Business Education

Drawbacks of MNCs

2011-11-20T04:00:00.000-08:00

There are lots of drawbacks of MNCs. All these drawbacks are being written on the basis of past experience of MNCs.

1. Interference in the Economic Sovereignty of the Host Country

MNCs affects the independence of any country. For example, one East India company came in India for business but it made India slave for 200 years. So, it is the biggest drawback of MNCs that these are the risky for freedom of any country.

2. Drainage of Resources

MNC's main aim is to earn the profit by any way. So, it exploits developing country's natural resources. These MNCs increase pollution of air and water.

3. Strain on Foreign Exchange Reserves

MNCs are very risky for foreign exchange reserves. India, there are lots of MNCs which transfer Indian currencies to their home country in the form of profit and dividends of foreign shareholders. With this, our foreign exchange reserve level is decreasing.

4. Minimum Transfer of Technology

No MNC bring any new technology in India. They only produces zero technology products in the form of cold drinks and other which can easily make in each village of India.

5. Exploitation of Labour

These MNCs do not create any employment in the host country because these MNCs are only interested to exploit laborers by paying them less. All top posts are filled by their home countries employees.

6. Cultural Loss

This is the one of biggest drawback of MNCs that it is risky for our cultural loss. Our culture makes us vegetarian but many MNCs employees eat meat and chicken. So, all these things are against our culture. Bad Indians copies MNCs employees and start to wear leather shoes. Due to this, animals of India are being killed . So, this activities are so bad.

7. Creation of Monopolies

MNCs create also monopolies. With high advertising and other ways, these MNCs do not live domestic companies. After this, these MNCs increase prices and then get high profit by exploiting consumers of India.

8. Evasion of Taxes

These MNCs do not disclose its all true account. So, with this, these MNCs save their tax liabilities.

9. Economic Power

This is also one of the important drawback of MNCs that these MNCs misuse of their economic power. With economic power, these MNCs tries to change the economic policies. With this, they have to pay zero tax in host country.

10. Depletion of Natural Resources

After increasing of MNCs in India, you can see that our all natural resources are decreasing very fastly. These MNCS are selling urea fertilizers. With this, our land is becoming useless.

Benefits of MNCs

2011-11-20T02:25:00.000-08:00

If any MNC works with honesty and high moral ethics, at that time there are lots of following benefits:

1. If MNC wants to benefit of human resource of the country in which it is operating, it can play important role to generate new employment. For example, there are lots of IT companies who hired Indians for their work, so with this employment of Indians has increased.

2. If MNC takes social responsibility, at that time, it can invest his profit for development of parks, education of employees' children and other welfare schemes instead of sending this profit to his home country.

3. MNC creates a place where different countries employees can collaborate. With this, they can increase world unity. They can think to solve world problems like poverty, killing of animals and pollution problems.

4. If MNC works with more honestly, at that time, it can share his technology with host country. But it is very rare case.

5. After coming of MNC, advertising company can earn more.

What is MNC

2011-11-20T02:13:00.000-08:00

MNC means multinational corporation. If any company's head office in one country and its business activities are in many countries, that company will be called multinational corporation. Its other popular name is multinational enterprise. These corporation is also called transnational corporation. Multinational corporation starts from their own country but they increase their business level and they do business many countries as per the rules and regulations of different countries.

Foreign Exchange Regulation Act 1973 applies on MNC. As per this, a corporation will be MNC, if

1) Its subsidiary or branches are in two or more countries. All these countries will be host countries for him.

2) Its head office is outside of India. His own country will be home country for him.

British East India company is first MNC who issued shares and created stock. More than 400 years history of big MNCs and its development. Every corporation starts his business as MNC because it has to get tax benefits. It has to get low labor cost benefits. It has to get marketing benefits. Large number of MNCs are from developed countries. There are big competition, so these corporations go to developing countries for their own benefits. By opening branches or subsidiaries in developing countries, they can produce their products at cheap material and labor cost.

What is MMNC?

It means micro multinational corporation. It is just like multinational corporation but at micro level. With the help of internet, anyone can make MMNC by creating or using e-commerce website or providing international service.

Features of MNC

1. Board of directors will be of home country.

2. MNCs do business with direct investment. It means these MNC will have right to buy land and make plant. It also have right to produce the products and sell the products in other country.

3. MNCs's advertising lobby is very advance. They want to sell every thing on the basis of high advertising whether it is quality product or not.

SWOT analysis

2011-10-28T04:59:00.000-07:00

Meaning of SWOT Analysis

SWOT analysis means strength, weakness, opportunities and threat analysis. In this analysis, first of company identify its strength and weaknesses. On this identification, company finds its opportunities and future threats. This analysis is very useful for planning and decision making. If any organisation finds its all strengths and weaknesses correctly, it is very easy to make a plan which will be helpful for getting opportunities and reducing future risks.

Example of SWOT Analysis

I can give SWOT Analysis example of my organisation. I started my organisation from Jan. 2008. Now, it is reaching its 4th year. Just 2 months after, it will be of 4 years. In this time, I find many my strengths and weakness through SWOT analysis which I am sharing with you.

1. I write what I know. This is my strength. So, I can find more opportunity if I will start to know more things and then write it myself. Yes, I am trying myself to know everything in my field.

2. My main weakness is that I do not know what are my weaknesses. So, when these weaknesses happens, I also faces loss. But, I started new way to find my known weaknesses. One of best way is for me to read and listen what are people are saying about me in my comment box or in my inbox. I am personally thankful all of them.

SWOT Analysis Template

Following SWOT Analysis Template will be helpful for business organisation for making good SWOT Analysis

Issues	Strengths	Opportunities	Weaknesses	Threats
1. Fund	Company has enough fund for investment	Company can start new projects or develop new project with this fund	No enough fund	Company can face the risk for repayment of past loan.
2. ROI	Company is gaining high Return on C Product.	Company can develop that C Product.	Company's D product has low return.	Company may suffer loss on D Product.
3. Innovation	If company works with innovation approach, it will be the strength of company	Company can take the share of other company who is not enough innovative.	If company do not care enough on innovation, it can become the major weakness of company	Company can lose the share of market due to lack of innovation.
4. Product Life	If company's product life is very high, it is very one of best strength of company.	Company can make it as brand of company because it will reduce the cost of customer for buying new product soon.	If company's product life is very less, it is the weakness of company.	Company can lose its brand due to this weakness in the market.
5. Confidence	If its all employees have confidence, it is big strength of company.	Company can get more efficiency from this confidence.	If company's employees have no confidence, it is the weakness of company.	Company may face big cost of training for increasing confidence of employees.

What is Environmental Appraisal? What are the Stages Involved in Appraisal?

2011-10-28T03:43:00.000-07:00

For finding business's available opportunities and risks, environmental appraisal is needed. Environmental appraisal means to analyze all the factors of business environments. Following are the main stages involved in environment appraisal.

1st Stage : Factors Affecting Environmental Appraisal

Following are the main factors affecting environmental appraisal

a) Factors relating to environment

We can not evaluate equally two organisation in same environment. we have to study every organisation's complexity and flexibility.

b) Factors relating to Organisation

Age of organisation will affect our environmental appraisal. We also see the organisation's size for doing business and its market type. What are the services and products, it is providing?

c) Factors Relating to Strategies

Policy makers play important role in appraisal. Age, education and experience of policy maker will affect the environmental appraisal.

2nd Stage : Identification of Environmental Factors

In second stage we have to identification of environmental factors on the basis of following issue

a) Critical Issues

b) High Priority Issues

c) Low Priority Issues

3rd Stage : Structuring the Environmental Appraisal

This is the third stage of environmental appraisal. In this stage, we create the structure of environmental appraisal. One side of structure will be our strengths and other side will be our weaknesses. By comparing both, we estimate our surviving power in the environment of business.

Factors of Environmental Scanning

2011-10-28T02:18:00.000-07:00

Following are the main factors of environment scanning.

1. Events

Past events of business environment is the main factor of environment scanning. For example, if Govt. has to control food prices, it has to scan every week prices of vegetables, fruits, milk and other food items. For more simplification of price rise, Govt. will calculate wholesale price index.

2. Trends

Not just to see the past events are effective but to establish the trends on the basis of events is also very important because this is important factor of business environment scanning. Suppose, you have to take decision relating to your vegetable prices, you have all the past market price data of same vegetable. Now, you will make a trend graph. If there is an increasing trend, you will fix your vegetable price according to this.

3. Issues

Issues are also important factor of business environment scanning. As a good businessman, you have to scan both cold and burning issues on daily basis. For example, I can tell you following business issue which I studied today newspaper.

a) European union wrote down a 50% of Greece's debts.

b) Sony Corp. buys Sony Erickson mobile phone joint venture for $ 1.45 billion.

c) Rajat Gupta is being charged for insider trading.

d) Bharti Airtel's urgent request failed.

4. PESTEL analysis

It means political , economical, social and technological analysis. We scan following updates in it.

Changes in Taxation Policy
Changes in Trade regulations
Changes in Governmental rules
Changes in Unemployment Policy etc.
Changes in Inflation rate
Changes in Growth in spending power
Changes in a pensionable age, suppose in Italy, pensionable age will be 67 years in 2026.
Technological changes
New or improved distribution channels
Improved communication and knowledge transfer etc.
moral factor
Laws on
Waste disposal
Energy consumption
Pollution monitoring etc.
Unemployment law
Health and safety
Product safety
Advertising regulations
Product labelling etc.

Approaches to Environmental Scanning

2011-09-22T06:25:00.000-07:00

For analyzing the information in environment scanning, we can use following approaches.

1. Systematic approach

In this approach, we first collect the information in systematic way. This information is collected from market, customers and govt. organisations.

2. Ad- hoc approach

Following are main features of this approach.

a) In ad hoc approach, organisation can survey of special environment issues. These survey will be done, if any new project will be made or has to analyze the current policies.

3. Processed Form Approach

If any organisation uses the secondary sources of information, then that approaches will be processed form approach to environment scanning.

Factors of Environment Scanning

2011-09-22T05:40:00.000-07:00

Following are main factors of environment scanning.

1. Events

In environment scanning, we study past events. Past events are the one of the important factors of environment scanning. For example, gas leakage in Bhopal union carbide factory is a past event which will helps for environment scanning.

2. Trends

Trends also are the main factor of environment scanning. We see what is the trend of past event or trend of action after happening any event in past.

3. Issues

Environment scanning also keep eye on important issue of business environment. For example, pollution is one of important issue.

4. Expectations of People

We also check the expectations of peoples. For more expectations, we will have to enable our product according to their expectations for surviving in business. That is the reason, we are interested to know the expectations of people in environment scanning.

Procedure of Formation of Company

2011-09-06T23:56:00.000-07:00

When some persons join for business and register their company under company law 1956, then company comes in existence. But this is not complete formation of company. Following are the steps which you have to follow, if you want to format the company under company law.

1st Step : Apply for Company Registration

First of all, you have to apply to your state's company registrar for registration of company. You have to give application to him with following documents

a) Memorandum of Association

It is the charter of company. In this document, company's working area will be mention. In case of public company, 7 member's signature is needed on this document. In case of private company, 2 members signature is needed on this document.

b) Article of Association

This document shows the rules of internal management. All the members who have signed MOA, have to sign on AOA.

c) Information regarding authorized capital

This document tells the authorized capital limit of company.

d) Information of registered office

This document shows the address of registered office of company.

2nd Step : Inspection by Registrar

After this, it is the duty of promoter that they have to help registrar for inspection.

Registrar see

whether

a) Aim of company is valid
b) Required members have signed on given documents
c) It has completed all the formalities of company creation
d) Name of company is valid.
e) Statutory declaration has been done.

3rd Step : Registered and Formed

When company registrar has satisfied with all matters, he will issue certificate of incorporation. After this, private company can start his business. In case of public company, it has to get certificate of commencement of business after getting certificate of incorporation. The certificate of commencement of business will be given, if it has obtained required minimum subscription and deposit the amount of qualification shares.

How to Start Contractor Business

2011-09-06T22:30:00.000-07:00

You can start contractor business in any industry. Today, we are telling you, how can you start contractor business specially construction of water tanks. Following are its main steps

1st Step : Estimation of construction overheads

Prepare a report of your estimated overhead cost and then it should be approved with proper authority. After this, contractor should fill the tender.

2nd Step : Investment

For construction of water tanks, he has to invest his money in machines, shattering, skilled labour capital and security.

3rd Step : Qualification

Minimum 10+2 or B.A. is sufficient to start contractor business.

4th Step : Experience

Before taking any govt. contract, he should take small private contract and his satisfied work will become his plus point for taking govt. contract.

5th Step : Way of Work

1. Material is supplied by owner. He will just do the work with the help of labors.

2. He will also supply all raw material.

Importance of Environment Scanning

2011-09-06T08:08:00.000-07:00

Following are main importance of environment scanning :

1. Effective Utilization of Resources

In environment scanning, we find the company's strength and weakness. With these strength and weakness, company can find future risk and opportunities. For reducing risk and getting the opportunities, company can use its resources effectively.

2. Constant Monitoring of the Environment

For success in business, it is very necessary to keep eye on its changing environment. With environment scanning, we can scan important updates of environment. Now, by studying these environment changes, it is very easy to find the challenging way.

Limitation of Business Environment Analysis

2011-09-01T15:44:00.000-07:00

Following are main limitation of business environment analysis:

1. Unexpected and Unanticipated Events

We can not tell unexpected and unanticipated events in business environment analysis. Sometime, business has to face unexpected happenings. So, there will no benefit of business environment in these cases.

2. No sufficient Guarantee

Business environment analyst does not give any guarantee whether all events will happen as per estimation in business environment.

3. Uncritical Faith

Sometime data may be incorrect. So, decisions on basis of these analysis may be risky for business.

4. To much information

Sometime too much information relating to business environment analysis will create the doubt in businessmen.

International Environment of Business

2011-09-01T15:36:00.000-07:00

In international environment of business, we can comprise all the factors which affects international business. These factors are international financial system, exchange rates, international lending operations, International organisations which control foreign business.

To know international business environment is very necessary because after knowing it, we can know its effect on Indian business. For example, we have to study WTO's rules and regulations. Check whether, these rules and regulations are in the favor of Indian business or not. There are also other international organisations like IMF and world bank. We also study their changes and its effect on Indian business.

Foreign aid and foreign investment is also developing international factor in developing countries. We should study whether it is helpful for development of developing countries or not.

Political Environment of Business

2011-09-01T15:27:00.000-07:00

Political environment is the mixture of the environment of legislature, executive and judiciary. In legislature and executive of Govt. decide the different work of nation. Judiciary sees whether it is legal or illegal. It is continue changing. As a businessman you should watch it. You can see the changes in the political environment with the help of media. Media shows the updates of politics. These days, Indian corruption is on the top of politics. You can watch and also analyze its effect on your business.

Political environment also affects business with different business laws. These laws controls all the activities of business. In India, there are lots of laws which has been made by Indian Govt. In these laws, we can add company law 1956 and Factory act 1948. For controlling stock exchanges, Govt. has made SEBI. For controlling banking business, Govt. has made RBI.

Objective of Business Environment

2011-09-01T08:11:00.000-07:00

Following are main objectives of business environment:

1. Knowledge of Information

By studying the business environment, we can know the changes of business. This information is very useful for our business. Every businessman should aware current environment of business. With this, he can think the future of his business in such environment.

2. Basis of Decisions

One of main objective of the study of business environment that it can provide all the information which is needed for taking good decisions. Suppose, you completed your internal business environment study. With this study, you can take decision relating to purchase, sale, salary and price because you know your competitor, you know your suppliers and you know your customers.

3. Helpful in making of Policies

For making good business policies, we need to know and scan business through business environment.

4. Technological Planning

Today, technology is changing very fastly. 3 years ago, I have to search software for downloading business software but today I can use all business software online free of cost. This has become possible due to changes of web technology. So, you have to study technological environment. With this, you can make better technological planning of your business.

5. Survive in the Business

Sometime industry may face recession. Production may be unlimited but sales will be limited. Only that business will survive who estimate all these situation in advance through business environment study.

FAMA Violation

2011-09-01T03:27:00.000-07:00

a) Transfer of foreign security by Indian resident .

b) Transfer of foreign security by Indian resident which is now outside India .

c) Transfer of immovable property .

e) Taking of Loan outside India in Indian Currency by Indian with the help of person who is living outside.

f) Giving the Guarantee by a person who is living in India for a person who is living outside India.

All transactions will apply only on capital transactions.

Demographic Environment of Business

2011-08-31T03:20:00.000-07:00

In demographic environment of business, we can include following things

1. Size of population

All these elements are relating to business. If size of population is increasing with high growth rate, demand is increased.

2. Growth rate

High growth rate of population is also tells us high rate of supply of laborers. Many companies motives to invest money in developing countries due Cheap labor power and developing market.

3. Age composition

Before producing the product, we see what age group will use this. For example, young population are interested to wear jeans but old age population are interested to wear curta and pajama.

4. Sex composition

Sex composition are two one is male and other is female. We also study the number of our customers who are female and no. of our customers are female. If female are more than male, we will care their need specially in making of our products.

5. family size

Suppose, we are making residential rooms. For making residential rooms, we should study the number of family members who will live in it.

7. Educational level

Educational level of our customer may also affect our marketing techniques. If our customers are very educated, we can use online advertising, if they are not educated we have to use old means of advertising.

Natural Environment of Business

2011-08-31T03:10:00.000-07:00

Natural environment is the group of natural resources which is used by business. Let me explain it in detail. Suppose, one business is of manufacturing. You know, from where will it get its raw material? For producing goods, manufacturing business gets all raw material from nature. All agricultural input will use in manufacturing. His machines are also made by nature's metals. His used energy is also from natural gas or diesel oil or electricity which come from nature.

In business, when we use these natural resources without any limit, natural environment changes. Global worming, floods, famines, tsunami and earth quake are its result. So, now it is the duty of business to protect this natural environment. He should support for planting more and more trees. He also stops to misuse of natural resources. After this, he can create co-ordination with nature.

What is Abatement

2011-08-27T23:23:00.000-07:00

If businessman dies before clears his dues, his liabilities should be decreased and up to the value of his assets in case if assets are not sufficient to clears all dues. Decrease of assets will be abatement.

What is a fortiori analysis?

2011-08-27T23:11:00.000-07:00

A fortiori analysis is that business system of decision making in which we do analysis by making the list of all alternatives and best alternative is selected.

Forms of Business Organisations

2011-08-21T03:24:00.000-07:00

Every business needs an organisation to regulate its functioning. When two or more persons work together to achieve a common objective, the division of labor takes place between them. This is the beginning of an organisation. The organisation plays a vital role in achieving the main and ancillary objective of the business.

The business units have different forms of organisations. These can be classified as follow

1. Individual or sole proprietorship

Sole proprietorship is the first stage in the evaluation of various forms of business organisation and hence the oldest one. It is the simplest and most natural form of organisation. Though, the sole proprietorship is the oldest for of organisation and many changes have taken place thereafter in the form of business ownership, yet it remain the most popular form in the modern business.

" A sole proprietorship is that form of business as the head of which stands an individual as the one who is responsible, who directs its operations and who alone runs the risk of failure."

2. Partnership firm

Partnership has two or more members each of whom is responsible for the obligation of the partnership. Each of the partners may bind the other, and assets of the partners may be taken for the debts of the partnership.

3. Joint Hindu family

Joint Hindu family or Hindu undivided family firm is a peculiar form of organisation which comes into existence by operation of Hindu law. The functioning of this form of organisation is governed by Hindu law. The hindu law comes into operation on the basis of two schools of thoughts which are as follow.

School of mitakshara

The school of mitakshara is applicable to whole of India except the state of Assam and Bengal, where the school of dayabhaga is applicable.

The Joint Hindu family firm as a form of organisation has its origin in the principles of inheritance under the mitakshara school of Hindu law. Thus, legally speaking, joint Hindu family firm exists only under the mitakshara system. All the male members of the joint Hindu family firm are known as coparceners. Their interest in the family business is called as the coparcenery interest. Thus the sons, grand sons and great grand sons become joint owners in the family property. The moment a male child borns in joint Hindu family, he becomes a joint owner to the ancestral property. Initially, a female member was not having right to the joint family property, but the amended Hindu succession act, 1956, enable the female members of the deceased coparceners family to share out of the coparcenery interest of such coparceners. However, the female members or their relatives do not enjoy the status of coparceners even after the amendment in Hindu succession act 1956.

4. Joint stock company

Company is an artificial person created by law for some common purpose, where the capital is divisible into parts, known as shares and with a limited liability.

5. Co-operative organisation

Co-operative organisation is the form of business organisation where in persons voluntarily associate together as human beings on the basis of equality for promotion of economic interest of themselves.

6. State enterprises and public utilities

Public enterprises mean state ownership and operation of industrial, agricultural, financial and commercial undertakings.

Types of Business Activities

2011-08-21T01:51:00.000-07:00

Broadly, the business activities can be classified as follow:

1. Industry

Industry covers production aspect of goods. The term industry refers to the production aspect. The units engaged in producing the goods are collectively called as industry. The industry uses the raw material or semi finished goods for producing the finished goods. These goods can be industrial goods as well as consumer goods. The industrial goods are goods which are used in factories for manufacturing goods. An engineering unit manufactures the machine tools, it means the units is producing the industrial goods, because, such machines are further used for manufacturing the products. If a unit is producing butter, bread, cloth etc., it means the unit is manufacturing consumer goods, since these are consumed by consumers directly.

The industry creates the form utility in the goods. Thus, it produces the economic value. Industry requires both physical and mental efforts of human beings for creating economic values in the goods.

2. Commerce

Sale or exchange of goods and services is an essential characteristic of business. In the process of sale or exchange, goods pass through different stages till these are finally used or consumed by the customers, the last link in the chain from producer to customer. The process which fills the gap between producers and consumers is known as commerce. All activities which remove the gap between the producers and consumers are known as commercial activities. It facilitates the distribution of goods and services among the consumers.

Difference Between Business and Profession

2011-08-21T01:39:00.000-07:00

Following are the main difference between business and profession.

1. Minimum qualification

→ No qualification is required to start a business.

→ A minimum technical or academic qualification is needed to join a profession.

2. Capital

→ An adequate amount of capital is required to run the business efficiently.

→ Real capital is the competency and specialized knowledge of the profession.

3. Objective

→ The main objective of the business is to earn profits.

→ Service first, profit second is the main objective of the profession.

4. Risk

→ There is an element of risk in the business.

→ In profession, there is minimum risk.

5. Secrecy

→ The secrecy in the business transactions is not necessary.

→ A professional must maintain the secrecy of dealings with his clients.

6. Code of Conduct

→ There is no specific code of conduct for the business.

→ There is a code of conduct for every profession for regulating their dealings.

7. Specialization

→ A businessman need not to have a specialized knowledge for starting a business

→ A professional must have a specialized knowledge in the profession which he wants to join.

8. Advertisement

→ Generally, the goods are advertised in business to increase sales.

→ Advertisement is prohibited in all the professions according to their code of conduct.

9. Criteria of Efficiency

→ Profits in business is the only criteria of efficiency.

→ Quality of service rendered is the basis of measuring the efficiency.

10. Transferability

→ One can easily transfer his interest in business to other. For example father can transfer his business to his son.

→ Profession involves the specialized knowledge which can not be transferred to any other person.

Objective of Business

2011-08-21T01:25:00.000-07:00

No human activity takes place without any objective. The business is also one of the most important human activity. So, it must be having its objectives i.e. economic and non economic. Basically, the business is an outcome of the social and human needs of the society. So, the social and human objectives are the main considerations of the business. To achieve these objectives, survival of the business is necessary which is not possible without profit earning, thus, the objective of the business can be categorized as follow:

1. Economic Objectives

a) Profit earning : Risk bearing is one of the important characteristics of the business. Therefore, it is necessary to earn profits for survival of business. It is an incentive which keeps the entrepreneur busy all the time. Moreover, employees demand for higher wages and better working conditions, investors expect higher rate of return. All these requirements can not be met without adequate profits. The profits are not only necessary for survival, but these are also required for the growth and expansion of business. Thus profit earning is an important objective of business. But the rate of earning profit must be reasonable.

b) Production of Goods : Every business activity is directed towards the satisfaction of the need and wants of the human beings. To satisfy the needs and wants of the people, the business has to produce the goods according their tastes and fashion.

2. Social Objective

If the profit earning is one of the important objectives of the business on the one hand then, on the other it should satisfy the social needs and wants i.e. by supplying good quality products at genuine price. In the modern society, business occupies a meaningful and significant place in the life of the people.

The social objectives of the business are as follow:

a) Availability of goods : The business should make the necessary goods and services available to the customers to satisfy their different needs and wants at appropriate time. This objective is so important that Govt. is also co-ordination the business for providing the necessary goods i.e. flour etc. to the people through its public distribution system. The commerce one of the major component of business, makes the goods available to the general public by collecting these from the manufacturing places. Thus to make the goods available to the society is one of the important social objective.

3. Human Objective

The success of the business mainly depends upon the involvement of the workers, co-operation of the consumers and financial support of the investors. Thus, it is the responsibility of the business to look after the interest of these persons.

The human objectives of the business are as under:

a) Welfare of the workers: The workers are the inseparable part of the business. They are not just the employees of the business but they put in their efforts in the formation of capital. Therefore, the business should pay attention towards the welfare of workers. They should not be considered as machines only. They should be paid wages in accordance with their labor. It has also been experienced that where the workers are provided with incentives such as bonus and additional facilities with regard to health and entertainment etc. the productivity has increased manifolds. So, it should undertake welfare programmes in order to make the workers satisfied with the working conditions. A satisfied worker is an invaluable asset to the business. Thus, it is the duty of the business to look after the welfare of the employees for its own development.

b) Consumers' satisfaction: The consumers are the sources of growth and expansion of the business. So, they should be provided with quality goods at reasonable prices. The special attention should be paid to the tastes and liking of the consumers. Many organisations of the consumers have come up under consumers protection act. The consumers have become vigilant about their rights. Thus, the business should satisfy the consumers with regard to quality, quantity and price. It will be better for the business even in the long run.

c) Satisfaction of shareholders : In the company form of organisation, the management of company should look after the interests of the shareholders i.e. the real owners of the company. The shareholders are widespread all over the country and do not know the managing director or directors of the company. They invest their money in the company on the basis of information received through prospectus and news papers etc. Thus, it is the obligation of the management to distribute fair return to the shareholders on their investments.

Difference between Memorandum of Association and Article of Association

2011-08-19T09:33:00.000-07:00

Basis of Difference	Memorandum of Association	Article of Association
1.Definition	It is that document of company which shows company's objectives, company's rights and area limitations. It is the charter of company	This is that document which shows internal rules of company. It is necessary for the management of company. It clears the rights of managers.
2. Apply the Section	Indian company law's section 2(28) applies for making MOA.	Indian company law's section 2(2) applies for making AOA.
3. Contents	In documents, following are main contents a) name of clause b) registered office clause c) objective clause d) Liability and capital clause	There are not any fixed clauses but following contents may be increased or decreased a) Adoption of preliminary contracts c) No. of shares and price d) allotment and call of shares
4. Apply doctrine	Doctrine of ultravirse applies on MOA	Doctrine of indoor management applies on AOA

What is Business?

2011-08-19T09:00:00.000-07:00

"Business is a way men make their living. It may be defined as human activity directed towards producing or acquiring wealth through buying or selling goods. It is an institution organised and operated to provide goods and services to society under the incentive of private gain."

The main emphasis of the above definitions is on exchange of goods or services for profit motive. The exchange of goods and services entail many economic activities. All these activities are to be regulated by persons.

Business, thus, involves the economic activities such as manufacturing, merchantability, financial, insurance, transportation and marketing etc.

Features of Business

2011-08-19T08:41:00.000-07:00

Following are main features of business

1. Economic Activity

Business is sum of economic activities. We can say all activities in which goods are produced, purchased and sold. Social welfare activities are not included in it.

2. Aim of Earn Profit

It is the feature of business that all activities are done for the aim of earning profit. If we collect donation for providing services to others, it will not be business.

3. Risk of Loss

In business, businessman takes the risk of loss of his capital. He has to face internal and outside business environment. Risk and uncertainty are the inseparable parts of business.

4. Regular Dealing

Regular dealing in business transaction is must for a business. An isolated transaction can not be called as a business transaction. Thus, business involves regular dealing in transaction.

5. Freedom

Freedom is also an important element of business. The functioning of a business is at the discretion of the entrepreneur. Functioning of a business is at the discretion of the entrepreneur.

Business How to Start Hotel Business (Video)

2011-08-19T02:36:00.001-07:00

With this video, you will learn to do the business of hotel.

How to Start Your Own T-shirt Business

2011-08-19T02:34:00.000-07:00

If you have small money but you want to invest in very useful business, then you can start your own T-shirt Business. Youtube channel tshirtriches will teach you how can we make a design on t-shirt and how can make money from t-shirt business. Because only with customer's required design on t-shirt will increase the sale of t-shirt. Actually, there is a machine to make transferring paper design on t-shirt.

How to Make Design on T-shirt

How to Make money from T-shirt business

How to Start Hotel Business in India

2011-08-18T09:28:00.000-07:00

Hotel business is that business in which your customers come to your office. They eat the food and give money for your food and service. So, in this business, you provide both service and product. If you are interested to start your hotel business in India, my first suggestion to you is that you must open vegetarian hotel. One side, it is profitable and other side, it is also helpful for nature because it reduce global worming, water problem and balance in nature. Now study its steps

1st Step : Investment Decisions

First of your main investment is of place where you have to establish the hotel. For this, you have to decide whether you will operate hotel on own place or rented place. This decision is affected by many factors. Do you have capital to buy own place? Do you want to start this business as test? Which is most profitable according to the situation?

2nd Step : Place Related Decisions

Place should be peaceful but movement of general public should be at large scale for the successful in beginning. You can also decide to choose where there are many other hotels. It will be helpful to you to find customer more fastly without any advertising.

3rd Step : Timing Related Decisions

Morning time is very important. You should get up early in the morning in this business because you can earn big amount from breakfast of customers.

4th Step : Purchasing of Raw Material

You technique of buying raw material should be technical. You should not buy material at large quantity because during the recession, your raw material may be damaged.

5th Step : Facilities

It is better for you if you do MBA in hotel management. With this education, you can enhance your skills to promote this business.

How to Start Construction Business in India

2011-08-16T02:48:00.000-07:00

If you want to start construction business in India. You should know basic things of construction business. In construction business, you have to buy land and then you make houses on it and sell to your customers. Following steps may be useful for you to start construction business in India.

1st Step : Purchasing of Land

First of all, you have to decide how much land you will use for your construction business. Minimum investment for buying land is Rs. 50,00,000 in small urban area. You should start from minimum investment to check whether this is best area of your business.

2nd Step : Planning of Construction of Houses

Now, in second step, you have to select no. of houses which will you make and sell. You can start construction of 5 and 10 residential houses.

3rd Step : Estimation of the Cost of Construction

This step is very important for starting construction business because you have to estimate each element's cost. You have to estimate the cost of all raw material, you have to estimate the cost of labor and other overheads like electricity consumption and other equipment cost.

4th Step : Estimating the Extra Cost of Wood Work, Electricity and Water Supply

Only estimation of construction cost is not sufficient. For completing the house, you have to hire carpenters for making doors and other wood work. You have to estimate their cost. You also complete electrical works and water supply. So, estimate these costs.

5th Step : Calculate the Sale Price of Houses

For calculating sale price, you have to add some margin in your total estimated cost of all houses. Now divide the sale price of all houses with no. of houses constructed. It will be sale price of your one house. Start to advertise for selling it.

How to Start a Company

2011-08-15T09:28:00.000-07:00

Companies Offices

If you want to start a business, company or corporate type organisation, it is best option for you because with this, your liability will be limited and your personal properties will not be used for payment of company's liabilities. But to start a company is not very easy task because you have to think many things for starting a company. All these things are its main steps which you should read in following lines

1st Step : Fix the Aim

Before starting the company, you should fix your aim what will be the aim of your company. Whether it will sell products or produce. Whether it will provide services or operate on service of others. What will be your company's product. Is it suitable according to your business idea. Will it give benefit to others long time. All these things should be decided in advance.

2nd Step : Planning of Company's Business

In the planning of company's business, you should take major decisions like production planning, marketing planning and human resource planning.

3rd Step: Calculate the estimated cost of Company's project

For starting a company, you need high amount of capital for establishing production plants, marketing stores and buying machines and equipment. Good estimation of cost of project will help you to manage that money better way. If you do mistake in this step, there is big risk, your business will fail at the starting time because low amount of paid up capital will not fulfill your wrong estimation of cost of company's project. Then you will take loan at high rate of interest which will decrease your return on investment.

4th Step : Planning for Legal Incorporation

Company is association of persons which is formed and credited under company law. You have to make its planning. Whether you company will be public company or private company. Whether your company will be MNC form or domestic type. You have to register your company to registrar of companies with memorandum of association and article of association. You have to get certificate of incorporation and certificate of commencement of business.

How to Start a Yoga Business

2011-08-14T12:18:00.000-07:00

yoga class

Today, yoga has become the source of good health. Patients can save millions of dollars by doing yoga or yoga. On the other side, some young blood can start it as business. In the starting time, yoga business may be challenging for you because patients may not come because they fear from doing any wrong exercise. But, you you will start with my following steps, you will see success in the beginning of your business.

1st Step : Start from Free Yoga Classes

You are new in the field of yoga. No one will faith on you. Never take yoga fees from any one. First one or two month give free yoga instruction to patients. If some of them will be treated from you. They will spread goodwill for you. That goodwill is real asset for you.

2nd Step : Choose Good Park

Yoga is natural way to treat the diseases. In second step, you have to choose good park where is good space. Never start it from your shop. Big place is better in this business. One more benefit of park is that you can get more customers.

3rd Step : Research New Yoga Exercise for special diseases

There are lots of poses and yoga exercises. But different are being used for different purposes. But you have to research a new pose or exercise which gives best relief. If you succeed in this, you can start to take advice fees or special training in homes. For example, I researched that If we open our hands and see sky, it is very- very helpful for back pain.

4th Step : Yoga Seminars

Time to time, you should start yoga seminars. For this, you should pay for small advertisement. With this way, people will join with you. It is pure business and you are doing this business for the welfare of society. In this yoga seminars, you can deal with other yoga books publishers and equipment vendors. With their association, you can easily promote your yoga business.

Steps to Write Business Plan

2011-08-13T00:50:00.000-07:00

Business plan means what will you do in business? When will you start your business? How much will you invest your own capital in business? What is estimated marketing of product of your business? Main need of making business plan is to get loan for business and decrease loss. Following are main steps for making business plan.

1st Step : Make a list of different elements of business.

a) Total amount of capital

b) Total no. or products

c) Types of products

d) Different risks

f) Level of competition

e) Expected customers

2nd Step : Explain above elements in detail

For example, if you are saying $ 10,00,000 investment of capital. What type of capital are you investing. Whether you have collected this from limited partnership or whether you are getting it from public issue of shares.

3rd Step : Explain the Skills of Your Employees

Success of business depends on employees. In your business plan, you should explain your employees skills and experience.

4th Step : Explain Estimated Cost of Project

What will be the cost of project? Will you do trading business or manufacturing business or construction business. Make the list with deep analysis of cost and benefit of project.

5th Step : Explain who are your consumer

In this section of business plan, you have to explain who are your consumer. What may be their age, what are their hobbies. Whether your products will satisfy their needs.

Macro Environment of Business

2011-08-12T23:58:00.000-07:00

Macro environment of business means that environment which can not be controlled by company. In this environment economic, social, political and technical environments are included. These environment powers affect not only our company or firm but these may affect whole industry. So, we can not stop of its affect. It means changing in this environment may be risky for our business.

I can explain this in simple world. For example a MNC is doing his business from 30 years in India. It is generating high profit and providing high value to the peoples of India. It has controlled its micro environment. But Govt. now has changed and Govt. has issued order to stop the business of that MNC because it may decrease domestic business. So, it may be very risky. So, MNC's officers should have to prepare for this. If they study macro environment of business. They can also get good idea for protecting its risk.

Fiscal Policy Meaning

2011-08-12T23:36:00.000-07:00

I have already explained fiscal policy. Today, I am trying to more simplify its meaning.

"Fiscal policy is that policy which is made by Govt. of any country. It is just like direction of Govt. about how will it collect revenue and how will it use this revenue. It is different from Govt. Budget. Govt. budget is just like estimation of one year expenditures and incomes but fiscal policy is planning to increase revenue of Govt. and decrease the expenditures. But one point is remembered that Govt. may not reduce all type of expenditures.So, paying important and necessary expenditures, it issues new currency notes. How much new notes will be issued? Its planning also includes in fiscal policy."

Monetary Policy in MBA

2011-08-12T23:27:00.000-07:00

One of my online has asked me, "What should we have to explain about monetary policy in MBA?"

As student of MBA, you should explain monetary policy concept with its deep explanation. Just explaining its meaning is not sufficient answer. You have to explain recent changes in monetary policy of your country. Suppose, I am living in India and examiner expects me that I have knowledge of Repo and reverse repo rates and these days, how is RBI using this in monetary policy. You should also explains the different techniques of monetary policy. If you do not know, you can read at here.

How to Start General Store Business

2011-08-12T22:55:00.000-07:00

One of best importance of general store business is that there is no need of high qualification. You should know simple maths and your local language. You can start this general store business in any area. For becoming successful in this business, you should need hard work.

1st Step : Collect the limited Capital

For starting general store business, you need minimum capital. Now, you have to decide this minimum capital. It depends on the size your general store. If you will start to sell 10 or 20 things, you need very very small capital. You can get bank loan for starting this general store business at large scale.

2nd Step : Good Purchasing from wholesale agencies

There are many products, you can sell in general store business. For example, you can sell kitchenware, food products, fashion products, confectionery products. One thing, you should remember that is good buying. We can tell you how can you buy these products on cheap prices. For this, you should contact good wholesale agencies in your local area.

3rd Step : How to Sell the Products in General Store Business

If you want to start general store business successfully, you should sell at very low prices. you should get only 10% margin. You should do any bargaining with customers. With this, your general store's business's goodwill increases.

4th Step : Advertise General Store Business

This is most important, we should advertise general store business through banner ads, poster ads and online ads and in local newspaper.

Micro Environment of Business

2011-08-12T04:38:00.000-07:00

Micro environment of business becomes from internal part of company. This environment includes different factors which can be controlled by company. Following are the main factors of micro environment

1. Suppliers

These people supply the goods to company. We can control them, if we pay them on the time. We should also keep contacts with multiple sources because it is very less risky. If one supplier stops to supply us, we can get raw material from other supplier.

2. Customers

Customers also affect on company's business. If we do not care our customers, our customers will buy from other company. Due to this, our sale will decrease. We should make good relation with our customers.

3. Market Intermediaries

Middlemen, physical distribution firms and marketing service agencies are main market intermediaries. We should choose best market intermediaries for fast distribution of our products.

4. Competitions

Company also have to face competition. If company has to win competition, it has to sell good quality product at lower price.

5. Public

Public is any group that has an actual or potential interest in or impact on an organisations ability to achieve its interests. Examples are

a) Media

b) Citizen

c) Local public

If we have to make public happy, we have to protect our environment. We have to produce our products in less polluted system.

Steps to Become a Petroleum Broker

2011-08-11T07:35:00.000-07:00

Petroleum Broker is the person who contacts big petrol pumps and sell petrol to them for his clients. For this, he gets commission. He has to go to different petrol pumps for getting order. High order means high commission. So, if you have good communication skills and good record of petroleum prices, petroleum broker is good option for you. For becoming a petroleum broker, following are its main steps.

1st Step : Get MBA in marketing. During your MBA, you should strong your business environment subject. You should good knowledge of political environment because petrol prices are mostly affected with govt. decisions.

2nd Step : Get experience in petroleum companies. This experience will help you to become successful petroleum broker.

3rd Step : Start with dealing small businessmen. With this, you can get idea how to do big deal of petroleum.

Steps to Start a Contract Engineer Company

2011-08-11T06:22:00.000-07:00

Business is always better field in any area. If you have recently completed your study of engineering, you can start contract engineer company. It is better option for you. A contract engineer a person who appoints persons on contract for the need of company. You can start it as company basis.

Following are its main steps

Step 1 : You should have valid degree of engineering for getting license. Only after getting license, you can start this company.

Step 2. Now, apply for company's establishment. For this, you need some other person for making private company. For making private company of contract engineer in India, you need minimum two persons.

Step 3. After register you company in the registrar of companies, you can start your work. You can meet different other companies who are doing same work. After getting skills, you can operate your contract engineer company.

Meaning of Business

2011-08-10T04:12:00.000-07:00

Business means all activities which generates wealth. In these activities, goods are produced or purchased and then are sold on profits. Following are main features of business.

1. Objective of business is to earn profit.
2. There are lots of risks in it.

Following are main business objectives:

1. Economic objectives

a) To earn profit

b) To Grow the business

c) Innovation of new products

2. Social objectives

a) Service to society

b) Employee satisfaction and development

c) Quality products and services

d) Fair return to investors

e) Good corporate citizenship

Video Lecture on Fiscal Policy

2010-09-18T23:43:00.000-07:00

I taught business environment to MBA students and in business environment, when we study economic environment, at that time, we have to learn fiscal policy. In this video lecture, you will learn the basics of fiscal policy.

New Industrial Policy

2010-09-06T21:44:00.000-07:00

New industrial policy was applied on 24th July 1991. There were many amendments in this industrial policy. New industrial policy is very different from old industrial policy.

Objectives of New Industrial Policy

1. Main objective of new industrial policy is to free industrial economy from unnecessary control of Indian administrators.

2. To reduce the weak points of different industries in India.

3. To start liberalization for connecting Indian Industries to foreign industries.

4. To remove the restrictions on direct foreign investment.

5. To remove the restrictions of MRTP act on domestic trades.

6. To try best to increase employment in industries.

7. To increase competitiveness in international trade.

8. To make the provision for increasing the profit of public organisations.

9. To 100% use of domestic resources of India.

10. To do more research for effective use of internal resources.

Economic Reforms

2010-09-06T21:32:00.000-07:00

Economic reform means to change and adjustments in internal economic structure according to the external economic changes. Following are main economic reforms :

1. First phase economic reforms

There were many changes in international markets, organisations and production areas. India started to accept all these changes. First phase of economic reforms was started in 1985 when Rajiv Gandhi was the prime minister of India. He announced new economic policy for increasing productivity, new technology import and effective use of human resources.

2. Second phase of economic reforms

In 1991-92, govt. of narsimaharav started second phase of economic reforms for reducing fiscal deficit which was 10891 crores of rupees. Govt had to take loan of Rs. 5 billion dollars from IMF. For effective use of resources, govt. started to get foreign investment.

Before the process of reform began in 1991, the government attempted to close the Indian economy to the outside world. The Indian currency, the rupee, was inconvertible and high tariffs and import licensing prevented foreign goods reaching the market. India also operated a system of central planning for the economy, in which firms required licenses to invest and develop. The labyrinthine bureaucracy often led to absurd restrictions—up to 80 agencies had to be satisfied before a firm could be granted a licence to produce and the state would decide what was produced, how much, at what price and what sources of capital were used. The government also prevented firms from laying off workers or closing factories. The central pillar of the policy was import substitution, the belief that India needed to rely on internal markets for development, not international trade—a belief generated by a mixture of socialism and the experience of colonial exploitation. Planning and the state, rather than markets, would determine how much investment was needed in which sectors.

– BBC

3. Third phase of Economic Reforms

The Vajpayee administration continued with privatization, reduction of taxes, a sound fiscal policy aimed at reducing deficits and debts and increased initiatives for public works.

Introduction to Economic Planning

2010-09-05T21:07:00.000-07:00

Economic planning is made for reducing economic risks. Under this planning, we can select best alternative for increasing the economic strength of company. Economic planning's other name is central planning and central economic planning.

In economic planning, we have to make plan regarding optimum use of our resources in producing of goods. We also have to make plan to produce optimum quantity of output. We can use economic planning at small level and at large level like investment decisions of Govt.

MNC uses economic planning for effective division of their resources in their different departments and branches. They also uses statistical techniques for calculating correlation of company's sale and other sale and one this basis, they make plan to increase sale.

Introduction to Economic Environment

2010-09-05T20:58:00.000-07:00

We can introduce economic environment as all the factors which affect business due to changing the economic policies, economic system and economic conditions. In big companies, there may be large number of economist whose work is to make economic policies and economic planning. They control the prices of product of company. They also control the production level and try to best to reach it on optimum level. They monitor all external economic factors and to reduce company's economic weaknesses and risks.

Introduction to Environment Scanning

2010-09-05T00:50:00.000-07:00

Scanning means to check carefully. Environment means group of factors which affect business. Environment scanning means the process which is helpful to check and analyze all the factors which affect business. With this, we can find our risks and opportunities.

In environment scanning, we introduce small level plans and policies for analyzing the future.

Importance of Environment Scanning

1. Effective Utilization of Resources

For success of business, it is very necessary to effective use of its resources without any wasting. With environment scanning, we can find company's weak points and other risks. After this, company can make good plans and policies for removing all these weak points and other risks. After this, it is sure, company will succeed in his life.

2. Constant Monitoring of the Environment

For success, it is also necessary to monitor the environment. After constant monitoring of the environment, we can face the problems due to internal and external factors and solve it on the time.

Introduction to Business Environment

2010-09-05T00:38:00.000-07:00

Business environment may be defined as the set of external and internal factors which affects the decisions of business. We can divide business environment into two parts

A. The Micro Environment of Business

These are powers which are deeply related with company and company can control these type of environment by improving its capacity and efficiency.

1. Suppliers

Suppliers are the persons who supply raw material to company.

2. Customers

Customers are the persons who buy goods from company.

3. Market Intermediaries

Market intermediaries are those person who helps company to sell its products.

4. Financial Intermediaries

Financial intermediaries are those institutions who provide loan, credit and advance to company.

5. Competitors

Competitors are those who also sell same product of company.

6. Public

Public is those group of people who can buy or who can show their interest to buy the products of company.

B. The Macro Environment of Business

Macro environment of business means all external factors which affects company and its business and there is no control of company on these factors.

1. Economic Environment

In economic environment, we can include govt. budget, import and export policies, economic system and economic conditions.

2. Political and Governmental Environment

In political and government environment, we can include legislature's decisions, executive's decisions and judiciary decision which affect company's business.

3. Socio cultural Environment

Socio-cultural environment includes morality, religion, education, health of peoples and family importance.

4. Natural Environment

In natural environment, we can include season, place elements, natural resources etc.

5. Demographic Environment

In demographic environment, we can include size of population, growth rate of population, age composition, sex composition and family size.

6. Technological Environment

In technological environment, we can include ecommerce technology, online payment, Internet technology, mobile banking and 3G technology and all other new technology which affect company's business.

7. International Environment

In international environment, we can includes rules and regulation of WTO, WB and MNC's affect on our company's business.

How to Do Conflict Management

2010-09-04T23:33:00.000-07:00

To remove conflict is major challenge for conflict management. First of all, concentrate all dealers on subordinate goals of company. If there is big confliction between company and dealers, then company can take some meeting with dealers and agree them by giving positive arguments.

* Diplomacy :- A person goes to dealer and resolve the confliction

* Mediation :- Solve problem by expert of third party.

* Arbitration :- Agreement between two party by giving argument and confliction by arbitrator.

Conflict Management

2010-09-04T23:29:00.000-07:00

Conflict management is the process to reduce the problems of channel of distribution by solving them effective ways.

Main conflicts

Suppose company wants to achieve rapid market. In this case fix low price policy. But all dealers are seeing short run high profit. So, they are charging high profit margin and products are not sold easily by dealers. It will create confliction between dealers and company

Channel Management

2010-09-04T23:26:00.000-07:00

Definition of Channel Management

Channel management means to select good middlemen and distribute the goods through them at cost effective.

Function of Channel Management

1. Selecting channel members

Before selecting good middlemen, check intermediary's experience and past reputation.

2. Training channel members

To train channel for proper work

3. Motivate channel members

4. Evaluate channel

Types of Marketing Channels

2010-09-04T23:19:00.000-07:00

A. Conventional Channel or Non- Integrated Channel

1. Manufacturer to Consumer

In this channel there is no intermediary. Manufacturer makes the goods and directly distributes to consumers.

2. Manufacturer to Retailer to Consumer

Retailer is the intermediary between manufacturer and consumer. He purchases goods from manufacturer and sells to consumer.

3. Manufacturer to Wholesaler to Retailer to Consumer

In this channel, there are two option, one is wholesaler and other is retailer. Wholesaler buys large scale and sells to retailer and the retailer sells to consumer.

4. Manufacturer to Wholesaler to Consumer

Consumer can buy easily and directly from wholesaler. So, in this channel there is only one intermediary and he is wholesaler.

5. Manufacturer to agent to wholesaler to retailer to consumer

B. Integrated Channel or Non conventional channels

Integrated channel are modern channel for distribution of goods. These channel can be divided into two parts.

1. Vertical Channel

Vertical channel is that corporate channel which are useful for the flow of products which are capital nature. In this, if one company contracts with other manufacturers who will convert the capital product into most usable shape and sell it to the dealers. Then it will be vertical channel.

2. Horizontal Channel

Two companies join together for marketing of any product for reducing competition and excess capacity.

Channel of Distribution

2010-06-14T20:54:00.000-07:00

Channel of distribution are the intermediaries which transfer goods from producers to consumers. Thus marketing channel are useful for proper distribution of goods and services. Following are main principles which apply on the channel of distribution.

1. The principle of minimum total cost of transaction :

Suppose, if goods are transferred to direct, the cost of transferring goods is Rs. 10.

But if it is purchased by channel of distribution, its cost is Rs. 2, it will be useful to reduce the cost of producers.

2. The principle of smoothness gap in assortment and sorting :

The intermediaries takes the goods and save it in store and sells it when consumer needs the goods. So, manufacturing needs intermediaries.

3. The principle of searching :

Channel of distribution creates the market of specific goods where consumer can search and buy.

4. Personal Touch

The channel of distribution close to the consumer, so they can know the needs of consumer and solve the problems of consumers.

Price Setting Process

2010-06-13T20:35:00.000-07:00

When a company develops a product, it is very necessary to set its specific price. But there are many factors which affect its setting which we can show following steps of its process.

1st Step : Selecting the Price Objectives :

We all know the price setting is the major part of marketing policy and one of P4 of marketing mix. So, it is the first in which you have to select the price object for setting it. It may be

a) Survival the product in market :

Company thinks that his product is new and for creating its position in market, company should take minimum price from its customers.

b) Maximum profit objective :

If company wants to earn maximum profit, the company can set high price under price skimming. Company thinks that if it will fix high price, no competitor faces it.

c) High market share objective :

Company's object is to increase sale. So, it will determine low price than competitors.

2nd Step : Determining the Demand :

Main aim of taking second step is to check whether our set price is best for increasing demand or not. In this step, we takes following decisions

a) Create the demand curve and check the trend :

With past records of our company's product price and past sales company can create demand curve, it shows the effect of changing price on demand of customer. The company can take the help of economist which they can explain its technical explanation. But with this, company can know whether company's price are creating bad effect on demand or good effect on demand.

b) Demand Elasticity

With this, company can estimate about how much demand is effected with increasing or decreasing the price.

3rd Step : Estimate the Costs :

For determination the price of product company should estimate the cost of product.

I) Calculate variable and fixed cost :

Fixed cost = Electricity + salary bill etc

variable cost = raw material cost + labour cost + other expenses etc.

II) Calculate differential cost in differential market :

Use activity base costing system if company sells product different time period.

III) Target Costing :

This is japan's technique

at what price consumer wants the product xxxx

Less margin = xxxx

-------------------------------------------------

Estimated price = xxxx

--------------------------------------------------

Cost must be less than estimated price

IV) Also estimate competitor's price:

4th Step : Selecting a Good Price Method :

a) Markup pricing :

Total cost price xxxx

Add % Margin on sale xxxx

----------------------------

Sale price xxxx

----------------------------

b) Perceived value price :

it is fixed on the basis of cost of market mix and margin

( product cost + advertising cost + placement cost ) + margin = fix price

c) Value Price :

Low price of quality product than competitors.

6th Step : Select the Final Price

After analysis of above five steps, marketer selects the final price of a new product.

What are Brand and branding? What are the Main Strategies of Its?

2010-05-10T00:10:00.000-07:00

Definition of Brand of Company

Brand means name, symbol or design of the product of company. It creates difference of one company's product with other competitor company's product.

Definition of Branding of Company

Branding is technique in which company provides the name and design to each product for creating a special identity. It is helpful for consumer to identify special quality product or products in market.

Strategies of Branding of Company

Following are the main branding strategy which can be used for making and developing of new brand.

1. Brand Positioning Strategy

Brand positioning means bring the brand name of company in mind of customer. When a customer goes to market and he or she should demand of specific product. It means company is successful to position the brand in the mind of consumer. Company must be careful while positioning the brand.

a) It must not be copied from other brand.

b) Company's brand shows the benefits of products.

c) It simply convey the idea of belief and values of company.

2. Brand Name Strategy

You often see that one company's brand name are easily copied due to weakness of brand selection. For example YouTube.com video site's brand name has been copied by many other site like utube.com etc.
So be careful when you are creating the name of brand.

a) It should tell the quality of product.

b) It should be easily to pronounce, recognize and remember.

c) It should easily be translated.

d) It should be capable for legal protection.

3. Brand Sponsorship

a) National brand

Sometime, a company can spend money for marketing of company brand as nation or international basis.

b) Middle men's brand

It is private brand which is created by middlemen.

c) Licensing

Sometime, company can take the brand of other company on license basis for increasing sale.

d) Co-brand

Sometime, company can contract with other company and mix other company brand as co-brand with his products brand and sell after this.

e) Takeover the brand

Google takeover the YouTube, so, its brand is also taken over by google.

4. Brand Development

a) Main name of brand + one more line which shows the quality of product

b) Use the same famous brand in other products.

c) Multi brand - Two or more name brand of same product.

5. Brand Management

a) Brand Equity

For brand management, management calculates the estimated value of brand. It shows as brand equity. It is an asset of company. Suppose, Lux, company creates lux brand equity fund with Rs. 9000000 and utilizes it for advertising, now its brand has becomes famous. Company can calculate its estimated value and try to protect it by opening brand asset management team.

What is Product Mix?

2010-05-09T23:49:00.000-07:00

Product mix is the set or group of products which a particular company offers to public. Product mix is very helpful for taking advantage one product brand benefit for selling other product. For example:

Godrej Agrovet division has following product mix:

a) animal feeds

b) agricultural inputs

c) horticulture

d) tissue culture

e) retailing

Product Life Cycle

2010-05-09T03:40:00.000-07:00

Product life cycle shows the different stages in which it lives his life just as human being. A human being enjoys childhood, youth age and old age and after this, it is sure he will die. Same thing happens with all products. Product life cycle has four parts. In first stage introduction, second stage is stage of growth, third is the stage of maturity and in the end stage is decline. After this, value of product is totally dropped from market due to invention of new product. We can portray its sketch on the graph paper. Its shape will be bell shape.

Its strategies are divided in Four stages according to life of product.

Ist Stage

Introduction stage of Product life cycle

First stage of plc is called introduction stage. In this stage, product is newly developed and launched in the market. Because, consumer does not know about this product earlier, so its marketing is very difficult. Marketer has to teach the consumers about its benefits and its advance facilities . For new product's introductory stage, marketer can take the market with marketing skimming strategy or marketing penetration strategy. One more feature of this stage that company sale will be low.

2nd Stage

Growth stage of Product life cycle

In this stage, consumer knows the product because he has taken past experience after purchasing it at introductory stage. So, sale will increase. In this stage, company can increase the price for getting old promotion and advertising cost. Company can pay more on advertising for developing product brand image in the minds of consumers. In this stage company's profit will also rise.

3rd Stage

Maturity

At this stage product life cycle, our sale reaches at highest level. Product is become well known in the market. In this stage, we have to decrease our price for taking maximum part of product and defeating market competitors. Company can offer special discount to dealer for selling fast before reaching it declining stage.

4th Stage

Decline Stage

At this stage, sales fall very sharply. No more new customer wants to buy it . At this stage, company can offer public to switch to his new advance product. Company can take milk from brand name without any new advertising cost.

Stages in Developing New Product

2010-05-08T05:17:00.000-07:00

Before describing the stages in developing the new product in marketing mix, we will define the product with following way

Definition of Product

Product is the tangible and intangible things which satisfy the needs of consumers. It means not only physical things which we purchase are the products but all the services of other persons are also product. For example TV, computer, watch, food, house and Taxi driver's services are also products which we can purchase and satisfy our needs.

Following are the seven stages or steps in development of a new product

Ist stage

Idea generation

Idea generation is the first stage of product development. For developing a product, company takes the idea from his internal and external sources.

internal sources of idea generation

a) basic research on google b) idea from production department c) sales men's idea d) top management's idea

external sources of idea generation

a) business magazine b) competitors c) necessity of consumers c) inventor's idea

*

Idea should be helpful for satisfying consumer's need, other wise drop the idea. For taking second step ask from yourself, is it worth considering - if yes, then take second step

2nd Stage

Idea Screening

It is the second stage or step of development of new product. After collecting large number of idea for making new product, company will analyze them with his technical screening system or team and drop bad idea. Idea screening is helpful

a) to reduce the chance of development of product on the basis of poor idea.

b) to reduce the chance of not developing the product on the basis of very good idea.

*

Technical base of idea screening

Company can enumerate his employees to make check list for idea screening.

value of idea

basis of screening

good idea - should be selected

bad idea - should not be selected

3rd Stage

Laboratory Test

This is the third stage of development of new product. In this step, we test the product's development with in company before actual launch in the market for following purpose.

a) To know

whether our buyer will buy it or not?

b) To know

whether it will be suitable for consumer according to their need of product?

* Company can also use computer for lab testing.

4th Stage

Marketing strategy development

In this stage, company makes following planning for good product development

a) first year market budget - cost

b) estimate first year profit

c) value of sales and profit after one year.

5th Stage

Business Analysis

This is the fifth stage of development of new product. In this stage, company calculate his overall return on investment, if company will launch the product. If it is profitable, company will produce it otherwise, drop his plan because company's money is not money of one man or employee but this money is invested by large number of investors. So, board of directors can not waste it by unprofitable production of new product. For calculating this, they will analyze

a) demand b) cost c) profitability

6th Stage

Actual Product development

After this, company's R and D department produces one or two sample of products and check it.

7th Stage

Market Test

In this step or stage, company launches product in very small part of market as market test and for knowing the interest of consumers, dealers and retailers. If consumers' reaction are good, company will take the next action.

8th Stage

Commercialization

In this step, company manages large scale production, marketing and commercialization of new product with following marketing strategy.

a) when to produce - fix the time

b) where to produce - fix the geography

c) to whom to sell - target marketing strategy

d) How - Brand Strategy.

Positioning for Competitive Advantage Simplified

2010-05-08T04:47:00.000-07:00

Simple definition of Positioning for competitive advantage

Positioning for competitive advantage is strategy for defeating our competitors. In this, we study weak points of our competitors and make the list. After this, company makes the product which can be easily sold, if our competitors are failed to provide same facilities with this product.

Strategy of Segmenting the Market

2010-05-08T04:41:00.000-07:00

For creating target market or segmenting the market, we can use following strategy :

1st Strategy

Undifferential Marketing or Mass Strategy

In this strategy, company does not make small segment of market and target the whole market in one offer. All marketing mix policy will be same for all parts of market.

2nd Strategy

Differentiated Segmented Marketing

In this strategy, company divides his products, services according to need of different consumers. Company's all market policy will be different for all market segmentation.

For example:

Company of refrigerator enters in differentiative marketing technique and divide his product on basis of income of consumers.

Ist Product - 165 liters. with two door advance refrigerator for rich consumers.

2nd Product - 165 liters. with one door simple for middle consumer.

3rd Strategy

Concentrated Marketing

This strategy is used when company has limited resources and wants high profit from specific segment of market, at that time company makes market policies for specific segment.

Market Segmentation

2010-05-07T00:03:00.000-07:00

Market segmentation is a technique in which companies divide their large market into small parts. This small division is very helpful to reach the specific consumer and providing his best product according to his need. There are large number of buyers in the market and market has been made big. So, it is very necessary to segment or divide into small parts according to the needs, wants, location of consumers.

Major basis or Ways or Approaches for segmenting consumer and business market

[ A] Segmenting Consumer Market

1. Geographic Segmentation

If a company divides his business market according to the geographical location, then it will be geographic segmentation. Segmentation is done on the basis of nations, regions, states countries, cities and villages.

2. Demographic Segmentation

In this segmentation, company divide the market into small parts on the basis of age, gender, family size and income.

For example, we can divide market according to age of consumers

We can develop products for young - Segment A

We can also develop products for old - Segment B

3.Gender Segmentation

In this division company divides market according to male and female need. This division can be seen in clothing business.

4. Income Segmentation

This segmentation can be used for selling financial products and automobile industry.

Suppose a company makes cars. Then its price will be divided according to the income of consumers

a) Car for high income class
b) Car for middle income class

5. Psychological Segmentation

This division is done according to life style and personality of consumer. You can see different makeup and fashion products in the market which are affected with the psychology of consumers.

6. Behavioral Segmentation

This division is done according to a) knowledge of consumers b) attitude of consumers c) response of consumers

For example

i) products for first time users

ii) products for regular users

[B] Segmenting the Business Market

Business market can not divide only above basis but we can divide it on the basis of Zip codes, level of population and IP address of computer also.

[C] Segmenting of International Market

For segmenting our international market, we have to study international economy and political environment of each country. After this, we can make and fix the target to sell specific product for specific country according to the need of consumer of that country. It is not necessary that same product will be sold in two or more country. Company should watch cultural factors of different country also.

Analyzing Consumer Market and Buyer Behavior

2010-05-06T23:43:00.000-07:00

Q: What is consumer behavior? What are main factors affecting consumer behavior and what are the stages or steps of buying decision process?

Definition of Consumer Behavior

Consumer behavior is the study of all factors which affect consumer's buying decision. It is the technique to analyze the psychology of consumer. It is very helpful for selling the products to all consumers and satisfy them. In simple words, with the study of consumer behavior, you can know:

a) When will our consumer buy the goods? - To know the correct time

b) Why will he buy the goods? - Know the need of consumer

c) How will he buy the goods? - Process of buying

d) Where will he buy the goods? - Place

Factor affecting consumer's behavior

1. Cultural factors

Culture affects consumer behavior very deeply. Following are the main components of cultural factors.

i) Nationality

Consumer buying decision is affected by nationality of consumer. Need of Indian consumer is different from need of USA consumers

ii) Religion

There are many religion In India. We can not do marketing of drinks for Hindu religious persons, because their behavior is affected by their religion. There religion teach them not to drink alcohols.

2. Social Factors

Consumer's behavior is also affected with many social factor whose list, we can make in following way

a) Reference group

friends, relatives, neighbours, co-workers and classmates

b) Family

father, mother, sister and brother

c) Role and status

peon, clerk and manager

3. Personal Factors

Age of person, his stage in life cycle and his personal occupation also effect his behavior. Children age is age of fun and they can demand education and fun products. After marriage, young couple can demand house for living but at the old age, you can demand health products.

4. Psychological factors

Following are the psychological factors which affects consumer's behavior.

a) motivation b) love c) morality d) security of body e) security of employment

Steps Of Buying Decision Process

1st Step

To Identify the need of Product

This is the first step of buying decision process in which marketer estimates consumer's need of products. Consumer can buy the product for satisfying his basic and other needs.

2nd Step

Collection of Information

After this, consumer will search for buying best product, he can search on Internet or can take help of friends, neighbours and newspapers for find quality product.

3rd Step

Evaluation of Alternatives

After this, buyer will evaluate all alternatives from where he can buy the product. He will choose the best alternative for buying the product.

4th Step

Purchase decision

In this step, buyer buys the product by physically going to market or by giving the order online.

5th Step

Post Purchase Behavior

After purchasing, buyer uses the product and shows his behavior by following ways

a) He is satisfied from the product

c) He is not satisfied from product

What is Marketing Research and Strategic Planning in Marketing Management? What are the Steps in Marketing Planning? What are its importance?

2010-05-05T23:37:00.000-07:00

Definition of Marketing Research and Strategic Planning

Marketing research and strategic planning is the process of estimation and directions for creating new customers. We all know that today business are facing competition. If we have to win competition, we have to take many decisions about future marketing. All decision are called marketing research and strategic planning.

Steps of marketing planning

Ist Step

To Identify company's Strength and Weakness

It is the first step of marketing planning in which company estimates his strength, opportunities and powers in marketing. It also estimates its weak points. This step can be done with marketing environment scanning. In this marketing scanning data and compare with our competitors. After this our strength and weakness can be estimated.

2nd Step

To Identify Marketing Objectives:

There are many objectives of marketing. It is the second step of marketing that we should identify these objectives. There are main objective of marketing planning

a) Financial objectives

It is the objective of marketing planning that we have to increase our return on investment.

b) To increase the share in market.

3rd Step

Making Marketing Policies

This is the third step of marketing planning in which company makes his marketing policies according to the marketing objectives.

4th Step

Development of Good Marketing Mix

After making the marketing policies, we have to make good marketing mix.

1. Product
2. Price
3. Promotion
4. Place

5th Step

Sub Plans

We also have to make sub plans which is helpful for obtaining main plan of the marketing.

6th Step

Monitoring

We have to check our main plan under monitoring

Importance of marketing planning and strategy

1. It is helpful for determination of future marketing decisions.

2. To know the opportunities and weakness of the company.

3. Management by Objectives

4. Effective use of financial resources.

5. Good co-ordination

Data Warehousing

2010-05-04T23:47:00.000-07:00

Data warehousing is system in which data is collected in online data base. It is also helpful for providing data for data mining. In data warehouse, you can find data of consumer according to consumer's profile. So, there is no need to further analyze that data. For taking data from data warehousing there is no need to do any large scale activities. Almost all the work is done automatically.

Data Mining

2010-05-04T23:41:00.000-07:00

Data mining is automatic analysis of large data stored in data warehouse. Today, different data mining sofware or cloud computing are being used for this purpose. It is useful for online marketing.

Marketing Intelligence

2010-05-04T23:37:00.000-07:00

Marketing intelligence is strategy in which company gets the information of competitors activities through his intelligence bureau and use it for his business sales promotion.

For Example :

Suppose there are three companies who are taking the contract for construction of building. The names of company are A, B and C. Suppose, govt. demands bid for construction of government building. C company is very clever and takes help from his intelligence bureau for knowing the bid prices of B and C company. After some investigation, company's intelligence bureau succeeded to know the expected bid prices of B and C company. Now, A company decreases his cost than competitors and win the bid from government department. So, marketing intelligence is very needed for every company.

Components of Marketing Information System or Sources of MIS

2010-05-04T23:30:00.000-07:00

1. Internal Marketing or Accounting System

This component or source tells that company should get all marketing relating information through this source. Company makes the accounts of customers and records the sales. After analyzing it through management accounting and cost accounting, company can obtain all useful information relating to past marketing data.

2. Marketing Intelligence

Company can take the help of marketing intelligence for getting information of competitor activities.

3. Marketing Research

For improving the quality of product, company need marketing research information. This information is given by marketing research team.

4. Marketing science

Marketing science means use mathematics and quantitative techniques to solve business and marketing problems.

Marketing Information System

2010-05-04T23:23:00.000-07:00

Definition of Marketing Information System ( MIS )

Marketing Information system is to collect, sort, analyze, evaluate the information relating to marketing. After this, information is distributed to marketing decisions makers. Internal company records and marketing research are the main sources of marketing information .

Need and Importance and Advantages of Marketing Information System or System to Handle Marketing Information:

1. For making marketing planning

Marketing information system is very useful for making marketing planning. With MIS, we get useful information for marketing short term and long term plans. Suppose, we are new banking company for providing loans to students. But, if our MIS gives us the correct information about how many companies are already providing this facilities, then we can make good strategic planning according to this.

2. Helpful to marketing control

With MIS, we can control marketing risk and our decision becomes effective.

3. Helpful to convert raw data into useful marketing information

MIS makes perfect system in which information providers can easily convert raw data into useful marketing information.

4. Integration

Marketing information system creates integration between all departments.

5. Improve the data capture process

MIS has a perfect system in which there are many steps to collect and convert into useful information. So, it improves the data capture process.

6. Helpful in transfer of Information

MIS makes way easy for transferring the information to those who need it.

Types of Marketing Information System

( I ) Classification which is based on the purpose of information.

( II ) Classification which is based subject matter of the information

Steps of Marketing Information System (MIS)

Ist Step

Defining the information need

2nd Step

Classification of information

3rd Step

Evaluation the cost of collecting the information

4th Step

Identifying the source of information.

Requisites of Good MIS

economical
user friendly
fast
clarity
accuracy
reliability
unbaised
relvance to decision making
completeness
suitable

Sales Force Management

2010-05-03T04:42:00.000-07:00

What is Sales Force Management? What is its Importance? What are the steps of Process of Sales Force Management in modern Marketing? Tell the Winning Tips of Sales Team?

Definition of Sales Force Management

Sales force management is one work of personnel department. Personnel manager recruits, selects and trains salesmen and sales personnel. Sales force is nothing but the team who are involved in sales related activities. Sales force management means decisions relating to sales team. Right person should be appointed at right place, at right time and he should do right working in sales field of company. In marketing, if sales force will be perfect, relation can be created with others.

Importance of Sales Force Management

It is helpful to make good sales personnel policies.
Job analysis of salesmen.
Good relation with sales force.
Reduction the personal selling cost.

Steps of sales force management process

1st Step

Determination the sales force objectives

Before creating sales force management, it is very important that fix one or all of following objectives

a) Sales Volume : How much will the sale team has to sell in specific time? - Sales target

b) Market Share: % of total share of market for a product.

c) Profit: To increase ROI

2nd Step

Determination of Sales force size

It is affected with need of organisation and cost of per sales man. Over loading and under loading of sales team will be misuse of money.

3rd Step

Recruitment and Selection

a) Recruitment is the list of qualified applicants of sales men.

b) Selection : Choose the best sales team.

4th Step

Training of Sales Team

a) What to teach? - About the company and its product.

b) Whom to teach? - New Salesmen

c) Where to teach? - On job or off job.

d) How to teach ? By expert.

5th Step

Compensating the Sales persons:

{*} Basic salary + Incentive + other Commission and allowance and TA

6th Step

Motivating salesmen

By job security + opportunity of promotion + award + reward

7th Step

Determination the area of salesmen

a) on geographical basis

b) on basis of distance travelled

8th Step

Controlling and evaluation the sale force performance:

Salesman's performance can be evaluated on the following basis

a) average no. of calls per day

b) average sales per customer

c) no. of new customer order

d) average gross profit per customer

Winning Tips for managing sales team

1. Selecting best salesmen

According to object of company, company has to make some minimum standard for clearing the interview by a new fresher who wants to become salesman. Following are best questions for talking or taking interview from new candidate:

a) How do you feel about talking strangers?

b) What is your opinion of salesman in general?

2. Motivation

If you want to get performance from salesmen, it is your duty to motivate them daily.

3 Stories of successful salesman of the world.

It is good to make Strong salesmen. With telling the story of great and successful salesmen, new salesmen can easily learn that for becoming successful salesman, he or she has to face failure , but he or she will not loose courage. After this, he or she can easily become successful businessman like me.

Public Relation

2010-05-03T03:52:00.000-07:00

Simple Definition of Public Relation

Public relation is a technique to promote the public to buy the product and protect company's reputation from bad voice of public via media.

Creation of Public Relation Department

Its duty is to reduce negative publicity.

Main Fields of Public Relation

a) Press Relation

b) Product Publicity

c) Corporate Communication

Sales Promotion

2010-05-03T03:48:00.000-07:00

Definition of Sales Promotion

Sales promotion is the technique in which salesman gives incentives to consumers for increasing the selling of his products.

Major Steps in Sales Promotion:

1st Step :

Setting of Objective

a) Target market - get consumers
b) switch away the market from competitors
c) Free trial for new users.

2nd Step:

Setting of Sales Promotion Tools :

a) Free Sample

b) Gift Coupons

c) Rebate or discount on sale

d) special facility : Free delivery

e) Contest, games and prizes

f) some quantity free with purchasing large scale.

g) Buy back guarantee

3rd Step

Setting Time Period for promotion

{*} Fix month, week or days of promotion

4th Step

Setting test before large scale sales promotion

{*} Test promotion incentive in small segment of market.

5th Step

Evaluation

Check the effect of promotion on sale

+ point : increase the sales

- point : decrease the sale

Advertising and its Strategy

2010-05-03T03:03:00.000-07:00

Advertising and Strategy which is Used in Advertising

Simple Definition of Advertising

Advertising is a technique in which company promote his sale without existence of any person. Advertisement is contract between advertiser and advertising companies. Advertiser pays money to advertising company. Advertising company uses his resource for showing the ads to public places. It is impersonal presentation of message of advertisers.

Following is the example of Ads

Come at Shop No. 4201 and Buy garments at 50% discount

Above ads can be shown in banner for or can be distributed in pamphlet form.

Big company has its own department and its name is advertising department. This department manages ads of company.

Strategy which is used in Advertising

1. Setting the advertising objectives

First of all, fix the objectives of advertising. Following are the three objectives of advertising

a) Information : Provide information of new product

b) Position of the Brand : Position the brand in the minds of buyers

c) Reminding : Just remind to buy again

2. Setting the Advertisement Budget

You also set the advertisement budget . It should not be very high or very low. But it should be optimum. After seeing stage of life of product cycle and competitors policy, we should decide minimum amount for advertisement.

3. Setting of advertisement message

Advertisement message should be creative, attractive. It must not make false claims.

4. Setting the media

a) Newspaper

+ point : Flexible, good for local market advertisement

- point : Short life

b) TV

+point: High attention, long life

- point : High cost

c) Radio

+ point : flexibility, large coverage, less cost

- point : lower attention

d) Magazines

+point : Quality reproduction

- point : some waste circulation

e) Brochures

+ Point : flexibility, full control

- point : over production

f) Telephone

+ point : Personal touch

- high cost

5. Evaluation the effect of advertising

a) Check the effect on sale

Try to check its effect on sale if sale has been increased due to this, it means advertising is successful otherwise change the budget, media or message .

b) Check the effect of communication

We also have to check the effect of advertising on communication.

Marketing

2010-04-27T23:43:00.000-07:00

Definition of Marketing

Marketing includes all activities for transferring goods from producer to consumers. Its main aim is to sell and satisfy the consumers. Today, market’s king is consumer. So, marketing provides you good technique to handle customers. Marketing’s best technique is marketing mix. Marketing mix has four P

1. Product which is made by producer must be made quality basis.

2. Price is fixed by market but marketer should take low price than market for increasing of sale.

3. Promotion is done by advertising; it must be used at proper time for target audience.

4. Placement is relating to distribution activities, marketer should reach by proper channel of distribution.

Features/ Nature of Marketing Orientation:-

1. Consumers

Consumers are the king of market and all salesmen who want to sell goods to consumers, should create good relationship with consumer and also solve their problems for enhancing the product branding in market.

2. Organizational Capability

Before marketing, it is very necessary that company should see his organizational capability which is available to fulfill the order of sale. If not, then create the limit of marketing.

3. Competitors

It is also nature of marketing that you will see competitors in the your market. Never ignore them and create advance strategy to fight and defeat your competitors. Some time, new competitors may be your friends for increasing sale because every new competitor helpful to make a physical market for you where consumer can come and buy.

4. Co-ordination

It is also nature of marketing that it is connected with other activities. It is the duty of marketing manager to do co-ordination with other department.

5. Performance

Marketing should be based on performance. We have to pay for all cost on the basis of past selling. If any branch’s sale value is high. We should promote that branch by increasing the salary that branch’s salesmen and advertising cost.

Main Marketing Concept

1. Production Concept

This concept guides us that we should produce the products at minimum production cost.

2. Product Concept

This concept guides us that we should sell the best quality product to consumers.

3. Selling Concept

Selling concept guides us that we should take minimum selling price from consumer. For this we have to decrease our selling cost.

4. Marketing Concept

Marketing concept guides us that in this era, consumer is king of market and all marketing activities main target should be to satisfy the consumers.

Scope of Marketing

1. Marketing in New Company

2. Marketing in Old Company

It is also the part of scope of marketing. In old company , we see that there are already large number of consumer are buying goods. There is no need to invest high amount on advertising but company can find his scope for improving the quality of product which will be sold to existing consumers. Old company should concentrate his mind for maintaining the stable his level in market by providing quality products, continuing researching and decreasing the cost.

3. Marketing in NGO

What Improvements can be brought in MBA Education ?

2009-11-28T08:56:00.000-08:00

Few days ago , I have started this blog after operating others like Accounting Education. I have tried to write contents relating to business environment topics in very simple language , so that all Indians who have admitted in MBA - Ist Semester from non - commerce side ( from B.A. or B.Sc. ) can also understand different legal policies , laws and its provisions which is also covered in B.Com. level. For this , I have studied many referred books , so that contents will be useful for better preparation of examination of MBA . I have tried to write contents more realistic after reading referred books of experienced authors .

For improvement in MBA Education , it is the duty of lecturer and professors to explain more practical example relating to present business , so that this MBA education will become more practical .

I think examination should be more practical . MBA student should solve the business problem . Writing the 5 answers out of 10 Questions of MBA is not good examination for checking the talent of MBA students . If we want to make good MBA Scholars , then Shiksha ( Education ) should be more practical .

Even Assignment system is not good because , student can easily copy the contents from books or net and write it and get marks in internal assessment . If university want to give internal assessment , then MBA students should have to opportunity to go to Companies office , plant and factory and for some weeks and ask their work experience . A student who understood better in practically should give more internal assessment than one other .

What is the NGO ? Discuss Its Type , Role And Legal Status ? Explain Various Methods in Which NGO Operates

2009-11-28T03:04:00.000-08:00

Contents are covered under Business Environment of MBA Ist Semester

Meaning of NGO

NGO means non - government organisation. Any organisation who is doing non profit activity is called NGO . The aim to make NGO is to do social activities . These organisations do not involve in commercial activities . The source of fund may be private or govt. NGO collects fund through donation . Now , NGO are also known as private voluntary organisation .

It is estimated that 40000 NGO are working internationally and more than 1 million NGO are only in India . Main objectives for making NGO are to reduce poverty , increase employment and support to poor children.

Student Welfare Council (NGO ) is sending Cheque for Children affected from Tsunami

( Members from left - Dr. Mathura Das Savtantra, Prof. Vinod Kumar, Krishan Kumar and many more.....)

Types of NGO

On the basis of Acronyms

INGO

INGO means international non govt. organisation . For example UNO and ILO are INGO.

BINGO

BINGO means business oriented international NGO . CARE , RED Cross and Green peace are BINGO

ENGO

ENGO means environmental NGO

GONGO

GONGO means govt. operated NGO .

QUANGO

QUANGO means quasi autonomous NGO

For example ISO

TANGO

TANGO means Technical assistance NGO

CSO

CSO means civil society organisation.

Types of NGO on the basis of World bank's classification

1. Operational

Operational NGO is that type of NGO which are created for development projects .

2. Advocacy

Advocacy NGO is that type of NGO which are created for awareness projects .

3. USAID

USAID is created as private voluntary organisation in US .

Legal Status

NGO has legal status under following laws

Any charitable society registered under society registration act 1860
Trust
Any ltd company formed under company law 1956 of India

Methods in which NGO operates

There are following methods to operate NGO

Lobbying
Other Social welfare projects like project for providing food , drinking water , and poverty alleviation.

Role of NGO in Consumer awarness

NGO plays a very important role in the consumer awareness . Consumer is the person who buys the products of the company. It is his right to choose the right product at right price . Many NGO are created for providing awareness to consumer with the help of print media , seminars and work shops with this consumers knows what are the points with a business man to cheat the consumers . He can give low quality products. These NGO are also helpful to give remedies to helpless consumers . Large nos. of advocates and legal experts work voluntarily in NGO . So , consumer can get help or advice from these members .

What is ISO ? Explain its Standards ISO 9000 and ISO 14000 . Discuss Its Objectives , working and Versions

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The following contents are covered under Business Environment of MBA First semester

Meaning of ISO

ISO means international standard organisation . In business environment , ISO word is so famous and International organisation provides standards to those business oraganisations who fulfill its conditions . It has
authority to issue certificate of quality management and quality environment . There are large numbers of business organisation who satisfy the conditions . They have ISO certificate .

ISO's official site is at the url http://www.iso.org/iso/home.htm

ISO (International Organization for Standardization) is the world's largest developer and publisher of International Standards. This organisation has made by participation of all countries .Its central secretariat is in Geneva , Switzerland .It is NGO which helps to promote business by providing them solution of quality problems .

Meaning of ISO 9000

This is the latest version of International organisation for standardisation which gives to those organisation who satisfy the following condition

It fulfills the quality requirements of customers .
It fulfills regulatory requirements .
Customers satisfaction
Continual improvement in quality management .
Records should show how and where raw materials and products were processed, to allow products and problems to be traced to the source.
You need to test and document whether the product meets design requirements, regulatory requirements and user needs.

Meaning of ISO 14000

ISO 14000 is standard certificate which gives to those business organisation who fulfill the conditions relating to quality environment . Quality environments means all measure to protect the environment from pollution .

Conditions

Company has minimized harmful effect on environment by proper control on waste and pollution.
Achieve improvement in its environment performance by planting the trees and other projects .
ISO 9000 and ISO 14000 are given after taking test of products who apply for same and ISO takes also some fees for issuing the certificate . There is no guarantee , any quality of end products but almost all ISO products are high quality .
The certificate will be for three years and after this product will again review for giving certificate .

Objectives of ISO 9000 and ISO 14000

1. To Increase the goodwill of company

Main objective of getting these standards is to increase the goodwill of company. Customer can compare the quality of two companies , one is with ISO standard and other is without ISO standard . Goodwill may be in form of increase in sale or more promotion of product of company.

2. Control on Quality

After getting ISO standards , company has to control on quality and it is the objective of ISO standards . ISO standard 9000 controls product's quality and ISO 14000 controls environment quality .

3. Revolution

After coming , ISO 9000 and ISO , 14000 companies have started to label the product by eco labeling . Moreover awarness has come in the minds of company after ist ISO standard in 1987.

Working of ISO

ISO 9000 is more powerful tool to get confidence in market . Company can invite customers to check the quality before purchasing the products. It will only possible after implement ISO 9000 standards . Every product's package is with ISO 9000 and customer can understand its value .

Version

ISO 9001 : 1987
ISO 9002 : 1987
ISO 9003: 1987
ISO 9000: 1987 , 1994 , 2000
ISO 9000 : 2008
ISO 9001 : 2008

ISO 14000 version

ISO 14000 family version
ISO 14001 : 2004 EMS
ISO 14020 ,14021 , 14022 , 14023 , 14024 , 14025

FTDR Act 1992

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Foreign trade development and regulation act was passed in 1992 . After this , old export control act 1947 was closed . All export and import are done by FTDR Act 1992 . FTDR Act is helpful to promote export
and import without any restrictions .

Main provisions

1. Reduce restrictions

This act's provisions are relating to reduce the restrictions on foreign trade .

2. EXIM Policy

This provision gives power to govt. of India to make policy of export and import under this act.

3. Appointment of Director general of Foreign trade

This act also powers to govt. of india to appoint director general of foreign trade . DFGT will advise for making exim policy .

4.Importer exporter code no.

Under this law , any body can export or import only after getting I-M-C-N from director general of foreign trade .

5. Issue of license

Export or import can be done under license issued by DGFT

6. Search and Seizure

Authorized person can search whether goods are imported or exported under term and conditions of FTDR Act 1992.

7. Penalty for contravention

If anybody contravenes the rules and regulations of FTDR Act 1992 , then he has to give 1000 rupees or 5 times of value of goods involve whichever is more .

Structure of Financial Institute in India

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Following is the structure of financial institute in India .It has divided into two parts . One part is national financial institute and other part is state level financial institute .

Development Banks

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Definition of Development Bank

A development bank is a financial institution which provides loan and other financial assistance to businessmen for development of enterprise .

Features of Development Bank

Providing loan for development of business of enterprise .
Loan is given on project basis not on the basis of security .
It provides loan at cheap rate of interest .

Functions of Development Bank

1. Providing loan at cheap rate

Development bank takes interest at very low rate and from time to time , they issue new scheme of loan in which rate of interest is very low .

2. Provide advice and guidance

Development bank provides advice to the businessman about which project is best . It is also function of development bank is to guide to businessman about how to use the loan .

3. Providing facility of refinancing of Commercial banks

Large numbers of commercial bank gets the refinance facility from development bank. Refinance means getting the finance for further distribution of loan to customer .

4. Providing underwriting services

These days development bank are also providing the facility of underwriting in which development bank promises to sell all the shares of company . For these services development bank gets some commission from companies .

Lending procedure of Development bank

Step one

Checking the project

Customer wants to get the loan , he will apply for same . He will attach his project with his application after this development bank will check the project . It will see the following points .

What amount of capital is investing by businessman .
Size of infrastructure .
What is the major transport facility for distribution of products .
Availability of raw material

After checking the above points development banks decides to give loan or not .

Step Second

Other Govt. formalities

Development bank also checks whether the customers has fulfilled all the formalities of govt. or not . Whether he obtained license or not .

Step Third

Acceptance of loan :

If project is good and customers fulfills all the conditions of govt. , then development bank will accept the project and issues the loan to customers bank account .

Step Fourth

Follow Up

After giving loan , development bank guides customers , how to use loan effective way for achievement in project under follow up step .

FEMA 2000

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Definition of FEMA 2000

FEMA 2000 means Foreign exchange management Act 2000. Foreign exchange management act 2000 is very helpful law for development of foreign exchange market in India. It was passed in 1999 and came into effect from June 1, 2000 to entire country. After this foreign exchange regulation act ( FERA ) 1973 was closed . FEMA was most suitable for India corporate sector instead of FERA because almost all strict regulations of FERA were removed in FEMA .

Objectives of FEMA

1. Main objective of apply FEMA is to reduce the restriction on foreign exchange . Now , any offense in foreign exchange will be civil offense not criminal offense .

2. This law's main objective is to increase the flow of foreign exchange in India. Now , under this law , you can bring foreign currency in India without any legal barrier .

Provision /Rules / Regulation of FEMA

1. Provision regarding dealing in foreign exchange :-

According to section 3 of FEMA 2000 ," only authorized person under the govt. terms can deal in foreign exchange in India . "

2. Provision regarding holding of foreign exchange :-

According to section 4 of FEMA 2000, " All persons which are provided authority only can hold or purchase foreign exchange in India or outside India."

3.Provision regarding current account transactions :-

According to section 5 of FEMA 2000 ," There is no restriction regarding sale or deal foreign exchange , if it is a current account transaction ."

The following transaction are deemed current account transactions under FEMA :-

a) Expenses in connection with foreign travel , education and medical care of parents , spouse and children ( Any body now can send the foreign currency in India for above expenses under current account )

b) Payment due as interest on loan

c) Payment due under short term loan for business .

4. Provision regarding capital account transactions :-

Under section six ," RBI will fix the limit of foreign exchange transactions relating to capital account after discussion with Indian govt. "

RBI can restrict following :-

a) transfer of foreign security by Indian resident .

b) transfer of foreign security by Indian resident which is now outside India .

c) transfer of immovable property .

5. Provision regarding export of goods and services :-

According to section 7 of FEMA 2000 , " It is the duty of exporter to declare the true and correct detail of goods which , he have to sell the market outside India and must send complete report to RBI .

RBI can make particular requirement for any exporter .

RBI can also make rules and regulations for realization of amount earned from foreign country.

6. Provision regarding authorised persons :-

RBI can authorize any body who can deal in money exchange or off shore transaction and foreign exchange .

He has to follow the rules and guidelines of RBI .
RBI can revoke the authorisation granted to any person at any time in public interest .
If authorized person will be done contravention the rules of RBI , he will be liable to pay up to Rs. 10000 penalty and Rs. 2000 for every day during which such contravention continue .

7. Provision regarding contravention and penalties :-

Section 13 to 15

If any body or person contravenes the rules and regulation of FEMA 2000 or RBI direction , he will be liable to a penalty three times of sum involved in contravention .

If contravention will continue , then he will pay upto Rs. 5000 per day during the time of contravention .

8. Provision regarding adjucation and appeal :-

According to section 18, " Central govt. can appoint adjudicating authority who can give the punishment of civil imprisonment of maximum six months if case is less than one crore . If demanded value is more than one crore then punishment of imprisonment may be of three years . the person can appeal to special director against the decisions of adjudicating officer . He can also appeal in appellate tribunal and also in high court with the sixty days of communication of order .

New Notification of Department of Telecommunications for National Security

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After applying IT Act 2000 , Ministry of Communication and Information technology are taking many new steps for national security . Department of telecommunications are under this ministry . Today, I found a new notification with my bill of internet . Notification is relating to providing awarness regarding use and access the internet . All internet providers and subscribers who uses internet should ensure that it is under secure wifi modem .If it is used to run a unsecure your own wifi modem , then its information should send to department of telecommunication for co-operation on the issue in the interest of national security .

Due to recent cases of misuse of internet in India by anti social and anti national elements especially through unlicensed brand of wifi technology at customer premises .

The subscriber will be responsible personally , if he does not inform to DOT of India . You can read the notification deeply Via this pdf file .

Information Technology Act 2000

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Introduction of Information Technology Act 2000

Information technology is one of the important law relating to Indian cyber laws. It had passed in Indian parliament in 2000. This act is helpful to promote business with the help of internet. It also set of rules and regulations which apply on any electronic business transaction.

Due to increasing crime in cyber space, Govt. of India understood the problems of internet user and for safeguarding the interest of internet users, this act was made.

The following are its main objectives and scope:-

1. It is objective of I.T. Act 2000 to give legal recognition to any transaction which is done by electronic way or use of internet.

2. To give legal recognition to digital signature for accepting any agreement via computer.

3. To provide facility of filling document online relating to school admission or registration in employment exchange.

4. According to I.T. Act 2000, any company can store their data in electronic storage.

5. To stop computer crime and protect privacy of internet users.

6. To give legal recognition for keeping books of accounts by bankers and other companies in electronic form.

7. To make more power to IPO, RBI and Indian Evidence act for restricting electronic crime.

Scope

Every electronic information is under the scope of I.T. Act 2000 but following electronic transaction is not under I.T. Act 2000

1. Information technology act 2000 is not applicable on the attestation for creating trust via electronic way. Physical attestation is must.

2. I.T. Act 2000 is not applicable on the attestation for making will of any body. Physical attestation by two witnesses is must.

3. A contract of sale of any immovable property.

4. Attestation for giving power of attorney of property is not possible via electronic record.

Highlights the main chapters of I.T. Act 2000 or its main provisions:-

There are 13 chapters in law and all provision is included in this chapters.

1. Chapter II

Any contract which is done by subscriber. If he signs the electronic agreement by digital signature. Then it will be valid.

In case bank, the verification of digital signature can be on the basis of key pair.

2. Chapter III

This chapter explains the detail that all electronic records of govt. are acceptable unless any other law has any rules regarding written or printed record.

3. Chapter IV

This chapter deals with receipts or acknowledgement of any electronic record. Every electronic record has any proof that is called receipt and it should be in the hand who records electronic way.

4. Chapter V

This chapter powers to organization for securing the electronic records and secure digital signature. They can secure by applying any new verification system.

5. Chapter VI

This chapter states that govt. of India will appoint controller of certifying authorities and he will control all activities of certifying authorities.

“Certifying authority is that authority who issues digital signature certificate.”

6. Chapter VII

In this chapter powers and duties of certifying authority is given. Certifying authority will issue digital signature certification after getting Rs. 25000. If it is against public interest, then C.A. can suspend the digital signature certificate.

7. Chapter VIII

This chapter tells about the duties of subscribers regarding digital signature certificate . It is the duty of subscriber to accept that all information in digital signature certificate that is within his knowledge is true .

8. Chapter IX

If any body or group of body damages the computers , computer systems and computer networks by electronic hacking , then they are responsible to pay penalty upto Rs. 1 crore . Fore judgment this , govt. can appoint adjucating officer .

9. Chapter X

Under this chapter, cyber regulation appellate tribunal can be established. It will solve the cases relating to orders of adjudicating officers.

10. Chapter XI

For controlling cyber Crime, Govt. can appoint cyber regulation advisory committee who will check all cyber crime relating to publishing others information. If any fault is done by anybody, he will be responsible for paying Rs. 2 lakhs or he can get punishment of 3 years living in jail or both prison and penalty can be given to cyber criminal.

11. Chapter XII

Police officers have also power to investigate dangerous cyber crime under IPC 1860 , Indian Evidence Act 1872 and RBI Act 1934 .

Advantages of I.T. Act 2000

1. Helpful to promote e-commerce

• Email is valid

• Digital signature is valid.

• Payment via credit card is valid.

• Online contract is valid

Above all things validity in eye of Indian law is very necessary. After making IT act 2000 , all above things are valid and these things are very helpful to promote e-commerce in India .

2. Enhance the corporate business

After issuing digital signature, certificate by Certifying authority, now Indian corporate business can enhance.

3. Filling online forms :-

After providing facility, filling online forms for different purposes has become so easy.

4. High penalty for cyber crime

Law has power to penalize for doing any cyber crime. After making of this law, nos. of cyber crime has reduced.

Shortcoming of I.T. Act 2000

1. Infringement of copyright has not been included in this law.

2. No protection for domain names.

3. The act is not applicable on the power of attorney, trusts and will.

4. Act is silent on taxation.

5. No, provision of payment of stamp duty on electronic documents.

Main Provisions of Competition Act 2002

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In 1969 Govt. has passed an act and it had given the name monopoly and restrictive trade practices (MRTP). It became popular with the name of MRTP 1969. This act has many provisions to control the
monopoly and to promote the competition. It has defined RTP and also explained the powers of MRTP commission. But its scope was very narrow and Govt. of India has made new act called competition act 2002. On the place of MRTP ACT 1969 after this MRTP act 1969 was fully repealed.

Explanation of Competition Act 2002

Competition Act 2002 states that Indian traders must not do any activity for promoting monopoly. If they will do any activity in the form of production, distribution, price fixation for increasing monopoly and this will be against this act and will be void. This act is very helpful for increasing good competition in Indian economy.

Under this act following are restricted practice and these practices are stopped by this act.

1. Price fixing:-

If two or more supplier fixes the same price for supply the goods then it will be restricted practice.

2. Bid ragging:-

If two or more supplier exchange sensitive information of bid, then it will also be restricted practice and against competition.

3. Re-sale price fixation:-

If a producer sells the goods to the distributors on the condition that he will not sell any other price which is not fixed by producer.

4. Exclusive dealing:-

This is also restricted practice. If a distributor purchases the goods on the condition that supplier will not supply the goods any other distributor.

Above all activities promote monopoly so under competition act these are void and action of competition commission will not entertain by civil court.

Establishment of Competition Commission Under this law

Govt. of India appoints the chairman and other member of competition commission. Competition act 2002 gives the rules and regulation regarding establishment and functions of this commission.

Qualification of chairperson of Competition commission:-

He or she should be Judge of high court + 15 years or more experience in the field of international trade , commerce , economics , law , finance , business and industry .

Function of Competition commission:-

1. To stop activity and practice which are promoting monopoly.
2. To promote the competition.
3. To protect the interest of consumers.

Conclusion:-

India is doing all work for safeguarding the interest of consumer and this law is one of the important pillar in this way.

Monopoly and Restrictive Trade Practice (MRTP ) Act 1969 and its Provisions

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After 1947 , many big firms had entered in Indian economy and they were trying to operate business without any competitors . Govt. of India had understood the policy of big Corporate firms and for safeguarding the
interest of consumers , Govt. of India has passed the bill of MRTP and made the monopoly and restrictive trade practise Act 1969 . After activation of this law , no company can promote monopoly and other restrictive trade activities . MRTP commission has power to stop all business activity who are creating barrier in the way of competition in Indian economy.

In this law , RTP is defined deeply and many provisions explains what are activities are restrictive .

Now , this act is converted into Competition Act 2002 and MRTP commission is converted into Competition commission.

Presentation of Social Responsibility of Business

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The following presentation shows the definition of social responsibility , arguments in favour and against and main social responsibilities .

Fiscal Policy

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Definition of Fiscal Policy

Fiscal Policy is the main part of Economic Policy and Fiscal Policy's first word Fiscal is taken from French word Fisc it means treasure of Govt. So we can define fiscal policy as the revenue and expenditure policy of Govt. of India .It is prime duty of Government to make fiscal policy . By making this policy , Govt. collects money from his different resources and utilize it in different expenditure . Thus fiscal policy is related to development policy . All welfare projects are completed under this policy
.

Objectives of Fiscal Policy

There are following objectives of fiscal policy :-

1. Development of Country :-

For development of Country , every country has to make fiscal policy . With this policy , all work work is done govt. planning and proper use of fund for development functions . If govt. does not make fiscal policy , then it may happen that revenue may be misused without targeted expenditure of govt.

2. Employment :-

Getting the full employment is also objective of fiscal policy . Govt. can take many action for increase employment. Government can fix certain amount which can be utilized for creation of new employment for unemployed peoples .

3. Inequality :-

In developing country like India , we can see the difference one basis of earning . 10% of people are earning more than Rs. 100000 per day and other are earning less than Rs . 100 per day . By making a good fiscal policy , govt. can reduce this difference . If govt makes it as his target .

4. Fixation of Govt. Responsibility :-

It is the duty of Govt. to effective use of resources and by making of fiscal policy different minister's accountability can be checked . I was seeing the Episode of Chanakya on YouTube in which I found that in old time fiscal policy was made and treasury officer and even prime minister are also responsible for any shortage of govt .fund .

See the video

Techniques of Fiscal Policy

1. Taxation Policy

Taxation policy is relating to new amendments in direct tax and indirect tax . Govt. of India passes finance bill every year . In this policy govt. determines the rate of taxes . Govt. can increase or decrease these tax rates and amend previous rules of taxation .Govt.'s earning's main source is taxation . But more tax on public will adverse effect on the development of economy.

→ If Govt. will increase taxes , more burden will be on the public and it will reduce production and purchasing power of public .

→ If Govt. will decrease taxes , then public's purchasing power will increase and it will increase the inflation.

Govt. analyzes both the situation and will make his taxation policy more progressive .

2. Govt. Expenditure Policy

There are large number of public expenditure like opening of govt schools , colleges and universities , making of bridges , roads and new railway tracks . In all above projects govt has paid large amount for purchasing and paying wages and salaries all these expenditure are paid after making govt. expenditure policy . Govt. can increase or decrease the amount of public expenditure by changing govt. budget . So , govt. expenditure is technique of fiscal policy by using this , govt. use his fund first on very necessary sector and other will be done after this .

3. Deficit Financing Policy

If Govt.'s expenditures are more than his revenue , then govt. should have to collect this amount . This amount is deficit and it can be fulfilled by issuing new currency by central bank of country . But , it will reduce the purchasing power of currency . More new currency will increase inflation and after inflation value of currency will decrease . So, deficit financing is very serious issue in the front of govt. Govt. should use it , if there is no other source of govt. earning .

4. Public Debt Policy

If Govt. thinks that deficit financing is not sufficient for fulfilling the public expenditure or if govt. does not use deficit financing , then govt. can take loan from world bank , or take loan from public by issuing govt. securities and bonds . But it will also increase the cost of debt in the form of interest which govt. has to pay on the amount of loan . So, govt. has to make solid budget for this and after this amount is fixed which is taken as debt. This policy can also use as the technique of fiscal policy for increase the treasure of govt.

Limitation of Fiscal Policy

1. After issuing new notes for payment of govt. of expenses , inflation of India is increasing rapidly and in this inflation , prices of necessary goods are increasing very fastly. Living of poor person has become difficult . So , these sign shows the failure of Indian fiscal policy.

2. Govt. fiscal policy has failed to reduce the black money . Even large amount of past minister is in the form of black money which is deposited in Swiss Bank.

3. After taking loan from world bank under the fiscal policy's debt technique , govt. has to obey the rules and regulations of world bank and IMF . These rules are more harmful for developing small domestic business of India. These organisation are inter related with WTO and they want to stop Indian domestic Industry.

4. After expending large amount for generating new employment under fiscal policy , rate of unemployment is increasing fastly and big lines on govt. employment exchange can be seen generally in working days . Database of employment exchanges are full from educated unemployed candidates .

Monetary Policy

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Definition of Monetary Policy

Monetary policy is that part of economic policy in which central bank controls the cost and supply of money and credit by applying different techniques. It is also main function of central bank.

We all know, if supply and cost of money are not controlled. Then both are harmful for development of economy. In India RBI is sole institute who is taking steps to regulate money and credit by controlling its supply. Monetary policy regulates both volume and value of currency and credit.

Objective of Monetary Policy

To control the supply of money.

To control the cost of money and credit.

Exchange stability

Full employment

Instruments or technique of credit control / monetary policy:-

1. Bank Rate

Bank rate is that rate which is charged by Central bank for issue loan to the member banks. By changing it, central bank can control the credit.

→ If Central bank increase this bank rate, all commercial banks will increase their interest rate by this loan become costly and flow of fund in the form of credit will decrease.

→ If central bank wants to expand credit, then Central bank will decrease bank rate, after this commercial bank can get advance and loan at cheap rate and by this way, they also decrease their interest rate. After this flow of cash in the form of loan will increases.

2. Open Market Operation

Open market operation is the all action which is done by central bank for purchase and sale of member banks' security in open market. If RBI wants to contract the credit, then RBI will sell the security of member bank and member bank's flow of cash will stop. If RBI wants to expand credit in recession, then RBI will start to buy the security of member banks and member banks get cash and they can now use it for providing more loans to customers.

3. Cash Reserve Ratio / Statutory minimum reserve:-

Cash reserve ratio is the minimum percentage of the deposit to be kept as reserve by the banks with central bank. It can be used as the technique of monetary policy. By changing cash reserve ratio, RBI can contract or expand credit in Indian economy.

→ If RBI wants to contract credit, and then RBI will increase this ratio. After this all banks have to keep more fund as reserve with RBI. So, they will decrease the amount of loan due to decrease the total fund available for enterprises.

→ If RBI wants to expand credit, then RBI will decrease this ratio, after this all banks have to keep less fund as reserve with RBI. So, they will issue more credit to public.

4. Changes in Marginal Requirement of loan:-

Marginal requirement is the difference between value of security and actual loan accepted by bank. Suppose a person wants to take loan of Rs. 80 , we has to give security of Rs. 100 then marginal requirement is Rs. 100 - Rs. 80 = Rs. 20 .

→ If RBI wants to contract the credit , this rate will increase suppose , if RBI fixes it as 40 % , then customer can get loan of Rs. 60 after giving security of Rs. 100 . So , trend of getting loan will decrease .

→ If RBI wants to expand the credit, this rate will decrease suppose, if RBI fixes it as 10% more people will take loan , if they get Rs. 90 in cash after giving security of Rs. 100 .

So , by this way RBI controls credit .

5. Moral Persuasion / Inspiration

RBI as central bank of country can control credit with moral persuasion. Under this persuasion, RBI can call a meeting of all commercial bank and give advice in discussion that they should not give loan for speculative purposes.

6. Rationing of Credit

RBI has right to create ration of credit under monetary policy. It can be done by following way:-

To fix the amount of loan for a particular bank.

To fix Quota for all banks.

To fix Quota for different traders.

7. Regulation of consumer credit

→ In case inflation, prices are increased. To control prices central bank contract credit to reduce the total amount of installment for payment.

→ In case of deflation, prices are decreased to control prices central bank expand credit to increase the amount of installment.

Economic Policies

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Definition of Economic Policies

All policies which are made for development of economy and its stability are called economic policies. Last year economic crisis and after coming its main roots, economic
policies are become most important and every country makes its after deep research and analysis.

Followings are the main economic policies:-

1. Industrial Policies :-

Industrial policies are the one of the important part of economic policies. For working of industry in peace environment, these policies are made. These policies may be different according to the size and location of industry.

2. Trade Policies:-

Trade policy is relating to import and export of goods. Govt. makes trade policy for protecting domestic industry by levying of tax on import.

3. Foreign exchange policy:-

It is also the part of economic policy. For exchanging the currency and better movement of international capital, these policies are made in international capital market.

4. Foreign investment and technology policy:-

This policy is very helpful for getting large amount in form of foreign investment and high skill in form of technology. Govt. makes this policy more liberalized to attract foreign investors.

5. Fiscal Policy:-

Fiscal policy is very advance tool to promote economy. Govt. can reduce the rate of indirect tax for removing recession from country under fiscal measurements .

6. Monetary policy:-

Monetary Policy is made by central bank of any country. RBI uses several tools of monetary policy like bank rate, open market operations and direct regulations.

Critical Role of Economic Policies:-

In India, there are approximate six economic policies and policies are so important for development of India economy. But there are also many shortcomings, we can see in these , which we can explain following way :-

→ Industrial policies affect on domestic industry adversely. Govt. promotes only big companies.

→ Economic policies can be criticized that these are affected from world economy which can not be controlled by govt.

→ Govt. has no direct control on monetary policies due to the control of RBI. So, it is less represented by public.

→ Liberalized foreign investment are decreasing the portion of public sector.

Transfer of Technology and its main method

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Definition of Transfer of Technology

“Transfer of Technology means to sell the technology or to provide technology to other for getting money from that person. Technology includes skill, knowledge and new and fast production techniques and any
organization will give it only after getting its fees that may be license fees. After this second party can share that technology for their own purposes.

Main methods of Transfer of Technology

1. Transfer of Technology by providing training to employees of company

If any company is started the work of training to employees of different company . By this way they can transfer their technology to the employees after learning skills , employees can work more technically.

2. Transfer of Technology by giving license

By this way company can also transfer of technology, Microsoft is the one of example of this; you can buy the license to use the different softwares of Microsoft company. For this Microsoft Company will take fees for this.

3. Transfer of Technology by selling of machinery and equipment

This is also another method of transferring the technology. Company can make any machine or equipment and it is finished with all technology by selling this machine or Equipment Company can transfer the technology.

4. Making of Partnership or joint venture programme

Under this method company does not sell the technology but technology becomes fixed investment in partnership or joint venture. One party brings technology and other party brings money and both start a new business.

5. by Expert Services

Under this method, expert can transfer of technology by giving his professional services and takes fees.

Technological Environment

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Definition of Technological Environment :-

“Technological Environment means the development in the field of technology which affects business by new inventions of productions and other improvements in techniques to perform the business
work. "

Explanation

We see that in 21st century, technology is changing fastly. Now, all work is done online and business shops are using machinery at high level. There are following technological environment factors which affects business.

• New inventions to produce the products.

• New inventions relating to marketing like BPO for selling online in international market.

Status of Technological Environment or Technology in India :-

After Independence, India had basic problems like poverty , unemployment and development of India . Indian Govt. has taken many following steps for technological development.

1. Establishment of technological and research institute

Indian govt. has established 500 technological institutes for providing education to Indian students. It has also established 1080 research institutes. In these institutes major names like space research centre, medical research centre and agricultural research centre have developed India technically.

2. Positive Technical policy

India has strong and positive technical policy for technological development. This policy opens door to import technology from foreign countries for increasing agricultural and industrial developments.

3. High Growth Rate of Information Technology in India

In India, IT sector is developing with 35% growth rate, India is second country after China who is using internet at large scale for e-commerce , e-education and e-accounting .

4. Incentive for promoting Technology in India

• Indian Govt. has given 100% income tax exemption for expenses incurred in research of technology in India.

• State financial corporation is uplifting domestic technology by supporting finance to domestic Industries.

Social Responsibility of Business and Points in Favour and Against of it

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Meaning of Social Responsibility of Business

Social responsibility is the duty of businessman to help the society to solve its major problems . Every enterprise is fully connected with society . He takes many things from society in the form of raw material ,
work from employees and also pollute environment of society. After this , many social problems rise due to pollution . So businessman's prime duty is to support in the form of plantation near the area of factory providing free health facilities to employees and also donate some part of profit for welfare of poor community to uplift them . These days trends shows that almost all companies are taken steps for becoming responsible toward society .

Arguments in favour of social responsibility :-

1. To increase reputation of society :-

Businessman sells the goods to the customers and customers are the social person .If businessman is responsible towards society , then he can increase his reputation in society . This is the one of most important argument that after providing good quality of goods at lower price and providing other free facilities to customers , business can grow his business.

2. Business legal obligations :-

Some law are made in India to reduce population . So businessman must follow these rules and regulations and after this he can save from government penalties . According to this argument businessman should come forward for doing social work. After this he can respect the law .

3. More Public expectation from business :-

In the modern time it may be argued that businessman should fulfil the expectation of public . Businessman gets raw material from very low cost and after producing he sells at very high cost . So it is the duty of businessman to share his some profit in the form of donation.

4. Business has useful resource

Many wise person from society gives argument that business has skill , experience and money resources and innovation mind . If these resources are used to solve social problem , then society can rich with in some year .

5. Better Environment from business

If a business gives good working condition to employee then it will provide better environment for business . How will it possible.

Good facility in factory and provide high wages to labourer

will reduce the absenteeism

will reduce labourer turnover

will reduce labourer crime.

Argument against Social responsibility

1. Cost of social work

Business has already limited resource. So , if it is used in social work then business activity may slow and business's expenses will increase and it will affected business inversely.

2. Businessman is not expert in social work :-

Businessman is not expert in social work . Because he has not done MSW . Master of social work is higher qualification for doing social work and fulfilling social responsibility as social and moral agent . So , without perfect knowledge , business should not do any social activity but concentrate only on his business .

3. Social responsibility is not legal responsibility :-

Some businessman argue that social responsibility is not legal responsibility , no one pressure on business man to give donation under any law .

4. International competition

One of important argument is given by Indian businessman that they have to face international competition . After adopting some social responsibility , it will increase the prices of their product and after competition our business will fail and foreign companies will win in competition.

5. Ignore Business Aim :-

It is the duty of Govt. to do that social activities and if a businessman ignore his business aim and start social activities , then after ignoring business aim businessman can succeed in business.

Conclusion

In very brief , we can give the conclusion of this debate that business should concentrate on business activities but also do social activities which promote the business. He can give small amount of donation and provide good services to employee and society .

Social Environment of Business

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Meaning of Social Environment

Social or Societary environment of business means all factors which affects business socially . Every business works in a society , so societies ' different factors like family , educational institutions and religion affects
business .

Main elements Of Societies and its effect on Business

1. Family :- Family is basic part of society from the birth of a person and upto death , he lives in family so personal decision of buying and selling of goods are affects from family . In the culture of a family , it may happen that parent does not allow to use any product , then sale of such product will decrease , so businessman must analyze different families needs . Many occasion of family like marriage of any family member , can increase the demand of goods .
2. Educational institutions :- Educational institutions are also main part of societies . They provide good knowledge , education , awareness , thinking what should students buy or not to buy . Suppose if a student is habitual to drink the tea and if his teacher advice him that this is harmful to his health after his guidance students can avoid to drink tea after this the sale of tea will decrease .
3. Religion :- Like family and education institution , religion is also effects the business socially . Religion means the system in which group of persons trust in God . They believe that there is one supernatural power in this earth and its name is God . They gives many name like Ek onkar sat nam , om and many more etc. Different religions have different principles , rules and regulations in which they sacrifice to use some products and to eat some food , in Hindu religion , they never use leather products . They affects the sale of leather industries . So, businessman must analyse the targeted audience and after listening their religious thoughts , he should produce the goods .