Commercial Applications — Sample Question Bank

Both statements are correct

Reason — In common language, a market refers to a physical place like a haat, bazaar or shopping mall where buyers and sellers meet. However, in a wider sense, a market is a mechanism through which products and services are exchanged, sold and transferred — even when buyers and sellers transact through telephone, internet or other means without meeting each other. Hence both statements describe valid concepts of a market.

False

Reason — A consumers' market is a market where goods are purchased for personal consumption. The market in which goods are purchased for use in further production is called a producers' market.

Parity pricing

Reason — Under parity pricing, a business firm adjusts its own price policy to the general pricing structure in the industry. It involves charging according to what competitors are charging. Therefore, it is also known as 'going rate pricing' or competition based pricing.

No correct option is given.

Reason — During the growth stage, demand and sales grow rapidly, distribution is widened, competition increases and prices fall. Promotional expenditure remains high, though it falls as a percentage of sales turnover. Therefore, statement 3 is correct. Statement 1 is a feature of the introduction stage, statement 2 belongs to the maturity stage, and statement 4 is a feature of the decline stage. Since the given options do not include "Only 3", none of the options is fully correct.

Branding

Reason — Branding is the process of assigning a distinctive name to the product by which it is to be known and remembered. It is the process by which a product is branded.

Product advertisement

Reason — The main objective of product advertising is to promote the sale or reputation of a particular product, brand or service. It is sponsored by manufacturers, traders and other organisations to promote the uses, features, benefits and image of their products and services.

Reduced customer loyalty

Reason — Post-sale follow-up helps the salesperson check whether the product is working to the satisfaction of the customer and helps win the trust and faith of the customer. Failing to follow up makes the customer feel ignored, which reduces customer loyalty and hurts repeat sales.

Post-sale follow-up

Reason — The seven steps of personal selling are — Preparation, Prospecting, Approach, Presentation, Convincing, Closing the Sale and Post-sale Follow-up. Hence, post-sale follow-up is the last step.

Narrow, wider

Reason — Book-keeping is concerned only with identifying, measuring, recording and classifying financial transactions, so its scope is narrow. Accounting, on the other hand, is a wider term as it also includes summarising, interpreting and communicating the recorded information to interested parties.

Book keeping, accounting

Reason — Book-keeping is the art of recording financial transactions in the books of accounts in a regular and systematic manner. Accounting is the art and science of recording, classifying and summarising of financial transactions and interpreting the results thereof.