Easy2Siksha.com
GNDU Question Paper-2021
Bachelor of Business Administration
BBA 3
rd
Semester
FUNDAMENTALS OF MARKETING MANAGEMENT
Time Allowed: Three Hours Max. Marks: 50
Note : The paper consists of four sections A, B, C and D. In each section there are two
questions. Students have to attempt five questions in all, with at least one question from
each section. The fifth question may be attempted from any section. Each question carries
10 marks.
SECTION-A
1. What is marketing and how it is different from selling? Highlight the scope of marketing
with examples.
2. Discuss the marketing environment. What are the factors that influence the marketing
decisions?
SECTION-B
3. Why market segmentation is required? Explain the bases for segmenting the consumer
markets in detail.
4. What is PLC? Discuss the major decision taken by marketing manager in
each stage of PLC.
Easy2Siksha.com
SECTION-C
5. How would you define the product? Discuss the classification of product and their
importance.
6. What is pricing? Discuss the method for deciding the price for product.
SECTION-D
7. Describe the advertising. What are the different methods for budgeting the advertising
expenses?
8. Write short notes on the following:-
(a) Personal Selling
(b) Direct Marketing
(c)Word of mouth marketing
(d) Sales promotion.
Easy2Siksha.com
GNDU Answer Paper-2021
Bachelor of Business Administration
BBA 3
rd
Semester
FUNDAMENTALS OF MARKETING MANAGEMENT
Time Allowed: Three Hours Max. Marks: 50
Note : The paper consists of four sections A, B, C and D. In each section there are two
questions. Students have to attempt five questions in all, with at least one question from
each section. The fifth question may be attempted from any section. Each question carries
10 marks.
SECTION-A
1. What is marketing and how it is different from selling? Highlight the scope of marketing
with examples.
Ans: Imagine a small shop owner named Asha, famous for her handmade soaps. Every
morning, she opens her shop and thinks about how to get more people to not just buy her
soaps once, but to keep coming back. She wonders: “Do I just need to sell to whoever
passes by? Or do I need to market my soaps so people seek them out even before I speak to
them?”
This is exactly where the story of Marketing vs Selling begins.
What is Marketing? – The Bigger Picture Beyond the Counter
In its simplest form, marketing is about understanding customers, creating products they
actually want, communicating value, delivering satisfaction, and building lasting
relationships.
It’s not just about making one transaction — it’s about creating an ecosystem where
customers naturally feel connected to your product or brand.
In Asha’s case:
• She studies what scents people like in her area.
• She listens to customers’ complaints about dry skin.
Easy2Siksha.com
• She creates products that address these needs.
• She packages them beautifully.
• She tells her story on social media.
• She ensures customers get a little thank-you note when they buy.
All of this together is marketing.
How Marketing is Different from Selling
A common confusion is to think marketing and selling are the same — they’re related, but
not identical.
Aspect
Selling
Marketing
Focus
Company’s needs — “I must sell
what I’ve made.”
Customer’s needs — “I will make what
people need.”
Approach
Product-centric — Push the product
to customers.
Customer-centric — Pull customers by
creating demand.
Timeline
Ends with the transaction.
Begins before production and
continues after sale.
Goal
Maximise sales volume.
Maximise customer satisfaction and
loyalty.
Scope
A part of marketing.
A broad, holistic business philosophy.
Story example: Selling is like Asha standing at her shop door and calling, “Handmade soaps,
20% off today!” Marketing is what she did weeks earlier — understanding what scent
people love, pricing fairly, and designing packaging that makes people pick it up without
being told.
The Scope of Marketing – The Whole Garden, Not Just the Fruit Tree
If marketing were a garden, selling would be just one tree in it. The scope of marketing
includes every step from identifying a need to satisfying it and keeping the relationship
alive.
Let’s walk through its main areas, with easy examples:
Identifying Consumer Needs
This is the first step. Businesses study markets to find out:
• What products or services are in demand.
• What problems customers face.
• How current products can be improved.
Easy2Siksha.com
Example: A smartphone company notices young users want better selfie cameras → they
design phones with AI-enhanced front cameras.
Product Planning and Development
Once needs are identified, companies create or adapt products to meet them.
• Includes features, quality, design, branding.
Example: A dairy brand launches lactose-free milk after studying health trends.
Pricing
Setting the right price is crucial — too high, and people won’t buy; too low, and you lose
profit.
• Pricing strategies: penetration pricing, skimming, competitive pricing.
Example: Streaming platforms like Netflix use subscription pricing so customers see value
over time instead of paying per movie.
Promotion
Communicating the product’s value to potential customers.
• Tools: advertising, sales promotions, public relations, personal selling, digital
marketing.
Example: Cadbury Dairy Milk’s “Kuch Meetha Ho Jaaye” campaign created an emotional
bond with consumers, not just a desire to eat chocolate.
Physical Distribution (Place)
Getting the product where it needs to be:
• Choosing the right channels: retail stores, e-commerce, distributors.
• Managing logistics so the product is available at the right time and place.
Example: Amazon’s vast delivery network ensures products reach even remote villages.
Customer Service
After-sales service strengthens loyalty.
• Includes warranties, return policies, feedback handling.
Example: Apple’s Genius Bar in stores helps solve customer issues and builds brand trust.
Market Research
Ongoing research ensures the company stays relevant.
• Uses surveys, focus groups, sales data analysis.
Easy2Siksha.com
Example: Fashion brands analyse seasonal sales data to decide next year’s styles.
Relationship Building
Marketing aims to create long-term loyalty, not just single transactions.
• Loyalty programs, personalised offers, engagement on social media.
Example: Starbucks rewards programme encourages repeat visits and makes customers feel
valued.
Societal Marketing
Companies must also consider societal well-being.
• Sustainable practices, ethical sourcing, community engagement.
Example: TATA’s initiatives in education and health care build goodwill beyond just selling
products.
Marketing vs Selling – A Quick Memory Hook
Think of it like dating vs proposing:
• Selling is like asking for marriage on the first date — it’s sudden, direct, and might
work sometimes but not often.
• Marketing is the courtship — understanding the other person, showing your best
qualities, building trust — so that the “proposal” (sale) feels natural and welcome.
Why the Scope of Marketing Has Expanded Today
In the digital era, marketing is no longer confined to physical markets or ads in newspapers:
• Social media allows real-time engagement.
• Data analytics personalises offers.
• Global reach is possible even for small businesses.
• Customers have greater choice and power, so relationship-building matters more
than ever.
Example: Asha, our soap maker, now uses Instagram to tell the story of her products, runs
targeted ads, takes orders via WhatsApp, ships through courier partners, and keeps in touch
with customers through personalised thank-you messages.
Putting It All Together – The Circle of Marketing
1. Understand → Customer needs & desires.
2. Create → Products that satisfy them.
3. Communicate → Value effectively.
Easy2Siksha.com
4. Deliver → Through the right place and time.
5. Delight → With service and quality.
6. Sustain → The relationship for repeat business.
Selling is one step inside this circle — the handshake that closes the deal. Marketing is the
entire journey before and after that handshake.
Closing Thought – Why Marketing Wins the Long Game
If selling is like lighting a match — quick and bright — marketing is like tending a fire, adding
logs at the right time, protecting it from wind, and letting it warm the whole house for
years.
Asha could stand by her shop door and shout deals all day, but when she markets well —
understanding her customers, meeting their needs, engaging them with her story — her
soaps will sell themselves, even when she’s not there.
That’s the beauty of marketing: it’s not just about pushing products; it’s about pulling
people in and keeping them close.
2. Discuss the marketing environment. What are the factors that influence the marketing
decisions?
Ans: Rohit, the café owner, is wondering why sales of his new cold brew have dropped,
even though customers loved it during summer. He’s brainstorming with his team:
• “Maybe the weather’s cooler now.”
• “Perhaps a big chain nearby started a similar drink.”
• “Could it be that people are spending less this month?”
Without realising it, Rohit is actually studying his marketing environment — the bigger
world outside and inside his café that affects how he makes decisions. And that’s exactly
what we’re going to explore.
What is the Marketing Environment?
In simple terms, the marketing environment is everything that surrounds a business and
influences its ability to serve customers successfully.
It’s like the ecosystem in which a fish lives. The fish (the business) must adapt to the water
temperature, other fish, predators, and available food. For a company, these
“environmental” factors could be customers, competitors, technology, laws, cultural shifts,
or even the weather.
A smart marketer never ignores the environment — because even the best product can fail
if the surroundings change and the business doesn’t adapt.
Easy2Siksha.com
Two Main Parts of the Marketing Environment
The marketing environment is usually divided into Micro Environment and Macro
Environment.
Think of them as the café’s immediate surroundings (micro) and the bigger world outside
the café’s doors (macro).
Micro Environment – The Close Circle
These are factors directly linked to the company’s operations. A business can sometimes
influence these elements, but it must also adapt to them.
Components:
a) The Company Itself
The different departments — production, finance, HR, R&D — all affect marketing decisions.
If production can’t make enough cold brew bottles, Rohit can’t run a “buy one, get one free”
campaign.
b) Suppliers
They provide the raw materials needed. If coffee bean prices rise because of a shortage,
costs go up, and pricing decisions may change.
c) Marketing Intermediaries
These are the people or businesses that help deliver the product to customers —
wholesalers, retailers, distributors. A sudden decision by a delivery partner to raise charges
affects final prices.
d) Customers
They are the heart of marketing decisions. A café must understand who its customers are,
what they want, and how their tastes change.
e) Competitors
Any business decision must consider what rivals are doing. If a new café opens nearby with
free Wi-Fi and music nights, Rohit must rethink how to attract customers.
f) Publics
Any group that can impact the company’s image — media, local community, social media
influencers.
Easy2Siksha.com
In short: The micro environment is like the “family and friends” circle — close enough to
influence daily life.
Macro Environment – The Wider World
These are larger societal forces that are generally beyond a company’s control but have a
big impact. Businesses can’t change them; they must learn to respond and adapt.
Components:
a) Demographic Environment
Refers to the study of people — age, gender, income, occupation, education.
• If more young professionals move into Rohit’s area, he might offer quick grab-and-go
breakfasts.
b) Economic Environment
Covers the overall economic health — inflation, interest rates, employment levels.
• In a downturn, customers may skip premium drinks and buy regular coffee.
c) Natural Environment
Availability of natural resources, weather patterns, environmental regulations.
• A drought in a coffee-growing region could reduce supply and increase prices.
d) Technological Environment
New technology changes how products are made, marketed, and delivered.
• Mobile ordering apps can make it easier for customers to buy coffee without
queuing.
e) Political and Legal Environment
Government policies, laws, trade restrictions.
• A ban on single-use plastics might push the café to switch to paper cups.
f) Socio-Cultural Environment
Customs, values, lifestyles.
• Growing health consciousness might lead Rohit to introduce sugar-free options.
Easy2Siksha.com
In short: The macro environment is like the “weather” — you can’t control it, but you must
prepare for it.
Factors that Influence Marketing Decisions
Whether micro or macro, these factors guide day-to-day and long-term decisions. Let’s
connect them directly to decision-making.
1. Consumer Preferences
If market research shows customers prefer eco-friendly products, marketing decisions will
highlight sustainability — like advertising biodegradable cups.
2. Competitor Actions
Aggressive pricing by competitors may push a company to revise its own pricing or add
value through loyalty rewards.
3. Economic Conditions
During inflation, marketers might promote value packs instead of premium single units.
4. Technology Changes
The introduction of mobile payments could lead to campaigns around the ease of cashless
transactions.
5. Legal Requirements
If advertising regulations limit certain claims, campaigns must adapt to remain compliant.
6. Supplier Reliability
Unreliable suppliers may force marketers to adjust promotions so they don’t promise what
they can’t deliver.
7. Social Trends
Festivals, cultural events, and seasonal habits can influence product launches and
promotions.
8. Environmental Concerns
Marketing can pivot to highlight eco-friendly practices when environmental awareness is
high among consumers.
Why Studying the Marketing Environment Matters
Easy2Siksha.com
Ignoring the environment is like sailing without checking the weather — you might be
caught in a storm unprepared.
By scanning the environment, companies can:
• Spot opportunities early (e.g., growing demand for vegan products).
• Avoid threats (e.g., new taxes or regulations).
• Make informed decisions about product, price, place, and promotion.
Rohit’s Café – Bringing It All Together
Let’s return to Rohit.
• Micro: His coffee bean supplier raised prices. A competitor launched an Instagram
campaign. Delivery partners are charging more.
• Macro: It’s winter now, and people prefer hot drinks. A new tax on sweetened
beverages is coming. Young professionals are moving into the area, and more people
are using online ordering apps.
By studying both environments, Rohit decides to:
• Introduce a winter-special spiced latte.
• Run a loyalty programme to retain customers.
• Negotiate with suppliers for better rates.
• Promote online orders with a discount for first-time app users.
That’s environmental scanning in action — making marketing decisions rooted in awareness
of the world around your business.
Final Thought – The Art of Reading the Winds
A great marketer is a bit like a skilled sailor:
• Micro environment is like your crew and ship condition — you can train them, fix
them, keep them ready.
• Macro environment is like the wind, tide, and storms — you cannot change them,
but you can adjust your sails.
When you understand both, your marketing decisions aren’t just guesses — they’re
informed moves that keep you ahead of the curve, even when the seas get rough.
Easy2Siksha.com
SECTION-B
3. Why market segmentation is required? Explain the bases for segmenting the consumer
markets in detail.
Ans: The Festival Fair Analogy
Imagine it’s the day of the big annual fair in your city. Hundreds of stalls are set up — from
spicy street food and colourful clothes to gaming booths and live music. Now, picture
yourself as a stall owner selling hand-painted mugs. You’ve only got a small budget for
posters and flyers. You could try calling out to everyone passing by… but you notice
something:
• The college students are more interested in the gaming zone.
• Families with kids are hanging out by the ice cream stands.
• Tourists are flocking towards handicraft stalls.
If you simply yell, “Buy my mugs!” to the whole crowd, most will ignore you. But if you focus
only on the people who love unique souvenirs — maybe the tourists and art lovers — your
chances of making sales shoot up.
That, in essence, is market segmentation: breaking a big, diverse market into smaller,
meaningful groups so you can serve them better.
Why Market Segmentation is Required
In the real world, no two customers are identical. People differ in their needs, incomes,
locations, lifestyles, and buying habits. If businesses tried to create one product and one
message for everyone, they’d end up pleasing almost no one.
Here’s why segmentation is essential:
Better Understanding of Customers
It allows companies to clearly define who they’re targeting, so they can design products and
campaigns that resonate deeply.
Example: A sports shoe company learns that one segment buys shoes for style, another for
running performance, and another for trekking durability.
Efficient Use of Resources
Instead of spreading marketing budgets thin across the entire population, resources are
directed towards the most promising customer groups.
Easy2Siksha.com
Example: A premium watch brand focuses only on affluent urban professionals rather than
advertising to every household.
Product Positioning
Segmentation helps position products in a way that speaks directly to the chosen segment’s
needs.
Example: An organic food brand positions itself as a lifestyle choice for health-conscious
families.
Competitive Advantage
When a company knows its niche better than its competitors, it can serve it more
effectively.
Increased Customer Loyalty
When customers feel a product speaks directly to them, they’re more likely to buy
repeatedly.
In short: Segmentation is like using a magnifying glass — it brings your focus sharply onto
the people who are most likely to buy from you.
Bases for Segmenting Consumer Markets
Segmentation can be done in many ways. Think of it like slicing a large cake — you can cut it
vertically, horizontally, or in creative patterns. The most common bases are:
Geographic Segmentation – “Where They Live”
Definition: Dividing the market based on location.
• Variables: Country, state, city, climate, rural/urban, region.
• Why it matters: Location influences needs and buying habits.
• Example:
o A woollen clothing brand focuses its heavy sweaters in cold northern states,
while sending light cardigans to southern states.
o McDonald’s alters its menu — McAloo Tikki in India, Teriyaki Burger in Japan.
Analogy: Just as crops grow differently in different soils, products succeed better when
matched with the local environment.
Demographic Segmentation – “Who They Are”
Definition: Segmenting based on measurable population characteristics.
Easy2Siksha.com
• Variables: Age, gender, income, occupation, education, family size, religion.
• Why it matters: Demographic traits often strongly influence product needs.
Examples:
• Toy companies target children aged 3–10, with products shaped and coloured for
that age group.
• A luxury car brand targets high-income individuals with premium features.
Analogy: Just as clothes are tailored to size, products are designed for the ‘size’ of needs
defined by demographics.
Psychographic Segmentation – “How They Think and Live”
Definition: Dividing the market based on lifestyle, social class, and personality traits.
• Variables: Lifestyle (adventurous, health-conscious, eco-friendly), social class (upper,
middle, lower), personal values.
• Why it matters: People with similar demographics can have completely different
lifestyles.
Examples:
• A travel agency markets luxury cruises to affluent, relaxation-loving retirees, while
promoting adventure treks to thrill-seeking young adults.
• Nike’s “Just Do It” campaign appeals to the mindset of determination and personal
achievement.
Analogy: This is like knowing not just what’s in someone’s wallet, but what’s in their heart.
Behavioural Segmentation – “What They Do”
Definition: Grouping customers based on their knowledge, attitudes, usage, or responses to
a product.
• Variables: Purchase occasion (festivals, birthdays), usage rate (light, medium, heavy
users), brand loyalty, benefits sought (quality, price, convenience).
• Why it matters: Behaviour often predicts future buying more accurately than
demographics.
Examples:
• A coffee chain launches festive flavours around Christmas to tap into seasonal
buying.
• Telecom companies offer special rewards to heavy data users.
Easy2Siksha.com
Analogy: This is like observing not just who is in the restaurant, but what they order and
how often.
Benefit Segmentation – “What They Seek”
Definition: Classifying customers based on the specific benefits they look for in a product.
• Example: Toothpaste buyers may seek:
o Whitening (aesthetic benefit)
o Cavity protection (health benefit)
o Fresh breath (sensory benefit)
Benefit segmentation cuts across other bases — customers from different age groups or
locations might seek the same benefit.
Analogy: It’s like choosing a smartphone — some want the best camera, others the longest
battery life, others the fastest processor.
Choosing the Right Segmentation Approach
Often, companies use a mix of these bases to get a precise target.
Example: A premium adventure gear company may target:
• Geographic: Mountainous regions.
• Demographic: Age 25–40, higher income.
• Psychographic: Adventure lifestyle.
• Behavioural: Frequent trekkers and campers.
This layered targeting increases the chances of reaching the perfect customers.
From Segmentation to Action – The STP Model
Segmentation is only the first step in the STP process:
1. Segmentation – Divide the market.
2. Targeting – Choose which segments to serve.
3. Positioning – Craft the right message for those segments.
Story wrap-up: Back at the festival fair, you (the mug seller) decide to target art-loving
tourists. You design a flyer in their language, offer bundle deals for souvenirs, and set up
near the handicrafts lane. Sales soar — because you stopped shouting to everyone and
started talking to someone.
Final Thought – Why Segmentation Wins the Game
Easy2Siksha.com
A business that markets to “everyone” is like a singer performing in the middle of a noisy
street — their voice gets lost. But a business that segments its market is like a singer in a
quiet concert hall — every word reaches the right ears.
Segmentation gives clarity, focus, and power to marketing decisions. It ensures that
products, prices, promotions, and distribution all align with the people most likely to
respond.
It’s not about reducing your audience — it’s about finding the audience that truly matters.
4. What is PLC? Discuss the major decision taken by marketing manager in
each stage of PLC.
Ans: The Toy Called “SparkBot” – A Journey Through Time
A few years ago, a small start-up launched a robot toy called SparkBot. In the beginning,
hardly anyone knew about it. Over the years, it became a craze among children, dominated
shelves, then slowly lost its shine as newer toys arrived. This life story of SparkBot is exactly
what marketers call the Product Life Cycle (PLC).
Just like living beings, products are “born,” grow, mature, and eventually decline. The PLC
is a concept that explains these stages — and helps marketing managers decide what to do
at each step.
What is PLC?
The Product Life Cycle represents the stages a product goes through from its introduction to
the market until it is withdrawn.
Main stages:
1. Introduction – Product is launched.
2. Growth – Sales pick up rapidly.
3. Maturity – Sales peak; competition is intense.
4. Decline – Sales fall; product is phased out or reinvented.
Why PLC Matters for Marketers
Understanding PLC is like having a road map of your product’s journey. It:
• Guides pricing, promotion, and distribution strategies.
• Helps decide when to invest more and when to pull back.
• Prepares for market changes and competition.
Easy2Siksha.com
Let’s walk through each stage with SparkBot’s story — and see what major decisions the
marketing manager must take.
Introduction Stage – The Birth of SparkBot
Story Scene: The day arrives when SparkBot hits the shelves for the first time. Only a few
curious parents and tech-loving kids notice it. Awareness is low, production costs are high,
and profits are almost zero (or even negative).
Key Features of This Stage:
• High costs (R&D, promotions, distribution setup).
• Low sales volume.
• Heavy promotional spending to create awareness.
• Risk of failure if market response is poor.
Major Marketing Decisions:
1. Product Strategy:
o Ensure product quality and features match the promise.
o Decide if a basic version or fully-loaded version should be launched first.
2. Pricing Strategy:
o Skimming Pricing: Set a high price to recover costs quickly (good for unique,
innovative products).
o Penetration Pricing: Set a low price to attract customers fast.
3. Promotion Strategy:
o Heavy investment in advertising, free trials, influencer reviews.
o Focus on educating customers about what the product is and why it’s special.
4. Place (Distribution) Strategy:
o Selective distribution — focus on key stores or online platforms.
o Train sales staff to demonstrate the product effectively.
SparkBot Example Decision: The marketing manager chooses a penetration pricing
approach, partners with toy influencers on YouTube, and offers live demos at malls to spark
curiosity.
Growth Stage – The Rise of SparkBot
Story Scene: Suddenly, SparkBot is everywhere — kids are talking about it at school, videos
go viral, and orders pour in. Sales curve shoots upward, costs per unit drop due to
economies of scale, and the company starts making healthy profits.
Easy2Siksha.com
Key Features of This Stage:
• Rapid increase in sales.
• Competitors start entering the market with similar products.
• Market expands as awareness grows.
Major Marketing Decisions:
1. Product Strategy:
o Add new features or variations (different colours, sizes, special editions).
o Ensure consistent quality to keep reputation strong.
2. Pricing Strategy:
o Maintain price if demand is strong; consider small adjustments to stay
competitive.
3. Promotion Strategy:
o Shift focus from awareness to brand preference.
o Run comparative ads showing SparkBot’s superiority over rivals.
4. Place (Distribution) Strategy:
o Expand distribution channels — more retail stores, online marketplaces,
maybe even global expansion.
5. Defensive Moves:
o Strengthen customer loyalty (warranty offers, loyalty programmes) to fend
off competitors.
SparkBot Example Decision: The manager launches a “SparkBot Dance Challenge” on social
media, introduces a new voice-command feature, and expands availability to major e-
commerce sites.
Maturity Stage – The Peak of SparkBot
Story Scene: SparkBot is now a household name. Every kid who wanted one has it. Sales
growth slows and finally stabilises. Competition is fierce — multiple brands now sell similar
robot toys, often at lower prices. The fight is now for market share.
Key Features of This Stage:
• Sales reach their highest point, then plateau.
• Profits are still good, but growth rate slows.
• Market becomes saturated.
• Price wars may begin.
Major Marketing Decisions:
Easy2Siksha.com
1. Product Strategy:
o Innovate to differentiate — introduce upgraded models or complementary
accessories (like SparkBot clothes, mini-games).
o Improve durability and user experience.
2. Pricing Strategy:
o Competitive pricing to match or slightly beat rivals.
o Offer value packs or bundles.
3. Promotion Strategy:
o Focus on brand loyalty and emotional connection.
o Highlight superior after-sales service.
4. Place (Distribution) Strategy:
o Intensify retail presence and ensure stock availability during peak seasons.
5. Extension Strategies:
o Explore new uses or markets (e.g., educational SparkBot for schools).
SparkBot Example Decision: The manager launches an “Educational Edition” SparkBot for
schools, offers a bundle pack during the holiday season, and runs nostalgic ads aimed at
parents who grew up with the toy.
Decline Stage – The Sunset of SparkBot
Story Scene: New AI-powered hologram toys hit the market. Kids start losing interest in
SparkBot. Sales drop sharply. Holding too much inventory could mean losses.
Key Features of This Stage:
• Declining sales and profits.
• Market shrinks as customers shift to newer trends.
• Competitors may exit or consolidate.
Major Marketing Decisions:
1. Product Strategy:
o Decide whether to rejuvenate (upgrade technology, change design) or phase
out.
o Reduce product range to focus on best-selling models.
2. Pricing Strategy:
o Discounts to clear stock.
o Lower prices to attract last segment of buyers.
3. Promotion Strategy:
o Reduce advertising to minimum required for clearance.
o Shift promotional focus to remaining loyal customers.
Easy2Siksha.com
4. Place (Distribution) Strategy:
o Limit distribution to the most profitable channels.
o Avoid overstocking.
5. Exit Strategy:
o Sell remaining stock, withdraw from market gracefully, and focus resources
on new products.
SparkBot Example Decision: The manager discontinues less popular variants, offers
clearance sales online, and diverts funds to the development of the next big toy.
How PLC Guides Marketing Strategy Overall
• Introduction: Build awareness and stimulate trial.
• Growth: Maximise market share and beat emerging competitors.
• Maturity: Defend market position and find ways to extend product life.
• Decline: Decide between rejuvenation, harvesting profits, or withdrawal.
Closing Thought – The Story Never Really Ends
While SparkBot’s chapter might close, the lessons learned in each stage prepare the
company for the next product’s journey. For a marketing manager, the PLC is like a compass
— it shows where the product stands and what strategic moves are most likely to keep it
thriving.
Just as seasons change, products too have their spring, summer, autumn, and winter. The
trick is knowing which season you’re in — and planting the seeds for the next spring before
the winter arrives.
SECTION-C
5. How would you define the product? Discuss the classification of product and their
importance.
Ans: The Magic of the “Box”
Imagine you’re walking through a busy market. A friendly shopkeeper holds up a mysterious
box and says, “Inside is something that will make your life easier.” You’re intrigued — but
you ask, What exactly is it?
The shopkeeper smiles and says, “It’s not just what’s inside the box, it’s the problem it
solves for you, the joy it brings, and the value you get from it.”
Easy2Siksha.com
That, in spirit, is the idea of a product. In marketing, a product isn’t just a physical object —
it’s anything that can be offered to satisfy a need or want. This could be:
• A tangible good (like a smartphone or a pair of shoes).
• A service (like an online course or a haircut).
• An idea (like a public health campaign).
• Or even an experience (like a holiday trip or a theme park ride).
Defining a Product
American Marketing Association (AMA) definition: A product is “a bundle of attributes
(features, functions, benefits, and uses) capable of exchange or use; usually a mix of tangible
and intangible forms.”
In simpler, story-friendly words:
A product is a solution, wrapped in something we can buy, use, and value.
For example, when you buy a perfume, you aren’t only buying a scented liquid — you’re
buying confidence, elegance, and the feeling it gives you.
Why Understanding Products Matters
• The product is the heart of all marketing activities.
• Price, place, and promotion — the other 3 Ps — all revolve around it.
• Without a product that meets needs, no amount of advertising can sustain long-term
success.
Classification of Products
Products come in many shapes and purposes. Marketers classify them to:
• Understand how customers shop for them.
• Design the right marketing strategies.
• Position them effectively in the market.
Broadly, we can classify products into Consumer Products and Industrial Products.
Consumer Products – Made for Personal Use
These are goods and services bought by the final consumer for personal, family, or
household use.
Easy2Siksha.com
A) Convenience Products
• Low-priced, bought frequently, with minimal effort.
• Buyers rarely compare alternatives deeply.
• Available widely and bought on impulse at times.
• Examples: Soap, toothpaste, snacks, soft drinks.
• Marketing focus: Wide distribution, mass advertising, strong branding.
Analogy: Like everyday spices in your kitchen — you don’t overthink before buying, but you
always expect them to be available.
B) Shopping Products
• Purchased less frequently; customers compare quality, price, and style.
• Require more time and effort in decision-making.
• Examples: Clothing, electronics, furniture.
• Types:
o Homogeneous shopping products: Similar in quality but different in price
(e.g., washing machines).
o Heterogeneous shopping products: Differ in quality, features, and style (e.g.,
fashion apparel).
• Marketing focus: Selective distribution, personal selling, product differentiation.
Analogy: Like buying a pair of jeans — you visit several stores, compare fits, and then
decide.
C) Specialty Products
• Unique characteristics or brand identity.
• Buyers are willing to make a special effort to get them.
• Price is not the primary concern.
• Examples: Luxury watches, designer handbags, high-end sports cars.
• Marketing focus: Exclusive distribution, prestige advertising, brand loyalty.
Analogy: Like a signature dish from a famous chef — people will travel just for it.
D) Unsought Products
• Products that consumers do not think about often or do not know about.
• Often require aggressive selling and promotional effort.
• Examples: Life insurance, funeral services, certain emergency tools.
• Marketing focus: Awareness campaigns, persuasive selling.
Easy2Siksha.com
Analogy: Like a fire extinguisher — you may not think about buying one until you realise the
risk.
Industrial Products – Made for Business Use
These are goods and services purchased by businesses for producing other products,
operating their activities, or reselling.
A) Materials and Parts
• Become part of the buyer’s product.
• Examples: Raw materials (cotton, iron ore), manufactured parts (microchips, tyres).
• Marketing focus: Quality consistency, reliable supply.
B) Capital Items
• Long-lasting goods used in production.
• Examples: Buildings, machinery, large tools.
• Marketing focus: Personal selling, after-sales service, financing support.
C) Supplies and Services
• Short-term goods and services needed to operate.
• Examples: Office stationery, lubricants, cleaning services.
• Marketing focus: Quick delivery, bulk discounts.
Other Ways to Classify Products
Apart from consumer vs industrial, products can be classified by:
• Durability:
o Durable goods (cars, appliances) – last long, need more personal selling.
o Non-durable goods (ice cream, bread) – consumed quickly, need mass
distribution.
• Tangibility:
o Tangible goods – physical items.
o Intangible goods – services, ideas, experiences.
• Use:
o Final products – consumed directly.
o Intermediate products – used to make other products.
Importance of Product Classification
Easy2Siksha.com
1. Guides Marketing Strategies
o A convenience good needs wide distribution and brand recall ads.
o A specialty product may rely on exclusive outlets and luxury positioning.
2. Helps Allocate Resources
o Marketing budgets can be distributed based on product type and buying
behaviour.
3. Facilitates Product Management
o Each category has a different sales cycle, competition level, and pricing
model.
4. Assists in Forecasting Demand
o Understanding which products are high frequency (convenience) or low
frequency (specialty) helps plan production and inventory.
5. Aids Communication
o Sales teams can tailor their pitch based on the nature of the product.
Bringing It Back to the Story – The Shopkeeper’s Box
Let’s return to our shopkeeper with the mysterious box. If the box contains:
• A pack of biscuits → It’s a convenience product — price low, quick sale.
• A handmade dining table → It’s a shopping product — customers will compare.
• A diamond necklace → It’s a specialty product — appeal to exclusivity.
• A solar water heater for factories → It’s an industrial capital item.
The marketing approach for each will be entirely different, even if they all come in a box.
Final Thought – Products Are More Than Things
In marketing, a product is never “just” an object. It’s a bundle of benefits and values in a
form people are willing to pay for. Knowing what type of product you have is like knowing
the terrain before a journey — it tells you what vehicle to take, how fast to go, and where to
focus your energy.
A wise marketer doesn’t just ask, What am I selling? but also, How will it live in the
customer’s life? Because that’s the secret to not just selling a product… but making it a part
of someone’s story.
6. What is pricing? Discuss the method for deciding the price for product.
Easy2Siksha.com
Ans: The Tale of the Mango Seller and the Art of Pricing
Ravi, a cheerful mango seller, is setting up his stall. He knows his mangoes are sweet, fresh,
and beautifully ripe. But here’s the catch — how much should he charge for each kilo? Too
high, and customers might walk away. Too low, and he’ll sell fast but make little profit.
This daily puzzle Ravi solves is not just a shopkeeper’s instinct — it’s called Pricing. In
marketing terms, it’s both an art and a science of deciding the amount customers will pay in
exchange for a product or service.
What is Pricing?
Pricing is the process of determining the value that will be charged for a product or
service. It’s the only element of the marketing mix (Product, Price, Place, Promotion) that
directly generates revenue — the rest are cost centres.
But price is more than just a number:
• It signals the value and positioning of a product (premium vs. budget).
• It influences how customers perceive quality.
• It directly impacts demand, profits, and competitiveness.
In Ravi’s case: If he prices his mangoes higher than others, people may see them as
premium quality — but only if he backs it with taste and presentation. If he prices lower, he
might win price-sensitive customers but risk being seen as “ordinary”.
Why Pricing is So Important
1. Revenue Generator – Price is what turns products into income.
2. Market Positioning Tool – Reflects brand image (luxury brands vs. value brands).
3. Influences Demand – Price changes can increase or reduce sales volume.
4. Competitive Weapon – Helps fight rivals in price wars or establish exclusivity.
5. Profitability Driver – Even small changes in price can significantly affect profit
margins.
Methods for Deciding the Price of a Product
Marketers don’t just pick a price at random; they follow structured pricing methods. These
methods can be grouped into three broad approaches: Cost-based, Competition-based, and
Demand-based, along with some modern strategic methods.
Let’s walk through them — with Ravi’s mango stall as our running example.
Cost-Based Pricing – “Cover Costs and Add a Margin”
Definition: Price is decided by calculating the total cost of production and adding a markup
(profit margin).
Easy2Siksha.com
Types:
• Cost-Plus Pricing: Formula: Selling Price = Cost per unit + Desired Profit. Example: If
Ravi’s cost per kilo is ₹60, and he wants ₹20 profit, price = ₹80.
• Mark-up Pricing: A percentage is added to the cost. If he adds 30% on ₹60, price =
₹78.
Advantages:
• Simple to calculate.
• Ensures cost recovery.
Limitations:
• Ignores customer demand and competitor prices.
• Might lead to overpricing or underpricing if market conditions shift.
Competition-Based Pricing – “Look Around Before You Decide”
Definition: Price is set with reference to what competitors are charging.
Types:
• Going-Rate Pricing: Match the prevailing market price.
• Premium Pricing: Set higher than competitors to signal superior quality.
• Penetration Pricing: Set lower to attract customers quickly.
Example: If nearby stalls sell mangoes at ₹80/kg, Ravi might:
• Charge ₹85 and highlight his mangoes’ sweetness (premium).
• Match ₹80 to blend in.
• Offer ₹75 to pull more footfall.
Advantages:
• Simple in highly competitive markets.
• Avoids extreme overpricing or underpricing.
Limitations:
• Ignores unique product costs or value.
• Can trap sellers in price wars.
Demand-Based Pricing – “Charge What They’re Willing to Pay”
Definition: Price is decided based on customer perception of value and demand levels.
Easy2Siksha.com
Approaches:
• Value-Based Pricing: Focus on the benefits to the customer.
• Price Skimming: Start high for early adopters, then gradually reduce.
• Dynamic Pricing: Change prices depending on demand (e.g., peak season vs. off-
season).
Example: During mango season’s start, scarcity allows Ravi to charge ₹120/kg. As supply
increases, he lowers it to ₹80 to attract bulk buyers.
Advantages:
• Aligns with what customers find fair and valuable.
• Maximises revenue when demand is high.
Limitations:
• Requires good market research.
• May alienate customers if prices fluctuate too much.
Psychological Pricing – “Play with Perception”
People often see ₹99 as much cheaper than ₹100, even though the difference is only ₹1.
Techniques:
• Odd Pricing: ₹99 instead of ₹100.
• Prestige Pricing: High price to signal quality (like ₹999 for exclusivity).
• Bundle Pricing: Multiple items at one price (5kg for ₹350 instead of ₹400).
Example: Ravi offers “3 kilos for ₹230” — buyers feel they’re getting more value.
Geographical Pricing – “Location Changes the Price”
Different prices for different locations due to transportation costs or market demand.
Example:
• In cities far from mango farms, prices might be ₹20/kg higher due to logistics.
Promotional Pricing – “Short-Term Attention Grabber”
Temporary lower prices to boost sales or clear stock.
• Festival discounts, limited-time offers, “Happy Hour” rates.
Example:
Easy2Siksha.com
• Ravi offers a Sunday morning special: ₹70/kg before 10 a.m. to draw early shoppers.
Penetration and Skimming Strategies – Opposite Ends of the Spectrum
• Penetration Pricing: Start low to enter the market and attract customers quickly.
• Price Skimming: Start high to recover investment quickly from customers willing to
pay more, then reduce over time.
Example: If Ravi were the first in the city to sell a rare Alphonso variety, he might start at a
premium (skimming). If he’s new to the market competing with many sellers, he might go
low (penetration).
Factors Influencing the Pricing Decision
Even with all these methods, the final price depends on:
1. Cost of Production – Direct and indirect costs.
2. Customer Demand – How much they’re willing to pay.
3. Competition – Prices of substitutes.
4. Objectives – Market penetration, profit maximisation, survival.
5. Government Regulations – Price controls, taxes.
6. Product Life Cycle Stage – Introductory vs. maturity vs. decline.
7. Brand Positioning – Premium vs. mass-market appeal.
Bringing It Back to Ravi’s Stall
If it’s early in the mango season and there’s excitement for fresh fruit, Ravi might:
• Use demand-based pricing to charge more.
• Apply psychological pricing to make it “₹99” instead of ₹100.
• Offer bundles to attract bulk buyers.
When the season peaks and competition heats up:
• Shift to competitive pricing to match rivals.
• Run promotional discounts to keep loyal customers.
Closing Thought – Price as the Storyteller of Value
In the end, price is not just a mathematical formula — it’s a message. It tells customers
whether your product is exclusive, affordable, seasonal, or premium. The best pricing
method is the one that balances costs, competition, and customer value while aligning with
the company’s goals.
Ravi’s mango stall may be small, but the same principles apply to tech giants, luxury brands,
and start-ups. Whether you’re selling mangoes or motorbikes, pricing is the bridge between
Easy2Siksha.com
your product’s value and the customer’s wallet — set it wisely, and it can turn your business
into a success story.
SECTION-D
7. Describe the advertising. What are the different methods for budgeting the advertising
expenses?
Ans: Neon lights flash, billboards glow, catchy jingles play from shop speakers, and on your
phone, a reel pops up showcasing a new gadget. This colourful orchestra of sights and
sounds is advertising at work — silently persuading, reminding, and nudging us toward a
product, service, or idea.
What is Advertising?
In simple terms: Advertising is a paid, non-personal form of communication aimed at
promoting products, services, or ideas to a large audience, using various media channels,
with the goal of influencing behaviour.
Breaking that down:
• Paid: Someone funds it — a company, government, or organisation.
• Non-personal: It’s addressed to masses, not one person specifically.
• Multiple Media: TV, radio, newspapers, social media, billboards, apps, cinema, etc.
• Purpose: To inform, persuade, and remind.
Example: When Coca-Cola runs its “Share a Coke” campaign with personalised names on
bottles, it’s not talking to just one person — it’s inviting everyone to connect with the
product emotionally.
Why Advertising Matters
Think of advertising as the storyteller of the business world. Without it:
• People wouldn’t know new products exist.
• Brands couldn’t differentiate themselves in crowded markets.
• Sales growth would depend only on word-of-mouth — slow and unpredictable.
Advertising:
1. Creates awareness – Introducing new offerings.
Easy2Siksha.com
2. Persuades customers – Showing why your product is better.
3. Builds brand image – Associating values like luxury, trust, or fun.
4. Reminds – Keeping the brand top-of-mind.
A Simple Story to Understand Its Power
Back in a small town, a baker named Meera made the fluffiest bread. Her first customers
were neighbours. Then she put up colourful posters in the market — suddenly, people from
nearby villages came just to buy her bread. The posters were her advertising, expanding her
reach beyond the limits of her voice.
Advertising Budget – Fuel for the Storyteller
Even the best ad idea can’t fly without a budget. An advertising budget is the amount of
money a business sets aside to spend on advertising over a period (usually annually).
It answers:
• How much can we afford?
• Where will we spend it?
• How will it be split among campaigns and media?
Budgeting is crucial because:
• Overspending can drain profits.
• Underspending can make ads invisible.
• It ensures the message reaches the right audience often enough to make an impact.
Different Methods for Budgeting Advertising Expenses
Marketers have developed several methods to decide the budget. Let’s walk through them
like tools in a toolkit — each with its own purpose.
Percentage of Sales Method
How it works: A fixed percentage of either past sales or projected future sales is allocated
for advertising.
Example: If Meera’s bakery had ₹10,00,000 in sales last year and uses 5% for advertising,
her ad budget would be ₹50,000.
Advantages:
Easy2Siksha.com
• Simple and easy to apply.
• Links advertising spend to sales ability.
Limitations:
• May cause a cycle — low sales → low budget → even lower sales.
• Ignores market opportunities and competition level.
Best for: Stable businesses with predictable sales.
Affordable Method
How it works: The company spends what it thinks it can afford after covering other
expenses.
Example: After paying rent, salaries, and suppliers, Meera has ₹20,000 left and decides
that’s her ad budget.
Advantages:
• Ensures the company doesn’t overspend.
• Useful for small businesses with tight cash flows.
Limitations:
• Not strategic — doesn’t consider market potential or competition.
• May lead to inconsistent spending.
Best for: New or small businesses with limited resources.
Competitive Parity Method
How it works: Match (or slightly exceed) what competitors are spending on advertising.
Example: If rival bakeries spend around ₹40,000 a year on ads, Meera budgets ₹45,000 to
remain competitive.
Advantages:
• Helps keep market share by staying visible alongside competitors.
• Avoids being “outshouted” in the market.
Limitations:
Easy2Siksha.com
• Assumes competitors’ spending is optimal.
• Doesn’t factor in unique strengths or brand positioning.
Best for: Highly competitive markets where visibility parity matters.
Objective and Task Method
How it works: Set specific objectives, identify the tasks needed to achieve them, estimate
the cost of each task, and sum them up to form the budget.
Example: Meera wants to increase bread sales by 20% in 6 months. She decides on:
• 3 months of radio ads = ₹25,000
• Posters in 10 locations = ₹15,000
• Social media campaign = ₹10,000 Total budget: ₹50,000.
Advantages:
• Logical, goal-oriented, and transparent.
• Flexible — adjusts to campaign needs.
Limitations:
• Requires detailed planning and market knowledge.
• Time-consuming compared to simpler methods.
Best for: Businesses that set measurable marketing goals.
Return on Investment (ROI) Method
How it works: Budget is based on the expected returns from advertising.
Example: Meera invests ₹30,000 in advertising, expecting ₹90,000 in additional sales (3x
return).
Advantages:
• Ensures money is spent with profit in mind.
• Makes ad spend accountable.
Limitations:
• Hard to measure exact returns, as many factors influence sales.
Easy2Siksha.com
Best for: Data-driven businesses with strong tracking systems.
All-You-Can-Afford Method
How it works: Maximise ad spend with available funds, prioritising aggressive marketing
when growth is the goal.
Example: A start-up with ₹5,00,000 capital may spend ₹2,00,000 on an initial ad blitz to gain
market entry.
Advantages:
• Great for building awareness quickly.
• Helps in launching new products.
Limitations:
• Risky if funds run out before results appear.
• Not sustainable long-term.
Best for: Product launches or brand awareness campaigns.
Choosing the Right Method – Matching the Recipe to the Meal
Just like you wouldn’t use the same recipe for soup and cake, you can’t use the same
budgeting method for every business situation.
Factors to consider:
• Size of the business
• Nature of the product
• Level of competition
• Stage in the product life cycle
• Available data and expertise
• Overall marketing objectives
A Practical Wrap-Up: Meera’s Bakery Plan
Meera reviews her situation:
• Small local business but with growing demand.
• Competitors spend visibly on ads.
• She wants steady growth without overspending.
Easy2Siksha.com
She chooses a blend:
• Sets objectives (increase market share by 10%).
• Uses Objective and Task to plan campaigns.
• Cross-checks with Percentage of Sales to stay within safe limits.
Closing Thought – Advertising as an Investment, Not Just an Expense
Advertising is not money thrown into the wind — it’s a seed planted for future harvest. The
budget is the water you give that seed: too little, and it won’t grow; too much, and you may
flood it.
The most successful marketers don’t just ask, How much can we spend? — they ask, How
much should we invest to tell our story well, reach the right people, and inspire them to act?
Because in the end, advertising is more than selling — it’s creating a connection between a
brand’s story and a customer’s heart. And the budget is what ensures that story is heard
loud, clear, and often enough to make a difference.
8. Write short notes on the following:-
(a) Personal Selling
(b) Direct Marketing
(c)Word of mouth marketing
(d) Sales promotion.
Ans: (a) Personal Selling – The Art of One-to-One Persuasion
The scene: You pause at a stall selling high-end coffee machines. A salesperson greets you
warmly, asks about your coffee habits, listens carefully, and then demonstrates how their
machine can brew your favourite espresso in under a minute. By the end of the
conversation, you’re sipping coffee and seriously considering buying it.
Definition: Personal selling is face-to-face interaction between a salesperson and a
prospective buyer, aimed at influencing the buyer’s purchase decision.
Key Features:
• Personal Interaction: Tailored communication that adapts to the buyer’s needs.
• Two-way Communication: Buyers can ask questions, clear doubts instantly.
• Relationship Building: Often focuses on long-term customer relationships.
• Goal-Oriented: Ends with a sale or the next step toward a sale.
Easy2Siksha.com
Advantages:
1. Builds trust and personal connection.
2. Explains complex products better (e.g., insurance plans, industrial equipment).
3. Allows for real-time feedback and negotiation.
Limitations:
• Costly because it requires trained salespeople.
• Time-consuming — limited reach compared to mass advertising.
Example: Real estate agents guiding potential buyers through property tours, answering
specific queries, and negotiating deals.
In our exhibition analogy: Personal selling is like the warm handshake and personal
attention you get at a stall — tailored to you, not the crowd.
(b) Direct Marketing – Reaching You Without a Middleman
The scene: Later, as you check your phone during a coffee break, you get an email from a
brand showcasing a special offer on the same coffee machine you just saw — with your
name in the greeting and a “Click to Buy Now” button.
Definition: Direct marketing involves communicating directly with targeted customers to
generate a response or transaction, without using intermediaries like retailers or
wholesalers.
Key Features:
• Targeted Communication: Messages crafted for a specific group or individual.
• Multiple Channels: Email, SMS, telemarketing, direct mail, social media ads.
• Measurable: Responses can be tracked precisely (e.g., clicks, calls, purchases).
• Action-Oriented: Usually has a clear call-to-action (CTA).
Advantages:
1. Highly personalised messaging.
2. Easy to measure campaign success.
3. Can be cost-effective if targeted well.
Limitations:
• Risk of being seen as spam if poorly executed.
• Requires accurate customer data.
Example: Amazon sending personalised product recommendations based on your browsing
and purchase history.
Easy2Siksha.com
In our exhibition analogy: Direct marketing is like the stall owner getting your contact info
and later sending you a personalised offer directly to your home or inbox — no middleman,
no guesswork.
(c) Word of Mouth Marketing – The Whisper That Travels Far
The scene: As you leave the coffee machine stall, you bump into an old friend who says,
“Hey, I tried that brand’s coffee maker last month — it’s amazing. You should get it.” Her
excitement feels genuine, and now you’re twice as interested.
Definition: Word of Mouth (WOM) marketing is when customers promote a product or
service to others through informal communication, based on their own experiences.
Key Features:
• Trust-Based: Recommendations come from people we know or trust, making them
very persuasive.
• Organic or Amplified: Can happen naturally or be encouraged by brands through
referral programmes, share-worthy experiences, or influencer collaborations.
• Long-Lasting Impact: Positive WOM can drive sales for years; negative WOM can
harm a brand quickly.
Advantages:
1. High credibility because it’s seen as unbiased.
2. Low cost if it happens organically.
3. Builds strong brand reputation.
Limitations:
• Hard to control — negative experiences spread just as fast.
• Takes time to build momentum.
Example: People raving on social media about a new restaurant, tagging their friends to try
it.
In our exhibition analogy: WOM is like visitors telling each other, “That stall in aisle 3 is
giving out the best samples — don’t miss it!” The buzz spreads faster than any official ad.
(d) Sales Promotion – The Limited-Time Spark
The scene: Before leaving the exhibition, you pass a table with a big sign: “Buy this coffee
machine today and get a free set of premium coffee beans — offer valid only till 6 PM!”
Suddenly, you feel the urge to act before the deal disappears.
Definition: Sales promotion refers to short-term incentives offered to encourage immediate
purchase or sales of a product or service.
Easy2Siksha.com
Key Features:
• Time-Bound: Urgency is key — discounts, freebies, contests.
• Boosts Short-Term Sales: Aims for instant results.
• Varied Tools: Coupons, samples, price-offs, contests, buy-one-get-one (BOGO)
offers.
Advantages:
1. Quick impact on sales.
2. Encourages trial of new products.
3. Helps clear excess stock.
Limitations:
• Overuse can train customers to wait for discounts.
• May not build long-term loyalty if not paired with quality.
Example: Domino’s offering “50% off on all pizzas this weekend only”.
In our exhibition analogy: Sales promotion is that flashy “today only” deal that makes you
decide on the spot — because tomorrow, it’s gone.
How These Four Work Together
If you think about it, in the real business world, these four are not competitors — they’re
teammates. A brand might:
• Use personal selling to explain a complex product in detail.
• Follow up with direct marketing to nudge you toward purchase.
• Encourage satisfied customers to spread word of mouth by sharing reviews or
referrals.
• Launch a sales promotion to create urgency and close the deal.
A Story of All Four in Action
Let’s imagine a premium travel agency called WanderLux launching a new luxury train
experience.
1. Personal Selling: Their sales representatives meet potential high-value clients at
travel expos, present brochures, answer questions, and show VR tours of the train
suites.
2. Direct Marketing: A week later, those visitors receive an elegant email with special
itineraries and a “Book Now” link, personalised with their names and preferred
travel dates.
Easy2Siksha.com
3. Word of Mouth Marketing: Early customers share glowing Instagram stories about
the trip. WanderLux reposts these, tagging the customers and encouraging them to
refer friends for a reward.
4. Sales Promotion: They announce: “Book before Sunday and get a complimentary spa
package on board worth ₹10,000.”
The combined effect? Bookings skyrocket.
Why Understanding These Matters for You
From an exam point of view:
• They are core promotional tools in marketing.
• Understanding differences helps you match the right tool to the right product,
audience, and situation.
• Examples make your answer stand out — examiners love it when you can connect
theory to relatable, real-life scenarios.
From a real-world perspective:
• As a business owner or marketer, knowing when to use each one (or a mix) can
drastically improve results.
• As a customer, recognising them helps you understand why you buy what you buy.
Final Thought – The Orchestra Analogy
Think of the promotional mix as a music concert.
• Personal Selling is the soloist — engaging directly with the audience, note by note.
• Direct Marketing is the targeted playlist sent to your phone before the show.
• Word of Mouth is fans telling friends, “That band is amazing, you have to hear them
live!”
• Sales Promotion is the limited-time ticket discount that gets you to book today.
Individually, each plays beautifully. Together, they create a performance that’s hard to
resist.
“This paper has been carefully prepared for educational purposes. If you notice any mistakes or
have suggestions, feel free to share your feedback.”
