\n\n This is an organised market where commodities (e.g., cotton) are bought and sold according to prescribed rules and regulations.<\/p>\n<\/td>\n | \n This is a specialised market for provi\u00adding long-term finance to business enterprises. It comprises specialised financial institutions, stock exchanges, investment trusts, insurance companies.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n (b)\u00a0Difference between a Skimming Pricing and Penetrating Pricing: \n<\/strong><\/p>\n\n\n\n\n Skimming Pricing<\/strong><\/p>\n<\/td>\n\n Penetrating Pricing<\/strong><\/p>\n<\/td>\n<\/tr>\n\n\n In this strategy a very high price is set so that in the initial stages the cream of demand may be skimmed and the investment made in the product is quickly realised.<\/p>\n<\/td>\n | \n This strategy involves selling a low price in the initial stage so as to make the brand quickly popular and to maximise the market share. The manufacturer seeks to sell to the masses.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n (c)\u00a0Difference between Saving Account and Current Account: \n<\/strong><\/p>\n\n\n\n\n Saving Account<\/strong><\/p>\n<\/td>\nCurrent Account<\/strong><\/td>\n<\/tr>\n\n\n 1. Savings bank account is opened for non-trading customers with small amounts.<\/p>\n<\/td>\n | \n 1. Current account is generally operated by the business houses.<\/p>\n<\/td>\n<\/tr>\n | \n2. In saving bank account, with\u00addrawals are limited to two or three times in a week.<\/td>\n | \n 2. In current account, there are no restrictions to limit the number of withdrawals.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n (d)\u00a0Difference between training and education: \n<\/strong><\/p>\n\n\n\n\n Training<\/strong><\/p>\n<\/td>\n\n Education<\/strong><\/p>\n<\/td>\n<\/tr>\n\n\n 1. Training involves increasing knowledge and skills for a specific job.<\/p>\n<\/td>\n | 1. Education involves improving general knowledge and intelligence.<\/td>\n<\/tr>\n | \n\n 2. Training is often given on the job.<\/p>\n<\/td>\n | \n 2. Education is generally imparted in schools and colleges.<\/p>\n<\/td>\n<\/tr>\n | \n3. The burden of training falls mainly on the employer.<\/td>\n | \n 3. The burden of education falls mainly on the Government and the student.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n (e)\u00a0Difference between Money costs and Real costs:<\/strong><\/p>\n\n\n\n\n Money Cost<\/strong><\/p>\n<\/td>\nReal Cost<\/strong><\/td>\n<\/tr>\n\nMoney cost means the amount of money which a producer spends on the production of a particular commodity.<\/td>\n | \n Real cost means the sacrifice, discomfort and pain involved in supplying the factors of production by their owners.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Question 2:<\/strong> \n(a)<\/strong> What is meant by \u2018Variable Cost\u2019? [2]<\/strong> \n(b)<\/strong> What is Tidal energy? [2]<\/strong> \n(c)<\/strong> Mention any four main reasons for the rapid growth of public relations. [2]<\/strong> \n(d)<\/strong> What is \u2018Balance Sheet\u2019? [2]<\/strong> \n(e)<\/strong> State two essential of a good advertisement. [2]<\/strong><\/p>\nAnswer:<\/strong> \n(a) Variable Cost:<\/strong> Variable costs are those costs which vary in amount with changes in the level of output or activity. Such costs increase or decrease in the same proportion in which the level of output increases or decreases. Variable costs vary in total amount but remain constant per unit of production. \n(b) Tidal Energy:<\/strong> The energy possessed by rising and falling water in tides is known as tidal energy. Tidal energy is harnessed for producing electricity by constructing a dam across a narrow opening to the sea. This is not a major source of energy.<\/p>\n(c)<\/strong> Four main reasons:<\/strong><\/p>\n\n- Communication gap.<\/li>\n
- Population growth.<\/li>\n
- Recognition of social responsibility.<\/li>\n
- Education in Public Relations.<\/li>\n<\/ol>\n
(d) Balance Sheet:<\/strong> Balance sheet means a statement which shows the assets and liabilities of the organisation (including capital fund and other fund) on a particular date. It is a statement which reports the property values owned by the organisation and the claims of creditors and owners against these proper-ties. It depicts the financial position of the organisation on specified date.<\/p>\n(e) The two essentials of a good advertisement:<\/strong><\/p>\n\n- Prestige:<\/strong> This theme is used to popularize luxurious items like motor cars, refrigerators and furniture. Their possession acts as a symbol of prestige to their holders.<\/li>\n
- Comfort:<\/strong> This theme is used to advertise products like fans, air conditioners, refrigerators etc., as such products help to make life comfortable.<\/li>\n<\/ol>\n
Question 3:<\/strong> \n(a)<\/strong> What are Receipts and Payments Accounts? [2]<\/strong> \n(b)<\/strong> What is understood by the \u2018Principle of consistency\u2019? [2]<\/strong> \n(c)<\/strong> What is meant by \u2018Discounting of a Bill of Exchange\u2019? [2]<\/strong> \n(d)<\/strong> What are the components of Marketing mix? [2]<\/strong> \n(e)<\/strong> What is meant by In-house market? [2]<\/strong><\/p>\nAnswer:<\/strong> \n(a) Receipt and Payment Account:<\/strong> It is the summary of Cash Book over a specified period. Actual cash receipts and actual cash payments dining the year are considered in this account. These cash receipts and cash payments are recorded under appropriate headings. Such an account necessarily commences with the initial cash and Bank Balances\/overdraft and closes with the final cash and Bank Balances\/overdraft. \n(b)<\/strong> Principle of consistency states that accounting procedures and methods should remain consistent from one year to another. These should not be changed from year to year as otherwise the net profits of different years will not be comparable. \n(c)<\/strong> Discounting of a bill means selling the bill before the due date to a bank at less than the face value. The banker takes the bill and in return gives cash which is equal to the amount of the bill minus the discount. The bank may collect the amount of the bill from the drawee on the due date. In case, the bill is dishonoured on maturity, the bank can recover the payment from the drawer. \n(d)<\/strong> Components of Marketing Mix:<\/p>\n\n- Product Mix.<\/li>\n
- Price Mix.<\/li>\n
- Place or Physical iJistribution Mix.<\/li>\n
- Promotion Mix.<\/li>\n<\/ol>\n
(e)<\/strong> In-Home Market: Marketer carouse door-to-door selling through trained sales force. Initial contact may be made by phone or mailed-in-coupon. This method is costly but effective. In India Eureka Forbes is using this method.<\/p>\nQuestion 4:<\/strong> \nJustify a reason either for or against each of the following:<\/strong> \n(a) <\/strong>Services are not homogeneous. [2]<\/strong> \n(b)<\/strong> Firms live forever (explain with reference to the concept of accounting). [2]<\/strong> \n(c)<\/strong> Public relations is a propaganda. [2]<\/strong> \n(d)<\/strong> The cost of sugarcane is an avoidable cost. [2]<\/strong> \n(e)<\/strong> A cheque is an inconvenient method of making payments. [2]<\/strong><\/p>\nAnswer:<\/strong> \n(a)<\/strong> For:<\/strong> Services are highly variable. It is difficult to control and measure. \n(b)<\/strong> For:\u00a0<\/strong><\/p>\n\n- It is assumed that the business will continue to exist for a long period in the future. The transactions are recorded in the books of the business on the assumption that it is a continuing enterprise.<\/li>\n
- It is on this concept that we record fixed assets at their original cost and depreciation is charged on these assets without reference to their market value.<\/li>\n<\/ol>\n
(c)<\/strong> Against:<\/strong><\/p>\n\n- Public Relations is not propaganda which is a instrument of politics and power for social control.<\/li>\n
- Propaganda does not necessarily require an ethical content and is guided solely by self-interest.<\/li>\n<\/ol>\n
(d) For:<\/strong> The cost of sugarcane can be avoided by closing down the sugar factory for one year. But the cost of factory building cannot be avoided for the year. \n(e) Against:<\/strong> A cheque is a very convenient method of making payment. There is no need of counting and checking notes when payment is made by a cheque.<\/p>\nSection – B (60 Marks)<\/strong><\/span> \n(Attempt any four<\/strong> questions from this Section)<\/em><\/p>\nQuestion 5:<\/strong> \n(a)<\/strong> Distinguish between a Product and a Service citing suitable examples. [5]<\/strong> \n(b)<\/strong> Describe the various steps involved in Personal selling. [5]<\/strong> \n(c)<\/strong> Explain the main principles of Accounting. [5]<\/strong><\/p>\nAnswer:<\/strong> \n(a) Difference between Product and Service:<\/strong><\/p>\n\n- Tangibility:<\/strong> Products are tangible, i.e., they can be felt, seen, tasted, heard or smelled before they are purchased whereas services are intangible, i.e., they cannot be felt, seen, tasted or smelled before they are purchased. For example, a person wants to purchase a car. He\/she can feel and see the car before purchase but a person going for a massage to the parlour, cannot feel the result before getting the massage done.<\/li>\n
- Variability:<\/strong> Services are highly variable but products are not. For example, if a patient wants to get his liver transplanted, the services given by a hospital situated in Delhi, which is equipped with all modern amenities for doing So, will be quite different from a hospital situated in rural areas of India.<\/li>\n
- Separability:<\/strong> Products are separable, i.e., products are manufactured, put into inventory, then through channel of distribution they reach the ultimate consumer. Thus, product is separable but this is not true in case of services, they are produced and consumed simultaneously. For example, a car is manufactured, put into inventory, distributed through their show\u00acrooms and then it is purchased by the customer but when a person travels by aeroplane, services of aeroplane (transportation) can be taken while it is flying, thus it is inseparable.<\/li>\n
- Perishability:<\/strong> Products can be stored whereas services cannot be stored. Thus, products are not perishable but services are. If a showroom keeps twenty scooters for sale during one month and they are not sold, they don\u2019t perish. But if a passenger bus has to carry fifty passengers at one time and it carries only 30 then the service meant for 20 passengers perishes.<\/li>\n
- Homogeneity:<\/strong> Products are homogeneous in many respects. In case of standardized products, a product is a perfect substitute for another where it is impossible for an individual to distinguish one from another. Thus, if a person has to buy a Gillette shaving gel, he can pick any one lying at the store. But services are not homogeneous, they are heterogeneous. For example, if one wants to take medicine from doctor, he\/she cannot choose any, but will choose the one which gives the best satisfaction.<\/li>\n<\/ol>\n
(b) Various Steps in Personal Selling:<\/strong><\/p>\n\n- Preparation:<\/strong> First of all a well-trained and motivated sales force is developed. Salespersons must have knowledge of the firm and its products and services, competitors and their products and services, customers and selling techniques. They must be fully aware with the quality, uses, prices, etc., of the goods to be sold.<\/li>\n
- Prospecting:<\/strong> Prospecting means locating and identifying the potential buyers. A list of prospective customer can be prepared with the help, of dealers, salespersons, telephone and trade directories etc. Information about fhe age, income, education, family background, tastes, preferences, etc., of prospective buyers should be collected.<\/li>\n
- Approach:<\/strong> In this step, the salesperson makes face-to-face contact with the prospective buyer. The sales-person should introduce himself, greet the customer and start the conversation with him\/her so as to create a good first impression.<\/li>\n
- Presentation:<\/strong> Now the salesperson displays and describes the product to be sold. He should tactfully demonstrate the product and explain its quality, utility, performance etc.<\/li>\n
- Closing:<\/strong> The salesperson concludes the sale by obtaining the consent of the buyer. Some concessions may be necessary for this purpose. He should assure the customer that he has made a wise choice and should thank the customer. In order to obtain repeat sales, the salesperson should carefully pack and deliver the product.<\/li>\n<\/ol>\n
(c) Main Principles of Accounting:<\/strong><\/p>\n\n- The Business Entity Concept:<\/strong> According to this concept, a business firm is treated as a unit separate and distinct from its owners. A completely separate set of books is kept for the firm and business transactions are recorded from the firm\u2019s point of view. The capital provided by the owner is treated as a liability of the firm. Interest on capital is treated as an expense of business. Similarly, the money\/goods withdrawn by the proprietor from the firm for his personal use is treated as drawings. The concept of separate entity is necessary for ascertaining the true net profits and financial position of a business firm.<\/li>\n
- The Going Concern Concept:<\/strong> It is assumed that the business will continue to exist for a long time in the future. Transactions are recorded on the assumption that the business will exist for an indefinite period of time. It is on this assumption that a distinction is made between capital expenditure and revenue expenditure. Fixed assets are recorded at their original cost less depreciation. Market value of fixed assets is not recorded, as these assets are not to be sold in the near future.<\/li>\n
- Accounting Period Concept:<\/strong> It is due to this concept that financial statements are prepared at regular intervals, generally one year. This period is called accounting period. The net profit\/net loss of business is ascertained separately for each accounting period.<\/li>\n
- Money Measurement Concept:<\/strong>\u00a0On the basis of this concept, only those transactions are recorded in accounts which can be expressed in terms of money. For example, the retirement of the chairman of the company cannot be recorded because it is not possible to measure the monetary effect of retirement except in terms of gratuity and other benefits payable to the chairman.<\/li>\n
- The Matching Principle:<\/strong> According to this principle, cost of a particular period should be charged from the revenue of same period only. Only such matching of cost and revenue can reveal the true profit or loss for a period. When cost is associated with a particular product or service, revenue earned from that product or service should be matched to its cost. This principle provides the guidelines as to how the expenses are to be matched with revenue. It requires that in determining the net profit, all costs which are applicable to revenue of that period should be charged against that revenue.<\/li>\n<\/ol>\n
Question 6:<\/strong> \n(a)<\/strong> Describe any two stages of Marketing. [5]<\/strong> \n(b)<\/strong> \u2018Advertising is a Social waste\u2019. Give reasons in support of your answer. [5]<\/strong> \n(c)<\/strong> Explain any two causes responsible for the destruction of the ecosystem. [5]<\/strong><\/p>\nAnswer:<\/strong> \n(a)<\/strong> From subsistence level and self-sufficiency to modem marketing has been a long journey. Advent of money led to the rise of markets and exchange system. The evolution of modem marketing can be traced through the following stages:<\/p>\n\n- Production-Oriented Stage (1869-1930):<\/strong> In this stage the motto was \u2018sell what can be produced\u2019. There was acute shortage of goods and there was no need to create demand. Product was the focus of attention and communication with the buyer was not needed. Products were manufactured on the assumption that customer would search and buy well build and reasonably priced products. This was based on Say\u2019s law: \u2018Supply creates its own demand\u2019. Production oriented stage lasted till the Great Depression.<\/li>\n
- Sales-Oriented Stage (1930-1950):<\/strong> Great Depression resulted in drastic changes in buying habits and behaviour of consumers, technological advancements in transportation and communication also changed the thinking. The focus shifted from production to selling. How to sell became a problem and the new motto was \u2018get rid of what you have\u2019. The focus was on increasing sales rather than on consumer satisfaction. Demand out stripped supply and it was still a seller\u2019s market.
\nIn the last stage of marketing, i.e., Marketing oriented stage, customer satisfaction became the principal reason for corporate existence. They realised that in order to survive and grow in this highly competitive world, a company must first determine what consumers want. Then produce that will satisfy consumers.<\/li>\n<\/ol>\n(b)<\/strong> Advertising has been criticised on the following grounds:<\/p>\n\n | | | | | | | | | | | | |