Give a Note on Marketing Concept for SMU MBA MB0046 Assignment

It is the solved assignment of “Give a note on marketing concept.” It is the solved assignment of MB0046 (Marketing Management) for SMU MBA. You may read Process of Developing New Product and Product Mix Pricing Strategies also.

The Marketing Concept proposes that a company’s task is to create, communicate and deliver a better value proposition through its marketing offer, in comparison to its competitors; to its target segment and that is customer oriented approach only can lead to success in the market place.

Today, marketing function is seen as one of the most important function in the organization. Many marketers put the customers at the centre of the company and argue in favor of such a customer orientation where all functions work together to respond, serve and satisfy the customer.

Many successful and well known multinational companies have adopted marketing concept as their business and marketing philosophies. Many Indian companies in the banking and other service sectors follow customer orientation and service as their motto. According to this concept, a company’s marketing effort must start right from identifying through Market Research, exact needs & wants of the target market.

In the recent years, we have been witnessing a lot of complaints about products and packaging that are harmful to health and ecology. Marketers must come forward to protect the interest of both the customers and the environment and this they can achieve by adopting or following the societal marketing concept.

Marketing as a concept has evolved over a period of time and has witnessed changes and modifications in its philosophy. There are five concepts which describe this development and offer ways to companies on how to conduct their business – Production Concept, Product Concept, Selling Concept, Marketing Concept and Societal Marketing Concept.

Product Mix Pricing Strategies for SMU MBA MB0046 Assignment

There is the solved assignment of “Explain the different product mix pricing strategies.” It is the solved assignment of MB0046 (Marketing Management) for SMU MBA. You may read Process of Developing New Product and Requisites of an Effective Segmentation also.

1. Product line pricing: strategy of setting the price for entire product life marketer differentiate the price according to the range of products i. e. suppose the company is having three products n low, middle and high end segment and prices the three products say Rs. 10, Rs. 20 and Rs. 30 respectively. In this condition, all the three products cater to the different segments low, middle and high income group respectively.

2. Optional product pricing strategy is used to set the price of optional or accessory products along with a main product.

3. Captive product pricing: setting a price for a product that must be used along with a main product. For example, Gillette sells low priced razors but make money on the replacement cartridges.

4. By-product pricing is determining the price for by-products in order to make the main products price more attractive. For example, L. T. Overseas manufacturers of Dawaat basmati rice, found that processing of rice results in two by precuts i.e. rice husk and rice brain oil. If the company sells husk and brain oil to other consumers, then company is adopting by-product pricing.

5. Product bundle pricing is offering companies several products together at the reduced price. This strategy helps companies to generate more volume, get rid of the unused products and attract the price conscious consumer. This also helps in locking the customer from purchasing the competitors products. For example, Anchor toothpaste and brush are offered together at lower prices.

Above mentioned are basic principles of product mix pricing strategies for SMU MBA MB0046 assignment.

Process of Developing New Product for SMU MBA Assignment of MB0046 for Marketing Management

It is the solved assignment of “Explain briefly what are the several processes involved in new product development.” The assignment has been solved for MB0046 (Marketing Management) of SMU MBA. You may see International Market Entry Strategies and Requisites of an Effective Segmentation also.

New Product Development:

New products are essential for existing firms to keep the momentum and for new firms they provide the differentiation. New product doesn’t mean that absolutely new to the world. It may be modification, or offered in the new market, or differentiate from existing products. Therefore it is necessary to understand what are new products?

New Products:

They are really innovative: Google’s Orkut a networking site which revolutionized social networking. In this site people can meet like-minded people; they can form their own groups and many more.

They are very different from others: Haier launches path-breaking 4-door Refrigerators first time in India.

They are imitative: these products are not new to the market but new to the company. For example, Cavin Kare launched ruche pickles. This product is new to Cavin Kare but not to the market.

New Product Development Process:

Stage 1: Idea generation: new product idea can be generated either from the internal sources or external sources. The internal sources include employees of the organization and data collected from the market. The external sources include customers, competitors and supply chain members.

Stage 2: Idea screening: Organization may have various ideas but it should find out which of these ideas can be translated into concepts.

Stage 3: Concept development:

Stage 4: Concept testing: at this stage concept was tested with the group of target customers.

Stage 5: Marketing strategy development: the marketing strategy development involves three parts.

Stage 6: Business analysis: it is the analysis of sales, costs and profit estimated for a new product to find out whether these align with company mission and objective.

Stage 7: Product development:

Stage 8: Test marketing

Stage 9: commercialization: in this stage product is completely placed in the market and aggressive communication program is carried out to support it.

Requisites of an Effective Segmentation for MB0046 Assignment of SMU MBA

It is the solved assignment of “List out the 5 important requisites of an effective segmentation by giving suitable examples”. It is the assignment of MB0046 (Marketing Management) for SMU MBA. You may view Define Customer Relationship Management and International Market Entry Strategies also.

Requisites of Effective Segmentation:

1. Measurable and Obtainable: The size, profile and other relevant characteristics of the segment must be measurable and obtainable in terms of data. If the information is not obtainable, no segmentation can be carried out. For example, Census of India provides the data on migration and education level, but do not specifies how many of the migrated employees are educated and if educated how many are there in white color jobs.
2. Substantial: The segment should be large enough to be profitable. For consumer markets, the small segment might disproportionably increase the cost and hence products are priced too high. For example, when the cellular services started in India cost of the incoming calls and outgoing calls were charged at Rs. 12/minute. As the number of subscribers grew, incoming calls become free.
3. Accessible: The segment should be accessible through existing network of people at a affordable cost. For example, Majority of the rural population still not able to access the internet due to high cost and unavailability of connections and bandwidth.
4. Differentiable: The segments are different from each other and require different 4Ps and programs. For example, Life Insurance Corporation of India needs separate marketing programs to sell their insurance plans, unit plans, pension plans and group schemes.
5. Actionable: The segments which a company wishes to purse must be actionable in the sense that there should be sufficient finance, personnel and capability to take them all.

Segmentation of market is the biggest task in our country for the diversity. The task always changes with the region, state and community.

Define Customer Relationship Management (CRM) from MB0046 of SMU MBA Assignment

There is the solved assignment of “Define Customer Relationship Management (CRM)”. The MB0046 (Marketing Management) assignment has been solved for SMU MBA assignment. You may view International Market Entry Strategies and Product Life Cycle also.

In the marketing world managers quite often says ‘retaining customer is more important than acquiring one’. We will examine the importance of this sentence. The organization uses communications tools to make their product and brand aware among the consumer. It uses its supply chains and human resources to sell their products. Each stage costs for the company. In this competitive world organizations want to reduce the cost and develop the database which helps in creating loyalty programs. There it is very essential for the organizations to use software to pile up big database of customer. Many Indian companies like Infosys, Wipro and others started offering CRM software to companies.

Definitions of Customer Relations Management (CRM):

Bery and Parasurman define CRM as “attracting, developing and retaining customer relationships.”

In industrial marketing, Jackson defines CRM as “marketing oriented toward strong, lasting relationships with individual accounts.”

Doyle and Roth define CRM as “the goal of relationship selling is to earn the position of preferred supplier by developing trust in key accounts over a period of time.”

The sequence of activities for performing relationship marketing would include developing core services to build customer relationship, customization of relationship, augmenting core services with extra benefits, and enhancing customer loyalty and fine-tuning internal marketing to promote external marketing success.

Christopher considers relationship marketing as “a tool to turn current and new customers into regularly purchasing clients and then progressively moving them through being strong supports of the company and its products to finally being active and vocal advocates for the company.”

From the above definitions, it could be concluded that Customer Relationship Management refers to all activities directed towards establishing, developing and sustaining long lasting, trusting, win-win, beneficial and successful relational exchanges between the focal firm and all its supporting key stakeholders.

CRM is not a new concept but an age-old practice, which is on the rise because of the benefits others, especially in the present marketing scenario. So, CRM today is a discipline as well as a set of discrete software and technology which focuses on automating and improving the business process associated with managing customer relationships in the area of sales, marketing, customer service and support.

Product Life Cycle for MBA Assignment of SMU MB0046

The solved assignment has been prepared for “State the meaning of Product life cycle and explain the different stages involved in it”. It is the solved assignment of MB0046 (Marketing Management) for SMU MBA. You should take a view of Micro Environmental Forces of Marketing and International Market Entry Strategies too.

The product which is introduced into the market will undergo some modifications over the period. Its sales also fluctuate. Therefore marketer is interested in finding out how sales changes over period? And what strategies best suits at that point? A product life cycle can be graphed by plotting aggregate sales volume for a product category over time.

Generally the curve resembles bell shaped curve but it is not the only one type of curve. We can obtain style, fashion or fad style of product life cycles also.

According to the type of cycle of product passes through five stages:

1. Product development stage: In this stage company indentifies the viable idea and develops it. Sales in this stage are zero but require huge research and development budget.

2. Introduction stage: Company introduces the product into the market. As the product is new to the market, awareness is usually very low.

3. Growth stage: Company gets experience over the period and now tries to get the maximum market share. Sales will grow rapidly resulting in lesser cost and better profit.

4. Maturity stage:

• a. Peak sales
• b. Low cost per customer
• c. High profits
• d. Competition based pricing
• e. Communicating the product differentiation to consumer
• f. Improving supply chain efficiency
• g. Defend the market share
• h. Industry experiences the consolidation

5. Decline stage: In this stage, product and profit declines. Company should phase out weak items from their product mix.

Some Other Product Life Cycles:

1. Style: a style is a basic and distinctive mode of expression appears in the field of human behavior.

2. Fashion: currently accepted or popular style in a given field for example, cargo jeans are now fashion with college going students.

3. Fad: a fashion that enters quickly, adopted with great zeal, peaks early and decline very fast for example, when the pager is introduced, everybody would like to have the product. But when people found mobile as alternative the demand for the product went down drastically.

International Market Entry Strategies for MB0046 SMU MBA Assignment

The solved assignment has been prepared for “What are the different market entry strategies if a company wants to enter international markets?” It is the solved assignment of SMU MBA for MB0046 (Marketing Management). You should take a view of Micro Environmental Forces of Marketing also.

Companies should evaluate each country against the market size, market growth and cost of doing business, competitive advantage and risk level before entering in international markets.

There are the checklists of country evaluation that should be evaluated by companies before entering in any international market.

Checklist for Country Evaluation:

1. Political Rights
2. Civil Liberties
3. Control of Corruption
4. Government Effectiveness
5. Rule of Law
6. Health Expenditure
7. Education Expenditure
8. Regulatory Quality
9. Cost of Starting a Business
10. Days to Start a Business
11. Trade Policy
12. Inflation
13. Fiscal Policy
14. Consumption
15. Competition

Companies should evaluate these eliminates with their weightages and they should give score also for those elements. Companies can enter in international market from any one of the following strategies.

• Exporting
• Licensing
• Contract Manufacturing
• Management Contract
• Joint Ownership
• Direct Investment

Exporting:

It is the technique of selling the goods produced in the domestic country in a foreign country with some modifications.

Licensing:

According to Philip Kotler licensing is a method of entering a foreign market in which the company enters into an agreement with a license in the foreign market, offering the right to use a manufacturing process, trademark, patent, or other item of value for a fee or royalty.

Contract Manufacturing:

Company enters the international market with a tie up between manufacturer to produce the product or the service.

Management Contracting:

In this type a company enters the international market by providing the knowhow of the product to the domestic manufacturer.

Joint Ownership:

A form of joint venture in which an international Company invests equally with a domestic manufacturer.

Direct Investment:

In this method of international market entry Company invest in manufacturing or assembling.

Micro Environmental Forces of Marketing for Marketing Management Assignment of SMU MBA

It is the solved assignment of “Explain the different micro-environmental forces with examples.” The assignment is solved for SMU MBA of MB0046 (Marketing Management). You can read other solved assignments also - Measures to Improve Employee Morale and Wage and Salary Administration Policies in India.

Marketing department let alone cannot satisfy all the needs of customer. Therefore it is essential to integrate the functions of suppliers, publics, company departments and intermediaries in creating the value to the customer. These forces are known as organization’s micro environment.

Microenvironment: The forces which are very close to company and have impact on value creation and customer service.

Forces in the micro-environment:



The Company:

Remember in the previous unit we discussed about the strategic and marketing planning. Deducing a strategic plan in to specific marketing plan require coordination of other functions like finance, Human resource, production, and research and development.

Intermediaries:

Marketing intermediaries: The firms which distribute and sell the goods of the company to consumer.

Marketing intermediaries plays an important role in the distribution, selling and promoting the goods and services.

Publics:

These are microenvironment groups, which helps company to generate the financial resources, creating the image, examining the companies’ policy and developing the attitude towards the product.

Competitors:

A company should monitor its immediate competitor. The product should be positioned differently and able to provide better services.

Suppliers:

Suppliers are the first link in the entire supply chain of the company. Hence any problems or cost escalation in the stage will have direct effect on the company. Many companies adopted supplier relation management system to manage them well.

Customers:

A company may sell their products directly to the customer or use marketing intermediaries to reach them. Direct or indirect marketing depends on what type of marketing company serves. Generally we can divide the markets into five categories.

Measures to Improve Employee Morale for MB0043 of SMU MBA Assignment

There is the solved assignment of “Suggest few measures to improve employee morale.” The assignment is solved for SMU MBA of MB0043 (Human Resource Management). You can read other assignments also - individual evaluation methods of performance appraisal and wage and salary administration policies in India.

There are a number of measures which can be used to control the warning signals of low morale. The following are the positive measures to be taken to bring job satisfaction to the employees and reconcile individual interests with the interests of the organization.

1. Creation of whole jobs
2. Job enrichment
3. Building responsibility into a job
4. Modifying the work environment
5. Flexing working hours
6. Job sharing
7. Rotation of jobs
8. Profit sharing

Morale can also be improved by adapting several other measures such as employee contest, special recognition and awards to long service employees, film shows to employees during their lunch hour, free coffee during rest pauses, and training the supervisors in how to handle people.

Under this method, complete jobs are assigned to the workers. The complexity of a job should be increased so that it may appeal to their higher needs.

Job enrichment tries to deal with dissatisfaction by increasing job depth. Under this, individual employees may be given responsibility for setting their own work pace, for concerning their own errors, and/or for deciding on the best way to perform a particular task.

Flex time permits employees to arrange their work hours to suit their personal needs and life-styles. This is particularly suited to situations with fluctuating workloads. Flex time employees are responsible for co-coordinating their factions with other employees and thereby have more responsibility and autonomy.

Morale can be improved by effective profit-sharing schemes. In addition to its economic aspects, profit-sharing has also psychological aspects relating to friendly move by the management in providing the workers an opportunity to participate in the profits.

Wage and Salary Administration Policies in India for MBA MB0043 SMU Assignment

It is the solved assignment of “Explain Wage Administration policy. What are the ways by which wages and salaries are managed in India?” This is the solved assignment of SMU MBA for MB0043 (Human Resource Management). You can look into these also - techniques and methods in selecting employees and individual evaluation methods of performance appraisal.

The basic purpose of wage and salary administration is to establish and maintain an equitable wage and salary structure. Its secondary objective is the establishment and maintenance of an equitable labour-cost structure i.e., an optimal balancing of conflicting personnel interests so that the satisfaction of employees and employers is maximized is concerned with the financial aspects of needs, motivation and rewards.

The term wage is commonly used for those employees whose pay is calculated according to the number of hours worked. Thus, the weekly pay check will fluctuate as the number of hours actually worked varies. The word salary applies to compensation that is uniform from one period to the next and does not depend upon the number of hours worked.

Salaried often implies a status distinction, because those who are on salary are generally white-collar, administrative, professional, and executive employees, whereas wage-earners are designated as hourly, non-supervisory, or blue-collar. Wage-earners in some organizations do receive full wage if they are absent for such reasons as sickness, whereas salaried employees, especially at the lower levels, often receive overtime pay when they work over the standard work week.

A job is defined as the collection or aggregation of tasks, duties, and responsibilities that, as a whole, is regarded as the reasonable assignment to an individual employee. A job may include many positions, for a position is a job performed by an individual and hence related to a particular employee. Thus, an employee as his position, but many positions may involve the same assignment of duties and constitute a single job. The job impersonal; the position is personal.

Individual Evaluation Methods of Performance Appraisal for SMU MB0043 MBA Assignment

There is the solved assignment of “discuss Individual evaluation methods used for performance appraisal.” The assignment has been solved for SMU MBA of MB0043 (Human Resource Management). You can read other assignments also - stocks and ratios and techniques and methods in selecting employees also.

You can evaluate an employee individually in five ways. These ways can be categorized into:

Graphic Rating Scale:

The most widely used performance evaluation technique is a graphic rating scale. In this technique, the evaluator is presented with a graph and asked to rate employees on each of the characteristics listed. The ratings can be in a series of boxes, or they can be a continuous scale (0-9) or so. In the latter case, the evaluator places a check above descriptive words ranging from none to maximum.

Forced Choice:

The forced-choice method of evaluation was developed because other methods used at the time led to a preponderance of higher ratings, which made promotion decisions difficult. In forced choice, the evaluator must choose from a set of descriptive statements about the employee.

Essay Evaluation:

In the essay technique of evaluation, the evaluator is asked to describe the strong and weak aspects of the employee’s behavior. In some enterprises, the essay technique is the only one used; in others, the essay is combined with another form, such as a graphic rating scale. In this case, the essay summarizes the scale, elaborates on some of the ratings, or discusses added dimensions not on the scale.

Management by Objectives:

Another individual evaluation method in use today is Management by Objectives (MBO). In this system, the supervisor and employee to be evaluated jointly set objectives in advance for the employee to try to achieve during a specific period.

Checklists and Weighted Checklists:

Another type of individual evaluation method is the checklist. In its simplest form, the checklist is a set of objectives or descriptive statements. If the Rater believes that the employee possesses a trait listed, the Rater checks the items; if not, the Rater leaves it blank. A rating score from the checklist equals the number of checks.

Techniques and Methods in Selecting Employees for MB0043 MBA Assignment

“Explain the various techniques and methods used in selecting employees.” It is the solved SMU MBA assignment of MB0043 (Human Resource Management). You can take a look of phases of evolution of human resource management and stocks and ratios also.

The hiring procedures are therefore, generally long and complicated. Many employers make use of such techniques and pseudo-sciences while coming to hiring decisions. There are some popular procedures to suit individual situation:

1. Initial or preliminary interview
2. Application blank or blanks
3. Check of references
4. Psychological tests
5. Employment interview
6. Approval by the supervisor
7. Physical examination
8. Induction or orientation

Preliminary Interview:

The more non-selective the recruitment programme, the more likely it is that a preliminary interview will be required. This initial interview is usually quite short and has its object the elimination of the obviously unqualified.

Application Blank:

An application blank is a traditional, widely accepted device for getting information from a prospective applicant which will enable a management to make a paper selection. The blank provides preliminary as well as aid in the interview by indicating areas of interest and decision.

Check of References:

The use of references is common in most selection procedures, for it involves only a little time and money, and minimum of effort. The procedure places reliance on the evaluation of former employers, friends and professional personal, checks on references are made by mail or telephone, and occasionally in person, or by using a reference form.

Psychological Tests:

The next step in the procedures outlined above is that of testing. If all organizations, large and small, are considered, it is apparent that most are not using psychological tests.

Interviewing:

Interviewing is probably the most widely used single method of selection. A substantial amount of subjectivity, and there, unreliability, is to be expected from interviewing when used as a tool of evaluation.

Physical Examination:

The physical examination is an employment step found in most businessmen can vary from a very comprehensive examination and matching of an applicant’s physical capabilities to job requirements to a simple check or general physical appearance and well-being.

Phases of Evolution of Human Resource Management for MB0043 SMU MBA Assignment

“Trace the phases of evolution of human resource management.” It is the solved assignment of MB0043 (Human Resource Management) for SMU MBA. You can take a look of stocks and ratios also.

Kautilya provides a systematic treatment of management of human resources as early as 4th century B.C. in his treatise titled “Artha-Shastra”.

In course of time, the guild system was followed by co-operative sector consisting of craftsmen and traders, and purporting to promote their professional interests. Indeed, numerous professional societies were formed on these lines with their own systematic procedures and policies to nature their own interests.

The concept of “Varnashram” or caste system was originally based on these principles. The individuals who used to earn their livelihood by engaging themselves in activities such as teaching, sacrifice or state management were designated as Brahmins while those specializing in fighting were termed as Kshatriyas.

As regards Indian economy in Mediaeval India, although there was a lull because of numerous foreign aggressions for around 700 years, during the Mughal rules, the trade and commerce were revived.

Accordingly, the workers were entirely helpless in the face of the organized and powerful European planters. Explicitly, during post-independence period, the activities of Personnel Department in different public and private sectors have multiplied. According to the provisions of section 49 of the Factories Act, 1948, it became obligatory for the employers to employ a Welfare Officer in factory employing 500 or more workers.

Management of human resources is being regarded as specialized profession such as that of medicine and law. In addition to the industrial relations functions the Personnel Department is responsible for other varied functions including employment, safety, training, wage and salary administration and research and development.

However, personnel counselling has been largely neglected in most of Indian enterprises. This gives rise to several grievances and lowers the efficiency of the workers.

Stocks and Ratios for MB0042 for MBA Assignment

“Write a note on Stocks and Ratios theory.” It is the solved assignment of MB0042 (Managerial Economics) for SMU MBA. There are some other solved assignments for MB0042 - Law of Variable Proportion, Elasticity of Demand and Equilibrium and Disequilibrium.

Stock is always measured at a given point of time and flow is measured over a given period of time. Macro Stock Variables are inventory, capital stock, wealth, debits etc. Macro flow variables are National Income and output, consumption, investment etc.

Both stock and flow are expressed in money units. Stock may be expressed as just rupee but flows are expressed as rupees per month, rupees per year or in any time unit. The distinction between the stock and flow can be cleared with an example. Total money supply is stock but change in money supply is flow.

There are various macroeconomic ratios, which are commonly used in management decision making. Consumption-income ratio shows the relationship between income and consumption. Saving-income ratio is obtained by subtracting consumption from income. Capital-output ratio shows the number of units of capital required for each unit of output produced.

Capital-labour ratio indicates factors proportion, the combination of labour and capital in the production process. Output-labour ratio shows the labour productivity. Index number is a statistical device which shows changes of a variable over a period of time. The value of money can be measured by means of Price Index number, in this there are two price indices consumer’s price index number and wholesale price index.

Index numbers are used in measuring the change in the value of money, changes in wages, and it is also useful for planners to design the policies. Stocks deals ratios and ratios is compatible with stocks. Both are quite compatible with each other to show the basic understanding about managerial economics.

Equilibrium and Disequilibrium Theory for MB0042 for SMU MBA Assignment

“Define Equilibrium and Disequilibrium.” It is the solved question of MB0042 (Managerial Economics) for SMU MBA assignment. You can take a look of some other solved assignments for MB0042 - Law of Variable Proportion, Elasticity of Demand and Pricing Policies and Objective of Pricing Policy.

Equilibrium is defined in economics as the position of rest or a state of balance or a state where there is no change required in a period of time. Equilibrium is absence of disequilibrium. Economics deals with variables, whose value changes over a period of time.

This concept of equilibrium is used in managerial economics also. Therefore, you, as management students, must understand this concept. Let us take an example of demand and supply analysis. This point where demand and supply intersect each other is the point where price settles down. This is the equilibrium price.

Whenever there is a change in demand and supply forces, this equilibrium is disturbed. But this equilibrium is restored again by interplay of demand and supply factors. There are two types of equilibriums, partial and general equilibriums. The above example is for partial equilibrium; where, it is assumed that everything in the economy is constant.

General equilibrium means equilibrium in all market and sectors. It assumes that everything depends upon everything. It emphasizes on the interdependence between different markets and sectors of economy.

Market Equilibrium is the point where the demand and supply curve intersect each other and the demand is equal to supply. If this equilibrium is disturbed, the price increases above the equilibrium. The supply will be more than the demand and this surplus and this surplus created between the sellers, drives the price down. Whereas, if the price is above the equilibrium price, there is shortage and the competition among the buyers drives the price up to the equilibrium price. The increase in the demand increases both the equilibrium quantity and equilibrium price.

Pricing Policies and Objective of Pricing Policy from MB0042 for SMU MBA Assignment

It is the solved assignment of - “Define Pricing Policy. Explain the various objective of pricing policy.” It is the question of MB0042 (Managerial Economics) SMU MBA assignment. There are already some solved assignments for MB0042 - Law of Variable Proportion, Elasticity of Demand and Price Discrimination.

Pricing Policies:

The decision of pricing is very important in any business. Price once fixed is never permanent. It needs to be reviewed and revised according to the market conditions.

Objectives of Pricing Policy:

To Maximize Profits:

Every firm tries to maximize their profits. So they should have a price policy, which fetches them maximum revenue. Every firm should have a price policy keeping the long run prospects in mind.

Price Stability:

Always fluctuating price is not for the goodwill of the company. A stable price always wins the confidence of customers.

Capture the Market:

Producer’s aim is to capture the market and to do so, he fixes comparatively lower price for his product, while introducing a product to capture the lion share of market. But once they gain stability and consistency they can change their price policy.

Facing Competitive Situation:

Every producer should fix the price, keeping the price of the competitor in mind in some types of market structure; prices are fixed in such a way so as to restrict the entry of rival firms in the industry.

Ability to Pay:

The price should be fixed according to the ability of consumer to pay; high price for rich customers and low for poor customers. This can be applied in case of services given by doctors, lawyers etc.

Prices once fixed cannot be kept constant forever; it has to be revised according to the condition and the economic situation. The main objective of pricing policy is to maximize profit for the firm, stability is necessary to win the confidence of the customers and it should be able to capture enough market for the firm.

Law of Variable Proportion from MB0042 SMU MBA Assignment

“Explain the Law of Variable Proportion.” The question has been solved for MB0042 (Managerial Economics) SMU MBA assignment. I have already submitted the solved assignments for MB0042 - Elasticity of Demand, Price Discrimination and Marginal Efficiency of Capital.

Law of Variable Proportion:

Total Product (TP) – Total quality of output produced by a firm.

Average Product (AP) – The total produced by a firm divided by the quantity of variable factors used to produce.

AP = TP/Q

AP – Average Product

TP – Total Product

Q – Number of Variable Factors

Marginal Product (MP) – Change in TP caused as a result of additional unit of Variable factor employed to the combination of Fixed Factor.

Law of variable proportion is also called Law of Diminishing Returns. It examines the production function when one factor varies keeping the quantities of other fixed factors constant. That is how the output varies when Variable Factors are employed to the fixed factors.

The law states, when Variable factors are increased in equal doses keeping the Fixed Factor constant, the total product will increase. But after a certain point it will increase at a diminishing rate and finally the total product starts decreasing.

Assumption:

This law is subject to certain assumptions:

1. The state of technology is given

2. Only one factor of production must be variable. In the example illustrated below, we have taken it as labour

3. There are some inputs, which are kept constant of fixed



In the above table, first column shows fixed factor as the land, say 5 acres. Second column shows labour as variable factor. Third column shows Total Product which changes due to change in the variable factor. Fourth column shows AP which is derived by dividing TP with Q. Fifth column, is MP which is derived by change in TP with change in Q. In the above table, at the fourth unit of variable factor, the total product reaches maximum and then starts has reached its maximum at third unit of variable factor. Marginal product starts falling first, average product follows it and total product falls last.

Marginal Efficiency of Capital and Factors of MEC for MB0042 Managerial Economics MBA Assignment

It is the solved assignment of – “What is Marginal efficiency of Capital? Describe the factors determine MEC.” The question has been submitted for MB0042 (Managerial Economics) SMU MBA assignment. There are already Elasticity of Demand and Price Discrimination from MB0042.

Managerial Efficiency of Capital (MEC) – any investment decision depends not only on rate of interest but also whether or not the expected rate of returns on the investment is greater than cost of borrowing the funds,. In these two factors, the MEC is an important factor because MEC is the expected rate of returns from the investment. If the returns expected are low, then the investment is not profitable because in short run, rate of interest is stable.

In MEC, capital means the real productive assets. MEC depends on expected rate of returns of a capital asset over its life time which is also called Prospective Yield and the supply price of capital assets. Any business man will weigh the prospective yield with the supply price before investing.

Factors Affecting MEC:

Expected demand for future – if the demand is expected to increase, the decrease in future, the prospective yield will be low and so the MEC. So the change in expectation gives sudden ups and downs in investment decisions.

Level of income – when people experience gains through reduction in tax or gains in bullish market, the businessmen become more optimistic as they know when income increases, the demand will increase and so the MEC is high and it is the other way when there are huge losses.

When consumption changes – In real life, whenever there is a shift in consumption Function, the MEC also changes.

Business expectation – Investment is something which gives returns only in the future. Any decision on investment depends on the return which the businessmen expect in future. If the environment is optimistic that leads to more expectations in future.

MEC and Business Expectation:

MEC depends on the businessmen’s expectations, which increases due to invention and goes down due to any threat to the returns on investment. It is also affected by the annual spirit of the entrepreneur. That is why investments are not always calculations but also irrational optimism. Business expectations are based on existing events and partly future facts.

Elasticity of Demand and Its Factors for MB0042 MBA Assignment

This is the solved assignment of – “What is Elasticity of Demand? Explain the factors determining it.” It is written for MB0042 (Managerial Economics) SMU MBA assignment. We already have explained about price discrimination and categories of environmental stressors.

Factors Influencing Price Elasticity of Demand:

Nature of Commodity - By the nature of commodity, we divide them into comfort, luxury and necessity. For luxuries and comforts the Ep> 1 because when prices of these commodities decrease, the demand for these commodities will also increase; whereas in case of necessities, the Ep<1 because when the price of these commodities decrease, the demand for these commodities will increase by less than proportionate.

Availability of substitutes – For those commodities which have enough substitutes in the market, the price elasticity is of more than one, because when the price of a commodity has many substitutes, the consumer will shift to the substitute available in the market.

Number of Uses – Those commodities which have many or multiple uses like coal, milk. For such commodities, the elasticity is more than one as they can be used for more than one purpose. So, if the price of such commodity decreases, there will be increase in the demand. But for those commodities which have very less use of limited uses, the demand will be relatively inelastic.

Durability of commodity – Durable goods is those which last for many years. E.g.: motorcycle, TV, washing machines, etc. The price elasticity of demand for durable goods will be more than one because when the price of such commodities increases, the demand will increase, but for the commodities like fish, vegetables etc., which come under perishable goods, the elasticity of demand will be less than one as these commodities cannot be stored. So even if the price decreases, the demand will not increase.

Consumer’s Income – The price elasticity of demand will be relatively elastic for overall commodities which the consumer’s income is high.

Price Discrimination for MB0042 MBA Assignment of SMU

“What is Price Discrimination? Explain the basis of Price Discrimination.” You need to solve the assignment question for MBA Semester 1 MB0042 – Managerial Economics. It is the assignment of fall session. You can check out other assignment questions also such as - Different Categories of Environmental Stressors and Process of Negotiation.

The measurement of this sensitivity in terms of percentage is called Price Elasticity of Demand. According to Marshall, Price Elasticity of Demand is the degree of responsiveness of demand to the chance in price of that commodity.

Perfect elastic demand is a case of theoretical extremity. When a small change in price leads to a very substantial change in quantity demand, the price elasticity is numerically infinite.

When a demand for the product is independent of price, such demand remains unaffected with any magnitude of change in price.

To make relatively elastic simpler, we can say that any small change in price leads to a big change in quantity demanded. It can be an increase or decrease.

When there is less then proportionate change in demand to the change in price, we say that the demand is relatively inelastic that is Ep<1.

In numerical co-efficient of price elasticity of demand in different cases, we find that its value ranges from zero to infinite.

For those commodities which have enough substitutes in the market, the price elasticity is of more than one, because when the price of a commodity has many substitutes, the consumer will shift to the substitute available in the market.

The price elasticity of demand for durable goods will be more than one because when the price of such commodities increases, the demand will increase, but for the commodities like fish, vegetables etc., which come under perishable goods, the elasticity of demand will be less than one as these commodities cannot be stored.