Business Studies 6 Marks Question

Factors affecting price of a product: (any four)
1. Product Cost: One of the most important factors affecting the price of a product or service is its cost. This includes the cost of producing, distributing and selling the product. The cost sets the minimum level or the floor price at which the product may be sold.In the long run, a firm cannot survive unless at least all its costs are covered. There are broadly three types of costs: viz Fixed Costs, Variable Costs and Semi Variable Costs.
2. The utility and demand: While the product costs set the lower limits of the price, the utility provided by the product and the intensity of demand of the buyer sets the upper limit of price, which a buyer would be prepared to pay. The buyer may be ready to pay up to the point where the utility from the product is at least equal to the sacrifice made in terms of the price paid.
3. Extent of competition in the market: The price will tend to reach the upper limit in case there is lesser degree of competition while under conditions of free competition, the price will tend to be set at the lowest level.
4. Government and legal regulations: In order to protect the interest of public against unfair practices in the field of price fixing, Government can intervene and declare a product as essential product and regulate it’s price. In such a case, the Government does not allow the firms to charge such a high price and intervene to regulate the price of the product.
5. Pricing objectives: Apart from profit maximisation, the pricing objectives of a firm may include: (a) Obtaining Market Share Leadership: If a firm's objective is to obtain larger share of the market; it will keep the price of its products at lower levels so that greater number of people are attracted to purchase the products; (b) Surviving in a Competitive Market: If a firm is facing difficulties in surviving in the market because of intense competition or introduction of a more efficient substitute by a competitor, it may resort to discounting its products or running a promotion campaign to liquidate its stock; and (c) Attaining Product Quality Leadership: In this case, normally higher prices are charged to cover high quality and high cost of research and Development.
6. Marketing Methods Used: Price fixation process is also affected by other elements of marketing such as distribution system, quality of salesmen employed, quality and amount of advertising, sales promotion efforts, the type of packaging, product differentiation, credit facility and customer services provided.

Following are the four elements of marketing mix:
1. PRODUCT: Product means goods or services or ‘anything of value’, which is offered to the market for sale. The concept of product relates to not only the physical product but also the benefits offered by it from customer’s view point. It also includes the extended product or what is offered to the customers by way of after sales services, handling complaints, availability of spare parts etc.The important product decisions include deciding about the features, quality, packaging, labelling and branding of the products.
2. PRICE: Price is the amount of money customers have to pay to obtain the product. In the case of most of the products, the level of price affects the level of their demand. The marketers have not only to decide about the objectives of price setting but to analyse the factors determining the price and fix a price for the firm’s products. Decisions have also to be taken in respect of discounts to customers, traders and credit terms, etc., so that customers perceive the price to be in line with the value of the product.
3. PLACE: Place or Physical Distribution include activities that make a firm's products available to the target customers. Important decision areas in this respect include selection of dealers or intermediaries to reach the customers, providing support to the intermediaries (by way of discounts, promotional campaigns, etc.). The other decision areas relate to managing inventory, storage and warehousing and transportation of the goods from the place it is produced to the place it is required by the buyers.
4. PROMOTION: Promotion of products and services include activities that communicate availability, features, merits, etc., of the products to the target customers and persuade them to buy it. Most marketing organisations use a number of tools such as advertising, personal selling and sales promotion techniques like price discounts, free coupons etc.

Various techniques used by Leena to improve the performance of her employees:
Method Study- The objective of method study is to find out one best way of doing the job. To determine the best way there are several parameters. Right from procurement of raw materials till the final product is delivered to the customer every activity is part of method study. Taylor devised the concept of assembly line by using method study. The objective is to minimise the cost of production and maximise the quality and satisfaction of the customer.
Time Study- It determines the standard time taken to perform a well-defined job. The standard time is fixed for the whole of the task by taking several readings. The method of time study will depend upon volume and frequency of the task, the cycle time of the operation and time measurement costs. The objective of time study is to determine the number of workers to be employed; frame suitable incentive schemes and determine labour costs.

SIGNIFICANCE OF DELEGATION:
(i) Effective management: By empowering the employees, the managers are able to function more efficiently as they get more time to concentrate on important matters.
(ii) Employee development: As a result of delegation, employees get more opportunities to utilise their talent and this may give rise to latent abilities in them. It makes them better leaders and decision makers.
(iii) Motivation of employees: Delegation helps in developing the talents of the employees. It also has psychological benefits. Responsibility for work build the self-esteem of an employee and improves his confidence.
(iv) Facilitation of growth: Delegation helps in the expansion of an organisation by providing a ready workforce to take up leading positions in new ventures.
(v) Basis of management hierarchy: Delegation of authority establishes superior-subordinate relationships, which are the basis of hierarchy of management.
(vi) Better coordination: The elements of delegation help to define the powers, duties and answerability related to the various positions in an organisation. This helps to avoid overlapping of duties and duplication of work.

(I) Securities Exchange Board of India(SEBI)
(II) Objectives of SEBI are (Any three)
• to regulate the stock exchanges and the security industry to promote their orderly functioning.
• to protect the rights and interest of the investors, particularly individual investors to guide and educate them.
• to prevent trading Malpractices and achieve a balance between self regulation by the security industries and its statutory regulation.
• to regulate and develop a code of conduct and fair practices, by intermediaries like brokers, merchant brokers etc. with a view of making them competitive and professional.
(III) Developmental functions: (Any two)
• Training of intermediaries of the securities market. ;
• Conducting research and publishing information useful to all market participants.
• Undertaking measures to develop the capital markets by adapting a flexible approach.