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Entrepreneurship 4 Marks Question

Enterprise Marketing · CBSE STD 12 Commerce (CBSE - English Medium). 26 questions.

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4 Marks Question

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26 questions · timed · auto-graded

Question 14 Marks
Explain any four factors that lead to effective employee relationships.
Answer
Factors which lead to effective employee relationship:
  1. Identifying objectives: Employee relationship management include time to hire, turnover and employee satisfaction.
  2. Determining employee needs: Needs vary greatly depending on employee characteristics--age, gender, etc. as well as the type of job being performed. Formal employee evaluation can provide a quantitative indication of employee needs.
  3. Balancing work and life needs: It means taking steps to ensure that the employee's work-life needs are well balanced. This can occur through creative staffing that might involve part-time, flex–time or even off-site work assignments.
  4. Open and honest communication: Managers must be committed to communicating regularly and honestly with employees about the issues that impact their work thus leading to increased loyalty and productivity among employees and decreased turnover and dissatisfaction.
  5. Measuring and monitoring results: Effective employee relationship management requires ongoing attention. That means that managers and their HR departments should be alert at all times for signs of discontent, be which can be subjective, as well as carefully monitoring the results of more formal assessments. These results should also shared with employees. Too often employees are asked to complete surveys and are not informed of the results-or what will be done with the results.
  6. Relationships are interpersonal: A clear understanding of employees' needs and a desire to meet those needs is foundational. Then steps must be taken to interact effectively with employees through a variety of communication channels, both interpersonal and formal.
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Question 24 Marks
Explain any four factors to be taken into consideration for selecting channels of distribution related to a market.
Answer
Considerations related to market:
  1. Number of buyers: If the number of buyers is large then it is better to take the services of middlemen for the distribution of the goods. On the contrary, the distribution should be done by the manufacturer directly if the number of buyers is less.
  2. Types of buyers: Buyers can be of two types: General Buyers and Industrial Buyers. If the more buyers of the product belong to general category then there can be more middlemen. But in case of industrial buyers there can be fewer middlemen.
  3. Buying habits: A manufacturer should take the services of middlemen if his/her financial position does not permit him/ her to sell goods on credit to those consumers who are in the habit of purchasing goods on credit.
  4. Buying quantity: It is useful for the manufacturer to rely on the services of middlemen if the goods are bought in smaller quantity.
  5. Size of market: If the market area of the product is scattered fairly, then the producer must take the help of middlemen.
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Question 34 Marks
Swati and Divya are professional fashion designers and are friends also. Swati lives in Calcutta whereas Divya lives in a village in Bihar.The young girls of the village used to get their clothes stitched as per the prevailing fashion from the near-by town. This gave Divya an idea to start a boutique in the village. She discussed about it with Swati who was already running a Boutique in Calcutta and earning good profits. Swati guided Divya for setting the boutique. Before starting the boutique, Divya trained young girls of her village who knew stitching. Not only this, she called the women of her village who were sitting idle at their homes to help the young girls in cutting, hamming, putting buttons and other small related activities. All the women of the village were happy as they started earning and were economically helping their families. Divya also started earning good profits. The goodwill of Swati was also increasing because of her good work and customer satisfaction. For earning more profits she opened four new boutiques in the near - by areas. The teams who were managing these boutiques were not efficient. Many customers complained about the quality of stitching and the material used for designing etc. Swati was very busy and could not control the activities of the new boutiques. It also damaged the image of the old boutique and resulted into declining of her profit. After few months her business failed, and she had to shut-down all the boutiques.
Based on the above paragraph, identify and explain any two causes of failure of Swati's boutiques. State, any two values which Divya communicated to the society.
Answer
  1. Causes of failure of Swati's boutique based on the question:
  • Not Paying Attention To Quality & Excellence: When you fail to pay attention to quality and excellence, you are planning to fail as an entrepreneur. People will always seek quality and excellence, to remain in business, you must continue to give it to them without abating.
  • Lack of Time Management Skills: If you do not manage your time well, you are sure headed for failure. Time management skill is important if you want to be successful as an entrepreneur. Forming a habit around keeping and maximizing time is highly needful.
  • Lack of Management Skills: Lack of managerial skills can ruin any business. Every entrepreneur must seek to always upgrade and refresh their management skills if they indeed run their venture well.
  • Not Hiring The Right People: When you hire the wrong people for the job, it spells doom. There is a whole lot of calamity that could befall your brand. Make it a point of duty to hire the best hands.
  1. Values communicated by Divya:
  • Women empowerment: Divya trained young girls house wives in around her area in order to make them financially strong and powerful.
  • Development of the village: By providing job opportunity in the village Divya contributed partially towards the development of the village.
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Question 44 Marks
Distinguish between the Cost plus pricing method vs. Variable pricing method.
Answer
Difference between cost-plus pricing method and variable pricing method.
Cost Plus Pricing Method: In this method the total cost of the product is first determined. The total cost is the sum of the variable costs and the fixed costs that are attributable to one unit of the product. A predetermined margin of profit is then added to the above to determine the sale price.
Variable Price Method: Some entrepreneurs fancy to adopt a policy of different prices from different customers depending upon the situation prevailing in the market. This policy is usually adopted when the entrepreneurs deal with different market segments.
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Question 54 Marks
Explain different types of brand name.
Answer
Various types of brands available are:
  1. Individual brand name: Here, every product is promoted by the entrepreneur on the basis of a separate brand name, like: Liril-brand name with the “freshness” concept. Lux-brand name for “beauty soap for film stars”.
  2. Family brand name (Umbrella branding): Here, the entrepreneur’s name or the company’s name is used for all the products, like: Kissan, is brand name for jam, sauces, etc. AMUL, has been used to market a large variety of dairy products viz. milk, ghee, butter, chocolates, etc.
  3. Corporate names: Here, entrepreneur can choose their corporate name or logo together with some brand names of individual products for example, Godrej, Tata, Bajaj, etc.
  4. Alpha-numeric names: It is mainly for industrial products. An alpha-numeric name signifies its physical characteristics. For example, SX4, Liv52, ANX Grindlay, ilO, i20, etc.
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Question 64 Marks
Explain any four factors to be taken into consideration while selecting channels of distribution related to a product.
Answer
  1. Unit value of the product - When the product is very costly, it is best to use a small distribution channel. On the other hand, for less costly products long distribution channel is used.
  2. Standardised or customised product - These are those products which are pre-determined and there is no scope for alteration. On the other hand, customised products are those which are made according to the discretion of the consumer and also there is a scope for alteration.
  3. Perishability - A manufacturer should choose minimum or no middlemen as channel of distribution for such an item or product which is of highly perishable nature. On the contrary, a long distribution channel can be selected for durable goods.
  4. Technical nature - If a product is of technical nature, then it is better to supply it directly to the consumer. This will help the user to know the necessary technicalities of the product.
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Question 74 Marks
Sonu and Monu completed their education from Delhi University. Sonu lived in near the University, whereas Monu had to go back to his village in Assam. Both of them wanted to start their own business. Since the Government announced ban on the use of polythene bags, an idea struck them to start a jute bag manufacturing business. Sonu thought that he would get the advantage of University area for marketing the jute bags and will earn good profits. He also had necessary funds. Therefore he started manufacturing the bags immediately. He was not having any experience of manufacturing jute bags. He also sold the bags on less margin due to tough competition. As a result, his business failed after a few years. On the other hand, Monu was happy because the raw material was available to him at a very low cost in Assam and people of the village were ready to work at low wages because of less job opportunities. Not only this, before starting the business Monu had researched about the cost-structure, the market, the competitors and the strengths and weaknesses of the business.
Based on the above paragraph, identify and explain any two causes of failure of Sonu’s business in comparison to Monu. Also, state any two values which Monu had communicated to the society through his business.
Answer
Causes of failure of Sonu's business: (Any two)
  1. Poor business Planning - A good business plan helps identify the mission, cost structure, market, external influences, strengths and weakness of a business.
  2. Ignoring the competition/less margin - Due to tough competition, he was selling his products on a less margin.
  3. Lack of industrial skills - Lack of experience in the industry will lead to poor organisation of a firm and its resources. Sonu did not have any experience in manufacturing jute bags.
  4. Lack of entrepreneurial skills - During the start-up phase of a new business, lack of entrepreneurial skills will lead to failure. A small firm's performance outcome is a function of many variables, including individual owner characteristics, owner behaviour environmental influences.
Values:
  1. Sensitivity towards environment.
  2. Development of village.
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Question 84 Marks
'Jagriti Ltd' are the manufacturers of Cars for the last 15 years and was earning good profits. Recently, due to the irregular supply of parts by the suppliers the company could not make timely delivery of cars to its customers. The customers cancelled their bookings, and there were very few new bookings. As a result, the sale of the cars declined and also the profits. The management of the company analysed the problems and decided to take over those two firms because of whom the problems arose. One of them was supplying engines and the other tyres. The company also launched new discount schemes for its customers. It also decided to employ 200 unemployed young boys and girls to take up the cleaning operations using imported machines inside the factories as well as the surrounding areas.
  1. Identify and state the concept of 'Enterprise Marketing and Growth Strategies' discussed in the above para.
  2. Identify anyone value which 'Jagriti Ltd' wanted to communicate to the society.
Answer
  1. Concept for enterprise marketing- Sales promotion.
  1. Meaning of sale promotion: Sales promotion activities can be targeted towards final buyers (consumer promotions), business customers (business promotions), retailers and wholesalers (trade promotions) and members of the sales force (sales force promotions).
  2. Concept for growth strategy- Acquisition.
Meaning of acquisition: A corporate action in which a company buys most, if not all, of the target company's ownership stakes in order to assume control of the target firm. Acquisitions are often made as part of a company's growth strategy whereby it is more beneficial to take over an existing firm's operations and niche compared to expanding on its own.
  1. Values communicated by Jagriti ltd to society are:
  1. Employment opportunity to young boys and girls.
  2. Clean and green surrounding area of the factory.
  3. Equality Jagriti ltd provided equal opportunity of job to girls and boys.
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Question 94 Marks
Explain any four points on the basis of which details are prepared by an entrepreneur while assessing the market.
Answer
  • Demand: The demand assessment will be based on the size of market being targeted, i.e., local markets, market at state level or national/international market. It will also involve a study of the target groups of consumers, their preferences, tastes and other related variables.
  • Supply and nature of competition: While assessing market, supply position is also studied by entrepreneurs. It should take into account future supplies from possible entrants in the field.
  • Cost and price of product: It is important to determine the cost of the product and its comparison with available products in the market. Cost variable of competitors in terms of transportation delays, wastage, storage etc., have to be studied to spot cost advantage.
  • Project innovation and change: Market assessment will require a study of prevailing innovations and changes being carried out by existing entrepreneurs. Technological advancements in the field have to be analysed because they may change the quality and influence the cost and price ultimately.
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Question 104 Marks
Distinguish between the cost-plus pricing method, vs. variable pricing method.
Answer
Difference between cost-plus pricing method and variable plus pricing method.
Cost Plus Pricing Method: In this method the total cost of the product is first determined. The total cost is the sum of the variable costs and the fixed costs that are attributable to one unit of the product A predetermined margin of profit is then added to the above to determine the sale price.
Variable Price Method: Some entrepreneurs fancy to adopt a policy of different prices from different customers depending upon the situation prevailing in the market. This policy is usually adopted when the entrepreneurs deal with different market segments.
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Question 114 Marks
Explain the benefits of CRM. Which values stand highlighted if an enterprise has an effective CRM system in place?
Answer
The CRM system benefits an organisation in the following ways:
  1. CRM allows all business data to be stored and accessed from a single location.
  2. CRM contains each and every bit of details of a customer, i.e. a 360-degree view of all customer's information, hence it is very easy to track a customer and accordingly decide which customer can be profitable and which not.
  3. All the details in CRM system is kept centralised which is available anytime on fingertips. This reduces the process time and increases productivity,
  4. The strongest aspect of CRM is that it is very cost-effective. The advantage of decently ORA Septo implemented CRM system is that there is very less need of paper and manual work which requires lesser staff to manage and lesser resources to deal with.
  5. Efficiently dealing with all the customers and providing them what they actually need increases the customer's satisfaction. This increases the chance of getting more business which ultimately enhances turnover and profit.
  6. If the customer is satisfied, they will always be loyal towards the business. It results in increasing customer base and ultimately, enhancing net growth of business.
The values exhibited are as follows:
  1. Concern and care towards customers.
  2. Ensuring value enhancement by building loyal customers.
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Question 124 Marks
Ayaan, Aarav and Ananta are all engineers. They belong to middle class families. Being very good at technical skills, they invented an engine whose fuel consumption is just 60% of the traditional engine. Enthusiastic about their discovery, they got it patented and decided to start their own manufacturing plant. However, only after one year of operations, problems started cropping up s and a promising venture was stalled. What according to you, are the causes of their business failure? Which values are exhibited by them in doing business together?
Answer
The causes of business failure according to me are:
  1. Lack of industry experience Since all three were new to business, they had a lack of industry experience. This would have led to poor organisation of firm's resources, leading to its failure.
  2. Inadequate financing Ayaan, Aarav and Ananta, all three were engineers from middle class background with no knowledge about finance and a business is bound to suffer if:
  1. Entrepreneurs do not have sufficient awareness of the costs involved in raising capital.
  2. They are not aware of the available alternative sources if there is rejection from a financier
  3. They fail to consider using a combination of debt and equity to fund their business.
  1. Poor business planning It seems that in their enthusiasm regarding their discovery, they failed to plan for their business and this might have led to their failure.
  2. Management incompetence Since all three were from technical background, therefore, it appears that they have not equipped to manage business efficiently.
  3. Lack of entrepreneurial skills Mostly during the start-up phase of a new business, lack of entrepreneurial skills in an owner can cause a business to fail.
Values exhibited by them in doing business together are:
  1. Promoting brotherhood.
  2. Acknowledging each other's contribution towards their invention.
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Question 134 Marks
Explain the benefits of CRM?
Answer
The benefits of CRM are:
  1. Storage: By CRM all business data is stored and accessed from a single location.
  2. Central location: Storing all the data of all departments like sales, marketing, customer service etc. in a central location provide immediate access to the recent data when it is required.
  3. Collaboration: Departments can collaborate with each other with ease.
  4. Improvement: It helps the enterprise to develop efficient automated process to improve business processes.
  5. 360-degree view: It provides a 360-degree view of all customer information, knowledge of what customers want and matching it with existing applications to consolidate all business information.
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Question 144 Marks
A company dealing in pharmaceuticals plans to promote its products through advertising and does not deter from making false claims. Give the rules of advertising of the company. Is the stand of the company correct? Which values stand violated by the Company's Act?
Answer
Rules of advertising No, the company's stand is not correct.The values which stand violated are:
  1. Lack of concern towards consumers.
  2. Promoting unethical behaviour.
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Question 154 Marks
Explain in detail SMART goals.
Answer
SMART is made from following words:
  1. Specific: Great goals are well-defined and focused. The moment we focus on a goal, our goal becomes a magnet, pulling us and our resources towards. “The more focused are our energies, the more power we generate.”
  2. Measurable: A goal without a measurable outcome is like a sports competition without a scoreboard or scorekeeper. To know whether we are on track, we have to put concrete numbers in our goals.
  3. Attainable: It means dream big and aim for the stars but keep one foot firmly based in reality. Entrepreneur must get a handle on realistic growth in the industry to set smart goals.
  4. Relevant: Achievable business goals are based on the current conditions and realities of the business climate.
  5. Time-Based: Business goals and objectives just don’t get done when there’s no time frame tied to the goal-setting process.
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Question 164 Marks
What is skimming pricing method? What are its advantages and disadvantages? What values are violated by an entrepreneur by following this pricing strategy?
Answer
This is a method of setting an extremely high initial price that skims the cream of the demand. This is adopted to recover the investment cost in the shortest possible time. This method can be applied possibly when the product is an innovative one and is accepted by the market well. The best example of this policy was pricing strategy followed by cellular phones and telecommunication company. Initially, they charged very high call charges, in addition of charges for incoming calls, now it is possible to make a call for 30 paise. The reason behind this pricing policy which was followed by these companies was that, they beared heavy promotional expenditure which were to be recovered within few years. The price so set can be allowed to continue till competitors arrive in the market.
Advantages:
  1. The initial investment may be recovered at the earliest.
  2. It helps in maintaining the brand name.
  3. People are ready to pay higher prices for better services.
Disadvantages:
The values violated by an entrepreneur by following this pricing strategy are as follows:
  1. Equity: By charging different prices in different time frames, entrepreneur is not promoting equity.
  2. Social responsibility: The entrepreneur is not being socially responsible by charging high price for his product.
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Question 174 Marks
'X' limited has decided to merge with Y limited to form 'Z' limited. In this process of merger, the company's have agreed upon an overall strategy and plan to discuss smaller details in later negotiations. Which form of negotiation is the companies opting for? Explain it.
Answer
The companies are opting for deductive method of negotiation. This method starts with an agreed upon strategy. The parties rely on established principles and a formula to frame the negotiation, while the finer and smaller details are discussed upon in later negotiations. This method is generally used in the process of mergers and acquisitions.
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Question 184 Marks
Lalita wants to buy a house. The seller wants 20 lakhs, but Lalita is willing to pay only 17 lakhs.
Which form of negotiation method would be appropriate for Lalita?
Answer
Distributive method of negotiation will be suitable for Lalita where one party's benefit is the other party's loss.
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Question 194 Marks
Rex saloon chain started in 2010 managed to keep the business going till 2013. The saloons could build a good customer base and could cover the costs. The owner Mrs Lily now thought of growing the business and tried to set new goals. She decided that she will be increasing marketing efforts and try to further sales growth to 20% in a span of one year. The aim for profit would be to ₹5 lakh per saloon. What do you think, is Lily able to set realistic goals of her business?
Answer
No, where her business was just able to cover costs till 2013, Lily is aiming to increase sales to
20%,which is quite unachievable.
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Question 204 Marks
Give the various sales promotion activities. Which values are exhibited by a firm by following these activities?
Answer
Various sales promotion activities:
A firm adopting these techniques of promotion exhibit the following values:
  1. Identifying the importance of retail and business customers, intermediaries and sales force in promoting the business of the firm.
  2. Working towards long-teusrm stainable development.
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Question 214 Marks
What is AIDA?
Answer
Developing effective advertising (AIDA): Good advertising elicits the following four responses:
Attention: It catches the eye or ear and stands out amid the clutter of competing advertisements.
Interest: It arouses interest and delivers sufficient impact in the message or offering.
Desire: It creates a desire to learn more or crave ownership.
Action: It spurs an action which leads to achievement of the ad’s original objective.
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Question 224 Marks
What are the rules for advertising?
Answer
There are four rules for advertising:
  1. Aim: It means the primary purpose of the advertisement and it aims to inform, sell, produce listings or improve the image of the business.
  2. Target: Who is targeted, i.e. which group of customers are targeted. For example, is it male, female, adult, teenager, child, mother, father, etc.
  3. Media: Based on aim and target which media is available and is most suitable i.e. TV, radio, press, etc.
  4. Competitors: Here, various aspects of the competitors are to be studied like moves of the competitors, media channel used, etc.
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Question 234 Marks
'Wintech limited' has been getting constant complaints from its customers regarding its after sale service. The sales department is pressurising the company to install an effective Customer Relationship Management system. But the company feels that it should do so only after installing the necessary technological infrastructure. Is the stand of the company correct? What is the impact of technology on CRM?
Answer
Yes, the stand of the company is correct. Technology plays an important role in CRM as advanced technology offers a perfect solution to the problem pertaining to data management. Advancement in technology has offered new ways for companies to communicate with customers and collect data about them. In using technology, a number of technology applications are used in the development of CRM strategy. Xu and Walton, 2005; Zaayman, 2004; Chen and Popovich, 2003; Meta Group, 1999 are some softwares that help in proper management of data relating to CRM.
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Question 244 Marks
Varshini started her high end boutique in a posh locality, but she was not aware of how to make her boutique popular in the area. Suggest some measures for it.
Answer
Varshini is suggested the following:
  1. To create a brand name for the product.
  2. To have a simple logo and tag line for the boutique.
  3. Go for the advertising through pamphlets and door to door publicity.
  4. Arrange for seminars related to ladies.
  5. Sponsor the programmes of ladies like kitty party, etc.
  6. Cover the marriages and other social programmes and display the brand name and the products.
  7. Arrange for promotional schemes like buy two and get one free.
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Question 254 Marks
What are the various types of brand names from the entrepreneur’s perspective?
Answer
Various types of brands available are:
  1. Individual brand name: Here, every product is promoted by the entrepreneur on the basis of a separate brand name, like:
Liril-brand name with the “freshness” concept.

Lux-brand name for “beauty soap for film stars”.
  1. Family brand name (Umbrella branding): Here, the entrepreneur’s name or the company’s name is used for all the products, like:
  • Kissan, is brand name for jam, sauces, etc.
  • AMUL, has been used to market a large variety of dairy products viz. milk, ghee, butter, chocolates, etc.
  1. Corporate names: Here, entrepreneur can choose their corporate name or logo together with some brand names of individual products for example, Godrej, Tata, Bajaj, etc.
  2. Alpha-numeric names: It is mainly for industrial products. An alpha-numeric name signifies its physical characteristics. For example, SX4, Liv52, ANX Grindlay, ilO, i20, etc.
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Question 264 Marks
Explain in short, the various elements of the promotion mix.
Answer
The various elements of promotion mix are as follows:
  1. Advertising: Advertising is a paid form of non-personal communication designed to persuade potential customers to choose a product or a service over that of a competitor. It is a planned and consistent activity that aims at keeping the name of the business uppermost in the mind of the consumer.
  2. Personal selling: Personal selling involves oral presentation of message in the form of conversation with one or more prospective customers for the purpose of making sales. Under personal selling, companies appoint salespersons, who contact with prospective buyers to create product awareness and preferences with the aim of making sales.
  3. Sales promotion: It relates to short-term incentives that encourage or promote the purchase or sale of a product or a service.
  4. Public relations: It is a deliberate, planned and sustained effort to establish and maintain mutual understanding between an organisation and its stakeholders by obtaining favourable publicity and building a good corporate image.
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