Marketing Mix - Concept, Product & Price Mix

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  • Q1

    Identify and explain the promotional tool of marketing mix which is an impersonal form of communication and is paid for by the marketer. Also, explain the benefits of this tool.

    Marks:3
    Answer:

    Advertising is the promotional tool which is non – personal and paid form of presentation or promotion of goods, services or ideas. It involves no direct face-to-face contact between the prospect and the advertiser.
    Following are the benefits of advertising:
    i. Mass Reach: Advertising reaches a large number of people scattered over a vast geographical area.
    ii. Expressiveness: Advertising acts as the most forceful medium of communication due to developments in art, computer designs and graphics.
    iii. Economy: Overall cost of advertising gets spread, leading to low per-unit cost.

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  • Q2

    What are the functions of labelling?

    Marks:3
    Answer:

    Following are the functions of ‘Labelling’:
    i. Describing the Product – It specifies the product features, its usage, cautions in use, etc. as well as specifies its contents.
    ii. Product Identification – It helps in easy identification of the product or brand. It provides information such as name & address of the manufacturer, net weight when packed, manufacturing date, maximum retail price and batch number.
    iii. Grading – It facilitates marketers in assigning different grades to indicate different features or quality of the product.

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  • Q3

    Explain any 3 elements of marketing mix.

    Marks:3
    Answer:

    Marketing Mix consists of 4 basic elements:
    i. Product Mix: It comprises of decisions related to the product. Product is a mixture of tangible and intangible attributes, capable of being exchanged for a value, with ability to satisfy customer needs. Product Mix comprises of 3 components- branding, labelling and packaging.


    ii. Price Mix: It consists of decisions related to the pricing of the product. Price is the amount of money paid by a buyer in consideration of the purchase of a product or a service. It is often used as a regulator of the demand of a product and acts as an effective marketing tool. It determines the revenue and profits of a firm.


    iii. Promotion Mix: It refers to the process of communication with the objective of informing potential customers about the product and persuading them to buy it. It involves a combination of promotional tools used namely, sales promotion, advertising and personal selling.

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  • Q4

    Name that element of marketing mix which affects the revenue and profits of a firm. Explain the factors which help in determining this element.

    Marks:5
    Answer:

    ‘Price Mix’ is the element of marketing mix that affects the revenue and profits of a firm. It consists of decisions related to the pricing of the product. ‘Price’ is the amount of money paid by a buyer in consideration of the purchase of a product or a service.


    The factors that help in determining price are:


    i. Pricing Objectives: It plays a crucial role in fixing the price of a product. Profit maximisation is the most important pricing objective of a firm. Apart from profit maximisation, obtaining market share, surviving in the competitive market and obtaining quality leadership forms the pricing objectives of a firm.
    ii. Cost: Price includes production cost, distribution cost, selling cost and profit margin. On the basis of total cost borne by a firm, the minimum level or the floor price at which the product would be sold is decided.
    iii. Demand: Demand is generally inversely proportional to the price of a product. Hence, a firm is in a better position to fix higher prices if the product has inelastic demand.
    iv. Competition: Quality, features and price of products offered by competition need to be considered before fixing product price.
    v. Quality and Service: A customer buys a product if it is of exceptional quality or value. The quality of the product and the services rendered with it plays a crucial role in determining price.

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  • Q5

    What are the different types of products?

    Marks:5
    Answer:

    Products can be broadly classified into two types:

    i. Consumer Product: These are products which are directly used by the ultimate consumers.

    a. Convenience goods: These include frequently purchased and least effort demanding goods. Example- Newspapers, toothpaste, tea, soaps, etc.

    b. Shopping products: These are products purchased after comparative analysis of comparative brands. Example-Furniture, Television, Washing Machine, etc.

    c. Specialty products: These products require special efforts while purchasing. Example- Jewellery, Fancy Items, etc.

    ii. Industrial Product: The products which are meant for use in manufacturing other products are called industrial products.
    a. Raw materials: These are converted into finished items. Example-Sugarcane, Cotton, etc.
    b. Supplies: These do not become part of finished product but necessary in manufacturing. Example- Nuts, bolts, paper clips, etc.
    c. Installations: These include factory sites, production lines, trucks, etc., which are items of heavy value.
    d. Accessory equipment: These include small lathes, portable drills etc., which are low capital value items.
    e. Fabricated parts: These are pre-produced items that become part of the finished product. Example- Mouse for computers, laces for shoes, etc.

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