SUGGESTED ANSWER

CAP II MARKETING JUNE, 2013

Roll No.
Total No. of Questions - 5
Time Allowed 1.5 Hours

Maximum Marks 50
Total No. of Printed Pages - 1
Marks

Section -'B'
6. Read the following case carefully and answer the questions given below:
The Bata Shoe Organization (BSO) was founded by Tomas Bata on 24 August 1894
in Czech Republic (former Czechoslovakia). Over the years, Bata has established
itself globally and operates more than 4600 retail stores in over 50 countries including
Nepal. Bata is estimated to serve one million customers each day and employs more
than 40000 people. It has sold more than 15 billion pairs of shoes more than the
number of people who have walked the earth during this time. If all the shoes sold by
Bata are laid end to end, they would extend to 12 million kilometers. The Bata pricing
in global market has nothing to do with psychological pricing as is widely believed.
The company has given emphasis on continuous product quality improvement.
According to the Marketing Director of BSO, Quality is the central of all marketing
and thus Bata shoes deserves premium price in global market in comparison to
competing brands.
a) Comment on the distribution strategy used by the BSO.
5
b) On the basis of above case, explain the marketing philosophy used by BSO.
5
Answer:
a) Comment on the distribution strategy used by the BSO.
Ans: Distribution strategy used by Bata is intensive distribution. In intensive distribution
strategy, marketers use maximum number of retailers to make the product easily accessible
and available in the target market. In the given case it is mentioned that Bata has established
itself globally and operates more than 4600 retail stores in over 50 countries including Nepal.
Operation of more than 4600 retail stores in over 50 countries means in an average there are
at least 92 retail stores in each country which clearly indicates use of intensive distribution
strategy.
b) On the basis of above case, explain the marketing philosophy used by the
organization.
Ans: On the basis of given case, marketing philosophy used by the organization is product
concept. This concept holds that customers are ready to pay reasonable price for quality
product. The main emphasis is given to quality improvement. In this case the focus of all
marketing is quality. High quality with premium price and high profit margin in the global
market indicates that the organizations marketing activities are guided by the product
concept philosophy of marketing.
7.
a) What is marketing? Briefly explain the importance of marketing to our dynamic
society of today.

(2+3=5)

b) What is marketing information system? Explain the role of decision support

system in a firms marketing information system.

(2+3=5)

Answer:
a) Marketing is a total system of business activities designed to plan, price, promote and
distribute want satisfying product to target market to achieve organizational objectives. It
includes all exchange related activities which direct the flow of goods and services from
ORK
P.T.O.

(2)
producer to consumer. Today marketing is fast growing. It is dynamic, competitive and
consumer oriented. Marketing provides value and benefits to customers, firms and the
society. A large number of people have got employment in this sector. Besides customers
supremacy, marketers fulfill social responsibilities. Economically marketing is very
important for the country.
Importance of marketing to our dynamic society can be seen from the following
points:
-creation and delivery of utility and rise in standard of living
-employment generation
-optimum utilization of resources
-revenue generation
-economic development
-poverty reduction
-globalization through marketing networks etc.
b) Basically, MIS is a structured interacting complex of persons, machines, and procedures
designed to generate an orderly flow of information collected from both internal and
external sources for use as the basis for decision making in specified areas of marketing
management.

The MIS is a carefully developed master plan for information flow.

There must be coordination among departments and individuals, including top
management, marketing research, personnel, finance, system analysts, programmers,
and computer experts.

Advance in computer technology, data copying, storage, and retrieval have been
instrumental in the growth of sophisticated MIS.
MIS consists of basically the following components
i.
Internal Records System;
ii.
Marketing Intelligence System;
iii.
Information Processing System;
iv.
Decision Support System; and
v.
Marketing Research.
The role of Decision Support System(DDS) is very important in marketing information
system because it provides ready-to-use information to the marketing decision-makers. Its
significant role in marketing information system can be viewed in the following ways
Decision Support System is a set of statistical and mathematical tools and decision
models that help the marketing managers in analyzing data gathered through the subsystems of MIS for making rational decisions.

Analytical system helps marketers to make decisions. In other words, analytical systems
allow a firm to ask, "Why did that happen?" and "What will happen if..?"
Mathematical and/or statistical tools and decision models are used to solve several
marketing problems such as media selection problems to evaluate new product
acceptance, weighing sales and pricing alternatives, and so forth.

It maintains a Data Bank which can supply required ready-to-use data to the decisionmakers whenever required.
8.
a) What is target market? Explain the evaluation criteria to select the target market
for business purpose.

(2+3=5)

b) What is packaging? Explain the features of good packaging.

(2+3=5)

ORK

(3)
Answer:
a) Target market consists of specified or identified market segments where the marketer wants
to enter for obtaining expected benefits. In other words, target markets are those groups of
people whom the firm wants to serve or wants to design product or services to meet their
needs and wants.
Selection of appropriate target market is essential for every marketing firm. This task can
be done by adopting the following evaluation criteria:

Predict demand for each segment of a product market,

Analyze competitive position of the company in each segment.
Predict segment size and profit size.
Analyze and assess the potential corporate goals and objectives in the market
segment.

b) Packaging is one of the very important parts of product development process. Most
physical products have to be packed. It is concerned with all the activities of designing and
producing the container or wrapper for a product. Properly designed packages help to
promote sale, convenience to consumers and protection to the product. It also helps to
create brand image and facilitate self service system in retail stores. The following are the
features of good packaging:
-convenient
-attractive
-economical
-protective
-communicative
-environment friendly
9.
a) Identify the components of physical distribution system and explain the
importance of transportation decision in marketing system.
b) What is pricing? Explain how price is determined under-going rate pricing
method?
Answer:

(2+3=5)
(2+3=5)

a) Physical distribution is concerned with the management of physical flow of goods from the
points of suppliers to the points of purchasers. The main objective of physical distribution
is getting the right products safely to the right places at the right time at the least possible
cost. More specifically, the objectives of physical distribution are:
a. To provide customer service;
b. To distribute goods more safely at right time;
c. to minimize the total cost; and
d. To supply goods to the right target market.
Physical distribution system consists of a set of interrelated functions with the following
elements:
i. Order Processing
ii. Inventory Management & Control
iii. Warehousing
iv. Materials handling and
v. Transportation
ORK

(4)
vi. Channel information management.
Transportation plays a significant role in marketing system in the following ways:
i. It assures regular mobility of factors of production from one place to another. It makes
continuous production possible;
ii. It facilitates distribution of goods within a short period of time i.e., it ensures quick
delivery of goods;
iii. It makes shopping of goods convenient throughout the country and the world as well;
iv. It can create adequate demand for the company' products;
v. It makes possible to link many geographically separated markets;
vi. It ensures regular supply of goods even during the period of shortages, and hence, helps
to stabilize market prices;
vii. It is the main basis of economic and social development;
viii. It discourages monopoly and promotes healthy competition by bringing together the
products of various manufacturers in the market;
ix. It ensures regular supply of the required factors of production to the industries and final
products to the market, and hence, leads to specialization in production sector;
x. It promotes both agricultural and industrial development in the country;
xi. It develops sound political relations among the countries by developing social and
cultural linkages between the countries.
b) Price is the value placed on what is exchanged. It is measured in monetary terns. It is the
act of determining the exchange value between the purchasing power and satisfaction
derived through the purchase and consumption of products. Firms are having different
objectives, policies and methods of setting prices. So price is one of the important elements
of the marketing mix that produces revenue, the other element produce costs. In most case
price is set by negotiation between buyers and sellers. Organizations have to handle prices
very carefully.
In going rate pricing, the company bases its price mainly on competitors prices. It is
competition oriented, so the company may fix same, more or less price than that of
competitors. It is useful mainly for homogeneous products. The smaller organizations
follow the leader. This method is popular as it is easy and useful where costs are difficult to
measure or competitive response is uncertain.
10. Briefly explain the following:
(52=10)
a) E-commerce
b) Sales force promotion tools
c) Labeling
d) Display advertising
e) Relationship marketing
Answer:
a) Electronic commerce, commonly known as e-commerce, is a type of marketing where buying
and selling of product or service is conducted over electronic systems such as the Internet
and other computer networks. Electronic commerce draws on technologies such as mobile
commerce, electronic funds transfer, supply chain management, Internet marketing, online
transaction processing, electronic data interchange (EDI), inventory management systems,
and automated data collection systems. Modern electronic commerce typically uses
ORK

(5)
the World Wide Web although it may encompass a wider range of technologies such as email, mobile devices, social media, and telephones as well.
Electronic commerce also consists of the exchange of data to facilitate the financing and
payment aspects of business transactions.
b) Sales Force Promotion Tools are important for sales promotion. Sales force indicates the
sales staff appointed by the manufacturers to sell manufactured products to the resellers and
customers through personal selling. They establish direct contact with the customers,
motivate them and sell the manufactured products.
Effective sales through sales force are possible when they are motivated. Dissatisfied sales
force cannot motivate the customers. Therefore, manufacturer offer sales promotion tools
directed at the sales force. Some of the sales promotion tools directed at the sales force are as
follows:
i.

Sales Contest

ii.

Bonus and Commission

iii.

Promotional Kits

iv.

Gift Items

v.

Trade Shows and Conventions

c) Label is an important feature of a product. Every physical product must carry a label, which
may be a simple tag attached to the product or an elaborately designed graphic that is part of
the package. Labels perform several functions. First, the label identifies the product or brand.
The label might also grade the product, the way vegetables are graded A, B, and C. The label
might describe the product: who made it, where it was made, when it was made, what it
contains, how it is to be used, and how to use it safely. Finally, the label might promote the
product through attractive graphics.
d) Display advertising is a Media of advertising. Under this media, goods are displayed
beautifully to assist the salesmen. It can attract the attention of the prospects and arouse their
interests. In this type of advertising, goods and the like are properly displayed in shops,
windows, fairs and exhibitions, walls, sky, electric signs etc.
Handicraft products, fashion products, and other most commonly used products are generally
displayed in the windows to attract the tourists. Some marketers arrange their store with
lighting and beautiful colors. These days' electric signs are getting popular. Electric signs can
be large permanent sign installed at the main centers of the city. They are built of steel
beams, metal sheets, plastics using bright and flashlights, animation movies, neon signs.
During the nighttime they look beautiful and attractive. Name and shape of the products are
attractively displayed in larger shape to attract the attention of the viewers.
e) Relationship marketing has the aim of building long-term relations with key parties such as,
suppliers, distributors. In return, company earns profit. It is concerned with building an
effective network of relationships with key stakeholders. Sellers offer quality products and
services for greater satisfaction of their customer at a fair price in proper time.
The relevance of relationship marketing is clear from the following facts:
Cuts down transaction cost and time.
Builds effective marketing network.
Develops mutually profitable business relationship.
Increases company profit, etc.
This new philosophy is getting popularity in the field of marketing.
ORK