Question : Which of the following statements are false with respect of Net profit ratio?
Option 1: Net Profit Ratio establishes the relationship between Net Profit and Revenue from Operations, i.e., Net Sales.
Option 2: Net Profit Ratio is an indicator of overall efficiency of the business. Higher the Net Profit Ratio, better the business.
Option 3: An increase in the ratio over the previous period shows improvement in the operational efficiency and decline means otherwise.
Option 4: None of the above.
Correct Answer: None of the above.
Solution : Answer = None of the above.
Net profit Ratio Establishes the Relationship Between Net profit and Revenue from operation
The net profit Ratio is an indicator of the overall efficiency of the Business.
Higher the Net Profit Ratio Better the Business.
Hence, the correct option is 4.
Answer laterQuestion : Case Study 3: Importance of Entrepreneurship Development
XYZ Electronics is a well-established company that has been manufacturing traditional electronic gadgets for decades. With changing consumer preferences, the demand for their products has declined. The management realized the need to innovate and cater to the growing market for smart devices. They invested in research and development to create cutting-edge smart gadgets, resulting in increased sales and market share.
Question:
How did XYZ Electronics respond to the changing market demands?
Option 1: By ignoring the market trends and continuing with traditional gadgets
Option 2: By investing in research and development for smart gadgets
Option 3: By shutting down the business
Option 4: By reducing the prices of their traditional gadgets
Correct Answer: By investing in research and development for smart gadgets
Solution : The correct answer is (b) By investing in research and development for smart gadgets
Recognizing the decline in demand for traditional electronic gadgets and the growing market for smart devices, XYZ Electronics took the proactive approach of investing in research and development. This strategic decision enabled them to create cutting-edge smart gadgets, leading to increased sales and market share.
Question : Identify the principle of management in the below case.
The head of the sales department asked his subordinate to increase the production due to increased sale of cloth whereas the head of finance department asked not to increase the production of cloth due to risk factor.
Option 1: Unity of direction
Option 2: Unity of command
Option 3: Division of work
Option 4: Scaler chain
Correct Answer: Unity of command
Solution : Unity of command is being violated here. It involves each subordinate should receive orders from only one superior. The subordinate is accountable to his single Boss only.
Hence Option B is correct.
Question : Statement 1: Sales promotion techniques aim to increase short-term sales and consumer interest.
Statement 2: Sales promotion techniques have an impact on consumer purchasing decisions.
Option 1: Both statements are correct.
Option 2: Statement 1 is correct, and statement 2 is false.
Option 3: Both statements are incorrect.
Option 4: Statement 2 is correct, and statement 1 is false.
Correct Answer: Both statements are correct.
Solution : The correct answer is (a) Both statements are correct.
Statement 1 is correct. Sales promotion techniques are designed to stimulate immediate sales and generate consumer interest in the short term through various strategies like discounts, coupons, contests, and limited-time offers.
Statement 2 is correct. Sales promotion techniques do indeed impact consumer purchasing decisions. These promotions often influence consumers to make a purchase by offering incentives, discounts, or attractive deals, affecting their decision-making process.
Question : Statement 1: Sales promotion techniques aim to increase short-term sales and consumer interest.
Statement 2: Sales promotion techniques have an impact on consumer purchasing decisions.
Option 1: Both statements are correct.
Option 2: Statement 1 is correct, and statement 2 is false.
Option 3: Both statements are incorrect.
Option 4: Statement 2 is correct, and statement 1 is false.
Correct Answer: Both statements are correct.
Solution : The correct answer is (a) Both statements are correct.
Statement 1 is correct. Sales promotion techniques are designed to stimulate immediate sales and generate consumer interest in the short term through various strategies like discounts, coupons, contests, and limited-time offers.
Statement 2 is correct. Sales promotion techniques do impact consumer purchasing decisions. These promotions often influence consumers to make a purchase by offering incentives, discounts, or attractive deals, affecting their decision-making process.
Question : Case Study 20:
IJK Retail is a chain of retail stores. The company aims to maintain consistent customer service standards across all its outlets.
Question:
What would be the first step for IJK Retail in the process of controlling?
Option 1: Setting customer service standards.
Option 2: Measuring customer satisfaction.
Option 3: Comparing sales data with targets.
Option 4: Taking corrective action.
Correct Answer: Setting customer service standards.
Solution : The correct answer is (a) Setting customer service standards.
In the process of control, the first step for IJK Retail would be setting customer service standards. Control begins with establishing clear and specific standards or goals against which performance will be measured. In this case, the company needs to define the expected customer service standards that it wants to maintain across its outlets before it can measure, compare, and take corrective action if necessary.
Question : Identify at what level of management the sales manager is engaged.
Option 1: Top level management
Option 2: Middle level management
Option 3: Operational-level management
Option 4: None of the above
Correct Answer: Middle level management
Solution : Sales managers are included in the middle level of management. The middle level consists of heads of different functional departments like department managers and other executive officers attached to different departments.
Hence, Option B is correct.
Question : Case Study 1:
ABC Ltd. is a well-established manufacturing company that has been operating for several years. Recently, the company faced a decline in sales due to the economic recession in the country.
Q :- Why is understanding the business environment important for ABC Ltd.?
Option 1: To ensure complete control over external factors
Option 2: To analyze the internal structure of the company
Option 3: To identify potential opportunities and threats in the market
Option 4: To determine the pricing strategy for existing products
Correct Answer: To identify potential opportunities and threats in the market
Solution : The correct answer is (C) To identify potential opportunities and threats in the market
Understanding the business environment is important for ABC Ltd. (and for any business) because it helps in identifying potential opportunities and threats in the market. By being aware of external factors, such as economic conditions, competition, and market trends, ABC Ltd. can make informed decisions and adapt its strategies to capitalize on opportunities and mitigate potential threats. This understanding allows the company to be more responsive and better prepared to navigate the challenges and changes in the market.
Question : Statement 1: Selling concept aims to build customer loyalty and long-term relationships.
Statement 2: Marketing concept solely focuses on achieving short-term sales goals.
Option 1: Both statements are correct.
Option 2: Statement 1 is correct, and statement 2 is false.
Option 3: Both statements are incorrect.
Option 4: Statement 2 is correct, and statement 1 is incorrect.
Correct Answer: Statement 1 is correct, and statement 2 is false.
Solution : The correct answer is (b) Statement 1 is correct, and statement 2 is false.
Statement 1 is incorrect. The selling concept primarily focuses on short-term sales and transactions rather than building customer loyalty and long-term relationships. It often involves aggressive sales tactics to close deals but may not prioritize long-term relationships.
Statement 2 is false. The marketing concept does not solely focus on achieving short-term sales goals. It emphasizes understanding customer needs and creating value for customers, aiming for long-term relationships and customer satisfaction.
Therefore, statement 1 is correct, and statement 2 is false.
