Question

(a) Explain the following functions of marketing :
(i) Customer support services
(ii) Physical distribution
OR
(b) State any four factors which affect the fixation of price of a product.

Hint:

For pricing factors, remember "CD GEM" - Cost, Demand, Government, Elasticity, Market objectives. For distribution, think "TWIO" - Transportation, Warehousing, Inventory, Order processing.

Answer 1

(a) Explanation of the Functions of Marketing:

(i) Customer Support Services:

Customer support services refer to the activities and services provided by a company to assist customers in resolving issues or obtaining maximum value from a product or service. These services play a critical role in ensuring customer satisfaction, loyalty, and retention. Some key aspects of customer support services include:

• Pre-sales Support: This involves assisting customers with product information, answering queries, and helping them choose the right product based on their needs.
• Post-sales Support: After the product is sold, companies provide support to address any issues customers may face. This includes offering maintenance services, product installation, troubleshooting, and providing warranties or guarantees.
• Customer Feedback and Assistance: Engaging with customers to gather feedback and address concerns helps in improving the product or service and enhancing customer satisfaction.

(ii) Physical Distribution:

Physical distribution is the function of marketing that involves the movement of products from the manufacturer to the end consumer. It includes various processes, such as transportation, warehousing, inventory management, and order fulfillment. The goal of physical distribution is to ensure that the product is available at the right place, at the right time, and in the right quantity. Key components of physical distribution include:

• Transportation: The physical movement of goods from one location to another. This can include road, rail, air, or sea transport, depending on the product and market.
• Warehousing: The storage of goods until they are needed for distribution. Proper warehousing ensures that the products are available when required by the customer.
• Inventory Management: The efficient management of stock levels to meet demand without overstocking or understocking, which could lead to higher costs or stockouts.
• Order Fulfillment: The process of picking, packing, and delivering orders to customers in a timely and efficient manner.

OR

(b) Four Factors Affecting the Fixation of Price of a Product:

The price of a product is determined by several factors. Below are four key factors that influence the fixation of price:

• Cost of Production: The cost of producing the product, including raw materials, labor, manufacturing, and overheads, directly affects the pricing. Companies typically aim to set a price that covers these costs and provides a reasonable profit margin.
• Demand and Supply: The basic law of demand and supply plays a crucial role in price fixation. When demand is high and supply is limited, prices tend to rise. Conversely, if supply exceeds demand, prices may fall.
• Competition: The pricing strategy of competitors also influences the price of a product. If competitors offer similar products at lower prices, a company may adjust its pricing to remain competitive in the market.
• Market Conditions: Economic conditions, such as inflation, recession, or changes in consumer purchasing power, can affect how much consumers are willing to pay for a product. During times of economic downturn, companies may lower prices to attract cost-conscious consumers.