3 Marks Question

Question 13 Marks

Tutu Pump Co. uses about 7500 valves per year, which is constant throughout the year. The valve costs ₹15 per unit and the carrying cost is estimated to be ₹ 3 per unit. The cost of placing an order and its processing is ₹ 18.
Calculate the Economic Order quantity (EOQ). Give any one benefit that Tutu Pump Co. derives after calculating the EOQ.

Answer

C = ₹ 3
P = ₹ 18
D = 7500
$\begin{aligned} \text { EOQ } & =\sqrt{ } 2 \times P \times D / 3 \\ & =\sqrt{ } 2 \times 7500 \times 18 / 3 \\ & =300 \text { units }\end{aligned}$
Benefits of calculating EOQ:
Ensures that there is no stock-out situation and the cost of carrying and placing the order is minimised.

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Question 23 Marks

‘A channel of distribution consists of three types of flows.’ Explain the three flows

Answer

A channel of distribution consists of three types of flows:
• Downward flow of goods from producers to consumers.
• Upward flow of cash payments for goods from consumers to producers.
• Both downward and upward direction Flow of marketing information on new products, new uses of existing products, etc from producers to consumers. Also, flow of information in the form of feedback on the wants, suggestions, complaints, etc from consumers/users to producers.

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Question 33 Marks

Explain any three market-related considerations to be used by an entrepreneur while selecting the channel for distribution.

Answer

The following market-related considerations to be used by an entrepreneur while selecting the channel for distribution:
• 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.
• 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.
• Buying quantity: It is useful for the manufacturer to rely on the services of middlemen if the goods are bought in smaller quantity.

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Question 43 Marks

In 2022, a popular snacking brand ‘Pom-Pom’ completed 25 years in India. They were one of the first such brands in the country and wanted to start a campaign that allowed the brand to connect with the consumers directly. The marketing team created the idea of ‘Me and Mera Pom-Pom’ where people were encouraged to share their stories woven around their experiences with the product. Such a campaign enabled the consumers to send their message to the company rather than receiving it from them. People shared some of the most poignant and private moments of their lives. Some uploaded their viral films too.
(I) Identify the Promotional approach used by ‘Pom-Pom’ to reach its customers.
(II) Explain any two important features of this approach.

Answer

(I) Below-the-line approach is the approach used by ‘Pom-Pom’ to reach its customers.
(II) Features of Below-the-line approach are:
• The purpose of the activities is to develop the brand by creating awareness and building a brand profile.
• It can lead to an actual sale which is easy to measure.

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Question 53 Marks

“One of the components of a business plan effectively establishes how the entrepreneur will compete and operate in the marketplace. It acts as a guideline regarding the marketing objectives, strategies, and activities to be followed by any new enterprise.”
(I) Identify the component of the business plan discussed above.
(II) Explain the steps described in the plan that help an entrepreneur find the group of customers whose needs the enterprise aims to fulfil.

Answer

(I) Marketing plan
(II) Steps in identification of the "target market" are:
(i) Deciding what the entrepreneur wishes to pursue is based on market research or industry analysis done and complied with by competent people or the entrepreneurs.
(ii) Divide the market into smaller groups based on:
• Consumer's characteristics viz. Geographic (State, Country etc.) Demographic (Sex, age, etc.), Psychographics (Personality, life style, etc.)
• Buying situations viz. Buying conditions (time available etc.), Usage, Desired benefits (features of product).

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Question 63 Marks

“An entrepreneur must pay attention to the quantity and quality of the manpower for his business as it directly impacts the performance and resulting productivity of the organization.”
(I) In the light of the aforesaid statement, identify the component of a business plan that helps an entrepreneur fulfill the stated purpose.
(II) State the objective and importance of the identified component.

Answer

(I) Manpower Plan
(II) Objective: Right person, at the right job, at right time.
Importance: To build up loyal, efficient and dedicated personnel, an entrepreneur
needs to pay adequate and proper attention to human resource planning.

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Question 73 Marks

Prudent Pharma has been a well-established manufacturer of curative medicines in India for the past 15 years. The company is planning to enter a new line of products known as ‘nutraceuticals’ which has both nutritional and medicinal benefits. With rising awareness levels and easy access to information, people are keen to try nutraceuticals as these health supplements claim to delay or reduce the impact of chronic diseases.
As income levels of the population have improved, nutraceuticals promise to emerge as a growing niche market in the country. It is governed by health and safety regulations and the company needs to acquire the required licenses to venture into this field. Though the concept is new to India, internationally it is already a growing market with multiple international brands. Prudent Pharma is in talks for a potential international tie-up for research and development.
On the basis of the given text, identify by quoting lines, any three macroenvironment factors that may affect the future of Prudent Pharma.

Answer

Macroenvironment factors that may affect the future of Prudent Pharma are:
• ‘governed by health and safety regulations and the company needs to acquire the required licenses - Legal factor
• ‘rising awareness levels and easy access to information of people’ - Social factor
• ‘As income levels of the population have improved’- Economic factor

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Entrepreneurship 3 Marks Question

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