Production, Marketing and Sales Management
Production and the market
This domain tests production planning, quality, productivity, inventory and the marketing mix. Production planning decides what, how much, when and with what resources; quality control checks specifications; productivity measures output per input. Marketing is broader than selling: it identifies customer needs and designs the 4 Ps - product, price, place and promotion. Channels may be direct or through wholesalers and retailers. Pricing can be cost-plus, competitive or value-based. Promotion includes advertising, personal selling, sales promotion and digital media. Sales management covers targets, territories, customer follow-up and after-sales service.
Worked example
A product reaches customers at MRP ₹200. The retailer takes a 20% margin and the wholesaler 10%, both calculated on their selling price. Manufacturer's realisation = ₹200 × (1 − 0.20) × (1 − 0.10) = ₹200 × 0.80 × 0.90 = ₹144. If unit cost is ₹120, manufacturer's margin is ₹24, or 20% of cost. A further trade discount would reduce realisation, so the price must be set after channel margins, not before.
Traps that cost marks
Do not treat marketing as advertising alone. Do not deduct both margins from ₹200 as if they were calculated on the same base. Do not ignore stock carrying cost when planning production. Do not set price without checking competitor and channel margins.