LECTURE

NOTES

ENTERPRENEURSHIP AND STARTUPS

CO-1 : Introduction to Entrepreneurship and Startups
Q-1) Define Entrepreneurship. What are the traits of an entrepreneur?

• Entrepreneurship is the art of starting a business, basically a startup company offering creative
product, process or service.
• It is an activity full of creativity.
• An entrepreneur perceives everything as a chance and displays bias in taking decision to exploit the
chance.
• An entrepreneur is a creator or a designer who designs new ideas and business processes according to
the market requirements and his/her own passion.
• To be a successful entrepreneur, it is very important to have managerial skill and strong team building
abilities

Traits of a Entrepreneur:

1. Strong leadership qualities

• A leader is someone who values the goal over any unpleasantness the work it takes to get there may
bring.
• But a leader is more than just tenacious. A leader has strong communication skills and the ability to
amass a team of people toward a common goal in a way that the entire team is motivated and works
effectively to get there as a team.
• A leader earns the trust and respect of his team by demonstrating positive work qualities and
confidence, then fostering an environment that proliferates these values through the team.
• A leader who nobody will follow is not a leader of anything at all.
2. Highly self-motivated

• Entrepreneurs are typically pretty intense personalities.

• Successful people go out into the world and invoke change through their actions.
• Typically, leaders enjoy challenges and will work tirelessly to solve problems that confront
them.
• They adapt well to changing situations without unraveling and are typically expert of helping
their teams change with them by motivating them toward new goals and opportunities.
• Often successful entrepreneurs are driven by a more complete vision or goal than simply the
task at hand and able to think on a more universal level in that regard.
• They are also often very passionate about their ideas that drive toward these ultimate goals
and are notoriously difficult to steer off the course.
3. Strong sense of basic ethics and integrity

• Business is sustainable because there is a common, understood code of ethics universally

that underpins the very fabric upon which commerce is conducted.

• While cheaters and thieves may win in the short term, they invariably lose out in the long
run.

• It is found that successful, sustainable business people maintain the highest standards of
integrity because, at the end of the day, if one cannot prove oneself a credible business
person and nobody will do business with them,

• With importance in working with clients or leading a team, effective leaders admit to any
error made and offer solutions to correct rather than lie about, blame others for, or dwell
on the problem itself.

4. Willingness to fail

• Successful entrepreneurs are risk takers who have all gotten over one very significant
hurdle: they are not afraid of failure.

• That's not to say that they rush in with reckless abandon.

• In fact, entrepreneurs are often successful because they are calculating and able to make the
best decisions in even the worst of cases.

• However, they also accept that, even if they make the best decision possible, things don't
always go according to plan and may fail anyhow.

5. Serial innovators

• Entrepreneurs are almost defined by their drive to constantly develop new ideas and
improve on existing processes.

• In fact, that's how most of them got into business in the first place.

• Successful people welcome change and often depend on it to improve their effectiveness as
leaders and ultimately the success of their businesses as many business concepts rely on
improving products, services and processes in order to win business.
6. Know what you don't know

• While successful entrepreneurs are typically strong personalities overall, the best have
learned that there's always a lesson to be learned.

• They are rarely afraid to ask questions when it means the answers will provide them insight
they can then leverage to effect.

• Successful entrepreneurs are confident, but not egotistical to the point that their bull-
headedness is a weakness that continually prohibits them from seeing a bigger picture and
ultimately making the best decisions for the business.

7. Competitive spirit

• Entrepreneurs enjoy a challenge and they like to win.

• They would have to since starting a business is pretty much one of the biggest challenges a
person can take on in their lifetime.

• In business it's a constant war with competition to win business and grow market share.

• It's also a personal challenge to use all of this to focus inward and grow a business from
nothing into a powerhouse that either makes a lot of money or is so effective that it is sold
or acquired for a profit as well.

8. Understand the value of a strong peer network

• In almost every case, entrepreneurs never get to success alone.

• The best understand it takes a network of contacts, business partners, financial partners,
peers and resources to succeed.

• Effective people nurture these relationships and surround themselves with people who can
help make them more effective.

• Any good leader is only as good as those who support him.

 Q-2) State the Functions of Entrepreneurship

Catalyst of Economic
Development

Innovation and
Functions of Entrepreneurship
Creativity Overcoming
resistance to change

Risk and Organization and Research

Achievement Management

FUNCTIONS OF ENTREPRENEURSHIP

(i) Innovation and Creativity –

• Innovation generally refers to changing processes or creating more effective

processes, products and ideas.

• For businesses, this could mean implementing new ideas, creating dynamic
products or improving your existing services.

• Creativity is defined as “the tendency to generate or recognize ideas, alternatives,

or possibilities that may be useful in solving problems, communicating with others.

• Creativity and innovation have always been recognized as a sure pa th to success.

Entrepreneurs think outside of the box and explore new areas for cost-effective
business solutions.

(ii) Risk taking and Achievement –

• Entrepreneurship is a process in which the entrepreneur establishes new jobs and

firms, new Creative and growing organization which is associated with risk, new
opportunities and achievement.

• It results in introducing a new product or service to society.

• In general, entrepreneurs accept four types of risks namely Financial Risk, Job Risk,
Social & Family Risk & Mental & Health Risk, which are as follows:
(a) Financial Risk – Most of entrepreneurs begin by using their own savings and personal
effects and if they fail, they have the fear of losing it. They take risk of failure.

(b) Job Risk – Entrepreneurs, not only follow the ideas as working situations, but also
consider the current risks of giving up the job & starting a venture. Several entrepreneurs
have the history of having a good job, but gave it up, as they thought that they were not
cut out for a job.

(c) Social and Family Risk – The beginning of entrepreneurial job needs a high energy
which is time consuming. Because of these undertakings, he/she may confront some
social and family damages like family and marital problems resulting on account of
absence from home and not being able to give adequate time to family.

(d) Mental Health Risk – Perhaps the biggest risk that an entrepreneur takes it is, the
risk of mental health. The risk of money, home, spouse, child, and friends could be
adjusted but mental tensions, stress, anxiety and the other mental factors have many
destructive influences because of the beginning and continuing of entrepreneurial
activity. This can even lead to depression, when faced with failure.

(iii) Organization and Management –

• The entrepreneurial organization is a simple organizational form that includes, one

large operational unit, with one or a few individuals in top management.

• Entrepreneurial management means the skills necessary to successfully develop and

manage a business enterprise.

• A small business start-up under an owner-manager is an example of

an entrepreneurial organization.

• Here, the owner-manager generally maintains strict control over business

operations. This includes directing the enterprise’s core management functions.

• According to Mintzberg, these include the interpersonal roles, informational roles

and decision-making roles.

• The smaller the organization, the more concentrated these roles are in the hands of
the owner-manager. The entrepreneurial organization is generally unstructured.

(iii) Research –

• An entrepreneur is a practical dreamer and does a lot of ground -work before taking
a leap in his/her ventures.
 • In other words, an entrepreneur finalizes an idea only after considering a variety of
options, analysing their strengths and weaknesses by applying analytical techniques,
testing their applicability, supplementing them with empirical findings, and then
choosing the best alternative.

• It is then that he/she applies the ideas in practice. The selection of a n idea, thus,
involves the application of research methodology.

(iv) Overcoming Resistance to Change –

• New innovations are generally opposed by people because it makes them change
their existing behaviour patterns.

• An entrepreneur always first tries new ideas at his/her level.

• It is only after the successful implementation of these ideas that an entrepreneur

makes these ideas available to others for their benefit.

• His/her will power, enthusiasm and energy help him/her in overcoming the society’s
resistance to change.

(v) Catalyst of Economic Development –

• An entrepreneur plays an important role in accelerating the pace of economic

development of a country, by discovering new uses of available resources and
maximizing their utilization.

• Today, when India is a fast developing economy, the contribution of entrepreneurs

has increased multi-fold.

Q-3) What are the types of Entrepreneurship?

The types of Entrepreneurship are as under:

(i) Small Business Entrepreneurship
• Small business entrepreneurship is a small business wholly created by a single individual.
• The company would not have the goal to expand.
• The individual will benefit in this form of business if the company prospers.
Example
Tina opens a tiny yet chic beauty parlor in her hometown. Her motivation, business strategy, and
vision will be the guiding factors for the success of her business.
 2. Scalable Startup Entrepreneurship
• Companies concentrating on finding newer ways to develop scalable and repeatable business
models focusing on greater sales with greater resources are known as Scalable Startup
Entrepreneurship.
• This form of entrepreneurship usually begins with an idea to make the world a better place to
live.
• Scalable startups intend for rapid business growth and substantial financial gain. The narrative
behind these types of entrepreneurial businesses is starting small and gaining great success
with innovation.
Example
Amazon is one of the best entrepreneurship examples of scalable startup entrepreneurship.

3. Intrapreneurship
• Intrapreneurship is a structure that permits an employee to behave like an entrepreneur
within a business or other organization.
• Self-driven, proactive, and action-oriented individuals, known as intrapreneurs, take the
initiative to explore new goods and services.
• An intrapreneur knows that failure does not have the exact personal costs as it does for an
entrepreneur because the company bears the costs of failure.
• However, intrapreneurship is a way companies motivate their employees to have an
entrepreneurial spirit.
Example
The tale of Google News’ origin is one of the fascinating examples of entrepreneurship. Krishna
Bharat, a research scientist at Google, was keeping up with the most recent news from various
websites in the wake of the 9/11 incident. He had the notion of developing a tool that could scan
and assess numerous news websites. Google developed his concept into what is today known as
Google News.

4. Large Company Entrepreneurship

• Large company entrepreneurship refers to an existing corporation that can create a new
business segment through entrepreneurship.
• In these types of entrepreneurship, current businesses may be positioned well to expand into
other industries or engage in cutting-edge technologies.

Example
Google, Microsoft, and Samsung are all examples of large company entrepreneurship as they
keep innovating and developing new products and services around their core- product line.
 5. International Entrepreneurship
• International entrepreneurship is the practice of an entrepreneur operating their firm in
another nation.
• This implies the firm’s expansion worldwide since an entrepreneur performs all business
operations outside the national borders.
• These types of entrepreneurship include exporting goods, obtaining licenses, and opening a
sales office abroad.
• These are the industries that operate outside of their country’s borders. Most firms cross
international borders to build value, expand their operations and engage in unique creative
cross-border activities, increasing the chances of innovation in goods and services.
Example
Amazon, Google, Microsoft, Yahoo, TikTok, Facebook, etc., are all international businesses run
by some great minds.

6. Social Entrepreneurship
• Social entrepreneurship’s essence is recognizing social issues and enacting social change through
entrepreneurial practices.
• It all comes down to conducting a thorough study/ research to fully define a specific social
problem before planning, launching, and overseeing a social enterprise to bring the desired
change.
• Social entrepreneurship primarily focuses on building social capital without assessing
performance in profit or return in monetary terms, in contrast to general and common business
entrepreneurship, which is initiating the start of a new firm or diversifying an existing one.
• A societal problem may or may not completely disappear due to the transformation. It might be
a lifelong process that concentrates on improving the current situation.
• Social entrepreneurs work for non-profit or non-governmental groups that raise money through
fundraisers in their local communities.

Example
A great example of a non-profit social enterprise is Rang De. It is an internet platform that
Ramakrishna and Smita Ram founded in 2008. It was for the poor people in India’s rural and
urban areas to get microcredits with interest rates as low as 2% annually. They offered direct
lending to borrowers, tracking investments, and receiving recurring payments online for lenders
nationwide.

7. Environmental Entrepreneurship
• Environmental entrepreneurship, often known as “ecopreneurship,” is created to address
environmental issues or sustainability. In the 1990s, the phrase gained acceptance.
• Entrepreneurs whose commercial activities are not just motivated by profit but also by a concern
for the environment are considered ecopreneurs.
• Under these types of entrepreneurship, entrepreneurs develop environmentally conscious firms,
combining profit maximization with the desire to produce a more sustainable environment around
them and their company.

Example
Garden planning, energy auditing, composting business, green consulting, etc., are a few
examples of environmental entrepreneurship.

8. Technopreneurship
• The phrases “technology” and “entrepreneurship” are combined to form “technopreneurship.”
• The word was first used in 1987, but it gained popularity in the early 2000s with the spread of
the Internet.
• These types of entrepreneurship need tech-savvy, inventive, creative people willing to take
calculated risks, unlike other forms of entrepreneurship, which may frequently be a one-person
show.

Example
Jeff Bezos, founder of Amazon, Bill Gates, founder of Microsoft, Steve Jobs founder of Apple, etc.,
are apt examples of technopreneurship.

9. Hustler Entrepreneurship
• Hustler entrepreneurship represents entrepreneurs who hustle and are independent thinkers
driven by a desire to succeed in business.
• Hustler is also a classification of entrepreneurship.
• Such people strive arduously to expand their businesses after starting modestly.
• They put their best effort into achieving their business goals rather than using money or capital.
• Since they create opportunities, they never wait for them. Hustlers never give up, have a high
appetite for risk, and are constantly prepared to take on difficulties.
• If you can sell anything and are prepared for any challenge that may come your way, you are a
hustler.

Example
One of the most famous examples of a hustler entrepreneur is the late Ray Kroc, who did not
create McDonald’s but helped mold it into the billion-dollar giant it is today. His forceful
acquisition of McDonald’s from the McDonald brothers made him generally considered a villain,
yet his grit and perseverance cannot be disputed. When selling milkshake makers, Kroc met
McDonald’s as a potential customer, but he left with an idea of how it could be even better.
From a purely business standpoint, Kroc was the best thing to ever happen to the company,
growing it from a single burger stand in San Bernardino, California, to a global franchise. He
worked tirelessly, accepting rejection as a challenge rather than a barrier.
 10. Innovative Entrepreneurship
• Innovative entrepreneurship is the foundation for developing new business concepts to make a
profit, assisting the community, and achieving commercial objectives.
• Innovative business owners use business models to discover the demands of an enterprise and
boost its marketability.
• Most business owners use cutting-edge concepts to develop new versions of these models or
improve the ones they already have.
• This inspiration can be used to create creative company success plans.

Example
Amazon has changed the face of retailing for generations to come! It brought innovation to the
entire e-commerce and made buying and selling an easy process for buyers, sellers, and business
owners.

Q-4) What is Intrapreneurship? Give Examples and Benefits of it?

• The term intrapreneurship refers to a system that allows an employee to act like
an entrepreneur within a company or other organization.
• Intrapreneurs are self-motivated, proactive, and action-oriented people who take the initiative
to pursue an innovative product or service.
• An intrapreneur knows failure does not have a personal cost as it does for an entrepreneur since
the organization absorbs losses that arise from failure.

EXAMPLES OF INTRAPRENEURSHIP

1 . THE APPLE MACINTOSH

The idea: Steve Jobs and 20 Apple engineers split off from Apple to create the Apple Macintosh
computer. The group operated independently, “without adult supervision,” as Apple officials put
it at the time.

The result: This group of creative employees created more diversity and competition for Apple’s
main line of products. This eventually led to Jobs’ temporary leave from the company

2. THE POST-IT NOTE

The idea: 3M Spencer Silver invented a sticky adhesive that Art Fry, a fellow 3M employee
discovered when searching for a way to keep pages in his books.
 The result: Silver and Fry began developing the product after realizing the potential to share
messages around the office. Fry supplied the company with the sticky notes and they were loved
by everyone. Post-Its now generate ~$1billion annually.

• Intrapreneurship is one step toward entrepreneurship—intrepreneurs can use what they've

learned as part of a team to develop their own businesses.
• Fostering intrapreneurships in the workplace can transform employees’ workday experience and
strengthen the company as a whole. The formula for successful intrapreneurships is simple.
• Leaders at every level must encourage their teams to innovate and pursue their ideas.
• To ensure the right people are brought aboard, create more complete job descriptions when
promoting openings that have the potential to include intrapreneurship projects.
• Help intrapreneurs evaluate their ideas to ensure the initiatives fit the company’s mission,
vision, values, and goals.
• Give your intrapreneurs the autonomy and resources they need to complete their goals and
bring their projects to fruition.
• Recognize and reward intrapreneurial successes.

BENEFITS OF INTRAPRENEURSHIP
• Improved Employee Morale and Productivity.
• Attract top talent with intrapreneurship
• Better Retention.
• Boost revenue and Growth
• Encourage widespread innovation.
• Make the most of inhouse talent and knowledge.

Q-5) What are the different types of Business Structures?

The different types of Business Structures in India are as follows:

i. Sole Proprietorships
• A Sole Proprietorship is an enterprise that. is wholly controlled by one person.
• Many entrepreneurs start small businesses in their names and continue as sole proprietors.
• Such an establishment and its owner are not considered separate entities.
• There is no formal registration required to start a business in India under Sole Proprietorship.
• While it is easy to register this entity, the proprietor must bear responsibility for all liabilities.
• The practical implication of such an agreement is that the entire profit made by sole proprietor
is in the hands of the owner.
For example, there are no separate tax returns that are to be filed and the income incurred by
the proprietor must be disclosed in the personal income tax returns itself.
• Many small businesses are recommended to and opt for this legal structure for the following
benefits that it provides:
✓ Cost-Effective: This kind of legal structure barely involves any cost; however conducting a
business in a separate area would require certain specific registrations like Shops and
Establishment Registration and others.

✓ Flexibility in decision making: The decisions are solely dependent on the Proprietor, therefore
they are easy to make and implement.

✓ Workplace Relationship: It is essential to maintain relationships with employees and customers

in Sole Proprietorship; the proprietor is capable of ensuring strong one on one relations with
both, respectively.
Facts: Flipkart and Snapdeal started their business as sole proprietorship companies in India

ii. Partnerships

• In a partnership firm, two or more people come together to work and earn profits.
• There is a partnership deed that specifies the invested interest of each partner and their profit
sharing ratios along with other terms of business functioning and operations.
• The partners are responsible for all liabilities and there is no limit to it. When it comes to the
registration of a partnership it is not mandatory but suitable to get it registered. This type of
business structure provides the following benefits:
✓ Fund Raising: It is easier to raise funds in a partnership as financial institutions consider them
safer than sole proprietorships.
✓ Shared Responsibility: This structure provides for better accountability of the partners and
enjoys a shared responsibility amongst them.
✓ Mutual trust: There is a sense of trust and faith among the partners in the Partnership setup.
All partners can act collectively or any one of the partners and act on behalf of others.
Facts: Hindustan Petroleum, Mahindra and Mahindra, Maruti Suzuki, Renault India are
registered under the 1932 act of Indian Partnership Act.

iii. Limited Liability Partnerships

• A Limited Liability Partnership is incorporated under the Limited Liability Partnership Act
2009.
• As opposed to partnership firms, partners in an LLP are not burdened with unlimited
liabilities caused by the business.
• Their responsibility towards losses or debts is limited to investments made by them. A
limited liability partnership and its partners are considered separate legal entities.
• Further, no partner is liable on account of the independent actions of other partners, thus
individual partners are safe and shielded from joint liabilities upon commission of another
partner’s misconduct.
 ✓ No Minimum Capital Requirement: An LLP can be started with no minimum amount of
capital contribution.
✓ Suitability: It is an easy process to start an LLP as compared to a private company, along
with lesser legal requirements.
✓ No limitation on the number of business owners: There can be two or more partners in
this form of legal structure.
✓ Less Registration Cost: The cost of registration is lesser as compared to a private limited
company or public limited company.
✓ Less Compliance: LLP’s are obligated to submit only two statements i.e. Annual Return
Statements and Statements of Accounts. Therefore, the compliance requirements are
comparatively less than in Private Limited Companies.
Facts: There are more than one lakh LLP company registrations in India

iv Private Limited Companies

• As per Section 2(68) of the companies Act 2013, A private company is defined as a ‘private
company means a company having a minimum paid-up share capital as may be
prescribed, and which by its articles,
(i) restricts the right to transfer its shares;
(ii) except in case of One Person Company, limits the number of its members to two
hundred:
(iii) prohibits any invitation to the public to subscribe for any securities of the company.’
• Most Startups and businesses in India with higher ambitions choose Private Limited
Company as a suitable business structure. A Private Limited company enjoys the following
benefits:
✓ Separate Legal Entity: A private limited company is said to be a separate legal entity. An
entity means something which has a legal existence; therefore the company can sue and
can also be sued under its name.
✓ Borrowing capacity: A private limited company enjoys the privileges of borrowing more
funds than LLPs as it has more options for taking on debt. Not only are bank loans easy to
obtain (relative to OPCs and LLPs), the option of issuing debentures and convertible
debentures are always available. Even banks and other financial institutions welcome
private limited companies better than partnership entities.
✓ Easy Exit: Private limited companies can be sold or transferred, either partially or in full,
to another individual or entity without any disruption to the current business.
✓ Ability to sue and can be sued: To sue means to carry legal proceedings against a person,
similarly just as one person can bring legal proceedings in its name against another in that
person’s name, a company being a separate legal entity can sue and be sued in its name.
✓ Continuous Existence: The company’s existence remains unaffected by the death or
resignation of any member.
✓ Complete Possession of Property: The shareholders cannot claim to be owners of the
property of the company. The company itself is the owner.
 ✓ Dual relationship: A person in a Private Limited Company can be a
shareholder/employee/director at the same time.
Facts: Anand Automotive Pvt. Ltd. and Parle Products Pvt. Ltd. are examples of famous private
limited companies in India.

V Public Limited Companies

• As per Section 2(71) of the Companies Act, a public company means “a company which is
not a private company”.
• A public limited is formed by a minimum of 7 (seven) persons with a minimum paid-up
capital.
• The company may get listed in the stock exchange and thereafter shares of the same are
traded openly. There are more legal restrictions on this type of establishment than a
Private Limited Company.
A public limited company enjoys the following benefits:
✓ Limited Liability: The liability of the shareholders is limited to their stake only. The
business can be sued by not involving any shareholders.
✓ Number of Members: There is a minimum requirement of seven shareholders and can
exceed any limitless number of members as its share capital can occupy.
✓ Continuous existence: The life span of the public limited company is not affected by the
death of any member or shareholder.
✓ Huge Capital: Public Limited Company can relish an increased ability to raise capital
through the stock market by issuing debentures and bonds from the public.
Facts: Reliance Industries and Bharti Airtel are examples of top Public Limited Companies
vi One-Person Companies
• As per Section 2(62) of the Companies Act 2013, “one person company” means a
company that has only one person as a member. This is a recent invention to facilitate
entrepreneurs to own and manage companies alone.
• All the shares can be owned by one person but there must be a nominee for the sole
member to register this form of business.
• The introduction of this concept of a company under the legal system is believed to
not only cater to economic growth but also create a good amount of employment
opportunities. Some benefits of choosing this structure are as follow:
• Payment of Interest on any delay in payment: One Person Company can avail all
benefits under the Micro, Small and Medium Enterprises Development Act 2006. One
Person Company is either a small or medium entity, therefore in case of any delay of
payment (receives payment after a specific period) to the buyer or the receiver they
are entitled to receive interest thrice as much as the bank rate.
• Sole Owner: Only the owner is entitled to make business decisions and control the
business without complying with the long processes and measures as adopted by few
other companies.
• Additional opportunities: Through this structure, an individual can take a higher
amount of risks in business without causing damage to personal assets.
• Facts: Truffle House and Akhan Diary are examples of OPCs.

Vii Section 8 Company

• A Section 8 Company or we may also call it a Non-profit Company, can be incorporated
under the provisions of the Companies Act, 2013 having the status of limited company
without the addition to its name of the word “Limited” or “Private Limited” for the
purpose of promoting commerce, art, science, sports, education, research, social
welfare, religion, charity, protection of environment or any such other object and the
Company shall use its profits or other income in promoting its objects only and
prohibit the payment of any dividend to its members as well.
• Section 8 company shall enjoy all the privileges and be subject to all the obligations of
limited companies. A firm may also be a member of section 8 company.
• Eligibility to apply for Section 8 Company License
• An individual or an association of individuals are eligible to be registered as Section 8
Company if it has below-mentioned objectives. The objectives must be confirmed to
the satisfaction of the Central Government.
• When the company intends to promote science, commerce, education, art, sports,
research, religion, charity, social welfare, protection of the environment or alike other
objectives;
• When the company holds an intention to invest all the profits (if any) or any other
income generated after incorporation in the promotion of such objects only;
• When the company does not intend to pay any dividend to its members.
• Any failure to meet the prescribed norms formulated by the Central Government may
lead to the closure of the Company on the orders of the Central Government.
• The Companies registered under the Section 8 of Companies Act, 2013 enjoy the
following advantages:
• Access to Tax benefits: Since Section 8 companies are charitable institutions, they
have access to the various exemptions available under the Income Tax Act. Section
80G of the Income Tax Act renders plenty of tax-related benefits to these companies.
• Zero Stamp Duty: The Section 8 Companies are not liable to pay stamp duty on the
Memorandum of Association (MOA) and Articles of Association (AOA), unlike other
entities incorporated under the Companies Act, 2013.
• Minimal share capital: Unlike private limited, public limited, or OPC, a Section 8
company can be set up without the requirement of having minimum paid-up share
capital of the Company.
• Exempted from any name: Section 8 companies do not have the compulsion to affix
the term like Limited or Private Limited in their name. These entities are registered
with limited liability.
• Separate legal entity: Section 8 company possesses a distinct legal status which
implies that entity’s existence is independent of its members. The section 8 entity has
perpetual existence.
• Improved Credibility: The flexible and transparent constitutional framework of
Section 8 companies allows them to garner better credibility than other types of NGOs
such as Society and trust.
• Reliance Foundation, Infosys Foundation, TATA Foundation, Reliance Research
Institute are some commendable examples of successful Section 8 companies
registered in India.
Viii Joint Venture Company
• Joint Venture (“JV”) under the Companies Act 2013, means a joint arrangement
whereby the parties that have joint control of the arrangement have rights to the net
assets of the arrangement.
• In other words, a joint venture may be defined as any arrangement whereby two or
more parties co-operate in order to run a business or to achieve a commercial
objective. This co-operation may take various forms, such as equity-based or
contractual JVs. It may be on a long-term basis involving the running of a business in
perpetuity or on a limited basis involving the realization of a particular project. It may
involve an entirely new business, or an existing business that is expected to
significantly benefit from the introduction of the new participant. A JV is, therefore, a
highly flexible concept. The nature of any particular JV will depend to a great extent
on its own underlying facts and characteristics and on the resources and wishes of the
involved parties. Overall, a JV may be summarized as a symbiotic business alliance
between two or more companies whereby the complimentary resources of the
partners are mutually shared and put to use.
• Formation of joint venture is an effective business strategy for enhancing marketing,
positioning and client acquisition which has stood the test of time. The alliance can be
a formal contractual agreement or an informal understanding between the parties.
• Joint ventures in India are used across sectors; however, they are more prevalent in
high-technology, high-capital or high-technical skills sectors. For example, joint
ventures are very prevalent in insurance, asset management, oil and gas, and
infrastructure sectors, and following the liberalisation of the defence sector, we are
also seeing some movement in defence sector joint ventures. In addition to joint
venture parties working together to increase synergy, some of these joint ventures
are governed by the rules prescribed under a particular statute and generally, as
prescribed by exchange-control laws.
• The following are the main advantages for a foreign investor choosing a JV structure
while entering India:
• Access to the established distribution and marketing channels of the Indian partner;
• Access to the available financial resources of the Indian partners; and,
• Access to the established contacts of the Indian partners, which will help ease the
process of setting up operations in India.
• Some examples of successful JVs in India are Bharti-AXA General Insurance Co.
Ltd. (Joint Venture between Bharti Enterprises and insurance major from France,
AXA), Mahindra-Renault Ltd. (Joint Venture between Mahindra & Mahindra and
world-renowned vehicle maker, Renault SA of France), Tata Starbucks Pvt. Ltd (Joint
Venture between Tata Global Beverages, a division of Tata Sons and Starbucks
 Corporation, USA) and Tata SIA Airlines Ltd (With the brand name Vistara), a JV
between Tata Sons and Singapore Airlines (SIA).
Ix Non-Governmental Organizations
• Non-Governmental Organizations or NGO are the organizations which are formed
with the objective of managing different types of activities which aim to benefit the
society at large especially for the underprivileged people.
• NGOs could be formed in various forms of organizations and every form of
organization has a different kind of requirements for its formation.
• NGOs can be in the form of Trust, registered under Trust Act 1882, Society to be
registered under Societies Registration Act, 1860, or Section 8 Company to be
registered under Companies Act, 2013. Apart from the big manufacturing units and
Multi-National Companies, NGOs are also contributing to the social development of
India.
• Therefore, the Role and Functions of NGOs in India are very important for the growth
of the country as a whole.
Roles and Functions of NGO
• NGOs are Non-Governmental Organizations that are involved in carrying out a wide
range of activities for the benefit of underprivileged people and the society at large.
They work for the welfare of society at large. Following are some of the functions of
an NGO:
• Eradication of Poverty
• Promote Education
• Protection of Environment
• Environment Conservation
• Wildlife Conservation
• Awareness about human rights
• Providing Health and Nutrition
• Providing Food and Shelter
• Old Age homes
• Adoption homes
• Homes for Women
• Sanitation and Hygiene
• Animal Rights
• Disease Control and Others
• Women Empowerment
• The members of NGOs work with the objective of charitable motive only, there is no
self-interest involved, as the main aim of NGOs in India is to serve the underprivileged
people. However, these organizations have to comply with the rules and regulations
as are framed by the Government of India.
• The functions of non-governmental organizations (NGOs) play an important role in
advancing our country’s socio-economic development. However, due to its enormous
democracy, there are still a number of challenges and millions of individuals that
require access to exercise their rights.
 • Benefits of establishing a NGO are as follows:
• Tax waiver from tax authorities.
• Status of autonomous legal identity.
• Access to government funding as well as funds of private avenues.
• No minimum capital requirements.
• Ease of transferring ownership or title.
• Serves long service life.
• National and Cross border collaborations.
• CRY (Child Rights and You), Smile Foundation, Goonj and Helpage India are examples
of some prominent NGOs working for social welfare in India.

Q-6) What are the similarities and differences between entrepreneurs and mangers?

Differences between Entrepreneur and Manager are as follows:

Particulars Entrepreneur Manager

It refers to persons who establish a They are individuals responsible for

Meaning company or enterprise and takes a administering and controlling a group

financial risk to get profits. of people in the company or enterprise.

They are visionaries who convert

Position in the They are the employees of the
an idea into a business. They are
company company.
the owners of the company.

Focus They focus on business startups. They focus on ongoing operations.

They bear all financial and other

Risk They do not bear any risks.
risks.
 They focus on starting the
They focus on the daily smooth
Focus business and expanding the
functioning of the company.
company.

Their key motivation is the Their motivation comes from the

Motivation
achievements of the company. power that comes with the position.

Their reward is the profit they Their reward is the salary they draw
Reward
earn from the company. from the company.

Their approach to every problem is

They can be casual in their role
Approach formal, and they take a scientific
and have an informal approach.
approach.

They are risk-takers. They take They are risk-averse. Their job is to
Nature of
calculated risks to drive the maintain the status quo of the
decisions
company. company.

Decision making The decisions tend to be intuitive. The decisions are calculative.

They do not need to be specialised They are trained to perform tasks and
Specialisation
in any particular trade. are specialists in their domain.

Similarities between Entrepreneurs and Mangers are as follows:

• The traits of an entrepreneur should play the compatible role in the business
management like a manager. They should share the compatible characteristics to the
business community.
• Entrepreneurship and management are both concerned with business growth, no matter
the growth is in a short or long run. The growth of business is crucial for both of them,
since entrepreneurs want to grow bigger their wealth as well as social reputation, and
managers want to promote their way to a better success.
• Entrepreneurship and business managers are both decision makers. The entrepreneur
makes the final decision-making for the overall business project; but the manager makes
some important decision makings in some details prior to the final judgment. For
example, managers could make decisions in human resources in the organization.
• They both have the similar way to manage the team and project the target. That is
maybe the entrepreneur had used to play a manager role in another entrepreneur's
company and receive the similar approach or experience as what the current manager
does.
• They should also have the similar quality of occupation. They should present a sort of
powerful culture. They should react to public as a quick listener and a great
communicator. A successful entrepreneur doesn't necessary to learn a second language,
but he or she must literally understand what a foreigner is trying to talk, even the
foreigner holds a broken accent. But once the foreigner has a clearly mind and knows
what to talk, a standard entrepreneur or manager should be at least expressed as
understandable, rather than reacted like a person who‘s not well educated.

Q-7) Describe 7M resources

The 7 M resources are as follows:

a) Man

• Man in management is referred as a human resource.

• Even in the automated world no organization can flourish without human resource.
• For instance, aviation Industry may have automated aircraft still it needs flight crew to
cater & assist the needs of their boarded air travellers.
• In terms of management recruitment, selection, training promotion, grievances handling,
payment of compensation gratuity, termination of services are the few issues that have
to be dealt effectively to retain the talent within an organization.

b) Material

• Material is a basic ingredient in management be it a service industry or a product industry.

• Most of the industries locate them self-nearby to the availability of material.
• For instance, a mineral water factory in India are mostly located in the Himalaya where a
fresh source of water, which is also a raw material to these companies are available.
• Similarly, services industries such as banking Insurance Hair Dressing Saloons etc. are
located near its existing and prospective clients.
• Perishable products such as dairy products locate themselves where well-connected
transportation and distribution facilities are available.

c) Machine

• Machine are the basic tools to produce goods or to generate services.

• Selection of an appropriate machine not only enhances efficiency but also saves times
and increases revenue.
• Tailoring the requirement of the organization, Selections of a right technical machine and
equipment, availability of spare parts, evaluation of after sales services, substitutes and
technology and the organization budget are the crucial criteria while purchasing a
machine.
• Maintenance and overhauling issues along with its life span also cannot be overlooked.
• In service Industry Technology matters a lot these days we are having Computers &
peripherals as a major machine to serve the service clients.

d) Money

• Money issue in management involves right from where an enterprise is established and
the owner brings money in the business.
• Various long term and short-term sources of finances are determined, Loans and
advances are taken management is done to meet day to day business requirements and
the funds involved in meeting those requirements are known as working capital.
• Investments in assets patents are done and proposals are screened according to the
payback period.
• In payback period only those investments are preferred which returns the invested
money in less time span.
• Similarly, there are other criteria of evaluating investments such is Internal Rate of
Return where only those investments are selected which has higher returns.
• Similarly, proposals are also screened on the basis of Net present Value which asserts
that a value of a rupee will worth a penny tomorrow.

e) Method-

• Everything has a right way to do and this right way is known as a Method in
management.
• In short it means an art of doing.
• A set of procedures and instructions is known as a method.
 • For instance, to obtain a credit card a customer follows a following series of steps filling
a credit card application, attaching required documents and submitting to a bank
representative.
• While processing the credit card application the form filled by the customer is checked.
Documents are verified and customer verification is done . credit card is dispatched by
generating pin to a courier company for the final delivery to the customer and records
are maintained. All these standard procedures are known as method in management.

f) Management-

• The functions of management involves planning controlling leading organising decision

making of business areas in Marketing, Production, Sales, Research & Development,
Human Resource, finance, Operations Etc.
• It includes Business tactics and strategy application.
• Few traditional management most heard are Strike when then iron is hot, No free lunch,
etc.
• There are various levels of management Top level takes all major and crucial decisions
and frames organization mission ,vision and objectives .
• Middle level management gives direction to lower-level management of how to
implement those business objectives. Policies are framed and work method are
determined to get set and Go.

g) Moral Values

• Every enterprise exist in a society and must conduct business by fair means.
• It must include the welfare of its stakeholders (also known as Corporate Governance) like
shareholders, buyers suppliers, employees. The paramount consideration of welfare must
not be overlooked in the blind race of profit making.
• Government policies rules and regulations also governs this aspect of management.
• Legal penalties against violation of corporate law are framed and it is an obligatory
requirement to abide by these laws and regulations if an organization wants to exist in a
society.

Q-8) Write a Note on Micro, Small, Medium Enterprises (MSME)

• Micro, Small, Medium Enterprises (MSME’s) are entities that are involved in production,
manufacturing and processing of goods and commodities.
• The concept of MSME was first introduced by the government of India through the Micro,
Small & Medium Enterprises Development (MSMED) Act, 2006.
Classification of MSME’s

• MSME’s are classified as per their turnover and investment. The new classifications as per
the Aatma Nirbhar Bharat Abhiyan Scheme in 2020 is given in the table below:

Micro, Small and Medium Enterprises Classification 2020

Size of the Enterprise Investment and Annual Turnover

Micro Investment less than Rs. 1 crore

Turnover less than Rs. 5 crore

Small Investment less than Rs. 10 crore

Turnover up to Rs. 50 crore

Medium Investment less than Rs. 20 crore

Turnover up to Rs. 100 crore

• The Ministry of Micro, Small and Medium Enterprises, a branch of the Government of
India, is the apex executive body for the formulation and administration of rules,
regulations and laws relating to micro, small and medium enterprises in India. The
Minister of Micro, Small and Medium Enterprises is Nitin Gadkari and the Minister of State
is Pratap Chandra Sarangi since 31 May 2019.
• Under the Micro, Small and Medium Enterprises Development Act, 2006, the Government
of India established The National Board for Micro, Small and Medium Enterprises
(NBMSME) to examine the factors affecting promotion and development of MSME. This
board also reviews the existing policies and suggests recommendations to the
Government for the growth of the MSME sector
• The services provided by the Ministry of MSME are as follows:

✓ Facilities for testing, training for entrepreneurship development

✓ Preparation of project and product profiles
✓ Technical and managerial consultancy
✓ Assistance for exports
✓ Pollution and energy audits.
 • Importance and Features of MSME’s
• The MSME sector is considered the backbone of the Indian economy that has contributed
substantially to the economic development of the nation. It generates employment
opportunities and works in the development of backward and rural areas. India has
approximately 6.3 crore MSMEs.
• In addition, due to the following features, they are considered a viable source of income
for those looking to venture into the manufacturing industry
• Export Promotion and potential for Indian products

▪ Funding – Finance & Subsidies

▪ Government’s Promotion and Support
▪ Growth in demand in the domestic market
▪ Less Capital required
▪ Manpower Training
▪ Project Profiles
▪ Raw Material and Machinery Procurement
• MSMEs contribute to approximately 8% of India’s GDP, employ over 60 million people,
have an enormous share of 40% in the exports market and 45% in the manufacturing
sector. Hence, they are of paramount importance for overall economic development of
India.

Q-9) State the MSME Industry Registration Process

MSME Registration In India: The Procedure

Every company in India must be registered with the respective authorities to start business
operations offline or online. However, the online registration process called Udyam registration
is faster and more effective for MSMEs.

Step 1: Visit The Official Website

Head over to the official website of Udyam registration- https://udyamregistration.gov.in/.

Navigate to the section “Welcome to Register Here” and click on the option “For New
Entrepreneurs” who are not registered as MSMEs or those with EM-II.

Step 2: Personal Information

A new window will open where you will be required to enter your twelve-digit Aadhaar number.
Once entered, click “Validate & Generate OTP '' and enter the OTP you receive on your Aadhar-
linked mobile number.
Step 3: PAN Number

The entrepreneur must enter the “Type of Organisation” and the PAN Number and click on the
“Validate PAN” button. The portal gets the PAN details from the government databases and
validates the PAN number of the entrepreneur.

Step 4: Correspondence

After verification of PAN, the Udyam Registration form will appear, and the entrepreneurs need
to fill in their personal details and details of their enterprise.
Step 5: Approval

Enter the investment and turnover details, select the declaration, and click on the “Submit and
Get Final OTP” button. The OTP is sent, and after entering the OTP and submitting the form,
the Udyam Registration Certificate will be sent through email. Entrepreneurs can also find
out the MSME registration status from the Udyam Registration Portal.
Q-10) Write a note on Startup India

• Startup India was a campaign that was first addressed by the PM Narendra Modi on 15th
August 2015 at Red Fort, New Delhi.
• This campaign was introduced under the Government of India as an initiative to develop
over 75 startup support hubs in the country.
• Startup India scheme is an important government scheme that was launched on 16th
January 2016 with an aim to promote and support the start-ups in India by providing bank
finances.
• It was inaugurated by the former finance minister, Arun Jaitley.
• Organized by the Department for promotion of industry and internal trade, the major
objective of Startup India is to discard some of the restrictive States Government policies
which include:

1. License Raj
2. Land Permissions
3. Foreign Investment Proposals
4. Environmental Clearances
• The Startup India scheme is based majorly on three pillars which are mentioned below:

1. Providing funding support and incentives to the various start-ups of the country.
2. To provide Industry-Academia Partnership and Incubation.
3. Simplification and Handholding.

Eligibility Criteria for Startup India scheme

An entity is eligible to apply when:

• It is incorporated as a private limited company or partnership firm or a limited liability

partnership in India
• It has less than 10 years of history i.e. less than 10 years have elapsed from the date of
its incorporation/registration
• The turnover for all of the financial years, since the incorporation/ registration has
been less than INR 100 crores
Startup India Benefits

• After the launch of the Startup India scheme, a new program was launched by the
government named the I-MADE program which focused on helping the Indian
entrepreneurs in building 1 million mobile app start-ups.
• The government of India had also launched the Pradhan Mantri Mudra Yojana which
aimed to provide financial supports to entrepreneurs from low socioeconomic
backgrounds through low-interest rate loans. Some of the key benefits of Startup India
are as follows:

1. To reduce the patent registration fees.

2. Improvement of the Bankruptcy Code ensuring a 90-day exit window.
3. To provide freedom from mystifying inspections and capital gain tax for the first 3
years of operation.
4. To create an innovation hub under the Atal Innovation Mission.
5. Targeting 5 lakh schools along with the involvement of 10 lakh children in innovation-
related programs.
6. To develop new schemes that will provide IPR protection to startup firms.
7. To encourage entrepreneurship throughout the country.
8. To promote India as a start-up hub across the world.

Government Measures to Promote Startup Culture in the Country

• As part of the “Make in India” initiative, the government proposes to hold one Start-Up
fest at the national level annually to enable all the stakeholders of the Start-up ecosystem
to come together on one platform. You can know in detail about the Make In India
program on the linked page.
• Launch of Atal Innovation Mission AIM – to promote Entrepreneurship through Self-
Employment and Talent Utilization (SETU), wherein innovators would be supported and
mentored to become successful entrepreneurs. It also provides a platform where
innovative ideas are generated. Relevant details on Atal Innovation Mission AIM are
available on the linked page.
• Incubator set up by PPP – To ensure professional management of Government-sponsored
or funded incubators, the government will create a policy and framework for setting-up
of incubators across the country in public-private partnerships. The incubator shall be
managed and operated by the private sector. Read more on Public-Private Partnership on
the link provided here.

• 35 new incubators in existing institutions. Funding support of 40% shall be provided by

the Central Government, 40% funding by the respective State Government and 20%
funding by the private sector for establishment of new incubators.
 • 35 new private sector incubators. A grant of 50% (subject to a maximum of INR 10 crore)
shall be provided by Central Government for incubators established by the private
sector in existing institutions.
• A Startup India Seed Fund Scheme has been implemented with effect from April 1, 2021.
The scheme aims to provide financial assistance to startups for proof of concept,
prototype development, product trials, market entry and commercialisation.

Startup India – State Rankings

States’ Startup Ranking Framework is an evolved evaluation tool aimed to strengthen the
support of States and UTs to holistically build their startup ecosystems.

The rankings are based on the criteria of policy, incubation hubs, seeding innovation, scaling
innovation, regulatory change, procurement, communication, North-Eastern states, and hill
states.

Q-11) What is the registration process for Start Up India?

Step 1: Incorporate your Business

• You must first incorporate your business as a Private Limited Company or a Partnership

firm or a Limited Liability Partnership.

• You have to follow all the normal procedures for registration of any business like

submitting the registration application and obtaining the Certificate of

Incorporation/Partnership registration.

• You can incorporate a Private Limited Company or a Limited Liability Partnership

(LLP) by filing the registration application to the Registrar of Companies (ROC) of your

region.

• You can establish a Partnership Firm by filing the application for registration of your

firm with the Registrar of Firms of your area.

• You need to submit the required documents and fees to the Registrar of Companies or

Registrar of Firms along with the registration application.

Step 2: Register with Startup India

• Then the business must be registered as a startup.

• The entire process is simple and online.

• Visit the Startup India website and click on the ‘Register’ button as shown below.
• Enter your name, email ID, mobile number, password and click on the ‘Register’ button.
 • Next, enter the OTP which is sent to your email and other details like, the type of user,

name and stage of the startup, etc and click on the ‘Submit’ button. After entering these

details, the Startup India profile is created.

• Once, your profile is created on the website, startups can apply for various acceleration,

incubator/mentorship programmes and other challenges on the website along with

getting access to resources like Learning and Development Program, Government

Schemes, State Polices for Startups and pro-bono services.

Step 3: Get DPIIT Recognition

• The next step after creating the profile on the Startup India Website is to avail the

Department for Promotion of Industry and Internal Trade (DPIIT) Recognition.

• This recognition helps the startups to avail benefits like access to high-quality

intellectual property services and resources, relaxation in public procurement norms,

self-certification under labour and environment laws, easy winding of company, access

to Fund of Funds, tax exemption for 3 consecutive years and tax exemption on

investment above fair market value.

• For getting DPIIT Recognition, log in with your registered profile (account) credentials on

the Startup India website and click on the ‘Apply for DPIIT Recognition' option under the

‘Recognition’ tab.
• On the next page, click on ‘Apply as Company or LLP’ or ‘Apply as Partnership Firm’.
When clicked on the ‘Apply for Company or LLP’ button, it will redirect to the National

Single Window System (NSWS) website.

• Companies and LLPs should register on the NSWS website and add form ‘Registration as

a Startup’ to get DPIIT recognition.

 • The ‘Startup Recognition Form’ page is as shown below.

Step 4: Recognition Application

• On the ‘Startup Recognition Form’, you need to fill the details such as the entity details,

full address (office), authorised representative details, directors/partner details,

information required, startup activities and self-certification. Click on the plus sign on

the right-hand side of the form and enter each section of the form.
• After entering all the sections of the ‘Startup Recognition Form’, accept the terms and

conditions and click on the ‘Submit’ button.

Step 5: Documents for Registration

• Incorporation/Registration Certificate of your startup

• Proof of funding, if any

• Authorisation letter of the authorised representative of the company, LLP or

partnership firm

• Proof of concept like pitch deck/website link/video (in case of a validation/ early

traction/scaling stage startup)

• Patent and trademark details, if any

• List of awards or certificates of recognition, if any

• PAN Number

Step 6: Recognition Number

• That’s it! On applying you will get a recognition number for your startup. The certificate

of recognition will be issued after the examination of all your documents which is

usually done within 2 days after submitting the details online.

• However, be careful while uploading the documents. If on subsequent verification, it is

found to be obtained that the required document is not uploaded/wrong document

uploaded or a forged document has been uploaded then you shall be liable to a fine of

50% of your paid-up capital of the startup with a minimum fine of Rs. 25,000.
Step 7: Other Areas

Patents, trademarks and/or design registration: If you need a patent for your innovation or a

trademark for your business, you can easily approach any from the list of facilitators issued by

the government. You will need to bear only the statutory fees thus getting an 80% reduction in

fees.

Funding: One of the key challenges faced by many startups has been accessing finance. Due to

lack of experience, security or existing cash flows, entrepreneurs fail to attract investors.
Besides, the high-risk nature of startups, as a significant percentage fail to take off, puts off

many investors.

In order to provide funding support, the Government has set up a fund with an initial corpus of

INR 2,500 crore and a total corpus of INR 10,000 crore over a period of 4 years (i.e. INR 2,500

crore per year). The Fund is in the nature of Fund of Funds, which means that it will not invest

directly into Startups, but shall participate in the capital of SEBI registered Venture Funds.

• Self Certification Under Employment and Labour Laws: Startups can self certify under

labour laws and environment laws so that their compliance costs are reduced. Self-

certification is provided to reduce regulatory burden thereby allowing them to focus on

their core business. Startups are allowed to self-certify their compliances under six

labour laws and three environment laws for a period of 3 to 5 years from the date of

incorporation.

Units operating under 36 white category industries as published on the website of the

Central Pollution Control Board do not require clearance under 3 environment-related

Acts for 3 years.
 • Tax Exemption: Startups are exempted from income tax for 3 years. But to avail

these benefits, they must be certified by the Inter-Ministerial Board (IMB). The Startups

incorporated on or after 1st April 2016 can apply for the income tax exemption.

Q-12) Write a note on Standup India

• The Stand Up India scheme aims at providing people belonging to the scheduled caste or
scheduled tribe or women of the country a loan between Rs.10 lakhs to Rs.1 crore, based
on their requirement.

• The aim is to promote entrepreneurship among them.

• Under the scheme, 1.25 lakh bank branches would each be expected to lend money every
year to at least one Dalit or tribal entrepreneur and one woman entrepreneur in their
service area.

Key Features of the Stand Up India Scheme:

• The Prime Minister of India, Mr Narendra Modi launched the Stand Up India Scheme in
April 2016, encouraging people from the scheduled caste and scheduled tribes and
women across the country to become entrepreneurs by loaning them a sum of money to
start a business.

Given below are the key features of the Stand Up India scheme:

• The scheme is part of an initiative by the Department of Financial Services (DFS),Ministry

of Finance to promote entrepreneurial projects.
• An amount ranging from Rs 10 lakhs to Rs.1 crore to be provided as a loan, inclusive of
working capital for setting up a new enterprise.
• The scheme states that each bank branch needs to facilitate two entrepreneurial projects
on an average. One for SC/ST and one for a woman entrepreneur.
• A RuPay debit card would be provided for the withdrawal of credit.
• Credit history of the borrower would be maintained by the bank so that the money is not
used for any personal use.
• Refinance window through Small Industries Development Bank of India (SIDBI) with an
initial amount of Rs.10,000 crore.
• Under this scheme, through NCGTC, creation of a corpus of Rs.5000 crore for credit
guarantee.
 • Supporting the borrowers by providing comprehensive support for pre-loan training like
facilitating the loan, factoring, marketing, etc.
• A web portal has been created to assist people for online registration and support
services.
• The main purpose of this scheme is to benefit the institutional credit structure by reaching
out to the minority sections of the population by initiating bank loans in the non-farm
sector.
• The scheme will also be an advantage for the ongoing schemes of other Departments.
• The Stand Up India scheme will be led by Small Industries Development Bank of India
(SIDBI) along with the involvement of the Dalit Indian Chamber of Commerce and Industry
(DICCI). Along with DICCI, there will also be involvement of other sector-specific
institutions.
• The designation of Stand Up Connect Centres (SUCC) will be provided to SIDBI and
National Bank of Agriculture and Rural Development (NABARD)
• An initial amount of Rs.10,000 crore will be allotted to the Small Industries Development
Bank of India (SIDBI) to provide financial aid.
• There will be a pre-loan and an operational phase for this scheme and the system and
Officials tend to help people throughout these phases.
• To help the credit system reach out to the entrepreneurs, the margin money for the
composite loan will be up to 25 per cent.
• The people who apply for this scheme will be familiarised with the online platforms and
other resources of e-marketing, web-entrepreneurship, factoring services and
registration.

Convergence and Inter-Sectoral Linkages In The Scheme:

• At the launch of this scheme, 5100 E-Rickshaws were distributed by Bhartiya Micro Credit
(BMC) under the Pradhan Mantri Mudra Yojna scheme.
• In addition to getting a loan under the Stand Up India Scheme, the recipients will also be
covered under Pradhan Matri Jan Dhan Yojna, Pradhan Mantri Jeevan Jyoti Bima Yojana,
Pradhan Mantri Suraksha Yojana, Atal Pension Yojana schemes, and other eight significant
Prime Minister schemes.
• BMC – Bhartiya Micro Credit, aims to spread awareness of the financial inclusion and
social security schemes and proposes to take the benefits to poor and homeless people
in the country.
• The idea is to facilitate the up-gradation of pedal rickshaw pullers into E Rickshaw owners
and help create a threefold increment in their income.
• The Mudra scheme is responsible for providing credit for all the facilities under this
program.
• The shift from pedal rickshaw to E rickshaw will also help contribute towards achieving
the goals of Swachh Bharat Abhiyan.
 • Under the scheme, charging and service station will also be set up, which will help the
growth of the emergence of small and micro enterprises along with creating many
opportunities for entrepreneurs.
• This organically integrates Bhartiya Micro Credit (BMC) E-Rickshaws program into the
‘Stand Up India’ initiative.
What is the need for this scheme?

• At present, only established cities get encouragement from the establishment of new
industries. But once this scheme is launched, the new industrial activity will be triggered
by 2.5 lakh people and 1.25 places across the country every year.

• Bank nationalisation was done in the name of the poor, but for the first 70 years after
Independence, nearly 40 per cent of the population did not have access to banking
services

• The idea is to provide finance and loans to not only big businesses but also to the common
man.

Eligibility Criteria: Stand Up India Scheme

There are certain eligibility criteria that need to be fulfilled by the people applying for the loan:

1. The individual must be 18 years or above

2. The company must be a private limited/LLP or a partnership firm.
3. The turnover of the firm must not be more than 25 crores
4. The entrepreneur should either be a woman for a person belonging to scheduled caste or
scheduled tribe category.
5. The loan will only be provided to fund greenfield projects i.e., the project must be a very
first one being undertaken under the manufacturing or service sector.
6. The applicant must not a bank or any other Organisation’s defaulter.
7. The company should be dealing with any commercial or innovative consumer goods. An
approval of DIPP is also required for the same.

Benefits of Stand Up India Scheme

• When the Government comes up with a scheme, its main aim is to benefit the citizens
and the same is the case with the Stand Up India scheme. Given below are the benefits
of launching the Stand-Up India scheme:
 • The basic aim of the initiative is to provide encourage and motivate new entrepreneurs
so as to minimize unemployment.
• If you are an investor then Stand Up India gives you the right platform where you get
professional advice, time, and knowledge about laws. Another benefit is that they would
assist you in the start-up for the initial two years of your work.
• They also provide post set up aid to the consultants.
• Moreover, another benefit for entrepreneurs is that they do not have to worry much
about how to pay back the amount that they have taken for the loan as they need to pay
back the loan in a span of seven years, which reduces the stress of repayment for the
borrowers. However, a certain amount needs to be paid back each year as per the
borrower’s choice.
• This scheme will help to eradicate legal, operational and other institutional obstacles for
entrepreneurs as well.
• It can be a very positive boost in terms of job creation, leading to socio-economic
empowerment of Dalits, tribals and women.
• It may also act as the driving force for other Government schemes like ‘Skill India’ and
‘Make in India’.
• It will help protect the demographic dividend in India
• With access to bank accounts and technological education, it will lead to financial and
social inclusion of these strata of society.
Q-13) Write a note on SSIP Gujarat

• The Student Startup and Innovation Policy (SSIP) 1.0 launched by the Government of
Gujarat has been successful in promoting entrepreneurship and innovation among
students.

• The policy has helped create a favorable environment for startups to grow and thrive in
the state. Here are some of the key success numbers of SSIP 1.0 in Gujarat:

✓ Students Outreached- 1.28 Lakhs

✓ Startups Supported- 2317
✓ PoC Supported- 6966
✓ IPs Filed- 1384
✓ Universities/Institutes Grantees- 186
• Overall, the SSIP 1.0 policy has been a significant success in Gujarat, and it has helped
create a culture of innovation and entrepreneurship among students.

• The program has not only created job opportunities but has also contributed to the
economic growth of the state.
 SSIP 2.0

• The Student Startup and Innovation Policy (SSIP) 2.0 is the updated version of the SSIP 1.0 policy
launched by the Government of Gujarat in January 2022.

• The policy period is of 5 years (January 2022 – March 2027).

• The aim of SSIP 2.0 is to build on the success of the previous policy and take it to the next level
by providing more comprehensive support to the startups and entrepreneurs in the state.

• The policy a provides funding assistance, mentorship, incubation, and accelerator support to
the student startups, along with access to industry networks and global markets.

• The SSIP 2.0 policy has also introduced a new concept of Innovation and Entrepreneurship
(iHub), which is acting as a one-stop-solution for sector-wise startups and entrepreneurs.

• These hubs will provide state-of-the-art facilities, including co-working spaces, labs, and
incubation centers, to the startups.

• The policy aims to create an innovation-driven ecosystem in the state and develop a culture of
entrepreneurship among students. It seeks to foster innovation, creativity, and collaboration
among startups, industry, academia, and government.

• Overall, the SSIP 2.0 policy is a step towards creating a robust startup ecosystem in Gujarat and
providing a platform for young entrepreneurs to realize their dreams.

• It is expected to have a significant impact on the economic growth of the state by creating job
opportunities, promoting innovation-led development, and attracting investments in the
startup sector.

Goals and Objectives

• Outreach and sensitize 5 million students for innovation and entrepreneurship, covering at least
1000 Higher Educational Institutions (HEIs) and 10,000 Schools of the State.
• Support to 10,000 student-led Proof-of-Concepts (PoCs/Prototype).

• Assistance to 5000 IP filings.

• Build capacity for at least 500 educational institutions and universities in the State, to
have a robust preincubation support system for beneficiaries.

• Nurture 1000 school student-led innovations

• Groom 1500 student Start-ups and upscale existing Start-ups.

• Incubate 500 Start-up (physical and virtual).

• Support to 500 Start-up under Start-up Srujan Seed Support (Up to INR 10 Lac).

• For effective implementation of the Policy, Gujarat Knowledge Society (GKS) will be the
nodal agency and state PMU for the Policy. The SLAC and the PIC shall direct the state
PMU and 4 PMUs for realization of Goals and Objectives of the Policy.
 LECTURE
NOTES

ENTERPRENEURSHIP AND STARTUPS

CO-2 : Business Ideas and their Implementation
Q-1) What are the different methods of Idea Generation?

• Idea generation is described as the process of creating, developing an abstract concrete or visual
ideas and anyone can participate in generating new ideas.
• Some of the techniques of idea generation are as follows:
1) Focus Group:
• In this method a group of individuals discuss and provide information in a structured format to
arrive at new business ideas.
• A leader or a moderator sits with group of people and discussions are held in a free frank manner
regarding new ideas for industries or services.
i) Leader acts as a moderator of creative thinking of focus group.
ii) The group generally consists of 10 to 14 participants and all members take part in the
discussions.
iii) The new ideas are directed towards market needs of today and needs of tomorrow.
iv) The groups consisting of end users generally give for new products.
v) The groups also give how the product should be marked, how should be packaged and how
the advertisement be made.
• The data received from various groups may be analyzed on realistic basis or quantitatively to
short the new ideas.

Use: The method is generally used for choosing apparel designs, jewellery designs, cosmetics,
health care products and the like.

Applicability: For generating new ideas the method of discussion with focus groups is less time
consuming and a practical approach.

2) Brainstorming:
• Brainstorming is a group method for obtaining new ideas and business solutions.
• The groups are organized for sitting together and stimulate greater creativity by exchange of
mutual experiences and participating in the discussions.
• The brainstorming ideas are canalized to a particular segment of product line or services. The
method of conducting brainstorming sessions are:

i) The group should be informed of the broad areas of the subject or area of discussions.
ii) The group should consist of people drawn from different streams of knowledge such as
marketing, production, quality control, planning, finance, costing, stores, handling, taxation and
the like. The group also should consist of different levels of officers, supervisors from the
organization.
 iii) The brainstorming session should be held in a good place with ambience. So, that the group
coms open with their ideas.
iv) The member should have no inhibitions about their status in the organization or department
where they serve. The session should be frank and be fun. The brainstorming sessions are held
where no individual or group dominate the discussions and no boss- subordinate relationships.
v) Day dreaming or wild ideas to be encouraged.
vi) There should not be any negative comments or criticism against any particular individuals or
groups or departments,
vii) The ideas of one can be improved by others but no repetition of ideas. Each individual may
be given a chance to three ideas and these ideas be recorded on a flip chart or black board. All
the ideas be recorded on the flip chart even if one idea is not practical or ill-logical.

Based on the above broad ideas a general format can be evolved, wherein the brainstorming
sessions could bring greater number of ideas and hence chances of emergence of more useful
ideas.

Applicability: This method is extensively used for generating ideas for new product packing and
distribution.

Reserve Brainstorming: A method similar to brainstorming is used wherein criticism is allowed

for obtaining new ideas. In this method the focus is given on the negative aspects such as, “ how
the idea fails” or “why the product be changed.” By asking questions the new ideas are
generated by innovative thinking. The way of negating and generating discussions over the
problems is called Reserve Brainstorming.

3) Check List:
• The new ideas for the business are developed based on discussions on list of related issues.
• A specific area of discussions is listed by entrepreneur and a list of questions, suggestions and
statements are developed for in-depth discussions and arrive at a business idea.
• The type of questions for a particular product may be:
i. Who uses the product? How it is used? Why at all the item is used?
ii. What are the new ways of usage of the product?
iii. Can the product be modified for better value to the customers?
iv. What are substitutes available in the market? How they are competitive? Can we
combine the features to develop a new product?
v. Can a copied and improved product will add value?
vi. Can we modify?
 vii. Can we change the shape, color, packing of the product? Can we make it larger, smaller
or increase frequency or add new ingredients?
viii. Can we bring a substitute product?
ix. Change processes, make it smaller or make it lighter?
x. Use different materials of construction, combine units, change appeal, change purpose,
bring more positive aspects that attract customers?
xi. What products are being used in other countries and why?
xii. What are the new emerging products in the particular product range?

4) Problem Inventory Analysis:

• It is a method of obtaining new ideas and solutions for business by focusing on the problems.
• In this case the individuals are used similar to focus groups for generating new business ideas. The
group discusses a category of products.
i) The group is given the problems that are commonly felt by consumers, dealers, transporters and
general public.
ii) The discussions are more focused and related to a particular product and problem suggested by
many on the particular product.
iii) The method may not give times new, entirely new, product ideas but it may add to the value of
the existing product.
In small business enterprise like small-scale industry or cottage industry the owner himself does the
problem inventory analysis by discussing with his close associates in the organization. The problem
inventory analysis also should take care of the discussions on all the relevant and related aspects and
see that the problem in one area does not become a headache in other areas.
• Gordon Method: When group members do not know the exact nature of the problem the method of
developing new ideas is called Golden Method. In the Golden method the entrepreneur gives thee
general concepts associated with the problem to the group who respond by their suggestions. The
actual problem is revealed to the group at the end of the discussions. With further discussions and
refinements the new ideas for business are generated in the Gorden Method.

5) Synectics:
• Synectics is a creative method of generating new business ideas through one of the four analogy
mechanisms namely direct, personal, symbolic and fantasy.
• A group related to a product work in two steps:
i) Familiarize with the product and thus removing the unknown elements of vagueness about the
products.
 Stage 1
Problem Solution
Problem Analysis
Identify the elements of problems to families’ entities
Stage 2
Use of analogies
Speculation
Fore Fit
Solution
6) Mix of Above Methods:
• An entrepreneur may use one or two of the above discussed methods for generating new business
ideas.
• The product category, consumers segmentation, time frame may force an entrepreneur to resort to
the mix of the above methods to seek new product ideas.
• The recent use of e-commerce and electronic communication methods has the methods of seeking
the new business ideas and squeezing the time frames.
• Any new business idea in e-commerce areas has two major components of internet—front end and
back end operations. Front end operations are mainly concerned with the functionality of the
website.
• The second and important stage is back end operation where it is necessary that there should be
seamless integration between customer orders, distribution channels and manufacturing
capabilities and make them flexible to handle the specific requirements of the customers.
• The challenge is the integration of front end and back end operations to maintain the competitive
advantage.
• The existing companies when they go in for e-commerce as a new area of business development
face few problems such as:

I) The product type should help shipping to different geographical locations.

II) Web operation should bring substantial cost reductions as compared to the present business.
III) Attracting customers to the new web-site.

When a Brick- and –mortar company takes up e-commerce it has to analyze and solve the problems
of cost benefit, synergy of combination of both type of marketing and resolve channel conflicts
between them.
Q-2) What is Product Identification

Awareness: What so ever is needed for you to know, you should collect it.

One has to select the right product ,it involves research,careful evaluation and sound judgement. This
activity is called the product analysis selection technique.

This technique consists of the following steps:

a) Idea Generation
b) Search and Screen
c) Evaluation

a) How Product Idea can be generated?

Product Idea can be generated in a number of ways. They are as follows:

• Observation
• Publication
• Brain Storming Session
• Talking to various bodies like SISI (Small Industries Service Institute),SIDC(State Industries Development
Corportion), The NSIC (national small industries corp. Ltd) and the national institute for
entrepreneurship and small business development.
• Talking to large scale pvt/public companies can also generate ideas.

b) Product Search and Screening:

After an entrepreneur comes up with an product idea, he/she looks at product presently available
related to those product ideas, those pose the exploratory questions:

• Are customers satisfied with what they are getting?

“Are Customers really satisfied with what they are served?-YES/NO”
• Can we identify a better method of production?
“ NEW Machine : 1 Skilled Person,OLD Machine : 10 Skilled Persons”.
• Can the basic design be improved?
Design :When a product really works…
• What is the present demand,future demand likely to be and so on?
• What are the skills needed to polish the production?
Skills can be improved by Training…
• How much knowledge is needed about the market?
As much as you can
c) (i) Product Evaluation Technique
• An entrepreneur takes manufacturing seriously and cannot generate product without making it
flawless from all the viewpoints.
• He makes it a point to evaluate the products objectively and in depth.
(FABing is needed : Features and Benefits to be known)
• This evaluation is carried out on the following factors:
Growth
Stability
Marketability
Company Position
Production

(ii) Process Structure:

• The product development process typically consists of several activities that firms employ in the
complex process of delivering new products to the market.
• Product development often overlaps much with the product design process, particularly if the
new product being developed involves application.
• Process structure can be likewise complex regarding management of personnel,milestones and
deliverables.
• Efficacious projects typically use an integrated product team approach.

(iii) Product Development Process:

The product development process is articulated and broken down in many different ways,many of which
often include the following phases/stages:

• Fuzzy Front End : It is a set of activities employed before the more formal and well defined
requirements specification is completed.
• Product design is the development of both the high level and detailed level design of the product:
which in turn specifies how this particular product will meet those requirements.
• Product implementation: It often refers to later stages of detailed design, where further refinements
of the product takes place.
• Fuzzy Back End : It is also known as the commercialization phase which represents the action steps
where the production and market launch occurs.
(iv) Company Production Factors:

• Degree of value addition: Greater the value addition better the rating, better to carry out the
entire manufacturing process himself rather than sub contracting.
• Availability of Raw material : If crucial raw material and other materials are available during
varying conditions, results in an outcome of good product.
• General Labour Atmosphere : The project should be located in a area of good labour climate.

(v) Production Factors :

• Procurement of equipment : An entrepreneur should make it possible to get machinery and

equipment easily and quickly.
• Utilities/Facilities required : Some projects are highly dependent on clean
water,steam,electricity and good sewage system and if these are not available regularly then
that project would be rated poorly.
• Freedom from maintenance problem: Manufacturing process which is hazardous could affect
the well being of the workplace but also the community at large.

Q-3) Define Business and State its characteristics

It may be defined as an activity in which different persons exchange something of value whether
goods or services for mutual gain or profit.
Characteristics:
• Economic Activity
• Production and procurement of goods and services
• Sale or exchange of goods/services
• Profit earning
• Uncertainty of return
• Elements of risk
• Regularity
• Entrepreneur’s presence.
Q-4) What are different types of Economic/Business Activities

a) Manufacturing :
• Production of merchandise for use/sale using labour and machine, tools, chemical and biological
processing or formulation, may also refer to arrange of human activity, from handicraft to high
tech, but is mostly applied to industrial production, in which raw materials are transfomed into
finished goods on a large scale.
• Such finished goods may be used for manufacturing other, more complex products, such as
aircrafts, household appliances or automobiles,or sold to whole salers,who in turn sell them to
retailers, who them sell them to end users- THE CONSUMERS.
b) Service
• An intangible commodity, a type of activity that is intangible is not stored and does not result in
ownership.
• A Service is consumed at a point of sale. Services are one of the two key components of
economics, the other being goods. Example of services include the transfer of goods, such as the
postal service-delivering mail and the use of expertise or experience such as a person visiting a
doctor.
c) Trading
• It is not a new phenomenon we have been doing it for centuries.
• The trade that occurred the most primitive humans has evolved considerably over time.
• Trading is the process of buying, selling,or exchanging goods or services, the amount of things or
goods that are bought or sold, the money made by buying or selling things or services, the act of
exchanging one thing for another.

Q-5) What is a Business Plan?

• The Business Plan is a comprehensively written down document prepared by the entrepreneur
describing formally all the relevant external and internal elements involved in starting a new
venture.
• It’s a formal statement of a set of business goals, the reasons they are believed attainable and
the plan for reaching those goals along with the background information about the organization
or/and team attempting to reach those goals.
• Thus a business plan is a comprehensive project report which not only encompasses the entire
range of activities which are being planned in the business but also:
i.Helps to understand the feasibility and viability of the proposed venture.
ii.Facilitates in assessing and making provisions for the bottlenecks in the progress and
implementation of the idea.
iii.Discusses the potential for success of the project along with the risk factors involved
Q-6) Why Business Plans are called Decision making tools?
• A Business Plan describes all the necessary inputs for the enterprise.
• It explains the mode of utilization of the resources.
• It does the detailing of the Strategies for the execution of the project.
• It outlines the desired goals.
• It does the assessing of the market sensitivity and profitability of the venture. Thus the content
and the format of the business plan is such which is able to represent all these aspects of the
business planning process.

Q-7) Who Writes a Business Plan and What elements are included in a business plan?

• An Entrepreneur writes a business plan.

• A Business plan represents all the aspects of the business planning procedure declaring vision and
strategy alongside sub plans to cover:
i. Marketing
ii. Finance
iii. Operations
iv. Human Resources
v. Legal Compliance
vi. Intellectual Property Rights etc.

Q-8) State the importance of Business Plan

• The business plan is valuable to the entrepreneur, potential investors, venture capitalists, banks,
financial institutions, new personnel, suppliers, customers, advisors and others who are trying to
familiarize themselves with the venture, its goals and objectives.
• It helps in determining the viability of the venture in a designated market
• It helps in providing a guidance to the entrepreneur in organizing his/her planning activities such
as :
a) Identifying the resources required
b) Enabling obtaining of licenses if required.
c) Working out legal requirement as desired by the government
• It helps in satisfying the concerns, queries and issued of each group of people interested in the
venture.
• Provides room for self assessment and self evaluation,requiring entrepreneur to think through
various scenarios and plan ways to avoid obstacles.
• Though not desirable, at times business plan helps to realize the obstacle which cannot be
avoided or overcome ,suggesting to terminating the venture while still on paper without
investing further time and money.
 • As the investors/lenders focus on the four Cs of Credit, Character, Cash flow and Colletral and
equity contribution, it is the business plan which reflects the entrepreneur’s credit history, the
ability to meet debt and interest payments, and the amount of personal equity invested thus
serving as an important tool in funds procurement.

Q-9) What are the formats of a Business plan?

• The Depth and detail in a business plan depends on the size and scope of the proposed new
venture.
• There is no fixed content for a business plan as it varies according to the entrepreneur’s goal
and audience (i.e. who are being targeted).
• Thus it is common especially for the start ups to have three or four formats as follows for the
same business plan
i. Elevator Pitch: It is a three minute summary of the business plan’s executive summary. This
is often used as a teaser to awaken the interest of potential funders, customers or strategic
partners.
ii. A Pitch deck with oral narrative: A hopeful, entertaining slide show and oral narrative that is
meant to trigger discussion and interest potential investors in reading the written
presentation i.e. the executive summary and a few key graphs showing financial trends and
key discussion making bench mark.
iii. A Written presentation for external stakeholders: A detailed, well written, and pleasingly
formatted plan targeted at external stakeholders.
iv. An internal operational plan: A detailed plan describing planning details that are needed by
management but may not be of interest to external stakeholders.

Q-10) What are the components of a business plan

i. Introductory Profile/General Introduction : This is the title or cover page that provides a brief
summary of the business plan’s contents. The information of general nature contained in the
introductory profile includes:
a) Entrepreneur’s Bio Data:
• Name and address of the promoter
• His/Her qualification
• Experience and other Capabilities
• In case of partners-their names, number, addresses,designation etc. individually
b) Industry’s Profile
• The name and address of the enterprise.
• Telephone Numbers/Fax/E-mail/Website address
• The nature of business
• Any branches/sister concerns.
 c) Constitution and Organization:
The constitution and organizational structure of the enterprise i.e. the legal form of the proposed
enterprise- Sole proprietorship, partnership, Company or any other form, along with registration
details.
d) Product details:
• Product Utility
• Product Range
• Product Design
• Precise USP (Unique Selling Proposition) of the product

(ii) Description of the Business Venture

• This section of the business plan generally begins with the “Mission Statement” by the
entrepreneur describing the size,scope and nature of the enterprise.
• What the Entrepreneur hopes to accomplish with that business along with a clear description
about the following key elements is covered under project description.
i.Site : Location of Enterprise, owned or leasehold land, industrial area, No Objection Certificate
from the Municipal Authorities if required, needs to be determined
ii.Physical Infrastructure : Availability of the following items of infrastructure should be mentioned
in the business plan.
1. Raw material : Whether Indigenous or imported, source of supply etc.
2. Labour : Type of labor required, provision for their training, number of manpower required etc.
3. Utilities : This includes Power, Fuel, Water, Gas, Electricity etc. Business Plan clearly needs to state
-Type of utilities required
-Load Sanctioned
-Sources and quality of water used, quantum of coal, coke,oil etc required and the suppliers for
the same.
4. Pollution Control: The Sewage System, and the sewage treatment plant,water harvesting system,
arrangement for dumping and disposing of the other types of waste or emission all needs to be
discussed in the plan.
5. Transport and Communication System: Requirements for transportation and communication
facilities,modes and means opted for,bottlenecks etc. are duly covered by the business plan.
6. Machinery and equipment : A Complete list of items of machinery and equipment required
indicating their size,capacity,type,cost and sources of their supply should be disclosed.
7. Production Process: A mention of the process involved in the production, the installed licensed
capacity of the plant, the technology to be used, whether available locally or imported,shifts
involved,needs to be present in the business plan.
(iii) Production Plan
• Production, the most important activity of an enterprise, because it is here that transformation of
raw material into finished product takes place with the help of energy, capital, manpower and
machinery.
• Being highly complex and tedious, the manufacturing operation needs to be well planned. No doubt
it will be nature of venture which will decide the magnitude of importance and disclosure required
under the production plan. Most likely there are three situations before the venture viz.
1. No manufacturing involved: If a new venture does not include any manufacturing function,say it’s a
trading firm or a service provider, then this section will stand eliminated from the plan.
2. Partial manufacturing : If some or all the manufacturing process is to be sub contracted or
outsourced, then the production plan should describe:
-Name and location of the subcontractor
-Reasons for their selection
-Cost and time involved.
-Any contracts that have been completed etc. In such cases a clear mention of what entrepreneur
intends to do himself and what he plans to get it done from outside is required.
3. Complete Manufacturing : If the manufacturing is to be carried out in whole by the
entrepreneur,he/she will need to describe:
-the physical plant layout
-the machinery and equipment required to perform the manufacturing operations.
-raw materials and suppliers names,addresses,terms and conditions.
-Cost of manufacturing.
-Any future capital equipment required etc.

OBJECTIVES OF PRODUCTION PLAN:

• Production plan helps to plan the work in such a manner that one can clearly form an idea about:
I.Production Schedule and/or budget
II.Machinery, Equipment requirement.
III.Manufacturing method and process involved.
IV.Plant Layout
V.Time, Motion and Work Study
VI.Manpower Requirement
VII.Inventory Requirement
(iv) Operational Plan

• Operational Plan is a system whereby there is achieved a smooth and coordinated flow of work
within the factory so that by planning and control of all the productive operations in all the stages
of manufacturing , the final product is completed in accordance with the plans.
• Where the Production plans aims at “ Plan your work”, there operation plan ensures “work your
plan”. It is actually a blue print prepared right in advance of actual operations-
• Ensuring orderly flow of materials in the manufacturing process from the beginning (Raw material)
to the end state (Finished Products).
• Facilitating continuous production,lesser work in progress and minimization of wastage.
• Coordinating the work of engineering,purchasing,production,Selling and inventory management.
• Describing the flow of goods/services from production point to the consumers
• Introducing a proper system of quality control.
• Undertaking the best and most economic production policies and methods

OBJECTIVES OF OPERATIONAL PLAN:

I. An operational plan aims in getting desired manufacturing results in terms of

-Quantity
-Quality
-Time
-Place
-Cost
II. The Operational plan in a way is planning:
-For production in advance of Operations
-Establishing the exact route of each individual item,part of assembly.
-Setting starting and finishing dates for each important assignment/work.
-Regulating the orderly movement of goods through the entire manufacturing cycle. i.e. right
from the procurement of all materials to the shipping of finished goods.

ELEMENTS OF OPERATIONAL PLAN

1. Routing : It is a process concerned with determining exact route or path a product/service has to
follow right from raw material till its transformation into finished product.
2. Scheduling: Scheduling, simply means fixation of time, day, date when each operation is to be
commenced and completed. In general. It’s the determination of the time should be required to
perform each operation.
3. Dispatching : The process of initiating production in accordance with pre conceived production
plan is said to be dispatching. This includes issuing necessary orders instructions, guidelines and/or
information to work pertaining to giving practical shape to the production plan.
4. Follow Up : follow up or expediting function relates to evaluation and appraisal of work
performed. A properly planned follow up procedure is helpful in dispatching errors and defects in
the work.
Follow up elements help the entrepreneurs in :
a) Developing ways to review the present situation with regard to materials,work in progress and
finished goods.
b) Evolving ways to expedite the performance of those departments which lag behind.
c) Removing obstacles in the way of production by suggesting remedial measures.
5. Inspection : It is the art of comparing materials,product or performance with established
standards. These elements helps the entrepreneur to set up laboratories or evolve strategies or
methods to ensure predetermined quality of product/service.
6. Shipping: This section goes beyond the manufacturing process and describes the flow of
goods/services from production to the consumers.
This part is a detailed presentation by the entrepreneur explaining the chronological steps in
completing a business transaction efficiently and profitably.Operation plan is greatly affected by :

-Nature of venture
-Type of product/service
-Scale of operation
-Technology involved.

(v) Organizational Plan:

You may start any kind of business, but, surprisingly all of them will fall into one of the four basic
categories:

a) Manufacturing : a business that makes a tangible product

b) Wholesale : a business that buys products in bulk from the manufacturers to be sold in smaller
lot to retailers.
c) Retail- A business that sells directly to the final consumer for final satisfaction.
d) Service- A business that sells intangible such as time or expertise.
Each type of business differs significantly in terms of :
-Commencement procedures
-Legal Constraints
-Financial Requirement
-Accounting methods
-marketing and promotional strategies
-Risk and Liability
 Elements of Organizational Plan:
a) In terms and conditions associated with the selected form.
b) Line of authority and responsibility of members of the new venture.
c) The names, designation, addresses and resumes of the members.
d) Stake of the members in the organization.
e) Roles and responsibilities of each member.
f) Procedure for solving Conflicts/Disputes amongst members.
g) Forms of Payment for the members of the organization
h) Voting rights, managerial and Controlling rights of the members

Importance of Organization Plan:

-Specifying the types of skills needed and the roles that must be filled by the members i.e. helps to
decide the enterprise’s formal organization and

-representing the attitudes, behaviours, dress, communication styles etc, thus chalking out informal
organization or culture.

(vi) Financial Plan

• Finance is one of the most important pre requisites to establish an enterprise. Availability of
finance facilities the entrepreneur to bring together man,material,machines and methods to
produce goods/services.
• The Entrepreneur should develop a sound financial plan discussing :
a) Financial requirements
b) Sources of fund raising
c) Exact assessment of the revenue,cost,profit,cash flow dynamics,stocks of the inventory loans etc.
Financial plan is a projection of key financial data about:
a. The potential investment commitment needed for the new venture
b. Economic feasibility of the enterprise

Elements of Financial plan

• To simplify,the financial plan is so designed that the entrepreneur and the investors could have a
clear picture of :
o How much funds are required?
o Where will funds come from?
o How are they disbursed?
o The amount of cash available
 o General Financial Well being of the new venture i.e. probable revenue forecast for the first year
atleast.

Components of Financial Plan

• Most financial items that should be included in the financial plan are:
o Proforma investment decisions.
o Proforma financing decisions
o Proforma income statements
o Proforma Cash Flow
o Proforma Balance sheet
o Break Even Analysis

• Proforma Investment Decision:

o This part of financial plan relates to how the enterprise’s funds are invested in different assets so
that the enterprise is able to earn the highest possible return in the investment.
o An estimate of various components of capital nature : i.e. fixed assets and of working capital
should be clearly mentioned in this part of financial plan
o Carefully, clearly and sequentially the entrepreneur should mention investment required in for :
i. Land and Building
ii. Machinery and Plant
iii. Installation cost
iv. Preliminary expenses
v. Margin for working capital
• Proforma Financing Decision:
o This section summarizes all the projected sources of funds available to the venture to raise finance
from,which you have already studied.Typically sources of funds are :
i. Owners i.e. Owner’s funds
ii. Outsiders i.e. Borrowed Funds
• Proforma Income Statement:
o The Proforma income statement is the projected net profit calculated from projected revenue
minus projected cost and expenses.
o Basically it summarizes all the profit data during the first years of operations of the new
enterprises.
o In preparing the proforma income statement,’sales by month’shall be calculated first,making use
of the forecasting statement as the basis.
 • Proforma Cash Flow:
o Profit and cash Flow are not the same ,when from sales we subtract expenses,the result is profit
and when from cash receipts we subtract cash payments,the resultant figure is the cash flow.
o Proforma cash flow reflects the projected cash available with the enterprise as a result of
subtracting projected cash disbursements from projected cash accumulations.
o Cash Flows only when actual payments are received or made.Mere sales which might be on
credit,will not generate cash.Similarly all bills are not paid immediately by the enterprises.
• Proforma Balance Sheet
o This Document helps the enterprise to reflect the position of the business at the end of its first
year.
o A summary of the projected assets,liabilities and net worth of the entrepreneur is depicted
through proforma balance sheet.
• Break Even Point
o Every firm wants to maximize its profits. The Break Even Point is that level of volume of
production at which firm neither makes a profit nor loss.
o Here the total revenue is equal to the total cost of a firm, at the given level of capacity.

(vii) Manpower Planning

o Every Organization comes into existence when a number of persons joins hands. All these people
work to achieve the organizational goal set by the entrepreneur.
o Human resource is of paramount importance for the success of any organization.
o Manpower planning thus helps to assess:
• What kind of people are required?
To carry on its work, each organization need personnel with the necessary qualifications, skills,
knowledge, experience and aptitude for work.
• How many people are required?
This questions deals with the quantity of personnel the enterprise needs. The number of people
required for various positions throughout the enterprise gets affected by:
-Total Work to be done.
-How much work can an average person do in a specified period of time.
-Level of Absenteesim expected.
-Rate of labour turnover.
• How will they be selected?
-As the next step in manpower planning, entrepreneur clearly mentions the strategies, methods,
policies, rules and regulations pertaining to personnels:
Recruitment
Selection
Training
 Procurement of right person, at right job, at right time is the objective of human resource plan

(viii) Marketing Plan

• This section goes beyond the production process by describing the market conditions and
strategies related to how:
o Products/services will be distributed.
o Priced
o Promoted
• The marketing plan represents a significant element in the business plan for new venture as it
effectively establishes how the entrepreneur will complete and operate in the market place by
providing answers to three basic questions:
i. Where have we been?
This segment focusses on :
✓ Some History of the market place
✓ Marketing strengths and weaknesses of the new venture.
✓ Market Opportunities and threats.
ii. Where do we want to go?
This primarily addresses the marketing objectives and goals of the enterprise in the next 12 months.
iii. How do we get there?
This question discusess
✓ The specific marketing strategy that will be implemented
✓ When it will occur
✓ Who will be responsible for the monitoring of activities.

STEPS IN PREPARING MARKETING PLAN

1. Business Situation Analysis:

Where have we been -is the question responded to as the first step in designing the marketing
plan.Mostly a review of the past performance and achievement of the enterprise are stated here
in but for a new venture, focus shifts rather towards:
✓ Personal Profile of the entrepreneur
✓ Emphasis on Product development
✓ What ‘need’it satisfies
2. Identify the target market
For a new venture, its very essential to define clearly the specific group of potential customers
whose needs the enterprise aims to fulfill. This identification of the “target market” is pretty
tedious task as it involves:
 ✓ Deciding what the general market or industry entrepreneur wishes to pursue is based,on market
research or industry analysis done and complied with by competent people or the entrepreneurs.
✓ Divide the market into smaller groups based on:
i. Consumer’s Charaterstics viz.
• Geographic (State,Country,Etc)
• Demograhic (Sex,Age, Etc.)
• Psychographics (Personality,Life Style Etc.)
ii. Buying Situations viz.
• Buying Conditions(Time available etc.)
• Usage
• Desired Benefits (Features of Product)
iii. Select Segment or segments to target.
iv. Develop a marketing plan integrating according to product,price,distribution,promotion.
3. Conduct SWOT Analysis:
It is important for the entrepreneur to consider in the ‘target market’ his/her enterprise’s :
✓ Strengths
✓ Weaknesses
✓ Oppurtunities
✓ Threats

Marketing plan needs to consider the above to ensure success.

4. Establish Goals : “ Where do we want to go?” is answered well by establishing –

✓ Realistic,attainable and well defined goals and objectives for the enterprises
✓ Quantifying the goals so that they could be measured for control purposes.
✓ Setting standards to measure those goals which are qualitative in nature.
5. Define Marketing Strategy
How do we get there? Demands specific activities to be outlined to meet the enterprise’s so
established goals and objectives.
The marketing strategy and action plan comprise of decisions pertaining to the following 4 P’s
• Product
• Price
• Promotion
• Place
6. Implementation and Monitoring of the Plan:
Solving a marketing plan is not a mere formality. It is meant to be a commitment by the
entrepreneur to a specific strategy.
It is important for the entrepreneur to be flexible and be prepared to make adjustments if
necessary in the plan.
Assessment of Risk
There are some hazards, risks, or /and obstacles always present in the competitive environment.
In a business plan entrepreneur should:
• Identify potential hazards
• Develop alternative strategies to either prevent or minimize or respond to the risk.

Q-11) Business Oppurtunity Identification and Evaluation

What is an Oppurtunity?

It is a situation that enables an entrepreneur to offer marketable products or services to

interested buyers or end users.

Types of Situational Factors

Product or service is still not in existence

Product or service is already in the market but failed to satisfy the customer-so need to be
improved.

Emergence of Oppurtunity

• When people decide they have certain needs and wants to be satisfied,or when people
discovered a problem of some kind that can be helped by a product or service
• The presence of unfulfilled needs and want and/or problems alerts the entrepreneur to the
potential opportunity.
• The entrepreneur later creates a business that is able to fulfill the needs or want and/or solve the
problem.

Opportunity Identification

It is a process that involved the search for discovery of business oppurtunities.

APPROACH TO OPPURUTUNITY IDENTIFICATION

1. Observe changes in the environment.

2. Recognize a need that customers have that is not being satisfied.
3. Recognize problems and find ways to solve it.

OBSERVING CHANGES IN THE ENVIRONMENT

Changes in the environment gives rise to needs and wants and/or problems, and an opportunity
emerges.
 Important environment forces to observe include:

1. Economic Forces
2. Social Forces
3. Technological Advances
4. Political and Regualtory Statues

Examples of how changes in the Environment provides openings for new product and service
oppurtunties

Recognize Needs and Wants

Oppurtunity occurs whenever there is a need and want to fulfill.The term “need” refers to basic
needs that the consumer must have in order to live while the term “wants” refers to personal
desire for something that is more than a basic need.

Recognize Problem and find solution

Problems can be recognized by observing the challenges that people encounter in their daily lives.
Solution to the problem represented a business opportunity
OPPURTUNITY IDENTIFICATION PROCESS

Ability to search and discover business oppurtunities

• Experience and Exposure

• Knowledge and Skill
• Special Alertness
• Social Network
• Creativity
• Vigilant

Mechanism to identify Oppurtunites

• Customers
• Retailers and Distributors
• Business Associates
• Bankers
• Consultants
• Employees
• Others

Evaluation and Selection Process:

This process involves judging the viability of the opportunity and assessing its potential.

CRITERIA FOR EVALUATION AND SELECTION

1. Can make money and has potential for growth?
2. Less Competition
3. Good Fit between entrpeneur and oppurutunity
4. Has Competitive advantage
5. Workable and Efficient
6. Not against the norms and values of the community
7. Conform with laws regulations.
Q-12) Define Marketing Research and what are the steps involved in market research process?

According to the American Marketing Association (AMA), Marketing Research is defined as,
“the function that link customer and public to the marketer through the information”.
Steps involved in marketing research are as follows:

STEP-1 Problem Definition

The first step in process of marketing research is to define the problem. In this step, researcher
must define the purpose of the study, background of the study, information required and also
explains how it will be helpful in decision making process. It involve the discussion with the
experts, decision makers, analyzing the secondary data and also include some qualitative
research like focus group discussion as well.

STEP-2 Approach Development

This step involves the formulation of the research objectives, analytical models, theoretical
framework, research questions and hypothesis formulation and information required.

STEP-3 Research Design Formulation

Research design is defined as the blueprint for conducting the research process. The main
purpose of the research design is to test the hypothesis formulated and determine the
tentative solution to the research questions. There are two types of research design:

• Exploratory Research Design

• Causal Research Design
This step also addressed the issue of how the data will be collected from the respondents (e.g.
with the help of experiment orby conducting a survey).
 Formulation of research design includes:
• Defining the information required
• Analysis of secondary data
• Qualitative research
• Methods for obtaining the quantitative data
• Scaling techniques
• Designing the questionnaire
• Sampling
• Data Analysis

STEP-4 Field Work / Data Collection

Field work involves a capable staff that operates either in the field or electronically or from the
office in order to collect the data. Right selection, proper training, necessary supervision and
the timely evaluation of the staff helps in reducing the error occurred during the data
collection.

STEP-5 Data Analysis

Data analysis includes:
• Editing
• Coding
• Transcription and
• Verification of the data

STEP-6 Report Preparation

The last step of the marketing research process is the report preparation and the presentation.
The whole process must be documented in a report that includes the problem definition,
description of the research approach, research design, data collection procedure, data analysis
methodology and show the results and main findings of the research.

Q-13) What is a Questionnaire? What are the characteristics of a good questionnaire?

A questionnaire is a research instrument consisting of a series of questions and other prompts

for the purpose of gathering information from respondents.

Characteristics of good questionnaire

The design of a questionnaire will depend on whether the researcher wishes to collect
exploratory information (i.e. qualitative information for the purposes of better understanding
or the generation of hypotheses on a subject) or quantitative information (to test specific
hypotheses that have previously been generated).
Exploratory questionnaires:
If the data to be collected is qualitative or is not to be statistically evaluated, it may be that no
formal questionnaire is needed. For example, in interviewing the female head of the household
to find out how decisions are made within the family when purchasing breakfast foodstuffs, a
formal questionnaire may restrict the discussion and prevent a full exploration of the woman’s
views and processes. Instead one might prepare a brief guide, listing perhaps ten major open-
ended questions, with appropriate probes/prompts listed under each.

Formal standardized questionnaires:

If the researcher is looking to test and quantify hypotheses and the data is to be analyzed
statistically, a formal standardized questionnaire is designed. Such questionnaires are generally
characterized by :
• prescribed wording and order of questions, to ensure that each respondent receives the same
stimuli
• prescribed definitions or explanations for each question, to ensure interviewers handle
questions consistently and can answer respondents’ requests for clarification if they occur
• prescribed response format, to enable rapid completion of the questionnaire during the
interviewing process. Given the same task and the same hypotheses, six different
people will probably come up with six different questionnaires that differ widely in their choice
of questions, line of questioning, use of open-ended questions and length. There are no hard-
and-fast rules about how to design a questionnaire, but there are a number of points that can
be borne in mind :

1. A well-designed questionnaire should meet the research objectives. This may seem obvious,
but many research surveys omit important aspects due to inadequate preparatory work, and do
not adequately probe particular issues due to poor understanding. To a certain degree some of
this is inevitable. Every survey is bound to leave some questions unanswered and provide a
need for further research but the objective of good questionnaire design is to ‘minimise’ these
problems.
2. It should obtain the most complete and accurate information possible. The questionnaire
designer needs to ensure that respondents fully understand the questions and are not likely to
refuse to answer, lie to the interviewer or try to conceal their attitudes. A good questionnaire is
organised and worded to encourage respondents to provide accurate, unbiased and complete
information.
3. A well-designed questionnaire should make it easy for respondents to give the necessary
information and for the interviewer to record the answer, and it should be arranged so that
sound analysis and interpretation are possible.
4. It would keep the interview brief and to the point and be so arranged that the respondent(s)
remain interested throughout the interview.
Q-14) What are the steps involved in designing a questionnaire?

There are nine steps involved in the development of a questionnaire:

1. Decide the information required.
2. Define the target respondents.
3. Choose the method(s) of reaching your target respondents.
4. Decide on question content.
5. Develop the question wording.
6. Put questions into a meaningful order and format.
7. Check the length of the questionnaire.
8. Pre-test the questionnaire.
9. Develop the final survey form

STEP-1 Deciding on the information required

It should be noted that one does not start by writing questions. The first step is to decide ‘what
are the things one needs to know from the respondent in order to meet the survey’s
objectives?’ These, as has been indicated in the opening chapter of this textbook, should
appear in the research brief and the research proposal. One may already have an idea about
the kind of information to be collected, but additional help can be obtained from secondary
data, previous rapid rural appraisals and exploratory research. In respect of secondary data, the
researcher should be aware of what work has been done on the same or similar problems in
the past, what factors have not yet been examined, and how the present survey questionnaire
can build on what has already been discovered. Further, a small number of preliminary informal
interviews with target respondents will give a glimpse of reality that may help clarify ideas
about what information
is required.

STEP-2 Define the target respondents

At the outset, the researcher must define the population about which he/she wishes to
generalise from the sample data to be collected. For example, in marketing research,
researchers often have to decide whether they should cover only existing users of the generic
product type or whether to also include non-users. Secondly, researchers have to draw up a
sampling frame. Thirdly, in designing the questionnaire we must take into account factors such
as the age, education, etc. of the target respondents.

STEP-3 Choose the method(s) of reaching target Respondents

It may seem strange to be suggesting that the method of reaching the intended respondents
should constitute part of the questionnaire design process. However, a moment’s reflection is
sufficient to conclude that the method of contact will influence not only the questions the
researcher is able to ask but the phrasing of those questions. The main methods available in
survey research are:
• Personal interviews
• Group or focus interviews
• Mailed questionnaires
• Telephone interviews.
Within this region the first two mentioned are used much more extensively than the second
pair. However, each has its advantages and disadvantages. A general rule is that the more
sensitive or personal the information, the more personal the form of data collection should
be.

STEP-4 Decide on question content

Researchers must always be prepared to ask, “Is this question really needed?” The temptation
to include questions without critically evaluating their contribution towards the achievement of
the research objectives, as they are specified in the research proposal, is surprisingly strong. No
question should be included unless the data it gives rise to is directly of use in testing one or
more of the hypotheses established during the research design. There are only two occasions
hen seemingly “redundant” questions might be included: Opening questions that are easy to
answer and which are not perceived as being “threatening”, and/or are perceived as being
interesting, can greatly assist in gaining the respondent’s involvement in the survey and help to
establish a rapport. This, however, should not be an approach that should be overly used. It is
almost always the case that questions which are of use in testing hypotheses can also serve the
same functions.
• “Dummy” questions can disguise the purpose of the survey and/ or the sponsorship of a
study. For example, if a manufacturer wanted to find out whether its distributors were giving
the consumers or end-users of its products a reasonable level of service, the researcher would
want to disguise the fact that the distributors’ service level was being investigated. If he/she did
not, then rumours would abound that there was something wrong with the distributor.

STEP-5 Develop the question wording

Survey questions can be classified into three forms, i.e. closed, open-ended and open response-
option questions. So far only the first of these, i.e. closed questions has been discussed. This
type of questioning has a number of important advantages;
• It provides the respondent with an easy method of indicating his answer - he does not have to
think about how to articulate his answer.
• It ‘prompts’ the respondent so that the respondent has to rely less on memory in answering a
question.
• Responses can be easily classified, making analysis very straightforward.
• It permits the respondent to specify the answer categories most suitable for their purposes.

STEP-6 Putting questions into a meaningful order and format

Opening questions : Opening questions should be easy to answer and not in any way
threatening to THE respondents. The first question is crucial because it is the respondent’s first
exposure to the interview and sets the tone for the nature of the task to be performed. If they
find the first question difficult to understand, or beyond their knowledge and experience, or
embarrassing in some way, they are likely to break off immediately. If, on the other hand, they
find the opening question easy and pleasant to answer, they are encouraged to continue.
Question flow : Questions should flow in some kind of psychological order, so that one leads
easily and naturally to the next. Questions on one subject, or one particular aspect of a subject,
should be grouped together. Respondents may feel it disconcerting to keep shifting from one
topic to another, or to be asked to return to some subject they thought they gave their opinions
about earlier.
Question variety : Respondents become bored quickly and restless when asked similar
questions for half an hour or so. It usually improves response, therefore, to vary the
respondent’s task from time to time. An open-ended question here and there (even if it is not
analysed) may provide much-needed relief from a long series of questions in which
respondents have been forced to limit their replies to pre-coded categories. Questions involving
showing cards/pictures to respondents can help vary the pace and increase interest.

Closing Questions: It is natural for a respondent to become increasingly indifferent to the

questionnaire as it nears the end. Because of impatience or fatigue, he may give careless
answers to the later questions. Those questions, therefore, that are of special importance
should, if possible, be included in the earlier part of the questionnaire. Potentially sensitive
questions should be left to the end, to avoid respondents cutting off the interview before
important information is collected. In developing the questionnaire the researcher should pay
particular attention to the presentation and layout of the interview form itself. The
interviewer’s task needs to be made as straight-forward as possible.
• Questions should be clearly worded and response options clearly identified.
• Prescribed definitions and explanations should be provided. This ensures that the questions
are handled consistently by all interviewers and that during the interview process the
interviewer can answer/clarify respondents’ queries. Ample writing space should be allowed to
record open-ended answers, and to cater for differences in handwriting between interviewers.

STEP-7 : Physical appearance of the questionnaire

The physical appearance of a questionnaire can have a significant effect upon both the quantity
and quality of marketing data obtained. The quantity of data is a function of the response rate.
Illdesigned questionnaires can give an impression of complexity, medium and too big a time
commitment. Data quality can also be affected by the physical appearance of the questionnaire
with unnecessarily confusing layouts making it more difficult for interviewers, or respondents in
the case of self-completion questionnaires, to complete this task accurately. Attention to just a
few basic details can have a disproportionately advantageous impact on the data obtained
through a questionnaire. In general it is best for a questionnaire to be as short as possible. A
long questionnaire leads to a long interview and this is open to the dangers of boredom on the
part of the respondent (and poorly considered, hurried answers), interruptions by third parties
and greater costs in terms of interviewing time and resources. In a rural situation an interview
should not last longer then 30-45 minutes.

STEP-8 Piloting the questionnaires

Even after the researcher has proceeded along the lines suggested, the draft questionnaire is a
product evolved by one or two minds only. Until it has actually been used in interviews and
with respondents, it is impossible to say whether it is going to achieve the desired results. For
this reason it is necessary to pre-test the questionnaire before it is used in a full-scale survey, to
identify any mistakes that need correcting. The purpose of pretesting the questionnaire is to
determine:
• Whether the questions as they are worded will achieve the desired results
• Whether the questions have been placed in the best order
• Whether the questions are understood by all classes of respondent
• Whether additional or specifying questions are needed or whether some questions should
be eliminated
• Whether the instructions to interviewers are adequate.
Usually a small number of respondents are selected for the pretest. The respondents selected
for the pilot survey should be broadly representative of the type of respondent to be
interviewed in the main survey. If the questionnaire has been subjected to a thorough pilot
test, the final form of the questions and questionnaire will have evolved into its final form. All
that remains to be done is the mechanical process of laying out and setting up the
questionnaire in its final form. This will involve grouping and sequencing questions into an
appropriate order, numbering questions, and inserting interviewer instructions.

Q-15) What is Sampling? What are the characterstics of Good Sample Design?

Sampling is the process of selecting units (e.g., people, organizations) from a population of
interest so that by studying the sample we may fairly generalize our results back to the
population from which they were chosen. Each observation measures one or more properties
(weight, location, etc.) of an observable entity enumerated to distinguish objects or individuals.
Survey weights often need to be applied to the data to adjust for the sample design. Results
from probability theory and statistical theory are employed to guide practice.

Characterstics of Good Sample Design

A good sample design requires the judicious balancing of four broad criteria - goal orientation,
measurability, practicality and economy.
1. Goal orientation :
This suggests that a sample design “should be oriented to the research objectives, tailored to
the survey design, and fitted to the survey conditions”. If this is done, it should influence the
choice of the population, the measurement as also the procedure of choosing a sample.
2. Measurability :
A sample design should enable the computation of valid estimates of its sampling variability.
Normally, this variability is expressed in the form of standard errors in surveys. However, this is
possible only in the case of probability sampling. In non-probability samples, such a quota
sample, it is not possible to know the degree of precision of the survey results.
3. Practicality :
This implies that the sample design can be followed properly in the survey, as envisaged earlier.
It is necessary that complete, correct, practical, and clear instructions should be given to the
interviewer so that no mistakes are made in the selection of sampling units and the final
selection in the field is not different from the original sample design. Practicality also refers to
simplicity of the design, i.e. it should be capable of being understood and followed in actual
operation of the field work.
4. Economy :
Finally, economy implies that the objectives of the survey should be achieved with minimum
cost and effort. Survey objectives are generally spelt out in terms of precision, i.e. the inverse of
the variance of survey estimates. For a given degree of precision, the sample design should give
the minimum cost. Alternatively, for a given per unit cost, the sample design should achieve
maximum precision (minimum variance).

Q-16) What are the steps of Sampling Design?

Sampling process consists of seven steps. They are:

1. Define the population
Population is defined in terms of :
(a) Elements
(b) Sampling units
(c) Extent
(d) Time.
Example : If we are monitoring the sale of a new product recently introduced by a company, say
(shampoo sachet) the population will be:
(a) Element - Company’s product
(b) Sampling unit - Retail outlet, super market
(c) Extent - Hyderabad and Secunderabad
(d) Time - April 10 to May 10, 2016

2. Identify the sampling frame :

Sampling frame could be
(a) Telephone Directory
(b) Localities of a city using the municipal corporation listing
(c) Any other list consisting of all sampling units.
Example : You want to learn about scooter owners in a city. The RTO will be the frame, which
provides you names, addresses and the types of vehicles possessed.

3. Specify the sampling unit :

Individuals who are to be contacted are the sampling units. If retailers are to be contacted in a
locality, they are the sampling units. Sampling Design Sampling unit may be husband or wife in
a family. The selection of sampling unit is very important. If interviews are to be held during
office timings, when the heads of families and other employed persons are away, interviewing
would under-represent employed persons, and over-represent elderly persons, housewives and
the unemployed.

4. Selection of sampling method :

This refers to whether (a) probability or (b) non-probability methods are used.
5. Determine the sample size :
This means we need to decide “how many elements of the target population are to be
chosen?” The sample size depends upon the type of study that is being conducted. For
example: If it is an exploratory research, the sample size will be generally small. For conclusive
research, such as descriptive research, the sample size will be large. The sample size also
depends upon the resources available with the company.
6. Specify the sampling plan :
A sampling plan should clearly specify the target population. Improper defining would lead to
wrong data collection.
Example : This means that, if a survey of a household is to be conducted, a sampling plan should
define a “household” i.e., “Does the household consist of husband or wife or both”, minors etc.,
“Who should be included or excluded.” Instructions to the interviewer should include “How he
should obtain a systematic sample of households, probability sampling, non-probability
sampling”. Advise him on what he should do to the household, if no one is available.
7. Select the sample :
This is the final step in the sampling process.

Q-17 ) Explain Sampling Errors

1. Sampling Error
The only way to guarantee the minimization of sampling error is to choose the appropriate
sample size. As the sample keeps on increasing, the sampling error decreases. Sampling error is
the gap between the sample mean and population mean.
2 Non-sampling Error
One way of distinguishing between the sampling and the non sampling error is that, while
sampling error relates to random variations which can be found out in the form of standard
error, non-sampling error occurs in some systematic way which is difficult to estimate.
3 Sampling Frame Error
A sampling frame is a specific list of population units, from which the sample for a study being
chosen.
4 Non-response Error
This occurs, because the planned sample and final sample vary significantly.

Example: Marketers want to know about the television viewing habits across the country. They
choose 500 households and mail the questionnaire. Assume that only 200 respondents reply.
This does not show a non-response error, which depends upon the discrepancy. If those 200
who replied did not differ from the chosen 500, there is no non-response error. Consider an
alternative. The people who responded are those who had plenty of leisure time. Therefore, it
is implied that non-respondents do not have adequate leisure time. In this case, thefinal sample
and the planned sample differ. If it was assumed that all the 500 chosen have leisure time, but
in the final analysis only 200 have leisure time and not others. Therefore, a sample with respect
to leisure time leads to response error.
Guidelines to Increase the Response Rate
Every researcher likes to get maximum possible response from the respondents, and will be
most delighted if cent percent respondent unfortunately, this does not happen. The non-
response error can be reduced by increasing the response rate. Higher the response rate, more
accurate and reliable is the data. In order to achieve this, some useful hints could be as follows:
1. Intimate the respondents in advance through a letter. This will
improve the preparedness.
2. Personalized questionnaire should be accompanied by a covering
letter.
3. Ensure/Assure that confidentiality will be maintained
4. Questionnaire length is to be restricted
5. Increase of personal interview, I.D. card is essential to prove
the bona fide.
6. Monetary incentives are gifts will act as motivator
7. Reminder/Revisits would help.
8. Send self addressed/stamped envelope to return the completed
questionnaire.

5. Data Error
This occurs during the data collection, analysis of data or interpretation. Respondents
sometimes give distorted answers unintentionally for questions which are difficult, or if the
question is exceptionally long and the respondent may not have answer. Data errors can also
occur depending on the physical and social characteristics ofthe interviewer and the
respondent. Things such as the tone and voice can affect the responses. Therefore, we can say
that the characteristics of the interviewer can also result in data error. Also, cheating on the
part of the interviewer leads to data error. Data errors can also occur when answers to open-
ended questions are being improperly recorded.

Q-18) State the types of Sampling Designs

Sampling is divided into two types:

Probability sampling: In a probability sample, every unit in the population has equal chances
for being selected as a sample unit.
Non-probability sampling: In the nonprobability sampling, the units in the population have
unequal or negligible, almost no chances for being selected as a sample unit.

Probability Sampling Techniques

1. Random sampling.
2. Systematic random sampling.
3. Stratified random sampling.
4. Cluster sampling.
5. Multistage sampling.
1. Random Sampling
Simple random sample is a process in which every item of the population has an equal
probability of being chosen. In random sampling, there are two possibilities:
(a) Equal probability
(b) Varying probability.
(a) Equal Probability: This is also called as the random sampling with replacement.
2. Systematic Random Sampling
In systematic random sampling first item was randomly selected. The rest are systematically
selected. This is a very popular method because we need only one random number.
3. Stratified Random Sampling
A probability sampling procedure in which simple random subsamples are drawn from within
different strata that are, more or less equal on some characteristics. Stratified sampling is of
two types:
A. Proportionate stratified sampling: The number of sampling units drawn from each stratum is
in proportion to the population size of that stratum.
B. Disproportionate stratified sampling: The number of sampling units drawn from each stratum
is based on the analytical consideration, but not in proportion to the size of the population of
that stratum.
Sampling process is as follows:
1. The population to be sampled is divided into groups (stratified).
2. A simple random sample is chosen.

4. Cluster Sampling :
The following steps are followed:
1. The population is divided into clusters.
2. A simple random sample of few clusters is selected.
3. All the units in the selected cluster are studied.

Non-probability Sampling Techniques

1. Deliberate sampling
2. Shopping mall intercept sampling
3. Sequential sampling
4. Quota sampling
5. Snowball sampling
6. Panel samples

1. Deliberate or Purposive Sampling

This is also known as the judgment sampling. The investigator uses his discretion in selecting
sample observations from the universe. As a result, there is an element of bias in the selection.
From the point of view of the investigator, the sample thus chosen may be a true
representative of the universe. However, the units in the universe do not enjoy an equal chance
of getting included in the sample. Therefore, it cannot be considered a probability sampling.
 2. Shopping Mall Intercept Sampling
This is a non-probability sampling method. In this method the respondents are recruited for
individual interviews at fixed locations in shopping malls.
3.Sequential Sampling
This is a method in which the sample is formed on the basis of a series of successive decisions.
They aim at answering the research question on the basis of accumulated evidence.
Sometimes, a researcher may want to take a modest sample and look at the results. Thereafter,
s(he) will decide if more information is required for which larger samples are considered. If the
evidence is not conclusive after a small sample, more samples are required. If the position is
still inconclusive, still larger samples are taken. At each stage, a decision is made about whether
more information should be collected or the evidence is now sufficient to permit a conclusion.
4. Snowball Sampling
This is a non-probability sampling. In this method, the initial group of respondents are selected
randomly. Subsequent respondents are being selected based on the opinion or referrals
provided by the initial respondents. Further referrals will lead to more referrals, thus leading to
a snowball sampling. The referrals will have demographic and psychographic characteristics
that are relatively similar to the person referring them.
Example: College students bring in more students on the consumption of Pepsi. The major
advantage of snowball sampling is that it monitors the desired characteristics in the population.
5. Panel Samples
Panel samples are frequently used in marketing research. To give an example, suppose that one
is interested in knowing the change in the consumption pattern of households. A sample of
households is drawn. These households are contacted to gather information on the pattern of
consumption. Subsequently, say after a period of six months, the same households are
approached once again and the necessary information on their consumption is collected.

Q-19) Define Market Survey and state its purpose

Definition: Market survey is the survey research and unit of analysis of the market for a
particular product/service which includes the investigation into customer inclinations. A study
of various customer capabilities such as investment attributes and buying potential. Market
surveys are tools to directly collect feedback from the target audience to understand their
characteristics, expectations, and requirements.

Purpose of Market Survey

• Gain critical customer feedback: The main purpose of the market survey is to offer marketing
and business managers a platform to obtain critical information about their consumers so that
existing customers can be retained and new ones can be got onboard.
• Understand customer inclination towards purchasing products: Details such as whether the
customers will spend a certain amount of money for their products/services, inclination levels
among customers about upcoming features or products, what are their thoughts about the
competitor products etc.
• Enhance existing products and services: A market survey can also be implemented with the
purpose of improving existing products, analyze customer satisfaction levels along with getting
data about their perception of the market and build a buyer persona using information from
existing clientele database.
• Make well-informed business decisions: Data gathered using market surveys is instrumental in
making major changes in the business which reduces the degree of risks involved in taking
important business decisions.

Q-20) What are the different templates of market survey?

Market Survey Templates

• Product Surveys: New products/concept testing survey templates offer questions to obtain
insights about products and concepts. These survey questions are curated by market research
experts and can help in analyzing which kind of products or features will work in a market.

• Conference Feedback Surveys: Conference feedback survey templates provide questions that
can be asked to participants of a conference. An organization can organize better conferences
by implementing feedback received from these surveys such as enhancing overall conference
management, improved IT infrastructure, better content coverage or other such factors.

• Focus Group Surveys: Focus group survey templates can be implemented during and after the
recruitment of the focus group. Gaining insights from a dedicated group of 8-10 people can be
done easily with this existent survey template.

• Hardware And Software Surveys: Hardware and software survey templates offer editable
questions about software product evaluation, hardware product evaluation, pre-installation
procedure, technical documentation quality and other such factors.

• Website Surveys: Website survey templates are customizable as per application and consist of
questions pertaining to website customer feedback, visitor profile information, online retail
information etc.
Q-21) State the importance of market survey

There are 5 factors that depict the importance of a market survey.

1. Understanding the demand and supply chain of the target market: A product is most likely
to be successful if it is developed by keeping in mind the demand and supply of the target
market. This way, marketers can obtain insights about market capabilities to absorb new
products and concepts to develop customer-centric products and features.

2. Developing well-thought marketing plans: The World is a target market for an organization,
especially a well-established one. Getting data from the target market through thorough
market research using market surveys and segmentation can be a source of creating concrete
and long-term marketing plans.

3. Figure out customer expectations and needs: All marketing activities revolve around
customer acquisition. All small and large organizations require market surveys to gather
feedback from their target audience regularly, using customer satisfaction tools such as Net
Promoter Score, Customer Effort Score, Customer Satisfaction Score (CSAT) etc. Organizations
can analyze customer feedback to measure customer experience, satisfaction, expectations etc.

4. Accurate launch of new products: Market surveys are influential in understanding where to
test new products or services. Market surveys provide marketers a platform to analyze the
scope of success of upcoming products and make changes in strategizing the product according
to the feedback they receive.

5. Obtain information about customer demographics: Customer demographics form the core
of any business and market surveys can be used to obtain intricate and sensitive details about
customer demographics such as race, ethnicity or family income.

Q-22) Explain types of market surveys with example

Types of Market Survey with Examples

1. Market Surveys for segmentation: An organization can spot existing and prospective
customers and understand why the customers have chosen their products/services and the
prospects have not yet made a purchase. This can lead to a structured market
segmentation and analysis.
2. Market Surveys for exploring various aspects of the target market: Get information about
factors such as market size, demographic information such as age, gender, family income etc. to
lay out a roadmap by considering growth rate of the market, positioning, and average market
share.

3. Market Surveys to probe into purchase procedure: How does a customer deciding on
making a purchase? What are the factors that convert product awareness into sales? This type
of market survey will unveil awareness, information, free trial, purchase, and repeat.

4. Market Surveys to establish buyer persona: These surveys are to build a buyer persona by
knowing about customer preferences, inclination, and capabilities of purchasing a product.

5. Market Surveys to measure customer loyalty: What is the degree of loyalty that the
customers have towards and organization? The answer to this question can be obtained by
conducting a market survey.

6. Market Surveys to analyze a new feature or concept: It is essential for an organization to

include market-compliant features and concepts. By carrying out a market survey to
understand which features to launch, will help all the teams involved in the feature
development process to do that with proper research.

7. Market Surveys for competitor analysis: Healthy competition is always good for an
organization’s progress. Market surveys done with the motive of competitor analysis will
produce results about how does the target market weigh the organization’s products/services
in comparison to the others in the market.

8. Market Surveys to understand the impact of sales activities: Sales activities are the
backbone of an organization and it becomes crucial to keep track of these activities. Market
surveys for sales activities will produce a report of the impact of sales activities, whether their
frequency needs to increase or any changes the audiences think should be inculcated in the
sales process.

9. Market Surveys to assess prices for new products/services: Affordability of products also is
an aspect that drives the market for organizations. Price ranges, product variants to cater
multiple price ranges, target customers for each of the products etc.

10.Market Surveys for evaluation of customer service: Good customer service can lead to
enhanced satisfaction levels among customers. Factors such as time taken to resolve issues, the
scope of improvement, best practices of customer service etc.
Q-23) Write a note on Data analysis and Interpretation

• Data analysis and interpretation is the next stage after collecting data from empirical
methods.

• The dividing line between the analysis of data and interpretation is difficult to draw as the
two processes are symbolic and merge imperceptibly. Interpretation is inextricably
interwoven with analysis.

• The analysis is a critical examination of the assembled data. Analysis of data leads to
generalization.

• Interpretation refers to the analysis of generalizations and results. A generalization

involves concluding a whole group or category based on information drawn from particular
instances or examples.

• Interpretation is a search for the broader meaning of research findings. Analysis of data is
to be made regarding the purpose of the study.

• Data should be analyzed in light of hypothesis or research questions and organized to yield
answers to the research questions.

• Data analysis can be both descriptive as well as a graphic in presentation. It can be

presented in charts, diagrams, and tables.

• The data analysis includes various processes, including data classification, coding,
tabulation, statistical analysis of data, and inference about causal relations among
variables.

• Proper analysis helps classify and organize unorganized data and gives scientific shape. In
addition, it helps study the trends and changes that occur in a particular period.

Q-24) What is the primary distinction between data analysis and interpretation?

• Data analysis is a critical examination of the assembled data, leading to generalization. In

contrast, interpretation refers to the analysis of these generalizations and results, searching
for the broader meaning of research findings.
Q-25) What are the steps involved in the processing of interpretation?

The steps include editing the data, coding or converting data to a numerical form, arranging

data according to characteristics and attributes, presenting data in tabular form or graphs, and

directing the reader to its component, especially striking from the point of view of research

questions.

1. Firstly, data should be edited. Since all the data collected is irrelevant to the study, irrelevant

data should be separated from the relevant ones. Careful editing is essential to avoid

possible errors that may distort data analysis and interpretation. But the exclusion of data

should be done with an objective view and free from bias and prejudices.

2. The next step is coding or converting data to a numerical form and presenting it on the

coding matrix. Coding reduces the huge quantity of data to a manageable proportion.

3. Thirdly, all data should be arranged according to characteristics and attributes. The data

should then be properly classified to become simple and clear.

4. Thirdly, data should be presented in tabular form or graphs. But any tabulation of data

should be accompanied by comments as to why the particular data finding is important.

5. Finally, the researcher should direct the reader to its component, especially striking from the

point of view of research questions.

Q-26)What are the three key concepts regarding the analysis and interpretation of data?

The three key concepts are Reliability (referring to consistency), Validity (ensuring the data

collected is a true picture of what is being studied), and Representativeness (ensuring the group

or situation studied is typical of others).

 Reliability

It refers to consistency. In other words, if a method of collecting evidence is reliable, it means

that anybody else is using this method, or the same person using it at another time, would

come with the same results.

In other words, reliability is concerned with the extent that an experiment can be repeated or

how far a given measurement will provide the same results on different occasions.

Validity

It refers to whether the data collected is a true picture of what is being studied. It means that

the data collected should be a product of the research method used rather than studied.

Representativeness

This refers to whether the group of people or the situation we are studying are typical’ of

others.’

The following conditions should be considered to draw reliable and valid inferences from the

data.

1. Reliable inference can only be drawn when the statistics are strictly comparable, and data are

complete and consistent.’ Thus, to ensure comparability of different situations, the data

should be homogenous; data should be complete and adequate, and the data should be

appropriate.

2. An ideal sample must adequately represent the whole population. Thus, when the number of

units is huge, the researcher should choose those samples with the same set of qualities and

features as found in the whole data.

Q-27) What is marketing mix? What are the 4P’s in the marketing mix?

• A marketing mix includes multiple areas of focus as part of a comprehensive marketing plan.
• The term often refers to a common classification that began as the four Ps: product, price,
placement, and promotion.
• Effective marketing touches on a broad range of areas as opposed to fixating on one message.
Doing so helps reach a wider audience, and by keeping the four Ps in mind, marketing
professionals are better able to maintain focus on the things that really matter.
• Focusing on a marketing mix helps organizations make strategic decisions when launching
new products or revising existing products.
• The four Ps classification for developing an effective marketing strategy was first introduced in
1960 by marketing professor and author E. Jerome McCarthy.1
• E. Jerome McCarthy. "Basic Marketing: A Managerial Approach," Page vi. R.D. Irwin, 1960.
• It was published in the book entitled Basic Marketing: A Managerial Approach. Depending on
the industry and the target of the marketing plan, marketing managers may take various
approaches to each of the four Ps. Each element can be examined independently, but in
practice, they often are dependent on one another.

Product
This represents an item or service designed to satisfy customer needs and wants. To effectively
market a product or service, it's important to identify what differentiates it from competing
products or services. It's also important to determine if other products or services can be
marketed in conjunction with it.

Price

The sale price of the product reflects what consumers are willing to pay for it. Marketing
professionals need to consider costs related to research and development, manufacturing,
marketing, and distribution—otherwise known as cost-based pricing. Pricing based primarily on
consumers' perceived quality or value is known as value-based pricing.

Placement

When determining areas of distribution, it's important to consider the type of product sold.
Basic consumer products, such as paper goods, often are readily available in many stores.
Premium consumer products, however, typically are available only in select stores.

Promotion

Joint marketing campaigns are called a promotional mix. Activities might include advertising,
sales promotion, personal selling, and public relations. One key consideration is the budget
assigned to the marketing mix. Marketing professionals carefully construct a message that
often incorporates details from the other three Ps when trying to reach their target audience.
Determination of the best mediums to communicate the message and decisions about the
frequency of the communication also are important.

Q-28) What is a target market? How to identify target market?

• A target market is a specific group of people with shared characteristics that a business
markets its products or services to.

• Companies use target markets to thoroughly understand their potential customers and craft
marketing strategies that help them meet their business and marketing objectives.

• Identifying a target market is an integral part of any new business undertaking, whether at a
Fortune 500 company or a soon-to-be-launched small business. Knowing your target market
sets you up for success.

How to identify your target market

• Determining your target market isn’t as simple as guessing who your customers are, or hoping
for a certain demographic. Instead, it requires an in-depth review of your products and
services, the marketplace, your potential (or current) customers, and more.

Here are some tactics to help you identify your target market:

Analyze your offerings

Ask yourself what problems your products and services solve, and, in turn, to whom they
appeal. For example, if you operate a landscaping business, your services would be attractive to
homeowners with lawns and, more specifically, people who are too busy to care for their yard
and can afford to pay someone to do it.

So, your target market would include higher-income adults with demanding jobs and/or
children, who don’t have time for or interest in lawn care but still want it to look good.

Conduct market research

Analyzing your target market goes beyond understanding your customers — you also have to
understand the marketplace. Analytics tools like Quantcast, Alexa, and Google Trends give you
a comprehensive view of the landscape by identifying and assessing competitors, helping you
find new customers, and enabling you to determine ways to improve.
 And don’t forget that some of the most helpful data can come from both existing and
prospective customers. Tools like surveys, focus groups, and in-person discussions can help you
understand what your target market needs, why it is (or isn’t) shopping with you, and what you
can do to make your offerings more appealing. You can also look at data from your POS or CRM
to glean insights about your customers.

• Create customer profiles and market segments

Market segmentation is the process of organizing a group based on various categories, like
demographics and psychographics.

As discussed earlier, demographics describe the more surface-level, baseline characteristics,

like age, gender, education level, ethnic background, and marital and family
status. Psychographics, on the other hand, offer a deeper look into who people really are, like
behaviors, values, personality, and lifestyle.

It’s important to consider both demographics and psychographics when trying to conduct a full
analysis of your target market.

• Assess the competition

Conduct a competitive analysis or use the online tools discussed above to get a
comprehensive view of the competitive landscape. What are the businesses that offer
comparable products and services? How much do they charge? What are they doing
differently?

Unless you believe you have a significant advantage, avoid going after the same customer,
especially in a small market where your competitors’ businesses are well established.

• Using your target market analysis

Once you’ve completed your analysis, put that data to work. Here are some ways to use the
information to grow and improve your business.
Product development: If your analysis helped you identify some holes in the market, you can
use this information to create products and services that your target market needs.

Niche markets: Did you identify an underserved population? Instead of going after the same
customers as your competitors, explore untapped markets.

Expansion opportunities: While assessing your local market, you might identify underserved
areas. This is valuable information if you’re considering franchising or adding a new location.
 Pricing strategy: While assessing your competition, you might have found that you’re either
pricing yourself out of the market or not charging enough. Use comparative data to determine
a fair price.

Curation: There is such a thing as offering too many options, and customers don’t like it. If you
offer many of the same items as your competitors (and they aren’t big sellers anyway), pare
down your inventory to focus on top-selling and exclusive items.

Marketing: Your target market should be the foundation of your marketing strategy. Use what
you know to determine what channels you should be using to communicate with your
customers and what messages work with them. Whenever you think about implementing
something new, whether it’s a social platform or a promotional campaign, check your analysis
to see if it resonates.

Q-29) What is Competition Evaluation and strategy adoption?

• Competitor analysis, also called competitive analysis and competition analysis, is the process
of examining similar brands in your industry to gain insight into their offerings, branding,
sales, and marketing approaches.

• Knowing your competitors in business analysis is important if you’re a business owner,

marketer, start-up founder, or product developer.

• A competitor analysis offers several benefits, including:

i. Understanding industry standards so that you can meet and exceed them
ii. Discovering untapped niche markets
iii. Differentiating products and services
iv. Fulfilling customers’ desires and solving their problems better than competitors
v. Distinguishing your brand
vi. Standing out in your marketing
vii. Measuring your growth

• Through competitor analysis, you’ll identify competitors and research their marketing
strategies. You’ll research the competitors' strengths and weaknesses and try to determine if
they are working on anything new.

How to do competitor analysis

The sections below provide a competitor analysis framework for evaluating your industry’s
competitive landscape. Return to this framework regularly and apply insights to developing
your business.
1. Find out who your competitors are.

Start by reviewing any notes, plans, or other business development legwork you’ve completed,
and ground yourself in your business values, goals, branding, products, and services. That way,
you can easily identify existing brands that target customers might choose over yours.

Next, gather information on the following:

• High-volume keywords (or search queries) that your target market uses to find information
related to your products and services
• URLs that appear at the top of search engine results pages (SERPs) for these keywords
• Social media accounts that come up in searches for relevant hashtags or keywords

Then, using the information you gathered, make a list of five to 10 brands whose offerings most
resemble yours and would present your target customers with comparable alternatives. Pull up
competitors’ websites, social media accounts, and other publicly available information, and
have this information handy for the steps that follow.

2. Describe competitors’ business structures.

By examining how competitors structure their businesses, you can gauge how equipped they
are to grow, gain market share, and earn customer loyalty in your target market. Review each
competitor’s website and social media profile to gather the following information:
• How large is the company in terms of the number of leaders and employees?
• How many years has the company been in operation?
• What job openings do these companies list on Glassdoor, Indeed, or LinkedIn? What are
their areas of expansion?

3. Evaluate competitors’ value propositions.

A value proposition is a short statement that summarises the benefits of a product and why a
customer would choose it over competing products. A value proposition often looks something
like the following: We help [target customer] do [outcome, benefit, experience] by
doing/offering [product or service].

In this section, you will find or deduce competitors’ value propositions to compose your value
proposition to stand out in the marketplace. Review competitors’ site copy, particularly on the
"About" or “What We Do" pages, as well as taglines or slogans posted on a home page or social
media profile. Answer these questions for each competitor:
• What problems and pain points do competitors’ products solve?
• What desires do products fulfill?
• What benefits or outcomes are explicitly stated?
• What data do they cite to support their claims about products’ benefits?
• What pricing structure do competitors use, and how are customers responding?
4. Evaluate competitors’ marketing efforts.

In this section, you will evaluate how competitors position themselves in the marketplace.
This will allow you to create a marketing strategy that gets your brand in front of your target
audience.

For each competitor, answer these questions:

• What social media influencers does this company partner with to leverage their authority,
authentic content, and personal connections to target customers?
• What affiliate marketing or brand ambassador programmes does this company offer to
leverage the recommendations of satisfied customers?
• What kind of digital or traditional paid advertising presence does this company have?
• On what marketing channels do competitors publish organic content, including websites,
landing pages, social media platforms, and email?
• What type of content do you see, including articles, videos, ebooks, reports, commercials,
and digital ads?

5. Audit competitors’ brand identities.

In this section, you will get to know competitors’ brand identities to understand the
customer experiences they’ve created. For each competitor, answers these questions:
• If this company were a person, how would you describe its personality?
• What words, phrases, tone, and style does this company use in its messaging?
• What values do competitors communicate through their messaging?
• How would you describe the visual elements of this company’s branding? And how do
those elements correspond to the brand’s values, voice, and personality?
• What emotions do the brand elements evoke in customers?

6. Follow each competitor’s customer journey.

In this section, you will study the customer journeys competitors have set up to nurture
and convert customers. Your goal is to gauge how seamless, integrated, and logical it is
to go from the first touchpoint to making a purchase and beyond.

Start by following your competitors on social media, subscribing to them via email, and
purchasing products and services to experience each customer journey for yourself.

As you experience the customer journey for each competitor, gather information on the
following:
• What are the different touchpoints along this company’s customer journey?
• What elements make it easy to keep moving along the customer journey?
• What calls to action and instructions are there to make it clear how to proceed?
• What kinds of content educate and entertain you at each touchpoint?
 • What elements create friction or make it difficult to advance to the next step?
• What do you experience after subscribing or making a purchase? Do you find customer
support, upsells, and access to a community?

7. Examine audience engagement.

In this step, you will scour competitors’ customer reviews, reactions, and comments on
their social media posts, social media mentions, media appearances, and even employee
reviews on job sites to understand the perception of competitors in the marketplace. With
this information, you can strategise how to garner a positive reputation for your brand,
learn from competitors’ mistakes and challenges, and work to avoid any pitfalls yourself.

For each competitor, explore the following:

• How do followers and subscribers interact with this company’s public content?
• What is the general public sentiment regarding this company, based on mentions,
product reviews, and social media likes and comments? Include praise as well as
complaints.
• What experiences do employees have, based on reviews on job sites like Glassdoor and
Indeed?

8. Conduct a SWOT Analysis of your competition.

A SWOT analysis is a classic exercise for identifying the strengths, weaknesses, opportunities,
and threats that exist within the competitive landscape. In this section, you’ll conduct a SWOT
analysis of competitors to consolidate everything you’ve learned into a succinct story about
your competitive position.

• What strengths recur across competitors’ branding, marketing, customer journeys, and
products?
• What weaknesses recur across competitors’ branding, marketing, customer journeys, and
products?
• What opportunities do you see for your business to capitalise on?

Q-30) What is market Segmentation?

Market segmentation is a marketing strategy in which select groups of consumers are identified
so that certain products or product lines can be presented to them in a way that appeals to
their interests.

Companies can generally use three criteria to identify different market segments:

1. Homogeneity, or common needs within a segment

 2. Distinction, or being unique from other groups
3. Reaction, or a similar response to the market

For example, an athletic footwear company might have market segments for basketball players
and long-distance runners. As distinct groups, basketball players and long-distance runners
respond to very different advertisements. Understanding these different market segments
enables the athletic footwear company to market its branding appropriately.

Market segmentation is an extension of market research that seeks to identify targeted groups
of consumers to tailor products and branding in a way that is attractive to the group.
The objective of market segmentation is to minimize risk by determining which products have
the best chances of gaining a share of a target market and determining the best way to deliver
the products to the market. This allows the company to increase its overall efficiency by
focusing limited resources on efforts that produce the best return on investment (ROI).

Q-31) What are the Types of Market Segmentation?

There are four primary types of market segmentation. However, one type can usually be split
into an individual segment and an organization segment. Therefore, below are five common
types of market segmentation.

Demographic Segmentation

Demographic segmentation is one of the simple, common methods of market segmentation. It

involves breaking the market into customer demographics as age, income, gender, race,
education, or occupation. This market segmentation strategy assumes that individuals with
similar demographics will have similar needs.

Example: The market segmentation strategy for a new video game console may reveal that
most users are young males with disposable income.

Firmographic Segmentation

Firmographic segmentation is the same concept as demographic segmentation. However,

instead of analyzing individuals, this strategy looks at organizations and looks at a company's
number of employees, number of customers, number of offices, or annual revenue.

Example: A corporate software provider may approach a multinational firm with a more
diverse, customizable suite while approaching smaller companies with a fixed fee, more simple
product.
Geographic Segmentation

Geographic segmentation is technically a subset of demographic segmentation. This approach

groups customers by physical location, assuming that people within a given geographical area
may have similar needs. This strategy is more useful for larger companies seeking to expand
into different branches, offices, or locations.

Example: A clothing retailer may display more raingear in their Pacific Northwest locations
compared to their Southwest locations.

Behavioral Segmentation

Behavioral segmentation relies heavily on market data, consumer actions, and decision-making
patterns of customers. This approach groups consumers based on how they have previously
interacted with markets and products. This approach assumes that consumers prior spending
habits are an indicator of what they may buy in the future, though spending habits may
change over time or in response to global events.

Example: Millennial consumers traditionally buy more craft beer, while older generations are
traditionally more likely to buy national brands.1

Psychographic Segmentation

Often the most difficult market segmentation approach, psychographic segmentation strives to
classify consumers based on their lifestyle, personality, opinions, and interests. This may be
more difficult to achieve, as these traits (1) may change easily and (2) may not have readily
available objective data. However, this approach may yield strongest market segment results as
it groups individuals based on intrinsic motivators as opposed to external data points.

Example: A fitness apparel company may target individuals based on their interest in playing or
watching a variety of sports.

Q-32) How to Determine Your Market Segment?

There's no single universally accepted way to perform market segmentation. To determine your
market segments, it's common for companies to ask themselves the following questions along
their market segmentation journey.

Phase I: Setting Expectations/Objectives

• What is the purpose or goal of performing market segmentation?

• What does the company hope to find out by performing marketing segmentation?
• Does the company have any expectations on what market segments may exist?
 Phase 2: Identify Customer Segments

• What segments are the company's competitors selling to?

• What publicly available information (i.e. U.S. Census Bureau data) is relevant and
available to our market?
• What data do we want to collect, and how can we collect it?
• Which of the five types of market segments do we want to segment by?

Phase 3: Evaluate Potential Segments

• What risks are there that our data is not representative of the true market segments?
• Why should we choose to cater to one type of customer over another?
• What is the long-term repercussion of choosing one market segment over another?
• What is the company's ideal customer profile, and which segments best overlap with this
"perfect customer"?

Phase 4: Develop Segment Strategy

• How can the company test its assumptions on a sample test market?
• What defines a successful marketing segment strategy?
• How can the company measure whether the strategy is working?

Phase 5: Launch and Monitor

• Who are key stakeholders that can provide feedback after the market segmentation
strategy has been unveiled?
• What barriers to execution exist, and how can they can be overcome?
• How should the launch of the marketing campaign be communicated internally?

Q-33) What are the Benefits and Limitations of Market Segmentation?

BENEFITS OF MARKET SEGMENTATION

Marketing segmentation takes effort and resources to implement. However, successful

marketing segmentation campaigns can increase the long-term profitability and health of a
company. Several benefits of market segmentation include;

• Increased resource efficiency. Marketing segmentation allows management to focus on certain

demographics or customers. Instead of trying to promote products to the entire market,
marketing segmentation allows a focused, precise approach that often costs less compared to a
broad reach approach.
• Stronger brand image. Marketing segment forces management to consider how it wants to be
perceived by a specific group of people. Once the market segment is identified, management
 must then consider what message to craft. Because this message is directed at a target
audience, a company's branding and messaging is more likely to be very intentional. This may
also have an indirect effect of causing better customer experiences with the company.
• Greater potential for brand loyalty. Marketing segmentation increases the opportunity for
consumers to build long-term relationships with a company. More direct, personal marketing
approaches may resonate with customers and foster a sense of inclusion, community, and a
sense of belonging. In addition, market segmentation increases the probability that you land
the right client that fits your product line and demographic.
• Stronger market differentiation. Market segmentation gives a company the opportunity to
pinpoint the exact message they way to convey to the market and to competitors. This can also
help create product differentiation by communicating specifically how a company is different
from its competitors. Instead of a broad approach to marketing, management crafts a specific
image that is more likely to be memorable and specific.
• Better targeted digital advertising. Marketing segmentation enables a company to perform
better targeted advertising strategies. This includes marketing plans that direct effort towards
specific ages, locations, or habits via social media.

Limitations of Market Segmentation

The benefits above can't be achieved with some potential downsides. Here are some
disadvantages to consider when considering implementing market segmentation strategies.

• Higher upfront marketing expenses. Marketing segmentation has the long-term goal of being
efficient. However, to capture this efficiency, companies must often spend resources upfront to
gain the insight, data, and research into their customer base and the broad markets.
• Increased product line complexity. Marketing segmentation takes a large market and attempts
to break it into more specific, manageable pieces. This has the downside risk of creating an
overly complex, fractionalized product line that focuses too deeply on catering to specific
market segments. Instead of a company having a cohesive product line, a company's marketing
mix may become too confusing and inconsistently communicate its overall brand.
• Greater risk of misassumptions. Market segmentation is rooted in the assumption that similar
demographics will share common needs. This may not always be the case. By grouping a
population together with the belief that they share common traits, a company may risk
misidentifying the needs, values, or motivations within individuals of a given population.
• Higher reliance on reliable data. Market segmentation is only as strong as the underlying data
that support the claims that are made. This means being mindful of what sources are used to
pull in data. This also means being conscious of changing trends and when market segments
may have shifted from prior studies.
Q-34) Define Advertising and Brand

Advertising is a marketing tactic involving paying for space to promote a product, service, or
cause. The actual promotional messages are called advertisements, or ads for short. The goal of
advertising is to reach people most likely to be willing to pay for a company’s products or
services and entice them to buy.

A brand is how a company differentiates itself from its peer brands. A brand can be thought of
as the personality of the company, communicated through an identifying mark, logo, name,
tagline, voice, and tone. Some of the oldest and most recognizable brand names in automotive,
toys, and food and beverage have been around for decades, with some surpassing more than a
century of consistent and recognizable branding.

Q-35) What are the steps to be followed in Brand Strategy?

A brand strategy is the roadmap companies follow in order to develop their brand. A well-
defined brand strategy is critical in creating a strong brand. Every brand strategy should
incorporate the following elements.

Research

A company’s brand-building strategy must be grounded in research that outlines the

competitive landscape and how the brand solves a unique need within it. This helps the brand
set realistic goals for growth and understand how its peers are positioning their brands.

Goals and objectives

Goals and objectives include measurable brand and marketing metrics as well as the
overarching brand goal. What is the promise of the brand? What are the experiences
consumers can expect with every brand interaction? Working backwards and answering these
questions first will help a company define who they are and what purpose they serve for
consumers.

Audience definition

Every brand and marketing strategy should include clearly defined audiences based upon
internal and external information. Develop personas – fictional representations of ideal
consumers – that include demographic and behavioral information to help inform the brand’s
tone of voice, media buying, and strategy to reach the right audiences.

Create a brand identity

When it comes to branding, identity means all of the design elements that work together to
make up the visual representation of the brand. This includes the name, logo, tagline, color
palette, typefaces, and image style. A clear and consistent brand identity contributes to
increased awareness.

Define messaging and positioning

What are the messages the brand will use to reinforce the brand promise? How will the brand
be positioned in relation to peer brands? Define both internal and external brand messaging,
with internal focusing on communicating with employees and stakeholders, and external
focused on communicating with consumers. Be sure to also define the brand’s mission, vision
statement, values, and brand positioning statement—what the brand does, for whom, and how
it delivers on its brand promise. Done right, these elements of brand storytelling will remain in
customers’ minds far longer than the memory of the individual products they’ve purchased.

Develop brand guidelines

Brand guidelines are the comprehensive outline of how and how not to use brand elements to
ensure cohesion across the board. Brand guidelines explain the voice and tone of the brand,
highlight image style, include a content style guide, and map out correct logo and typeface
usage. Brand guidelines are a critical piece of brand management and brand marketing strategy
because they allow for companies to roll out a brand at scale with everyone building from the
same toolkit. This also includes the brand asset library, where marketers can pull approved
brand assets.

Rollout timeline

Brand marketing strategy should include a rollout timeline, including details for when elements
like a complementary web presence and supporting digital advertising campaign will launch.
Remember that if this is a rebrand, everything from email signatures, to social assets, to
newsletter templates, to signage needs to be updated, too.

Brand measurement

It’s important to include detailed metrics and how a company will monitor and measure both
short-term and long-term brand success. Measure things like brand satisfaction through the
Net Promoter Score, which measures customer loyalty and enthusiasm; Customer Satisfaction
Score ; brand recognition and awareness; brand relevance; and differentiation.
Q-36) What is digital marketing? Explain the types of digital marketing

Digital marketing, also called online marketing, is the promotion of brands to connect with
potential customers using the internet and other forms of digital communication. This includes
not only email, social media, and web-based advertising, but also text and multimedia
messages as a marketing channel.

Types of digital marketing

There are as many specializations within digital marketing as there are ways of interacting using
digital media. Here are a few key examples of types of digital marketing tactics.

i. Search engine optimization

Search engine optimization, or SEO, is technically a marketing tool rather than a form of
marketing in itself. The Balance defines it as “the art and science of making web pages
attractive to search engines.”

The "art and science" part of SEO is what’s most important. SEO is a science because it requires
you to research and weigh different contributing factors to achieve the highest possible ranking
on a serch engine results page (SERP).

Today, the most important elements to consider when optimizing a web page for search
engines include:

• Quality of content
• Level of user engagement
• Mobile-friendliness
• Number and quality of inbound links
• In addition to the elements above, you need to optimize technical SEO, which is all the
back-end components of your site. This includes URL structure, loading times, and
broken links. Improving your technical SEO can help search engines better navigate and
crawl your site.
• The strategic use of these factors makes search engine optimization a science, but the
unpredictability involved makes it an art.
• Ultimately, the goal is to rank on the first page of a search engine’s result page. This
ensures that those searching for a specific query related to your brand can easily find
your products or services. While there are many search engines, digital marketers often
focus on Google since it's a global leader in the search engine market.
• In SEO, there's no quantifiable rubric or consistent rule for ranking highly on search
engines. Google and other search engines change their algorithm almost constantly, so
it's impossible to make exact predictions. What you can do is closely monitor your
page's performance and make adjustments to your strategy accordingly.
 ii. Content marketing

As mentioned, the quality of your content is a key component of an optimized page. As a result,
SEO is a major factor in content marketing, a strategy based on the distribution of relevant and
valuable content to a target audience.

As in any marketing strategy, the goal of content marketing is to attract leads that ultimately
convert into customers. But it does so differently than traditional advertising. Instead of
enticing prospects with potential value from a product or service, it offers value for free in the
form of written material, such as:

• Blog posts
• E-books
• Newsletters
• Video or audio transcripts
• Whitepapers
• Infographics

Content marketing matters, and there are plenty of stats to prove it:

• 84% of consumers expect companies to produce entertaining and helpful content

experiences
• 62% of companies that have at least 5,000 employees produce content daily
• 92% of marketers believe that their company values content as an important asset

As effective as content marketing is, it can be tricky. Content marketing writers need to be able
to rank highly in search engine results while also engaging people who will read the material,
share it, and interact further with the brand. When the content is relevant, it can establish
strong relationships throughout the pipeline.

To create effective content that’s highly relevant and engaging, it’s important to identify your
audience. Who are you ultimately trying to reach with your content marketing efforts? Once
you have a better grasp of your audience, you can determine the type of content you'll create.
You can use many formats of content in your content marketing, including videos, blog posts,
printable worksheets, and more.

Regardless of which content you create, it’s a good idea to follow content marketing best
practices. This means making content that’s grammatically correct, free of errors, easy to
understand, relevant, and interesting. Your content should also funnel readers to the next stage
in the pipeline, whether that’s a free consultation with a sales representative or a signup page.
 iii. Social media marketing

Social media marketing means driving traffic and brand awareness by engaging people in
discussion online. You can use social media marketing to highlight your brand, products,
services, culture, and more. With billions of people spending their time engaging on social
media platforms, focusing on social media marketing can be worthwhile.

The most popular digital platforms for social media marketing are Facebook, Twitter,
and Instagram, with LinkedIn and YouTube not far behind. Ultimately, which social media
platforms you use for your business depends on your goals and audience. For example, if you
want to find new leads for your FinTech startup, targeting your audience on LinkedIn is a good
idea since industry professionals are active on the platform. On the other hand, running social
media ads on Instagram may be better for your brand if you run a B2C focused on younger
consumers.

Because social media marketing involves active audience participation, it has become a popular
way of getting attention. It's the most popular content medium for B2C digital marketers at
96%, and it's gaining ground in the B2B sphere as well. According to the Content Marketing
Institute, 61% of B2B content marketers increased their use of social media this year.

Social media marketing offers built-in engagement metrics, which are extremely useful in
helping you to understand how well you're reaching your audience. You get to decide which
types of interactions mean the most to you, whether that means the number of shares,
comments, or total clicks to your website.

Direct purchase may not even be a goal of your social media marketing strategy. Many brands
use social media marketing to start dialogues with audiences rather than encourage them to
spend money right away. This is especially common in brands that target older audiences
or offer products and services not appropriate for impulse buys. It all depends on your
company's social media marketing goals.

To create an effective social media marketing strategy, it’s crucial to follow best practices. Here
are a few of the most important social media marketing best practices:

• Craft high-quality and engaging content

• Reply to comments and questions in a professional manner
• Create a social media posting schedule
• Post at the right time
• Hire social media managers to support your marketing efforts
• Know your audience and which social media channels they’re most active on

To learn more about how Mailchimp can help with your social media strategy, check out the
comparison of our free social media management tools versus others.
 iv. Pay-per-click marketing

Pay-per-click, or PPC, is a form of digital marketing in which you pay a fee every time someone
clicks on your digital ads. So, instead of paying a set amount to constantly run targeted ads on
online channels, you only pay for the ads individuals interact with. How and when people see
your ad is a bit more complicated.

One of the most common types of PPC is search engine advertising, and because Google is the
most popular search engine, many businesses use Google Ads for this purpose. When a spot is
available on a search engine results page, also known as a SERP, the engine fills the spot with
what is essentially an instant auction. An algorithm prioritizes each available ad based on a
number of factors, including:

• Ad quality
• Keyword relevance
• Landing page quality
• Bid amount
• PPC ads are then placed at the top of search engine result pages based on the factors
above whenever a person searches for a specific query.
• Each PPC campaign has 1 or more target actions that viewers are meant to complete
after clicking an ad. These actions are known as conversions, and they can be
transactional or non-transactional. Making a purchase is a conversion, but so is a
newsletter signup or a call made to your home office.
• Whatever you choose as your target conversions, you can track them via your chosen
digital marketing channels to see how your campaign is doing.

v. Affiliate marketing

Affiliate marketing is a digital marketing tactic that lets someone make money by promoting
another person's business. You could be either the promoter or the business who works with
the promoter, but the process is the same in either case.

It works using a revenue sharing model. If you're the affiliate, you get a commission every time
someone purchases the item that you promote. If you're the merchant, you pay the affiliate for
every sale they help you make.

Some affiliate marketers choose to review the products of just 1 company, perhaps on a blog or
other third-party site. Others have relationships with multiple merchants.

Whether you want to be an affiliate or find one, the first step is to make a connection with the
other party. You can use digital channels designed to connect affiliates with retailers, or you can
start or join a single-retailer program.
If you're a retailer and you choose to work directly with affiliates, there are many things you
can do to make your program appealing to potential promoters. You'll need to provide those

affiliates with the tools that they need to succeed. That includes incentives for great results as
well as marketing tools and pre-made materials.

vi. Native advertising

Native advertising is digital marketing in disguise. Its goal is to blend in with its surrounding
content so that it’s less blatantly obvious as advertising.

Native advertising was created in reaction to the cynicism of today's consumers toward ads.
Knowing that the creator of an ad pays to run it, many consumers will conclude that the ad is
biased and consequently ignore it.

A native ad gets around this bias by offering information or entertainment before it gets to
anything promotional, downplaying the "ad" aspect.

It’s important to always label your native ads clearly. Use words like “promoted” or
“sponsored.” If those indicators are concealed, readers might end up spending significant time
engaging with the content before they realize that it's advertising.

When your consumers know exactly what they're getting, they'll feel better about your content
and your brand. Native ads are meant to be less obtrusive than traditional ads, but they’re not
meant to be deceptive.

vii. Influencer marketing

Like affiliate marketing, influencer marketing relies on working with an influencer–an individual
with a large following, such as a celebrity, industry expert, or content creator–in exchange for
exposure. In many cases, these influencers will endorse your products or services to their
followers on several social media channels.

Influencer marketing works well for B2B and B2C companies who want to reach new audiences.
However, it’s important to partner with reputable influencers since they’re essentially
representing your brand. The wrong influencer can tarnish the trust consumers have with your
business.

viii. Marketing automation

Marketing automation uses software to power digital marketing campaigns, improving the
efficiency and relevance of advertising. As a result, you can focus on creating the strategy
behind your digital marketing efforts instead of cumbersome and time-consuming processes.
While marketing automation may seem like a luxury tool your business can do without, it can
significantly improve the engagement between you and your audience.

Marketing automation lets companies keep up with the expectation of personalization. It

allows brands to:

• Collect and analyze consumer information

• Design targeted marketing campaigns
• Send and post digital marketing messages at the right times to the right audiences

Many marketing automation tools use prospect engagement (or lack thereof) with a particular
message to determine when and how to reach out next. This level of real-time customization
means that you can effectively create an individualized marketing strategy for each customer
without any additional time investment.

ix. Email marketing

The concept of email marketing is simple—you send a promotional message and hope that your
prospect clicks on it. However, the execution is much more complex. First of all, you have to
make sure that your emails are wanted. This means having an opt-in list that does the
following:

• Individualizes the content, both in the body and in the subject line
• States clearly what kind of emails the subscriber will get
• An email signature that offers a clear unsubscribe option
• Integrates both transactional and promotional emails

You want your prospects to see your campaign as a valued service, not just as a promotional
tool.

Email marketing is a proven, effective technique all on its own: 89% of surveyed
professionals named it as their most effective lead generator.

It can be even better if you incorporate other digital marketing techniques such as marketing
automation, which lets you segment and schedule your emails so that they meet your
customer's needs more effectively.

A few tips that can help you craft great email marketing campaigns:

• Segment your audience to send relevant campaigns to the right people

• Ensure emails look good on mobile devices
• Create a campaign schedule
• Run A/B tests
 x.Mobile marketing

Mobile marketing is a digital marketing strategy that allows you to engage with your target
audience on their mobile devices, such as smartphones and tablets. This can be via SMS and
MMS messages, social media notifications, mobile app alerts, and more.

It’s crucial to ensure that all content is optimized for mobile devices. According to the Pew

Research Center, 85% of Americans own a smartphone, so your marketing efforts can go a long
way when you create content for computer and mobile screens.

Q-37) State the benefits of Digital Marketing

The benefits of digital marketing
Digital marketing has become prominent largely because it reaches such a wide audience of
people. However, it also offers a number of other advantages that can boost your marketing
efforts. These are a few of the benefits of digital marketing.

• A broad geographic reach

When you post an ad online, people can see it no matter where they are (provided you haven’t
limited your ad geographically). This makes it easy to grow your business's market reach and
connect with a larger audience across different digital channels.

• Cost efficiency

Digital marketing not only reaches a broader audience than traditional marketing but also
carries a lower cost. Overhead costs for newspaper ads, television spots, and other traditional
marketing opportunities can be high. They also give you less control over whether your target
audiences will see those messages in the first place.

With digital marketing, you can create just 1 content piece that draws visitors to your blog as
long as it's active. You can create an email marketing campaign that delivers messages to
targeted customer lists on a schedule, and it's easy to change that schedule or the content if
you need to do so.

• Quantifiable results

To know whether your marketing strategy works, you have to find out how many customers it
attracts and how much revenue it ultimately drives. But how do you do that with a non-digital
marketing strategy?

There's always the traditional option of asking each customer, “How did you find us?"
 Unfortunately, that doesn't work in all industries. Many companies don't get to have one-on-
one conversations with their customers, and surveys don't always get complete results.

With digital marketing, results monitoring is simple. Digital marketing software and platforms
automatically track the number of desired conversions that you get, whether that means email
open rates, visits to your home page, or direct purchases.

• Easier personalization

Digital marketing allows you to gather customer data in a way that offline marketing can't. Data
collected digitally tends to be much more precise and specific.

Imagine you offer financial services and want to send out special offers to internet users people
who have looked at your products. You know you'll get better results if you target the offer to
the person's interest, so you decide to prepare 2 campaigns. One is for young families who have
looked at your life insurance products, and the other is for millennial entrepreneurs who have
considered your retirement plans.

How do you gather all of that data without automated tracking? How many phone records
would you have to go through? How many customer profiles? And how do you know who has
or hasn't read the brochure you sent out?

With digital marketing, all of this information is already at your fingertips.

• More connection with customers

Digital marketing lets you communicate with your customers in real-time. More importantly, it
lets them communicate with you.

Think about your social media strategy. It's great when your target audience sees your latest
post, but it's even better when they comment on it or share it. It means more buzz surrounding
your product or service, as well as increased visibility every time someone joins the
conversation.

Interactivity benefits your customers as well. Their level of engagement increases as they
become active participants in your brand's story. That sense of ownership can create a strong
sense of brand loyalty.

• Easy and convenient conversions

Digital marketing lets your customers take action immediately after viewing your ad or content.
With traditional advertisements, the most immediate result you can hope for is a phone call
shortly after someone views your ad. But how often does someone have the time to reach out
to a company while they're doing the dishes, driving down the highway, or updating records at
work?

With digital marketing, they can click a link or save a blog post and move along the sales funnel
right away. They might not make a purchase immediately, but they’ll stay connected with you
and give you a chance to interact with them further.

Q-38) How to create a digital marketing strategy?

For many small businesses and beginner digital marketers, getting started with digital
marketing can be difficult. However, you can create an effective digital marketing strategy to
increase brand awareness, engagement, and sales by using the following steps as your starting
point.

Set SMART goals

Setting specific, measurable, achievable, relevant, and timely (SMART) goals is crucial for any
marketing strategy. While there are many goals you may want to achieve, try to focus on the
ones that will propel your strategy forward instead of causing it to remain stagnant.

Identify your audience

Before starting any marketing campaign, it’s best to identify your target audience. Your target
audience is the group of people you want your campaign to reach based on similar attributes,
such as age, gender, demographic, or purchasing behavior. Having a good understanding of
your target audience can help you determine which digital marketing channels to use and the
information to include in your campaigns.

Create a budget

A budget ensures you’re spending your money effectively towards your goals instead of
overspending on digital marketing channels that may not provide the desired results. Consider
your SMART goals and the digital channel you’re planning to use to create a budget.

Select your digital marketing channels

From content marketing to PPC campaigns and more, there are many digital marketing
channels you can use to your advantage. Which digital marketing channels you use often
depends on your goals, audience, and budget.

Refine your marketing efforts

Make sure to analyze your campaign's data to identify what was done well and areas for
improvement once the campaign is over. This allows you to create even better campaigns in the
future. With the help of digital technologies and software, you can obtain this data in an easy-
to-view dashboard. Mailchimp’s digital marketing analytics reports will help you keep track of
all your marketing campaigns in one centralized location.
Digital marketing creates growth
Digital marketing should be one of the primary focuses of almost any business’s overall
marketing strategy. Never before has there been a way to stay in such consistent contact with
your customers, and nothing else offers the level of personalization that digital data can
provide. The more you embrace the possibilities of digital marketing, the more you'll be able to
realize your company's growth potential.

Q-39) Write a note on B2B marketing.

• Business-to-business, or B2B, marketing refers to a business’s process of promoting products

and services to other companies to help them improve their operations.

• When selling to other companies, remember that B2B marketing involves considerations and
best practices that differ from those associated with marketing to individual consumers
(B2C).

• For example, B2B customers generally look for products and services that will contribute to a
healthier bottom line while avoiding investments with low chances of return.

• Considering that businesses may be responsible for payroll and other large business
expenses, there may be more at stake for B2B than B2C customers, so when marketing,
you’d want to bear this difference in mind.

5 common B2B channel marketing strategies

1. B2B content marketing

Content marketing, particularly SEO content on your website, is an effective way to reach B2B
audiences. Focused content can build trust with decision makers, increase your website’s
ranking in search engine results, and serve as the basis for marketing efforts on other channels.

Here are different types of content that work well for a B2B audience:
• Thought leadership and educational content on important industry trends and strategies
that your target B2B customers can use
• Videos explaining how your products and services can help B2B customers
• Webpages explaining your company’s method of prioritizing diversity, equity, and
inclusion and what these efforts mean for your target B2B customer
• Customer testimonials
 2. B2B social media marketing

To attract B2B customers on social media, adopt practices that are specific to a
business-oriented audience, including the following:
• Leverage the power of videos for product demonstrations, tutorials, industry highlights,
behind-the-scenes content, case studies, about us stories, and business building
strategies.
• Tailor your posts to each platform. For example, you could repurpose long-form content
into a Tweet-able tip, an infographic for Instagram, and an excerpt for LinkedIn.
• Set up in-platform purchase and subscription options on social media. Algorithms may
promote this content to more viewers, as it doesn’t lead users away from the platform.
• Partner with micro-influencers in your niche (users with around 15,000 followers) to
gain access to their loyal, targeted followers.

3. B2B email marketing

Email marketing can be an effective way to build relationships with B2B customers and
convert leads (also called potential customers or prospects) into buyers.
• To build your subscriber base, design a lead-capture landing page that addresses a
problem or a need that is top-of-mind for your target B2B customers and promises a
solution in the form of a lead magnet, such as a downloadable report or a free video
tutorial.
• Make sure your lead magnet actually provides the solution promised on the landing
page and demonstrates how your company can help other businesses operate more
smoothly.
• Divide your subscribers into smaller segments based on their roles within a decision-
making unit, the kind of business, where they are in the customer journey, and other
factors so that you can tailor email marketing content accordingly.
• Include attention-grabbing words in your email subject lines, such as solutions to a
problem or product offers, to get B2B email subscribers to click.
• Craft each email message to deliver value and guide subscribers to make a purchase.
Emails can expound upon social media and content marketing pieces, offer exclusive
information, invite subscribers to complete a survey and shape future content, and
announce new products.

4. B2B event marketing

Hosting, attending, and sponsoring events—either in person or online—can increase your

brand’s exposure and generate qualified leads.

Successful B2B events can take on many forms, including:

• Workshops, classes, and webinars on topics of interest to your target B2B customers
 • Networking events, exhibitions, and trade shows where you can build relationships with
company decision makers in your target market and introduce them to your products
and services
• Professional conferences where your target B2B customers can learn new information
and network with peers
• Parties, performances, dinners, and other social events to entertain target B2B
customers and offer individualized or VIP experiences

5. Word-of-mouth and referrals

Loyal and satisfied customers can be a great source of new leads, especially in B2B
marketing. When a business recommends your product or service and can also quantify
a positive outcome, it comes with authority.

To encourage customers to make thoughtful referrals, you might offer referral bonuses
or set up an affiliate program.

Q-40) State the difference between B2B and B2C marketing.

Q-41)Define E Commerce

• "Ecommerce" or "electronic commerce" is the trading of goods and services on the internet.
It is your bustling city center or brick-and-mortar shop translated into zeroes and ones on
the internet superhighway.
• Ecommerce is one way people buy and sell things in retail. Some companies sell products
online only, while other sellers use ecommerce as a part of a broader strategy that includes
physical stores and other distribution channels.
• Either way, ecommerce allows startups, small businesses, and large companies to sell
products at scale and reach customers across the world.

Q-42) What is an ecommerce website?

• An ecommerce website is your digital storefront on the internet. It facilitates the transaction
between a buyer and seller. It is the virtual space where you showcase products, and online
customers make selections.
• Your website acts as the product shelves, sales staff, and cash register of your online
business channel.
• Businesses might create a branded store experience on a store like Amazon, build their own
commerce site on a dedicated domain, or do it all for a multi-channel approach.

Q-43) What is an ecommerce business?

• An ecommerce business is a company that generates revenue from selling products or
services online. For example, an ecommerce company might sell software, apparel,
housewares, or web design services. You can run an ecommerce business from a single
website or through multiple online channels like social media and email.

Q-44) How does ecommerce work?

• Ecommerce works by connecting buyers and sellers using various electronic channels.
• For example, you need a channel, such as a website or social media, so customers can find
products and services to purchase. Then a payment processor enables the exchange of the
goods or services. Once the transaction succeeds, the customer receives a confirmation
email or SMS, and a printable receipt.
• If the transaction is for goods, then the seller ships the items and sends the customer a
tracking number via email or SMS. If the transaction is for a service, then the service
provider can reach out to schedule and complete the service.

Q-45) Write Steps to starting an ecommerce business

• The steps to starting an ecommerce business can vary depending on factors like what you
want to sell.
• For example, if you're selling services, then there’s no need to manage
inventory or fulfillment.
• However, if you want to sell products online, then inventory and fulfillment will likely play a
critical part in your operations.
 Here are some steps you can follow to get started:

1. Research business ideas

2. Make sure there’s demand for the products you want to sell
3. Determine how you'll sell and ship products to customers
4. Find suppliers and manufacturers
5. Choose which online channels you'll sell through (e.g., an Amazon store)
6. Create a website or online storefront and upload products
7. Create a plan for your fulfillment strategy
8. Begin attracting customers with promotions
9. Check out this guide to starting an ecommerce business for more details.

Q-46) What are the types of ecommerce?

Ecommerce takes as many different forms as there are various ways to shop online channels. A
few common business models that shape the world of ecommerce are:
1. B2C – Businesses sell to individual consumers (end-users). The most common model with
many variations.
2. B2B – Businesses sell to other businesses. Often the buyer resells products to the consumer.
3. C2B – Consumers sell to businesses. C2B businesses allow customers to sell to other
companies.
4. C2C – Consumers sell to other consumers. Businesses create online marketplaces that
connect consumers.
5. B2G – Businesses sell to governments or government agencies.
6. C2G – Consumers sell to governments or government agencies.
7. G2B – Governments or government agencies sell to businesses.
8. G2C - Governments or government agencies sell to consumers.

Q-47) Where and how does ecommerce take place?

Online shopping evolves and shifts daily. People shop from their computers, phones, tablets,
and other devices. They patronize websites, visit social media pages, and participate in thriving
virtual channels. Here’s an overview of three distinct methods of conducting ecommerce today.

M-commerce
Online transactions that take place on mobile devices are known as mobile commerce or “m-
commerce.” With portable devices in the hands of consumers worldwide, it's no wonder m-
commerce is anticipated to account for over 43% of total retail ecommerce sales in 2023 (up
almost two percent from 2022).

Many people now do their product research and online purchasing through their phones. This
trend shows no signs of slowing, so it’s essential to optimize your online store for mobile.
Enterprise ecommerce
Enterprise ecommerce is the buying and selling of products to large companies or
organizations. If a large business sells many different types of products or has multiple brand
lines and transitions into selling online, then it is participating in enterprise ecommerce.

Social media ecommerce

Social media can help you market and promote ecommerce stores to a broad audience. Just as
social media enables you to connect with friends and family, it also has the potential to attract
customers to your business. Done well, social media marketing engages customers in an
informal setting.
Social media can help you:
Attract new customers
Build brand awareness
Generate online sales

Q-48) What are the advantages and challenges of ecommerce?

Benefits of ecommerce
• Is growing rapidly
• Offers global marketing reach
• Provides the ease of ordering products online
• Generally involves lower operating costs
• Gives direct-to-consumer access
• Rapid growth
• Global marketing reach
• Ease of ordering products
• Lower operating costs
• All of these advantages add up to low overhead. You don’t need to pay rent or worry
about building maintenance. Once online, your store is open 24 hours a day—without
the need to be monitored or staffed like a physical store.
• Direct-to-consumer access

Challenges of ecommerce

Some businesses may try to avoid ecommerce due to challenges like:

• Limited face-to-face interaction
• Technical difficulties
• Data security
• Challenges of shipping and fulfilling orders at scale
• Let’s walk through each of these potential pitfalls.
• Limited face-to-face interaction
• Technical difficulties
 Challenges related to technology can negatively impact sales. Just as a hiccup in your
supply chain can prevent timely delivery of products, internet issues, or a hard drive
failure can cost you time and money.
• Data security concerns
Customers care about how information is stored and shared. Build customer trust by
giving details on your privacy policy. Doing so demonstrates transparency and reassures
customers that you will safeguard their personally identifiable information.
• Shipping and fulfillment at scale
It may be easy to pack and ship orders from your garage or spare room when you’re
starting out in ecommerce. But as your business grows, order fulfillment becomes a
much more time-consuming process.

Q-49) Write a note on GeM

• The Government e Marketplace (or e-Marketplace) (GeM) is an online platform

for public procurement in India.
• The initiative was launched on August 9, 2016, by the Ministry of Commerce and
Industry, Government of India with the objective to create an open
and transparent procurement platform for government buyers.
• It was built in a record time of 5 months to facilitate the online procurement of goods
and Services.
• The purchases through GeM by Government users have been authorized and made
mandatory by the Ministry of Finance by adding a new Rule No. 149 in the General
Financial Rules, 2017.
• The platform is owned by GeM SPV (Special Purpose Vehicle) which is a 100
percent Government-owned, non-profit company under the Ministry of Commerce and
Industries, Government of India.
• GeM is a contactless, paperless and cashless online marketplace that replaced the
Directorate General of Supplies and Disposals (DGS&D) in 2016.
• Since its inception, GeM has brought in the visibility and transparency in public
procurement.
• The portal has transformed public procurement in India by driving its three pillars,
namely, inclusion, usability and transparency and efficiency and cost savings.
• According to an independent assessment made by the World Bank, average savings for
buyers in Government e Marketplace portal is about 9.75% on the median price.
• The Government of India has made it mandatory for sellers to display the 'country of
origin' on products to be sold on GeM portal.
Q-50)What is Product Life Cycle (PLC)?

• A product life cycle is the amount of time a product goes from being introduced into the
market until it's taken off the shelves.
• There are four stages in a product's life cycle—introduction, growth, maturity, and decline.
• A company often incurs higher marketing costs when introducing a product to the market
but experiences higher sales as product adoption grows.
• Sales stabilize and peak when the product's adoption matures, though competition and
obsolescence may cause its decline.
• The concept of product life cycle helps inform business decision-making, from pricing and
promotion to expansion or cost-cutting.

STAGES OF PLC

Introduction Stage

The introduction phase is the first time customers are introduced to the new product. A
company must generally includes a substantial investment in advertising and a marketing
campaign focused on making consumers aware of the product and its benefits, especially if it is
broadly unknown what the item will do.

During the introduction stage, there is often little-to-no competition for a product, as
competitors may just be getting a first look at the new offering. However, companies still often
experience negative financial results at this stage as sales tend to be lower, promotional pricing
may be low to drive customer engagement, and the sales strategy is still being evaluated.

Growth Stage

If the product is successful, it then moves to the growth stage. This is characterized by
growing demand, an increase in production, and expansion in its availability. The amount of
time spent in the introduction phase before a company's product experiences strong growth
will vary from between industries and products.

During the growth phase, the product becomes more popular and recognizable. A company
may still choose to invest heavily in advertising if the product faces heavy competition.
However, marketing campaigns will likely be geared towards differentiating its product from
others as opposed to introducing the goods to the market. A company may also refine its
product by improving functionality based on customer feedback.

Financially, the growth period of the product life cycle results in increased sales and higher
revenue. As competition begins to offer rival products, competition increases, potentially
forcing the company to decrease prices and experience lower margins.
Maturity Stage

The maturity stage of the product life cycle is the most profitable stage, the time when the
costs of producing and marketing decline. With the market saturated with the product,
competition now higher than at other stages, and profit margins starting to shrink, some
analysts refer to the maturity stage as when sales volume is "maxed out".

Depending on the good, a company may begin deciding how to innovate its product or
introduce new ways to capture a larger market presence. This includes getting more feedback
from customers, and researching their demographics and their needs.

During the maturity stage, competition is at the highest level. Rival companies have had enough
time to introduce competing and improved products, and competition for customers is usually
highest. Sales levels stabilize, and a company strives to have its product exist in this maturity
stage for as long as possible.

A new product needs to be explained, while a mature product needs to be differentiated.

Decline Stage

As the product takes on increased competition as other companies emulate its success, the
product may lose market share and begin its decline. Product sales begin to drop due to market
saturation and alternative products, and the company may choose to not pursue additional
marketing efforts as customers may already have determined whether they are loyal to the
company's products or not.

Should a product be entirely retired, the company will stop generating support for it and will
entirely phase out marketing endeavors. Alternatively, the company may decide to revamp the
product or introduce a next-generation, completely overhauled model. If the upgrade is
substantial enough, the company may choose to re-enter the product life cycle by introducing
the new version to the market.

The stage of a product's life cycle impacts the way in which it is marketed to consumers. A new
product needs to be explained, while a mature product needs to be differentiated from its
competitors.
Q-51) Write a note on Mortality Curve of a product (Bath Tub Curve)
A bathtub curve is a visual representation of the failure rate of a product or group of products
over time. By plotting the occurrences of failure over time, a bathtub curve maps out three
periods that an asset experiences within its lifetime:
1. Infant mortality period
2. Normal life period
3. Wear-out period

It is important to note the trend of failure rates over time rather than the exact shape of the
curve, as real-world examples might not be as clean-cut as the model.

What Is the Infant Mortality Period?

The infant mortality period, also known as the early failure period, begins when a product is
used for the first time. It is an interval characterized by a decreasing failure rate, and it starts
from a high failure occurrence, quickly decreasing to a lower failure rate, and plateauing.
Failures that occur within this time are usually driven by manufacturing defects or installation
issues. Other causes of failure events in this period could be design flaws or improper start-up
procedures.
What Is the Normal Life Period?
Once the failure rate levels out after the initial operation period, the normal life kicks in. This
region of the curve is also known as the useful life period, and operators expect assets in it to
have a relatively constant failure rate. The majority of assets will spend most of their
operational life in this state.
 Assuming a constant failure rate also implies that breakdowns are due to random events. With
increased usage, and as the assets undergo normal wear, failure events become less
random and more predictable. This marks the beginning of the next period in the bathtub
curve.
What Is the Wear-Out Period?
Assets naturally deteriorate over time. The number of failure occurrences that an asset
experiences predictably increases after a certain usage period. The wear-out region in the
bathtub curve is characterized by this increasing failure rate trend. As failure rates increase
quickly before the end of an asset life cycle, the bathtub curve slopes sharply upward.
Eventually, this leads to the total failure of an asset.

Q-52) What is new product development process?

1. Idea Generation

The new product development process begins with idea generation, where you brainstorm an
idea (or ideas) that will help you solve an existing customer problem in a new and innovative
way. As you’re coming up with ideas that will help you solve customer needs, it’s important to
have a robust understanding of your target market and the pain points they have that you want
to solve.

Your initial idea generation stage can be as simple as saying “What if we did this?” and then
they become more ROBUST during the research stage.

2. Research

Once you’ve developed a product idea, the next step is conducting research to FLESH IT OUT.
There are various steps you can take to do this, like:

• Market research to understand the current sentiment in your industry and if there are any
holes that your product will fit into, and if there will even be demand for it.
• Competitor analysis to understand if customers think there are things your competitors'
products or services lack that you can incorporate into your product to better fit your target
market's needs.
During this stage, you can also get early feedback from customers about what they think of
your ideas before coming up with a final definition for your product. One of the best ways to
get this feedback is through surveys, where you can easily and quickly collect information from
existing customers. A high-quality tool like Lucky Orange can help you create these surveys, and
with it, you can ask multiple choice questions about types of products they may be interested
in, or more open-ended questions that give you more insight into customer opinions.

This stage may include a bit of iteration because your research may tell you that you need to
refine your original ideas and adjust your research scope before moving on to the next stage.
3. Planning

The third stage is planning, where you formulate a final product idea/definition based on your
initial idea and research and begin coming up with your plans to bring it to life.

When you define your final product, you’ll want to begin planning for what you’ll need in order
to create it. For example, if you’re creating a physical product, you’ll need to source the
necessary materials or find production partners that will assist in manufacturing.

Planning also involves coming up with a marketing strategy that will help you effectively market
when your product is completed, pricing models that make sense for your product, and that
your customers will pay.

It’s also critical to identify the teams that will be involved in your product development process
that will help bring it to market, from the marketing teams that will promote your product to
any possible external partners that will assist with production.

4. Prototyping

The prototyping phase is when you come up with a sample product that is a mockup of what
will be created during mass production.

This prototype is often referred to as a minimum viable product (MVP), which is a basic version
of your tool, still similar to your final product, that will help you get a sense of how it functions
and identify any areas that need to be improved.

You may make multiple prototypes and go back and forth between this stage and the testing
stage before you have a finalized prototype.

5. Testing

Before launching your product you need to test it to ensure it will work as advertised and
effectively solve your customer needs. So, during this stage, you’ll share your prototypes with
target audiences and ask for actionable feedback on how the product works.

Essentially, you want your product to be used in situations that are similar to real-world use
cases so you know exactly what works and what doesn’t. Sometimes the results of your testing
will require you to go back and make changes to your prototype, as mentioned above.

Once you feel as though your prototype is finished and ready to solve your customer needs,
you’ll begin product development.
 6. Product Development

This stage involves creating the final product that will be commercialized once completed.
You’ll use the insights gained from testing your MVP to make final touches to your prototype,
and begin mass production.

Depending on your type of business, you’ll likely have a different process for product
development. For example, if you’re a SaaS business, your internal software development or
programming teams will likely work to finalize code. If you create a physical product, you may
outsource labor for certain components and assemble final products in your warehouse.

Whichever your process is, your planning stage should’ve helped you identify how your product
development will go.

7. Commercialization

The final stage of your new product development process is commercialization, where you
introduce your products to market. This is the culmination of your brainstorming, research,
iteration, where your audiences can finally make use of what you created.

You’ll enact your marketing plans to make your audiences aware of your new product, and
enact campaigns that will entice them to become customers.

Although this is the final stage, many businesses launch their products and, over time, return to
make improvements to their products based on customer feedback and market changes to
ensure they’re always providing the best possible customer experience.

Q-53) What is Supply Chain Management? How it works and what its importance?

• Supply chain management (SCM) is the centralized management of the flow of goods and
services and includes all processes that transform raw materials into final products.
• By managing the supply chain, companies can cut excess costs and deliver products to the
consumer faster and more efficiently.
• Good supply chain management keeps companies out of the headlines and away from
expensive recalls and lawsuits.
• The five most critical elements of SCM are developing a strategy, sourcing raw materials,
production, distribution, and returns.
• A supply chain manager is tasked with controlling and reducing costs and avoiding supply
shortages.
 How Supply Chain Management (SCM) Works?
• Supply chain management (SCM) represents an effort by suppliers to develop and implement
supply chains that are as efficient and economical as possible. Supply chains cover everything
from production to product development to the information systems needed to direct these
undertakings.
• Typically, SCM attempts to centrally control or link the production, shipment, and distribution
of a product. By managing the supply chain, companies can cut excess costs and deliver
products to the consumer faster. This is done by keeping tighter control of internal inventories,
internal production, distribution, sales, and the inventories of company vendors.
• SCM is based on the idea that nearly every product that comes to market results from the
efforts of various organizations that make up a supply chain. Although supply chains have
existed for ages, most companies have only recently paid attention to them as a value-add to
their operations.

5 Parts of SCM
The supply chain manager tries to minimize shortages and keep costs down. The job is not only
about logistics and purchasing inventory. According to Salary.com, supply chain managers
“oversee and manage overall supply chain and logistic operations to maximize efficiency and
minimize the cost of organization's supply chain."1

Productivity and efficiency improvements can go straight to the bottom line of a company.
Good supply chain management keeps companies out of the headlines and away from
expensive recalls and lawsuits. In SCM, the supply chain manager coordinates the logistics of all
aspects of the supply chain which consists of the following five parts.

Planning

To get the best results from SCM, the process usually begins with planning to match supply with
customer and manufacturing demands. Firms must predict what their future needs will be and
act accordingly. This relates to raw materials needed during each stage of manufacturing,
equipment capacity and limitations, and staffing needs along the SCM process. Large entities
often rely on ERP system modules to aggregate information and compile plans.

Sourcing

Efficient SCM processes rely very heavily on strong relationships with suppliers. Sourcing entails
working with vendors to supply the raw materials needed throughout the manufacturing
process. A company may be able to plan and work with a supplier to source goods in advance.
However, different industries will have different sourcing requirements. In general, SCM
sourcing includes ensuring:

• The raw materials meet the manufacturing specification needed for the production of goods.
• The prices paid for the goods are in line with market expectations.
• The vendor has the flexibility to deliver emergency materials due to unforeseen events.
• The vendor has a proven record of delivering goods on time and in good quality.

Supply chain management is especially critical when manufacturers are working with perishable
goods. When sourcing goods, firms should be mindful of lead time and how well a supplier can
comply with those needs.

Manufacturing

At the heart of the supply chain management process, the company transforms raw
materials by using machinery, labor, or other external forces to make something new. This final
product is the ultimate goal of the manufacturing process, though it is not the final stage of
supply chain management.

The manufacturing process may be further divided into sub-tasks such as assembly, testing,
inspection, or packaging. During the manufacturing process, a firm must be mindful of waste or
other controllable factors that may cause deviations from original plans. For example, if a
company is using more raw materials than planned and sourced for due to a lack of employee
training, the firm must rectify the issue or revisit the earlier stages in SCM.

Delivering

Once products are made and sales are finalized, a company must get the products into the
hands of its customers. The distribution process is often seen as a brand image contributor, as
up until this point, the customer has not yet interacted with the product. In strong SCM
processes, a company has robust logistic capabilities and delivery channels to ensure timely,
safe, and inexpensive delivery of products.

This includes having a backup or diversified distribution methods should one method of
transportation temporarily be unusable. For example, how might a company's delivery process
be impacted by record snowfall in distribution center areas?

Returning

The supply chain management process concludes with support for the product and customer
returns. Its bad enough that a customer needs to return a product, and its even worse if its due
to an error on the company's part. This return process is often called reverse logistics, and the
company must ensure it has the capabilities to receive returned products and correctly assign
refunds for returns received. Whether a company is performing a product recall or a customer
is simply not satisfied with the product, the transaction with the customer must be remedied.

Many consider customer returns as an interaction between the customer and the company.
However, a very important part of customer returns is the intercompany communication to
identify defective products, expired products, or non-conforming goods. Without addressing
the underlying cause of a customer return, the supply chain management process will have
failed, and future returns will likely persist.

Q-54) Why Is Supply Chain Management Important?

Supply chain management is important because it can help achieve several business objectives.
For instance, controlling manufacturing processes can improve product quality, reducing the
risk of recalls and lawsuits while helping to build a strong consumer brand. At the same time,
controls over shipping procedures can improve customer service by avoiding costly shortages or
periods of inventory oversupply. Overall, supply chain management provides several
opportunities for companies to improve their profit margins and is especially important for
companies with large and international operations.

Q-55) What is SWOT Analysis?

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.

• Strengths are internal, positive attributes of your company. These are within your
control.

• Weaknesses are negative factors that detract from your strengths. These are things that
you might need to improve on to be competitive
 • Opportunities are external factors in your business environment that are likely to
contribute to your success.

• Threats are external factors that you have no control over. You want to plan to handle
them

SWOT analysis will help you to be armed with a solid strategy for prioritizing the work that you
• SWOT analysis will force you to look at your business in new ways and from new directions,
while we feel that we know enough about our enterprise or business.
• You will look at your strengths and weaknesses, and how you can leverage those to take
advantage of the opportunities and threats that exist in your market.
• For a SWOT analysis to be effective, company founders and leaders need to be deeply
involved. This isn’t a task that can be delegated to others
• For best results, you’ll want to gather a group of people who have different perspectives on
the company.
• Select people who can represent different aspects of your company, from sales
• Select people who can represent different aspects of your company, from sales and customer
service to marketing and product development.
• Everyone should be involved while doing a company’s SWOT analysis. Innovative companies
even look outside their own internal ranks when they perform a SWOT analysis and get input
from customers to add their unique voice to the mix.

Risk Analysis
• Risk analysis is the process of identifying and analyzing potential issues that could
negatively impact key business initiatives or projects. This process is done in order to
help organizations avoid or mitigate those risks.
 • The process involves understanding various threats involved in the course of work and
how to effectively deal with them.
• Performing a risk analysis includes considering the possibility of adverse events caused
by either natural processes or adverse events caused by inefficient or inadvertent
human activities
• Enterprises and other organizations use risk analysis to:

• anticipate and reduce the effect of harmful results from adverse events;

• evaluate whether the potential risks of a project are balanced by its benefits to aid in
the decision process when evaluating whether to move forward with the project;

• plan responses for technology or equipment failure or loss from adverse events, both
natural and human-caused; and

• identify the impact of and prepare for changes in the enterprise environment, including
the likelihood of new competitors entering the market or changes to government
regulatory policy.

Benefits of risk analysis

• To identify, rate and compare the overall impact of risks to the organization, in terms of
both financial and organizational impacts
• Enhance communication and decision-making processes as they relate to information
security;
• To improve security policies and procedures and develop cost-effective methods for
implementing these information security policies and procedures;
• To put security controls in place to mitigate the most important risks;
• To increase employee awareness about security measures and risks by highlighting best
practices during the risk analysis process; and
• To identify gaps in security and determine the next steps to eliminate the weaknesses
and strengthen security
• To understand the financial impacts of potential security risks.
•
Steps in risk analysis process

1.Conduct a risk assessment survey.

2.Identify the risks.

3.Analyse the risks.

4.Develop a risk management plan

 The risk analysis should produce control recommendations that can be used to mitigate,
transfer, accept or avoid the risk.
5.Implement the risk management plan

Starting with the highest-priority risk, resolve or at least mitigate each risk so it's no longer a
threat

6.Monitor the risks

Q-56) What are the sources of Innovation?

Peter Drucker’s seven sources of innovation provides us with a purposeful way to search for
opportunities as well as mitigate risks. The first four sources of innovation are symptoms of
something that has already occurred, or can easily be implemented with little effort. They offer
us evidence that make them reliable indicators that there is a great opportunity to innovate.
The last three sources of innovation is not so clear and cut as the first four; therefore, they pose
a greater risk of failure; however, promises greater rewards.

1. The first source of innovation is “The Unexpected.” When something unexpected happens to
us we are hardwired to rule out it out. It's a learned behavior. However, if we were to analyze
The Unexpected, we may find an opportunity to innovate. Think of the story of how the use of
gasoline came about. Oil Refiners was dumping this by product of kerosene into the Ohio
River. This by product would unexpectedly catch fire and blow up. This by product was
gasoline and thousands of barrels was being tossed into the river. John D. Rockefeller saw this,
and instead of seeing as unexpected event, he saw it as an opportunity to leverage its
combustion capabilities in the engines of his factories. Hence gasoline was born and
Rockefeller capitalized off of it handsomely.

2. The second source of innovation is “Incongruities.” This one is a fun one, because when you
ask someone why do they operate in a particular way, and they respond "because we've
always have done it this way."This is an indicator their may be a case of incongruity there,
because they are operating in a way that is the status quo instead of asking is there a better
way to do a particular function. Bottom line if something conflicts with the status quo, most of
us are not inclined to change it.

3. The third source of innovation is “Process Change.” This is one of my favorites, because you
could always analyze a process and find concrete ways to improve it. Amazon is a master of
this. If you take a tour of one of their fulfillment centers, you'll see tons of ways they
innovated through technology, engineering, and supply chain from the status quo to quickly
fill millions of orders. Take time to study a process you you'll be amazed on possibilities you
may have to innovate, especially as technology improves.
4. The fourth source of innovation is “Industry and Market Structures.” A change in and industry
or market opens up ample opportunity to innovate. Cloud technology is probably the most
apparent at this time. 10 years ago, it was difficult to use cloud technology, because of the
need to have fast and reliable internet connection. Since internet services and speeds have
significantly improved, it opened the door for the cloud computing market.

5. The fifth source of innovation is "Demographics." In 2008 I received a data set from large tire
manufacture to conduct a market analysis. When I opened the zipped file, I saw information
on one of their studies to design a new tire focused on the Tuner Group. This group was street
racers in their late teens and twenties, that had an appetite for a particular type of high
performance tire. While conducting my analysis, I noticed they focused on a certain
demographic to determine the design, compound, and cost of the tires. I found it insightful on
the impact demographics played on how they engineered their tires.

6. The sixth source of innovation is "Changes in Perception." In mathematics there is no

difference between "The glass is half full" and "The glass is half empty." However, the
meaning of these two statements is completely different, and so are their consequences. We
can go back to the cloud computing example. Amazon had built these elaborate data-centers
to run their own business; however, they saw an opportunity in cloud computing. They didn't
stop and say owe, we are a online retailer. No they changed the perception of what business
they were in and started the Amazon Web Services part of their business to capitalize off the
rapidly expanding cloud business.

7. The seventh source of innovation is "New Knowledge."This source of innovation is what most
of us think of, when we think of innovation. This is where the Bill Gates, Mark Zuckerbergs,
and Steve Jobs of the world play in. It's the most difficult form of innovation; however, the
most lucrative. It's conceptualizing a new idea and that new idea changes an entire market.