NCERT Solutions for Class 12 Business Studies Business Studies II Chapter 2: Marketing

Chapter at a glance

Exercises – Very Short Answer Type

Question VSA – Q1

State any two advantages of branding to marketers of goods and services.

Answer

1. Helps in product differentiation – a brand distinguishes the firm’s product from competitors’.
2. Helps in advertising and display – a brand can be advertised; without one, advertising would help competitors too. (Also: differential pricing, ease in introducing new products.)

It differentiates the product from competitors’ and makes advertising and display possible (also helps differential pricing and new product launches).

Question VSA – Q2

How does branding help in differential pricing?

Answer

Once customers become loyal to a brand and associate it with quality, they are willing to pay a higher price for it than for similar unbranded or competing products. So the firm can charge a different (higher) price for its branded product.

Brand loyalty makes customers willing to pay a higher price than for competing products, allowing the firm to charge a premium.

Question VSA – Q3

What is the societal concept of marketing?

Answer

The societal marketing concept holds that a business should satisfy the needs of customers profitably while also taking care of the long-term well-being of society – avoiding pollution, wastage of resources and harmful products, and taking care of social and ethical concerns.

Satisfying customers profitably while also protecting the long-term interests and well-being of society.

Question VSA – Q4

Enlist the advantages of packaging of consumer products.

Answer

1. Protection of the product from damage, spoilage and leakage.
2. Convenience in handling, use and storage.
3. Product identification – distinctive packages are easily recognised.
4. Promotion – an attractive package acts as a “silent salesman”.
5. Rising standards of health and sanitation – sealed packages prevent adulteration.
6. Self-service outlets – packaging helps sell goods without salespeople.
7. Innovation opportunity and product differentiation.

Protection, convenience, identification, promotion (silent salesman), hygiene, help in self-service selling and product differentiation.

Question VSA – Q5

List five shopping products purchased by you or your family during the last few months.

Answer

Shopping products are bought after comparing quality, price and style across stores:

1. Clothes/garments
2. Footwear
3. Mobile phone
4. Furniture
5. Refrigerator/television (consumer durables)

Clothes, footwear, mobile phone, furniture and a refrigerator/TV.

Question VSA – Q6

A marketer of colour TV having 20% of the current market share of the country aims at enhancing the market share to 50 per cent in next three years. For achieving this objective he specified an action programme. Name the function of marketing being discussed above.

Answer

Marketing planning – setting marketing objectives (raising market share) and specifying an action programme to achieve them.

Marketing planning.

Exercises – Short Answer Type

Question SA – Q1

What is marketing? What functions does it perform in the process of exchange of goods and services? Explain.

Answer

Marketing is a social process by which individuals and groups obtain what they need and want through creating, offering and freely exchanging products and services of value with others. Its focus is on satisfying customers’ needs.

Functions

1. Gathering and analysing market information – identifying customers’ needs and opportunities.
2. Marketing planning – setting marketing objectives and action plans.
3. Product designing and development – making attractive, useful products.
4. Standardisation and grading – uniform quality; classifying products by quality.
5. Packaging and labelling – protecting, identifying and promoting products.
6. Branding – distinguishing products.
7. Customer support services – after-sales service, complaint handling, credit, maintenance.
8. Pricing – deciding the price of products.
9. Promotion – informing and persuading customers (advertising, personal selling, sales promotion, publicity).
10. Physical distribution – making products available at the right place and time.
11. Transportation and storage/warehousing.

Marketing is the social process of creating and exchanging products of value to satisfy needs; its functions include market research, planning, product design, standardisation, packaging, branding, customer support, pricing, promotion, physical distribution, transport and storage.

Question SA – Q2

Distinguish between the product concept and production concept of marketing.

Answer

The production concept focuses on availability and low cost through mass production; the product concept focuses on quality, performance and features.

Question SA – Q3

Product is a bundle of utilities. Explain.

Answer

A product is anything of value offered to a market to satisfy needs. Customers buy a product not merely for its physical features but for the benefits (utilities) it provides:

1. Functional utility – e.g. a car provides transportation.
2. Psychological utility – e.g. a luxury car provides status, prestige and a sense of achievement.
3. Social utility – e.g. belonging to a group.

A product thus includes its physical features, brand, package, after-sales service and warranty – a bundle of benefits that satisfies different needs. Marketers should design products to offer the utilities customers want.

A product is bought for the benefits it offers – functional, psychological and social – along with features, brand, package and service, so it is a bundle of utilities.

Question SA – Q4

What are industrial products? How are they different from consumer products? Explain.

Answer

Industrial products are products used as inputs for producing other products or for running a business – e.g. raw materials, machinery, tools, lubricants, spare parts, installations.

Industrial products are inputs for producing goods or running a business; unlike consumer products, they have few buyers, derived demand, direct channels, rational expert buying and close buyer–seller ties.

Question SA – Q5

Distinguish between convenience product and shopping product.

Answer

Convenience products (soap, bread) are cheap, bought often with little effort and widely available; shopping products (clothes, furniture) are costlier, bought occasionally after comparing quality and price.

Question SA – Q6

Describe the functions of labelling in the marketing of products.

Answer

1. Describe the product and specify its contents – ingredients, usage, cautions.
2. Identification of the product or brand – name, brand.
3. Grading of products – into different grades by features or quality (e.g. red, yellow, green label tea).
4. Help in promotion of products – attractive labels persuade customers.
5. Providing information required by law – e.g. statutory warning on cigarette packs, maximum retail price, net weight, date of manufacture and expiry, batch number, manufacturer’s name and address, FSSAI licence.

Labelling describes the product, identifies the brand, grades the product, helps promotion and provides information required by law.

Question SA – Q7

Discuss the role of intermediaries in the distribution of consumer non-durable products.

Answer

Consumer non-durables (soap, toothpaste, biscuits, tea) are bought frequently, in small quantities, by millions of customers spread over wide areas. Intermediaries – distributors, wholesalers and retailers – play a key role:

1. Sorting and accumulation – collecting goods from producers and grading them.
2. Breaking bulk – dividing large quantities into small lots for retailers and consumers.
3. Assortment – offering a variety of products at one place.
4. Product promotion – displays, advice, point-of-sale promotion.
5. Negotiation of price and terms.
6. Risk taking – bearing the risk of spoilage, theft and price fall.
7. Storage and transportation – making goods available at the right place and time.
8. Financing – providing credit to retailers.

Without intermediaries, producers would find it very costly to reach every consumer.

Intermediaries collect, sort, break bulk, assort, store, transport, promote, negotiate, finance and bear risk, making frequently bought non-durables available to millions of consumers at low cost.

Question SA – Q8

Define advertising. What are its main features? Explain.

Answer

Advertising is an impersonal form of communication, paid for by an identified sponsor, to promote ideas, goods or services.

Features

1. Paid form – the sponsor pays for the communication.
2. Impersonality – no direct face-to-face contact with prospects; it is a monologue.
3. Identified sponsor – the advertiser is a known firm or individual.
4. Uses mass media – newspapers, TV, radio, internet, hoardings.
5. Persuasive – aims at influencing buying behaviour.

Advertising is a paid, impersonal communication by an identified sponsor to promote ideas, goods or services, using mass media to persuade buyers.

Question SA – Q9

Discuss the role of ‘sales promotion’ as an element of promotion mix.

Answer

Sales promotion means short-term incentives to encourage the purchase or sale of a product.

Role

1. Attention value – incentives attract attention.
2. Useful in introducing new products – samples and offers induce trial.
3. Synergy in total promotional efforts – supports advertising and personal selling.
4. Increases sales quickly – in the short term.
5. Clears stock – helps sell off slow-moving goods.

Techniques: rebates, discounts, refunds, product combinations (buy one get one), quantity gifts, instant draws and assigned gifts, lucky draws, usable benefits, full-finance at 0 %, sampling, contests.

(Limitations: overuse may suggest poor quality; it may spoil the brand image.)

Sales promotion offers short-term incentives (discounts, free gifts, samples, contests) that attract attention, help introduce new products, boost and clear sales quickly, and support advertising and personal selling.

Question SA – Q10

As the marketing manager of a big hotel located at an important tourist destination, what societal concerns would be faced by you and what steps would you plan to take care of these concerns? Discuss.

Answer

Societal concerns

1. Environmental pollution – waste, plastic, sewage, noise.
2. Overuse of water and energy in a tourist region.
3. Damage to local culture and heritage.
4. Safety and security of guests and local people.
5. Fair treatment of local community and employees.
6. Food safety and hygiene.

Steps

1. Waste management – segregation, recycling, ban on single-use plastic, sewage treatment.
2. Water and energy conservation – rainwater harvesting, solar power, efficient appliances, linen-reuse programme.
3. Respect local culture – promote local art, cuisine and handicrafts; educate guests.
4. Employ local people and support local suppliers.
5. Ensure safety – fire safety, security systems.
6. Maintain hygiene and food safety standards (FSSAI).
7. Community programmes – cleanliness drives, CSR activities.

Concerns: pollution, water and energy use, harm to local culture, safety, hygiene and fairness to locals. Steps: waste management, conservation, promoting local culture and employment, safety and hygiene standards, and community/CSR programmes.

Question SA – Q11

What information is generally placed on the package of a food product? Design a label for one of the food products of your choice.

Answer

Information on a food package

• Name of the product and brand.
• List of ingredients.
• Net weight/quantity.
• Nutritional information.
• Veg/non-veg symbol.
• Date of manufacture/packing and “best before”/expiry date.
• Batch number and maximum retail price (incl. of all taxes).
• Manufacturer’s name and address.
• FSSAI licence number.
• Directions for storage/use.
• Allergen information and customer care details.

Sample label – “SunGold Whole Wheat Biscuits”

A food label shows the brand and product, ingredients, net weight, nutrition facts, veg/non-veg mark, dates, batch number, MRP, manufacturer, FSSAI number, storage directions, allergens and customer care – as in the SunGold biscuit label.

Question SA – Q12

For buyers of consumer durable products, what ‘customer care services’ would you plan as a manager of a firm marketing new brand of motorcycle. Discuss.

Answer

1. Pre-sale services – test rides, product demonstrations, guidance on models and finance options.
2. Easy finance – tie-ups with banks for loans and EMIs; exchange offers.
3. Warranty and guarantee – e.g. 5-year warranty on engine, free first few services.
4. After-sales service network – authorised service centres in all towns; trained mechanics.
5. Availability of genuine spare parts at fair prices.
6. Roadside assistance – 24×7 helpline and breakdown service.
7. Complaint handling – toll-free number, online portal, quick redressal.
8. Service reminders and pick-up and drop facility.
9. Insurance and registration support.
10. Customer feedback and loyalty programmes – rider clubs, discounts on accessories.

Test rides and guidance, easy finance, warranty and free services, a wide service network with genuine spares, 24×7 roadside assistance, quick complaint handling, service reminders and pick-up, insurance help and loyalty programmes.

Exercises – Long Answer Type

Question LA – Q1

What is marketing concept? How does it help in the effective marketing of goods and services.

Answer

The marketing concept holds that the key to achieving organisational goals is identifying the needs and wants of the target market and satisfying them better than competitors. The focus shifts from the product to the customer.

Pillars

1. Identification of the market (target market).
2. Understanding the needs and wants of customers in it.
3. Developing products/services to satisfy those needs.
4. Satisfying needs better than competitors.
5. Doing so profitably – profit through customer satisfaction.

How it helps effective marketing

• Products are made as per customers’ needs, so they sell easily.
• Customer satisfaction builds loyalty and repeat purchases.
• Gives competitive advantage.
• Integrated marketing efforts – all departments work towards satisfying customers.
• Leads to long-term profitability and growth.
• Helps identify new opportunities.

The marketing concept means identifying the target market’s needs and satisfying them better than competitors, profitably; it ensures products sell, builds loyalty and competitive advantage, integrates efforts and brings long-term profits.

Question LA – Q2

What is marketing mix? What are its main elements? Explain.

Answer

Marketing mix is the set of marketing tools that a firm uses to pursue its marketing objectives in the target market. It consists of the 4 Ps:

1. Product – goods or services offered to the market: features, quality, branding, packaging, labelling, after-sales service. Product decisions include design, variety and brand.
2. Price – the amount of money customers pay. Decisions include pricing objectives, price level, discounts and credit terms, considering cost, demand and competition.
3. Place (physical distribution) – activities that make products available to customers: channels of distribution and physical movement (order processing, transportation, warehousing, inventory control).
4. Promotion – activities that inform and persuade customers: advertising, personal selling, sales promotion and public relations.

The elements must be combined properly to suit the target market.

Marketing mix is the combination of the 4 Ps – product (features, brand, package), price (cost, demand, competition), place (channels and physical distribution) and promotion (advertising, personal selling, sales promotion, publicity).

Question LA – Q3

How does branding help in creating product differentiation? Does it help in marketing of goods and services? Explain.

Answer

Branding means giving a name, sign, symbol or design (or a combination) to a product to identify it and distinguish it from competitors’.

Product differentiation: a brand gives the product a distinct identity. Customers associate the brand with specific quality, image and benefits, which separates it from similar products in the market – e.g. Amul butter versus other butter.

Helps marketers

1. Product differentiation – controls the market for the product.
2. Helps in advertising and display – brand-based advertising.
3. Differential pricing – loyal customers pay a premium.
4. Ease in introducing new products under the same brand (brand extension).

Helps customers

1. Easy identification of products.
2. Ensures quality – consistent standards.
3. Status symbol – some brands add to social status.

So branding greatly helps the marketing of goods and services.

Branding gives a product a distinct identity linked to quality and image, setting it apart from rivals; it aids marketing through differentiation, advertising, premium pricing and easy launch of new products, and helps customers identify quality products.

Question LA – Q4

What are the factors affecting determination of the price of a product or service? Explain.

Answer

1. Product cost – total cost (fixed, variable, semi-variable) sets the minimum price; in the long run the price must cover costs.
2. Utility and demand – demand sets the upper limit; the buyer pays up to the utility derived. Elastic demand calls for lower prices.
3. Extent of competition in the market – more competition means prices are close to competitors’; less competition gives more freedom.
4. Government and legal regulations – price controls on essential goods; regulations against unfair pricing.
5. Pricing objectives – profit maximisation, obtaining market share leadership, surviving in a competitive market, attaining product quality leadership.
6. Marketing methods used – distribution system, quality of salespeople, advertising, packaging, credit facilities and customer services affect price.

Product cost, utility and demand, extent of competition, government regulations, pricing objectives and marketing methods used.

Question LA – Q5

Explain the major activities involved in the physical distribution of products.

Answer

Physical distribution covers all activities required to physically move goods from producers to customers:

1. Order processing – receiving, recording and executing orders accurately and quickly; delays cause dissatisfaction.
2. Transportation – physical movement of goods from the place of production to the place of consumption (road, rail, air, water, pipeline); it creates place utility.
3. Warehousing – storing goods until they are sold; creates time utility. Number and location of warehouses affect costs and service.
4. Inventory control – deciding the level of stock to hold; balancing the cost of holding stock against customer service. It depends on the degree of customer service, cost of carrying stock, and accuracy of demand forecasts.

Channels of distribution – direct (zero level) or indirect (one, two or three level) – carry goods through intermediaries.

Order processing, transportation, warehousing and inventory control – along with the choice of distribution channels.

Question LA – Q6

‘Expenditure on advertising is a social waste.’ Do you agree? Discuss.

Answer

Arguments that advertising is a social waste (objections)

1. Adds to cost – the cost is passed to consumers through higher prices.
2. Undermines social values – promotes materialism and creates dissatisfaction.
3. Confuses buyers – many similar claims make choice difficult.
4. Encourages sale of inferior products.
5. Some ads are in bad taste – vulgar or offensive.

Arguments against (defence)

1. Reduces per-unit cost – increased demand leads to economies of scale; prices may fall.
2. Informs consumers about new products, uses, prices – improves choice.
3. Promotes competition and better quality.
4. Raises standard of living by creating demand for better products.
5. Supports media – newspapers, TV and internet depend on advertising revenue.
6. Generates employment in advertising and related industries.

Conclusion: advertising is not a social waste if used responsibly. It plays an important informative and economic role; its abuses can be checked through self-regulation (ASCI) and law.

No – though advertising adds to cost and can mislead or encourage materialism, it informs consumers, lowers unit costs through scale economies, promotes competition and quality, supports media and creates jobs; with regulation it is not a social waste.

Question LA – Q7

Distinguish between advertising and personal selling.

Answer

Advertising is impersonal, standardised, mass-media, low cost per person and one-way; personal selling is face-to-face, tailored, flexible, costly per person, gives instant feedback and suits technical products.

Question LA – Q8

Explain the factors determining the choice of channel of distribution.

Answer

1. Product-related factors

• Industrial products (short channels) vs consumer products (longer channels).
  • Perishable products (short channels).
  • Unit value (high-value goods use short channels).
  • Technical complexity (direct, short channels).

2. Company characteristics

• Financial strength (strong firms can have their own channels).
  • Degree of control desired (short channels give more control).

3. Competitive factors – channels used by competitors.
4. Market factors
   • Size of market (large markets need more intermediaries).
   • Geographical concentration (concentrated markets can be served directly).
   • Quantity purchased (large quantities sold directly).
5. Environmental factors – economic conditions, legal constraints (e.g. sale of certain drugs only through licensed outlets).

Product factors (nature, perishability, value, complexity), company factors (finances, control), competition, market factors (size, concentration, order size) and environmental factors (economic and legal).

Question LA – Q9

Project Work: Identify a product or service for a new launch for attracting potential consumers. Prepare a project file to – (a) Advertise the product or service selected. (b) Write a Press Release for the launch of new product or service. (c) Publicity of your product as a PR tool.

Answer

Sample project – “PureSip” reusable steel water bottle with a built-in filter.

(a) Advertisement

PureSip – Every Sip, Pure and Plastic-free! Built-in carbon filter · Keeps water cold for 24 hours · Leak-proof · 750 ml food-grade steel. Say goodbye to plastic bottles – save money and the planet. Launch offer: ₹ 699 (MRP ₹ 899) – free extra filter on purchase this month! Available at leading stores and on PureSip.example · Customer care 1800-XXX-XXXX

(b) Press release

FOR IMMEDIATE RELEASE PureSip launches India’s first filter-fitted steel bottle to fight plastic waste Jaipur, 25 October 2026 – PureSip Products Pvt. Ltd. today launched the PureSip bottle, a 750 ml stainless-steel bottle with an in-built carbon filter that removes impurities from tap water. Priced at ₹ 899, with a launch price of ₹ 699, it aims to cut the use of single-use plastic bottles. “Every PureSip bottle can replace hundreds of plastic bottles a year,” said the company’s founder. The bottle is available in five colours across 200 stores and online. For media queries: media@puresip.example.

(c) Publicity as a PR tool

• Partner with schools and colleges for a “Plastic-free Campus” drive and distribute bottles to winners of eco-quizzes.
• Get news coverage of a clean-up drive at a local lake sponsored by PureSip.
• Invite influencers and journalists to a launch event; share their reviews on social media.
• Display refill stations in malls and railway stations carrying the PureSip brand.
• Publish a case study on the number of plastic bottles saved, for local newspapers.

A sample project (PureSip bottle) gives an advertisement, a press release announcing the launch, and PR/publicity activities such as eco-drives, media events, influencer reviews and refill stations.

Topic checklist

• ☒ Marketing – meaning, functions and philosophies (VSA 3, 6; SA 1, 2; LA 1)
• ☒ Marketing mix and product decisions – classification, branding, packaging, labelling (VSA 1, 2, 4, 5; SA 3–6, 11, 12; LA 2, 3)
• ☒ Price determination (LA 4)
• ☒ Physical distribution and channels (SA 7; LA 5, 8)
• ☒ Promotion – advertising, personal selling, sales promotion, PR (SA 8, 9; LA 6, 7, 9)
• ☒ Societal concerns (SA 10)

Total questions answered: 27 of 27