PREVIOUS YEAR SOLVED PAPERS - July 2018
- Option : B
- Explanation :
Consumer goods can be classified into four categories:
∎ Convenience Goods: These goods are demanded by customers frequently in small quantities, but they must be immediately available at easily accessible retail shops. These are low cost, highly advertised items that are designed for mass markets and are sold to all income classes. All sales promotions devices are liberally used to stimulate consumer demand. These goods have to be distributed through numerous retailers. Examples of convenience goods are daily use items like soaps, detergents, biscuits, cosmetics and so on.
Because most retail stores sell only a small volume of the total output of a convenience good, it is not economical for the manufacturer to sell directly to all retail outlets. Instead, the manufacturer depends on distributors or retailers to sell the product to the consumers. Intensive distribution is required for convenience goods.
∎ Shopping Goods: A tangible product for which consumers want to compare quality, price, and perhaps style in several stores before making a purchase is considered a shopping goods. These products need search efforts and special visits to central markets, there are not urgent purchases and buyers can postpone buying according to their convenience. They need not have numerous retail outlets. Buyers want to shop around and select goods after comparing quality, terms, style, price, services and so on. Examples of shopping goods are furniture, jewellery, fashion goods, appliances, automobiles.
As fewer retailers are required, and retail stores typically buy shopping goods in large quantities, it is common for manufacturers to use short channels of distribution. Usually they sell directly to retailers.
∎ Speciality Goods: A tangible product, for which consumers have a strong brand preference, and are willing to spend substantial time and effort in locating the desired brand is called a speciality good. They are goods with unique features. They demand special shopping efforts. They are sold in speciality shops. Buyers develop brand preferences and make special efforts to buy it. It should be noted that in the modern marketing environment, there is a thin line of difference between shopping and speciality goods.
Examples of speciality goods can be desired brands of expensive designer clothes (clothes designed by leading designers like J.J. Vallaya or Ritu Beri), expensive sound systems and so on. The most important feature of speciality goods is that consumers insist on a particular brand and are willing to spend considerable effort to find it. Like shopping goods, few retail stores are required to sell speciality goods. Manufacturers may follow exclusive distribution policy for selling speciality goods i.e., opening their own exclusive stores or selling franchise of exclusive stores.
∎ Unsought Goods: An unsought good is a new product that the consumer is not yet aware of or he is aware of that product but does not want it at this moment. An example of unsought goods can be a new product to be launched in the market which does not have a ready demand. Another example is personal insurance. Personal selling combined with advertising is the best strategy to sell unsought goods.
38. When a company treats each single customer as a separate segment, this is called:
- Option : D
- Explanation : Each segment should be large enough to be profitable. Procter & Gamble found a segment of candy consumers that wants a low-calorie product. However, it is too small to justify the investment a line of confections would require. In concept, management could treat each single customer as a separate segment. Actually, this situation, called micromarketing.
39. Under which of the following conditions, the level of consumer’s involvement will not be high?
- Option : B
- Explanation : A significant factor influencing how consumer decisions are made is the consumer’s level of involvement, reflected in the amount of effort that is expended in satisfying a need. Some situations are high involvement. That is, when a need arises a consumer decides to actively collect and evaluate information about the purchase situation. These purchases entail all five stages of the buying-decision process.
Although it is risky to generalize because consumers are so different, involvement tends to be greater under any of the following conditions:
∎ The consumer lacks information about alternatives for satisfying the need.
∎ The consumer considers the amount of money involved to be large.
∎ The product has considerable social importance.
∎ The product is seen as having a potential for providing significant benefits.
- Option : D
- Explanation : Product-Orientation Stage: Firms with a product orientation typically focus on the quality and quantity of offerings while assuming that customers will seek out and buy reasonably priced, well-made products. This mindset is commonly associated with a long-ago era when the demand for goods generally exceeded the supply, and the primary focus in business was to efficiently produce large quantities of products. Finding the customers was viewed as a relatively minor function.
