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GNDU Question Paper-2022
Bachelor of Business Administration
BBA 3
rd
Semester
FUNDAMENTALS OF MARKETING MANAGEMENT
Time Allowed: Three Hours Max. Marks: 50
Note: Attempt Five questions in all, selecting at least One question from each section. The
Fifth question may be attempted from any section. All questions carry equal marks.
SECTION-A
1. What is marketing environment? What are the uncontrollable factors that affect the
marketing decisions?
2. Describe the marketing and how it is important? Discuss the scope of marketing and
how it is different from selling?
SECTION-B
3. What is Product life cycle? Highlight the marketing strategies for each stage of product
life cycle.
4. Why market segmentation is required and what are its level ? What are bases for
market segmentation ?
SECTION-C
5. Describe the branding and why it is required? What are the different methods of
branding?
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6. What is product? Explain the product classifications and what are the major decisions
regarding product.
SECTION-D
7. What is Word of mouth and how it helps in marketing? Discuss the various channels of
distribution.
8. Explain the advertising and its features. How it is different from sales promotion and
personal selling? How it is important?
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GNDU Answer Paper-2022
Bachelor of Business Administration
BBA 3
rd
Semester
FUNDAMENTALS OF MARKETING MANAGEMENT
Time Allowed: Three Hours Max. Marks: 50
Note: Attempt Five questions in all, selecting at least One question from each section. The
Fifth question may be attempted from any section. All questions carry equal marks.
SECTION-A
1. What is marketing environment? What are the uncontrollable factors that affect the
marketing decisions?
Ans: The Story of “SpiceAura Café”
In a lively corner of Ludhiana, there’s a small café called SpiceAura. The owner, Arjun, is
passionate about offering fusion snacks — think masala pasta and kulhad coffee.
One evening, as Arjun sips tea and reviews his sales, he notices something puzzling:
• His street is busier than ever.
• But customers are fewer than the same time last year.
He calls his marketing friend, Nisha, for advice. She smiles knowingly and says,
“Arjun, the answer is in your marketing environment. You can’t run a business without
understanding the winds that blow around it — some you can control, some you cannot.”
That’s where our topic unfolds.
What is the Marketing Environment?
In simple words, the marketing environment is everything that surrounds a business and
affects its ability to build and maintain relationships with customers.
It includes forces, factors, and conditions — some inside the company, some outside — that
influence marketing decisions.
A helpful way to think of it is: Your business is like a boat on a river.
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• The oars and sails you control — that’s your internal environment.
• The winds, currents, and weather you cannot control — that’s your external
environment.
Our focus here is on uncontrollable factors — the external forces you can’t stop or change
directly, but must adapt to.
The Uncontrollable Factors Affecting Marketing Decisions
Nisha explains to Arjun:
“Even the best marketing plan can fail if you ignore these forces. They are part of the macro
environment and micro environment, and the trick is to watch them closely and adjust your
strategy — like a sailor adjusting the sails to the wind.”
Let’s explore them one by one.
1. Demographic Factors
These relate to the makeup of the population — age, gender, income levels, education,
family size, and so on.
• If the youth population grows, demand for trendy, affordable products might rise.
• If the area has more working women, ready-to-eat meals or services that save time
could be in higher demand.
Example: In Arjun’s café neighbourhood, a new university opens, bringing in hundreds of
students — a perfect opportunity to market student-friendly combos.
2. Economic Factors
The overall health of the economy affects people’s purchasing power.
• In a booming economy, customers may spend more on luxury and premium
products.
• In a recession, people cut back, preferring affordable essentials.
Example: If inflation pushes coffee prices up, Arjun might need to rethink his pricing or offer
smaller but cheaper cup sizes.
3. Social and Cultural Factors
Culture shapes tastes, preferences, and buying habits.
• Festivals, traditions, and lifestyle trends can create marketing opportunities or
challenges.
• Shifts like health-conscious living can change the demand for certain products.
Example: If the local trend leans towards healthy eating, Arjun could introduce millet wraps
or sugar-free desserts to attract this segment.
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4. Technological Factors
Technology changes how products are made, marketed, and sold.
• Digital marketing, online ordering apps, and contactless payments are now standard
expectations.
• New equipment can improve quality and reduce costs.
Example: Arjun joins a food delivery platform — suddenly his sales reach customers far
beyond the café’s street.
5. Political and Legal Factors
Laws, regulations, and government policies can directly impact business decisions.
• Food safety laws, employment rules, and environmental regulations must be
followed.
• Political stability affects market confidence.
Example: A new GST change alters the café’s profit margins, forcing a small menu price
adjustment.
6. Natural and Environmental Factors
Nature can be unpredictable — weather patterns, natural disasters, and availability of
natural resources all matter.
• A poor monsoon can drive up the cost of certain ingredients.
• Public awareness about sustainability can push businesses toward eco-friendly
practices.
Example: Arjun switches to biodegradable cups because customers value eco-responsible
cafés.
7. Competitive Factors
Competitors’ actions — pricing, promotions, product launches — can shift customer
behaviour.
Example: A new café opens nearby with live music nights. Arjun might respond by hosting
weekend poetry sessions to create a unique identity.
Story Break – Adapting to the Winds
Six months later, Arjun has adjusted to his marketing environment:
• He introduced affordable student meal plans. (Demographic)
• Added budget-friendly menu items during inflation. (Economic)
• Brought in vegan and sugar-free options. (Social & Cultural)
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• Partnered with online delivery apps. (Technological)
• Complied with new hygiene certification laws. (Political & Legal)
• Shifted to eco-friendly packaging. (Environmental)
• Created a unique “open mic” night. (Competitive)
The result? Footfall increases, and the café feels like it’s riding with the current rather than
against it.
🗝 Key Takeaways
• The marketing environment is the set of forces and conditions affecting marketing
performance.
• Uncontrollable factors include demographics, economy, culture, technology,
politics/laws, nature, and competition.
• Businesses can’t control these, but can monitor, predict, and adapt to them for
better decisions.
Quick Recap Table for Revision
Factor
What It Affects
Example Impact
Demographic
Who your customers are
Student population rise → student combos
Economic
Spending power
Inflation → smaller cup sizes
Social/Cultural
Tastes & preferences
Health trend → millet wraps
Technological
How you produce & sell
Delivery apps → wider reach
Political/Legal
Rules & regulations
GST change → price adjustment
Environmental
Resources & climate
Ban on plastic → biodegradable cups
Competitive
Market position
Rival events → unique offerings
Final Thought
Understanding the marketing environment is like learning to read the sky and water before
setting sail. The sea will always have winds you can’t control — but with skill, patience, and
timely adjustments, you can navigate them to reach your destination successfully.
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2. Describe the marketing and how it is important? Discuss the scope of marketing and
how it is different from selling?
Ans: The Story of Kavya’s Handcrafted Soaps
In the small, busy streets of Jaipur, Kavya makes beautiful, natural soaps at home — with
scents like lavender, neem, and rose. Her products are amazing, but there’s one problem:
very few people know she exists.
One day, her friend Sameer tells her,
“Kavya, you have magic in your hands — but the world won’t find out unless you do
marketing.”
From that moment, Kavya learns that marketing isn’t just selling bars of soap — it’s a bridge
between her creativity and the people who need it.
What is Marketing?
In simple words, marketing is the process of identifying customer needs, creating products
or services to meet those needs, and delivering them in a way that builds lasting
relationships.
It’s not just advertising or closing a sale. It starts much earlier — from understanding what
people want — and continues long after they’ve bought the product, ensuring they stay
happy and loyal.
Think of marketing as a story with four acts:
1. Knowing what people want (research)
2. Creating something they’ll love (product)
3. Letting them know it exists (promotion)
4. Delivering it to them in the best way (distribution and after-sales service)
Importance of Marketing
Marketing is like oxygen for a business — without it, even the best products can wither
away unnoticed. Here’s why it’s so important:
1. Connects Products with People
o Helps the right customers discover the right products.
o Without marketing, Kavya’s soaps would just sit on her shelf.
2. Builds Brand Identity
o Marketing tells people who you are and what you stand for.
o Kavya’s eco-friendly message became part of her brand’s personality.
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3. Drives Business Growth
o Effective marketing increases sales, profits, and market share.
4. Encourages Innovation
o By listening to customers, businesses can improve or create new products.
5. Strengthens Customer Loyalty
o Ongoing engagement keeps customers coming back.
Scope of Marketing
The scope of marketing is much wider than many people think. It’s not just about “selling
stuff” — it’s about every step that moves a product from idea to the customer’s hands, and
beyond. Let’s explore this like stepping through Kavya’s business journey.
1. Product Planning and Development
• Before you sell, you must decide what to sell.
• This includes design, quality, packaging, and features.
• Kavya experimented with shapes, fragrances, and eco-friendly wrapping based on
customer preferences.
2. Market Research
• Systematically collecting and analysing information about customers, competitors,
and trends.
• Without research, marketing decisions are based on guesswork.
3. Pricing
• Deciding the right price so customers feel it’s worth it while the business remains
profitable.
• Kavya learned to price her soaps competitively while highlighting their premium,
organic quality.
4. Promotion
• Communicating with customers to inform, persuade, and remind them about the
product.
• Advertising, social media, events, influencer collaborations — all fall under this.
5. Distribution (Place)
• Choosing the right channels to make the product easily available — retail shops,
online platforms, direct delivery.
6. Customer Service
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• After-sales support and relationship building to keep customers loyal.
7. Physical Evidence (especially in services)
• The overall look, feel, and presentation of the brand that reassures customers about
quality.
8. People and Processes (modern marketing)
• The team, their behaviour, and the way things are done all influence marketing
success.
Marketing vs. Selling
This is a common confusion — so let’s clear it up with another mini-story.
Selling is like trying to push something you already have, whether or not the customer
wants it.
Example: If Kavya made a batch of lemon-scented soap and went door-to-door persuading
people to buy it, that’s selling.
Marketing, on the other hand, starts with understanding what people want first, then
making the product accordingly.
Example: Kavya surveys her customers and finds most prefer rose and sandalwood. She
then makes those scents and promotes them — that’s marketing.
Aspect
Selling
Marketing
Starting Point
Product
Customer Need
Focus
Company’s Need to Convert
Customer’s Need to be Satisfied
Timeframe
Short-term
Long-term Relationship
Orientation
Push
Pull
Goal
Profit via volume
Profit via customer satisfaction
Story Break – How Kavya Applied Marketing
At first, Kavya focused on selling — she made what she liked and tried hard to convince
others to buy. Sales were slow.
Then, she applied marketing thinking:
• Researched customer preferences
• Created products that matched those needs
• Set prices that felt fair to buyers
• Used Instagram reels to tell stories about her soaps
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• Partnered with a local gift shop for distribution
• Added personalised thank-you notes in every package
Within a year, her orders doubled, and she had repeat customers who wouldn’t buy soap
from anyone else.
🗝 Key Takeaways
• Marketing is bigger than selling — it’s about understanding and satisfying customer
needs profitably.
• It’s important because it connects products to people, fuels growth, builds loyalty,
and encourages innovation.
• The scope of marketing covers everything from product idea to after-sales service.
• Selling focuses on pushing products; marketing focuses on creating and delivering
what customers actually want.
Final Thought
Marketing is like planting a tree:
• Selling is only picking the fruit when it’s ripe.
• Marketing is preparing the soil, planting the seed, watering it, protecting it, and
making sure it keeps bearing fruit year after year.
SECTION-B
3. What is Product life cycle? Highlight the marketing strategies for each stage of product
life cycle.
Ans: What is Product Life Cycle?
Imagine for a moment that a product is just like a human being. Just as a person is born,
grows up, matures, and eventually declines, a product also goes through similar stages
during its time in the market. This journey of a product from its introduction to its decline is
known as the Product Life Cycle (PLC).
In simple words, the Product Life Cycle is the process through which every product passes —
starting from the time it is launched into the market, growing in sales, reaching maturity,
and finally declining as new innovations replace it.
Marketers carefully study the PLC because each stage requires different marketing
strategies to survive and succeed. If a company fails to adapt, its product may vanish before
its time.
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A Short Story to Understand the PLC
Let’s take the story of “ChocoBuzz” – a new chocolate brand launched by a small company.
This chocolate bar will help us understand how products live through their life cycle.
1. Introduction Stage – The Birth of the Product
When “ChocoBuzz” was first launched, hardly anyone knew about it. People were already
used to brands like Dairy Milk or KitKat. So, the company faced a big challenge: How to
make people aware of ChocoBuzz?
At this stage:
• Sales are low because customers are not aware of the product.
• Costs are high due to heavy advertising and distribution expenses.
• Profits are usually negative or very low because the company spends more money
on marketing than it earns from sales.
Marketing Strategies for Introduction Stage:
1. Heavy Promotion: The company should invest in advertising to create awareness.
For ChocoBuzz, TV ads showing kids enjoying the new chocolate could work.
2. Sampling and Discounts: Giving free samples in schools or malls can attract first-
time buyers.
3. Selective Distribution: Initially, ChocoBuzz may focus on a few big cities rather than
spreading too thin across the country.
4. Building Brand Image: Instead of just selling chocolate, the company should tell a
story—like ChocoBuzz being the “fun energy bar for kids.”
In short, the goal here is: to make people aware and encourage them to try the product.
2. Growth Stage – Rising Popularity
After a few months, people start recognizing ChocoBuzz. Kids ask their parents to buy it, and
shops happily keep it on their shelves. Slowly, the product becomes popular.
At this stage:
• Sales increase rapidly.
• Costs per unit decrease because of larger production.
• Profits begin to rise as more people buy the product.
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Marketing Strategies for Growth Stage:
1. Product Improvement: The company can introduce new flavors like ChocoBuzz with
caramel or nuts.
2. Wider Distribution: Expand availability from big cities to small towns so more people
can buy it.
3. Competitive Pricing: Since competitors may notice ChocoBuzz’s success, the
company should set attractive prices to hold the market.
4. Brand Building: Focus on making customers loyal to the brand by highlighting unique
features, e.g., “ChocoBuzz gives double energy in one bite!”
Goal in this stage: To maximize market share and beat competition.
3. Maturity Stage – The Peak
After a few years, ChocoBuzz becomes a well-known chocolate brand. But now, the market
is full of competitors. Almost every kid has tried it, and sales are no longer increasing as
quickly as before.
At this stage:
• Sales reach their peak but growth slows down.
• Competition is very intense because many similar products exist.
• Profits may still be good but start to level off.
Marketing Strategies for Maturity Stage:
1. Product Differentiation: Introduce variations like “ChocoBuzz Mini,” “ChocoBuzz Ice-
cream,” or even festival gift packs.
2. Sales Promotions: Offer “Buy 1 Get 1 Free” or festival discounts to keep customers
excited.
3. Strong Distribution Network: Ensure the product is available in every corner shop,
supermarket, and even online.
4. Customer Loyalty Programs: Offer points or rewards for repeated purchases to
retain existing customers.
Goal in this stage: To defend market share and extend the product’s life as much as possible.
4. Decline Stage – The Downfall
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Nothing lasts forever in the market. With time, new chocolates with healthier ingredients or
trendier packaging may enter the market. Kids might shift their attention to those new
brands, and ChocoBuzz may start losing its charm.
At this stage:
• Sales decline as customers shift to new products.
• Profits fall and may even turn into losses.
• The company must decide whether to rejuvenate the product or discontinue it.
Marketing Strategies for Decline Stage:
1. Harvesting: Reduce marketing expenses and continue selling to loyal customers who
still prefer ChocoBuzz.
2. Discounts and Clearance Sales: Attract remaining buyers by offering lower prices.
3. Product Re-launch or Rebranding: Sometimes, giving the product a new look or
improved taste can extend its life.
4. Phasing Out: If sales keep falling, the company may stop producing ChocoBuzz and
focus on new products.
Goal in this stage: To minimize losses and decide whether to exit or revive the product.
Importance of PLC in Marketing
The Product Life Cycle is not just theory. It helps companies:
• Plan marketing strategies effectively.
• Decide when to invest heavily and when to cut costs.
• Know when to innovate or bring in new products.
• Avoid sudden failures by predicting market changes.
For example, just as people save money for their old age, companies prepare new products
while existing ones reach maturity or decline.
Another Short Story Example
Think of Nokia mobile phones.
• In the Introduction stage, they were new and exciting.
• In the Growth stage, everyone wanted a Nokia; sales skyrocketed.
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• In the Maturity stage, Nokia ruled the mobile world with models like 1100 and N-
series.
• But in the Decline stage, they failed to adapt to smartphones, and brands like
Samsung and Apple took over.
This shows why understanding PLC is crucial—no matter how strong a brand is, without
timely strategy changes, it can decline.
Conclusion
The Product Life Cycle is like the biography of a product. From birth (introduction) to youth
(growth), from adulthood (maturity) to old age (decline), every product passes through
these stages. Smart marketers study each stage carefully and apply the right strategies.
For our story of ChocoBuzz, success depended not just on making a tasty chocolate but also
on changing strategies at every stage—from awareness building, to fighting competition, to
extending maturity, and finally managing decline.
4. Why market segmentation is required and what are its level ? What are bases for
market segmentation ?
Ans: Imagine you walk into a huge shopping mall. There are hundreds of shops—some sell
clothes, others sell electronics, some sell toys, and some sell food. Now, think about it: if all
the shops in the mall sold only one product (say, everyone was selling just shoes), would the
mall be so attractive? Probably not. The magic of the mall is that different shops serve
different groups of people, according to their needs, tastes, and budget. This simple idea is
what we call market segmentation in marketing.
1. Why Market Segmentation is Required?
At its core, market segmentation is about understanding that “one size does not fit all.”
Customers are not identical; they are different in their preferences, lifestyles, income levels,
and even their buying behaviours. Let me share a small story here.
✦ Story: Ice-Cream Seller at the Beach
Once upon a time, there was an ice-cream seller at a crowded beach. On the first day, he
decided to sell only one flavor: vanilla. Some kids loved it, but many people walked past him
because they preferred chocolate, mango, or strawberry. His sales were average.
On the second day, he changed his strategy. He kept four flavors: vanilla for kids, chocolate
for teenagers, mango for adults, and sugar-free strawberry for health-conscious people.
Suddenly, his sales went up. Why? Because instead of treating everyone the same, he
understood the different groups of people and served them accordingly.
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This is exactly why businesses use market segmentation—it helps them to identify groups of
people with similar needs and then provide products and marketing strategies that match
those needs.
✦ Main Reasons for Market Segmentation:
1. Better Understanding of Customers – Businesses can understand what customers
actually want, rather than assuming.
2. Efficient Use of Resources – Instead of wasting money on everyone, companies
focus only on targeted groups.
3. Improved Customer Satisfaction – When customers feel that products are “just
made for them,” they remain loyal.
4. Competitive Advantage – Companies can differentiate themselves by focusing on
specific groups.
5. Profit Maximization – By charging different prices for different groups (like economy
and premium class in airlines), companies earn more profits.
So, segmentation is like having a roadmap that guides businesses toward the right audience.
2. Levels of Market Segmentation
Now that we know why segmentation is needed, let’s explore the levels. Think of these
levels as zooming in from a very broad view to a very narrow focus.
(i) Mass Marketing (No Segmentation)
This is like the old style of marketing where companies assumed “everyone is the same.”
For example, Henry Ford, when he started making cars, offered only one model in one
colour—black. At that time, customers had fewer choices, so it worked. But in today’s
world, mass marketing rarely succeeds because customers expect personalization.
(ii) Segment Marketing
Here, the company divides the market into broad groups based on common features. For
example, a clothing brand may divide the market into men, women, and kids. Each group
has different needs and styles, so the company designs separate collections.
(iii) Niche Marketing
This is a deeper focus on a small and specific segment. For instance, instead of just making
clothes for men, a brand may target plus-size men’s clothing or formal wear for young
professionals. Here, the company becomes a specialist in serving one particular group.
(iv) Micromarketing
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This is the narrowest level, where marketing is tailored almost at an individual or local level.
For example, an online store recommending products based on your personal browsing
history, or a coffee shop offering different flavours depending on the tastes of the local
community.
So, the levels move from mass marketing → segment marketing → niche marketing →
micromarketing. Each step zooms in more closely on customer needs.
3. Bases of Market Segmentation
Now comes the interesting part: On what basis do we divide the market? There are several
ways, and companies often use a mix of them. Let’s understand each in detail.
(i) Geographic Segmentation
Here, the market is divided based on location—country, state, city, climate, or even
neighbourhood.
• Example: A woollen clothing company will focus more on North India (cold regions)
than South India.
• Benefit: Products suit the needs of local conditions.
(ii) Demographic Segmentation
This is the most common basis, dividing people by age, gender, income, education,
occupation, religion, etc.
• Example: A toy company targets children; a luxury car brand targets high-income
groups.
• Benefit: Easy to measure and understand.
(iii) Psychographic Segmentation
This is deeper—it looks at people’s lifestyle, personality, values, and interests.
• Example: Nike targets fitness enthusiasts who value sports and an active lifestyle.
• Benefit: Helps create emotional connection with customers.
(iv) Behavioural Segmentation
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Here, customers are divided based on their behaviour toward products—purchase habits,
brand loyalty, usage rate, benefits sought, etc.
• Example: Airlines divide passengers into business travellers (who need comfort and
flexibility) and vacation travellers (who seek low cost).
• Benefit: Directly linked to buying behaviour, so highly practical.
(v) Benefit Segmentation
Customers buy the same product for different reasons (benefits).
• Example: Toothpaste: some buy for whitening, others for fresh breath, and some for
cavity protection.
• Benefit: Company can design different versions of the same product.
✦ Linking Back to Our Story
Think about the ice-cream seller again. His decision to sell different flavors was actually a
combination of these segmentation bases:
• Kids (demographic: age)
• Health-conscious adults (psychographic: lifestyle)
• Tourists on the beach (geographic: location)
• People wanting sugar-free options (benefit segmentation)
This simple beach example shows how segmentation works in real life—by identifying
different groups with different needs.
4. Conclusion
To sum it up, market segmentation is required because it helps businesses understand
customers better, use resources wisely, and remain competitive. Its levels range from broad
(mass marketing) to very specific (micromarketing). And the bases include geographic,
demographic, psychographic, behavioural, and benefit segmentation.
Without segmentation, businesses would be like that first-day ice-cream seller—trying to
please everyone but truly satisfying only a few. With segmentation, they become like the
second-day seller—knowing exactly what each group wants and serving them effectively.
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SECTION-C
5. Describe the branding and why it is required? What are the different methods of
branding?
Ans: Branding and Why It Is Required? Different Methods of Branding
Imagine you enter a big supermarket. Hundreds of products are kept neatly on the
shelves—biscuits, cold drinks, soaps, shampoos, chips, and many more. Now, think for a
second: if all the packets of biscuits looked the same, with no names, no colors, no logos—
just plain white wrappers—how would you decide which biscuit to buy? Probably you would
feel confused and lost.
This is exactly where branding comes into play. Branding is like giving an identity to a
product, just like a name and personality are given to a human being. Without branding,
products would remain “nameless” and “faceless,” and customers would have a hard time
recognizing, remembering, or trusting them.
What is Branding?
Branding is the process of creating a unique image, name, design, or symbol for a product or
business so that customers can easily identify and differentiate it from others.
• A brand is not just a name or a logo; it is a promise of quality, trust, and value.
• For example, when you see the golden “M” of McDonald’s, your mind immediately
recalls burgers, fries, and a happy meal. Similarly, when you hear “Nike,” you
instantly imagine sports, shoes, and the famous tagline: “Just Do It.”
So, branding is the art of making your product stand out in the crowd and creating an
emotional connection with the customer.
Why is Branding Required?
Now let us understand why branding is so important. Think of branding as the bridge
between a business and its customers. Without it, the connection may remain weak.
Here are the main reasons:
1. Easy Identification
Branding makes products recognizable. When you walk into a shop and want a toothpaste,
you don’t say, “Give me that white tube with blue stripes.” You simply say “Colgate.”
Branding saves time and effort.
2. Builds Trust and Loyalty
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People trust branded products because they have already experienced their quality. For
example, if you always buy Amul butter, you continue to trust it without hesitation. This
creates loyalty over time.
3. Creates Value Beyond the Product
A product is just a physical item, but branding adds emotional value. Think about an iPhone.
Technically, many phones do the same job, but the Apple brand adds prestige, status, and
style, making people happily pay extra.
4. Helps in Advertising
A strong brand makes advertisements more powerful. If you already know about Coca-Cola,
then even a short commercial with just its logo and red background is enough to remind you
of the drink.
5. Encourages Repeat Purchases
Once customers develop a liking for a brand, they keep coming back. This is why many
people say, “I only wear Adidas shoes,” or “I only drink Nescafé.”
6. Competitive Advantage
In today’s crowded market, branding gives a product a unique identity. Without branding,
everything would look similar, and price would be the only factor. But with branding,
companies can stand out and even charge higher prices.
A Short Story to Understand Branding Better
Once upon a time, there were two brothers who made mango pickles in a small village. Both
had the same recipe, same quality, and same taste. But one brother decided to sell his
pickles in plain jars, while the other gave his pickles a name: “Grandma’s Secret Mango
Pickle.” He added a nice label with a picture of a smiling grandmother and told stories about
how the recipe came from their grandmother’s kitchen.
At first, both sold equally well in the local market. But soon, “Grandma’s Secret” became
famous. People started preferring it because the name and design created trust, nostalgia,
and emotional value. Even though the taste was the same, customers remembered one
product and forgot the other.
This story shows that branding is not only about quality; it is about creating an identity that
stays in people’s hearts and minds.
Methods of Branding
Now that we understand what branding is and why it is required, let’s explore the different
methods used by businesses.
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1. Product Branding
This is the most common method. It focuses on giving a specific name and identity to
individual products. For example:
• Coca-Cola for soft drinks
• Lux for soap
• Pepsi for cold drinks
Here, each product becomes a brand of its own.
2. Corporate Branding
In this method, the company name itself becomes the brand. All products are promoted
under one umbrella name. For example:
• Samsung sells phones, TVs, fridges, and many other items under the same brand
name.
• Tata is trusted for salt, steel, tea, and even cars.
Corporate branding builds trust across many products at once.
3. Family Branding
Here, a group of products is sold under a single brand name. For example:
• Nestlé Maggi noodles, Maggi ketchup, Maggi soup.
• Amul milk, Amul cheese, Amul ice cream.
Customers trust the entire family of products because they already trust one.
4. Individual Branding
Some companies create different brand names for different products, even if they belong to
the same company. This prevents one product’s failure from affecting another.
For example:
• Hindustan Unilever owns brands like Dove, Surf Excel, and Ponds.
• Procter & Gamble owns Tide, Gillette, Pampers, etc.
5. Co-Branding
Sometimes two brands collaborate to make a product. This is called co-branding.
For example:
• Nike + Apple joined hands to make fitness gadgets.
• Domino’s + Pepsi often promote together.
Co-branding benefits both companies by combining strengths.
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6. Generic Branding
This is the opposite of strong branding. In generic branding, products are sold without any
significant brand name, usually focusing on low price. For example: medicines sold under
the name “Paracetamol” instead of branded names.
7. Service Branding
Brands are not limited to products. Services also use branding. For example:
• Uber for ride-hailing services.
• Amazon for online shopping services.
• Airtel for telecom services.
Here, branding promises reliability and experience rather than a physical product.
Another Small Example: Why Branding Matters
Suppose you want to buy water at a railway station. There are two bottles—one plain with
no label, and another with the blue label of Bisleri. Even though both might be pure, you will
most likely pick Bisleri, because the brand assures you of quality and safety. That’s the magic
of branding—it reduces doubt and increases trust.
Conclusion
Branding is not just about names and logos—it is about creating a unique identity, trust, and
emotional connection with customers. It helps products stand out, builds loyalty, adds
value, and makes businesses grow.
Different methods of branding—such as product branding, corporate branding, family
branding, individual branding, co-branding, generic branding, and service branding—allow
companies to choose the best strategy for their needs.
6. What is product? Explain the product classifications and what are the major decisions
regarding product.
Ans: Scene at the Sunday Market
It’s a lively Sunday morning in Amritsar’s local bazaar. Stalls are filled with colourful things:
fresh mangoes stacked like golden pyramids, the smell of hot jalebis curling through the air,
cotton kurtas fluttering in the breeze, and shopkeepers calling out their best prices.
Meena, a college student, is shopping for her friend’s birthday. As she walks through the
lanes, she realises that everything around her — from the ripe guavas to the phone covers —
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is a product. Some are bought for need, some for desire, but all have been made, packaged,
and presented for someone to buy or use.
This is where our topic begins.
What is a Product?
In simple terms, a product is anything that can be offered to the market to satisfy a want or
need.
It’s not only about physical goods. A product can also be a service, idea, experience, or even
a place. When you visit a hill station, hire a taxi, download an app, or buy a ticket to a music
concert — you’re consuming a product.
Marketing guru Philip Kotler famously said: “A product is anything that can be offered to a
market to satisfy a want or need, including physical goods, services, experiences, events,
persons, places, properties, organisations, information, and ideas.”
Three Levels of a Product
To make it even clearer, products have layers, like an onion:
1. Core Product – The basic need it fulfils.
o Example: A mobile phone’s core product is communication.
2. Actual Product – The tangible features and qualities.
o Example: Brand, design, colour, memory, screen size.
3. Augmented Product – Additional services or benefits.
o Example: Warranty, after-sales service, free installation.
Product Classifications
Products are generally classified in two big ways:
A. Consumer Products (Products bought by final consumers for personal use)
1. Convenience Products
o Bought frequently, immediately, and with minimal effort.
o Low price, widely available.
o Examples: Toothpaste, bread, soap.
2. Shopping Products
o Purchased less often, after careful comparison of quality, price, style.
o Examples: Clothes, electronics, furniture.
3. Specialty Products
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o Unique characteristics or brand identification; buyers make special effort to
purchase.
o Examples: Luxury watches, high-end sports cars, designer handbags.
4. Unsought Products
o Products consumers don’t think of buying until needed.
o Examples: Insurance, fire extinguishers, funeral services.
B. Industrial Products (Purchased for further processing or for use in business)
1. Materials and Parts
o Raw materials (cotton, steel) or manufactured parts (engines, chips).
2. Capital Items
o Long-term goods that help in production (machines, buildings).
3. Supplies and Services
o Operating supplies (lubricants, stationery) and services (maintenance, legal
advice).
Story Break – Why Classification Matters
When Meena buys a loaf of bread, the seller knows it’s a convenience product, so it’s placed
in an easy-to-grab spot. But when she browses for a laptop, the seller offers multiple
brands, comparisons, and financing options — because it’s a shopping product requiring
more decision-making.
This classification helps businesses design the right marketing strategy for each product
type.
⚙ Major Decisions Regarding a Product
Once a company creates or sells a product, there are several important decisions to make.
Think of these as the “life choices” a product faces in its journey from factory to customer.
1. Product Attributes
• Decisions about quality, features, and design.
• Example: A budget smartphone may cut down on camera quality, while a premium
one focuses on high megapixels and sleek design.
2. Branding
• Deciding the brand name, logo, and identity that will help customers recognise and
trust the product.
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• Example: Apple’s bitten apple logo isn’t just an image — it’s a promise of innovation
and quality.
3. Packaging
• More than a wrapper — it protects, attracts attention, and communicates
information.
• Example: Pringles’ cylinder pack is part of its identity.
4. Labelling
• Providing essential information — ingredients, usage instructions, expiry date, price.
• Also part of brand communication.
5. Product Support Services
• Additional help offered after purchase: warranties, helplines, repairs.
• These can build loyalty and differentiate the product.
6. Product Line Decisions
• Deciding the number of related items in a product category.
• Example: A shampoo brand may offer anti-dandruff, herbal, and colour-protect
variants.
7. Product Mix Decisions
• Determining the variety of product lines and items a company offers.
• Example: A company like ITC sells biscuits, soaps, notebooks, and clothing.
8. New Product Development
• Launching new products based on customer needs, market trends, or innovation.
9. Product Life Cycle Management
• Products go through stages — Introduction, Growth, Maturity, Decline.
• Decisions at each stage affect pricing, promotion, and distribution.
Another Quick Story – The Birth of a New Tea Brand
A start-up launches an organic tea.
• Product Attributes: They decide on rich aroma and eco-friendly leaves.
• Branding: Call it “NatureSip” with a green leaf logo.
• Packaging: Biodegradable paper pouches with a zip lock.
• Labelling: Ingredients, brewing tips, expiry date.
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• Support Services: Subscription delivery, free samples.
• Product Line: Variants like chamomile, tulsi, and hibiscus.
Every decision shapes how customers see and value the product.
🗝 Key Takeaways
• A product is anything that satisfies a need or want — goods, services, ideas,
experiences.
• Classifications: Consumer products (convenience, shopping, specialty, unsought) and
industrial products (materials, capital items, supplies/services).
• Major product decisions cover attributes, branding, packaging, labelling, support
services, product line, product mix, innovation, and life cycle management.
Final Thought
A product is like a living character in the story of business — it has an identity, a role, a life
cycle, and choices that shape its journey. When companies understand their product deeply,
classify it correctly, and make wise decisions at each stage, they give it the best chance to
succeed in the competitive market bazaar — just like the stalls in Meena’s Sunday market,
where every product is waiting to find its perfect customer.
SECTION-D
7. What is Word of mouth and how it helps in marketing? Discuss the various channels of
distribution.
Ans: Word of Mouth and Channels of Distribution
Imagine you are standing outside a newly opened food stall in your city. The stall is not
advertised on television, no posters are pasted on the walls, and it hasn’t even paid a single
rupee for online ads. Yet, you notice a crowd gathering. Curious, you ask a friend, “Why is
this stall so popular when it’s just opened?”
Your friend smiles and says, “Oh! I tried their food yesterday — it was so tasty and
affordable! I told my cousin, he told his classmates, and they all came here. That’s why you
see this rush today.”
This, my friend, is the magic of Word of Mouth (WOM) marketing. Now, before we get into
channels of distribution, let’s carefully unpack what WOM means, why it’s so powerful, and
then move into how products actually reach customers through distribution channels.
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1. What is Word of Mouth?
At its simplest, Word of Mouth means people talking about a product, service, or brand to
others. It is like a chain reaction — one person has a good (or bad) experience, shares it with
another, and the story keeps spreading.
Unlike advertisements that are paid and polished, WOM is free and natural. It’s like a
recommendation from someone you trust — a family member, a friend, or even a social
media influencer who honestly shares their experience.
Marketers often say, “People trust people more than they trust advertisements.” That is why
word of mouth is one of the oldest and strongest forms of marketing.
2. Why is Word of Mouth Powerful in Marketing?
Let’s break it down with simple points:
1. Trust Factor – When your best friend tells you about a great phone he bought, you
believe him more than a glossy ad on YouTube. Trust builds WOM’s power.
2. Cost-Effective – Companies don’t need to spend lakhs on billboards when customers
themselves spread the message.
3. Viral Effect – One happy customer can influence ten others, and those ten can
influence a hundred more. Like a ripple in water, the effect grows.
4. Emotional Connection – WOM is often based on emotions: excitement, happiness,
surprise. Emotions make the message stick in memory.
5. Brand Loyalty – Customers who talk about a product positively are not just buyers;
they are unpaid promoters. This builds long-term loyalty.
3. A Small Story: How Word of Mouth Made a Brand
There’s a famous example from the business world — the story of Starbucks in its early
days. When Starbucks first started, it did not spend big money on advertising. Instead, it
focused on giving an excellent coffee experience: the smell, the ambiance, the friendly
service. Customers loved it and started talking about it to their friends — “Hey, you must try
this new coffee shop, it feels different!”
Slowly, without heavy advertising, Starbucks became a household name. All because people
talked, shared, and recommended. This is word of mouth in action.
4. Modern Word of Mouth – Not Just Talking!
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In today’s digital world, word of mouth is not limited to face-to-face conversations. It
happens online too, in forms like:
• Online Reviews (Google, Amazon, Flipkart)
• Social Media Sharing (Instagram stories, YouTube reviews)
• WhatsApp Recommendations (Forwarded to family/friends)
• Influencer Marketing (When someone genuine talks about their real experience)
Thus, WOM has become even more powerful today because technology allows one opinion
to reach thousands instantly.
5. Moving to Distribution: How Does the Product Actually Reach People?
Now that we understand how WOM helps spread awareness, let’s move to the second part
of the question: channels of distribution.
Imagine again: you hear about that food stall, and you’re excited to try it. But if the stall
were located 50 kilometers away in a remote area, would you still go? Probably not.
This is where distribution channels matter. Marketing doesn’t end at making people want
the product — companies must also make sure the product is available at the right place
and at the right time.
6. What are Channels of Distribution?
A distribution channel is the path through which a product travels from the producer (the
maker) to the final consumer (the buyer).
Think of it like a bridge connecting the factory to your hands. Without a strong bridge, even
the best product cannot reach customers.
7. Types of Distribution Channels
(a) Direct Channel (Producer → Consumer)
This is the shortest path. No middlemen, no extra costs.
• Example: A farmer selling vegetables directly in the local market, or a company
selling products on its website.
• Advantage: Cheaper for customers, more control for producers.
• Disadvantage: Limited reach, difficult to handle on a large scale.
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(b) Indirect Channel
Here, the product passes through intermediaries before reaching the consumer. There can
be different levels:
1. One-Level Channel (Producer → Retailer → Consumer)
o Example: A shoe company sells shoes to retailers, and you buy from the
shop.
2. Two-Level Channel (Producer → Wholesaler → Retailer → Consumer)
o Example: FMCG goods like soaps, biscuits, and chips. The manufacturer sells
to wholesalers, wholesalers supply to retailers, and then you buy from your
neighbourhood shop.
3. Three-Level Channel (Producer → Agent → Wholesaler → Retailer → Consumer)
o Example: Often seen in export-import trade. Agents help in connecting large
producers with foreign wholesalers.
(c) Modern Online Channels
Today, e-commerce has become a giant. Companies like Amazon, Flipkart, Myntra act as
distribution channels themselves. Producers can list products online and reach customers
directly without traditional retailers.
8. Importance of Choosing the Right Channel
A company must be very careful in selecting its distribution channel because:
• The right channel reduces costs.
• It increases convenience for customers.
• It ensures wide availability.
• It improves customer satisfaction.
For example, imagine if Coca-Cola decided to sell only in big malls. Would it succeed? No.
Coke is successful because it is available everywhere — from a five-star hotel to the smallest
roadside stall. That is the power of a good distribution channel.
9. Connecting WOM and Distribution
Here’s the interesting part: word of mouth and distribution go hand in hand.
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If WOM creates excitement for a product but the product is not available nearby, customers
will be disappointed. Similarly, if a product is available everywhere but no one talks about it,
sales will remain low.
So, successful marketing ensures:
1. People hear about the product (through WOM and other methods).
2. People find the product easily (through proper distribution channels).
10. Another Short Story: The Pen That Everyone Wanted
A few years ago, a company launched a simple pen that could write smoothly without
smudging. Students loved it and told their classmates, “This pen is the best for exams.”
Soon, word of mouth spread across schools.
But here’s the twist: the company had wisely planned its distribution. They had already
supplied these pens to every stationery shop near schools and colleges. So, when students
wanted to buy, the pen was always available. Sales shot up, and the brand became a leader.
If the distribution hadn’t been ready, the excitement would have died quickly.
Conclusion
To sum up:
• Word of Mouth is the natural, trustworthy, and cost-effective way of promoting
products. It spreads like fire and builds long-lasting trust and loyalty.
• Channels of Distribution are the routes that ensure products are available where and
when customers need them. They can be direct, indirect, or online.
Marketing success is like a bicycle — one wheel is WOM (creating demand), and the other is
distribution (fulfilling demand). Only when both wheels move together smoothly can the
journey of business run fast and far.
8. Explain the advertising and its features. How it is different from sales promotion and
personal selling? How it is important?
Ans: Advertising and Its Importance
Imagine you are walking through a busy market street. On your left, a colourful hoarding of
a new chocolate brand shines with the tagline: “A bite of happiness in every square.” On
your right, a digital screen flashes an ad of the latest smartphone, showing a boy clicking
bright selfies. Without saying a single word to you directly, these products are already
whispering: “Try me once, I will make your life better.”
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That, my friend, is advertising—a magical way of talking to thousands or even millions of
people at the same time, without physically being there.
Advertising is not just about selling products; it is about creating awareness, shaping
perceptions, and building trust in the minds of people. It is like the personality of a
product—through advertising, a product does not remain just a product; it becomes a
brand.
Meaning of Advertising
Advertising can be defined as a paid, non-personal form of communication by an identified
sponsor, done through various media such as TV, radio, newspapers, magazines, hoardings,
or digital platforms.
In simple words:
• A company pays money.
• It sends a message about its product/service.
• The message reaches a large number of people at the same time.
For example, when Coca-Cola shows an ad during the cricket World Cup, it is not talking to
one person. It is sending its message to millions of viewers sitting in different cities and
countries.
Features of Advertising
To understand advertising more deeply, let’s list out its main features in a student-friendly
way:
1. Paid Form of Communication
o Advertising is never free. A company must spend money to publish an ad in
newspapers, to show it on TV, or to display it on YouTube.
o For example, if Nike wants to display a 30-second ad during a football match, it
pays lakhs or even crores for those few seconds.
2. Non-Personal in Nature
o Unlike a shopkeeper who speaks to you face-to-face, advertising talks to you
from a distance.
o It doesn’t know you personally, but it reaches thousands or millions at once.
3. Identified Sponsor
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o Every advertisement has a clear sender. We always know who is behind the ad.
For example, when we see a toothpaste ad saying “Keeps your teeth 100%
cavity-free,” we know it’s from Colgate or Pepsodent.
4. Mass Communication
o Advertising communicates with the masses. Whether you are rich or poor,
young or old, male or female, the same TV ad can reach everyone sitting in
front of the screen.
5. Persuasive Nature
o The main purpose of advertising is persuasion. It wants to change your thinking
from “I don’t need this” to “Maybe I should try this once.”
6. Use of Various Media
o Advertising uses multiple platforms: newspapers, magazines, radio, TV,
cinema, internet, social media, posters, and even buses or trains.
7. Creates Brand Image
o Through consistent ads, a product becomes a brand. For example, Apple
doesn’t just sell phones; it sells the image of premium, stylish, innovative
lifestyle.
A Short Story to Understand Advertising Better
Long ago, in a small town, there was a baker named Raghav. He made delicious cakes, but
only a few people knew about them. He depended only on word-of-mouth. Then, one day,
his son suggested printing small posters saying, “Raghav’s Cakes—Taste the Sweetness of
Love” and sticking them around the town. Slowly, more people came to try the cakes.
The posters worked like an advertisement—they spread the word, created curiosity, and
convinced new people to try the cakes. Raghav’s shop became popular, and soon he was
known as the best baker in town.
Moral of the story? Even a small, simple advertisement can change the destiny of a
business.
Advertising vs Sales Promotion vs Personal Selling
Many students get confused between these three terms. Let’s make it very simple with a
comparison:
1. Advertising
• Nature: Paid, non-personal, mass communication.
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• Purpose: To build awareness and long-term brand image.
• Example: A TV ad of Surf Excel saying “Daag Ache Hain.”
2. Sales Promotion
• Nature: Short-term incentives or schemes.
• Purpose: To boost immediate sales quickly.
• Example: Buy 1 Get 1 Free on Lays chips, 20% discount on Flipkart during Big Billion
Days.
3. Personal Selling
• Nature: Face-to-face, personal communication.
• Purpose: To persuade an individual buyer directly.
• Example: A salesperson at a car showroom convincing you to buy a new model.
In short:
• Advertising is like shouting from the rooftop to tell everyone about your product.
• Sales Promotion is like giving chocolates to attract people quickly.
• Personal Selling is like having a personal conversation to convince you.
Importance of Advertising
Advertising is not just important for companies—it is equally important for customers,
society, and the economy. Let’s see why:
1. For Business Firms
• Creates Brand Awareness: Without advertising, even the best product may remain
unknown.
• Boosts Sales: More people know about it, more people buy it.
• Competitive Advantage: Helps a company stand out from its rivals.
• Long-Term Brand Loyalty: Repeated advertising builds trust.
2. For Customers
• Information Provider: Customers learn about new products, features, prices, and
availability.
• Comparison Made Easy: Helps customers compare between brands.
• Improves Lifestyle: Encourages people to try modern, innovative products.
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3. For Society
• Employment Creation: Advertising agencies, designers, models, and media houses—
all get work.
• Supports Media Industry: Newspapers, TV channels, and online platforms earn
money through ads.
• Promotes Social Messages: Many ads spread awareness about health, cleanliness,
education, and safety (e.g., “Swachh Bharat,” “Quit Smoking” campaigns).
Another Quick Story
When India launched the “Pulse Polio” campaign, many rural people did not understand its
importance. But when they saw famous film stars like Amitabh Bachchan repeatedly saying
“Do Boond Zindagi Ke” on TV and radio, they became aware and started giving polio drops
to their children.
This is a shining example of how advertising is not only about products but also about saving
lives and changing society.
Conclusion
Advertising is like a bridge between producers and consumers. It introduces new products,
explains their benefits, and creates a bond between brands and people. While sales
promotion gives a quick push and personal selling works one-to-one, advertising builds a
long-lasting image in the minds of millions at once.
In today’s fast-changing world, where people are surrounded by hundreds of choices,
advertising is not a luxury—it is a necessity. Without it, even the best product will remain
hidden in darkness, just like Raghav’s cakes before he printed those posters.
Thus, advertising is not only important for selling products, but also for educating
customers, shaping lifestyles, and even guiding social change.
“This paper has been carefully prepared for educational purposes. If you notice any mistakes or
have suggestions, feel free to share your feedback.”
