AMK 01 Solved Assignment 2022 – 23 (IGNOU)


IGNOU B.Com Free Solved Assignment 2022 – 23

Marketing AMK 01 Solved Assignment 2022 – 23




Maximum Marks: 100

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AMK 01 Solved Assignment 2022 - 23

Attempt all the questions.

1. What do you mean by market segmentation? Explain the importance of market segmentation. (20)

Ans: Marketing Segmentation

A market consists of large number of individual customers who differ in terms of their needs, preferences and buying capacity. Therefore, it becomes necessary to divide the total market into different segments or homogeneous customer groups. Such division is called market segmentation. They may have uniformity in employment patterns, educational qualifications, economic status, preferences, etc. Market segmentation enables the entrepreneur to match his marketing efforts to the requirements of the target market. Instead of wasting his efforts in trying to sell to all types of customers, a small scale unit can focus its efforts on the segment most appropriate to its market. It is defined as “The strategy of dividing the market in order to consume them”.

According to Philip Kotler, “It is the subdividing of market into homogenous subsets of consumers where any subset may be selected as a market target to be reached with distinct Marketing Mix”

According to Philip Kotler, market segmentation means “the act of dividing a market into distinct groups of buyers who might require separate products and/or marketing mixes.

According to William J. Stanton, “Market segmentation in the process of dividing the total heterogeneous market for a good or service into several segments. Each of which tends to be homogeneous in all significant aspects.

Advantages / Importance / Significance of Market Segmentation:

The purpose of segmentation is to determine the differences among the purchases which may affect the choice of the market area and marketing strategies. Following are some of the benefits of marketing segmentation.

1) Facilitates consumer-oriented marketing: Market segmentation facilitates formation of marketing-mix which is more specific and useful for achieving marketing objectives. Segment-wise approach is better and effective as compared to integrated approach for the whole market.

2) Facilitates introduction of suitable marketing mix: Market segmentation enables a producer to understand the needs of consumers, their behavior and expectations as information is collected segment-wise in an accurate manner. Such information is purposefully usable. Decisions regarding Four Ps based on such information are always effective and beneficial to consumers and the producers.

3) Facilitates introduction of effective product strategy: Due to market segmentation, product development is compatible with consumer needs as there is effective crystallization of the specific needs of the buyers in the target market. Market segmentation facilitates the matching of products with consumer needs. This gives satisfaction to consumers and higher sales and profit to the marketing firm.

4) Facilitates the selection of promising markets: Market segmentation facilitates the identification of those sub-markets which can be served best with limited resources by the firm. A firm can concentrate efforts on most productive/ profitable segments of the total market due to segmentation technique. Thus market segmentation facilitates the selection of the most suitable market.

5) Facilitates exploitation of better marketing opportunities: Market segmentation helps to identify promising market opportunities. It helps the marketing man to distinguish one customer group from another within a given market. This enables him to decide his target market. It also enables the marketer to utilize the available marketing resources effectively as the exact target group is identified at the initial stage only.

6) Facilitates selection of proper marketing programme: Market segmentation helps the marketing man to develop his marketing mix programme on a reliable base as adequate information about the needs of consumers in the target market is available. The buyers are introduced to marketing programme which is as per their needs and expectations.

7) Provides proper direction to marketing efforts: Market segmentation is rightly described as the strategy of “dividing the markets in order to conquer them”. Due to segmentation, a firm can avoid the markets which are unprofitable and irrelevant for its marketing purpose and concentrate on certain promising segments only. Thus due to market segmentation, marketing efforts are given one clear direction for achieving marketing objectives.

8) Facilitates effective advertising: Advertising media can be more effectively used because only the media that reach the segments can be employed. It makes advertising result oriented.

9) Provides special benefits to small firms: Market segmentation offers special benefits to small firms. The resources available with them are limited as they are comparatively new in the market. Such firms can select only suitable market segment and concentrate all efforts within that segment only for better marketing performance. Such firms can compete even with large firms by offering personal services to customers within the segment selected.

10) Facilitates optimum use of resources: Market segmentation facilitates efficient use of available resources. It enables a marketing firm to use its marketing resources in the most efficient manner in the selected target market. The marketing firm selects the most promising market segment and concentrates all attention on that segment only. This offers best results to the firm in terms of sale, profit and consumer support as compared to the results available from spending such resources on the total market.

In conclusion, it can be said that market segmentation offers benefits not only to marketing firms but also to customers. The marketing job will be conducted efficiently and the available resources will be utilised in a better mariner. These advantages also suggest the importance of market segmentation and make a case in its favour.

2. What is product life cycle? Discuss the various stages in the life cycle of a product.    (20)

Ans: Product Life Cycle

A product is like a human being. It is born, grows up fast, matures and then finally passes away. Product life cycle is the stages through which a product or its category bypass. From its introduction to the marketing, growth, maturity to its decline or reduce in demand in the market. Not all products reach this final stage, some continue to grow and some rise and fall. In short, The PLC discusses the stages which a product has to go through since the day of its birth to the day it is taken away from the market.

However, the basic difference in case of human beings and products is that a product has to be killed by someone. Either the company (to bring better products) or by competition (too much external competition). There are several products in the market which have lived on since ages (Light Bulbs, Tube lights), whereas there are others which were immediately taken off the shelf (HD DVD).

Thus the Product life cycle deals with four stages of a products life.

Stages of Product life cycle:

A) Introduction: The stage 1 is where the product is launched. A product launch is always risky. You never know how the market will receive the product. There have been numerous failures in the past to make marketers nervous during the launch of the product. The length of the introduction stage varies according to the product.

If the product is technological and receives acceptance in the market, it may come out of the introductory phase as soon as it is launched. Whereas if the product is of a different category altogether and needs market awareness, it may take time to launch.

Characteristics of Introductory stages of Product life cycle

Ø Higher investment, lesser profits

Ø Minimal Competition

Ø Company tries to Induce acceptance and gain initial distribution

Ø Company needs Promotions targeted towards customers to increase awareness and demand for product

Ø Company needs Promotions targeted towards channel to increase confidence in the product

B) Growth: Once the introductory phases are over, the product starts showing better returns on investment. Your customers and channels begin responding. There is better demand in the market and slowly the product starts showing profits.

This is a stage where competition may step in to squash the product before it has completely launched. Any marketing mistakes done at this stage affect the product considerably as the product is being exposed to the market and bad news travels fast. Thus special care has to be taken in this stage to ensure competition or bad decisions do not affect the growth stage of the product.

Characteristics of Growth stage of Product life cycle

Ø Product is successfully launched

Ø Demand increases

Ø Distribution increases

Ø Competition intensifies

Ø Company might introduce secondary products or support services.

Ø Better revenue generation and ROI

C) Maturity stage: One of the problems associated with maturity stages in a technologically advanced environment is the problem of duplication. Not only is the product available in duplicate markets, but also there are several competing products which arise with the same features and capabilities. As a result, the USP’s of the product become less attractive.

Along with competition, Penetration pricing becomes a weapon for competitors. Competitors sell products with the same features at lesser prices thereby trying to penetrate in the market. Nonetheless, The sales of a product (especially sales from return customers) is at its peak point during the maturity stages. The growth of sales may be lesser, but the sales revenue of the organization is maximum during the maturity stage of product life cycle.

Characteristics of Maturity stages of Product life cycle

Ø Competition is high

Ø Product is established and promotion expenditures are less

Ø Little growth potential for the product

Ø Penetration pricing, and lower profit margins

Ø The major focus is towards extending the life cycle and maintaining market share

Ø Converting customer’s product to your own is a major challenge in maturity stage

D) Decline: 1 product, 10 competitors, minimum profits, huge amount of manpower and resources in use – A typical scenario which a product might face in its last stage. In this stage the expenditures begin to equal the profits or worse, expenses are more than profits.

Thus it becomes a typical scenario for the product to exit the market. It also becomes advantageous for the company as the company can use resources it was spending on the declining product on an altogether different project.Characteristics of Decline stages of Product life cycle

Ø Market is saturated

Ø Sales and profits decline

Ø Company becomes cost conscious

Ø A lot of resources are blocked in rejuvenating the dead product.

3. Write short notes on the following:           (4×5)

(a) Consumer Behavior.

Ans: Consumer Behaviour

Behaviour is a mirror in which everyone shows his or her image. Behaviour is the process of responding to a thing or event. Consumer behavior is to do with the activities of individual in obtaining and using the good and services. The term consumer behaviour is defined as the behaviour that consumer display in searching for, purchasing using, evaluating and disposing of products and services that they expect will satisfy their needs.

In the words of Kotler,” Consumer   behaviour   is   the study   of   how   people   buy, what they buy, when they buy and why they buy.”

Characteristics of consumer behavior are:

a)      Consumer behavior is the part of human behavior. This cannot be separated. Human behavior decides what to buy, when to buy etc. This is unpredictable in nature. Based on the past behavioral pattern one can at least estimate like the past he might behave.

b)      Learning the consumer is difficult and complex as it involves the study of human beings. Each individual behaves differently when he is placed at different situations. Every day is a lesson from each and every individual while we learn the consumer behavior. Today one may purchase a product because of its smell, tomorrow it may vary and he will purchase another due to some another reason.

c)       Consumer behavior is dynamic. A consumer’s behavior is always changing in nature. The taste and preference of the people vary. According to that consumers behave differently. As the modern world changes the consumer’s behaving pattern also changes.

d)      Consumer behavior is influenced by psychological, social and physical factors. A consumer may be loyal with a product due to its status values. Another may stick with a product due to its economy in price. Understanding these factors by a marketer is crucial before placing the product to the consumers.

(b) Trade Promotion.

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(c) Ware housing.

Ans: Warehousing:Warehousing or storage is an act of storing and assorting the financial goods so as to create maximum time utility at minimum cost. Warehousing covers two sub functions namely, movement and storage of finished goods. Movement refers to the actual receipt of products from the manufacturing centre or centers, their transfer into warehouse and stocking at designated place, assorting according to customer orders and transferring them to common carriers on their way to consumers. The storage function in mainly concerned with holding and carrying the goods from the time they are placed in and till they are placed out in common carriers. It is mainly a safety and preservative function.

(d) Services.

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4. Differentiate between the following:            (4×5)

(a) Publicity and Advertisement.

Ans: Distinguish between advertising and publicity.     





The activity of generating advertisements of products and services to commercialize them is known as Advertising.

The activity of providing information about an entity, i.e. a product, an individual or a company to make it popular is known as Publicity.

Given by

It is done by company and its representative.

It is done by third party.


It is a paid form of communication.

It is unpaid form of communication.

Credibility and reliability

Credibility and reliability is more as compared to publicity.

 Credibility and reliability is less.


There is complete control over advertisement.

There is no control over publicity.

(b) Selective Distribution and exclusive distribution.

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(c) Broker and Commission agent.

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(d) Retailer and Wholesaler.

Ans: Difference between Wholesaler and Retailer:

1. Link:Wholesaler servers as a link between producers and retailers on the other hand, a retailer provides a link between wholesalers and consumers. Wholesaler is the first link, whereas retailer is the last link in the chain of distribution of goods.

2. Scale of operations: A wholesaler carries on business on a large scale and requires huge capital. A retailer, on the other hand, deals generally on a small scale and capital invested in retail trade in relatively small.

3. Range of goods:A wholesaler generally deals in one commodity. But a retailer deals in a large variety of goods and caters to the diverse needs of his customers.

4. Dealings:A wholesaler generally sells goods to retailers on credit. But a retailer usually sells goods to consumers on cash basis.

5. Location:A wholesaler can have a go down in a corner of the city and can supply goods there from. But the shop of a retailer needs to be located in the heart of the city to attract a large numbers of customers.

6. Profit margin:A wholesaler has not to spend money on shop decoration etc., and has a large volume of sales. Therefore, he charges a smaller margin of profit than that charged by the retailer.

5. Comment briefly on the following statement:             (4×5)

(a) Marketing is the most important activity of any business.

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(b) An effective system of physical distribution greatly helps a firm in achieving its marketing objectives.

Ans: Full answer available in our mobile application

(c) Finding an appropriate brand name for a new product is a tricky job.

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(d) When a new product is launched in the market, the manufacturer enjoys flexibility in the matter of price setting.

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