IGNOU

TS-3

IMPORTANT QUESTIONS AND ANSWERS

Q1) Define organizational structure. Discuss the components of organizational structure

Ans) Organizational structure may be defined as the network of relationships that exists
among various positions and position holders. Formal structure is a pattern of
relationships that has been consciously planned and implemented. It includes formal
hierarchy of authority as well as rules and procedures and other planned attempts to
regulate behaviour.

Organizational structure determines corporate communication, and the executive and

managerial hierarchy, and creates a plan for efficient growth for the future. The six
elements of organizational structure come together to create the blueprint for how your
company is laid out, and determine how your managerial staff goes about effecting
change in your organization.
Geography
How your organization is structured can depend on how many corporate locations you
need to account for in your planning. The more spread out an organization is, the more
autonomy each location will need to be given in order for the company to run efficiently.
Hierarchy communication is also a challenge when creating an organizational structure
over a large geographic area. Managers who report to executives in another location
need to establish a clear line of communication in order to receive guidance and
instruction.
Number of Employees
A large employee population can necessitate that there be several layers of management
for a company to run efficiently. As a company grows, the organizational structure
needs to be elastic enough to accommodate more employees and the potential need for
a larger management structure.
Product Evolution
A company may start off with a small line of products that cover a general part of the
industry. As the company grows, the need to create specified departments for product
development and manufacturing can have an effect on the company's organizational
structure.
Distribution of Authority
According to a study done by a group of college students known as Group A-Plus, a
company's organizational structure is affected by whether the company wants
centralized management or decentralized management. Centralized management keeps
all major decisions with one specific executive group, while decentralized management
allows company managers to have more say in the decision-making process.
Control
According to Management Guru, a company that requires a higher product quality will
have stricter rules and a more regimented environment. This would apply to companies
that manufacturer high tech products, hand-crafted products or critical products such
as medical equipment. Companies that engage in the mass production of products may
not exert as much control over the quality of their products and, subsequently, may
create a different organizational structure.
Marketplace
The marketplace also has a bearing on how a company is structured. For example, a
manufacturer may decide to sell products through wholesalers as well as directly to end
users. In order for this model to be successful, the organizational structure of the
company would need to be set up so as to keep these elements separate, including a
separate marketing team and a separate sales force.

Q2) Define the term Group . Explain the various factors affecting inter-group relations
and suggest the ways to manage the inter- group relations.

Ans) A group can be defined as two or more interacting and interdependent

individuals who come together to achieve particular objectives. A group behavior can
be stated as a course of action a group takes as a family. For example: Strike.

Types of Groups
There are two types of groups an individual forms. They are formal groups and
informal groups. Let us know about these two groups.

Formal Groups
These are the type of work groups created by the organization and have designated
work assignments and rooted tasks. The behavior of such groups is directed toward
achieving organizational goals.

Informal Groups
These groups are formed with friendships and common interests. These can be further
classified into two sub-groups −
  Task group − Those working together to finish a job or task is known as task
group.

 Friendship group − Those brought together because of their shared interests or

common characteristics is known as friendship group.

A workplace can consist of different groups of employees that can be broken down by
gender, age, ethnic background and religion. Intergroup relations can sometimes be
strained by intolerance or a communication gap. Your company should work on
strategies to improve intergroup relations to maintain a productive work environment.
Company policies can be helpful in encouraging diversity and improving group
relations.
New Employee Orientation
A good strategy for developing a tolerant workplace is to start at the new employee
orientation. Put the company's policies on encouraging intergroup cooperation in the
employee handbook, and devote a segment of the new hire training to reviewing those
policies. Create a comprehensive strategy that will convey the company's zero tolerance
for intergroup discrimination. You can hire a diversity training specialist to do this
portion of the training to allow an expert to present the ways in which your workplace
practices tolerance and diversity.
Management
Employees look to company management for cues on what is acceptable in the
workplace. Encourage your managers to practice patience and sensitivity when dealing
with intergroup issues. Offer diversity training to your managers to help them
understand the best ways to handle intergroup conflicts. Encourage your managers to
discuss intergroup issues with employees on a regular basis to keep them updated on
any potential problems. Develop a comprehensive human resources reporting system to
allow managers to properly log and deal with instances of workplace discrimination
that can help to fuel intergroup conflict.
Hiring
Intergroup issues can develop if a segment of your staff feels there is a bias in the hiring
process. Develop recruiting and hiring policies that eliminate the potential for
discrimination. Policies can include omitting a candidate's name, ethnic background, age
and religion from the hiring process. Develop a numbering system that allows
interviewers to grade candidates equally based on company needs. By eliminating bias
from the recruiting and hiring process, each candidate feels she has a fair chance at
getting the job.
Diversity
Intergroup relations issues can be handled effectively if your management team is made
up of diverse members. Hold regular staff diversity training sessions where your
management team can address intergroup issues and suggest possible resolutions. A
diverse staff led by a management team from a variety of backgrounds will find it easier
to resolve intergroup conflicts than a team that is dominated by one or two groups.
Having a diverse management team also helps ensure that the promotion of employees
is based on performance and merit and that all employees have the opportunity to
qualify for managerial positions.

Q3) What do you understand by planning? Discuss the steps involved in planning.

Ans) Planning (also called forethought) is the process of thinking about and organizing
the activities required to achieve a desired goal. It involves the creation and
maintenance of a plan, such as psychological aspects that require conceptual skills.
There are even a couple of tests to measure someone s capability of planning well. As
such, planning is a fundamental property of intelligent behavior.

Also, planning has a specific process and is necessary for multiple occupations
(particularly in fields such as management, business, etc.). In each field there are
different types of plans that help companies achieve efficiency and effectiveness. An
important, albeit often ignored aspect of planning, is the relationship it holds to
forecasting. Forecasting can be described as predicting what the future will look like,
whereas planning predicts what the future should look like for multiple scenarios.
Planning combines forecasting with preparation of scenarios and how to react to them.
Planning is one of the most important project management and time management
techniques. Planning is preparing a sequence of action steps to achieve some specific
goal. If a person does it effectively, they can reduce much the necessary time and effort
of achieving the goal. A plan is like a map. When following a plan, a person can see how
much they have progressed towards their project goal and how far they are from their
destination.

1. Goal setting:
Plans are the means to achieve certain ends or objectives. Therefore, establishment of
organizational or overall objectives is the first step in planning. Setting objectives is the
most crucial part of planning. The organizational objectives should be set in key areas of
operations.
They should be verifiable i.e., they should as far as possible be specified in clear and
measurable terms. The objectives are set in the light of the opportunities perceived by
managers. Establishment of goals is influenced by the values and beliefs of executives,
mission of the organization, organizational resources, etc.
Objectives provide the guidelines (what to do) for the preparation of strategic and
procedural plans. One cannot make plans unless one knows what is to be accomplished.
Objectives constitute the mission of an organisation. They set the pattern of future
course of action.
The objectives must be clear, specific and informative. Major objectives should be
broken into departmental, sectional and individual objectives. In order to set realistic
objectives, planners must be fully aware of the opportunities and problems that the
enterprise is likely to face.
2. Developing the planning premises:
Before plans are prepared, the assumptions and conditions underlying them must be
clearly defined these assumptions are called planning premises and they can be
identified through accurate forecasting of likely future events.
They are forecast data of a factual nature. Assessment of environment helps to reveal
opportunities and constraints. Analysis of internal (controllable and external
(uncontrollable) forces is essential for sound planning premises are the critical factors
which lay down the bounder for planning.
They are vital to the success of planning as they supply per tenant facts about future.
They need revision with changes in the situation. Contingent plans may be prepared for
alternate situations.
3. Reviewing Limitations:
In practice, several constraints or limitations affect the ability of an organization to
achieve its objectives. These limitations restrict the smooth operation of plans and they
must be anticipated and provided for.
The key areas of Imitations are finance," human resources, materials, power and
machinery. The strong and weak points of the enterprise should be correctly assessed.
4. Deciding the planning period:
Once the broad goals, planning premises and limitations are laid down, the next step is
to decide the period of planning. The planning period should be long enough to permit
the fulfillment of the commitments involved in a decision.
This is known as the principle of commitment. The planning period depends on several
factors e.g., future that can be reasonably anticipated, time required to receive capital
investments, expected future availability of raw materials, lead time in development
and commercialization of a new product, etc.
5. Formulation of policies and strategies:
After the goals are defined and planning premises are identified, management can
formulate policies and strategies for the accomplishment of desired results. The res-
ponsibility for laying down policies and strategies lies usually with management. But,
the subordinates should be consulted as they are to implement the policies and
strategies.
Alternative plans of action should be developed and evaluated carefully so as to select
the most appropriate policy for the organization. Imagination, foresight, experience and
quantitative techniques are very useful in the development and evaluation of
alternatives.
Available alternatives should be evaluated in the light of objectives and planning
premises. If the evaluation shows that more than one alternative is equally good, the
various alternatives may be combined in action.
6. Preparing operating plans:
After the formulation of overall operating plans, the derivative or supporting plans are
prepared. Several medium range and short-range plans are required to implement
policies and strategies.
These plans consist of procedures, programmers, schedules, budgets and rules. Such
plans are required for the implementation of basic plans.
Operational plans reflect commitments as to methods, time, money, etc. These plans are
helpful in the implementation of long range plans. Along with the supporting, plans, the
timing and sequence of activities is determined to ensure continuity in operations.
7.Integration of plans:
Different plans must be properly balanced so that they support one another. Review and
revision may be necessary before the plan is put into operation. Moreover, the various
plans must be communicated and explained to those responsible for putting them into
practice.
The participation and cooperation of subordinates is necessary for successful
implementation of plans. Established plans should be reviewed periodically so as to
modify and change them whenever necessary.
A system of continuous evaluation and appraisal of plans should be devised to identify
any shortcomings or pitfalls of the plans under changing situations.

Q4) What is Airline Management? Discuss the importance of planning and organisation
in Airline Management

Ans) Airline and airport management (also known as airport and airline management)
is a branch of study that teaches management of airport and airlines.This provides a
broad overview of the airline industry and creates awareness of the underlying
marketing, financial, operational, and other factors influencing airline management.
This study provides information on airline commercial and operational priorities, along
with teaching the key characteristics of aircraft selection and the impact of airport
decision making.

In the commercial aviation sector, just about every group in the aviation industry chain
— airports, airplane manufacturers, jet engine makers, travel agents, and service
companies, to name a few — turns a profit. It is seemingly ironic that the airline
companies that actually move passengers from one place to another, the most crucial
link in the chain, struggle to make a profit.
This is largely due to the complex nature of the business, manifested in part by the
significant degree of regulation (which minimizes consolidation), and the vulnerability
of airlines to outside events that happen with regularly, such as security concerns,
volcanic eruptions (independent.co.uk). Ongoing price pressure is also a factor; the
airline industry is one of the few sectors that has seen prices fall for decades. Since the
1950s, airline yields (defined as the average fare paid by a passenger per kilometer)
have consistently dropped.
Given these circumstances, airlines must continue to focus on top-line growth because
their limited profitability depends almost solely on revenue gains, while increasing
productivity in order to shore up and perhaps even increase margins. The way
individual commercial airlines react to and navigate several trends playing out across
the globe will determine carrier performance in the coming years

(1) Planning Provides Direction:

Under the process of planning the objectives of the organisation are defined in simple
and clear words. The obvious outcome of this is that all the employees get a direction

and all their efforts are focused towards a particular end. In this way, planning has an
important role in the attainment of the objectives of the organisation.

For example, suppose a company fixes a sales target under the process of planning. Now
all the departments, e.g., purchase, personnel, finance, etc., will decide their objectives in
view of the sales target.

In this way, the attention of all the managers will get focused on the attainment of their

objectives. This will make the achievement of sales target a certainty. Thus, in the
absence of objectives an organisation gets disabled and the objectives are laid down
under planning.

(2) Planning Reduces Risks of Uncertainty:

Planning is always done for future and future is uncertain. With the help of planning
possible changes in future are anticipated and various activities are planned in the best
possible way. In this way, the risk of future uncertainties can be minimised.

For example, in order to fix a sales target a survey can be undertaken to find out the
number of new companies likely to enter the market. By keeping these facts in mind and
planning the future activities, the possible difficulties can be avoided.
(3) Planning Reduces Overlapping and Wasteful Activities:
Under planning, future activities are planned in order to achieve objectives.
Consequently, the problems of when, where, what and why are almost decided. This
puts an end to disorder and suspicion. In such a situation coordination is established
among different activities and departments. It puts an end to overlapping and wasteful
activities.

Consequently, wastages moves towards nil, efficiency increases and costs get to the

lowest level. For example, if it is decided that a particular amount of money will be
required in a particular month, the finance manager will arrange for it in time.

In the absence of this information, the amount of money can be more or less than the
requirement in that particular month. Both these situations are undesirable. In case, the
money is less than the requirement, the work will not be completed and in case it is
more than the requirement, the amount will remain unused and thus cause a loss of
interest.

Q5) What do you understand by a Public Limited Company? What are its disadvantages?

Ans) Definition of Public Ltd. Company

A Public Limited Company or PLC is a joint stock company formed and registered under
The Indian Companies Act, 2013 or any other previous act. It is an association of
persons formed voluntarily, having a minimum paid up capital of Rs. 5,00,000.

There is no defined limit on the number of members the company can have. Also, there
is no restriction on the transferability of the shares. The company can invite the public
for the subscription of shares or debentures, and that is why the term Public Limited
gets added to its name.

A public limited company (PLC) is the legal designation of a limited liability company
which has offered shares to the general public and has limited liability. A PLC's stock is
offered to the general public and can be acquired by anyone, either privately, during an
initial public offering or through trades on the stock market.

!--break--The appellation PLC is more commonly used in the United Kingdom and some
Commonwealth countries, as opposed to "Inc" or "Ltd," which are the norm in the
United States and elsewhere. The mandatory use of the PLC acronym after the name of
the company serves to instantly inform investors, or anyone dealing with the company,
that the company is public and probably fairly large.
 Public limited company disadvantages
There are some important disadvantages of a public limited company, compared to a
private limited company. These public limited company disadvantages include:
1More regulatory requirements
To help protect shareholders, the legal and regulatory requirements for a public limited
company are more onerous than for private limited companies. For example, additional
restrictions include:

 A trading certificate must be obtained from Companies House before the company can
trade (there is no such requirement for a private company)
 The need to have at least two directors (only one is required in a private company)
 More onerous rules apply concerning loans to directors
 A suitably qualified company secretary must be appointed (not required for a private
company)
 As well as higher transparency around accounts, they must be produced within 6
months of the end of the financial year (9 months for private companies)
 AGMs must be held, whereas in a private company decisions can more often be made by
resolution
 There are various additional restrictions on the company s share capital and limits
on pre-emption rights and dividends
If the company s shares are listed, the company will also need to follow the rules of the
market. These rules, particularly those to be listed on the London Stock Exchange, are
demanding.
Understanding and applying these additional rules will consume time and effort that
cannot then be dedicated to growing the business. Appointing staff or advisers –
including the required company secretary – will help but come at a cost.
2Higher levels of transparency required
Limited companies, whether public or private, have more of their details in the public
domain, available via Companies House, than other business types. But the required
level of transparency is much higher for public companies.
As well as needing to have its accounts audited, public limited companies are generally
unable to file abbreviated accounts, whereas smaller private companies can often do so.
The fuller form of accounts means a public limited company has to disclose more
detailed data about the business and its performance, information which is then
available to anyone who wishes to access it.
The accounts of public limited companies are often scrutinised more by analysts and
receive more media commentary.
3Ownership and control issues
With a private limited company, the shareholders will typically be people known to the
directors or founders. A private company will often be selective over who to admit as a
shareholder, ensuring they support the vision and plans for the business. The use
of pre-emption rights can allow existing shareholders to maintain control over the
company when a new share issue is undertaken, a shareholder dies or wants to transfer
their shares.
With a public limited company, it s much harder to control who is a shareholder of the
company, and who the directors are ultimately accountable to. There is therefore a
possibility that the original owners or directors can lose control of the direction of the
company, face disputes or just spend a lot more time managing shareholder
expectations.
Institutional shareholders can wield particularly high levels of influence, often
expecting consultation and adoption of particular policies or standards in return for
their investment.
4More vulnerable to takeovers
At worst, a company can become vulnerable to a hostile takeover if a majority of
shareholders agree to a bid. With shares being freely transferable, a potential bidder can
build up a shareholding in advance of launching a bid attempt.

Q6) Define management. Write a detailed note on management levels.

Ans) Management is the process of reaching organizational goals by working with and
through people and other organizational resources.

Management has the following 3 characteristics:

1. It is a process or series of continuing and related activities.

2. It involves and concentrates on reaching organizational goals.
3. It reaches these goals by working with and through people and other
organizational resources.
Management (or managing) is the administration of an organization, whether it be a
business, a not-for-profit organization, or government body. Management includes the
activities of setting the strategy of an organization and coordinating the efforts of its
employees or volunteers to accomplish its objectives through the application of
available resources, such as financial, natural, technological, and human resources. The
term "management" may also refer to the people who manage an organization.

The term Levels of Management refers to a line of demarcation between various

managerial positions in an organization. The number of levels in management increases
when the size of the business and work force increases and vice versa. The level of
management determines a chain of command, the amount of authority & status enjoyed
by any managerial position. The levels of management can be classified in three broad
categories:

1. Top level / Administrative level

2. Middle level / Executory
3. Low level / Supervisory / Operative / First-line managers
Managers at all these levels perform different functions. The role of managers at all the
three levels is discussed below:

LEVELS OF MANAGEMENT
1. Top Level of Management

It consists of board of directors, chief executive or managing director. The top

management is the ultimate source of authority and it manages goals and
policies for an enterprise. It devotes more time on planning and coordinating
functions.

The role of the top management can be summarized as follows -

a. Top management lays down the objectives and broad policies of the
enterprise.
b. It issues necessary instructions for preparation of department budgets,
procedures, schedules etc.
c. It prepares strategic plans & policies for the enterprise.
d. It appoints the executive for middle level i.e. departmental managers.
e. It controls & coordinates the activities of all the departments.
f. It is also responsible for maintaining a contact with the outside world.
g. It provides guidance and direction.
h. The top management is also responsible towards the shareholders for the
performance of the enterprise.

2. Middle Level of Management

The branch managers and departmental managers constitute middle level. They
are responsible to the top management for the functioning of their department.
They devote more time to organizational and directional functions. In small
organization, there is only one layer of middle level of management but in big
enterprises, there may be senior and junior middle level management. Their role
can be emphasized as -

a. They execute the plans of the organization in accordance with the policies
and directives of the top management.
b. They make plans for the sub-units of the organization.
c. They participate in employment & training of lower level management.
d. They interpret and explain policies from top level management to lower
level.
e. They are responsible for coordinating the activities within the division or
department.
f. It also sends important reports and other important data to top level
management.
g. They evaluate performance of junior managers.
h. They are also responsible for inspiring lower level managers towards
better performance.
 3. Lower Level of Management

Lower level is also known as supervisory / operative level of management. It

consists of supervisors, foreman, section officers, superintendent etc. According
to R.C. Davis, Supervisory management refers to those executives whose work
has to be largely with personal oversight and direction of operative employees .
In other words, they are concerned with direction and controlling function of
management. Their activities include -

a. Assigning of jobs and tasks to various workers.

b. They guide and instruct workers for day to day activities.
c. They are responsible for the quality as well as quantity of production.
d. They are also entrusted with the responsibility of maintaining good
relation in the organization.
e. They communicate workers problems, suggestions, and recommendatory
appeals etc to the higher level and higher level goals and objectives to the
workers.
f. They help to solve the grievances of the workers.
g. They supervise & guide the sub-ordinates.
h. They are responsible for providing training to the workers.
i. They arrange necessary materials, machines, tools etc for getting the
things done.
j. They prepare periodical reports about the performance of the workers.
k. They ensure discipline in the enterprise.
l. They motivate workers.
m. They are the image builders of the enterprise because they are in direct
contact with the workers.

Q7) Define tourism product. Discuss the characteristics of the tourism product.

Ans) Tourism Product

As tourism is termed as a very big industry, like other industry it also sells its product to
the potential tourist. But there is a big difference in the tourism product and other
products. As tourism is termed as a smokeless industry and unlike other product it has
not its own entity or a single item but it is the combination of different products,
services and attractions.

A tourism product is the sum of the physical and psychological experience got by tourist
during their traveling to the destination. It is the composite product, as the combination
of different services like tourist attraction, transport, accommodation and of
entertainment which provide tourist satisfaction. Each of the components of a tourist
product is supplied by individual providers of services like hotel companies, airlines,
travel agencies, etc.

The tourist product can be analyzed in terms of its attraction, accessibility and
accommodation.

Attractions: Of the three basic components of a tourist product, attractions are very
important. Unless there is an attraction, the tourist will not be motivated to go to a
particular place. Attractions are those elements in a product which determine the choice
made by particular tourist to visit one particular destination rather than another. The
attractions could be cultural, like sites and areas of archaeological interest, historical
buildings and monuments, flora and fauna, beach resorts, mountains, national parks or
events like trade fairs, exhibitions, arts and music festivals, games, etc.

inventory of the various attractions which are of significance in tourism are given
below:

Inventory of Tourist Attractions

Cultural: Sites and areas of archaeological interest, Historical buildings and Monuments,
Places of historical significance, Museums, Modern Culture, Political and Educational
institutions,

Religious Institutions Traditions: National Festivals, Arts and Handicrafts, Music,

Folklore,

Native life and Customs Scenic: National Parks, Wildlife, Flora and Fauna, Beach Resorts,
Mountain Resorts.

Entertainment: Participation and Viewing sports, Amusement and Recreation Parks

Zones and Oceanariums, Cinemas and Theatres, Night Life and Cuisine.

OTHERS: Climate, Health resorts or Spas, Unique characteristics not available

elsewhere.

. Intangibility: - services can not be touched or seen. What can be seen is their effect. A
guide s comment can be heard. While a travel agent provides a ticket from place A to
place B. the ticket is just a piece of paper, only an entry pass for using the service. An
airline provides the service of transportation. What we only can see is the aircraft which
carries passenger from one place to another. The intangible characteristic poses
problems of understanding and evaluating services. The services are promises which
can be evaluated after or during use and not before. The difference between the
products and services are products are first produced then sold and then consumed. But
services first sold then produced and consumed simultaneously.

2. Inseparability: - It is not possible to separate services from the person providing the
service. A guide or an interpreter has to be present to provide the service.
3. Perishability: - Services can not be stored. Fro example hotel rooms not occupied for
one particular day are lost for that day. If tourists do not do not come to see the Taj
Mahal the view is lost for that day.

4. Absence of ownership:-when a person buy a car, the ownership of the car is

transferred to him but when that person hire a taxi he only buy the right to be
transported to a pre-determined destination at a pre-determined price. Hotel rooms can
be used but not owned by the guest. So services can be bought for consumption but the
ownership remains with the person or the organization which is providing the service.

5. Variability: - services are people based products. Services are inseparable from the
person who offers it. They are produced and offered by individuals. Due to this, quality
of service differs from person to person, and from time to time with the same individual.
Therefore services can not be standardized. Another reason for variability of services is
involvement of the guest or customer in the process of service production, delivery and
consumption system.

6. Participation of Customer: - in the service delivery system (selling – production –

consumption) the customer is involved almost at every stage. A per son who wants to
fly from CCU to DEL may ask any one else to book the ticket on flight but that person
needs to be present on the flight physically. Otherwise the service for that particular
person can not be produced and hence can not be consumed.

Q8) Define organizational structure. Discuss the components of organizational structure

Ans) Organizational structure may be defined as the network of relationships that exists
among various positions and position holders. Formal structure is a pattern of
relationships that has been consciously planned and implemented. It includes formal
hierarchy of authority as well as rules and procedures and other planned attempts to
regulate behaviour.

Organizational structure determines corporate communication, and the executive and

managerial hierarchy, and creates a plan for efficient growth for the future. The six
elements of organizational structure come together to create the blueprint for how your
company is laid out, and determine how your managerial staff goes about effecting
change in your organization.
Geography
How your organization is structured can depend on how many corporate locations you
need to account for in your planning. The more spread out an organization is, the more
autonomy each location will need to be given in order for the company to run efficiently.
Hierarchy communication is also a challenge when creating an organizational structure
over a large geographic area. Managers who report to executives in another location
need to establish a clear line of communication in order to receive guidance and
instruction.
Number of Employees
A large employee population can necessitate that there be several layers of management
for a company to run efficiently. As a company grows, the organizational structure
needs to be elastic enough to accommodate more employees and the potential need for
a larger management structure.
Product Evolution
A company may start off with a small line of products that cover a general part of the
industry. As the company grows, the need to create specified departments for product
development and manufacturing can have an effect on the company's organizational
structure.
Distribution of Authority
According to a study done by a group of college students known as Group A-Plus, a
company's organizational structure is affected by whether the company wants
centralized management or decentralized management. Centralized management keeps
all major decisions with one specific executive group, while decentralized management
allows company managers to have more say in the decision-making process.
Control
According to Management Guru, a company that requires a higher product quality will
have stricter rules and a more regimented environment. This would apply to companies
that manufacturer high tech products, hand-crafted products or critical products such
as medical equipment. Companies that engage in the mass production of products may
not exert as much control over the quality of their products and, subsequently, may
create a different organizational structure.
Marketplace
The marketplace also has a bearing on how a company is structured. For example, a
manufacturer may decide to sell products through wholesalers as well as directly to end
users. In order for this model to be successful, the organizational structure of the
company would need to be set up so as to keep these elements separate, including a
separate marketing team and a separate sales force.

Q9) What do you understand by marketing management? What are the different bases
for market segmentation?
Ans) Marketing management facilitates the activities and functions which are involved
in the distribution of goods and services.
According to Philip Kotler, Marketing management is the analysis, planning,
implementation and control of programmes designed to bring about desired exchanges
with target markets for the purpose of achieving organisational objectives.
It relies heavily on designing the organisations offering in terms of the target markets
needs and desires and using effective pricing, communication and distribution to
inform, motivate and service the market. Marketing management is concerned with the
chalking out of a definite programme, after careful analysis and forecasting of the
market situations and the ultimate execution of these plans to achieve the objectives of
the organisation.
Further, their sales plans to a greater extent rest upon the requirements and motives of
the consumers in the market. To achieve this objective, the organisation has to pay heed
to the right pricing, effective advertising and sales promotion, distribution and
stimulating the consumers through the best services.
To sum up, marketing management may be defined as the process of management of
marketing
programmes for accomplishing organisational goals and objectives. It involves planning,
implementation and control of marketing programmes or campaigns.
Demographic segmentation – Demographic segmentation is one of the simplest and
most widest type of market segmentation used. Most companies use it to get the right
population in using their products. Segmentation generally divides a population based
on variables. Thus demographic segmentation too has its own variables such as Age,
gender, family size, income, occupation, religion, race and nationality. To read more,
click on this link for demographic segmentation.
Demographic segmentation can be seen applied in the automobile market. The
automobile market has different price brackets in which automobiles are manufactured.
For example – Maruti has the low price bracket and therefore manufactures people
driven cars. Audi and BMW have the high price bracket so it targets high end buyers.
Thus in this case, the segmentation is being done on the basis of earnings which is a part
of demography. Similarly, Age, life cycle stages, gender, income etc can be used for
demographic type of market segmentation.
Behavioral segmentation – This type of market segmentation divides the population on
the basis of their behavior, usage and decision making pattern. For example – young
people will always prefer Dove as a soap, whereas sports enthusiast will use Lifebuoy.
This is an example of behavior based segmentation. Based on the behavior of an
individual, the product is marketed. This type of market segmentation is in boom
especially in the smart phone market. For example – Blackberry was launched for users
who were business people, Samsung was launched for users who like android and like
various applications for a free price, and Apple was launched for the premium
customers who want to be a part of a unique and popular niche.
Another example of behavioral segmentation is marketing during festivals. Say on
christmas, the buying patterns will be completely different as compared to buying
patterns on normal days. Thus, the usage segmentation is also a type of behavioral
segmentation.
Psychographic segmentation – Psychographic segmentation is one which uses peoples
lifestyle, their activities, interests as well as opinions to define a market segment.
Psychographic segmentation is quite similar to behavioral segmentation. But
psychographic segmentation also takes the psychological aspects of consumer buying
behavior into accounts. These psychological aspects may be consumers lifestyle, his
social standing as well as his AIO. Do refer more to Activities, interests and opinions.

Application of psychographic segmentation can be seen all across nowadays. For

example – Zara markets itself on the basis of lifestyle, where customers who want the
latest and differential clothing can visit the Zara stores. Similarly Arrow markets itself to
the premium office lifestyle where probably your bosses and super bosses shop for the
sharp clothing. Thus, this type of segmentation is mainly based on lifestyle or AIO.
Geographic segmentation – This type of market segmentation divides people on the
basis of geography. Your potential customers will have different needs based on the
geography they are located in. In the article on geographic segmentation, i have
explained how people who are located in non municipal areas might require a RO water
purifier whereas those located in municipal areas might need UV based purifiers. Thus,
the need can vary on the basis of geography.
Similarly in cold countries, the same company might be marketing for heaters wheresa
in hot countries, the same company might be targeting air conditioners. Thus, many
companies use geographic segmentation as a basis for market segmentation. This type
of segmentation is the easiest but it was actually used in the last decade where the
industries were new and the reach was less. Today, the reach is high but still geographic
segmentation principles are used when you are expanding the business in more local
areas as well as international territories

Q10) Fixed assets and current asset

ans) The difference between fixed assets and current assets can be drawn clearly on the
following grounds:
1. The non-current assets which the entity owns for the purpose of continuing use, to
generate income, is called fixed asset. Current assets are defined as the items which are
held for the purpose of resale and that too for a maximum period of one year
2. The conversion of a fixed asset into cash cannot be done easily. On the contrary, current
assets are converted into cash immediately.
3. Fixed assets are used by the company to produce goods and services. Thus they are held
for more than one year. Conversely, companies kept current assets, in the form or cash
or in such form that can be easily converted into cash. Therefore such assets are held for
less than one year.
4. Fixed assets are valued at net book value, i.e. original cost of the asset less depreciation.
As against this, the valuation of a current asset is at cost or market value whichever is
lower.
5. As the investment in fixed assets requires huge capital investment, so long term funds
are utilised for its acquisition. Unlike current assets, which require short-term financing
for its acquisition.
6. Fixed assets cannot be pledged while current assets can be pledged, as collateral for
granting loans.
7. The fixed charge is created on fixed assets whereas current assets are subject to floating
charge.
8. When the company sells current assets, the profit earned or loss suffered is of revenue
nature. On the other hand, selling of fixed asset will result in capital profit or loss to the
company.
9. Revaluation reserve is created, when there is an appreciation in the value of fixed asset,
whereas no such reserve is created in the case of appreciation in the worth of current
assets.

Q11) Ordinary shares and preference shares

ans) Preference shares, also known as preferred shares, have the advantage of a higher
priority claim to the assets of a corporation in case of insolvency and receive a fixed
dividend distribution. Ordinary shares, also known as common shares, have a lower
priority for company assets and only receive dividends at the discretion of the
corporation s management. Preference shares often do not have voting rights and can
be converted into common shares. Ordinary shares are generally entitled to one vote
per share. One way to think of preference shares is as a hybrid of a bond and a security.
For this reason, preference shares are often used by venture capitalists for startup
companies.

Dividends for preference shares are set at a specific rate. However, owning preference
shares does not guarantee dividend payment. Preference shares can be cumulative or
noncumulative. For cumulative shares, if a corporation fails to pay a dividend, that
dividend amount is owed at some point in the future. The shares accumulate
outstanding dividends.
For noncumulative shares, a dividend is lost if it is not paid. The dividends are paid to
preference share owners prior to common owners receiving dividends. Dividends from
preference shares may be given favorable tax treatment.

Another type of preference shares is participatory shares. These shares include not only
a guaranteed dividend payment but also payment of an additional dividend amount if
the corporation meets certain performance goals.

In the case of bankruptcy or liquidation, preference shares are paid according to their
par value only after payments are made to outstanding bond holders. Preference shares
receive payment prior to common shares receiving anything. Still, there is risk in being
behind creditors. Due to this risk, investors may want to focus on preference shares in
companies with strong credit ratings where there is a lower likelihood of default.
 IGNOU

TS-03

SOLVED ASSIGNMENT

JULY-2020

Q2) Who is an entrepreneur? Discuss the qualities required to be an

entrepreneur.

ans) Who is an Entrepreneur?

The word entrepreneur has its origin in the French language. An entrepreneur is one
who organises, manages and assumes the risks of an enterprise. Enterprise is an
undertaking, especially one which involves minimum four factors (i.e. land, labour,
capital and entrepreneur) of production as indicated below.

An entrepreneur visualises a business, takes bold decisions to establish

undertaking/enterprise; Coordinates the various factors of production and gives it a
start. So it involves the willingness to take risk and innovation in undertaking an
economic activity.

Entrepreneurs are the owners of the business/enterprise who invest/contribute the

capital and bear the risk of uncertainties during business life.

The entrepreneur and enterprise are linked; the success of an enterprise depends on
the entrepreneur. He is action oriented and highly motivated. He has the capability to
evaluate business opportunities to collect the necessary inputs/resources to advantage
of them and to initiate appropriate action to guarantee success.

Entrepreneur is the main factor of production. He is innovation oriented. He takes

decisions regarding the product i.e., what to produce? How to produce? where to
produce? and who are the consumers? or where is the market?

Or for whom to produce? It is the entrepreneur who initiates production process after
mobilising all the factors of production. He is responsible for the success or failure of the
business or for the profit or the loss.

According to Schumpeter, “Entrepreneurs are business leaders and not simple owners
of capital. They are men of vision, drive and talent, who spot out opportunities and
promptly grasp them for exploitation”.
In the words of Joseph. A. Schumpter “The entrepreneur in an advanced economy is an
individual who introduces something new into the economy, a new method of
production, a new product with which the consumers are not familiar, a new source of
raw material or new market and the alike.”

Further according to him entrepreneur’s function is to “Reform or revolutionise the

factors of production by exploiting an invention or more generally an untried
technological possibility for producing a new commodity”.

1. Look out for opportunities: An entrepreneur should always look out for
opportunities. He must be able to exploit the opportunities.

2. Strong desire to succeed: Desire is the greatest impetus for entrepreneurship.

Entrepreneurs must have the desire to get better identity, improve status and
accumulate wealth. They must have the desire to achieve greater heights and succeed in
life

3. Persistent: On the road of entrepreneurship, entrepreneurs have to face several

problems. Establishing enterprises may be time consuming. An entrepreneur has to
tolerate the humiliation and discouraging act of people around him during initial stages.

4. Broaden the horizon: Entrepreneurs who update themselves and who are well
informed can acquire greater knowledge and can effectively reduce the distance
between themselves and success. Entrepreneur must be very familiar with the
operation of the industry, technology, management, people and market. Broadening the
vision can help the entrepreneurs to establish and run the business successfully.

5. Responding to Changes: The primary purpose of entrepreneurship is to make money

in the reasonable and legitimate manner. An entrepreneur must understand the way of
the world. Business is influenced by political, social, economical and legal factors. The
entrepreneur has to watch the business environment and respond to the changing
trends.

6. Inter personal skills: Entrepreneurs cannot run business on their own. They are
dependent on customers, employees, suppliers and government agencies and so on. An
entrepreneur has to build his business network or social network in order to succeed in
business. An entrepreneur must make use of professionals when need arises in running
the business. Interpersonal skills should be the first in the quality of entrepreneurs.

7. Problem solving: Strategy is actually a way of thinking and finding a solution to deal
with the problem. Entrepreneurs must utilize the wisdom to tackle the arising
problems.

8. Courage: Venture itself is an adventure. An entrepreneur must have the courage, to

run enterprises. Business may fetch profit or losses. He must be daring to face losses. He
must have the guts to take the risk. Risk-taking spirit of entrepreneurs is an important
component for running the business.

9. Willingness to share: Entrepreneurs must be willing to share resources with others. It

is impossible to become bigger without sharing the profits. He must be willing to pay
fair salary to employees, rent for the land and interest on the capital borrowed by him.
He must pay taxes to the government for the profits reaped by him.

10. Ability of self-reflection: Entrepreneurship is a continuous process of exploration.

Entrepreneurs must recognize their errors and correct their mistakes.

11. Hard working: Entrepreneurs have to work hard. Initially an entrepreneur will not
be able to get good return for working long hours.

12. Self-confident: Entrepreneurs must demonstrate extreme self-confidence in order to

cope with all the risks of operating their own business. He must believe his own
strengths and abilities.

13. Judgment: Entrepreneurs must have the ability to think quickly and make a wise
decision.

14. Need to achieve: Entrepreneurs must have the desire to achieve better status and
identity in the society. Although their objective is to make profit this is often secondary
to the drive toward personal success.

15. Profit motive: Entrepreneurs must focus on profit and know that their business
success is measured by profits.

16. Possess managerial skills: An entrepreneur must possess managerial skills such as
planning, organizing, staffing, directing, coordinating and controlling. An entrepreneur
has to be an efficient manager. He should be efficient enough to handle production,
marketing, finance, personnel and all other important areas.

17. Responsibility: An entrepreneur must have a sense of responsibility.

18. Creative: An entrepreneur has to be creative. He must use innovative ideas to

introduce new product, service to meet the customer needs.

Q4) What do you understand by decision making? List the steps in decision
making

ans) Decision-making is an integral part of modern management. Essentially, Rational

or sound decision making is taken as primary function of management. Every manager
takes hundreds and hundreds of decisions subconsciously or consciously making it as
the key component in the role of a manager. Decisions play important roles as they
determine both organizational and managerial activities. A decision can be defined as a
course of action purposely chosen from a set of alternatives to achieve organizational or
managerial objectives or goals. Decision making process is continuous and
indispensable component of managing any organization or business activities. Decisions
are made to sustain the activities of all business activities and organizational
functioning.

Decisions are made at every level of management to ensure organizational or business

goals are achieved. Further, the decisions make up one of core functional values that
every organization adopts and implements to ensure optimum growth and drivability in
terms of services and or products offered.

As such, decision making process can be further exemplified in the backdrop of the
following definitions.

Definition of Decision Making

According to the Oxford Advanced Learner’s Dictionary the term decision making
means - the process of deciding about something important, especially in a group of
people or in an organization.

Decision making is a daily activity for any human being. There is no exception about
that. When it comes to business organizations, decision making is a habit and a process
as well.
Effective and successful decisions make profit to the company and unsuccessful ones
make losses. Therefore, corporate decision making process is the most critical process
in any organization.
In the decision making process, we choose one course of action from a few possible
alternatives. In the process of decision making, we may use many tools, techniques and
perceptions.
In addition, we may make our own private decisions or may prefer a collective
decision.
Usually, decision making is hard. Majority of corporate decisions involve some level of
dissatisfaction or conflict with another party.
Let's have a look at the decision making process in detail.

Steps of Decision Making Process

Following are the important steps of the decision making process. Each step may be
supported by different tools and techniques.

Step 1: Identification of the purpose of the decision

In this step, the problem is thoroughly analysed. There are a couple of questions one
should ask when it comes to identifying the purpose of the decision.
 What exactly is the problem?
 Why the problem should be solved?
 Who are the affected parties of the problem?
 Does the problem have a deadline or a specific time-line?

Step 2: Information gathering

A problem of an organization will have many stakeholders. In addition, there can be

dozens of factors involved and affected by the problem.
In the process of solving the problem, you will have to gather as much as information
related to the factors and stakeholders involved in the problem. For the process of
information gathering, tools such as 'Check Sheets' can be effectively used.

Step 3: Principles for judging the alternatives

In this step, the baseline criteria for judging the alternatives should be set up. When it
comes to defining the criteria, organizational goals as well as the corporate culture
should be taken into consideration.
As an example, profit is one of the main concerns in every decision making process.
Companies usually do not make decisions that reduce profits, unless it is an
exceptional case. Likewise, baseline principles should be identified related to the
problem in hand.

Step 4: Brainstorm and analyse the different choices

For this step, brainstorming to list down all the ideas is the best option. Before the idea
generation step, it is vital to understand the causes of the problem and prioritization of
causes.
For this, you can make use of Cause-and-Effect diagrams and Pareto Chart tool. Cause-
and-Effect diagram helps you to identify all possible causes of the problem and Pareto
chart helps you to prioritize and identify the causes with highest effect.
Then, you can move on generating all possible solutions (alternatives) for the problem
in hand.

Step 5: Evaluation of alternatives

Use your judgement principles and decision-making criteria to evaluate each

alternative. In this step, experience and effectiveness of the judgement principles come
into play. You need to compare each alternative for their positives and negatives.

Step 6: Select the best alternative

Once you go through from Step 1 to Step 5, this step is easy. In addition, the selection of
the best alternative is an informed decision since you have already followed a
methodology to derive and select the best alternative.

Step 7: Execute the decision

Convert your decision into a plan or a sequence of activities. Execute your plan by
yourself or with the help of subordinates.

Step 8: Evaluate the results

Evaluate the outcome of your decision. See whether there is anything you should learn
and then correct in future decision making. This is one of the best practices that will
improve your decision-making skills.

Conclusion

When it comes to making decisions, one should always weigh the positive and negative
business consequences and should favour the positive outcomes.
This avoids the possible losses to the organization and keeps the company running
with a sustained growth. Sometimes, avoiding decision making seems easier;
especially, when you get into a lot of confrontation after making the tough decision.
But, making the decisions and accepting its consequences is the only way to stay in
control of your corporate life and time.

Q6) Discuss the importance of human resource development in tourism services.

ans) These aspects of human resource management and development are essential for

every sector but in the case of tourism, they have a special significance. This is because

tourism is a service industry and here the customer is not only buying a service or a

product but he is also experiencing and consuming the quality of service which is

reflected in the performance of the persons involved in the production and delivery of

the service.

Since what is marketed here is a relationship between the customer and the producer of

services, the importance of human resources becomes vital for the success of the

business. Generally, in such service operations, the emphasis has been on courtesy and
efficiency and it is assumed that the service in tourism is all smiles and effective

communication.

However, with the changing nature of tourism and growing specializations, only smiles,

communication skills and courtesy will not serve the purpose. For example, a guide May

be very good in communication but unless he or she is equipped with knowledge and

information related to the monument or the city, he or she will not be able to perform

quality service.

Similarly, a driver may be very good at driving but unless he knows the roads and

addresses of the city, only his driving capabilities will be of no help in providing quality

service. And we must remember here that tourists, whether foreign or domestic, are

increasingly becoming more demanding as regards quality of service.

In order to gain competitive power for the hotel, human resource management is an
elementary issue. Human resource management can be regarded as the foundation for
the hotel to acquire competitive advantage.

Honoring the employees through effective communication, training programs for the
employees and benefit programs is what effective hospitality management is all about.

Human resource management and effective hospitality management is the corner stone
of successful business in hospitality industry.

The Human Resources Management (HRM) function includes a variety of activities, and
key among them is deciding what staffing needs you have and whether to use
independent contractors or hire employees to fill these needs, recruiting and training
the best employees, ensuring they are high performers, dealing with performance
issues, and ensuring your personnel and management practices conform to various
regulations. Activities also include managing your approach to employee benefits and
compensation, employee records and personnel policies.

In today’s quality-driven, empowered, hospitality workplace, practices that encourage

greater employee performance must become integrated into the way a hotel, restaurant,
resort, or any other form of hospitality service organization does business. Getting it
right the first time (one of the sacred tenets of total quality management) can only be
achieved in the hospitality industry through a motivated, empowered, and trained team.
At times guest problems are not foreseen; therefore, employees have to feel empowered
to correct a problem on the spot. In a service business, you can’t have a rigid set of rules.
It is possible to have guidelines, but people must be allowed the freedom to make
different interpretations. A mature, well-trained hospitality team is capable of making
better quality decisions than a single individual. The use of a team approach improves
the overall quality of decision making, and the level of commitment to the team
becomes much higher.

Q7) What do you understand by financial management? What steps would you
take for managing cash?

ans) Meaning of Financial Management

Financial Management means planning, organizing, directing and controlling the

financial activities such as procurement and utilization of funds of the enterprise. It
means applying general management principles to financial resources of the enterprise.

Scope/Elements

1. Investment decisions includes investment in fixed assets (called as capital

budgeting). Investment in current assets are also a part of investment decisions
called as working capital decisions.
2. Financial decisions - They relate to the raising of finance from various resources
which will depend upon decision on type of source, period of financing, cost of
financing and the returns thereby.
3. Dividend decision - The finance manager has to take decision with regards to the
net profit distribution. Net profits are generally divided into two:
a. Dividend for shareholders- Dividend and the rate of it has to be decided.
b. Retained profits- Amount of retained profits has to be finalized which will
depend upon expansion and diversification plans of the enterprise.

Objectives of Financial Management

The financial management is generally concerned with procurement, allocation and

control of financial resources of a concern. The objectives can be-

1. To ensure regular and adequate supply of funds to the concern.

2. To ensure adequate returns to the shareholders which will depend upon the
earning capacity, market price of the share, expectations of the shareholders.
3. To ensure optimum funds utilization. Once the funds are procured, they should
be utilized in maximum possible way at least cost.
4. To ensure safety on investment, i.e, funds should be invested in safe ventures so
that adequate rate of return can be achieved.
5. To plan a sound capital structure-There should be sound and fair composition of
capital so that a balance is maintained between debt and equity capital.
Step 1: Put in Place Good Credit Control Procedures

Start with your credit control procedures. This includes deciding on payment terms and
ensuring those terms are properly communicated to your customers both in your
paperwork and in sales interactions. You should also have procedures in place for
occasions when invoices become overdue.

Step 2: Produce Regular Sales Forecasts

Sales forecasts help you understand the cash you are likely to see in your business over
the coming months. They are similar to targets, but they should be as realistic as
possible. The ideal situation is when your forecast closely matches reality.

Step 3: Negotiate Good Supplier Terms

This includes getting enough time to pay your invoices so there is as little lag as possible
from the time you pay until the time your customers pay you.

Step 4: Put in Place Tight Stock Control Measures

It is easy to run into problems when you have cash tied up in stock you can’t sell fast
enough. Therefore, it is important to manage stock levels and get the right balance, i.e.
getting stock in on time and at the right price while avoiding having cash tied up in
stock unnecessarily.

Step 5: Control Spending

This applies to all aspects of your business including buying equipment and other
expenses. You should control costs through all business cycles, including when things
are going well, to help you more effectively manage your cash flow.

Step 6: Reduce Unnecessary Costs

This one follows on from the previous step. You should regularly look at the costs in
your business and make efficiency savings wherever possible. The more control you can
have on costs, the easier it will be to manage cash flow.

Step 7: Produce and Read Financial Reports

A key part of effectively managing cash flow is having a proper understanding of your
business. For example, are sales ahead of expectations or behind? Are there areas of
your business that are under performing or costs that have dramatically increased? Do
you understand the trends your business currently faces? You can find all this
information and more by reading financial reports – cash flow reports, sales reports,
balance sheets, forecasts, profit and loss reports, etc.

Step 8: Learn How to Spot Warning Signs

There will be signs in your financial reports and elsewhere that can indicate potential
future cash flow problems. For example, a major customer may tell you they plan to
temporarily reduce spending which could have an impact on your cash flow a few
months down the line. Currency exchange rates, the weather, Government policy, and
more can all also have an impact on cash flow. You should learn to spot these warning
signs.

Step 9: Be Honest and Realistic

This final step particularly applies if you regularly face cash flow problems in your
business. If you do, you should honestly assess the position of your business, possibly by
going back over the previous steps. You might not have enough sales, for example, or
your cost base might be too high. Be realistic about what you can achieve and then put a
plan in place to address the problem.

Q8)Discuss the importance of product knowledge in packaging tours.

ans)In today's world of specialisation, the tour operators also package different kinds of
tours and accordingly acquire product knowledge for packaging tours. We have
mentioned earlier that there are inbound tour operators as well as outbound and
domestic tour operators. Within these categories, we can further divide the tour
operators in two categories:

Mass Market Operators are, those who offer routine packages which include travel,
accommodation, and some services.

Specialist Tour Operators design their packages keeping in view the market
segmentation of the customers. For example, exclusive package tours are created for
adventure tourism by some, others package wildlife tour packages or some design
packages for a particular age group. Some tour operators go for geographical
segmentation and operate in a specific region only. For example, certain local tour
operators may organise tours in their catchment areas only or some may deal with
business for one or two countries only. Among this category, there are also tour
operators which specialise in using specific types of accommodation, transport and
entertainment. In fact, there is no end to imagination and creativity in designing special
tours after analysing the demand trends and attitudes.

Some tour operators specially design and package tours on the requests of the clients. A
typical example in this regard could be the following

A group of 15 archaeologists from U.K. intends to visit India. They want to have a feel of
prominent archaeological sites and they are in the age group of 35-45. They place their
requests to a travel agency in U.K. and the travel agency passes on this request to a tour
operator in India. The first task for the tour operator is to assess whether such a group
can be handled by the company. This may include:
 1) The company has to get in touch with an archaeologist in India for identification of
the sites to be visited.

2) What will be the modes of transportation to these sites?

3) Where accommodation has to be provided ?

4) Identification of a tourist guide who specialises in archaeology.

5) What type of entertainment can be provided to them in the evenings ?

6) What type of meals to be served and where ?

7) Where to take them for shopping, etc. ?

A travel agent thrives on the value they provide more than just facilitating bookings.
This is more relevant when a traveller can be in different situations due to –

 An overwhelming range of travel products to choose from

 An overload of information on the internet
 A demand for more “Selfie-venues” combined with competition for bragging rights.
 Travel product advertising across all media – now you need someone to interpret the
finely printed terms and conditions of those cruises and tours.
 Post covid19 scenario – which are the safe places to travel to, what are the latest
travel advisories, how to be equipped and what to carry when traveling.

Travel agents need to adapt to the times and understand the needs of travelers. They
must be creatively resourceful, manage their time and maximise their relationship
with their product suppliers. They need to have a plan on how to gather and store the
huge amount of product knowledge, which is their bread and butter. Here is how you
can be an expert in travel product knowledge.

1. Define your products

In a recent conversation with a travel agency owner, I enquired about some of their
key selling products pre-Covid19. “Packages”, that was the single word answer given
whereas I was expecting something more specific.

As a travel agent you may feel that you are supposed to sell every travel product, but
then let us put that on paper. Firstly, define all the products that you sell. Next, you
will have to map how they relate to each other. For example – if you are selling a
honeymoon package, write down all products that your need to put up that package

 Destination options
 Transportation options
 Suppliers in the destination
 Hotels / resorts in the destination
 Specific experiences for honeymooners
 Additional activities
 Visa & other formalities
 Emergency contacts, insurance

2. Organise
After you define your products, you will have a list of products and suppliers under
each of them. So organise these into product / supplier groups in terms of similarity.
Here, you can decide on what kind of groups you would like to create. After the
groups are created, it is now easy to collect and organise the information on these
products and suppliers.

3. Know your suppliers

The products and suppliers that you work with are partners who provide you with
necessary information. They assist in customising experiences for your clients and
offer opportunities to enhance your skills and revenue. You can get this support from
most of your preferred suppliers, but all your suppliers whether big or small,
contribute to your business success.

4. Practise
Currently when international travel is at a standstill for the past couple of months
and there have been zero queries related to travel, you will feel out of touch with
most of your products. Furthermore, in the absence of normal daily operations, there
is a possibility that knowledge that is not in use may tend to be forgotten.

One effective way to practice your product knowledge is to role-play with another
travel colleague or even with a friend or family member. You can pretend that the
other person is a client who wants to visit Goldcoast. Instruct the person to ask a lot
of questions as if they are really going on this trip and be picky about the details. This
technique is usually used during training of freshers in frontline sales, but it can
really help in refreshing your destination knowledge and customer handling skills.

5. Use existing resources from suppliers & partners

Many destinations conduct online travel expert or destination specialist training
programmes that are open for travel professionals. On successful completion of these
training, they are offered some perks in the form of certificates, opportunities for fam
trips, incentives, referrals and more. Some destinations and travel suppliers conduct
live product trainings through webinar which is useful in keeping updated with
development at the product side. Suppliers have product knowledge content in the
form of presentations and videos which they usually share with their partners during
their sales visits or via email updates.