Lecture No. 3 of COMMUNICATION

THEORIES OF COMMUNICATION
Introduction

We have been discussing how important communication will be for your success in business communication. Communication does not occur haphazardly. Nor does it happen all at once. It is more than a single act. It is a dynamic, transactional (two way) process that can be broken into different phases. To have a better understanding of the process of communication, we need to look at different theories of it.

Electronic Theory

One very influential theory is called the mathematical or electronic theory of communication.

This idea emphasized the technical problems of transmitting a message from a sender to a receiver.

It is based on, and uses the language of, electronics.

The message begins with an information source, the mind of the sender (writer or speaker), who encodes a message into words and sentences. The message is transmitted as a signal (marks on paper or sound waves) through a channel, where it may be distorted by noise (such as smudged typing or acoustical problems). As a last step, the receiver (listener or reader) decodes the message. Look at the following illustration of this theory.

Message

                                            Communicator                                         Audience

                                            As “sender”                                               as “receiver”

The electronic theory is helpful because it introduces the ideas of senders and receivers and of possible interference. It emphasizes one important aspect of communication: accuracy.

Its usefulness is limited, people are not machines. It may be possible to design perfectly 

an accurate electronic communication system but not a human one. Emphasis on accuracy

ignores many other important dimensions of the situation in which we communicate. One may express an idea very accurately, but other may think he does not have the right to talk, so we need to understand other theories too.

 

Social Environment Theory

Social environment theory is of the social and behavioral scientists. It says that we must consider the situation, the social context in which we will work. When we work and communicate together, we all participate in a social situation Within that situation, each agrees to assume certain roles – such as “compromiser,” “initiator,” “or “encourager” – based on our part in the activity. We each have a certain status prescribed officially, such as our job title. We need to understand the rules, or the “culture,” of the environment in order to communicate: both the official rules – such as company policies and practices – and those unwritten rules regarding to whom, how, and when, and for how long it is appropriate for us to communicate within a certain organization. Look at the following illustration of this theory.                                                     Message             Communicator                                                  Audience             As “sender”                                                       as “receiver”                                              Within a certain environment Social environment is helpful because it adds the important dimension of the specific social situation. Too often, inexperienced business people neglect to take into account role status and rules when they communicate. A nicely tailored message may still fail to achieve its objective if you write to the wrong person at the wrong time

Rhetorical Theory

Third set of theorists add more dimensions to our understanding of the communication process: communication is not linear, but circular; not just sending a message to be received, but producing a response; not static, but dynamic. Rhetorical theorists provide an important addition to a communication model for business communicators Many people in business get so much absorbed in the accuracy of their message and appropriateness of the situation that they forget the third crucial variable, producing the desired response form their audience. The importance of response in business communication is illustrated in the following figure—which incorporates the ideas of accuracy (from the collective theory) and situation (from the social environment theory). This model is circular, not linear. Message                                                                                                         Message                       Communicator                                                    Audience Response                                                                                                          Response In fact, perhaps the most important difference between business communication and other forms of communication is this circular quality: your business communication effectiveness depends on the result you achieve. How can you achieve desired response? That’s what the rest of this course will be about. You will learn not only how to be more correct and accurate, and how to be more sensitive to the situation, but also how to identify your audience’s needs in order to become a better communicator.

Lecture No. 2 of Communication

 Flow of Communication
Introduction
An organization is a group of people associated for business, political, professional, religious, social, or other purposes. Its activities require human beings to interact and react, that is, to communicate. They exchange information, ideas, plans, order needed supplies and make decisions, rules, proposals, contracts, and agreements. All these activities require one skill that is communication. So we can say that communication is the "Lifeline" of every organization.
An exchange of information within an organization is called internal communication. It takes place at different levels -- downwards, upwards and horizontal.
To exchange information within and outside the organization we use a variety of formal and informal forms of communication that carry the flow of information.

Flow of Internal Communication

Formal

Planned communication Memo, letter, report, e-mail & faxes that follow company’s chain of command

Internal Communication

Casual Communication among employees e-mail face to face conversation phone calls, discussions

Informal

　

i) Internal Communication

The formal Communication Network
• The formal flow of information follows the official chain of command.

Following is the table to help us understand this official chain of command.

Direction of Flow Within the Organization

Upwards communication by employees to top management

Downwards communication by top management to employees

Horizontal communication from one employee/dept to another

Downward Flow

External Communication

Communication that takes place outside the organization is called external communication. The right letter, proposal, report, telephone call, or personal conversation can win back an angry customer, create a desire for a firm’s product or services, encourage collections, motivate performance, and in general, create goodwill.
Flow of External Communication

Formal

Planned communication with outsides Memo, letter, report e-mail, Fax’s that follow company’s chain of command

External Communication

Casual Communication among Customers, suppliers, investors, e-mail face to face conversation phone calls, discussions

Informal

 

Various Aspects of External Communication

Informal External Communication Although external communication is formal, informal contacts with outsiders are important for learning customer’s needs. Plenty of high level manager recognize the value of keeping in touch with "the real world by creating opportunities to talk with and get feedback from customers and frontline companies.
Ways of External Communication Letters, pamphlets, annual reports, interviews with the news media etc. Any of these forms is used to communicate externally. It depends on the needs of the communication.
Effective communication internally and externally can help create a good reputation and have a positive impact on the ultimate success of the individual as well as organization.

ENG301 - Lecture No. 1: Communication

Introduction

You may say that communication is important and that you spend a lot of time doing it. But you’re pretty good at communicating. After all you talk to people, write notes, read books, get along with other people, and make myself understood already. Why should you study communication?”

The apparent simplicity of communication is deceptive. Just because we all communicate every day does not make us good communicators. Just because some aspects of effective communication are based on common sense does not mean common sense alone is enough. Skilled communicators draw on an extensive and complex body of knowledge, including semantics (the study of word choice), linguistics (the study of language), rhetoric (the study of writing and speaking effectively), psychology, sociology, graphic design, and even computer science. You will explore and apply the scholarship and research from all of these fields in your study of communication.

“Why then,” you may well ask finally, “study business communication specifically? Communication is communication: I’ve taken plenty of English courses and communicated in every one of my other courses.”

 Definition of Communication

The word communication means the act or process of giving or exchanging of information, signals, or messages as by talk, gestures, or writing. Technically speaking, in the act of communication, we make opinions, feelings, information, etc known or understood by others through speech, writing or bodily movement.
Why do we communicate?
The purpose of any given communication may be:a) to initiate some action;b)
c) to establish, acknowledge or maintain links or relations with other people.
Initiating Action
Initiating action may be achieved by two basic categories of communication.
Expressing needs and requirements.
This can range from a baby’s cry – or even the bleep of an alarm clock – to an adult’s more precious expression of needs and wants. In a business organization, it would include briefings, instructions and procedure manuals. This will only be effective where the other person is willing to satisfy the needs.
Persuading and motivating others
It means to carry out the desired course of action" in other words, giving them a reason (other than one’s own want or need) to perform that action. Persuasion of this kind is likely to be a major element in marketing and sales: a sales reply cannot simply ask a customer to buy the product because she, the sale rep, needs a success. She must show that there are benefits to the consumer, which will make the purchase worthwhile.
Imparting Information
Imparting information, ideas, attitudes, beliefs and feelings may have any number of specific purposes. to impart information, ideas, attitudes, beliefs or feelings; and /or· Creating awareness· Creating understanding· Persuading others·
Information gathering is a constant activity of human beings. We receive a great deal of data and information in our daily lives, only some of which we seek or consciously absorb. Think about it: news bulletins, books, bank statements, business information, gossip, thing people tell you, things you ask them. This list is endless.
Remember that other people may be seeking information in the messages you ‘send’ (and in the tone of your voice and other indications of what is ‘between the lines’). This information may or may not be something you wish to communicate: you will need to be aware of it before your listener/reader is.
Establishing relations
Establishing, acknowledging and maintaining relations with other people is a vital function of communication. Influencing othersImportanceCommunicating effectively in speaking and writing is useful in all areas of business, such as management, technical, clerical, and social positions as we have just seen.
The ability to communicate well has always given advantages to those who possess it. Communication has a rich history. The ancient world, both the East and the West, depended on oral communication. In ancient Greece and Rome, it was necessary to communicate when dealing with matters in assemblies and the courts. During the Medieval and Renaissance Periods, the oral tradition progressed. As writing became more important as a permanent record of communication, authors and books on written communication principles appeared.
So we can say that some of today’s principles of writing are a mixture of ancient oral and written traditions.Advantages of Communication in your CareerYour success in your career is based on your ability to do well in written and oral communication.
This ability to communicate effectively is a valuable asset for you.· If your career requires mainly mental rather than manual labor, your progress will depend on how effectively you communicate your ideas to others who need or should receive them.· Strong communication skills are found in every job description listed by companies’ advertising positions. Communication is a primary responsibility in many careers, such as customer relations, labor relations, marketing personnel, public relations, sales, and teaching.· Communication is also required in government and non profit organizations. There skills play a major role at every level.Communication&Global MarketThe way you communicate both within and outside your own country affects everything you do. Moreover your ability to speak and write effectively will also make a difference to your organization. These qualities will help you to be successful in dealing with international business people.
Always remember that "To the customer, you are the company". Your dealing with customers, clients and the public reflects the company you represent. Important communications can make a difference to your company because each message communicates the essential quality and culture of your company and can either build goodwill or destroy it.
Messages written to international customers and other business contacts are sensitive to the readers. Your goodwill as well as your organization’s is at stake. So be very careful while communicating with international people.
The ability to communicate effectively with others is repeatedly named as a top quality of a successful businessman. You as a businessman may be a very intelligent person; but if you can’t get your message across to the other, you will be thought of as less intelligent than you are because ideas are common, but the ability to clearly communicate ideas to others is rare.
If you are a better communicator, customers and business associates form better impression of you and your organization. This impression is based solely upon your ability to communicate both oral and written messages. Effective business message builds or retains goodwill which is a priceless commodity. Because the exchange of written communication is vital to a businessman for promoting goodwill, the art of producing effective correspondence will help ensure your success in business.
So, your ability to communicate is, in fact, your trademark. The memos, letters and reports you write, demonstrate your ability, or lack of ability to communicate. Presenting yourself through your communication will project a favorable image as well as promote successful business both internally and externally.
Besides, as a businessman you are required to run the working of your organization smoothly because you are to clearly transfer your objectives, policies, method of working etc. to the people working with you at different levels, so this ability to communicate is very crucial for you as a businessman for basic managerial functions.
As a businessman you will regularly plan design and control affairs to maximize your production and minimize your cost. Your ability to communicate effectively is going to help you from the brainstorming step to implementing the objectives that you chalk out for the promotion of your business.
Another factor that is important for a businessman to achieve the desired objectives is decision making. Here again ability to communicate both orally and in writing helps you make the most of yourself and your organization.
Above all , your ability to communicate helps you in understanding human relationships. Being an effective communicator you can interact effectively and positively with others. This situation results in an open climate of communication within organization as well as outside it. So communication is of paramount importance for a businessman to be successful in his business. Developing the right attitude"To the customer, you are the company." Your attitude when dealing with customers, clients, and the public reflect on the company you represent. Your attitude will reflect your country and your culture.
Each message communicates the essential quality and culture of your company and can either build goodwill or destroy it.
Doing an honest job enthusiastically and competently helps both the doer and the receiver. Answering even routine inquiries should and can be an interesting challenge.Preparing AdequatelyMost of the people can learn to communicate effectively for business if they are willing to devote whatever effort is necessary to prepare themselves adequately. In addition to the proper goodwill-building attitude, the following qualities are desirable:
Careful, sound judgment when choosing ideas and facts for each message.
Patience and understanding, even with unjustly insulting persons.
Integrity, backed up by a valid code of ethics.
Reasonable facility with the English language.
Applied knowledge of the communication process and principles and of successful methods for sending and receiving messages. Advancement in TechnologyThe internet, e-mail, voice mail, faxes, pagers, and other wireless devices have revolutionized the way people communicate. Such technological advances are new and better tools to the workplace but also increase the speed, frequency, and reach of communication. People from opposite ends of the world can work together effectively, 24 hours a day. Moreover, advances in technology make it possible for more and more people to work away from the office-in cars, airports, hotels and at home. So it is easier to understand why communication is so important.

Advancement in
internet, e-mail, voice mail, faxes, pagers, and other wireless devices have revolutionized the way people communicate. Such technological advances are new and better tools to the workplace but also increase the speed, frequency, and reach of communication. People from opposite ends of the world can work together effectively, 24 hours a day. Moreover, advances in technology make it possible for more and more people to work away from the office-in cars, airports, hotels and at home. So it is easier to understand why communication is so important.

Knowledge of the cultural conventions of your audienceKnowledge of the cultural conventions of your audience Careful, sound judgment when choosing ideas and facts for each message.
Patience and understanding, even with unjustly insulting persons.
Integrity, backed up by a valid code of ethics.
Reasonable facility with the English language.
Applied knowledge of the communication process and principles and of successful methods for sending and receiving messages.

Introduction to Economics –ECO401 VU
Lesson 01
INTRODUCTION TO ECONOMICS
WHAT IS ECONOMICS?
Economics is not a natural science, i.e. it is not concerned with studying the physical world like
chemistry, biology. Social sciences are connected with the study of people in society. It is not
possible to conduct laboratory experiments, nor is it possible to fully unravel the process of
human decision-making.
“Economics is the study of how we the people engage ourselves in production, distribution and
consumption of goods and services in a society.”
The  term economics  came  from  the Greek  for  oikos  (house)  and  nomos  (custom or   law),
hence "rules of the household. 
Another definition is: “The science which studies human behavior as a relationship between
ends and scarce means which have alternative uses.”
BRANCHES OF ECONOMICS
Normative economics:
Normative economics  is  the branch of  economics  that   incorporates value  judgments about
what the economy should be like or what particular policy actions should be recommended to
achieve a desirable goal. Normative economics looks at the desirability of certain aspects of
the economy. It underlies expressions of support for particular economic policies. Normative
economics  is known as statements of  opinion which cannot  be proved or  disproved,  and
suggests what  should be done  to solve economic problems,   i-e unemployment  should be
reduced. Normative economics discusses "what ought to be".
Examples:
1-A normative economic theory not only describes how money-supply growth affects inflation,
but it also provides instructions that what policy should be followed.
2- A normative economic theory not only describes how interest rate affects inflation but it also
provides guidance that what policy should be followed.
Positive economics:
Positive economics,  by contrast, is the analysis of facts and behavior in an economy or “the
way things are.” Positive statements can be proved or disproved, and which concern how an
economy  works,   i-e   unemployment   is   increasing   in   our   economy.  Positive   economics   is
sometimes defined as the economics of "what is"
Examples:
1- A positive economic theory might describe how money-supply growth affects inflation, but it
does not provide any instruction on what policy should be followed.
2- A positive economic theory might describe how interest rate affects inflation but it does not
provide any guidance on whether what policy should be followed.
We the people: includes firms, households and the government.
Goods are the things which are produced to be sold.
Services involve doing something for the customers but not producing goods.
FACTORS OF PRODUCTION
Factors of production are inputs into the production process. They are the resources needed
to produce goods and services. The factors of production are:
• Land  includes the land used for agriculture or industrial purposes as well as natural
resources taken from above or below the soil.
• Capital  consists of  durable producer goods  (machines,  plants etc.)  that  are  in  turn
used for production of other goods.
• Labor consists of the manpower used in the process of production.
• Entrepreneurship  includes   the  managerial   abilities   that   a   person   brings   to   the
organization. Entrepreneurs can be owners or managers of firms.
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Scarcity does not mean that a good is rare; scarcity exists because economic resources are
unable to supply all the goods demanded. It is a pervasive condition of human existence that
exists because society has unlimited wants and needs,  but   limited resources used  for  their
satisfaction. In other words, while we all want a bunch of stuff, we can't have everything that
we want.
Rationing is a process by which we limit the supply or amount of some economic factor which
is   scarcely   available.   It   is   the   distribution   or   allocation   of   a   limited   commodity,   usually
accomplished based on a standard or  criterion.  The  two primary methods of   rationing are
markets and governments. Rationing is needed due to the scarcity problem. Because wants
and needs are unlimited, but resources are limited, available commodities must be rationed
out to competing uses.
ECONOMIC SYSTEMS
There are different types of economic systems prevailing in the world.
Dictatorship:
Dictatorship is a system in which economic decisions are taken by the dictator which may be
an individual or a group of selected people.
Command or planned economy:
A  command  or  planned  economy  is  a mode  of  economic  organization   in  which   the  key
economic   functions   –   for   whom,   what,   how   to   produce   are   principally   determined   by
government  directive.  In a planned economy,  a planning committee usually government  or
some group determines the economy’s output of goods and services. They decide about the
optimal mix of resources in the economy. They also decide how the factor of production needs
to be employed to get optimal mix.
Free market/capitalist economy:
A free market/capitalist economy is a system in which the questions about what  to produce,
how to produce and for whom to produce are decided primarily by  the demand and supply
interactions  in  the market.  In  this economy what   to produce  is  thereby determined by  the
market  price of  each good and service  in  relation  to  the cost  of  producing each good and
service.
In a free economy the only goods and services produced are those whose price in the market
is at least equal to the producer’s cost of producing output. When a price greater than the cost
of producing that good or service prevails, producers are induced to increase the production. If
the product’s price falls below the cost of production, producers reduce supply.
Islamic economic system:
This system  is based on Islamic values and Islamic rules  i-e zakat,  ushr, etc.  Islam forbids
both the taking and giving of interest. Modern economists, too, have slowly begun to realize
the futility of interest. The Islamic economic principles if strictly followed would eliminate the
possibility of  accumulation of  wealth  in  the hands of  a  few and would ensure  the greater
circulation   of  money   as  well   as   a  wider   distribution   of  wealth.   Broadly   speaking   these
principles are (1) Zakat  or compulsory alms giving (2)  The  Islamic law of   inheritance which
splits  the property of  an  individual   into a number  of  shares given  to his  relations  (3)  The
forbiddance of   interest  which checks accumulation of wealth and  this strikes at   the  root  of
capitalism.
Pakistan case: A mixed economy
In Pakistan, there is mixed economic system. Resources are governed by both government
and individuals. Some resources are in the hand of government and some are in the hand of
public. Optimal mix of resources is decided by the price mechanism i-e by the market forces of
demand and supply.  Pakistan economy  thus consists of   the characteristics of  both planned
economy and free market economy. People are free to make their decisions. They can make
their properties.  Government controls the Defence. 
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CIRCULAR FLOW OF GOODS & INCOME
There are two sectors in the circular flow of goods & services. One is household sector and
the other is the business sector which includes firms. Households demands goods & services,
Firms   supply   goods  &  services.  An   exchange   takes   place   in   an   economy.   In  monetary
economy, firms exchange goods & services for money. Firms’ demands factors of production
and households supply factors of production. Firms pay the payment in terms of wages, rent,
etc.  This  is circular   flow of  goods.  On  the other  hand,  household gives money  to  firms  to
purchase the goods & services from firms, and firms’ gives money to households in return for
factors of production.
DISTINCTION BETWEEN MICRO & MACRO ECONOMICS
Micro Economics:
The branch of  economics  that  studies  the parts of   the economy,  especially such  topics as
markets,  prices,   industries,  demand,  and supply.   It  can be  thought  of  as  the study of   the
economic  trees,  as  compared  to macroeconomics,  which  is  study of   the entire economic
forest.  Microeconomics  is a branch of  economics  that  studies how  individuals,  households,
and  firms make decisions  to allocate  limited resources  typically  in markets where goods or
services are being bought and sold. It also examines how these decisions and behaviors affect
the supply and demand for goods and services, which determines prices, and how prices, in
turn, determine the supply and demand of goods and services.
Macro Economics:
The branch of economics that studies the entire economy, especially such topics as aggregate
production, unemployment, inflation, and business cycles. It can be thought of as the study of
the economic forest, as compared to microeconomics, which is study of the economic trees.
Macroeconomics,   involves  the  "sum  total  of  economic activity,  dealing with  the  issues  of
growth,   inflation,  and unemployment  and with national  economic policies  relating  to  these
issues” and the effects of government actions (e.g., changing taxation levels) on them.

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Introduction to Economics –ECO401 VU
Lesson 02
INTRODUCTION TO ECONOMICS (CONTINUED)
COST & BENEFIT ANALYSIS
Rational   choice  is   the   choice   based   on   pure   reason   and  without   succumbing   to   one’s
emotions or  whims.  Consumers can decide about   the  rational  decision by using cost  and
benefit   analysis.  Rational   choice   is   a   general   theory   of   human   behavior   that   assumes
individuals   try   to make  the most  efficient  decisions possible  in an environment  of  scarce
resources. By "efficient" it is meant that humans are "utility maximizes" - for any given choice a
person seeks  the most  benefit   relative  to costs.  Consumers can make about   the  rational
decision   by   using  cost   and  benefit   analysis.  Consumers  want   to  maximize   their   level   of
satisfaction relative to their cost. Rational choice is also the optimal choice.
Optimum means producing the best possible results (also optimal).
Equity  in economics means a situation in which every thing is treated fairly or equally,  i.e.
according to its due share. So if the lives of all individuals are deemed to have equal value,
equity would demand that all of them have equal financial net worth.
Nepotism means doing unfair favors for near ones when in power.
Rational   choice  is   the   choice   based   on   pure   reason   and  without   succumbing   to   one’s
emotions or whims.
Barter trade  is a non-monetary system of trade in which “goods” not money is exchanged.
This was the system used in the world before the advent of coins and currency.
HOW CONSUMER DECIDES ABOUT OPTIMAL CHOICE
The consumers decides about the optimal choice by using the cost and benefit analysis which
maximizes the benefit relative to the cost.
Example:
Benefit
(Salary)
Cost
(Transportation)
Net Benefit
= Benefit – Cost
Job A (Lahore) 15,000 1,000 14,000
Job B
(Gujranwala)
20,000 7,000 13,000
Since net benefit of job A is greater so the ration choice is job A which is in Lahore.
HOW PRODUCERS DECIDES ABOUT OPTIMAL CHOIE
Assume  that  a  firm which  is  thinking  to open a new production  line of  car  manufacturing.
Rational decision involves the cost and benefit of that car’s production.
Costs  will   be   additional   labor   employed,   additional   raw material   and   additional   parts   &
components that have to be bought.
Benefits will  be additional revenue  that  the firm will  get  by selling the additional  number of
cars.
It will be profitable to invest if revenue is greater than the cost.
OPPORTUNITY COST
The opportunity cost  of  a particular choice is the satisfaction  that  would have been derived
from  the next   best  alternative   foregone;   in  other  words,   it   is  what  must   be given  up  or
sacrificed in making a certain choice or decision.
Example:
Let’s take the decision to buy the book or not,  if you will  not buy the book then you will  be
involved in many other activities.  In the following table,  opportunity Cost of buying the book
and not giving charity = 20 SU, which is the benefit derived from giving charity. You will buy
the book if the benefit  from other alternatives is les than the benefit  derived from buying of
book.
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Cost
Benefit Derived in
Satisfaction Unit
Book 200 10
Clothes 200 5
Charity 200 20
MARGINAL COST AND MARGINAL BENEFIT
Marginal cost is the increment to total costs of producing an additional unit of some good or
service. There are other broader definitions as well.
Marginal benefit is the increment to total benefit derived from consuming an additional unit of
good or service. There are other broader definitions as well.
PRODUCTION POSSIBILITY FRONTIER (PPF)
Production   possibility   frontier   (PPF)  is   the   curve  which   joins   all   the   points   showing   the
maximum amount of goods and services which the country can produce in a given time with
limited   resources,   given   a   specific   state   of   technology.  A  production   possibilities   frontier
represents  the boundary or  frontier of  the economy's production capabilities. That's why  it's
termed a production possibilities frontier (or PPF). As a frontier, it is the maximum production
possible given existing (fixed) resources and technology.
Table: Choice & Opportunity cost revisited: The law of increasing opportunity cost
Rice
(Bags)
Cotton
(Bushels)
Opportunity Cost
of Additional Unit
A 0 10
B 1 9 1
C 2 7 2
D 3 4 3
E 4 0 4
This   table   represents   the   alternative   combinations   of   rice   and   cotton   for   a   hypothetical
economy which  is producing only 2 goods.  At  point  A only cotton  is produced,   rice  is not
produced. In order to produce one unit of rice, we have to give up one unit of cotton (10-9=1).
So the opportunity cost is 1 at point B. further in order to produce next unit of rice, we have to
give up 2 units of cotton (9-7=2). So the opportunity cost of next additional unit is 2 and so on.
This  table shows  that  opportunity cost   is  increasing with each additional  unit.   It  means we
have to give up higher and higher units of cotton in order to produce each additional unit of
rice.  This  is  the principle of   increasing opportunity cost.     If  opportunity cost  decreases with
each additional  unit  produces,   then  it   is  the principle of  decreasing opportunity cost.  And  if
opportunity cost remains constant with each extra unit produced, it is the principle of constant
opportunity cost.
The law of  increasing opportunity cost  is what  gives  the curve  its distinctive convex shape.
Points on  the PPF show  the efficient  utilization of   resources.  Points  inside  the PPF show
inefficient  use of   resources.  Points outside  the PPF show  that  some of   the  resources are
unemployed or not  utilized.  PPF curve shifts upward due to  technological  advancements.   If
there is improvement in technology to produce the output, then total output will increase and
PPF will shift outward.  
OPPORTUNITY COST & PRODUCTION POSSIBILITIES
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The production possibilities analysis, which is the alternative combinations of two goods that
an economy can produce with given  resources and  technology,  can be used  to  illustrate
opportunity cost--the highest valued alternative foregone in the pursuit of an activity. The PPF
showed in the video lecture slide shows the principle of increasing opportunity cost.
PPF AND ITS RELATIONSHIP WITH MACROECONOMICS
In the graph of PPF, Points within the PPF are inefficient and it is the rare possibility in the real
world.     Inefficient  means  that   it  may not  be using  its  available  resources.  May be some
workers are unemployed creating the macro economic problem of unemployment or may be
capital is not using properly. Points outside the PPF are unattainable since the PPF defines
the maximum output produced at the given time period so there is no possibility to produce
output outside the PPF. Here in PPF, we are not concerned with the combinations of goods
which  is a micro economic  issue rather we are concerned with the overall  output  produced
which is a macroeconomic issue.
Economic growth  is an increase in the total output of a country over time. It is the long-run
expansion of the economy's ability to produce output. When GDP of a country is increasing it
means that country is growing economically. Economic growth is made possible by increasing
the quantity or quality of the economy's resources (labor, capital, land, and entrepreneurship).
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EXERCISES
Could production and consumption take place without money?   If you think they could,
give examples.
Yes. People could produce things for their own consumption.  For example, people could grow
vegetables   in   their   garden   or   allotment;   they   could   do  their   own   painting   and   decorating.
Alternatively people could engage in barter: they could produce things and then swap them for
goods that other people had produced.
Must goods be at least temporarily unattainable to be scarce?
Goods need not be unattainable to be scarce.  Because people’s incomes are limited, they can
not have everything they want from shops, even though the shops are stocked full. If all items in
shops were free, the shelves would soon be emptied!
If we would all like more money, why does the government not print a lot more? Could it
not thereby solve the problem of scarcity ‘at a stroke’?
The problem of  scarcity is one of  a lack of  production.    Simply printing more money without
producing more goods and services will merely lead to inflation.  To the extent that firms cannot
meet   the extra demand  (i.e.   the extra consumer  expenditure)  by extra production,   they will
respond by putting up their prices.   Without extra production, consumers will be unable to buy
any more than previously.
Which of the following are macroeconomic issues, which are microeconomic ones and
which could be either depending on the context?
a) Inflation.
b) Low wages in certain service industries.
c) The rate of exchange between the dollar and the rupee.
d) Why the price of cabbages fluctuates more than that of cars.
e) The rate of economic growth this year compared with last year.
f) The decline of traditional manufacturing industries.
a) Macro.  It refers to a general rise in prices across the whole economy.
b) Micro.  It refers to specific industries
c) Either.  In a world context, it is a micro issue, since it refers to the price of one currency in
terms of one other.  In a national context it is more of a macro issue, since it refers to the
exchange rate at which all Pakistanis goods are traded internationally.  (This is certainly
a less clear–cut division that in (a) and (b) above.)
d) Micro.  It refers to specific products.
e) Macro.  It refers to the general growth in output of the economy as a whole.
f)     Micro (macro in certain contexts).  It is micro because it refers to specific industries.  It
could,   however,   also   help   to   explain   the   macroeconomic   phenomena   of   high
unemployment or balance of payments problems.
Assume that you are looking for a job and are offered two.  One is more unpleasant to do,
but pays more.  How would you make a rational choice between the two jobs?
You should weigh up whether the extra pay (benefit) from the better paid job is worth the extra
hardship (cost) involved in doing it.
How would the principle of weighing up marginal costs and benefits apply to a worker
deciding how much overtime to work in a given week?
The worker would consider whether the extra pay (the marginal benefit) is worth the extra effort
and loss of leisure (the marginal cost).
Would it ever be desirable to have total equality in an economy?
The objective of total equality may be regarded as desirable in itself by many people. There are
two problems with this objective,  however.  The first  is in defining equality.  If there were total
equality of incomes then households with dependants would have a lower income per head than
© Copyright Virtual University of Pakistan 4Introduction to Economics –ECO401 VU
households where everyone was working.  In other words, equality of incomes would not mean
equality in terms of standards of living.
If on the other hand, equality were to be defined in terms of standards of living, then should the
different needs of different people be taken into account?  Should people with special health or
other needs have a higher income?  Also, if equality were to be defined in terms of standards of
living,  many people would  regard  it  as unfair   that  people should  receive different   incomes
(according to the nature of their household) for doing the same amount of work.
The second major problem concerns incentives.  If all jobs were to be paid the same (or people
were to be paid according to the composition of their household), irrespective of people’s efforts
or skills, then what would be the incentive to train or to work harder?
If there are several other things you could have done, is the opportunity cost the sum of
all of them?
No.  It is the sacrifice involved in the next best alternative.
What is the opportunity cost of spending an evening revising for an economics exam?
What would you need to know in order to make a sensible decision about what to do that
evening?
The next best alternative might be revising for another exam, or it might be taking time off to
relax or to go out.   To make a sensible decision, you need to consider these alternatives and
whether  they are better or worse for you than studying for the economics exam.    One major
problem here is the lack of information.   You do not know just how much the extra study will
improve your performance in the exam, because you do not know in advance just how much you
will learn and you do not know what is going to be on the exam paper.   Similarly you do not 
know this information for studying for other exams.
Make a list of the benefits of higher education.
The benefits  to  the  individual   include:   increased  future earnings;   the direct  benefits of  being
more educated; the pleasure of the social contacts at university or college.
Is the opportunity cost to the individual of attending higher education different from the
opportunity costs to society as a whole?
Yes.    The opportunity cost  to society as a whole would include the costs of  providing  tuition
(staffing costs, materials, capital costs, etc.), which could be greater than any fees the student
may have to pay. On the other hand, the benefits to society would include benefits beyond those
received by the individual. For example, they would include the extra profits employers would
make by employing the individual with those qualifications.
There is a saying in economics, ‘There is no such thing as a free lunch’. What does this
mean?
That there is always (or virtually always) an opportunity cost of anything we consume.   Even if
we do not incur the cost ourselves (the ‘lunch’ is free to us), someone will incur the cost (e.g. the
institution providing the lunch).
Are any other (desirable) goods or services truly abundant?
Very few!  Possibly various social interactions between people, but even here, the time to enjoy
them is not abundant.
Under what circumstances would the production possibility curve be (a) a straight line;
(b) bowed in toward the origin?  Are these circumstances ever likely?
a) When there are constant opportunity costs.  This will occur when resources are equally
suited to producing either good.  This might possibly occur in our highly simplified world
of just two goods.  In the real world it is unlikely.
b) When   there   are   decreasing   opportunity   costs.     This   will   occur   when   increased
specialization in one good allows the country to become more efficient in its production.
It gains ‘economies of scale’ sufficient to offset having to use less suitable resources. 
Will   economic growth necessarily  involve   a parallel  outward  shift  of   the production
possibility curve?
© Copyright Virtual University of Pakistan 5Introduction to Economics –ECO401 VU
No.   Technical progress, the discovery of raw materials, improved education and training, etc.,
may favour one good rather than the other.   In such cases the gap between the old and new
curves would be widest where they meet the axis of the good whose potential output had grown
more.
Which of   the  following are positive statements,  which are normative statements and
which could be either depending on the context?
a) Cutting the higher rates of income tax will redistribute incomes from the poor to
the rich.
b) It is wrong that inflation should be reduced if this means that there will be higher
unemployment.
c) It is wrong to state that putting up interest rates will reduce inflation.
d) The government should raise interest rates in order to prevent the exchange rate
falling.
e) Current government policies should reduce unemployment.
a) Positive.  This is merely a statement about what would happen.
b) Normative.  The statement is making the value judgment that reducing inflation is a less
desirable goal than the avoidance of higher unemployment.
c) Positive.  Here the word ‘wrong’ means ‘incorrect’ not ‘morally wrong’.  The statement is
making a claim that can be tested by looking at the facts.  Do higher interest rates reduce
inflation, or don’t they?
d) Both.  The positive element is the claim that higher interest rates prevent the exchange
rate falling.  This can be tested by an appeal to the facts.  The normative element is the
value judgment that the government ought to prevent the exchange rate falling.
e) Either.     It  depends what   is meant.     If   the statement  means  that  current  government
policies are  likely  to  reduce unemployment,   the statement   is positive.     If,  however,   it
means that the government ought to direct its policies towards reducing unemployment,
the statement is normative.
© Copyright Virtual University of Pakistan 6

MKT501 Marketing Management Final 2010 Paper solved by vuZs Team

Question No: 1    ( M a r k s: 1 )    http://vuzs.net

 Critical path analysis is a part of which of the following?

       ► Implementation stage

       ► Marketing strategies

       ► Executive summary

       ► Financial summary

Implementation: Personnel requirements, assigning responsibilities, give incentives, training on selling methods, financial requirements, management information systems requirements, month-by-month agenda, pert or critical path analysis, monitoring results and benchmarks, adjustment mechanism, contingencies (What if's) need to be worked out.

   

Question No: 2    ( M a r k s: 1 )    http://vuzs.net

 Packaging used for the ice creams is an example of which of the following?

       ► Decorative packaging

       ► Transport packaging

       ► Secondary packaging

       ► Primary packaging

Ref:Primary packaging: First-level product packaging such as the bottle, can, jar, tube, etc., that contains the item sold. It is the last packaging thrown by the consumer. It requires protection, tampering resistance, and special physical, chemical, or biological needs. It also shows the product that is labelled to show any nutrition information on the food being consumed.
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Question No: 3    ( M a r k s: 1 )    http://vuzs.net

 A brand targeted to a high price elasticity market segment is called:

       ► Premium brand

       ► Economy brand

       ► Fighting brand

       ► Costly brand

 An Economy brand is a brand targeted to a high price elasticity market segment.

Question No: 4    ( M a r k s: 1 )    http://vuzs.net

 All of the following are true about price EXCEPT:

       ► Price is independent of the other elements of the marketing mix

       ► Price is the monetary value of a product

       ► Price is most flexible tool in the marketing mix

       ► Price is marketing mix element which produces revenue

Question No: 5    ( M a r k s: 1 )    http://vuzs.net

 Which of the following price will be used for the heart pacemaker?

       ► Skimming price

       ► Penetration price

       ► Psychological price

       ► Premium price

People will buy a premium priced product because they require flawless performance in this application - The cost of product malfunction is too high to buy anything but the best - example: heart pacemaker.

   

Question No: 6    ( M a r k s: 1 )    http://vuzs.net

 During which year a revolution came that transformed advertising into a modern, more scientific approach in which creativity was focused making advertisements interesting to read?

       ► 1913s

       ► 1940s

       ► 1960s

       ► 1930s

The 1960s saw advertising transform into a modern, more scientific approach in which creativity was allowed to shine, producing unexpected messages that made advertisements interesting to read.

Question No: 7    ( M a r k s: 1 )    http://vuzs.net

 When was mass media introduced?

       ► 1950s

       ► 1940s

       ► 1930s

       ► 1920s

Mass media: It was coined in the 1920s with the advent of nationwide radio networks and of mass-circulation newspapers and magazines.   

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Question No: 8    ( M a r k s: 1 )    http://vuzs.net

 A company is offering a reduced price if you buy two t-shirts instead of just one. Identify the type of price discrimination?

       ► First degree discrimination

       ► Forth degree discrimination

       ► Third degree discrimination

       ► Second degree discrimination

In second degree price discrimination, price varies according to quantity sold. Larger quantities are available at a lower unit price.

Question No: 9    ( M a r k s: 1 )    http://vuzs.net

 Which of the following offers an incentive to buy a product?

       ► Direct mail

       ► Public relations

       ► Sales promotion

       ► Advertising

Sales promotion: A diverse collection of incentive tools, mostly short term, designed to stimulate quicker &/or grater purchase of particular products/services by consumers or the trade. Where advertising offers a reason to buy, sales promotion offers an incentive to buy.
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Question No: 10    ( M a r k s: 1 )    http://vuzs.net

 Nido has advertised that get 5% extra milk for the same price. Identify the type of consumer sales promotion technique used by Nido.

       ► Cents-off deal

       ► Price deal

       ► Loyalty rewards program

       ► Price-pack deal

Price-pack deal: The packaging offers a consumer a certain percentage more of the product for the same price (for example, 25 percent extra).   

Question No: 11    ( M a r k s: 1 )    http://vuzs.net

 All of the following are the objectives of sales promotion EXCEPT:

       ► Personal interaction between two or more people

       ► Invites and rewards quick consumer response

       ► Offers strong incentives to buy

       ► Attracts consumer attention

   

Question No: 12    ( M a r k s: 1 )    http://vuzs.net

 What does BATNA stands for?

       ► The best alternative to a negotiated agreement

       ► The best available to a negotiated agreement

       ► The best alternating to a new agreement

       ► The best available to a new agreement

  Best alternative to a negotiated agreement (batna)

Question No: 13    ( M a r k s: 1 )    http://vuzs.net

 How marketing manager can develop strategies for each product using information from sales force management system?

       ► Using communication mix variables

       ► Using marketing mix variables

       ► Using product mix variables

       ► Using promotion mix variables

Developing marketing strategies for each of your products using the marketing mix variables of price, product, distribution, and promotion.    vuzs

Question No: 14    ( M a r k s: 1 )    http://vuzs.net

 Which of the following is the combination of institutions through which a seller, market products to the user?

       ► Marketing logistics

       ► Supply chain management

       ► Distribution channel

       ► Inventory management

   

Question No: 15    ( M a r k s: 1 )    http://vuzs.net

 Outbound operations, including all fulfillment activities and transportation to customers are which type of supply chain management activities?

       ► Strategic level

       ► Tactical level

       ► Operational level

       ► Functional level

Operational Activities:

Outbound operations, including all fulfillment activities and transportation to customers.  vuzs

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Question No: 16    ( M a r k s: 1 )    http://vuzs.net

 What does GSCF stand for?

       ► Global Supply Chain Forum

       ► Global Supply Chain Federation

       ► Global Supply Chain Finance

       ► Greater Salina Community Foundation

Global Supply Chain Forum (GSCF).   

Question No: 17    ( M a r k s: 1 )    http://vuzs.net

 Which of the following is a supply chain management model promoted by the Supply-Chain Council?

       ► SCOR

       ► GSCF

       ► SCM

       ► CRM

SCOR is a supply chain management model promoted by the Supply-Chain Council.

Question No: 18    ( M a r k s: 1 )    http://vuzs.net

 Which of the following is an example of agency based sales?

       ► Web selling

       ► B2 B selling

       ► Advertising

       ► Real estate

Agency-based

• Consignment

• Multi-level marketing

• Sales agents (real estate, manufacturing) 

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Question No: 19    ( M a r k s: 1 )    http://vuzs.net

 What is the input of consumer behavior?

       ► Response

       ► Stimuli

       ► Actions

       ► Reactions

The 'inputs' (stimuli) that the consumer receives from his or her environment.

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Question No: 20    ( M a r k s: 1 )    http://vuzs.net

 Which of the following is considered as a strength to an organization?

       ►  Competitors developing new products

       ►  New machinery or equipment

       ►  Lack of computing expertise

       ►  A new or developing market

   

Question No: 21    ( M a r k s: 1 )    http://vuzs.net

 Products that are usually purchased due to adversity and high promotional back up rather than desire are called:

       ► Sought goods

       ► Unique goods

       ► Unsought goods

       ► Preferred goods

Article (such as medical supplies) or service (such as life insurance) that consumers seldom go out looking for, and which are purchased due to adversity (or fear of adversity) instead of desire. 

Question No: 22    ( M a r k s: 1 )    http://vuzs.net

 Retailers are the part of:

       ► Broad environment

       ► Weak environment

       ► Task environment

       ► Competitive environment

Task environment involves immediate actors, such as suppliers, distributors, dealers and consumers etc, involved in production, distribution and promotion.

   

Question No: 23    ( M a r k s: 1 )    http://vuzs.net

 In which section of the marketing plan you would find the detailed information about the marketing environment, market trends, customers and competitors?

       ► Situation analysis  

       ► Product/market background

       ► Marketing strategies

       ► Market analysis

Current Situation - Market Analysis: Indeed, market situation must be taken into account in all details and carefully studied. Market definition, Market size, Market Segmentation, Industry Structure and strategic groupings, Competition and market share, Competitors' Strengths and Weaknesses and Market Trends must be carefully studied and analyzed.

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Question No: 24    ( M a r k s: 1 )    http://vuzs.net

 For which of the following products would the manufacturer be more likely to use selective distribution?

       ► Bags of potato chips

       ► Paper clips

       ► Microwave ovens

       ► Nail clippers

Selective distribution - This is the normal pattern (in both consumer and industrial markets) where `suitable' resellers stock the product.

   

Question No: 25    ( M a r k s: 1 )    http://vuzs.net

 Fixed costs ___________ as the number of units produced increases.

       ► Decrease

       ► Increase

       ► Divide in half

       ► Remain the same

   

Question No: 26    ( M a r k s: 1 )    http://vuzs.net

 _______ are the sum of the _______ and _______ for any given level of production.

       ► Fixed costs; variable; total costs

       ► Fixed costs; total; variable costs

       ► Variable costs; fixed; total costs

       ► Total costs; fixed; variable costs

   

Question No: 27    ( M a r k s: 1 )    http://vuzs.net

 In which of the following machines you insert a coin, select a song and song starts to play at your own choice?

       ► Black box

       ► Lock box

       ► Juke box

       ► Pandora box

 A jukebox is a partially automated music-playing device, usually a coin-operated machine that will play a patron's selection from self-contained media. The classic jukebox has buttons with letters and numbers on them that, when entered in combination, are used to play a specific selection.

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Question No: 28    ( M a r k s: 1 )    http://vuzs.net

 Whenever bread comes in your mind; you usually think of a limited number of brand names. It reflects which one of the following concepts?

       ►Mind Share

       ►Dominant mind share

       ►Market share

       ►Relative market share

 When people think of examples of a type or category of product, they think of a limited list (referred to as an evoked set).

Question No: 29    ( M a r k s: 1 )    http://vuzs.net

 Which one of the following functions is being performed by the wholesaler when they achieve savings for their customers through buying carload lots and segregate it into smaller units?

       ►Bulk breaking

       ►Selling and promoting

       ►Financing

       ►Transportation

  Bulk Breaking: involves dividing larger quantities into smaller quantities.

Question No: 30    ( M a r k s: 1 )    http://vuzs.net

 Which one of the following wholesalers is involved in carrying stock of Air Conditioner (AC), offering credit to its customers, providing quicker deliveries and assistance of installation to its customers?

       ►Full-Service Wholesaler

       ►Limited-Service Wholesaler

       ►Merchant Wholesaler

       ►Exclusive distributor

Full-Service Wholesaler - a wholesaler offering a complete range of services including buying, selling, storage, transporting, sorting, financing, providing market feedback and risk-taking; also called a Full-Function Wholesaler.

   

Question No: 31    ( M a r k s: 1 )    http://vuzs.net

 Which of the following shopping involves walking through a shopping district or mall with the purpose of looking at the displays in each retail store?

       ►Window shopping

       ►Online shopping

       ►Actual shopping

       ►Virtual shopping

   

Question No: 32    ( M a r k s: 1 )    http://vuzs.net

 Which one of the following is NOT included in a model “AIUAPR” of buyer decision making model?

       ►Understanding

       ►Procurement

       ►Repeat purchase

       ►Understanding

   ( Awareness, Interest, Understanding, Attitudes, Purchase, Repeat purchase).

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Question No: 33    ( M a r k s: 1 )    http://vuzs.net

 In which of the following, decisions are unduly influenced by initial information that shapes our view of subsequent information?

       ►Anchoring

       ►Group decision

       ►Conservatism and inertia

       ►Faulty generalizations

 Anchoring - Decisions are unduly influenced by initial information that shapes our view of subsequent information.

Question No: 34    ( M a r k s: 1 )    http://vuzs.net

 The need for the security of employment and security of revenues reflects which of the following needs.

       ►Physiological needs

       ►Self-actualization

       ►Love/belonging needs

       ►Safety needs

 Safety Needs

When the physiological needs are met, the need for safety will emerge. Safety and security rank above all other desires. These include:

• Security of employment

• Security of revenues and resources.

  

Question No: 35    ( M a r k s: 1 )    http://vuzs.net

 Which of the following is NOT a safety need?

       ►Security of revenues and resources

       ►Moral and physiological security

       ►The need to regulate body temperature

       ►Security of employment

   

Question No: 36    ( M a r k s: 1 )    http://vuzs.net

 In which of the following researches, researcher creates a quasi-artificial environment to control spurious factors and then manipulates at least one of the variables?

       ►Qualitative marketing research

       ►Quantitative marketing research

       ►Experimental techniques

       ►Observational techniques

Experimental Techniques - the researcher creates a quasi-artificial environment to try to control spurious factors, and then manipulates at least one of the variables - examples include purchase laboratories and test markets.

Question No: 37    ( M a r k s: 1 )    http://vuzs.net

 Which of the following is the part of implementation section of marketing plan?

       ►Critical path analysis

       ►Physical distribution

       ►Competitor indexing

       ►Brand equity

Implementation: Personnel requirements, assigning responsibilities, give incentives, training on selling methods, financial requirements, management information systems requirements, month-by-month agenda, pert or critical path analysis, monitoring results and benchmarks, adjustment mechanism, contingencies (What if's) need to be worked out.

Question No: 38    ( M a r k s: 1 )    http://vuzs.net

 In which of the following strategies the firm shows no proactive or little proactive approach?

  

       ► Prospector strategy

       ► Analyzer strategy

       ► Innovator strategy

       ► Reactor strategy

Reactor: A reactor has no proactive strategy.

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Question No: 39    ( M a r k s: 1 )    http://vuzs.net

 Which of the following is a basic characteristic of a shopping good?

  

       ► Store image is unimportant if price is low

       ► Brand is most important variable

       ► Product is exclusive

       ► Product location needs to be convenient

   

Question No: 40    ( M a r k s: 1 )    http://vuzs.net

 Which of the following is a brand created and owned by a large retailer of a product after purchasing in bulk quantity from manufacturer?

       ► Co-brand

       ► Private brand

       ► Manufacturer's brand

       ► Licensed brand

When large Retailers buy products in bulk from manufacturers and put their own brand name on them, this is called Private Branding, store brand, or private label.

Question No: 41    ( M a r k s: 1 )    http://vuzs.net

 Which of the following is the pricing objective mentioned most frequently by four out of every five firms?

  

       ► Meeting competitors’ prices

       ► Target return on sales

       ► Sales maximization

       ► Revenue maximization

   

Question No: 42    ( M a r k s: 1 )    http://vuzs.net

 Reductions in price offered to consumers, industrial users, or channel members for prompt payment of a bill are known as:

       ► Trade discounts

       ► Quality discounts

       ► Cash discount

       ► Off price discounts

 Cash discounts for prompt payment.

Question No: 43    ( M a r k s: 1 )    http://vuzs.net

 Costs that do not vary with production or sales level are referred as ________.

       ► Fixed costs

       ► Variable costs

       ► Total costs

       ► Unit costs

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Question No: 44    ( M a r k s: 1 )    http://vuzs.net

 Promotion can be economically important because:

       ► It provides employment for thousands of people

       ► It increase sales volume

       ► It subsidizes the communication media

       ► All of the given options

   

Question No: 45    ( M a r k s: 1 )    http://vuzs.net

 Advertising and sales promotion are the most commonly used elements of promotion in a:

       ► Distribution strategy

       ► Product strategy

       ► Pushing strategy

       ► Pulling strategy

   

Question No: 46    ( M a r k s: 1 )    http://vuzs.net

 Which of the following refers to the consumer’s perception of a store and the shopping experience.

       ► Retail image

       ► Store classification

       ► Full service retailer

       ► Wheel of retailing

   

Question No: 47    ( M a r k s: 1 )    http://vuzs.net

 The personal determinants of consumer behavior include which of the following?

       ► Culture

       ► Family

       ► Society

       ► Individual needs and wants

 Culture, family, society is sociological determinants of consumer behavior.

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Question No: 48    ( M a r k s: 1 )    http://vuzs.net

 Which of the following statements most closely relates to the consumer decision process?

       ► An important factor in problem recognition is changed financial status

       ► There are two major steps: internal search and external decision making.

       ► Attitude triggers the consumer decision process

       ► Routine purchases require both evaluation and search

Question No: 49    ( M a r k s: 3 )

 Suppose you are going to buy an item which is offered for Rs.5000. Consider these situations.        

There is 10% discount.

There is 10% surcharge

Calculate price you are going to pay for the item in each case.

 Answer:

Price after discount:

As discount is 10% so the new price will be 90% of the actual price that is

5000 x 90 /100 =4500

Price after surcharge:

As surcharge is 10% so new price will be 110% of actual price that is

5000 x 110 /100 = 5500

   

Question No: 50    ( M a r k s: 3 )

 Differentiate between sales price and transfer price.

 Answer:

Transfer price means to set the location, to analyze, place and alteration of charges made between two parties or companies for any business.   Transfer prices among mechanisms may be used to reflect distribution of resources among such components or for other purposes.  Transfer prices are important for both taxpayers and tax managements because they determine in large part the income and expenses and taxable profits.

Sale price is that price at which something is obtainable for sale we can also say it the fair market value.  According to the business dictionary sale price is also the reduce price of something during sale of something.

   

Question No: 51    ( M a r k s: 5 )

 Considering a situation in which you are going to negotiate with a party, what are the necessary skills you think you should have for successful and effective negotiation? Explain what the benefits of an effective negotiation are?

  Answer:

 www.vuzs.net

Negotiation means two persons or two parties trying to solve some problem, Negotiations can occur in profit organization, non profit organization and Govt. offices. 

There are many techniques used in negotiations like by skilled negotiator.  The analysis of the negotiation or problem organization styleshould have the following points consideration:

Presenting demands 

Ability to speak first 

Calculation Deadlines

Take it or leave it

Rejecting an offer

Limited authority

Getting it in your hands

The effective negotiating resulting in a best solution and by negotiation we solved very big problems in any organization.

Question No: 52    ( M a r k s: 5 )

 What are the important questions a marketer should consider while selecting a distribution channel for any market segment?

  Answer:

Before selecting a distribution channel for any market segment following questions must be answered in order to have an effective distribution channel.

<!--[if !supportLists]-->·         <!--[endif]-->Who is the operating authority of the channel?

<!--[if !supportLists]-->·         <!--[endif]-->Should distribution be exclusive, selective or extensive? 

<!--[if !supportLists]-->·         <!--[endif]-->Should the product be sold through a retailer? 

<!--[if !supportLists]-->·         <!--[endif]-->Should the product be distributed through wholesale? 

<!--[if !supportLists]-->·         <!--[endif]-->Should multi-level marketing channels be used? 

<!--[if !supportLists]-->·         <!--[endif]-->How long should the channel be? 

<!--[if !supportLists]-->·         <!--[endif]-->Where should the product or service be available? 

<!--[if !supportLists]-->·         <!--[endif]-->When should the product or service be available? 

<!--[if !supportLists]-->·         <!--[endif]-->Should channel relationships be informal or contractual? 

<!--[if !supportLists]-->·         <!--[endif]-->Should electronic methods of distribution be used? 

<!--[if !supportLists]-->·         <!--[endif]-->Are there physical distribution and logistical issues to deal with?

   

Question No: 53    ( M a r k s: 5 )

 When we are going to buy something from the market, it happens to our self that we buy things irrationally. How would you comment on this situation by keeping in view the model of Herbit Simon?

  Answer:

Buyers normally engage in irrational buying behavior because perfectly rational buying cannot be achieved for the reason that there are number of factors that limit rational buying.

As Simon said if a complete analysis is to be done, a decision will be immensely complex.

Peoples' information processing ability is very limited.

The assumption of a perfectly rational economic actor is unrealistic.

Often we are influenced by emotional and non-rational considerations when we try to be rational we are at best only partially successful.

Moreover, perfectly rational decisions also pose a time constraint.