Marketing

Suggested Answer
Roll No……………. Maximum Marks – 50
Total No. of Questions - 5 Total No. of Printed Pages -7
Time Allowed – 1.5 Hours

All questions are compulsory.

Section -'B'
6. Read the following case and answer the questions given below:

‘Holiday at home’: Managing a media campaign

Because of the strong Australian dollar and the growing number of low-cost
airlines, more and more Australians were flying to Asia for their holidays. To
encourage Australians to ‘holiday at home’, a large advertising budget was given
to the Department of Tourism. The marketing manager, wanting get the campaign
running quickly, split the department into teams-one team for television, another
for radio, a third for print media, a fourth for online advertisements and a final
group for outdoor. At the end of two weeks, the groups were asked to present
their proposals. Each team had come up with different ideas but none fitted within
the allocated budget. The manager looked over the plans and had no idea what to
do but they were so different that it was impossible to fairly compare one against
another—and integrating the campaigns into a whole looked impossible. The
Marketing Manager had no choice but to set the proposals aside and start again,
looking at the campaign as a whole. Trying to rush things and failure to take an
integrated approach had ended up delaying the progress instead of making it
easier.

a) On the basis of above case, analyze the objective of the media campaign?
b) Was the step taken by marketing manager correct? Give your opinion.

Answer 6(A)

The main objective of the media campaign should be to encourage the Australians
to spend their holidays in their own country. As mentioned in the above case,
more and more Australians were flying to Asia for their holidays because of the
strong Australian dollar and growing number of low-cost airlines. Strong
Australian dollar indicates strong economic condition or purchasing power of the
Australians and low-cost airlines definitely motivates them to visit Asia which
indicates challenges to Department of tourism. Thus, to discourage them to visit
outside Australia and to enjoy the increasing purchasing power of Australians,
because of the strong Australian dollar, it was inevitable to retain them within the
country. So, the objective of the media campaign should be promoting domestic
tourism i.e. encouraging Australians to spend their holidays in their own country.
Answer 6(B)

The step taken by marketing manager was not correct. For quick campaign,
marketing manager has divided the department into various teams on the basis of
media. But the fact is, each medium has its own merits and demerits. If each team
works separately, idea generated for one medium cannot work for other media.

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There is also possibility of conflicts among the teams for resources and
implementation of their own ideas. So, marketing manager must focus on
integrated marketing communication for better coordination and effective
utilization of resources. They must follow steps of developing effective
communication i.e. identifying target audience, determining communication
objectives, designing message, allocating budget and only selection of media.
Mere selection of media and creation of ideas by different team independently is
not appropriate for effective promotion.

7.
a) Discuss the meaning of marketing mix and its role in marketing
decision making.
b) Show your acquaintance with the term marketing environment?
Describe the demographic environments of marketing in Nepalese
context.
Answer 7(A)
Marketing mix is the combination of the four major components that
comprise a company's marketing program. Marketing mix is the core of
marketing program. Marketing mix includes major components and
supporting components. Major components include product, price,
promotion, and place; while supporting components include process,
people and physical evidence.
The main role of marketing mix in marketing decision making includes –
i. Help identifying the right product to the customers that can satisfy
the expected needs and expectations of the target customers;
ii. Help setting the best price for the product that can be affordable
and acceptable to the target customers;
iii. Help communicating the target customers about the products
through the right promotion tools such as advertising, publicity,
sales promotion, personnel selling, and public relations;
iv. Help distributing goods to the right place where the target
customers want to buy the products;
v. Help providing the required services at right time;
vi. Help developing relation with the customers so that the customers
can deal with the marketer friendly without any hesitation;
vii. Help maintaining the internal environment of the organization in
an attractive way so that it can motivate the customers in visiting
the office premises repeatedly and buy goods from the
organization;

Answer 7(B)

A company’s marketing environment consists of all the factors and forces outside
marketing that affect marketing management’s ability to build and maintain
successful relationships with target customers. Successful companies know the
vital importance of constantly watching and adapting to the changing
environment. As we move into the twenty-first century, both the customers and
marketers wonder what the future will bring. The environment continues to

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change rapidly. More than any other group in the company, marketer must be
trend trackers and opportunity seekers.
According to Professor Philip Kotler, “marketing environment comprises all the
actors and forces outside marketing that affect marketing management’s ability to
develop and maintain successful transactions with its target customers.”
The marketing environment surrounds and impacts upon the organization. There
are two key perspectives on the marketing environment, namely the macro
environment and the micro environment.
Demography is the study of human population in terms of size, density, location,
age, gender, race, occupation, and other statistics. The demographic environment
is of major interest to marketers because it involves people and people make up
markets.
The world population is growing at an explosive rate. It now totals more than 6.3
billion and will exceed 8.2 billion by the year 2030. The world’s large and highly
diverse population poses both opportunities and challenges.
The explosive world population growth has major implications for business. A
growing population means growing human needs to satisfy. Depending on
purchasing power, it may also mean growing market opportunities. Thus
marketers keep close track of demographic trends and developments in their
markets, both at home and abroad. They track changing age and family structures,
geographic population shifts, educational characteristics and population diversity

Demographic environment is one of the major forces of Nepalese marketing

environment which includes size, growth and distribution of population, age mix,
urbanization and migration.
Population limits the size of the market. According to 2011 census, total
population of our country is 264, 94, 504 showing population growth rate of 1.35
per annum. Similarly, total number of households in the country is 54,27, 302. Of
the total population, terai constitutes 50.27% and hills and mountain constitute
43% and 6.73% respectively. Among the five development region central
development region has the highest population (36.45%) and far western
development region records the lowest i.e.9.63%. According to 2011 census,
population density at national level is 180 per square kilometer. The highest
population density (4416 per square kilometer) is found in Kathmandu district and
lowest in Manang district which is 3 per square kilometer. Similarly, fastest
decadal population growth rate is found in Kathmandu district (61.23%) and least
in Manang (-31.80%)
Nepal is a country of young population. Among the total population 43% belongs
to under 15 years of age and working age population aged 15 to 59 years are 57%
of the total population.
Rate of urbanization is very slow in our country. According to 2011 census, urban
population is 45,23820 which constitutes 17% of the total population. Recently,
Nepal Government has declared new municipalities. Number of municipalities in
the country has reached 199.
Migration is the worldwide trend and Nepal is not the exception. The migration of
Nepalese people mountains and hills to terai and rural to suburban and urban area
is increasing day by day. Migration of Nepalese youth for foreign employment is
also increasing. Market has shifted with the shift in population.

8.
a) Explain the meaning and process of market segmentation.
b) Differentiate consumer buying from organizational buying

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Answer 8(A)

Market segmentation is a process of dividing the total market for a good or

service into several smaller, internally homogeneous groups. It is based on
customer oriented philosophy. No marketer can satisfy the needs of all customers
by developing single marketing mix. The essence of segmentation is that the
members of each group are similar with respect to the factors that influence
demand. In segmentation, we first identify the wants of customers within a
submarket and then decide if it is practical to develop a marketing mix to satisfy
those wants.
According to Philip Kotler, “Market segmentation is the subdividing of a market
into homogeneous subsets of customers, where any subset may conceivable be
selected as a market target to be reached with a distinct marketing mix.”
Market segmentation is a systematic process which can be explained as follows:
i. Market survey: Without better information, market segmentation is not
possible. Market survey is conducted to obtain better information about
the market characteristics. In market survey information such as
customers’ need, taste, preferences, product usage rate and pattern,
demand size, loyalty status, brand awareness etc are collected.
ii. Segment identification: After market survey, collected information are
analyzed by using mathematical and statistical tools. Factors affecting
market demand are classified into major and minor factors. Homogeneous
groups of customers are clustered to identify market segments.
iii. Segment profiling: Appropriate variables for segmentation are identified.
Variables may be demographic, geographic, psychographic or behavioral
variables. Operating variables and purchase related variables can also be
used for industrial market segmentation. Each identified segment is
profiled in terms of similarities and dissimilarities in the market demand
and consumer characteristics. At the end of this stage, the decision makers
have various alternative market segments.
iv. Segment selection: After the careful evaluation, company will select one
or more segments as per their marketing strategy. Selected segment is
considered as target market. While evaluating and selecting, firms should
consider segment attractiveness, desired market coverage, organizational
objectives and resources, government rules and regulation etc.

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Answer 8(B)

There are certain fundamental differences between consumer buying and

organizational buying, they are as follow:
i. In case of consumer buying, demand is created from insight of the
individual’s mind, while demand is derived for organisational buying.
ii. Demand for consumer products is elastic, while demand for business
products is inelastic i.e., there is very little change in demand in response
to price change.
iii. Demand in consumer buying is less fluctuating while demand is widely
fluctuating for organisational buying.
iv. Consumer buying is not regulated by law. The individual customers can
buy goods whenever required. In case of organizational buying, it is a
regulatory purchase i.e., organizations buy goods according to the
government and organization’s laws, rules and regulations.
v. In case of consumer buying, consumers may be less informed about the
goods; while in case of organizational buying, buyers are well informed
about what they are buying.
vi. Consumer buying decision may be frequently changing. Organizational
buying decision aims at a long-term relation with suppliers. Organizations
generally do not frequently change their suppliers.
vii. Consumer buying involves frequent purchases; while organizational
buying involves infrequent purchase. Organizations do not buy goods
frequently as an individual buyer does.
9.
a) Describe the meaning of branding and the reasons for branding
a product.
b) What is advertising? Explain the main features of advertising.

Answer 9(A)

Branding is a process of determining and using a brand name or a legal term to

the newly manufactured product that help identifying and differentiating product
in the market; it also helps protecting the interesting of the manufacturer against
duplication or brand piracy in the market. Branding may involve not only the
name or legal term; it also involves special design, colors, symbol, or the
combination of all these elements.
Most manufacturers or marketers do branding their products for the
following reasons _
 To differentiate a firm's products from those of competitors;
 To make convenience in shopping;
 Brands refer the prestige of the manufacturers, sellers; and also give
prestige to the consumers when they use popular brands;
 To legally protect the company;
 To identify the exact market for their products;
 To assure regular satisfaction to the customers;
 To symbolize as a quality product;
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 To reduce price comparisons.

Answer 9(B)
Advertising is any paid form of non-personal communication, usually delivered
through mass media or tools by an identified sponsor. It involves a variety of
media including radio, television, newspapers, magazines, motion pictures,
brochures and booklets, posters and leaflets, audio-visual materials, symbols and
logos, directories, etc.
The distinct features of advertising include –
i. It is a Mass Communication
ii. It is Informative in Action
iii. It is a Persuasive Act
iv. It is a Competitive Act
v. It is a Paid Form of Communication
vi. It has an Identified Sponsor
vii. It is Non-personal Presentation

10. Briefly explain the following:

a) Meaning of distribution
b) Relationship marketing
c) Innovative product.
d) Economic factors affecting the consumer buying decision.
e) Psychological pricing
Answer 10(A)
Distribution includes all the various activities the company undertakes to make
the product accessible and available to target customers. It involves the marketing
channel and physical distribution. Marketing channel makes the product available
to the customers. Physical distribution makes the product accessible to the
channel members and customers. Distribution is also called the “the other half of
marketing.” It fulfills the gap between the producer and consumer
Answer 10(B)
Relationship marketing is one of the emerging concept of modern marketing.
Relationship marketing is building long term mutually satisfying relations with
customers in order to earn and retain their long term loyalty. In relationship
marketing, customer is regarded as a partner in creating value. Relationship
marketing is a long term partnership between marketer and customer. Both parties
collaborate on identifying needs and designing marketing mix for customer
satisfaction and organizational goal achievement.

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Answer 10(C)
Today's business firms should develop and offer new product to retain in the
hyper competitive market. New product may be in the form of modified product,
improved product and innovative product. Innovative products are those products
which are developed and introduced in the market for the first time, not
previously sold by any firm. Development of innovative products involves high
costs, risks, efforts and time required for profitability of the company.

Answer 10(D)
Economic factors affecting the buying decision of the buyer includes –
i. Level of Personal Income
ii. Income of Other Members of the Family
iii. Expectation of Income in Future
iv. Availability of Liquid Assets
v. Availability of Credit Facility to the Consumer
vi. Past-Expenditure Habits

Answer 10(E)
Psychological pricing is one of the popular pricing strategy which encourages
emotional buying. It influence buyers to perceive the price favorably.
Psychological pricing includes prestige pricing, odd-even pricing, psychological
discounting, customary pricing and promotional pricing. 99 pricing is one of the
example of psychological pricing.

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