CUSTOMER_CODE
SMUDE
DIVISION_CODE
SMUDE
EVENT_CODE
JULY15
ASSESSMENT_CODE BB0001_JULY15
QUESTION_TYPE
DESCRIPTIVE_QUESTION
QUESTION_ID
31179
QUESTION_TEXT
Define market segmentation. Explain different types of Market segments?
SCHEME OF
EVALUATION
Meaning and defintition:
( 2 marks )
Market segmentation consists of taking the total heterogeneous market for a
product and dividing it into several submarkets or segments, each of which
tends to be homogeneous in lull significant aspects.
William J. Stanton The different types of segments are briefly as
follows: ( 8 marks )
i. Territorial or geographic segmentation: We can divide India into two
distinct regions - rural markets and urban markets.
ii. Demographic segmentation: Customers are classified in homogeneous
groups under demographic similarities like age, sex, educational level,
incomes.
iii. Socio-psychological segmentation: Different socio-classes have different
spending behavior patterns.
iv. Need-oriented segmentation: Here the segmentation is done on the basis
of needs or benefits a group seeks from the goods.
v. Volume segmentation: This involves segmenting of market judging the
event of use such as heavy, medium, light users and those who do not use the
product at all.
vi. Qualitative segmentation: In this type of segmentation emphasis
is placed on repeat purchases by the buyers.
vii. Product segmentation: This is directed towards differences
among the product that comprise markets.
viii. Lifestyle segmentation: This emphasizes segmentation on the basis of
the distinctive mode of living of segments involving questions regarding how
they spend their time, the nature of their interests and the basic characteristics
like stage in the life-cycle. Income education.
QUESTION_TYPE
DESCRIPTIVE_QUESTION
QUESTION_ID
31180
QUESTION_TEXT
Define Product Planning. Explain various Product Line Polices and Strategies?
SCHEME OF
EVALUATION
Product Planning:
( 2 marks )
Johnson defines product planning. "Product planning determines
the characteristics of products best meeting the consumer's
numerous desires, characteristics that add stability to products and
incorporates these characteristics into the finished product.
Various product line policies and strategies:
( 8 marks )
1. Product line contraction: It is a method by which either the number of
product lines or-the depth of a product line to thinned out. It is also termed as
'simplification.
2. Product line expansion: It is just the opposite of the product line
contraction and is referred to as diversification
3. Trading up and trading down: This gives increased profitability through
additional sales volume got by changing certain features of the product and selling
it to a new market.
4. Changing models or styles of the existing products: Continuous changes in
fashion create a problem for the producer compelling him to assess in advance
such changes.
5. Quality variations: In contrast to the above, under certain circumstances a
manufacturer is forced to produce differing qualities of a particular product)
6. Product identification: The ultimate aim of producing a commodity is selling.
7. Test marketing: Test marketing reduces risks. Test marketing is a trial and error
method to know what is likely to happen when a new product is introduced
commercially. By this future difficulties and problems are removed.
QUESTION_T
DESCRIPTIVE_QUESTION
YPE
QUESTION_ID 31181
QUESTION_T
List out any five differences between old and new concepts of marketing.
EXT
SCHEME OF
The difference between old and new concepts of marketing can be easily understood
EVALUATION on the following basis:
Each point 2 marks, (2 × 5 10 marks)
QUESTION_TYPE
DESCRIPTIVE_QUESTION
QUESTION_ID
103096
QUESTION_TEXT Explain in detail the various methods of cost based pricing.
The various cost based pricing methods are:
SCHEME OF
EVALUATION
1.
Mark up pricing/ Cost plus pricing: Here the prices of products
are fixed by adding a margin to the cost price. The mark up or margin
differs from product to product depending upon the unit cost of the
product and other factors. The assumption under this method is that
demand cannot be known accurately, but costs can be known. A
reasonable mark up is added to the costs. The objective is to maximise
profits in the short run without sacrificing sales due to excessive prices.
(2.5 marks)
2.
Absorption cost pricing/ Full cost pricing: This method
calculates the variable and fixed costs involved in producing, selling and
administering the product. This is the total cost of the product to which
profit margin is added which becomes the price of the product. Firms
preferring great amount of safety in their pricing method follow this
method of pricing. This is mostly followed in manufacturing
organisations.
(2.5 marks)
3.
Rate of return pricing: This method is similar to that of
absorption cost pricing but is different in the sense that mark-up is
arbitrary in case of absorption cost pricing, but in case of rate of return
pricing, it is decided based on return on investment criteria of the firm.
In other words, rate of return on the funds employed is s function of
mark-up.
(2.5 marks)
4.
Marginal cost pricing: This is a method of pricing where direct
variable costs are realized fully and a portion of the fixed costs is also
realized. The difference between absorption cost pricing and marginal
cost pricing is that in case of absorption cost pricing full variable and
fixed costs are recovered. But in marginal cost pricing a part of fixed
costs may remain unrecovered depending upon the market situation. It
also gives the flexibility to recover a larger share of the fixed cost from
certain customers and a smaller share from others.
(2.5 marks)