PREVIOUS YEAR SOLVED PAPERS - UGC NET Management July 2016

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22. Which one of the following is a potential drawback of multibranding?

  • Option : A
  • Explanation : Multibranding offers a way to establish different features and appeal to different buying motives, by introducing additional brands in the same category. A product category is a grouping of products, often at retail level, which may be substituted for each other (Colgate-Palmolive different brands of toothpaste) or which in some way supplement each other (Colgate-Palmolive pre-rinses and dental loss).
    Multibranding also allows a company to command more shell space allows the company to protect its major brand by setting up flanker or fighter brands for example, Seiko uses different brand names for its higher-priced watches (Seiko Lasalle) and lower-priced watches (Pulsar) to protect its mainstream Seiko brand Sometimes a company inherits different brand names in the process of acquiring a competitor, and each brand name has a loyal following. Thus, Electrolux, the Swedish multinational, owns a stable of acquired brand names for its appliance lines– Frigidaire, Kelvinator, Westinghouse and Zanussi. Finally, companies sometimes develop separate brand named for different regions on countries, perhaps to suit different cultures or languages. For example, Procter & Gamble dominates the US laundry detergent market with Tide, which in all its forms captures more than a 30 per cent market share. In Europe, however, P&G leads with its Ariel detergent brand.
    A major drawback of multibranding is that each brand might obtain only a small market share, and none may be very profitable. The company could end up spreading its resources over many brands instead of building a few brands to a highly profitable level.
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23. When a firm improves the quality and increases the price of a product in relation to a competitor making a price reduction, the firm is ___________ .

  • Option : A
  • Explanation : Responding to Price Changes
    For responding the Price Change, the firm needs to consider several issues: Why did the competitor change the price? Is the price change temporary or permanent? What will happen to the company's market share and profits if it does not respond? Are other competitors going to respond? Besides these issues, the company must also consider its own situation and strategy and possible customer reactions to price changes. If the company decides that effective action can and should be taken, it might make any of four responses. First, it could reduce its price to match the competitor’s price. It may decide that the market is price sensitive and that it would lose too much market share to the lower-priced competitor. Cutting the price will reduce the company’s profits in the short run. Some companies might also reduce their product quality, services, and marketing communications to retain profit margins, but this will ultimately hurt the long-run market share. The company should try to maintain quality as it cuts prices. Alternatively, the company might maintain its price but raise the perceived value of its offer. It could improve its communications, stressing the relative value of its product over that of the lower-price competitor. The firm may find it cheaper to maintain price and spend money to improve its perceived value than to cut price and operate at a lower margin, Or, the company might improve quality and increase price, moving its brand into a higher price-value position. The higher quality creates greater customer value, which justifies the higher price. In turn, the higher price preserves the company's higher margins. Finally, the company might launch a lowprice “fighting brand”—adding a lower-price item to the' line or creating a separate lower price brand. This is necessary if the particular market segment being lost is price sensitive and will not respond to arguments of higher quality.
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24. Which one of the following explains “the knowledge and courtesy of employees and their ability to convey trust and confidence”?

  • Option : D
  • Explanation : According to Zeithaml and colleagues, there are five dimensions of service:
    1. Tangibles: Appearance of physical facilities, equipment, personnel and communication materials.
    2. Reliability: Ability to perform the promised service dependably and accurately.
    3. Responsiveness: Willingness to help customers and provide prompt service.
    4. Assurances: Knowledge and courtesy of employees and their ability to convey trust and confidence.
    5. Empathy: Caring, individualized attention provided to customers.
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25. Match the items of List–I with the items of List–II :

List–IList–II
(a) Rich-media ads1. Online ads that appear between screen changes on a website, especially while a new screen is loading.
(b) Pop-ups2. Display ads that use eyecatching techniques such as float, fly, and snapback.
(c) Interstitials3. Ads that users can block through the use of applications developed by web browser providers.

  • Option : C
  • Explanation : Interstitials are online display ads that appear between screen changes on a Web site, especially while a new screen is loading. For example, visit www.marketwatch.com and you’ll probably see a 10-second ad for Visa, Verizon, Dell or another sponsor before the home page loads, Pop-ups are online ads that appear suddenly in a new window in front of the window being viewed. Such ads can multiply out of control, creating a major annoyance. As a result, Internet services and Web browser providers have developed applications that let users block most popups. But not to worry. Many advertisers have now developed pop-unders, new windows that evade pop-up blockers by appearing behind the page you’re viewing.
    Rich media ads attract and hold consumer attention better than traditional banner ads. They employ techniques such as float, fly, and snapback—animations that jump out and sail over the Web page before retreating to their original space.
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