni, when a company sets social and behavioral
standards for its employees, values become approved values.
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8. D The three psychographic dimensions are personality, motives and lifestyles.
Psychographic segmentation helps marketers understand buyer behavior better and
design communication programs, which will appeal to the target audience.
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9. B Split loyals are those customers who use more than one brand. Their loyalty is
divided among two or three brands.
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10. B Marketing 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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11. 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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12. D The major reason behind Target stores partnerships is option (d) to reinforce its
image in the market and provide quality products to its customers. As already it is
having loyal customer base that are looking for trendy yet affordable range
merchandise it wants to provide quality and trendy products
Option (a) is not apt because it is not the only factor.
Option (b) is not correct because the designer cloths are costlier than the normal
cloths.
Option (c) is also not a correct option. Because designer products are very costly to
produce.
Option (e) is not relevant because it is not at all an inexpensive way because
partnerships include large amount of investments.
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13. D In the given example, Sandy is in the purchase stage of the buying decision process.
As she already recognized problem, searched information and now decided to
purchase.
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14. E Customer inclination to use credit depends on disposable income, interest rate, size
of down payments, monthly installments.
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15. C The societal-marketing concept holds that the organization’s task is to determine the
needs, wants and interests of target markets and providing quality products.
Organizations must also help maintain and improve society’s well being. Satyam
computers not only satisfying their clients needs and wants but also helping the
society to improve.
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16. C Generic products are unbranded, plainly packaged products and are less expensive
than branded products.
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17. C Ansoff has proposed a model to identify such growth patterns, know as Ansoff’s
product/market expansion grid. In this grid, we can analyze market opportunities
through a four quadrant matrix. The third quadrant denotes the strategy for growths
in the new markets of existing products known as the market development strategy
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18. D Option (d) is the best fitting buying decision in this condition for Apna Bazar.
Because of the printers the customers are frustrated and they are already
complaining against that. If the management doesn’t take an active step and
purchase Ink jet printers the customers may change their store. So there is a threat
of decrease in sales. As Logitech is not producing Inkjet printers they have to
purchase Inkjet printers from some other company immediately.
If they continue with same printers or repair the existing ones or purchase new dot
matrix printers from other company the time of billing won’t decrease.
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19. C Hyderabad House formed a strategic alliance with local player since it will help
them to understand the culture of the new country and also help to add on the
present market of the existing player to the new customers which it has been
targeting for. The new partner will look after all the legal and labor litigations. So,
the Hyderabad House management can focus more on its strategies for improving
its business rather than concentrate for small things and go into trouble. After
habituating itself with the conditions it can break the alliance and work itself. Hence
option (c) is the answer.
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20. 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.
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21. A Organizations can use various techniques such as “material requirement planning
and Just in time to take organizational buying decisions. In materials requirement
planning, a firm forecasts its sales and develops its production schedule
accordingly; the firm then orders the goods according to its production schedules.
This help the company avoid buying too much or too little of the raw material.
On the other hand, Just in time is a method for maintaining the minimum inventory
of raw materials and finished goods. In this method, raw materials are purchased on
the basis of customer demand. In other words raw material is procured only when
the production process is about to begin.
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22. B Option (b) best describes the success of Hero Honda as it innovated value of the
mileage and performance and produced bikes according to the customer’s needs and
wants. Not only producing the desired value they also sustained and communicated
the value over a period of time.
Option a does not best describes the reason for success because every company is
strong in the technological front.
Option c, companies failed not only for poor communication there are other reasons
also
Option d, e are not relevant because every company is preferring the mileage and
performance as the core value of a bike.
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23. C Customers exhibit extensive problem solving buying behavior when they indulge in
buying expensive, infrequently purchased unfamiliar products. They gather a lot of
data on the various brands available.
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24. B Depression is a state of intense recession Where the rate of unemployment is very
high, wages are very low, Gross National Product (GNP) drops and customers lack
confidence in the economy. The government uses various measures like the
monetary policy and fiscal policies to eliminate the effects of recession and
depression.
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25. A The marketing concept holds that the key to achieving its organizational goals
consists of the company being more effective than competitors in creating,
delivering, and communicating superior customer value to its chosen target markets.
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(b) The selling concept holds that consumers and businesses, if left alone, will
ordinarily not by enough of the organization’s products. The production concept
holds that consumers will prefer products that are widely available and inexpensive.
(c) Production concept concentrates on achieving high production efficiency, low
costs, and mass distribution. (d) The societal-marketing concept holds that the
organization’s task is to determine the needs, wants and interests of target markets
and to deliver the desired satisfactions more effectively and efficiently than
competitors do. (e) The product concept holds that the consumers will favor those
products that offer the most quality, performance or innovative features.
26. E Consistency refers to the closeness exhibited by the products lines in production
requirements, distribution, end usage, etc. (a) Product width is the total number of
product lines a company carries. (b) The depth of a product mix is the assortment of
sizes, colors and variations offered for each product in the product line. (c) The
length of the product mix is the total number of items in that mix. (d) Option is not
applicable.
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27. B Market challengers are runner-up companies that aggressively attack competitors to
get more market share.
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28. B Marketing programs have to be planned in such a way that the strategies formulated
are properly implemented and aid in the achievement of organizational goals and
focus the entire marketing program in support of the chosen positioning strategy.
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29. B Niche marketing can be defined as the marketer’s effort to position their product or
service in smaller markets that have similar attributes and have been neglected by
other markets. Niche is a small segment of the market that has some specific
unsatisfied needs. The fundamental difference between segment and niche is that a
segment is usually a broad market place where many competitors operate. A niche
is a comparatively smaller segment. The firm should also clearly differentiate itself
from its competitors. The company should not introduce products that compete with
its own products in the market.
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30. B Operating variables include factors like the technology of the company, product and
brand use status and the customer capabilities.
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31. A Monitoring information is obtained by scanning of information sources on a
continuous basis and includes information on industry, competitors, etc obtained
from newspaper articles, magazines, trade journals, government reports and annual
reports.
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32. C Government agencies are the largest buyers of goods and services in a country. The
purchasing process of the government is influenced by different groups of people at
various levels, who legislate, select and analyze the goods and services before
actually purchasing them. This makes the buying procedures complex.
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33. D Avoidance group is the reference group to which an individual does not hold any
membership and tries to resent values and beliefs of the group.
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34. A Marketing cost analysis is very important for marketers to conduct a marketing cost
analysis since it provides them with the estimate of the extent of profits that each
product line brings to the company. (b) Customer profitability analyzes the revenues
of the company to identify the profit contribution of a customer. (c) Financial
situation analysis is used to analyze the current situation of an organization and ratio
analysis is one of the widely used tools for financial situation analysis. (d)
Contribution analysis deals with techniques for determining profitability at the
market segment level, the product level, the distribution level and the customer
level. (e) This option is not relevant.
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35. E Measuring the defection rate helps the companies to pay close attention to the rate
at which they lose customers. This measurement is not helpful in attracting new
customers.
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36. A Line stretching occurs when a company lengthens its product beyond its current
range of products offered to consumers.
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37. E Limitations of facilities, financial resources, management capabilities, marketing
skills and brand image are weakness for a business. Culture is not a source of
weakness for business.
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38. C Strategic planning is the process of developing and analyzing the organization's
mission, overall goals, general strategies, and allocating resources. The strategic
planning process is carried out at the corporate level, business level, and product
level. It begins with an analysis of the organization's current strategic posture, but
strategic planning focuses on the future.
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39. E The segment by segment planning means going one step at a time so that
competitors should not get a clear picture of the direction in which the organization
is moving.
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40. A Individuals and not the organizations make purchase decisions in organizations,
although the philosophies and procedures of the organizations provide them with a
framework and restrict the purchasing patterns. The risk taking and risk averting
nature of a buyer is another criterion that has to be looked into for serving them.
This is a personal characteristic.
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41. C Selective competitor, who reacts only to certain types of strategies, perhaps to
added product features or line extensions.
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42. D In opportunity and issue analysis, the marketing manager analyzes the opportunities
available to the company in the market and the threats to the company. In the issue
analysis, the manager determines the issues related to the strengths and weaknesses
of the company and highlights the areas which the marketing plan has to focus.
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43. A Demographic segmentation is the simplest method to segment organizational
markets. The demographic variables to segment organizational markets include the
industry, company size and customer location.
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44. B Segmentation by loyalty status refers to the repurchase of a kind due to various
levels of allegiance a customer exhibits.
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45. B Secondary research is generally quicker and cheaper than primary research, so most
research projects would begin by reviewing what secondary data is already
available.
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46. C Buying decisions of organizations are also influenced by such as environmental,
organizational, social and personal factors.
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47. D A person who initiates the idea of purchasing the product is called an initiator . He
recognizes that the problem can be solved or avoided by acquiring the product. A
person whose view and advice influence the buying decision is an influencer. A
person who decides where, when, why and how to buy the product is decider. And
the person who actually purchases the product is a buyer. Here Rakesh didn’t take
initiation to buy the cycle so he is not an initiator. But he decides whether to buy or
not. So he is a decider and he only bought the cycle so he is a buyer.
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48. E The experience curve works well in certain circumstances. When a product is in the
early stages of its life cycle, the experience curve provides the greatest benefits to
organizations.
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49. B Population age mix falls under the gamut of demographic environment. (a)
Lifestyle is an element of the psychographic environment. (c) Inflation is an
important element of the economic environment. (d) Family dependent ratio and (e)
existence of core cultural values are the elements of the social environment.
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50. D Reengineering is the process of redesigning the organization structure, business
processes and associated systems to achieve a dramatic improvement in business
performance. Companies reengineer their processes when they perform poorly in
financial terms, face intense competition or erosion of market share, or discover
emerging marketing opportunities. The other options are wrong which do not
redesign the organization structure when the company is performing poorly in
financial terms and face intense competition.
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51. C Form competition is the one in which a company sees itself competing with all the
other companies offering similar benefits. Generic competition is a form of
competition where all the companies compete for the same disposable income of the
customers. As customers have limited disposable income, they can buy only a
limited number of things with it. Therefore, all marketers try to ensure that their
products are included in the list of immediate purchases of every potential customer.
Industry competition is the one in which a company competes with the same kind of
products manufactured by other firms. Brand competition is one in which a
company competes with the companies offering similar products to the same
consumer segments.
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52. D Analyzing the marketing opportunity is the first step in the marketing planning
process.
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53. B In conglomerate diversification strategy, the company tries to perform unrelated
business activities. Reliance here is entering into totally new business which is
totally new to its business. So it is adopting conglomerate diversification strategy.
Concentric diversification strategy, a company tries to diversify by serving a new
customer base with products that are related to the existing product category. If the
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company tries to attract current customers with new products even if the company
has to acquire a new manufacturing capability, it is known as horizontal
diversification strategy. And if it plans to adopt a backward integration strategy,
then it will produce its own raw materials by starting a dairy farm for milk, and
producing wheat etc. If it plans to integrate horizontally, then it may acquire the
business of one of its competitors.
54. A Quality is not a characteristic of variables used in segmentation. The other three are
all criteria to use in deciding whether the resulting segments are suitable for use by
a company.
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55. E Penetrated market is the market that comprises of customers who have already
purchased the product.
The number of customers who are likely to become customers and buy a product is
called a market.
The set of buyers interested in buying a product is called Potential market.
The number of buyers who have an interest in the product as well as purchasing
capacity and access to the market is called available market.
The number of unqualified and inaccessible buyers who have an interest in the
product is called restricted market.
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56. D Organizational buyers are fewer compared to individual buyers so it becomes easier
for marketers to offer specialized marketing services to organizational buyers.
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57. E The five stages of decision-making are problem recognition, information search,
evaluation of alternatives, purchase decision and post purchase behavior. The
process of buying starts when a person realizes that he has a problem or an
unsatisfied need. Self-actualization needs are an individual’s need to realize his full
potential through continuous growth and self-development. Hence problem
recognition triggered by self-actualization motives is least likely to lead to an
organizational buying decision.
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58. D 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. It Refers to post-purchase psychological tension
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59. D The change in the attitudes, beliefs, norms, values and lifestyles relate to sociocultural
environment. These forces can change the market dynamics and marketers
can face both opportunities and threats from them.
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60. B Outsourcing offers cost saving, lower expenses and specialization of products and
services and helps the company become more competitive. All other options are
irrelevant.
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61. C Introducing fresh advertising campaigns, new packaging and even product relaunches
is a strategy for the maturity stage. Regaining market share is difficult
during the decline stage. Therefore, firms will not invest in high cost activities such
as advertising and sales promotion.
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62. B SWOT analysis (standing for Strengths, Weaknesses, opportunities, Threats) is a
widely used method of comparing the internal capabilities of an organization with
the demands and challenges of its external environment
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63. E Option (e) is the best strategy for Zero, because it is a tough competitor for the
market leader Sugar free. Sugar free is the only product from the company. But
Reliance has wide network all over India so it can utilize that network and can beat
the market leader sugar free. Distribution Network is an advantage for Reliance
foods.
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64. D Market segmentation can be defined as the process of dividing a market into smaller
distinct groups of buyers with different needs, characteristics or behavior who might
require separate products or marketing programs. (a) Market share refers to a
company’s share in the target market it serves as compared to its competitors. (b)
Positioning is creating an image in the minds of customers. (c) Market evaluation
refers to assessing the feasibility of a market. (e) Market audit is a comprehensive
review of a firm’s marketing environment, objectives, strategies, and goals.
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65. B One of the biggest problems in mail interviews is the low response rate. It is
believed that only 20 to 40 percent of the respondents reply to mail interviews. The
response rate in telephonic interviews is also low, since on an average only one call
per six calls is picked up. In personal interviews respondents may be reluctant to
share the confidential information, which may be essential for the research process.
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66. B In causal research, the cause and effect relationships between two variables are
analyzed. This research helps managers select a particular strategy. It is carried out
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by considering a detailed questionnaire. (a) Exploratory research helps the
management identify the presence of potential opportunities and threats for the
company. (c) Descriptive research is generally conducted after the exploratory
research. As the problem is clearly defined in exploratory research, the quantum or
intensity of the problem is identified. Option (d) and Option (e) are not applicable.
67. B Product specification is a crucial stage in buying process where the firm starts
negotiating with the suppliers by giving the technical specifications of the product.
Methods such as product value analysis are adopted, by means of which the firm
will search chances of reducing the price of the products and alternately identify
ways and means of producing those products through cheaper methods.
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68. E When customers buy low-cost, regularly purchased/routine products, they do not
make significant efforts to gather much information about the product. Instead they
choose the brand, which they are familiar with or have been choosing for a long
time. Purchase decision in such cases is quick. Therefore, customer involvement in
such purchase decisions is low.
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69. C The economic performance of a country is measured by its Gross Domestic Product
(GDP). PPP can help in comparing the relative value of two currencies. Purchasing
Power Parity (PPP) is used to compare incomes across nations. The PPP takes into
account the cost of standard basket of products for each country but does not
consider the subsidies provided by a government for essential goods like food,
agriculture, utilities and medical care. The PPP analysis help in determining the
relative purchasing power of two countries, the higher the PPP of a country, the
more buying power it enjoys.
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70. D Value is a subjective measure as people will perceive different benefits from any
given product. However, it can be best described as the difference between the
benefits derived from the product and the cost of acquiring the product.
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71. A There is negative demand when customers have a dislike for a company’s product.
In this case the discontinuing with subscription is a sign of dislike for its product
probably due to availability of better alternatives. In case of negative demand,
marketers must analyze cause for dislike and take necessary actions like marketing
program consisting of product redesign, lower prices and more positive promotion
can change beliefs and attitudes. Hence, option (a) is the answer.
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72. B Slow reactor type of competitor reacts very slowly to the competition. (a) Selective
competitor is a type of competitor who reacts to only certain types of strategies,
perhaps to added product features or line extensions. (c) Tough competitor is a type
of competitor who strongly retaliates to the slightest move of his competitors. (d)
Unpredictable competitor is a type of competitor who may or may not respond to
the strategies of his competitors. (e) Option is not relevant
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73. C Market share analysis judge’s a company’s performance vis-à-vis its competitors.
(a) Sales analysis is a process of analyzing the actual sales and comparing them
with the projected sales. (b) Marketing audit is defined as a comprehensive,
systematic, independent and periodic evaluation of a firm’s marketing activities,
goals and strategies in order to identify the opportunities and problem areas, and
suggest suitable recommendations for improving the firm’s overall marketing
performance. (d) Marketers use financial analysis to formulate profitable strategies
for the company and to identify the factors determining the firm’s rate of return on
net worth. (e) Marketing expenses to sales analysis helps a company analyze
whether its marketing expenses are within limits or if it is overspending.
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74. C In full market coverage the company targets the full market rather than any specific
segment.
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75. D Power structures in different organizations vary widely. Within this approach,
suppliers can segment their customers on the basis of the level of impact of
influential units of organization. Company tackles the power structure through its
advanced technical skills.
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76. E The components of a marketing information system are: the internal record system,
marketing research system, marketing intelligence system and the marketing
decision support system. Automatic identification system is not a component of the
marketing information system.
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77. E Original equipment manufacturers buy industrial products and incorporate them into
their final products.
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78. D A motive is a strong urge that drives person’s activities towards unfulfilled needs
and wants. Customers are influenced by a motive or a set of motives when they
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have unfulfilled needs.
79. A Economies of scale refer to a decrease in the average cost incurred in the production
of goods in large numbers.
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80. C Transformations clearly viewed the customer’s requirement they viewed the
requirement in a broader sense. As Brigade is starting its new offices in different
cities there is a need for a maintenance and security staff also. They had a nation
wide network and therefore there is no need for hiring separate firms for different
states. Transformations understood the need of these staff for brigade and proposed
the same thing, by this transformation was successful.
Option (a) is not best answer because it was not the only problem, the far
sightedness of transformations added to the failure of wise decors.
Transformations proposal is not at all cheap when compared to Wise decors.
Options d and e are not relevant.
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81. C World-one music was in a Marketing myopia it failed not because markets are
saturated but because of the failure and short sightedness of the management. It
should be customer led not product oriented. Though there are so many features and
technical strengths in the product it should meet the customers need and wants.
Spending more on advertising, celebrity endorsements make the product much
costly and cannot help the company.
The organization has already made a balance between value and the cost, as the
production itself is costly and the transmission of world music is also costly.
Though they follow the process of production according to the orders they may not
get profits
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82. A Over positioning is the situation where the buyers may have a very narrow image of
the company’s brand. Over positioning is usually seen in cases where the firm
initially promotes its brand as a premium brand.
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83. B Differentiation achieved through having better-trained people is personnel
differentiation. (a) Services differentiation lies in adding valued services. (c)
Channel and (d) image differentiation are through better channel infrastructure and
corporate advertising campaigns respectively. (e) Product differentiation implies
differentiating on the basis of product form, features, benefits etc.
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84. C (c) By adding a higher priced or prestige item to a product line, a manufacturer
“trades up” in the hope of attracting customers for its lower-priced items as well. (a)
Marketers who adopt a trading down strategy add low priced products to their
already existing line of specialty products. (b) Product repositioning is more a
psychological exercise to play on the collective minds of the target group. (d)
Sometimes firms eliminate products or product lines to thin out their product lines
that contribute little to profits. (e) Product expansion necessitates adding new
products to an existing product line or adding new product lines to an existing
product mix.
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85. B The depth of a product mix is the assortment of sizes, colors and variations offered
for each product in the product line. (a) Product width is the total number of product
lines a company carries. (c) The length of the product mix is the total number of
items in that mix. (d) Option is not applicable. (e) Consistency refers to the
closeness exhibited by the products lines in production requirements, distribution,
end usage, etc.
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86. D As the company is in huge losses and there is a cut throat competition, the market
share is eroding. In this context the company needs to redesign its organization
structure and its process of doing the business. i.e., it has to go for reengineering
strategy. It helps in achieving an improvement in its business performance.
There is no use of outsourcing its work as it is expert in manufacturing security
device.
If it setting its own benchmark it cannot be in the top position. As the market
leaders performance may be more than this benchmark.
Initially it has restructure its organization then only it can give more autonomy to its
employees
Thought it offers online services customers prefer to buy in person as this is a
security device they may want to test it practically in their presence. Through
internet it is not possible.
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87. D Positioning uses all elements of the marketing mix to establish in the minds of
customers and potential customers how a product differs form its competitor.
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88. D A company may differentiate itself from its competitors by image; the particular
image or "personality" it acquires is created by its logo and other symbols, its
advertising, its atmosphere, its events and personalities. (a) Product differentiation
implies differentiating on the basis of product form, features, benefits etc. (b)
Services differentiation lies in adding valued services. (c) Differentiation achieved
through having better-trained people is personnel differentiation. (e) Companies can
achieve a distinct differentiation for their products on the basis of the distribution
channel they use.
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89. D Products can be classified depending on who the final purchaser and how he uses
them. Based on the usage of the products, they are divided into consumer products
and industrial products.
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90. B Rapid penetration strategy demands the launching of a product at a lower price and
with heavy promotion.
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91. E The best way in which Value Research can gather information is conducting a
survey by using questionnaires. Questionnaire method is the best way to gather
information since it provides quality data and is less costly compared to personal
interviews.
As the market for realty shows now-a-days is very huge, telephonic interviews and
mail interviews are not preferable.
Personal interviews are very costlier and also the possibility for respondent being
reluctant to share the essential information or giving false answers is very high.
Using their personnel to observe youth and college students discussions is not
appropriate since it cannot provide the adequate information regarding consumers
viewing habits.
Sending mails is also not a right option because the response rate is very low.
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92. A Differentiation only works if buyers appreciate the point of differentiation. If the
differentiated features do not satisfy their needs, the product is less likely to be
bought.
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93. D Products are expected to perform satisfactorily during their useful life. This is called
durability. This also comes under product attributes. This is not a service aspect.
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94. C Unsought products are those that a customer purchases when faced with a sudden
problem and insurance is an unsought product. (a) Convenience products are those,
which are relatively inexpensive and are bought frequently. (b) Specialty
products are products that have one or more unique characteristic features and are
not available freely. (d) Shopping products are those for which a buyer is willing to
spend time and effort in planning and making purchase decisions. (e) Industrial
products are those that are used to produce other goods.
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95. C In the maturity stage, competition is fierce as many brands compete at the same
time. Sales start declining and customers try out new products and substitutes.
Therefore, each competitor tries to improve his product and highlight the product
benefit.
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96. C Option c, targeting youth age between 15 and 25 is the right option Because youth
are the main segment who contribute 50% of telecom industry’s revenue. They are
the significant users of SMS, VAS.
It is almost impossible for Virgin mobile to buy out a competitor as all the existing
players are very big companies with very deep pockets.
Option (e) could not fetch revenues because many customers don’t want to change
their number and only offers cannot attract new customers in telecom industry
Above all attracting an existing customer of another brand is very difficult as most
of the customers never like to keep on changing their services or their mobile
numbers.
Corporate market is also cluttered by the market giants and they also don’t want to
change their number.
Age group between 25 and 40 also come in any of the options a, b, d and e.
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97. A Option (a) is the answer. Extending a business online has many advantages for
companies. However, in the context of Indiaplaza.com which is more like a
facilitator of trade and auctions the best advantage is that the website serves as a
sales and information channel.
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98. C Ordering ease refers to the comfort with which the customer can place the order for
the product.
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99. E If the technology used in a product becomes obsolete fast, the advantage derived by
the marketer from its durability also gets reduced.
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100. C Specialty products are products that have one or more unique characteristic features.
Customers are aware of what they want and will not accept a substitute for these
products even though they might have to wait for a considerable time to get the
product.
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