nd

MBA 2 Year Assignment

Assignment submitted in partial fulfillment of the
requirements for the awards of the degree of Master of
Business Administration of the Manonmaniam
Sundaranar University.

DIRECTORATE OF DISTANCE AND CONTINUING

EDUCATION MANONMANIAM SUNDARANAR
UNIVERSITY
TIRUNELVELI 627 012

DRC 21 : Functional Management I

1. Explain with examples, the types of retailers.
2. Describe the role of auditing in HR Functions.

DRC 22 : Functional Management II

1. Elaborate the determinants of working capital.
2. Discuss the types of plain layout with suitable
illustration.

DRC 23 : Strategic Management

1. Elaborate the Strategic planning process.
2. Explain with the help of examples, the types of Grand
Strategies.

DRC 24 : Marketing Research

1. Marketing Research is a tool of management
Comment.
2. Explain the application of marketing research.

DRC 25 : Advertising and sales promotion

1. Narrate the problems and prospects of advertising.
2. Explain the techniques used for measuring
advertisement performance.

DRC 26 : International Marketing

1. Bring out the impact of Marketing intelligence on
Export Oriented business.

2.

Analyse the role of EXIM Bank in India.

DRC 27 : Service Marketing

1. Bring out the 7Ps of services Marketing with suitable
examples.
2. Briefly explain the marketing of hospitability services
in India.

DRM 28 : Entrepreneurship and Management of Small

Business
1. Explain the role of Entrepreneurship in the economic
development.
2. Critically evaluate the Public Distribution System
(PDS) in Tamilnadu.

DRC 21 : Functional Management I

1. Explain with examples, the types of
retailers
1. Small -Scale retailers
2. These Amy is divided into:(i) Street Stalls
(ii) Stalls in Markets or Bazaars
(iii) Co-operative Stores
(iv) Independent Shops

(v) Second-hand dealers

(vi) Hawkers & Pedlars
(i) Street Stalls-These are shops with very limited space as they are
usually constructed on any available space on a busy street, They are
usually of a permanent nature. They are owned by independent retailers
or are small partnership firms.
(ii) Stalls in Markets or Bazaars-These are small shops in specially
constructed markets such as the Crawford Market of Bombay or the New
Market of Calcutta. The space is limited.
The great advantage of such a stall is that likely buyers are always
passing by. Such stalls may be permanent or as in the case of weekly
markets in villages, temporary. These are generally owned by the sole
trader or by partnership firm.
(iii) Co-operative Stores --These may be run on a small or large-scale
basis. We shall deal with them later.
(iv) Independent Retailers or Sole Traders-These include grocers,
bakers, greengrocers, fishmongers, etc.; and those who deal in
miscellaneous articles in universal demand; such as cloth shopkeepers,
book-sellers, small stores stocking articles such as sticks, umbrellas,
boots, shoes, hats, gloves, toys, etc.
These private shopkeepers play in important part on the retail market.
Through their display and salesmanship and personal contact with the
customer they create a demand, which demand is met by selling in small
quantities as required by the customers. They even grant credit to their
customers and receive the amount by instalments. These small retail
shopkeepers are popular, and carry on a good trade in spite of large
organizations, such as department stores, competing against them
because they are in a position to give personal and detailed attention to
the wants of their customers, as they are personally acquainted with the
customers of the locality. These retail shops have to meet intense
competition in proprietary and branded articles belonging to producers
and manufacturers.
The retail shopkeeper frequently deals in perishable goods, and that is one
other reason why he is anxious to see that his turnover is rapid, so that he
may not suffer as loss through the stock getting stale.

(v) Second-hand Dealers-These usually sell books, clothes, furniture,

motor-cars, etc. and do very good business as they cater to the needs of
the majority of people who cannot afford to buy new goods. These are
owned by sole- traders or -partnership firms.
(vi) Hawkers and Pedlars-They carry a very limited stock which they
get from wholesalers or local retailers and move about from locality to
locality. They are usually found on busy street corners. The goods they sell
are generally of inferior quality and temptingly priced. As they are rarely
found again in the same spot there is no question of any guarantee given
or complaint made.
The price is seldom fixed. Fruit, toys, pens, handkerchiefs, hair-pins,
combs, etc. are the type of articles applied to a person who has a
handcart or animal for transporting and displaying his goods, while a
pedlar is one who carries the goods himself. The pedlar is usually on his
own but hawkers sometimes work in partnership.
2. Large-scale Retailers
These may be divided into:(i) Multiple or Chain Shops.
(ii) One price shops.
(iii) Co-operative Stores.
(iv) Departmental Stores.
(v) Mail Order Business.
(vi) Self-service & Supermarkets.
(vii) Auto market of the future.
(i) Multiple of Chain Shops
The multiple or chain shop system originally developed through the
success of retail shopkeepers. A Shopkeepers opens one shop which, for
example, becomes very successful, with the result that he opens a second
shop, and with the success of the second opens a third, and so on; and
thus with the increase of shops he naturally wants more capital which he
obtains by converting his organization into a limited company.

Manufacturer has also opened shops to sell their goods which could not be
marketed otherwise. In a departmental store the main idea is to
concentrate the whole business in one centre and then attempt to draw
the customers to it, but under the multiple or chain shop arrangement sin
attempt is made to approach as near the customer as possible by opening
a large number of smaller shops in different localities under a manager in
charge, and by directing the working of it through the central office or
depot. Another departure from the department stores' practice is to
specialize in a particular set of articles in which the firm has chosen to
deal, instead of playing the part of universal providers.
An advantage of this type of organization is that as these shops
concentrate on a certain line of goods dealt in on large lines purchases
can be made from manufacturers on the most advantageous terms. The
multiple shop system is the manufacturer's answer to the increasing
tendency of retailers who make either their purchases abroad, or who
ignore certain factories in preference to others.
If a manufacturer in one particular line, say, boots and shoes, wishes to
put forward his own products on retail lines, he adopts the multiple shop
system and opens shops all over the town, where the gods are offered for
sale. Here, an attempt is made to introduce personality in the shop fronts
and name boards by adopting one particular design and seeing that the
same design of shop fronts and name boards as used in the case of every
shop in every locality. By special arrangement with the landlords, the
frontal windows are also altered to the pattern selected. Thus, the
manufacturer is entirely independent both of the wholesale middleman as
well as the retail shopkeeper a deals with the consumer direct.
(ii) One Price Shops
The one price shop varies from the hawker who sells cheap toys, pens,
etc., all at the same price to the large centrally maned stores like
Woolworths of England and America which has a store in nearly every city.
In the case of a central organisation which runs a number of one price
shops, the articles are bought at the centre on a large-scale and then
distributed among its shops in various localities. In some cases the shops
are permanent while in other cases a one price shop is opened
temporarily in particular locality either to dispose of certain goods or to
catch a particular market while the demand lasts.
(iii) Co-operative Retail Stores

Just as the chain as the chain stores and the department stores were set
up to eliminate the profit of the middleman, so consumers have also set
up their own stores in order to keep the middleman's profit to themselves.
A co-operative society is formed in which members invest their capital
with the main purpose of supplying goods and services to its members at
a low price through its store.
The members also get an interest on their capital. The store is managed
by representatives of the members. Consumers' co-operatives are not
suitable for consumers of very low income levels as they would not be
able to provide the necessary capital, and consumers with high income
levels are not interested in the economies which are possible by means of
such stores. Thus these co-operatives are particularly suitable for
consumers of the lower middle- class.
Today there has been an increase in the opening of cooperative stores all
over India such as the Sahakari Bhandar in offers them generally to the
consumers at lower prices than those prevailing in other shops. In this
sense they are rendering a good service.
(iv) Departmental Stores
Many small shops sell a variety of goods but when this is done on a large
scale various departments are opened, each department selling different
types of article. Thus a large departmental store is really a number of
shops under the same management and under the same roof.
Departmental Stores are generally owned by joint stock companies.
Each department is treated as a separate unit under a separate manages
but all being centrally controlled by the General Manager and a Board of
Directors. There is also a staff Personal Manager to recruit and supervise
the large staff necessary to run such a big organisation.
(v) Mail-Order Business
These are organizations which conduct their business through the mail
and thus extend the scale of their operations by reaching out into a wider
territory. The main problem of mail order business in India consists of the
various languages prevailing in different parts of the country which makes
it difficult for the mail order business to extend outside a small local area.
They may thus have to concentrate on the major cities by conducting
their business in English as operating in different languages in different
areas might be expensive.

(vi) Self-Service Stores and Supermarkets

In the case of well-known goods sold in packages of convenient size with
trademarks or trade names, there is really no need to get any advice or
assistance from a salesman. Thus in Europe and America many retailers
have cut down the expenses of employing a large staff by providing selfservice.

2. Describe the role of auditing in HR

Functions.
Human Resource (HR) Audit is a comprehensive examination of
organizations current HR policies, systems, and procedures to evaluate
compliance with employment regulations and identify areas for
improvement. A well-executed HR Audit will reveal gap areas that can
potentially lead to costly legal disputes and governmental fines. It is
advisable to conduct an HR audit once every year. Additionally,
conducting an HR Audit after a significant change in the organization
(such as reconstruction, expansion, or deduction in force), will help to
identify the right practices and highlight functions in need of modification.
Types of HR Audit
Legal Compliance Audit: This audit ensures compliance with all
applicable federal, state, and local laws and reviews whether the current
HR policies and systems meet the legal requirements.
Comparative Audit: This audit involves comparing the current
procedures of the organization with other organizations in the market that
have proved to be successful in practice, in order to gain a competitive
advantage.
Strategic Audit: This audit involves evaluating the SWOT (Strengths,
Weakness, Opportunities and Threats) analysis of the HR processes to
ensure that they are in alignment with the organizations strategic plan.
Function-Specific: This audit focuses on specific functions in HR such as
Training, Compensation and Recruitment and helps to measure their
effectiveness in relation to long-term business goals.
Objectives of the Human Resource Audit

To review the performance of the Human Resource Department and its

relative activities in order to assess the effectiveness on the
implementation of the various policies to realize the Organizational goals.

To identify the gaps, lapses, irregularities, short-comings, in the

implementation of the Policies, procedures, practices, directives, of the
Human Resource Department and to suggest remedial actions.

To know the factors which are detrimental to the non-implementation or

wrong implementation of the planned Programmes and activities.

To suggest measures and corrective steps to rectify the mistakes,

shortcomings if any, for future guidance, and advise for effective
performance of the work of the Human Resource Department.

v To evaluate the Personnel staff and employees with reference to the

Performance Appraisal Reports and suggest suitable recommendations for
improving the efficiency of the employees.

To evaluate the job chart of the Human Resource Managers, Executives,

Administrative Officers, Executive Officers, Recruitment Officers, whether
they have implemented the directives and guidelines for effective
Management of the Human resources in their respective Departments.

Benefits of Human Resource Audit

Several benefits associated with Human Resource audit are listed below. An audit
reminds member of HR department and others its contribution, creating a more
professional image of the department among manager and specialist. The audit
helps clarify the departments role and leads to greater uniformity, especially in
the geographically scattered and decentralized HR function of large
organisations. Perhaps most important, it finds problems and ensures compliance
with a variety of laws and strategic plans in an organization.

Identifies the contribution of Human Resource department to the

organization

Improves the professional image of the Human Resource department.

Encourages greater responsibility and professionalism among member of

the Human Resource department.

Clarifies the HR departments duties and responsibilities.

Stimulates uniformity of HR policies and practices.

Finds critical HR problems.

Ensures timely compliance with legal requirements.

Reduces human resource cost through more effective Human Resource

procedure.

Creates increased acceptance of needed change in the Human Resource

department.

Requires thorough review of Human Resourcedepartments information

system.

DRC 22 : Functional
Management II
1.
Elaborate the determinants of
working capital.
A firm must have adequate working capital; it should be neither excessive
nor inadequate. Schall and Haley have rightly said, Managing current
assets require more attention than managing plant and equipment
expenditure. Mismanagement of current assets can be costly.
It is therefore, essential that proper estimates of working capital
requirements be made to run the business efficiently and profitably. There
are several factors that determine the requirements of working capital.
These determinants are briefly explained below:
(i) Nature of Business: The working capital requirements essentially
depend on the nature of business undertaken. Public utility concerns like
railways, electricity have limited need for working capital since most of
their transactions are on cash basis and they do not require large
inventories. On the other hand, trading and financial concerns have a very
less investment in fixed assets but have a considerable need for working
capital since they have to make substantial investment in current assets
like inventories and debtors/receivables. Some manufacturing businesses
like construction firms also have to invest substantially in working capital
and a nominal amount in the fixed assets. In fact, the working capital
needs of most of the manufacturing concerns fall between the two
extreme requirements of trading concerns and public utilities. Such
concerns are required to make appropriate investment in current assets
depending upon the total assets structure and other relevant variables.
(ii) Scale of Operations: Generally, greater the size of the business unit,
larger will be the working capital requirements. However, in certain cases,
even a smaller concern may need for working capital due to high
overhead charges, inefficient use of available resources etc.
(iii) Length of Production cycle: The manufacturing cycle begins with the
purchase and use of raw materials and completes with the production of
finished goods. Longer the manufacturing process, the higher will be the

working capital requirements and vice-versa. An extended manufacturing

time span means a greater deal of funds being tied-up in inventories.
iv) Rapidity of turnover: There is a high degree of correlation between the
amount of working capital and the speed with which sales are effected. A
company with a high rate of stock turnover will need lower amount of
working capital as compared to a firm having a low rate of turnover. For
instance, in case of jewellers, the turnover is quite slow. They have to
maintain a high inventory of jewellery of different types, and keeping in
mind that the movement of inventory too is slow, their working capital
needs will definitely be high.
(v) Credit Policy: The credit policies maintained by the concern with its
debtors and creditors have a significant influence on the working capital
requirements. A company allowing liberal credits to its customers may
have higher sales but will require more working capital when compared to
a company which has an efficient debt collection policy with strict credit
terms. This is so since in case of the former, a substantial amount of its
funds will get tied up in its sundry debtors. Similarly, a company enjoying
liberal credit terms from its suppliers will need lower amount of working
capital when compared with a company with no access to such liberal
credit facilities.
(vi) Business fluctuations: Most firms experience seasonal and cyclical
fluctuations in the demand for their products and services. These business
fluctuations affect the working capital requirements, especially the
temporary working capital component. For instance, a boom in the
economy will boost sales which in turn will necessitate an increase of the
firms investment in inventories and book debts. Under boom, additional
investment in fixed assets may be made by some firms to increase their
productive capacity; this will definitely require additions of working
capital.
(vii) Production Policy: A steady production policy will cause inventories to
accumulate during the slack seasons, exposing the firm to increased
inventory costs and risks. Such a policy will require higher working capital.
The production schedule may also be adjusted by curtailing the production
in the slack seasons and increasing it in the peak seasons.
(viii) Growth and expansion activities: It is difficult to precisely state the
relationship between the growth in the volume of business and the growth
in the working capital of the business. Generally, the working capital
needs of the firm increase as it grows in terms of sales or fixed assets. In

fact, for normal expansion in the volume of business, profit retention may
suffice; however for fast growing concerns, larger amounts of working
capital will be needed.
(ix) Earning capacity and Dividend policy: A firm with higher earning
capacity may generate cash profits from operations and contribute to
their working capital. Again, the firms policy to retain or distribute profits
also has a bearing on working capital. Payment of dividend consumes
cash resources and thus reduces the firms working capital to that extent.
(x) Price level changes: Generally, rising price levels require a firm to
maintain a higher amount of working capital since the same level of
current assets will now require increased investment. Of course,
immediate revision in product prices can help companies to counter the
rising price levels. However, the effects of rising prices will be different for
different companies; some will face no working capital problem while the
working capital problem of some may aggravate.
(xi) Operating Efficiency: The operating efficiency of the firm relates to the
optimum utilisation of resources at minimum costs. The use of working
capital is improved and pace of the cash cycle is accelerated with
operating efficiency. Better utilisation of resources improves profitability
and thus, helps release pressure on the working capital.
(xii) Other factors: There are several other factors that impact the working
capital requirements of a firm. They include factors like, management
ability, asset structure, credit availability etc.

2. Discuss the types of plain layout with

suitable illustration.
(A) Product or Line Layout:

Product or Line Layout is the arrangement of machines in a line (not

always straight) or a sequence in which they would be used in the process
of manufacture of the product. This type of layout is most appropriate in
case of continuous type of industries where raw materials is fed at one
end and taken out as finished product at the other end. For each type of
product a separate line of production will have to be maintained.
This type of layout is most suitable in case of metal extraction industry,
chemical industry, soap manufacturing industry, sugar industry and

electric industry. It should be noted that this method is most suitable in

case of mass production industries.
Following diagram clearly explains product layout:
In the above diagram there are two products A and B for which separate
lines of production have been maintained. Kimbaii and Kimbaii jr. have
given a simple diagram to explain this type of layout in the book
Principles of Industrial organisation.
According to Shubin and Madeheim, product layout is suitable where:
(i) large quantity of standardized products are produced;
(ii) the standardized products are to be processed repetitively or
continuously on the given production facilities;
(iii) there must be sufficient volume of goods processed to keep the
production line actively occupied,
(iv) there should be greater interchangeability of the parts; and (v) to
maintain good equipment balance each work station must employ
machines or equipments of approximately equal capacities. Similarly to
maintain good labour balance, each work station must require an equal
amount of work to be performed.
Advantages of Product Layout:

(1) Removal of obstacles in production:

Product layout ensures unrestricted and continuous production thereby
minimising bottlenecks in the process of production, this is because work
stoppages are minimum under this method.
(2) Economies in material handling:
Under this method there are direct channels for the flow of materials
requiring lesser time which considerably eliminate back-tracking of
materials. On account of this, cost of material handling is considerably
reduced. This is greatly helpful in achieving desired quality of the end
product.
(3) Lesser manufacturing time:

Under this method (as already pointed), backward and forward handling of
materials is not involved, it leads to considerable saving in manufacturing
time.
(4) Lesser work in progress:
On account of continuous uninterrupted mass production, there is lesser
accumulation of work in progress or semi-finished goods.
(5) Proper use of floor space:
This method facilitates proper and optimum use of available floor space.
This is due to non- accumulation of work in progress and overstocking of
raw materials.
(6) Economy in inspection:
Inspection can be easily and conveniently undertaken under this method
and any defect in production operations can be easily located in
production operations. The need for inspection under this method is much
less and can be confined at some crucial points only.
(7) Lesser manufacturing cost:
On account of lesser material handling, inspection costs and fullest
utilisation of available space, production costs are considerably reduced
under this method.
(8) Lesser labour costs:
Due to specialisation and simplification of operations and use of automatic
simple machines, employment of unskilled and semi-skilled workers can
carry on the work. The workers are required to carry routine tasks under
this method. This leads to lesser labour costs.
(9) Introduction of effective production control:
Effective production control on account of simple operation of this method
can be employed successfully. Production control refers to the adoption of
measures to achieve production planning.
Disadvantages of Product Layout:

(1) Lesser flexibility:

As work is carried in sequence and process arranged in a line, it is very

difficult to make adjustments in production of operations. Sometimes,
certain changes under this method become very costly and impractical.
On account of this drawback, this method is not suitable in the production
of goods which are subject to quick style and design changes.
(2) Large investment:
Under this method, machines are not arranged in accordance with
functions as such similar type of machines and equipment is fixed at
various lines of production. This leads to unavoidable machinery
duplication resulting in idle capacity and large capital investment on the
part of the entrepreneur.
(3) Higher overhead charges:
Higher capital investment leads to higher overheads (fixed overheads)
under this method. This leads to excessive financial burden.
(4) Interruption due to breakdown:
If one machine in the sequence stops on account of breakdown, other
machines cannot operate and work will be stopped. The work stoppage
may also take place on account of irregular supply of material, poor
production scheduling and employee absenteeism etc.
(5) Difficulties in expanding production:
Production cannot be expanded beyond certain limits under this method.
(6) Lack of specialisation in supervision:
Supervision of different production jobs becomes difficult under this
method as there is absence of specialised supervision as the work is
carried on in one line having different processes and not on the basis of
different departments for different specialised jobs. Under this method a
supervisor is supposed to have detailed knowledge of all the machines
and processes which leads to absence of specialisation in the process of
supervision.
(7) Under-utilisation of machines:
As has already been pointed out, separate set of one type of machines is
fixed at different lines of production. Usually, these machines are not

properly and fully utilised and there remains idle capacity in the form of
under utilised equipment.
(B) Functional or Process Layout:

It is just the reverse of product layout. There is a functional division of

work under this method. For example, lathes are fixed in one department
and welding activities are carried in another department of the factory.
The salient features of this type of layout are based on Frederick W.
Taylors concept of functional organisation.
This method is generally adopted for producing different varieties of unlike
products. This is particularly adopted tor job order industries like
engineering, ship building and printing etc. The following diagram shows
that raw material travels through various process or departments from
lathes passing through mills, grinders, drills, welding, inspection, finishing,
and assembly and to finished product.
Advantages of Process Layout:

(1) Maximum utilisation of machines:

This method ensures fuller and effective utilisation of machines and
consequently investment in equipment and machines becomes
economical.
(2) Greater flexibility:
Changes in the sequence of machines and operations can be made
without much difficulty. This is because the machines are arranged in
different departments in accordance with the nature of functions
performed by them.
(3) Scope for expansion:
Production can be increased by installing additional machines without
much difficulty.
(4) Specialisation:
As has already been pointed out that under this method, specialised
machines are used for performing different production operations. This
leads to specialisation.
(5) Effective utilisation of workers:

Specialised workers are appointed to carry different type of work in

different departments. This leads to effective and efficient use of their
talent and capabilities.
(6) More effective supervision:
As the machines are arranged on the basis of functions, performed by
them, the specialised and effective supervision is ensured by the
specialised knowledge of supervisors. Each supervisor can perform his
task of supervision effectively as he has to supervise limited number
machines operating in his department.
(7) Lesser work stoppages:
Unlike the product method, if a machine fails, it does not lead to complete
work stoppage and production schedules are not seriously affected. Due
to breakdown in one machine, the work can be easily transferred to the
other machines.
Disadvantages of Process Layout:

(1) Coverage of more floor area:

Under this method, more floor space is needed for the same quantum of
work as compared to product layout.
(2) Higher cost of material handling:
Material moves from one department to another under this method,
leading to the higher cost of material handling. The mechanical devices of
material handling cannot be conveniently employed under this method on
account of functional division of work. Material has to be carried by
applying other methods from one department to another, resulting into
higher cost of material handling.
(3) Higher labour costs:
As there is functional division of work, specialised workers are to be
appointed in different departments for carrying specialised operations.
The appointment of skilled worker leads to higher labour costs.
(4) Longer production time:
Production takes longer time for completion under this method and this
leads to higher inventories of work-in-progress.

(5) Difficulties in production, planning and control:

Due to large variety of products and increased size of the plant, there are
practical difficulties in bringing about proper coordination among various
areas (departments) and processes of production. The process of
production, planning and control becomes more complex and costly.
(6) Increased inspection costs:
Under this type of layout more supervisors are needed and work is to be
checked after every operation which makes the process of supervision
costlier.
(C) Layout by Stationary Material:

This type of layout is undertaken for the manufacture of large parts and
assemblies. In this case, material remains fixed or stationary at one place,
men and equipment are taken to the site of material. This is suitable in
case of ship building, locomotives and heavy machinery industries etc.
Advantages:

(a) Economies in transformation:

As the work is carried at one place and material is not taken from one
place to another, this leads to savings in transformation costs.
(b) Different jobs with same layout:
Different projects can be undertaken with the help of same layout.
(c) Production in accordance with specifications:
The jobs can be performed in accordance with the specifications given by
the customers.
(d) Scope for flexibility:
It provides maximum flexibility for various changes in production
processes and designs of the products.
Disadvantages:

(a) Immobility of material:

As material is fixed at one place, this leads to certain difficulties in

arranging specialised workers, machines and equipment for the job.
(b) Large investment:
This method is time consuming and costlier as compared to first two
methods.
(c) Unsuitable for small products:
This method is not suitable for producing and assembling small products
in large quantities. In actual practice, it has been observed that a judicious
combination of three types viz., product, process and stationary material
layout is undertaken by different organisations. This is done with the view
to enjoy the advantages of all the methods.

DRC 23 : Strategic
Management
1. Elaborate the Strategic planning
process.
In today's highly competitive business environment, budget-oriented planning or
forecast-based planning methods are insufficient for a large corporation to
survive and prosper. The firm must engage in strategic planning that clearly
defines objectives and assesses both the internal and external situation to
formulate strategy, implement the strategy, evaluate the progress, and make
adjustments as necessary to stay on track. A simplified view of the strategic

planning process is shown by the following diagram:

Process

The Strategic Planning

Mission &
Objectives

Environmental
Scanning

Strategy
Formulation

Strategy
Implementation

Evaluation
& Control
Mission and Objectives

The mission statement describes the company's business vision, including

the unchanging values and purpose of the firm and forward-looking
visionary goals that guide the pursuit of future opportunities.
Guided by the business vision, the firm's leaders can define measurable
financial and strategic objectives. Financial objectives involve measures
such as sales targets and earnings growth. Strategic objectives are related
to the firm's business position, and may include measures such as market
share and reputation.

Environmental Scan

The environmental scan includes the following components:

Internal analysis of the firm

Analysis of the firm's industry (task environment)

External macroenvironment (PEST analysis)

The internal analysis can identify the firm's strengths and weaknesses and
the external analysis reveals opportunities and threats. A profile of the
strengths, weaknesses, opportunities, and threats is generated by means
of a SWOT analysis
An industry analysis can be performed using a framework developed by
Michael Porter known as Porter's five forces. This framework evaluates
entry barriers, suppliers, customers, substitute products, and industry
rivalry.
Strategy Formulation

Given the information from the environmental scan, the firm should match
its strengths to the opportunities that it has identified, while addressing its
weaknesses and external threats.
To attain superior profitability, the firm seeks to develop a competitive
advantage over its rivals. A competitive advantage can be based on cost
or differentiation. Michael Porter identified three industry-independent
generic strategies from which the firm can choose.
Strategy Implementation

The selected strategy is implemented by means of programs, budgets,

and procedures. Implementation involves organization of the firm's
resources and motivation of the staff to achieve objectives.
The way in which the strategy is implemented can have a significant
impact on whether it will be successful. In a large company, those who
implement the strategy likely will be different people from those who
formulated it. For this reason, care must be taken to communicate the
strategy and the reasoning behind it. Otherwise, the implementation
might not succeed if the strategy is misunderstood or if lower-level
managers resist its implementation because they do not understand why
the particular strategy was selected.

Evaluation & Control

The implementation of the strategy must be monitored and

adjustments made as needed.
Evaluation and control consists of the following steps:
1. Define parameters to be measured
2. Define target values for those parameters
3. Perform measurements
4. Compare measured results to the pre-defined standard
5. Make necessary changes

2. Explain with the help of examples,

the types of Grand Strategies.
Grand strategies are a means to get to your ends growth, profitability,
etc. The more time that you spend researching and learning about your
environment, your market and your business, the more clearly these come
into focus for you. While there is always some uncertainty and some risk
with any business decision, a strategic decision with the proper homework
done is a pretty clear cut one.
The major Grand Strategies are:

Concentrated Growth
In this strategy, a firm directs it resources to the profitable growth of a
dominant product, in a dominant market, with a dominant technology

Market Development
This strategy consists of marketing present products, often with only
cosmetic modifications, to customers in related market areas by adding
channels of distribution or by changing the content of advertising or
promotion

Product Development
This strategy involves the substantial modification of existing products or
the creation of new, but related, products that can be marketed to current
customers through established channels

Horizontal Integration
In this term strategy there is growth through the acquisition of one or
more similar firms operating at the same stage of the productionmarketing chain. Such acquisitions eliminate competitors and provide the
acquiring firm with access to new markets

Vertical Integration
A companys aim in this strategy is to acquire firms that supply it with
inputs (such as raw materials) or are customers for its outputs (such as
warehouses for finished products). When supplying firms are acquired, it is
called Backward Vertical Integration. When output firms are acquired, it is
called Forward Vertical Integration.

Concentric Diversification
This strategy involves the acquisition of businesses that are related to the
acquiring firm in terms of technology, markets, or products. With this
strategy, the selected new businesses possess a high degree of
compatibility with the firms current businesses.

Conglomerate Diversification

In this strategy, a firm, particularly a very large one, plans acquire a

business because it represents the most promising investment
opportunity available. The principal concern of the acquiring firm is the
profit pattern of the venture, rather than creating product-market synergy
with existing businesses

Turnaround
This is a strategy used by a firm that is in trouble. Its managers believe
that the firm can survive and eventually recover if a concerted effort is
made over a period of a few years to fortify its distinctive competences.
There are two basic forms 0f retrenchment: Cost Reduction and Asset
Reduction

Divestiture
This strategy involves the sale of a firm or a major component of a firm.

Liquidation
In this strategy, the firm typically is sold in parts, only occasionally as a
wholebut for its tangible asset value and not as a going concern.

Examples of Grand Strategies in Businesses

Grand strategies are major, overarching strategies that shape the course
of a business. Unlike tactics, they are focused on the long-term goals of
the business. Running your own business means pondering grand
strategies involving everything from product development to liquidation.
Different strategies will, of course, fit different situations, so it is best to be
familiar with a few different approaches.

Market Growth
Market growth is a low-risk strategy compared to other, more
encompassing, strategies. Instead of investing in research and

development to create new product offerings, the market-growth strategy

focuses on growing the market for a current product. An example of this is
an electronics company that develops markets for an existing stereo
system instead of developing a new system. To develop new markets it
may be necessary to sell stereos in other markets as time passes, such as
in foreign countries that are less technologically developed.

Product Development
Product development is essentially the opposite of market development.
While market development focuses on exploitation, product development
focuses on exploration. This involves investing heavily in research and
development in order to create new and innovative product offerings. For
example, a food manufacturer may invest heavily in research into
healthier foods that can be marketed to the general public, or a car
manufacture may develop safer or more fuel-efficient cars through
investments in research. These advances give firms an advantage over
the competition.

Turnaround
The turnaround strategy is used when a firm is experiencing profit
stagnation, decline or other serious problems. It is an attempt to change
the firm's strategy in the hopes of reversing its fortunes. In order to turn a
firm around, managers will often change the direction of the firm. For
example, a print newspaper might make the switch to online publication in
order to adapt to the changing market.

Liquidation
Liquidation is the grand strategy of last resort. When a firm cannot
successfully turn itself around and there are no interested buyers, there is
no choice but to liquidate the firm. Liquidating the firm involves selling off
all its assets, including physical assets such as factories and merchandise,
as well as intellectual assets, like brands and patents. The goal of a
liquidation strategy is to recoup as much money for the ownership as
possible, before shuttering the business.

DRC 24 : Marketing Research

1. Marketing Research is a tool of
management Comment.
One definition of marketing states: "Marketing is the process of planning
and executing the conception, pricing, promotion and distribution of ideas,
goods and services to create exchanges that satisfy individual (customer)
and organizational objectives". The concept of marketing as a business
philosophy defines marketing as a process that is intended to find, satisfy
and retain customers while business makes a profit. But central to all
these definitions is the role of the customer and his relationship to the
product (i.e. whether he considers the product or service to meet a need
or want).
Therefore, market research is imperative for a company to know what
type of products or services would be profitable to introduce in the
market. Also with respect to its existing products in the market, good
market research enables a company to know if it has been able to satisfy
customer needs and whether any changes need to be made in the
packaging, delivery or the product itself. This enables a company to
formulate a viable marketing plan or measure the success of its existing
plan.
Market Research Is An Essential Management Tool
Market research consists of a plan that charts how relevant data is to be
collected and analyzed so that the results are useful and relevant for
making marketing decisions. Once the research and the related analysis
are complete, the results are communicated to management. This
provides management with in-depth information regarding crucial factors
that have an impact on the target market and existing marketing mix.

Market research allows management to make the changes necessary for

better results through adopting a proactive approach.
Types Of Market Research
Market research consists of two separate types of research that can be
categorized as secondary and primary research. Secondary research
consists of collecting already published data to create a "company
database" that may serve to perform situation analysis. It helps to identify
the company's competitors, perform a strategy for benchmarking and also
determine the segments the company should target in view of factors
such as demographics, population, usage rate, life style and behavioral
patterns.
Primary research serves to provide information through monitoring sales
levels and measuring effectiveness of existing business practices like
service quality and tools for communication being used by the company. It
carefully follows competitor plans to gather information on market
competition. Both primary and secondary researches are essential to fulfill
the company's objectives.
Data Collection Methods
Data collection methods for marketing research are divided into
quantitative and qualitative methods. Quantitative studies use
mathematical analysis, which can disclose differences that are statistically
significant. The sample size used is quite large.
Qualitative methods are used to provide a base for quantitative research
and help in quantitative research design development. They target
problem defining, generating hypotheses and identifying determinants.
They consist of one to one interviews to probe for personal opinions,
beliefs and values and serve to uncover hidden issues. The sample size in
this method is small.
The fact is that you can't have a successful company without having the
right data about customers, products and the market in general. Market
research is an essential management tool for a viable business plan
enabling any company to survive and thrive in today's fiercely competitive
market conditions.

2. Explain the application of marketing

research.

Applications of marketing research can be divided into two broad areas:

1. Strategic
2. Tactical
Among the strategic areas, marketing research applications would be
demand forecasting,
sales forecasting, segmentation studies, identification of target markets
for a given product, and positioning strategies identification.
In the second area of tactical applications, we would have applications
such as product
testing, pricing research, advertising research, promotional research,
distribution and logistics related research. In other words, it would include
research related to all the Ps of marketing:
how much to price the product, how to distribute it, whether to package it
in one way or another, what time to offer a service, consumer satisfaction
with respect to the different elements of the marketing mix (product,
price, promotion, distribution), and so on. In general, we would find more
tactical applications than strategic applications because these areas can
be fine-tuned more easily, based on the marketing research findings.
Obviously, strategic changes are likely to be fewer than tactical changes.
Therefore, the need for information would be in proportion to the
frequency of changes.
The following list is a snapshot of the kind of studies that have actually
been done in India.
1. A study of consumer buying habits for detergentsfrequency, pack
size, effect of promotions, brand loyalty and so forth.
2. To find out the potential demand for ready-to-eat chapatis in Mumbai
city.
3. To determine which of the three proposed ingredientstulsi, coconut oil
or neem, the consumer would like to have in a toilet soap
4. To find out what factors would affect the sales of Flue Gas
Desulphurisation equipment (industrial pollution control equipment)
5. To find out the effectiveness of the advertising campaign for a car brand
Marketing research is the gathering, recording, and analyzing of data that
relates to a specific problem in marketing products or services. While this
definition implies a systematic approach to marketing, marketing research
is often performed as a reaction to a problem that occurs. Marketing
research efforts, therefore, often are undertaken for specific projects that
have set beginning and ending points.
Market and Economic Analysis
Market analysis involves analyzing market-segment factors to determine
the market potential of a given product or service. The marketing
researcher gathers data and analyzes the factors that affect possible sales

in a given market segment. The economic analysis is also used by

marketing research departments to determine:
How actively a company should market in a given market segment
How much money it should invest in marketing to that segment
How much it may have to produce to fulfill the needs of the market
segment
Economic analysis often involves economic forecasting, which analyzes
and attempts to forecast developing market trends and demands.
Product Research
Marketing research departments conduct product research for a variety of
reasons, including:

Measuring potential acceptance of new products

Finding improvements or additions for existing products
Making changes or improvements in product packaging
Determining acceptability of a product over a competitor's product

When a new product is being developed, marketing research departments

will often use product concept testing to see how customers might react
to the new product. Typically, before a business invests in the
development of a prototype for a new or improved product, it will have its
marketing researchers verbally describe or visually depict the prospective
product to a group of potential customers in the target market.
Once a product has been accepted during the concept-testing stage, the
business may move on to develop a prototype of the product. The
marketing research department may then conduct product use tests, in
which potential customersbe they industrial users or consumersare
given the new or modified product to try. Consumers may be given a new
type of hot breakfast cereal to try at home so that the marketing
researcher can test the product use among families; industries may be
given a new type of telephone system to test in their offices so that the
marketing researcher can receive management's evaluation of the system
and see how the new product works in a field test site.
After product concept and product use tests are completed, businesses
may decide to use market tests before they go full-throttle into the
marketplace with their products. These market tests allow the business tp
see how the product is accepted in various market segments before it is
rolled out to the mass market, and before the business invests in a fullblown release of the product. While test marketing is viable for producers
of products that do not involve millions of dollars in production costs for

production facilities, it may be cost-prohibitive for businesses producing

large, expensive goods. Soap detergent is easily test-marketed for a
relatively inexpensive price tag; the cost of test marketing jet airplanes,
on the other hand, is not cheap.
Pricing Research
Marketing research can be used to evaluate the acceptability of product or
service prices in the marketplace. While businesses must price their
products to make enough money to cover production and operating costs,
often the formula they use for achieving a given profit margin causes
them to price their products or services above or below acceptable market
levels.
Pricing research activities conducted by marketing researchers to
determine buyers' perception of price and quality factors in a given
product can be used to determine acceptable price levels that will allow
businesses to achieve desired profits and gain market share. Marketing
research can help to determine acceptable price levels. Because of the
competitive marketplace, however, businesses frequently do not have the
time to conduct an elaborate pricing research study; therefore, they often
enter the marketplace without conducting one.
Advertising Research
Advertising can be a costly endeavor for businesses. To determine the
potential effect their advertising might have on a target audience,
businesses often conduct research into the content, the media, and the
effectiveness of advertisements before they invest heavily in the
advertising campaign. Content research measures how the desired
content comes across to an audience sample (a limited number of
people).
If the advertisement is pretested, a sample audience may be asked
questions after being shown a television commercial or after viewing a
layout of a print advertisement. If the advertisements are tested after
they have appeared in various media, customers may be asked what they
remember about the particular advertisements and how they reacted to
them. By pretesting and post testing customers, marketing researchers
can determine whether the desired message is getting across in a positive
manner.
Media research involves finding the best mix of media with which to hit a
target audience. Marketing researchers may evaluate market studies of
various media outlets (e.g., A. C. Nielsen for electronic media, or W. R.
Simmons and Company for print media). By researching the media,

marketing researchers can determine how best to allocate marketing

dollars to hit the desired market.
To perform advertising effectiveness research, businesses must state what
marketing objectives they hope to accomplish with their advertising
efforts before they roll out the advertising campaign. Marketing research
must be done prior to the advertising campaign so as to have something
to measure the results of the advertising against. If a business is trying to
increase customer awareness of one of its more overlooked products, then
it must determine, before the advertising campaign begins, how wellknown that product actually is so that the business will be able to measure
how well advertising increases awareness.
Sales Research
When a marketing research department conducts a sales analysis, it
studies customer records and other available data to determine where
marketing opportunities lie among potential target markets. Selling
research, on the other hand, analyzes the approach used by the person
selling the product or service to determine whether the sales presentation
is effectively piquing the interest of customers and allowing them to
understand the product. The selling research can determine:
The kinds of collateral materials (e.g., brochures, charts, lists) that work
best to sell the product
The percentage of sales that are closed in a sales call
Other aspects of the selling process that show what methods have been
most effective with the target market

DRC 25 : Advertising and sales

promotion
1. Narrate the problems and
prospects of advertising.
Challenges and Prospects in Advertising
In advertising one has a diverse range of jobs to choose from, to suit ones
inclination, talent and personality. The choice of working in an
organization that manufactures certain goods or provides certain services,
to look after the advertising of these goods or services would demand a
particular kind of skills and interests. One can choose to work in an
organization that creates advertising and distributes advertisements
through different media. In such an organization there is a wide variety of
jobs calling for different types of skills and creativity.
To make matters easier, one has to start with simple definitions. The
manufacturer or provider of goods and services would be referred to at
this stage as the advertiser or, may be, the marketing organization. The
organization providing advertising services is the advertising agency. And
advertising itself is the communication link between the product or service
and the consumer. The media of course would include newspapers and
magazines, radio, television, posters and everything that can be used to
inform the customer about a product or service. Another expression that
we shall be using at that stage is the market. After all, all goods and
services are brought and sold in the market not necessarily only a
market or a fair, but also shops or retail outlets as they are called. In

advertising we talk of the markets to mean really the consumers. The

producer of goods or services markets its products and hence is referred
to as a marketing organization. There are job opportunities in these areas
in the field of advertising and advertising-related services. There is more.
Today one can set up ones own shop specializing in one particular area of
advertising or advertising-related activity. This would call for a
combination of many talents and different types of creativity.
Advertising in the sense of a communication link between a buyer and a
seller or a producer and a consumer is really as old as civilization itself. As
we know it today, its beginnings go back to more than 200 years. As an
organized profession, advertising is relatively young. During the last two
decades, and particularly since the beginning of the nineties, it has
reached a fairly high level of maturity and sophistication comparable with
the standards seen in the advanced industrialized countries. Not only has
its progress been very fast in the last few years, its character has also
undergone a radical change.
This is due to a number of factors. First, the communication revolution has
set in motion a process of homogenization of consumer aspirations and
value systems. This has also homogenized the very pattern and form of
communication between the advertiser and the consumer. A more or less
universal language of advertising is emerging, even though conditioned
and modified by local usage and expressions, which are often a medley of
western and Indian words, images, concepts and music. The
communication explosion has invaded the home with its message of
consumption-orientation. Multi-channeled television, through its
entertainment programmes and advertising, has generated an awareness
of entirely new concepts of living and with these, a desire for a whole
range of consumer durables and non-durables, which had not been
thought of earlier.
Secondly, to meet the growing consumer aspirations and value systems,
particularly in terms of lifestyles, new products and services are coming in
the market. These are meeting new needs, generated by new ways of
living. This is leading to tremendous and even fierce competition among
manufacturers of these products or providers of new services. This is
because, although the Indian population is massive, the actual number of
consumers of advertised goods or services is relatively small. Different
manufacturing, marketing or services organizations are offering the same
products. Thus the consumer has a wider choice. Sometimes two different
products or services might meet similar needs. For example, the
consumer can choose between two cola drinks manufactured by different

companies. It is in this context that in advertising and marketing one talks

of brand names, brands or branded products. With the same product
being manufactured by different manufacturers, each company has its
own name for its product. Thus one brand of sunflower oil competes
against another brand. If you come to services, a number of banks today
offer you mutual funds as do insurance companies. Here too the consumer
has a choice and every mutual fund is trying to sell to the same consumer.
Here is a challenge that people in the advertising profession face every
day how to win over a consumer for one brand against another and
retain loyalty to the same brand, sale after sale?
Thirdly, such diversification of products or services and the expansion of
the market have been possible because of the opening up and
liberalization of the economy. There is now very or no restriction on the
goods and services to be provided. Lower tax on personal incomes has
increased the disposable surplus in the hands of the expanding middle
class for discretionary purchases to meet the aspirations for better living.
The liberal entry of foreign manufacturers and the reduction in import
restrictions have made many new products and services more easily
available than before. The hire-purchase system, bank finance and credit
cards are accelerating this process of consumption-orientation in a section
of the population. Advertising intervenes at every stage of this process of
a desire being transformed into a purchase, of a concept of a product or
service being transformed into a sale.
Advertising has now become part of everyday life. Today advertising
influences every days purchase decision, consciously or subconsciously.
Young people, the main target of advertising, speak the language of
advertising, sing advertising jingles, dress according to the fashions set by
role models and stereotypes in advertising. Advertising, in turn, picks up
the language and the behavior pattern of the consumer, particularly the
youth. Many talented young people seek a career in advertising, not mere
job.
This environment and wider choice of goods or services also mean
increasing consciousness of quality and price among the consumers. The
competition thus becomes concerned with sensitivity to consumer
expectations and even the environmental conditions and processes of
purchase decisions. It is here that communication has to intervene. It is
this wider dimension of advertising today that offers unprecedented
challenges and makes stringent demands on creativity, imagination and
innovative approaches from every person in the advertising profession,
whatever be his or her specific job in the communication link between the

product or service and the consumer. It should be obvious from this

discussion that advertising today is an integral part of the socio-economic
and the cultural system, too. It is linked to the distribution aspect of the
economic system. By creating demands, which might not have existed
before, advertising helps determine the types of goods or services to be
offered and their quantum. Hence, advertising can even influence the
allocation of resources in different sectors of the economy. What is more,
advertising today has even become the communication link between
political parties and the electorate. It also plays a role in mobilizing public
opinion and even action on social and ideological issues, such as
environment protection or prevention of AIDS.
No wonder, the annual average rate of growth of advertising is much
higher than that of the economy. It is obvious that the opening up of the
economy, which had begun very haltingly in the mid-seventies, gathered
some momentum in the mid-eighties and has now acquired considerably
more speed from the beginning of the current decade, has contributed
significantly to the current boom in advertising. It is this situation which is
opening up wide and diverse opportunities in the profession.
Surely, when marketing organizations spend large amount of money year after
year on advertising, they would expect the most effective returns in terms of the
quality of sales. It is true, as we shall see later, that advertising is only one
component of a whole diverse range of activities that combine to effect a sale of
product or service. Nevertheless, it is possible to measure today the
effectiveness of advertising as an information and persuasion link between a
product or service and the consumer. It is not merely a question of a number of
competing brands. There is also the problem of proliferating media, through
which advertisements reach the consumer. Here again is a challenge to the
creativity and innovativeness of an advertising professional how to choose
between radio and television, between one television channel and another,
between the electronic media and the newspapers or different periodicals. The
point is that, considering the problems faced, the money available is always
limited.

2. Explain the techniques used for

measuring advertisement performance.
Whether you are trying to measure immediate response ads or attitude
advertising, the better you plan, the more accurate your results will be.
You must not only determine what you expect your advertising to do, but
also find ways to determine if clients have seen or heard the ad.
Testing immediate response ads

The following devices can help you weigh the results of your immediate
response advertisements:
Use coupons
Usually, redeemed coupons represent sales of the product. Ask yourself
whether enough sales were made to pay for the ad. Date the coupon so
you can determine the number of sales for the first, second, and third
weeks that you placed the ad.
In your radio or television ads, you can have listeners create their own
coupons. For example, ask them to redeem their hand-drawn coupon for a
free offer sample.
Use coupons for direct mail advertising
Code the coupon in some manner so that you can easily measure the
response. You can even use bar codes containing detailed demographic
information.
Hide offers in the ad
A hidden offer can allow you to track how many clients saw or heard the
ad because they'll have to mention something in person, on the phone or
in writing. For example, in the middle of an ad, include a statement that
will allow the customer to receive a free sample, great discount or
something similar upon request or by saying a magic word. Results should
be checked over a period of one-week to between six and twelve months
since people may not immediately react to this type of ad.
Compare similar ads
Prepare two ads (only slightly different according to the variable you'd like
to test) and run them on the same day. Identify the ads in the message
or with a coded coupon so you can tell them apart. Ask customers to
bring in the coupon or to use a special phrase. Run two broadcast ads at
different times or on different stations on the same day with different
discount phrases. Ask a newspaper to give you a split run that is, to
print ad A in part of its press run and ad B in the rest of the run. Count the
responses to each ad to see which scenario is most effective. Comparing
similar ads is also effective in other media such as on the Internet.
Promote a particular item

If the ad is about a bargain or limited-time offer, you can consider that

sales for the following four weeks came from that ad. You may need to
judge how many sales came not from the ad, but from in-store displays or
were encouraged by your sales associates.
Check your business' traffic
An important function of advertising is to build client traffic that also
results in customers buying items that are not advertised. For example, a
customer who are attracted to a store by an ad for a blouse may also buy
a handbag. Some may buy the bag in addition to the blouse, and other
may just buy the blouse. You could hire students to interview customers
as they leave the store to determine which advertised items they bought,
what other items they bought and what they shopped for but did not buy.
Website traffic works in a similar way.
Testing attitude (or image-building) advertising

Compare advertising and sales records

The individual ads are building blocks, so to speak, which make up your
advertising over a season. The problem is trying to measure each ad and
the effects of all of the ads taken together.
When advertising is spread out over seasons, to measure its effectiveness,
you need to keep records. Your aim is to compare records of ads and sales
for an extended time-period. Keep a record by date of all forms of
advertising, record their cost, keep a copy of each ad, and break the file
down into monthly, quarterly, or semi-annual blocks. By recording the
sales of the advertised items on the copy of each ad or in a log, you can
make comparisons.
One approach is to make weekly comparisons. For example, if you run an
ad each week, compare each week's sales with sales from the previous
week as well as with the sales of the same week a year ago. You will, of
course, be measuring the momentum of all of your ads as well as the
results of a single ad. After time, you will probably be able to estimate
how much of the results are due to the individual ad and how much to the
momentum of all your advertising. You may then make changes in specific
details of the ad to increase response.
When comparing sales increases over another period, keep in mind that
some situations may have been unusual. For example, your experience
may be that rain on the day an ad appears reduces its pulling power by

50%. Similarly, advertising response will also be affected if your

customers work in a factory that is out on strike.

What factors should I take into account when comparing

advertising results?
Divide ads into at least two classes: high-response ads and low-response
ads, then look for differences between the two classes. You should then be
able to determine the combination of factors that work best for your
business and products.
Timing
The time the ad was broadcast or run may be responsible for a particular
response level. However, other factors may be as influential as time,
though in radio, time is often crucial. On the Internet, targeting the right
audience may be the most crucial factor.
The tone or look of the message
Consider the message and how well it was expressed. If you used slogans,
did they help make the point? For print and Internet, consider the effects
of images, type size, white space, colour, and ad location. In broadcast,
consider whether or not the voice of the person doing the ad or the music
used may have had an effect. Check the effect of the length of broadcast
ads. Did you get the best results with 10-second, 30-second, or 60-second
ads?
Media
No business should count on finding a magic formula. There is no single
formula that will ensure high response ads every time. Advertising
changes. Therefore, you should watch the ads of others to see what
changes are occurring. These days, it is especially important to note the
changes in media used. The Internet and personal electronic devices have
revolutionized the way you can reach consumers and target clients.
Continue to analyze your own ads, make small changes occasionally, and
note any variations in response.
Feedback
Listen to what people say about your ads. In doing so, try to discover the
mental framework within which any comment about your ad was made.
Then try to find points that reinforce believability and a feeling that your
product fulfills some customer wish or need.

However, you should not be misled by what people say. An ad can cause a
great deal of comment and bring in practically no sales. An ad may be so
beautiful or clever that, as far as the customer is concerned, the sales
message is lost. An ad can spread like wildfire and become viral with
electronic devices it doesn't mean the ad is affecting your bottom line.

Measure the results of my Internet advertising

Business websites have become an important if not essential tool for
marketing one's goods and services. Similarly, placing ads on the Internet
is becoming an increasingly effective way to promote a product or service
since it targets people that are already interested in what you have to
offer.
You can measure the effectiveness of your Internet advertising by
counting how many people have come to your website through each ad
(your ads may vary by type and size, as well as by message, image, or
layout). Let's call these channels by which a customer came to your site.
Name each channel in a way that you can distinguish it from another, by
inserting the variable component (colour scheme, image, placement,
etc.).
For more information on the uses of the Internet for business, and in
particular, marketing on the internet, consult the following documents.

Online marketing
Online marketing techniques like social networking, emailing and blogging
are useful and involve little to no direct costs.

Website analytics and performance management

Do you want to know how effective your website is? Find out how visitors
reach your website, what they do there, and how often they visit.

Developing your website

Learn how to create a website so you can attract more customers to your
business.

DRC 26 : International Marketing

1. Bring out the impact of Marketing
intelligence on Export Oriented
business.

The role of market intelligence in export strategy

Understanding the forces and trends of food and beverage international markets
is essential for firms that intend to successfully compete in those markets. It is
also relevant for other export stakeholders, including policy makers, trade
support institutions and government officials to understand the dynamics of the
markets in which exporters participate to enhance the effectiveness of their
support. Export-oriented firms need to scan global and regional markets for
product and market diversification opportunities, to define a desired, feasible
positioning, and to identify potential clients, among others. Their managers and
analysts need to efficiently access and use relevant market information as well
as to develop the skills needed to perform the necessary analyses. Thus,
conducting market research becomes an indispensable business tool for all
stakeholders involved in export strategy development. Research can help,
among others, with:

Identifying prospective export markets and high-opportunity segments

Understanding consumer behavior and how a product can fulfill or create a
need
Identifying the best market entry strategy and product introduction tactics
Getting insights into competitors strategies, operations, strengths and
weaknesses
Finding out the key success factors to play and win in that specific market

Market intelligence is a key step in export strategy making

Conducting market intelligence is more than just collecting statistics and
information. No research can be valid until it is analyzed and transformed into
relevant insights to assist managers make informed decisions based on facts.
That analysis, together with the managers intuition will create the basis of the
market entry strategy and further export planning. As the chart below shows, the
analysis of export markets constitutes a significant early stage within the export
strategy development process

Developing an Approach to Market Intelligence

In the next pages we dive into the methodological aspects of conducting market
intelligence. Hence, we present two frameworks that the reader can then adapt
or adopt in its full structure. First, we clarify research concepts to then propose a
market research process and plan. Second, we focus on research within the
export planning process and look at the different research subjects of interest for
analyzing a market as well as some sources and practical hints.

Achieving Excellence in Market Intelligence

After making the case of the importance of conducting market intelligence to
enhance export strategy development, it is of importance to managers and
analysts to understand how to capitalize from that effort for the longer term.
Thus, the need arises to developing effective and efficient market intelligence
competences at an organizational level, so the expertise and process can be
optimized and transformed into a systematic approach that perfects over time.
Six Keys to Developing Excellence in Market Intelligence

Make it a systematic, continuous process with scheduled monitoring, updating and

evaluation activities
Allocate the necessary resources (individuals, budget, technology) if sound results are
expected
Keep dynamic, regularly-updated databases that can be shared among all stakeholders in
the organization
Stick to research and analysis plans and objectives
Develop mechanisms to continuously share relevant knowledge, facts and insights with
other involved areas in the organization
Communicate at an organization-level the importance of collaborative market
intelligence and information sharing efforts

Designing and implementing the necessary systems to improve an organizations

market intelligence capabilities will depend on factors such as size, needs and
resources available. Yet, it is important
to consider all the elements that will strengthen market intelligence efforts so
managers can make a conscious assessment of how to best organize their
research activities. In the chart below, we show a conceptual model to structure
them.

2. Analyse the role of EXIM Bank in

India.

Export-Import Bank of India (Exim Bank) was set up by an Act of the

Parliament THE EXPORT-IMPORT BANK OF INDIA ACT, 1981 for providing
financial assistance to exporters and importers, and for functioning as the
principal financial institution for co-ordinating the working of institutions
engaged in financing export and import of goods and services with a view
to promoting the countrys international trade and for matters connected
therewith or incidental thereto.
Exim Bank has two broad business streams: one, the traditional export
finance typical of export credit agencies around the world and two,
financing of export oriented units (export capability creation), which are
non-traditional for export credit agencies. Since inception, Exim Bank has
been the principal financial institution in the country for financing project
exports and exports on deferred credit terms. As per Memorandum PEM
(MEMORANDUM OF INSTRUCTIONS ON PROJECT EXPORTS AND SERVICE
EXPORTS) of Reserve Bank of India, the following constitute project
exports:
i.
ii.
iii.
iv.

Supply of goods / equipment on deferred payment terms

Civil construction contracts
Industrial turnkey projects
Consultancy / services contracts

Exim Bank extends funded and non-funded facilities for overseas turnkey
projects, civil construction contracts, technical and consultancy service
contracts as well as supplies.

Turnkey Projects are those which involve supply of equipment along

with related services, like design, detailed engineering, civil
construction, erection and commissioning of plants and power
transmission & distribution
Construction Projects involve civil works, steel structural works, as
well as associated supply of construction material and equipment
for various infrastructure projects.
Technical and Consultancy Service contracts, involving provision of
know-how, skills, personnel and training are categorised as
consultancy projects. Typical examples of services contracts are:
project
implementation
services,
management
contracts,
supervision of erection of plants, CAD/ CAM solutions in software
exports, finance and accounting systems.
Supplies: Supply contracts involve primarily export of capital goods
and industrial manufactures. Typical examples of supply contracts
are: supply of stainless steel slabs and ferro-chrome manufacturing
equipments, diesel generators, pumps and compressors.

In addition to project exports, Exim Bank also extends fund-based and

non-fund-based facilities to deemed export contracts as defined in Foreign
Trade Policy of GOI, e.g.,
- secured under funding from Multilateral Funding Agencies like
the World Bank, Asian Development Bank, etc.;
- contracts secured under International Competitive Bidding;
- contracts under which payments are received in foreign
currency.
Exim Bank offers the following Export Credit facilities, which can be
availed of by Indian companies, commercial banks and overseas entities.
For Indian Companies executing contracts overseas
Pre-shipment credit
Exim Bank's Pre-shipment Credit facility, in Indian Rupees and foreign
currency, provides access to finance at the manufacturing stage enabling exporters to purchase raw materials and other inputs.
Pre-shipment credits are usually extended by exporters commercial banks
for period upto 180 days. Exim Bank extends pre-shipment / postshipment credit either directly or in participation with commercial banks.
In order to offer one-stop banking products to export clients, the Bank has
also been offering short-term pre / post shipment credit either directly or
through exporters bankers. Exim Bank may consider extending preshipment credit and post-shipment credit for periods exceeding 180 days,
on case-to-case basis and subject to the merits of the case.
Supplier's Credit

This facility enables Indian exporters to extend term credit to importers

(overseas) of eligible goods at the post-shipment stage.
Post-shipment Suppliers Credit can be extended to Indian exporters upto
the extent of the deferred credit portion of the export contract, either in
Rupees or in Foreign currency. The period of deferred credit and
moratorium will generally depend on the nature of goods [List A and List B
of Memorandum PEM] or nature of projects, as per guidelines contained in
the Memorandum PEM of RBI.
For Project Exporters
Export Project Cash-Flow Deficit Financing Programme [EPCDF]
Indian project exporters (including those under Deemed Exports category)
incur expenditure in rupee or foreign currency while executing contracts
i.e. costs of mobilisation/acquisition of materials, personnel and
equipment etc. Exim Bank's facility helps them meet these expenses for a) Project Export Contracts;
b) contracts in India categorized as Deemed Exports in the Foreign
Trade Policy of India.
Capital Equipment Finance Programme (CEFP)
Capital Equipment Finance Programme [CEFP] has been conceived to
cater to capital expenditure for procurement of capital equipment to be
utilized across multiple contracts. CEFP provides direct access to Exim
Banks finance for eligible Indian companies for procurement of
indigenous and imported capital equipment for executing overseas
projects / deemed export projects.
For Exporters of Consultancy and Technological Services
Exim Bank offers a special credit facility to Indian exporters of consultancy
and technology services, so that they can, in turn, extend term credit to
overseas importers.
Guarantee Facilities
Indian companies can avail of guarantee facilities of different types to
furnish requisite guarantees to facilitate execution of export contracts
(including deemed export contracts) and import transactions.
Eligibility: Indian project exporters securing overseas or deemed export
contracts.
For Overseas Entities
Buyer's Credit
Overseas buyers can avail of Buyer's Credit from Exim Bank, for import of
eligible goods from India on deferred payment terms. As per Memorandum
PEM guidelines, RBI has authorised Exim Bank to extend overseas buyers

credits upto USD 20 mn for project exports without seeking approval of

RBI.
The facility enables exporters/contractors to expand abroad and into nontraditional markets. It also enables exporters/contractors to be
competitive when bidding or negotiating for overseas jobs.
Benefits to Foreign Customers
Enables overseas buyers to obtain medium-and long-term financing
Competitive interest rate against host country's high cost of
borrowing.
Buyers Credit under NEIA
Buyers Credit NEIA is a unique financing mechanism that provides a
safe mode of non-recourse financing option to Indian exporters and serves
as an effective market entry tool to traditional as well as new markets in
developing countries, which need deferred credit on medium or long-term
basis.
Under this facility, Exim Bank facilitates project exports from India by way
of extending credit to overseas sovereign governments and government
owned entities for import of Indian goods and services from India on
deferred credit terms. Exim Bank will obtain credit insurance cover under
NEIA through ECGC. NEIA is a trust set up by the Ministry of Commerce
and administered by Export Credit & Guarantee Corporation of India
(ECGC).Facility is available for project exports requiring medium or long
term deferred credit.
Overseas Investment Finance Programme
Exim Bank encourages Indian companies to invest abroad for, inter alia,
setting up manufacturing units and for acquiring overseas companies to
get access to the foreign market, technology, raw materal, brand, IPR etc.
For financing such overseas investments, Exim Bank provides:
a) Term loans to Indian companies upto 80% of their equity investment in
overseas JV/ WOS.
b) Term loans to Indian companies towards upto 80% of loan extended by
them to the overseas JV/ WOS.
c) Term loans to overseas JV/ WOS towards part financing
(i) capital expenditure towards acquisition of assets,
(ii) working capital,
(iii) equity investment in another company,
(iv) acquisition of brands/ patents/ rights/ other IPR,
(v) acquisition of another company,
(vi) any other activity that would otherwise be eligible for finance
from Exim Bank had it been an Indian entity.
d) Guarantee facility to the overseas JV/ WOS for raising term loan/
working capital.

Finance for Corporates

Research & Development Finance for Export Oriented Units:
Exim Bank encourages Indian exporters to invest more in their R&D
spending in order to develop new products/processes/ IPRs for enhancing
export capabilities. Considering the need to bridge the funding gap of
Indian exporters in R&D space, the Bank has a dedicated R&D Financing
Programme. Under the said Programme, financing for R&D can be
extended to any export oriented company/ SPV promoted by companies,
irrespective of the nature of industry. The financing covers both capital
and revenue expenditure including inter alia:

Land and building, civil works for housing eligible R&D activities;
Equipments, tools, computer hardware/ software, miscellaneous
fixed assets used in eligible R&D activities;
Acquisition of technology from India or overseas at the proof of
concept or design stage, which will be used to develop new product/
process.
Salaries of R&D personnel, support staff during the R&D project
phase including training costs;
Cost of regulatory approvals, filing and maintenance of patent
registration;
Product documentation and allied costs during the R&D project
phase.
Costs of materials, surveys, technology demonstration studies and
field trial
Any other costs to enhance R&D capability.

Lending Programme for Export Oriented Units:

Exim Bank provides term loans to export oriented Indian companies to
finance various capital expenditures including certain soft expenditures in
order to improve their export capability and to enhance their international
competitiveness. Loans/Guarantees are extended for the following
purposes: Expansion, modernization, upgradation or diversification
projects including acquisition of equipment, technology etc.; export
marketing; export product development; setting up of Software
Technology Parks;
Multilateral Funded Projects Overseas (MFPO)
The Bank provides a package of information and support services to
Indian companies to help improve their prospects for securing business in
projects funded by the World Bank, Asian Development Bank, African
Development Bank, and European Bank for Reconstruction and
Development.
Exim Bank as a Consultant

The Banks experience in evolving as an institution supporting

international trade and investment, in addition to functioning as an export
credit agency in a developing country context, is of particular relevance in
other developing countries. The Bank has been sharing its experience and
expertise by undertaking consultancy assignments. Exim Bank also shares
its experience and expertise through provision of on-site exchange of
personnel programmes aimed at providing a first-hands experience to the
employees of its institutional partners.
Institutional Linkages
The Bank has fostered a network of alliances and institutional linkages
with multilateral agencies, export credit agencies, banks and financial
institutions, trade promotion bodies, and investment promotion boards to
help create an enabling environment for supporting trade and investment.
The Global Network of Exim Banks and Development Finance Institutions
(G-NEXID) was set up in Geneva in March 2006 through the Banks
initiative, under the auspices of UNCTAD. With the active support of a
number of other Exim Banks and Development Finance Institutions from
various developing countries, the network has endeavoured to foster
enhanced South-South trade and investment cooperation. Observer
Status in UNCTAD underscores support for the Forum.
Award for Excellence
The Bank, in association with CII, has instituted an Annual Award for
Business Excellence for best Total Quality Management (TQM) practices
adopted by an Indian company. The Award is based on the European
Foundation for Quality Management (EFQM) model.

DRC 27 : Service Marketing

1. Bring out the 7Ps of services
Marketing with suitable examples.

The service marketing mix consists of 7 Ps .Simply said, the service

marketing mix assumes the service as a product itself. However it
adds 3 more Ps which are required for optimum service delivery.

The product marketing mix consists of the 4 Ps which are Product,

Pricing, Promotions and Placement. These are discussed in my
article on product marketing mix the 4 Ps.

The extended service marketing mix places 3 further Ps which

include People, Process and Physical evidence. All of these factors
are necessary for optimum service delivery. Let us discuss the same
in further detail.

Product The product in service marketing mix is intangible in

nature. Like physical products such as a soap or a detergent, service
products cannot be measured. Tourism industry or the education
industry can be an excellent example. At the same time service
products are heterogenous, perishable and cannot be owned. The
service product thus has to be designed with care. Generally service
blue printing is done to define the service product. For example a
restaurant blue print will be prepared before establishing a
restaurant business. This service blue print defines exactly how the
product (in this case the restaurant) is going to be.

Place Place in case of services determine where is the service

product going to be located. The best place to open up a petrol
pump is on the highway or in the city. A place where there is
minimum traffic is a wrong location to start a petrol pump. Similarly
a software company will be better placed in a business hub with a
lot of companies nearby rather than being placed in a town or rural
area.

Promotion Promotions have become a critical factor in the

service marketing mix. Services are easy to be duplicated and
hence it is generally the brand which sets a service apart from its
counterpart. You will find a lot of banks and telecom companies
promoting themselves rigorously. Why is that? It is because
competition in this service sector is generally high and promotions is
necessary to survive. Thus banks, IT companies, and dotcoms place
themselves above the rest by advertising or promotions.

Pricing Pricing in case of services is rather more difficult than in

case of products. If you were a restaurant owner, you can price
people only for the food you are serving. But then who will pay for
the nice ambience you have built up for your customers? Who will
pay for the band you have for music? Thus these elements have to
be taken into consideration while costing. Generally service pricing
involves taking into consideration labor, material cost and overhead

costs. By adding a profit mark up you get your final service pricing.
You can also read about pricing strategies.

Here on we start towards the extended service marketing mix.

People People is one of the elements of service marketing mix.

People define a service. If you have an IT company, your software
engineers define you. If you have a restaurant, your chef and
service staff defines you. If you are into banking, employees in your
branch and their behavior towards customers defines you. In case of
service marketing, people can make or break an organization. Thus
many companies nowadays are involved into specially getting their
staff trained in interpersonal skills and customer service with a focus
towards customer satisfaction. In fact many companies have to
undergo accreditation to show that their staff is better than the rest.
Definitely a USP in case of services.

Process Service process is the way in which a service is delivered

to the end customer. Lets take the example of two very good
companies Mcdonalds and Fedex. Both the companies thrive on
their quick service and the reason they can do that is their
confidence on their processes. On top of it, the demand of these
services is such that they have to deliver optimally without a loss in
quality. Thus the process of a service company in delivering its
product is of utmost importance. It is also a critical component in
the service blueprint, wherein before establishing the service, the
company defines exactly what should be the process of the service
product reaching the end customer.

Physical Evidence The last element in the service marketing mix

is a very important element. As said before, services are intangible
in nature. However, to create a better customer experience tangible
elements are also delivered with the service. Take an example of a
restaurant which has only chairs and tables and good food, or a
restaurant which has ambient lighting, nice music along with good
seating arrangement and this also serves good food. Which one will
you prefer? The one with the nice ambience. Thats physical
evidence. Several times, physical evidence is used as a
differentiator in service marketing. Imagine a private hospital and a
government hospital. A private hospital will have plush offices and
well dressed staff. Same cannot be said for a government hospital.
Thus physical evidence acts as a differentiator.

This is the service marketing mix (7p) which is also known as the
extended marketing mix.

2. Briefly explain the marketing of

hospitability services in India.
The hospitality industry is a competitive marketplace for which traditional
advertising streams, such as television, newspapers and billboards have become
increasingly insufficient. Additionally, when you run an independent small hotel
or restaurant, you dont have access to the enormous marketing budgets on
which the international and national chains rely. A creative, more personal
marketing plan may serve you best.
The marketing scenario in the Indian hospitality industry has gone in for a techsplurge. In pursuit of getting closer to the guests, brands have sneaked right into
guests bedroom, bathroom, and where not! They are eating with the guests,
sleeping with the guests, travelling with the guests and reminding them all the
time that they are willing to go miles extra just to stay closest. All thanks to the
digital media, hotels and restaurants are catering to the rising tech-savvy middle
class big time on the close-to-heart cyber space. It has revolutionized the way
brands communicate with the public: from real media to the virtual one, and
how! Brands are devising newer techniques by the hour to make guests
experience more amicable, convenient and comfortable, and themselves more
affable over their peers, ofcourse.

Hosting an Event
Your marketing plan should include ways for potential clients to visit your
facility through open invitations. As a small hotel and restaurant owner,
you have the capacity to host events that most of your area clubs and
business groups appreciate. If youre not a member of your local Chamber
of Commerce, join and offer to host an after-hours mixer. Contact local
charities and offer your space for them to use for fundraising events or
volunteer recognition efforts. Target those groups whose members are
similar to your own target customer. Enlist the participation of a local
celebrity to increase your exposure and send out press releases to the
media.

Reward Loyalty
According to the Food Service Warehouse Ludhiana, you can count on
about one-third of your business to come from repeat customers. As the
proprietor, you may even come to know your best clients by name and
recognize them when they visit. Design a marketing program aimed at
loyal customers, providing incentives for them to refer you to their friends
and family. Offer discounts to your patrons who refer others to the

restaurant. Give a free nights stay to a repeat customer who also books a
room for guests. Develop creative strategies to show your appreciation
and reward loyalty.

Online Presence
Few small businesses operate successfully without utilizing social
networking, blogs and websites to promote their businesses. You need to
develop a presence online with a clear, attractive website, a social media
presence with exciting entries and an informative blog to capture and
retain interest in both your repeat customers and potential clients. Utilize
the writing skills of your staff and encourage them to create blog posts
about your eating and overnight options. Hold a contest for customers to
win a free meal or overnight stay for the most creative article and post a
picture of the winner alongside the article on your blog. Market your blog
as a place for visitors to gain insight with tips about the area in which
youre located.

Partner Up
You can increase the effectiveness of your marketing by partnering with
other businesses targeting the same consumers. Local tourist attractions,
your citys Convention and Visitors Bureau, the Chamber of Commerce,
theaters and sports franchises all could make successful partners for a
shared-marketing campaign. Share the costs of ads for festivals or other
big events in town. Provide food for an event in exchange for posters and
ads in the theater program. Host the kick-off party for a new show in town
and work out a trade to house out-of-town performers in exchange for
prominent billing in print and television ads.

Customer Insight Marketing

This point overlaps with customer service, however this doesnt make it
any less important in fact it could make it more-so. Whether a hospitality
establishment is successful or not can depend entirely on customer
perception if they find fault with anything, they will shout it from the roof
tops...metaphorically speaking. Therefore, its exceptionally important to
gauge who your customers are, what they want and how you, as a
business, can improve.
Customer insight marketing can be simple to implement; simply by asking
your guests to fill in a quick survey, or even fill in a guest book if you want
something a little more old-school and personal, you can have a positive
effect. Customers like to feel important, and like to know their opinions
matter which they do! If your customers dont like your establishment,
you wont have a business for much longer. Youve probably heard it

before, and I feel a little bit cheesy mentioning it but...the customer is

key!
Email & Content Marketing
You may be thinking that this is a little outdated, however, email
marketing is still hugely effective so long as youre not bombarding
customers with them daily. Emailing marketing campaigns are a fantastic
way to remind customers of your existence, especially during low-season.
Here you can highlight special offers, special events or awards that youve
won.
Make your website even more engaging by having a blog: this is an
excellent way to give your business a personality, so to speak, and be
more than another faceless enterprise. TV advertising is expensive, so a
blog, together with excellent branding, is definitely a more affordable
alternative that you can get involved with! Of course, it doesnt just have
to end with digital methods of marketing; direct marketing with leaflets
and promotional gifts can also be hugely beneficial, however you must
ensure that they look professional and represent your business effectively.
Digital Presence & Social Media
Unfortunately, the days are gone where having a beautiful hotel or
restaurant in the perfect location will be enough to ensure success
thinking about it, did a time like that ever exist?
In the digital age, social media MUST be a part of hospitality marketing
and it goes without saying that every hotel or restaurant needs to have a
high quality website preferably with an online booking system. With
hotel review sites such as Trip Advisor becoming more and more popular
its important to have a digital presence and be involved! Here, customers
can review your establishment honestly; you can get some real insight
into what your customers think and how you can improve. These types of
sites can make or break a business, so you must take notice!
Of course, this is not the only way to keep up to date with your customers;
you should also have a Facebook page and Twitter page where you can
interact with your customer plus you can highlight special offers and
events at your business and throughout the local area. Think about it, the
more followers you have digitally, the more people you can connect with
and attract to your establishment.

DRM 28 : Entrepreneurship and

Management of Small Business
1. Explain the role of Entrepreneurship in the economic
development.
In a developing country like India, Small Scale Entrepreneurship plays a
significant role in economic development of the country. These industries,
by and large represent a stage in economic transition from traditional to
modern technology after globalization. The variation in transitional nature
of this process is reflected in the diversity of these industries. Most of the
small scale industries use simple skills and machinery. Besides playing

economic role in the country, small scale industries, because of their

unique economic and organizational characteristics, also play social and
political role in local employment creation, balanced resource utilization,
income generation and in helping to promote change in a gradual and
peaceful manner.
The entrepreneurship is essential not only to solve the problem of
industrial development but also to solve the problems of unemployment,
unbalanced areas development, concentration of economic power and
diversion of profits from traditional avenues of investment.
Economic development of a country is aided by entrepreneurship in the
following ways:
(1) Promotes Capital Formation:
Entrepreneurs promote capital formation by mobilising the idle savings of
public. They employ their own as well as borrowed resources for setting
up their enterprises. Such type of entrepreneurial activities lead to value
addition and creation of wealth, which is very essential for the industrial
and economic development of the country.
(2) Creates Large-Scale Employment Opportunities:
Entrepreneurs provide immediate large-scale employment to the
unemployed which is a chronic problem of underdeveloped nations. With
the setting up.of more and more units by entrepreneurs, both on small
and large-scale numerous job opportunities are created for others. As time
passes, these enterprises grow, providing direct and indirect employment
opportunities to many more. In this way, entrepreneurs play an effective
role in reducing the problem of unemployment in the country which in turn
clears the path towards economic development of the nation.
(3) Promotes Balanced Regional Development:
Entrepreneurs help to remove regional disparities through setting up of
industries in less developed and backward areas. The growth of industries
and business in these areas lead to a large number of public benefits like
road transport, health, education, entertainment, etc. Setting up of more
industries lead to more development of backward regions and thereby
promotes balanced regional development.
(4) Reduces Concentration of Economic Power:

Economic power is the natural outcome of industrial and business activity.

Industrial development normally lead to concentration of economic power
in the hands of a few individuals which results in the growth of
monopolies. In order to redress this problem a large number of
entrepreneurs need to be developed, which will help reduce the
concentration of economic power amongst the population.
(5) Wealth Creation and Distribution:
It stimulates equitable redistribution of wealth and income in the interest
of the country to more people and geographic areas, thus giving benefit to
larger sections of the society. Entrepreneurial activities also generate
more activities and give a multiplier effect in the economy.
(6) Increasing Gross National Product and Per Capita Income:
Entrepreneurs are always on the look out for opportunities. They explore
and exploit opportunities,, encourage effective resource mobilisation of
capital and skill, bring in new products and services and develops markets
for growth of the economy. In this way, they help increasing gross national
product as well as per capita income of the people in a country. Increase
in gross national product and per capita income of the people in a country,
is a sign of economic growth.
(7) Improvement in the Standard of Living:
Increase in the standard of living of the people is a characteristic feature
of economic development of the country. Entrepreneurs play a key role in
increasing the standard of living of the people by adopting latest
innovations in the production of wide variety of goods and services in
large scale that too at a lower cost. This enables the people to avail better
quality goods at lower prices which results in the improvement of their
standard of living.
(7) Promotes Country's Export Trade:
Entrepreneurs help in promoting a country's export-trade, which is an
important ingredient of economic development. They produce goods and
services in large scale for the purpose earning huge amount of foreign
exchange from export in order to combat the import dues requirement.
Hence import substitution and export promotion ensure economic
independence and development.
(8) Induces Backward and Forward Linkages:

Entrepreneurs like to work in an environment of change and try to

maximise profits by innovation. When an enterprise is established in
accordance with the changing technology, it induces backward and
forward linkages which stimulate the process of economic development in
the country.
(9) Facilitates Overall Development:
Entrepreneurs act as catalytic agent for change which results in chain
reaction. Once an enterprise is established, the process of industrialisation
is set in motion. This unit will generate demand for various types of units
required by it and there will be so many other units which require the
output of this unit. This leads to overall development of an area due to
increase in demand and setting up of more and more units. In this way,
the entrepreneurs multiply their entrepreneurial activities, thus creating
an environment of enthusiasm and conveying an impetus for overall
development of the area.
Here are a few entrepreneurs and companies who actually defined new
businesses/products and shaped India:
Jamsetji Tata (1839- 1904)
Founder of the Tata group, this entrepreneur from Gujarat is honoured by
many as the father of Indian industry. The multi billion company we see
today had its first phase in a trading firm started by J N Tata in 1869 with
an initial capital of Rs 21,000.
Dhirajlal Hirachand Ambani (Dhirubhai Ambani) (1932 2002)
Dhirubhai Ambani was an Indian rags-to-riches business tycoon who
founded Reliance Industries in Mumbai with his cousin. From a poor worker
in the fifties to one of the countrys largest megacorp, Ambanis journey to
the pinnacle was at flashing speed.
Verghese Kurien (1921 - 2012)
Verghese Kurien, born at Kozhikode, Kerala was the founder of the Gujarat
Co-operative Milk Marketing Federation (GCMMF) that manages the Amul
food brand. He was recognised as the man behind the success of the Amul
brand. He helped modernise the Anand model of cooperative dairy
development and thus engineered the White Revolution in India, and
made India the largest milk producer in the world.

N. R. Narayana Murthy (1946)

A co-founder of Infosys, N. R. Narayana Murthy isthe man who is often
attributed for much of Indias IT revolution. He left no stone unturned to
put Bangalore on the global map and make India a soft power. Infosys, the
company he co-founded in 1981 with Rs 10,000 in capital is now a $7
billion company and also the second largest software exporter from India.
Above mentioned are the names of a few entrepreneurs who have hit the
glamour circuit. There are many other entrepreneurs and companies
whochanged the face of India, but are being talked about in low tones, in
rare columns and in rarer features.

2. Critically evaluate the Public

Distribution System (PDS) in
Tamilnadu.
PUBLIC DISTRIBUTION SYSTEM OUTLINE

Tamil Nadu Government is

implementing Universal Public Distribution System (UPDS) and no exclusion is

made based on the income criteria. The Hon'ble Chief Minister has made the
universal public distribution system 'poor friendly' by ordering rice at free of cost
under public distribution system to all eligible card holders from 01.06.2011
Tamil Nadu Civil Supplies Corporation procures rice and other essential
commodities required for public distribution system from Food Corporation of
India and through tenders. Distribution of commodities through fair price shops
is being carried out by Tamil Nadu Civil Supplies Corporation and the Cooperative
societes.
Tamil Nadu Civil Supplies Corporation lifts essential commodities from Food
Corporation of India and stores them in 226 operational godowns located all over
the state. From the Tamil Nadu Civil Supplies Corporation operational godowns,
stocks are moved by lead Cooperative Societies / self lifting societies

and

delivered at the doorsteps of fair price shops. Similarly, Sugar is moved by Tamil
Nadu Civil Supplies Corporation from the respective Cooperative / Private Sugar
Mills and distributed through its operational godowns. Tamil Nadu Civil Supplies
Corporation also procures various other essential commodities for Special Public
Distribution System directly from the market through tenders and also through

designated Government of India agencies. Tamil Nadu Civil Supplies Corporation

and Cooperatives lift kerosene from wholesale dealers of the oil companies
Issue of family cards to eligible families is a continuous process and this
Government have issued necessary instructions to the Principal Commissioner
and Commissioner of Civil Supplies and Consumer Protection to issue cards
without delay. At the same time, bogus cards are also being eliminated.
The goal of the Public Distribution System in Tamil Nadu is to ensure food
security to all citizens, particularly poor people, by making available essential
commodities of good quality at affordable prices every month, through fair price
shops which are accessible.
1. Objectives of the Public Distribution System:

Elimination of chronic hunger and starvation in Tamil Nadu.

Protect citizens from ill effects of rise in price of essential commodities.

Reduction of micro nutrient deficiency through fortification of essential

commodities
supplied through PDS.

Make available affordable domestic fuels like kerosene and LPG.

Ensure easy accessibility of Fair Price Shops by cardholders.

2.

Ensure affordable prices of essential commodities , especially for the

poorest.
Ensure availability of essential commodities at the right time every month.
Key strategies for effective implementation of Public Distribution

System

Effective handling of complaints given by cardholders.

Open Part-time shops scheme for villages having difficulty in access to

existing Fair Price Shops.

Timely and controlled movement of essential commodities though route

charts and momentary.

Reduction of leakages through system improvements, tightened

enforcement and deterrent criminal action.

Error free and correct allotment and movement of essential commodities to

fair price shops through E-Governance.

3. Agencies involved in PDS

Cooperation, Food and Consumer Protection department of the Government of
Tamil Nadu lays down policy for Public Distribution System in Tamil Nadu and is
under the charge of Hon'ble Minister for Food and headed by a Secretary to
Government. There are three agencies under the CF&CP department:
1.Civil Supplies and Consumer Protection Department (CS&CPD): is headed by a
Commissioner with 31 district offices and 221 taluk/zonal offices.
2.Tamil Nadu Civil Supplies Corporation (TNCSC): is responsible for procurement,
movement and supply of essential commodities under PDS and is headed by a
Managing Director.
3.Registry of Cooperative Societies (RCS): is responsible for running FPS through
its cooperative societies in all districts and is headed by a Registrar aided by
Joint Registrars in each district.
4.Ministry of Food, Consumer Affairs and Public Distribution: in the Government
of India is responsible for fixing procurement prices of food grains and allots
subsidized food grains to the State Governments under PDS.
5.Food Corporation of India : is a Government of India organization that procures
rice, wheat and other essential commodities from various states and moves
them to states as per Ministry of Food allotment orders under PDS.
MECHANISM TO CONTROL LEAKAGES
Efforts are made to monitor the movement of stocks from Food Corporation
of India depots to TNCSC Ltd taluk operational godowns and then to PDS outlets.
Route charts are followed for movement from Taluk godowns and shops which
are being intercepted and inspected by various teams.
General inspections and monitoring of Public Distribution System is carried out
by following agencies:
District Collectors
Civil Supplies Department
Co-operatives/TNCSC Ltd. Officials in their respective shops.

Inspections are carried at godowns, shops and also enroute movements.

The system of universal Public Distribution System followed in Tamil Nadu
with its effective and diligent mechanism of implementation has contributed to a
great extent in stabilising the food grain price even during the drought years.