May 15, 2012Organization and Management: Leadership BANKING DIPLOMA EXAMINATION Banking Diploma Courses under The Institute

of Bankers, Bangladesh (IBB) Organization and Management-JAIBB Leadership Q.1 What do you understand by Leadership? Discuss the functions of Leadership. Ans.: Keith Davis - Leadership is the ability to persuade others to seek defined objectives enthusiastically. It is the human factor which binds the group together and motivates it towards goal. Keys and Case Leadership is the process of influencing and supporting others to work enthusiastically towards achieving objectives. Weihrich and Koontz Leadership is the art or process of influencing people so that they will strive willingly and enthusiastically towards the achievement of group goals. Thus leadership is the process and the art influencing the behaviour, attitudes, activities of people to work willingly and enthusiastically towards the accomplishment of group goals. Functions of Leadership: Guides or Inspires or Motivates Boosts Morals Creates Confidence and Enthusiasm Develops Team Spirit Creates Vision and Initiative Transforms Potential into Reality Sincerity and Honesty Courage and Will Power Flexible and Dynamic Emotional Stability i.e. Maturity Sound Judgment Tact and Humour Education and Knowledge Conceptual Skills Administrative Skills Analytical Skills Human Relations Skills Technical Skills _________________________________________________________________ Q.2 Explain the various styles of Leadership.

Ans.: Leadership style is the general way or pattern of behaviour of a leader towards his followers in order to influence their behaviour to attain a goal. The main styles of leadership are as follows:(1) Autocratic and Authoritarian Leadership: An autocratic leader is one who centralizes power and make all the decisions himself. He tells his followers what to do and expects to be obeyed without questions. Thus, such a leader imposes his will on his followers. Autocratic leaders may be of two types :(i) Pure Autocratic or Negative Leader : He is a director and makes all decisions himself. He superimposes his decisions on his subordinates. He uses fear of punishment or penalty to carry out his decisions. Thus, it is a negative leadership. (ii) Benevolent Autocrat or Positive Leader : When an autocrat leader avoids negative coercive power and uses reward power to influence his subordinates, he is called a benevolent autocrat leader. Such a leader shows active concern for the feelings and welfare of his subordinates. (2) Participative/Democrative Leadership: Participative leaders decentralize authority. Such leaders involve subordinates in decision making process. The leaders and their group members work as a social unit. They freely exchange their views and express opinions and suggestions. (3) Free Rein or Laissez Faire Leadership Style : Such a leader completely delegates his authority to his subordinates and allow them to make their own plans, procedures and decisions. He simply aids his subordinates in performing their job. He exist as a contact person with the subordinates external environment. Free rein leadership style is permissive and leader least intervenes his subordinates. The leader remains passive observer but intervenes only during the crisis. Free rein leadership is suitable where subordinates are highly competent and duty conscious. (4) Paternalistic Leadership: A paternalistic leadership is authoritarian by nature. It is heavily work centered but has consideration after his subordinates the way father looks after his children. Such a leader helps, guide and encourages his subordinates to work together as member of a family. The subordinate in turn tend to remain submissive and faithful.

_________________________________________________________________ Q.3 Discuss the different theories of Leadership. Ans.: Several theories of leadership have been developed by management theoreticians. These theories may be classified into three categories. (1) Personality Theories (2) Behavioral Theories (3) Situational or Contingency Theories (1) Personality Theories: Personality theories are theories that focus on the personal qualities or traits of leader. Such theories include the following:(i) Great Man Theory (ii) Trait Theory (i) Great Man theory of Leadership: Great man theory of leadership claims that Leaders are born, not made. Leadership qualities are inherited or carried in genes. Leadership qualities cannot be acquired or developed through education or training. (ii) Trait Theory of Leadership: This theory states that there are certain unique traits or qualities essential for successful leader. Any person who wants to be a successful leader must posses those traits. This theory emphasizes that those traits need not necessarily be inborn but may be acquired through education, training and practice. (2) Behavioural Theory of Leadership: Behavioural theory focuses on what the leaders do i.e. on the actual behaviour of the leader. Behavioural theory is based on the premise that effective leadership is the result of effective behaviour of the leader. Success of leadership depends on the behaviour of the leader and not on his traits. A particular behaviour pattern of a leader (functional behaviour) makes him a successful leader and its opposite (dysfunctional) would reject him as a leader. The functional dimensions include setting goals, motivating employees towards achievement of goals, making effective communication and interaction, building team spirit etc. The dysfunctional dimensions of leaders behaviour include in ability to accept subordinates ideas, poor communication and ineffective interaction, poor, human relations etc. (3) Situational / Contingency Approach : The situational approach of a leadership emphasis that emergence and success of a leader is largely determined by supranational factors This theory stresses that a leadership behaviour which is effective under the particular situation may be ineffective under the other. These are

several different situational models of leadership have been developed. Fiedlers contingency model, path goal model, Blanchards model etc. May 15, 2012Organization and Management: Introduction to Business BANKING DIPLOMA EXAMINATION Banking Diploma Courses under The Institute of Bankers, Bangladesh (IBB) Organization and Management-JAIBB Introduction to Business Q.1 Discuss the different concepts of Business that have emerged so far in World. Also distinguish between the Traditional and Modern Concept of Business? Ans.: Business activity has been conceptualized by many business persons, business managers and academicians in the field of business management ever since business emerged as an organised activity. Therefore the concept of business has changed over the years of history of business. So far the following concept of business has emerged :(i) Profit Oriented Concept of Business (ii) Customer Oriented Concept of Business (iii) Social or Modern Eclectic Concept of Business Profit Oriented Concept of Business : In the early age of the business, it was conceived to be a wealthy producing or profit making economic activity. Any human activity directed towards the acquisition of wealth or earning profit through production or exchange of goods was treated to be a business. The profit oriented concept is also known as traditional concept of business. When people started doing business by forming organization, than business used to be conceived as an organization organised and operated to produce and provide goods and services to society under the incentive of private gain or profit. Assumptions : (i) The sole objective of the business is to earn profits by production and/or distribution of goods. (ii) Customers will buy the products that are available in the market at the most competitive rates. (iii) There is hardly any need to think for customer service and satisfaction for running a business.

Customer Oriented Concept of Business : This concept has came into existence around 1950s and gained momentum during the 1960s and 1970s. The business organization began to think that business should earn profits through service and satisfaction of the customers Organization were forced to regard customer as the king of the market. Assumption : (i) Business organizations should produce and provide the goods/ services that are needed by the customers. (ii) The products and services provided by the business should satisfy the needs of the customers. (iii) The business should earn the profits through the service and satisfaction of the customer. Distinction between Traditional and Modern Concept :

________________________________________________________________

Q.2 What do you mean by Business. Explain clearly the role of Business in the Modern World. Ans.: The literal meaning of the term business is the state of being busy or business. But when the term is used in relation to the business world, it means much more specific. All the definition to business may be classified under the following three categories. Traditional Definitions : Traditionally, business was regarded as the institution organised for production and /or distribution of goods/ services for earning profit. Customer Oriented Definitions : Businessmen began to think about earning profits through customer service and satisfactions. Hence the academicians and professional the term business accordingly. Hopkins, Duff et.cl Business is the organised activities designed to satisfy peoples wants for goods and services. Urwick and Hunt Business is any enterprise which makes, distributes or provides any article or service which other members of the community head and are able and willing to pay.

Social Definitions/ Modern Eclectic Definitions : A few such modern definitions from social point of view are reproduced as follows:Buskirk, Green and Rodgers - Business is a system created to satisfy societies, need and desires. Keith Davis and Blomstorm - The term business refers to both private and public institutions which develop and process economic values in a society. Significance/ Role of Business : The role or significance may be properly discussed under the following heads : (i) Significance for Business Persons/ Institutions (ii) Significance for Consumers (iii) Significance for the Society (iv) Significance for the Economy

(i) Significance for Business Persons : It helps in accomplishing their objectives. It helps in acquiring the knowledge and letter skills. Business persons may go for expansion and diversification of business. Get knowledge and feed back information from the middleman & customers They may by more emphasis on customer satisfaction. Create and maintain better relation with wholesalers, dealers, retailers, and other merchantile intermediaries. Easily innovate and develop new product. More responsible to the society. Optimum utilization of resources in the most effective and efficient way. Enjoy a very high societal status. (ii) Significance for Customers: Helps them to get right the product. It ensures satisfaction of the needs of consumers It ensures better facilities, better deal and after sale services. Customers also get benefits under loyal customer schemes. Customer gets better products and services at lower costs.

 Customer also gets the joy of larger choice. (iii) Significance for the Society: Members of society get better products and services at reasonable rates. Employment Opportunities. Better standard of living and quality of life. Security and welfare of their old age and raising days. Eradicate poverty, disease, ignorance, social evils through social welfare programmes. (iv) Significance for the Economy : Planned development in the economy. Efficient and effective utilization of national resources. Ensures regular process of production and distribution of goods and services. Increasing national productivity. Balanced Regional Development. Increase and provide employment opportunities. Foreign exchange reserves by way of exports of goods and services. _________________________________________________________________ Q.3 What are the forms of Business Ownership? State the main features of all of them. Ans.: Different forms of ownership of business organization available to each sector they are as follows :(1) Private Sector: In private sector, the following forms of ownership/organization are available: (a) Sole Proprietorship (b) Partnership (c) Joint Hindu Family Business firm (d) Company (e) Cooperative Society (2) Public Sector: In public sector, the following are the main forms of ownership of business organization:(a) Departmental Organization (b) Corporations (c) Government Company Private Sector:

(i) Sole Proprietorship: Sole proprietorship is a form of business organization which is established, owned controlled and usually operated by an individual and that individual also assumes all the risks of the business and entitled to all the profits made from it. Characteristics: The oldest form Sale ownership Unlimited liability Entitled to all profits No separate existence of the business Free from legal formalities Sole decisions and control Limited scope of operations (ii) Partnership: A partnership is an association of two or more persons who agree to carry on business for earning and sharing profit among them. Characteristics: At least two persons Maximum number of partners (Banking sector 10 persons, Any other sector 20 persons) Agreement Business Sharing of profit Mutual agency Unlimited liability Jointly and several liability Mutual trust and confidence Business in firms name No separate existence of the firms Registration not compulsory Unanimous decisions Contribution of capital (iii) Hindu Undivided Family : When a Joint Hindu Family carries on a business, it is called Joint Hindu Family Firm. The members of such firm are called co-partners Joint Hindu family consist of all persons lineally descended from a common ancestor and includes their wives and unmarried daughter. There are two schools of Hindu law namely Dayalhagya and Mitakshra. According to Dayalhagya school of Hindu law, each son acquires an interest in the ancestral property only after the death of his father. According to Mitakshra school a son acquires such interest by birth or by adoption.

(iv) Company: Company is a voluntary association of persons formal and registered under the present Companies Act, or under any previous law. In the eyes of the law, it is an artificial persons having separate entity from its members, with perpetual succession and a common seal. The capital of the company is divided into transferable shares and shareholders are called members. Characteristics: Registered voluntary association At least seven persons in case of public company and two in case of a private company. Maximum number of member in a private company may be 50. No limit in case of public company Company is an artificial person Separate legal entity Perpetual succession Limited liabilities Minimum paid up capital of BDT 5 lakh in case of public company and BDT 1 lakh in case of private company Governance by majority Nationality It is not a citizen and has no fundamental rights Managed by board of directors Transferable shares (v) Cooperative Organizations: A co-operative society or organization is one which has been voluntarily formed by some persons for the promotion of their common economic interest. Characteristics: Voluntary organization/association Registered under the co-operative societies Legal existence Limited liabilities Perpetual existence Every member contributes in its capitals Non transferable shares. One member - one vote Democratic management Equitable distribution of profit Service motives Based on principles of equality, justice and mutual help Public Enterprises: A public enterprise refers to an industrial, commercial or service enterprise which is owned and controlled by the government or by public authority/ government organization for providing goods or services to the public.

(i) Departmental Organization: Departmental form of organization is the oldest form of organizing public enterprises. Under this form of organization, an enterprise is put under the control of a department. Such department is leaded by the concerned minister. Example:- Railway Department. Characteristics : Managed by a department of the government. Minister-in-charge of the department has the direct control. Financed by annual appropriations. Wholly owned and financed by the government. Accountable to the Lok Sabha, Rajya Sabha & Vidhan Sabha Employees are civil servants. (ii) Public or Statutory Corporation : A public or statutory corporation is a body corporate incorporated under a special Act of the Parliament or state legislature for the purpose of carrying on certain industrial or commercial activities or rendering specific type of services. Characteristics : Incorporated body under a statute enacted by a parliament or state legislature. Artificial person having all the rights of a person but not of a individual. Separate legal existence from the government. It can sue and be sued by the government. Wholly owned by the central and/ or state government. When ownership is shared by private entrepreneurs it is said to be a mixed corporations. It can enjoy independence in the matters of its financial management. Employees are not civil servants. Autonomy in its operation. Accountable to the parliament and/or state legislature. (iv) Government Company: Government Company is one in which not less than 51% of the paid-up capital is held by the central or state government; and/or by the government company and/or by any public corporation, authorities. Characteristics: It is registered or an incorporated body under the Indian companies Act, but all the provisions of the act will not apply to it. Majority of shares are held by the central government on by the state government or by any public corporation/authority or government company. _____________________________0__________________________

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HOMEABOUT IBBMEMBERSHIPCOUNCILREGULATION & SYLLABUSEXAMINATION PART-IEXAMINATION PARTIICONTACTDISCLAIMER May 15, 2012Organization and Management: Decision Making BANKING DIPLOMA EXAMINATION Banking Diploma Courses under The Institute of Bankers, Bangladesh (IBB) Organization and Management-JAIBB Decision Making Q.1 Define Decision Making and give its characteristics. Ans.: Decision making is the process of choosing or selecting any one option out of several options to achieve some objectives. Glueck Decision making is the process of thought and deliberation that leads to a decision. Allen Decision making is the work a manager performs to arrive at a conclusion or judgment. Thus decision is a process of selecting a course of action from among the available alternatives in order to achieve a desired goal in a given situation. Characteristics/Nature of Decision Making : (i) Decision making is a sequential process involves the searching, evaluative and choosing a course of action. (ii) It is an intellectual and logical process. (iii) This process will take place in the human mind. (iv) It is a human and social process.

(v) It is largely an intuitive process but can be formally structured. (vi) There is an existence of alternatives. (vii) Ascertainment of choice. (viii) It aims at attaining some objectives. (ix) Decision is directed to solve some problem. (x) Decision making involves commitment. (xi) It is influenced by environmental conditions. (xii) Decision making is the essence of management. _________________________________________________________________ Q.2 Discuss in brief the various techniques of Decision Making. Ans.: The important techniques of decision making are as follows :(1) Experience or Judgment: In this technique, a manager makes decision on the basis of his knowledge and experience gained through working in a particular position over the years (2) Intution : Intution or hunch is a knowledge based on instant inner feelings or spiritual perception rather than reasoning. It is based on faith. (3) Habbits : Established habits can be used as a technique of decision making. Managers try to solve repetitive and routine problems through their established habits.

(4) Standing Plans and Procedures: There are standing plans and procedures in every organization such as policies, rules, procedures, methods etc. They all serve as a technique for decision making. (5) Organization Structure: Organization structure make it clear who is responsible for what and to whom. Therefore it can be used as a decision making technique. (6) Principles of Management: The principle of management can serve as a useful guide in making decisions. (7) Economic and Financial Techniques: Marginal analysis, break even analysis, utility analysis etc are some of the most important economic techniques of decision making. Pay back analysis, inflow outflow analysis, ratio analysis are some of the financial techniques of decision making. (8) Linear Programming: It is a mathematical technique of limited resources. It helps in making decisions regarding allocation of limited resources among various competing demands in an optimum way. (9) Game Theory: In this technique, one member chooses one such course of action that frustrates and defeats the action of the competing member and help him in wining the game. This technique used under competitive and conflicting situations. (10) Waiting Line or Queuing Theory: This technique is used to decide problem of waiting line in an organization with the help of the technique, manager decides optimum rate of flow through service points by balancing the cost of making customers wait against the cost of servicing them more rapidly. (11) Simulation: Simulation is a technique for studying and analyzing behaviour of a system under several alternative conditions in an artificial setting. (12) Network Techniques: PERT and CPM are the techniques that helps managers in deciding a logical sequence of activities required for completing a complex project. (13) Heuristic Technique: It is an trial and error technique of finding solutions to a complex problem by breaking it into small components. (14) Participative Techniques: It is a technique of making decisions with the participation of the employees. This technique encourages industrial democracy.

________________________________________________________________ Q.3 Draw a flow diagram of process of Decision Making. Ans.: A flow diagram of process of Decision Making is as follows:

Steps in Decision Making Process: 1. Identification of Problem 2. Diagnosing the Problem 3. Establishing Specific Objectives 4. Identifying Limitations 5. Evaluating Alternatives 6. Selecting Appropriate Alternative 7. Implementing the Decision 8. Feedback _______________________________0_________________________________

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HOMEABOUT IBBMEMBERSHIPCOUNCILREGULATION & SYLLABUSEXAMINATION PART-IEXAMINATION PARTIICONTACTDISCLAIMER May 15, 2012Organization and Management: Planning BANKING DIPLOMA EXAMINATION Banking Diploma Courses under The Institute of Bankers, Bangladesh (IBB) Organization and Management-JAIBB Planning Q.1 What do you meant by Planning? Discuss its nature. Ans.: Simply stated, planning means deciding future course of action i.e. making plans for attaining organizations objectives. Planning is the process of determination of organizations objectives and selecting the course of action i.e. plans for attaining them.

According to Weihrich and Koontz Planning involves selecting mission and objectives and actions to achieve them. If requires decision making i.e. choosing from among alternative future course of action. According to Robert Albanese, Planning is the process or activity of determining in advance specifically what should be done in order to achieve particular goals, how it should be done, when or where it should be done and who should do it. Nature of Planning:

(1) Primary or Basic Function: It is a primary function because it is the foundation on which all other managerial function rest. (2) Pervasive Function: Each and every manager has to perform this function regardless of his level and area of specialization. (3) Purposeful: Planning begins with some goals or objective that an organization wishes to achieve. (4) Interdependent Activity: Planning in one development is dependent on the planning of other department. (5) A Process: Planning is a process in which managers anticipate future by analyzing environmental factors, set goals or objectives. (6) Planning is a Path Finder Process: It is the process by which answers to questions like where, when, how etc. (7) It is a continuous and never ending process. (8) It is a dynamic process. (9) It is an intellectual process because it requires managers to think intelligently and rationally before doing. (10) Futuristic: Every plan is prepared to face and win over the future challenges and threats. (11) Time Bound: It is always time bound. It may be of short range or medium range or long range. (12) Planning involves Decision Making: It is a process of selecting one best course of action out of the available alternatives. (13) Planning and Action are Twins: Planning alone cannot serve any purpose. Planning presupposes necessary action for its implementation. Both must go hand in hand.

(14) Planning and Controlling are Inseparable: Plans furnished the standards against which actual performance is measured and controlled. (15) Forecasting is the Basis of Planning: Future course of action are decided on the basis of information and knowledge provided by forecasting. _____________________________________________________________________ ____________ Q.2 What are the essential elements of Planning? Ans.: The main components or elements of planning are as follows:(1) Objectives: Objectives are the desired results that an organization wants to achieve within a specified time period. (2) Strategies: Strategy means the long range approach for dealing with the organizations competitive environment with a view to win over competitors in business. (3) Policies: Policies are the guidelines set to provide direction in decision making. These set the boundaries around which decisions are made. (4) Procedures: Procedures are the chronological sequence of steps or actions to be taken to accomplish a specific test or job. (5) Method: A method is a prescribed way of completing a step in a procedure. (6) Rules: Rules are guiding statements that direct action or behaviour of individuals in a given situation. (7) Standards: Standard is a measure against which the level of performance is measured or evaluated. (8) Programmes : A programme is a sequence of action steps arranged in the priority necessary to accomplish an objective.

(9) Schedules: A Schedule is a plan which indicate the time of (i) commencement of task. (ii) passing through the different stages or processes. (iii) Finalizing the task. (10) Budgets: A budget is a numerical plan containing expected results in quantitative or numerical terms. (11) Projects: A project is a programme with less significant objectives, generally a shorter period of time and usually less detail. _____________________________________________________________________ ____________ Q.3 What are the steps involved in the Planning Process? Ans.: Steps in Planning: (i) Environment Scanning (ii) Setting Objectives (iii) Establishing Planning Promises (iv) Searching Alternatives (v) Evaluating the Alternatives (vi) Selecting the Most Appropriate Alternative or Plan (vii) Formulating Derivative Plans (viii) Budgeting i.e. Committing Resources

(ix) Implementing the Plans (x) Follow-up Action _____________________________________________________________________ ____________ Q.4 Write the essentials of an Effective Planning. Ans.: Planning or a plan can be more effective if the following factors are taken into consideration:(i) Well Defined Objectives (ii) Simple and Easy to Understand (iii) Comprehensive (Cover each and every aspect) (iv) Flexible (Capable of being modified) (v) Balanced (Balance between objectives and resources) (vi) Economical (vii) Stable (viii) Continuity (ix) Unity (Operate under one overall plan) (x) Consistency (xi) Written (xii) Practicable

(xiii) Logical and Rational (xiv) Accountability for Implementation _____________________________________________________________________ _____________ Q.5 What is MBO? Explain its characteristics and objectives. Ans.: MBO: The modern model of objective setting is known as the Management by Objectives or MBO. This model was first discussed by Peter Drucker in 1954 in his book The Practice of Management. Meaning and Definition of MBO: MBO is a process where by both superior and subordinate managers jointly identify their common goals or their work unit and define each employee major areas of responsibility and goals with his active participation. Carlisle Management by Objective is a process by which the members of a work unit individually meet with their superior to establish performance related goods. Boone and Koontz MBO is a prgramme designed to improve employees motivation by having them participate in setting their own goals, letting them know in advance precisely have they will be evaluated. Characteristics of MBO : A Philosophy of Management Goal Oriented Approach An Interactive Approach A Comprehensive Approach A System Approach Applies to Total Management System

 Aims at Optimum Results Simple Universal Approach Multiple Uses Participation and Involvement Common Objectives and Individual Goals Assumptions: Mutual understanding between superior and subordinate. Employees know their expected efforts and their contribution in overall performance. Employees participate in formulation of the plan. Employees know the results of their efforts. Employees want to be fairly rewarded for their performance. Objectives of MBO : (i) To set organizational units and individual goals by active participation of the all concerned. (ii) To set verifiable and measurable goals. (iii) To measure and judge performance. (iv) To relate individual performances to organizational goals.

(v) To clarify both the job to be done and the expectation of accomplishment. (vi) To foster the increasing competence and growth of subordinates. (vii) To enhance communications between superiors and subordinates. (viii) Serve as a basis for judgment about salary and promotion. (ix) To stimulate the subordinates motivation. (x) To serve as device for organizational control. _______________________________0_____________________________________

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HOMEABOUT IBBMEMBERSHIPCOUNCILREGULATION & SYLLABUSEXAMINATION PART-IEXAMINATION PARTIICONTACTDISCLAIMER May 15, 2012Organization and Management: Management BANKING DIPLOMA EXAMINATION Banking Diploma Courses under The Institute of Bankers, Bangladesh (IBB)Organization and Management-JAIBB Management Q.1 Discuss the nature of Management.

Ans.: The nature of management can be discussed as follows :(1) Multidisciplinary : Management draws knowledge and concepts from various disciplines. It draws freely ideas and concepts from such disciplines as psychology, sociology, anthropology, economics, ecology, statistics, operation research, history etc. Management integrates the idea and present newer concepts which can be put into practice for managing the organisations. (2) Dynamic Nature of Principles : Based on integration and supported by practical evidences. Management has framed certain principles. These principles are flexible in nature and change with the change in the environment in which an organisation exist. (3) Relative, not Absolute Principles : A particular management principle has different strengths in different condition. Therefore principles of management should be applied in the light of prevailing conditions. Allowance must be made for different changing environment. (4) Management - Science or Art : Management is both a science and an art. The process of scientific theory construction and confirmation is used in the process of management. And has to do with applying of knowledge.This is especially important in management because in many instances, much creativity and adroitness in applying the managerial efforts are necessary to achieve the desired results. (5) Management as Projection : Management satisfies the requirement of a profession in the form of existence of knowledge. The concept of management is still evolving and continuously new principles are being developed. (6) Universality of Management : Management is a universal phenomenon. Management principles are not universally applicable but are to be modified according to the needs of the situation._____________________________________________________________ ____ Q.2 What do you mean by principles of Management? Discuss the important principles of Management. Ans.: Management principles are those fundamental truths or statements of facts which serve as guide to managers in thinking and doing their job of managing. Management principles may be derived in any of the following ways :(i) By observation and analysis of managerial practices. (ii) By conducting studies through system enjury, collection and analysis and testing of facts. Some Important Principles of Management : F. W. Taylor, Henry Fayol, Mary Parkeer Follett, Urwick, Koontz O Donnel, George R. Terry etc. are the leading thinkers who have listed and described certain management principles :-

(1) Fayols Principles of Management : Henri Fayol, who is recognized as the father of modern theory of management formulated a set of 14 principles. (i) Division of Work : Division of work states that the total work should be subdivided into small components / parts and each part of the work should be allocated to the worker who specializes in that part of the work. (ii) Authority and Responsibility : Authority creates responsibility whenever a person exercises authority, responsibility arises. Responsibility is the essential counter part of authority. (iii) Discipline : According to Fayol, discipline is absolutely essential for the smooth running of business. Without it no business can prosper. (iv) Unity of Command : The principle of unity of command states that each subordinate should receive orders from only one boss or superior. (v) Unity of Direction : The principle of unity of direction states that there should be one head and one plan for a group of similar activities having the same objective. In other words, the activities that have same objective should be directed by only one manager under one plan. (vi) Subordination of Individual Interest to General Interest : Interest of organisation as a whole must prevail over the individual interest wherever individual interest and the common interest differ, efforts must be made to reconcile them. (vii) Remuneration : Fayol stressed that the remuneration or compensation for work done should be fair to both employers and the firm. It should neither be low nor high. (viii) Centralization : Decreasing the role of subordinates in decision making is centralization of authority and increasing their role in it is decentralization of authority. Fayol believed that managers should retain final responsibility but should at the same time give their subordinates enough authority to do their job properly. (ix) Scalar Chain or Hierarchy of Authority : Scalar chain or hierarchy of authority refers to the unbroken chain or line of authority running from the top management to the lowest levels of the organisation. (x) Order : The principle of order states that there should be a place for every think and for every person. Material and people should be in the right place at the right time. People should be assigned the jobs that are best suited to them. (xi) Equity : According to this principle, the manager must install equity in the organisation. To ensure this, manager should be friendly, fair and kind in dealing with their subordinates.

(xii) Stability of Personnel : This principle states that there should be reasonable stability of the tenure of personnel in the firm. No employee must be removed from his position within a short period of time. (xiii) Initiative : This principle states that subordinates should be given the freedom to develop and carry out their plans. But managers should do so within the limits of authority and discipline. (xiv) Esprit de Corps : This principle states that managers should promote esprit crops or team spirit and a sense of unity among the employees. Other Important Principles : (xv) Principle of Objective : Koontz and ODonnel suggest that The organisation as a whole and every part of it must contribute to the attainment of enterprise objectives. (xvi) Principle of Planning : The principle of planning states that good planning is a prerequisite for good management. Therefore managers should accurately plan the activities of their organisation keeping in view the environmental factors. (xvii) Principle of Span of Control : Span of control means the number of subordinates under the direct supervision of the superior. According to this principle, a superior should supervise only that number of subordinates which be can properly supervise directly under his control. (xviii) Principle of Balance : This principle states that different parts or units of an organisation should be in balance. This is essential in order to ensure proper development of business and its efficiency. (xix) Principle of Coordination : This principle states that human efforts and other resources should be co-ordinated in order to achieve organisational goals effectively. (xx) Principle of exception : The principle of exception states that every superior should set the objectives and plan for their subordinates and delegate them appropriate amount of authority to take all decisions to carry out the plans. (xxi) Principle of Participation : This principle states that managers must encourage participation of their subordinates in taking decisions on matters directly affecting them.________________________________________________________________ _ Q.3 Discuss the major functional area of Management. Ans.: An acceptable and practical classification includes four broad functional areas :(i) Production : This area is normally kept under the control of a production manager who is responsible for the performance of entire related activities.This area may further be classified into major sub-activities : Purchasing Material Management Research and Development

(ii) Marketing : This area involves the distribution of organisations product to the buyers. This can be divided into following subareas :- Advertising Marketing Research Sales Management (iii) Finance and Accounting : This area deals with the record keeping of various transactions and management of financial resources :- Financial Accounting Management Accounting Costing Investment Management Taxation (iv) Personnel : This aspect deals with the management of human beings in the organisation. It includes following areas :- Recruitment and Selection Training and Development Wage and Salary Administration Industrial Relations_____________________________________________________________ ____ Q.4 Discuss the major functions of management. Ans.: A function is a group of similar activities. However what functions are undertaken by managers in organisations, there is a divergence of views. But the major management functions suggested by most of the authors are as follows :(i) Planning : Planning is the conscious determination of future course of action. This involves why an action, what action, how to taken action, and when to take action. Thus planning includes determination at specific objectives, determining projects and programmes, setting policies and strategies, setting rules and procedures and preparing budgets. (ii) Organising : Organising is a process of dividing work into convenient task or duties, grouping of such duties in the form of positions, grouping of various positions into department and sections, assigning duties to individual positions and delegating authority to each position so that the work is carried out as planned. (iii) Staffing : Staffing involves manning the various positions created by the organizing process. It includes preparing inventory of personnel available and identifying the gap between manpower required and available, identifying the sources from where people will be selected, selecting people, training and development fixing financial compensation, appraising them periodically etc. (iv) Directing : Directing includes communicating, motivating and leading. When people are working in an organisation, they must know what they are expected to do in the organisation. Superior managers fulfill this requirement by communicating to subordinates about their expected behaviour. The superiors have a continuous responsibility of guiding and leading them for better work performance and motivating them to work with zeal and enthusiasm. (v) Controlling : Controlling involves identification of actual results. Comparison of actual results with expected results as set by planning process, identification of deviation between the two, if any and taking of corrective action so that actual result match with expected

results._______________________________________________________________ __ Q.5 Classify the various approaches of the Management thought along with the origination period and the major contributors. Ans.: The various approaches to management can be divided into the following major schools :(A) The Classical Approach : (i) Scientific Management : Time Period (1900 1930), Introduced by (F. W. Taylor). (ii) Administrative or Functional Approach : Henry Fayol (1916 1940). (iii) Organisational Theory Approach : Max Wabor, C. I. Bernard, H. A. Simon. (B) Neo Classical Approach : (i) Human Relation Approach : George Elton Mayo (1924 -1932). (ii) Behavioural Science Approach : Herzberg, Fred Fiedler, Mclellend, Likert etc. (1950 -1970) (C) Modern Approach : (i) Quantitative or Management Science Approach : (1950 -1960). (ii) System Approach : Ludwig Von Bertalanffy (1960 onwards). (iii) Contingency Approach : Tosi and Hammer (1970 onwards). _________________________________________________________________ Q.6 Assess the contribution of Scientific Management to the development ofManagement thought. Ans.: Scientific management approach is also known as the productivity or efficiency approach. The credit for pioneering and developing scientific management approach is primarily given to F. W. Taylor. He is recognised as the father of scientific management. The other individuals who contributed to this school of management thought are Frank Gilkreth, Lillian Gillreth, Henry Gantt and Harrington Emerson. Scientific management school concentrates on the process of finding one best way of doing a thing in order to achieve maximum production and efficiency. Philosophy and Principles of Taylor : Develop a science to replace rule of thumb Labour Management Cooperation Maximization of output or production Equal division of responsibility Job specialization Scientific selection, training and

development of workers. Planning and scheduling of work Standardisation Wage incentives Mental Revolution Mechanism of Scientific Management : In order to blend philosophy and principles of scientific management into practice, Taylor developed the followingtechniques or mechanism :(1) Scientific Task Setting : The task of every worker for everyday should bedetermined through scientific investigation. (2) Experimentation or Work Study : Work Study means organised systematic and objective analysis and assessment of the operational efficiency of all the elements connected with the work. The main areas of work study are as follows :(i) Method Study : Survey of production process. (ii) Motion Study : The study of movement of a worker or a machine in doing a job. (iii) Time Study : Find out a standard time for doing the job. (iv) Fatigue Study : Fatigue study is the study of the reduction of human energy in doing his job. (3) Planning : Planning function should be separated from the doing function. (4) Scientific Selection and Training of Worker. (5) Specialization : Allocate the task according to their specialization. (6) Standardisation : Taylor advocated for standardisation of material, tools equipment, method etc.. (7) Efficient Costing System : To control cost of production and pricing. (8) Incentive Wage Plan : Worker is to receive a bonus in addition to his wages if he completed his jobs before the standard fixed time. (9) Congenial Atmosphere of Work : The environment must also be cheerfuland psychologically satisfactory___________________________________________________________ _____ Q.7 Explain the various tasks conducted in the Hawthorne studies. Also discuss the contribution of Hawthorne Experiments in the development of Managerial thinking. Ans.: Harvard University research team conducted a series of studies. George Elton Mayo, F. I. Roethlisberger, W. J. Dicton and others were the members of the team. The studies were conducted at Hawthorne plant of the western electric company, Chicago (USA) between 1924 and 1932.

Four studies were conducted at the Hawthorne Plant :(1) Illumination or Test Room Study : The illumination study was conducted to determine the relationship between light intensity and productivity of efficiency of workers. For this purpose, three different experiments were conducted in which researchers changed light intensity. They concluded that lighting was a minor factor affecting the productivity of workers. (2) The Relay Assembly Test Room Study : The relay assembly test room study was conducted to ascertain the factors other than the light intensity affecting the productivity. During the test researcher change working condition and they concluded that most likely cause of higher productivity was the change in social situation in the work group. (3) Mass Interviewing Study : The third study was the mass interviewing programme. Under this programme over 21,000 employees were interviewed. They have asked some direct question and on some indirect questions. And finally the researchers reached in the conclusion that work performance and the individual status in the organisation are determined not by the person himself but by the group members, peers and their personal problems also effect the feeling about his job. (4) Bank Wiring Observation Room Study : In order to observe informal group behaviour more accurately, band wiring observation room study was undertaken. The following conclusions were drawn :(i) The group was restricting output by enforcing the norms or standards set by the group. (ii) There existed internal cliques or groups which are not formed on the basis of occupation. Conclusions / Contribution of Hawthorne Studies : (i) Work is a group activity. (ii) Workers form internal informal group. (iii) Social groups influence the productivity. (iv) Social groups determines informal norms. (v) Group cooperation is planned. (vi) Worker is not only rational economic being. (vii) Supervisor behaviour affect the behaviour of worker. (viii) Free flows of communication affects the attitude of workers towards work. (ix) Complaints may not be statement of facts.

(x) Birth of human relation movements. -----------------------------------------0 ---------------------------------------------

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HOMEABOUT IBBMEMBERSHIPCOUNCILREGULATION & SYLLABUSEXAMINATION PART-IEXAMINATION PARTIICONTACTDISCLAIMER April 4, 2012Marketing of Financial Services: Buyer Behaviour BANKING DIPLOMA EXAMINATION Banking Diploma Courses in Bangladesh under The Institute of Bankers, Bangladesh (IBB) Marketing of Financial Services-JAIBB Buyer Behaviour A. Major factors influencing buying behaviour. The aim of marketing is to meet and satisfy target customers needs and wants. Some time customer say something but actually do different. Their buying behaviour influenced by many factors. 1. Cultural factors : (To Get Download Option Click Read More) The culture is the most fundamental determinant of a persons wants and behaviour. (a) Culture : Culture has a broadest and deepest influence on buying behaviour. The growing child acquires a set of values, perceptions, preferences, norms and behaviour through his or her family and other key institutions. For example, a child growing up in the United States is exposed to the following values : achievement and success, activity, efficiency and practicality, progress, material comfort, individualism, freedom, external comfort, humanitarianism and youthfulness.

(b) Subculture : Each culture consist of smaller subcultures that provide more specific identification and socialization for their members. Subcultures include nationalities, religions, racial groups and geographic regions. Many subcultures make up important market segments and marketers often design their product or services and marketing programs according to consumers needs. (c) Social class : Social classes are relatively homogeneous and enduring divisions in a society, which are hierarchically ordered and whose members share similar values, interests and behaviour. Social classes do not reflect income alone, but also other indicators such as occupation, education and area of residence. Social classes differ in dress, speech patterns, recreational preferences and many other characteristics. Social classes have several characteristics. First, those within each social class tend to behave more alike than persons from two different social classes. Second, persons are perceived as occupying inferior or superior position according to social class. Third, social class is indicated by a cluster of variables - for example, occupation, income, wealth, education and value orientation - rather than by any single variable. Fourth, individuals can move from one social class to another - up or down - during their life time. 2. Social factors : A consumers buying behaviour is influenced by such social factors as reference groups, family and social roles and status. (a) Reference groups : A persons reference groups consists of all the groups that have a direct ( face to face ) or indirect influence on the persons attitudes or behaviour. Groups having direct influence on a person are called membership groups. Some membership groups are primary groups, such as family, friends, neighbors and co workers, with whom the person interacts fairly continuously and informally. People also belong to secondary groups, such as religious, professional and trade union groups, which tend to be more formal and require less continuous interaction. Their reference groups in at least three ways significantly influence people in our society. Reference groups expose an individual to new behaviours and lifestyles. Their attitudes and self - concepts also influenced by the reference groups. And they create pressures for conformity that may affect actual product and brand choices. So, marketers try to identify their target customers reference groups, which influence varies among product and brand choices. (b) Family : (c) Roles and status : 3. Personal factors :(a) Age and stage in the life cycle :(b) Occupation and economic circumstances :(c) Personality and self - concept : 4. Psychological factors : (a) Motivation :(i) Herzbergs theory : Freuds theory :(ii) Maslows theory :(iii)

(b) Perception :(i) Selective retention : (c) Learning : (d) Beliefs and attitudes :

Selective attention :(ii)

Selective distortion :(iii)

B. Buying roles. It is easy to identify the buyer for many products. But even the marketers must be careful in making their targeting decisions, because buying roles can be change. Five types of people might play roles in a buying decision. These are : 1. Initiator : or services. 2. Influencer : A person who first give or suggest the idea of buying the products A person whose view or advice influence the buying decision.

3. Decider : A person who decides on any component of a buying decision, whether to buy, what to buy, how to buy, when to buy and where to buy. 4. Buyer : 5. User : The person who makes the actual purchase of products or services. A person who consumes or uses the products or services.

C. Buying behaviour. Consumer decision - making varies with the different type of products or services buying decision. We can classify the consumer buying behaviour into four categories, these are : 1. Complex buying behaviour : Complex buying behaviour involves a three step process. First, the buyer develops beliefs about product. Second, he or she develops attitudes about the product. Third, he or she makes a thoughtful choice. Consumers engage in complex buying behaviour when they are highly involved in a purchase and aware of significant differences among brands. This is usually the case when the product is expensive, bought infrequently, risky and highly self - expressive. Typically the consumer does not know much about the product category. So, the marketer of a high - involvement product must have to understand the consumers information gathering and evaluation behaviour nature. 2. Dissonance - reducing buying behaviour : Sometimes the consumers are highly involved in a purchase but see little difference in brands. The high involvement is based on the fact that the purchase is expensive, infrequent and risky. The buyer will try to learn more information about the product what is available at the time of purchase but will buy fairly quickly, perhaps responding to a good price or to purchase convenience. For example, carpet buying is a high - involvement decision because carpeting is expensive and self expressive, yet the buyer may consider most carpet brands in a given price range to be the same. After the purchase, the consumer might experience dissonance that stems from noticing certain disquieting features or hearing favourable things about the other brands.

3. Habitual buying behaviour :Many products are bought by the consumer under conditions of low involvement and absence of significant brand preference. Such as salt, sugar, match etc. Consumers have little involvement in this product category. They go the store and reach for the brand. If they do not get their own brand then they shifts into the other brand. They have no strong brand loyalty. The consumers have low involvement with most low cost, frequent, less risky purchased products. With these products, consumer behaviour does not pass the normal sequence of belief, attitude and behaviour. Consumers do not show interest to search extensively for information, evaluate characteristics and make decision on which brand to buy. Marketers of such kinds of products find it effective to use price and sales promotions to stimulate product trial. 4. Variety - seeking buying behaviour : Some buying situations are characterized by low involvement, frequent, less risky but significant brand differences. Here consumers often do a lot of brand switching. As for example, cookies. The consumer has some beliefs about cookies, chooses a brand of cookies without much evaluation and evaluates the product during consumption. Next time, the consumer may reach for another brand out of a wish for a different taste. Brand switching occurs for the sake of variety rather than dissatisfaction.

D. Post purchase behaviour. 1. Post purchase satisfaction :2. Post purchase actions : 3. Post purchase use and disposal :Buyer Behaviour

March 17, 2012Marketing of Financial Services:Introduction to Marketing BANKING DIPLOMA EXAMINATION Banking Diploma Courses in Bangladesh under The Institute of Bankers, Bangladesh (IBB) Marketing of Financial Services-JAIBB Introduction to Marketing

Q.1 What is the nature & scope of marketing & why is marketing important? Ans.: Nature & Scope of Marketing: Marketing is an ancient art & is everywhere. Formally or informally, people & organizations engage in a vast numbers of activities that could be called marketing. Good marketing has become an increasingly vital

ingredient for business success. It is embedded in everything we do- from the clothes we wear, to the web sites we click on, to the ads we see. Marketing deals with identifying & meeting human & social needs or it can be defined as meeting needs profitably. The American Marketing Association has defined marketing as an organizational function & a set of processes for creating, communicating & delivering value to the customers & for managing customers relations in ways that benefit the organization & the stake holders. Or Marketing management is the art & science of choosing target markets & getting, keeping & growing customers through creating, delivering & communicating superior customer value. Or Delivering a higher standard of living For a managerial definition, marketing has been defined as the art of selling products but people are surprised when they hear that the most important part of marketing is not selling. Selling is only the tip of marketing iceberg. Peter Drucker says it this way that the aim of marketing is to know & understand the customer so well that the product or service fits him & sells itself. All that should be needed is to make the product or the service available. Eg. The success of Indica, the first indigenously designed car by Tata Motors. Backed by strong customers delight, the company designed a vehicle with luggage space & legroom & offered it a price easily available & affordable to middle class. (2) Gillette launched its March III razor. Marketing people are involved in marketing 10 types of entities: goods services, events, experiences, persons, places, properties, organizations, information & ideas. Therefore ideal marketing should result in a customer who is ready to buy.

Importance of Marketing: Financial success of any organization depends upon marketing ability of that organization. There should be sufficient demand for products & services so the company can make profit. Therefore many companies created chief marketing officer (CMO) position to put marketing on a more equal footing with other e-level executives. Marketing is tricky & large well known business such as Levis, Kodak, Xerox etc. had to rethink their business models, Even Microsoft, Wal-Mart, Nike who are market leaders cannot relax. Thus, we can say that making the right decision is not easy & marketing managers must take major decisions about the features of the product prices & design of the product, where to sell products & expenditure on sales & advertising. Good marketing is no accident but a result of careful planning & execution. Marketing practices are continuously being refined to increase the chances of success. But marketing excellence is rare & difficult to achieve & is a never ending task Eg. NIRMA The brand icon of the young girl has adorned the package of Nirma washing powder. The jingle has become one of the enduring times in Bangladeshi advertising. Q.2 What are some fundamental marketing concept? Ans.: The various fundamental concepts are :(1) Exchange Concept : The Exchange concept holds that the exchange of a product between seller & buyer is the central idea of marketing Exchange is an important part of marketing, but marketing is a much wider concept. (2) Production Concept : The production concept is one of the oldest concepts in business. It holds that consumers will prefer products that are widely available & expensive. Manager of production oriented business concentrate on achieving high production efficiency low cost & mass distribution. Eg. Haier in China take advantage of the countrys huge inexpensive labor pool to dominate the market, to manufacture PC & domestic appliances. (3) Product Concept : This concept holds that consumers will prefer those products that are high in quality, performance or innovative features. Managers in these organization focus on making superior products & improving them. Sometimes, this concept leads to marketing myopia, Marketing myopia is a short sightedness about business. Excessive attention to production or the product or selling aspects at the cost of customer & his actual needs creates this myopia.

(4) Selling Concepts : This concept focuses on aggressively promoting & pushing its products, it cannot expect its products to get picked up automatically by the customer. The purpose is basically to sell more stuff to more people, in order to make more profits. Eg. Coca Cola (5) Marketing Concept : The marketing concept emerged in the mid 1950s. The business generally shifted from a product centered, make & sell philosophy, to a customer centered, sense & respond philosophy. The job is not to find the right customers for your product, but to find right products for your customers. The marketing concept holds that the key to achieving organizational goals consist of the company being more effective than competitors in creating, delivering & communicating superior customers value. This concept puts the customers at both the beginning & the end of the business cycle. Every department & every worker should think customer & act customer. Distinguishing Features of the Marketing Concept : (i) Consumer Orientation : The purpose of any business is to create a customer. It is the customer who determines what a business is(ii) Integrated Management with Marketing as the Fulcrum : Integrated management means that all the different functions of a business must be tightly integrated with one another. This is essential because every function has a bearing on the consumers & the aim is to see that all the functions make a favourable impact on the consumer. (iii) Consumers Satisfaction : The marketing concept emphasizes that it is not enough if a firm has consumer orientation, it is essential that with such an orientation, it should lead to consumer satisfaction. (iv) Realization of all Organizational Goals, Including Profits : The firm should not forget its own interests. It treats consumer satisfaction as the pathway to the attainment of goals of the organization. In short the marketing concept essentially represents a shift in orientation. From production orientation to marketing orientation. From product orientation to customers orientation. From supply orientation to demand orientation. From sales orientation to satisfaction orientation From internal orientation to external orientation. (6) Social Marketing Concept : This concept holds understanding broader concerns & the ethical, environmental & legal & social context of marketing activities &

programs. The cause & effects of marketing extend beyond the company & the consumes to society as a whole. Social responsibility also requires that marketers carefully consider the role that they are playing & could play in terms of social welfare. (7) Holistic Marketing Concept : This concept is based on the development, design & implementation of marketing programs, processes & activities that recognizes their breadth. Holistic concept realizes that everything matters with marketing.

March 18, 2012Marketing of Financial Services: Sales Promotion BANKING DIPLOMA EXAMINATION Banking Diploma Courses in Bangladesh under The Institute of Bankers, Bangladesh (IBB) Marketing of Financial Services-JAIBB Sales Promotion

Q. Define sales promotion? What is the nature, role & importance of sales promotion? OR What is sales promotion? Discuss the nature, role & importance of sales promotion.

Ans.: Sales promotion is a key factor & strategy for marketers within the promotional mix. Sales promotion refers to many kinds of incentives & techniques directed towards consumers & traders with the intention to produce immediate or short term effects. Sales promotion helps in stimulating trial or purchase by final customers or others in the channel. A marketer can increase the value of its Product/ Service by offering an extra incentive to purchase a Product/ Service or brand. A few definitions are quoted below:-

1. American Marketing Association - Sales promotions is media & non media marketing pressure applied for a predetermined, limited period of time in order to stimulate trial & impulse purchases, increase consumer demand or improve Product/ Service quality.

2. Council of Sales Promotion Agencies sales promotion is a marketing discipline that utilizes a variety of incentives techniques to structure sales related programs targeted to consumers/trade/ and or sales level, that generate a specific measurable action or response for a Product/ Service/service. 3. Institute of sales promotion, U.K. Sales promotion comprises that range of techniques used to attain sales/marketing objectives a cost effective manner adding value to a Product/ Service or service either to intermediate or end users, normally but not exclusively within a definite time period. Sales promotions have 3 distinct characteristics (a) Communication They gain attention & usually provide information that may lead the consumer to the Product/ Service. (b) Incentive They give certain concession, inducement or contribution that gives value to the consumer. (c) Invitation They invite a distinct invitation to engage in the tre. Nature of sales promotion:1. Irregular / non recurring activity- Sales promotion is an irregular & non recurring activity to increase the sales & this technique is used for specific situations only such as decline in demand, fall in profit, acute competition in the market or during the introduction of new Product/ Service in the market. 2. Target- The target for producers sales promotion may be middleman, end users, household or business users or the producers own sales force. Middleman sales promotion at their sales people or prospects further down the channel of distribution. 3. Motivation & extra incentive- Sales promotion involves some type of incentives that offer a reason to buy. This incentive is usually the key element in a promotional program & is an effort by which consumers, traders and sales force are motivated towards maximum sales. 4. Acceleration tool- sales promotion is designed to speed up the selling process & maximize sales volume. 5. Immediate impact- Sales promotion can be implemented quickly & gets sales results sooner than advertising sales promotions offers an incentive to buy now.

6. Objective- The objective of sales promotion is to establish a link & coordination between the activities like advertising, personal selling, publicity etc. sales promotion bridges a gap between advertising and personal selling. 7. Non media activity- Sales promotion is referred to as a non media activity as sales promotion is differentiated from advertising & publicity & also includes them as part of the overall promotions mix. 8. Strategic role- Because of the immediate nature of the impact, sales promotion have been thought of as merely this view is changing and the strategic role of sales promotion and their integral role in the promotional mix are being recognized. 9. Planned activity- The fact that sales promotion can be effective throughout the life of a brand shows their strategic role. Sales promotion activities should be planned well to stimulate sale. 10. Versatile- Sales promotion is extremely versatile. The different forms of sales promotion are capable of being used with various groups & designed to achieve different effects. Sales promotion can be useful throughout the Product/ Service life cycle. 11. Means of marketing communication- It is an important means of communication by which views & ideas of consumers about the Product/ Services & services are exchanged with the producers regularly. 12. An element of promotion mix- Sales promotion is one of the important elements of promotion mix, other than advertising, personal selling and publicity. 13. Universal activity- It is a universal activity adopted by all the economies of the world in their sales efforts. Role of sales promotion:1. To popularize goods and services of the producer among the potential consumers & to motivate them towards larger purchases. 2. To motivate the existing customers for maximum purchase.

3. To maintain the sales up to normal level even during seasonal vacations & during the declining stage of PLC. 4. To increase goodwill of the firm. 5. To educate customers/dealers & salesmen about the techniques of sales promotion. 6. To simplify the efforts of sales force & motivate them for larger purchase. 7. To stimulate maximum sales on special occasions such as Diwali, religious festivals & other such occasions. 8. To search for a new market & to introduce new Product/ Services in to the market. 9. To counteract competition. 10. To facilitate coordination & proper link between advertising and personal selling. 11. To promote larger sales in certain specified segments of market. 12. To present a counter promotional program against the competitoBDT 13. To develop patronage habits among customeBDT 14. To prove the Product/ Service better in quality & useBDT Importance of sales promotion:Sales promotion is an important component of the marketing program . It can be a specific tool of the promotion. Quality sales promotion provides advantages to the various groups described below:1. Importance to consumers 2. Importance to produceBDT

3. Importance to middlemen. 4. Importance to society & nation. 1. Importance to consumers:(i) Availability of new Product/ Services- It is easy to sell new Product/ Services with the help of sales promotional tools. Hence the producers are encouraged to bring new Product/ Services. (ii) Various rebates & free discounts- Sales promotions offers various incentives like rebates & free discounts, free samples which helps to stimulates sales & purchase. (iii) Thrill in life- The various incentives contents samples, demonstrations, fair and exhibitions create thrill and joy in consumers life and the relish these beneficial offeBDT (iv) Low price- Sales promotion increases sales volume and reduce the unit cost of Product/ Serviceion & thus the prices reduce & it benefits consumeBDT (v) Increase knowledge- Sales promotion increases the knowledge of the consumers with regard to the uses, operation & maintenance of the Product/ Service. (vi) Provide higher standard of living. (vii) Buying confidence- Sales promotion tools provide the consumers an opportunity to understand the Product/ Service. This creates a buying confidence among consumeBDT They may take better buying decisions which ultimately increases their satisfaction level. (viii) Minimize exploitation- The promotional plan creates a better knowledge about the Product/ Services, their uses & quality. As a result, the seller cant exploit the consumeBDT 2. Importance to producers:-

(i) Increase in sales- Sales promotion attract consumers & stimulate them to make larger purchaser. (ii) Improve effectiveness of Media Activities- the sales promotions plans make the advertisement & other media activities more effective to achieve the sales largest these give pulling power to ads. (iii) Help personal selling- sales promotions supports personal selling process the salespersons can use demonstrations , distributions to free samples , contest methods to push the sales. Sales promotion aimed at companys own sales force might motivate salesmen to get new costumers, selling a Product/ Service. (iv) Able to capture new market. (v) Increase regular sales & seasonal Product/ Services. (vi) It helps in increasing goodwill of the firm. (vii) The various promotional incentives offered to the dealers help to achieve cooperation from them to sale the Product/ Services & to maintain maximum stock with them. (viii) It is an effective step to face the competition. (ix) It helps in increasing the demand of new Product/ Services. (x) It helps in maintaining existing customeBDT (xi) It creates a trusting attitude among customeBDT Free sample & functional demonstrations creates a faith in the use of merchandise which results in longer sales. Importance to middlemen / dealers:(i) Facilitates longer sale. (ii) By operating various sales promotional plans, manufacturers provide various type of helps such as rebates, trade discounts, gifts, rewards to dealers & reselleBDT

(iii) A direct relationship between the dealers & the customers are established through the sales promotion techniques which will continue for a long term. (iv) As the cost of each deal is reduced the profits of dealers are also increased. Q. What are the functions performed by a sales promotion department? Ans. The success of modern business largely depends on the functions of sales promotion department. Sales promotion department becomes more important as there exist a buyers market in place of a sellers market. The functions & responsibilities of sales promotions department have been described by Alfered Ghoss & Haughten in 3 ways: To establish coordination with other departments. 1. Assisting functions towards dealeBDT 2. To motivate the customeBDT Usually the sales promotions department undertakes the following functions:1. Planning for sales promotion company-The primary function of the sales promotions department is to make long term & short term planning for undertaking promotional programs. This is done by evaluating the various factors such as market condition , level of competition , demand & supply situation , advertising , personal selling , etc. 2. Assistance to top executives- The sales promotions department provides various information to top executives & give assistance in related matters for decision making. 3. Coordination & liaison with other departments- The sales promotion department regularly coordinates with other departments such as advertising, sales force management, packaging, publicity etc. The value promotion is coordinated in view of the travelling schedule of salesmen, sales presentation etc. Sales promotion department is also associated with Product/ Serviceion, finance, training departments of the organization & established coordination with these departments from time to time. 4. Sales promotion research- In order to make sales promotion program more effective , the S.P. department undertakes surveys & evaluates the information

gathered to know about the changing values, traditions, culture , consumers behavior & public opinions. 5. Execution of sales promotion program -The sales promotion department also execute programs design for consumers, dealers & the various advertising & promotional agencies, PR officers, distributers & exchange ideas with them. It organizes sales exhibitions, trade fairs, contests etc, from time to time. 6. Provides training to the sales lesson -The sales promotion department trains the salesmen about the company , its Product/ Services , promotional incentives being gives to buyeBDT The department also gives introduction about companys policies & plans. Customers-salesmen relationship. 7. Evaluation of sales promotion - sales promotion department evaluates the planned promotional program & with the help of these promotional plans, data are collected & it is analyzed to find out the effectiveness of the program. Consumes survey, consumer panels gives a clear picture of the various sales promotional tools. 8. Assisting dealers / middlemen to make advertising more effective-dealers also deal with advertising of the various Product/ Services. The sales promotion department helps in producing training to the salesmen , to promote dealer interests etc. The sales promotion department also decides on with best advertising messages, copies & media for their Product/ Services. 9. Coordination between advertising & personal selling. Q. What is distinction with advertising & personal selling? OR Discuss the points which make sales promotion distance with that of Advertising & personal selling. Ans. Sales promotion can be differentiated from advertising in the following ways:1. New media activity:- Sales promotions a non-media or below the line activity & advertising is the media related activity. 2. Limited time period:-Advertising is for long term effect & is for longer periods, whereas sales promotion is for a limited time period only.

3. Easy evaluation:-The impact of sales promotion can be easily measured in comparison to advertising. 4. Faces on immediate purchase:- Advertising is designed to have awareness , interest & preference building effects over a long run. Sales promotion simulates quick & immediate purchase or sales promotion offers a reason to buy now. 5. Creating action:-Advertisement builds long term brand awareness & sales promotion is used for creating action. Distinction of sales promotion & personal selling. 1. Role:- Sales promotion helps to increase the effectiveness of personal selling & personal selling creates desire for a Product/ Service thereby effecting sales . 2. Motivation:-Sales promotion provides physical motivation to customers personal selling provides physical and emotional motivation to customers 3. Personal presence:-Personal presence of salesmen is not necessary in sales promotion whereas in personal selling salesmen is required for selling. 4. Media:-Sales promotion can be presented through any media like vocal, written or audio visual personal selling it can be presented through vocal media only. 5. Compumentary function:- Sales promotion is complimentary to personal selling whereas personal selling does not complement to the sales promotion program. 6. Continuity:- Sales promotion is not used as a securing activity whereas personal selling is a routure activity which regularly operates. 7. Orientation:- Sales promotion is oriented largely towards the firms or its Product/ Service , personal selling in customer oriented. 8. Object:-The objective of sales promotion is to feel a gap between advertising & personal selling & the objective of personal selling is to solve the problems of customers & to get more sales Q. What are the roles of sales promotion in an company or shortages?

Ans. There are three types of world economy:- developed, developing & under developed (Shortage economy) . In an economy of shortages, the availability of goods & resources are shorter or lesser than their demands. Limitations of a shortage economy1. Under developed in economic aspects. 2. Natural resources remain untapped. 3. Restricted development of industrial activities. 4. Lower standard of living of people . 5. Shorter supply of Product/ Service & resources. 6. Slow growth of capital formation. 7. Limited opportunity for employment. Economists say that development of economy is possible only when there is increased sale. Therefore sales promotion is considered to be tool for stimulating the sales. Also, in a shortage economy, sellers market is dominant whereby seller takes the advantage of the situation & creates situations of unfair trade practice. Thus, sales promotion can stop this situation of unfair trade practice & thus the economy will grow through the Product/ Serviceion of new items copy setting Product/ Services of new industries & industrial units & this way the wheel of economy development might move faster & can create a surplus situation in an economy of shortage. Q. What are the commonly used tools & techniques of dealer? Promotions? OR What are the different sales promotional tools useful for traders? Ans. These promotional tools are targeted to marketing intermediaries such as wholesalers, retailers, distributers or agents who stock the manufactures Product/ Services for sale sales promotion directed at the trade helps push a Product/ Service into the distribution channel until it reaches customeBDT Here are the most common types of trade promotion tools:1) Point of purchase displays:- A manufacturer designed display distributed to retailers who use it to draw the customers attention to Product/ Service promotions is called as pop displays. Pop includes passion racks, displaycartoons, banners, signs, price cards, mechanical Product/ Service, dispenses etc. 2) Incentives: - Incentives to members of trade include awards in the form of travel, cash bonus, gifts etc. another form of trade incentive is referred to as push money.

Push money is carried out through a program in which retail sales people are offered a monetary reward for featuring a marketers brand with shoppe BDT 3) Trade allowance: - Trade allowance is probably a discount or deal offered to retailers or whole sales, to encourage them to stock display the manufacturers Product/ Service Types of allowances offered(i)Advertising allowance: - In this method, actual expenses or certain percentage to purchases made, are not met by the producer. Instead an allowance is paid to the dealer toward advertising expenses. (ii) Promotional allowance: - Certain items which helps in advertising and publicity are distributed to retailers free of cost.Such novelties include pens, calendars, paper weights, bill books, bags, diaries, memo pads etc. (iii)Display allowance:- The producers who dont provide display material to dealers, provide them with display allowances. (iv)Buying allowance/Price off allowance:- The price of allowance is given on purchase made during a specified period of time directly from the producer. This encourage larger purchase from the producer. (v) Brand deal allowance:- Such allowances are given to those middlemen who deal exclusively with a single brand. (vi)Buy back allowance:- It is a sum of money given to the reseller for each unit brought after an initial deal is over. 4) Sales training program:- Another form of dealer promotional tool is sales training program. Salesmen at the retail level need to be trained about the features of the Product/ Service, benefits, advantages of different models/brands etc. cosmetics, appliances, computers, electronic Product/ Services are examples for which consumer rely on trained sales staff. 5) Trade shows:- Trade shows are certain activities designed where manufacturer can display their Product/ Services to current as well as prospective buyer BDT They are attended by retailers to distributors and involve demonstrating Product/ Services, identifying prospectus and gathering customer BDT Trade shows are particularly valuable when a new Product/ Service is introducing in to the market many companies use trade shows to entertain key customers and to develop and maintain relationship with them.

6) Cooperative advertising:- In this method the dealer and the producer both jointly share the expenses of advertising. Either the producer may bear a fix amount of the advertising expenses or certain percentage to the purchase made by the dealer in a year. 7) Free merchandise:- Free merchandise is sometimes offered to resellers who purchase stated quantities of the same or different Product/ Services. 8) Sales contests:- Sales contests are organized for dealers also on the basis of highest sales achieved by dealers during a specific time period. Prizes, certificates are issued to such dealers and such contest hence motivates the dealer for longer purchases. 9) Retailer kits:- Materials that support retailers selling efforts are retailer kits. The kits contain supporting information such as detailed Product/ Service specification, ad slicks- print ads that are ready to be sent to the local print media. (10) Advertising and display aids:- Some of the aid are (i) Local news paper advertising:- Advertisements in local news paper specifying name, contact no. and address of dealers, helps the people to know about the dealers in town. (ii) Direct mail advertising:- In this the producer sends various advertising and publicity material to dealer by mail. This includes reply cards, calendars, diaries, folders, house magazines, order book, hand bills etc. (iii)Outdoor advertising:- Producers provide banners, sign boards, posters, bill boards, holdings to dealers at their own cost. (iv)Organizing fashion shows:- Some companies organize fashion shows in big cities to promote their Product/ Services. This is also an encouragement to Deale BDT 11) Sales assistance:(i) Building up sales plan: - Producers extend help and express knowledge to wholesalers and retailers in building up sales plan, formulating strategies and sales programs. This helps the dealers to increase their selling skills.

(ii) Sales meetings:- Producers organize sales meeting for distributors to provide knowledge about new Product/ Services, sales policies and sales plan. (iii)Buy back guarantee:- Producers sometimes gives buy back guarantee to dealers for the goods that have not been sold by them. Thus goods are sold to dealers on sell or return condition. (iv)Special trade terms:- Middlemen/Dealers are encouraged by special trade terms which may be related to price, payment, credit, allowance, financial assistance balance of stock etc. (v) Special services:- Producers also offer special services to dealers which include packaging, categorization of Product/ Services, dealer listing. (vi)Credit facilities: - Producers provide short term credit facility to dealers to motivate them to have maximum stock of the goods. 12) Management assistance:- It includes (i) Providing knowledge about management techniques. (ii) Advice towards policy matteBDT (iii)Guidance in setting up internal organization. (iv)Sales management process. Q. What are the different tools of sales promotion for consumer promotion? Ans. This sales promotion is aimed at final consumer or use BDT Consumer sales promotion used by retailers are aimed at attracting customers to specific locations. The consumer promotion tools are1) Sample-Samples are offer of a trial amount of a Product/ Service generally 84% consumer package goods marketers use sampling as part of their promotion strategy. By offering free samples, a company gains entry into that market, soaps, detergents, toothpastes, shampoos, conditioners are examples of few Product/ Services that are normally popularized through free samples. Free samples are distributed for several

reasons: To stimulate trail of a Product/ Service to increase sales volume in the early stages of PLC, to obtain desirable distribution. The samples can be distributed through in store sampling (food Product/ Services and cosmetics), door to door sampling, mail sampling, (through postal service), news paper sampling, mobile sampling, on package sampling, professional sampling(drugs). 2) Premiums:- Premiums are goods offered either free or at low cost or an incentive to buy the Product/ Service. Premiums are offered as bonus, prize, gifts or other free offer BDT Premium can be used to boost sales to attract competitors customers, introduces different Product/ Services. E.g.:- Aquafresh toothpaste- At the launching of Aquafresh toothpaste offered two tubes at the price of one. Colgate offered 125gm. tube for the price of 100 gm. Santro- book year santro today & take home a world space Hitachi digital radio receiver worth BDT 4990/- free. Pepe- Buy Product/ Services worth BDT 4000/- & get a bag worth BDT 888/- free. Adidas- Buy Product/ Service worth BDT 2800/- and get a Adidas bag free. 3) Contests: - Contests of various kinds constitute widely used sales promotion tools. There are consumer contest which are open for all, consumer contest are given wide publicity to attract the participation of the widely scattered consumer base. Consumer contest take a variety of forms- Quiz contests, beauty contest, car rallies, scooter rallies, suggesting a logo etc. Contests can be divided in to 2 broad categories- Skill competition & sweepstakes. One form of sweepstakes is a game & scratch off cards with instant winners & prizes are an important promotional tool. E.g.: (i) Nescafe shake contest Nescafe shake contest offered BDT 5 lacks as total prize money with BDT 1 lack for the first prize. The total number of prizes ran to 21000. The contest had a specific objective to make consumers aware of Nescafe as a cool summer drunk in addition to this traditional image of a hot beverage. (ii) Cadburys family contest- Cadbury announced fabulous prizes round the world, economy class are ticket for two adults & two children plus BDT 1 lack in prize money. The participant has to submit a minimum no. of Cadburys wrappers & coin a jingle to participate in the contest. The campaign helped to increase the sales. (iii)Lakme Create your own shade contest Lakme lever held the to elle 18, Create your own shade contest for the target audience of elle 18 range of colors cosmetics & fragnances. The participants were required to create own shades. The winner created a sparkling blue shade & later Lakme launched the new shade in the market. (iv) Pepsi contest for children Pepsi ran a contest among children to promote its potato chips brand ruffles. Nearly 500 children from a school were collected 30 of them were picked to speak for a minute the winners were given ruffles. Pepsi had

covered 250 schools and 125000 students across the country spending BDT 2 lacks only. 4) Demonstration:- Companies resort to Product/ Service demonstration for sales promotion especially when they are coming up. With a Product/ Service new to the market. In Bangladesh Product/ Services like beverages, washing powders, electronic Product/ Service have utilized Product/ Service demonstration as a tool of sales promotion. it may be(i) Demonstration at retail store. (ii) School demonstration. (iii)Door to door demonstration. (iv)Demonstrations to key people. 5) Coupons: - Coupons are certificates which offer reductions to consumers for specified items. Coupons distributed through newspaper, magazine advertisement or by direct mail. Coupons enchoose the customer to exploit the bargain and them also serve as an inducement to the trade for stocking the items. Types of coupons(i) Instant redemption coupon- Consumers can immediately redeem the coupon. (ii) Bonus back coupon- Coupons can be placed inside packages so that customer cant redeem them quickly. (iii) Scanner delivered coupon- Firm can issue coupons at the cash register. These are triggered by an item being scanned. (iv) Cross ruffling- It is the placement of a coupon for one Product/ Service on another Product/ Service. E.g. a coupon for an onion sauce placed on a package of potato chips is a cross scuffling coupon. (v)Free standing inserts coupons can be delivered to consumers through news paper.

(vi) In store couponing- Coupons are distributed in a retail environment. 6) Trade fairs and exhibitions:- They form one of the oldest practices of sales promotion. Trade fair & exhibition provide companies with the opportunity for introducing and displaying their Product/ Services. This brings the companys Product/ Service and the consumers direct contact with each other. Trade fairs have become a handy and effective tool of sales promotion. Orders and enquiries worth billions get generated at international trade fair BDT 7) Discounts and price of E.g. 20% off on levis 10% on Tanishq 8) Free gifts/Gift cards- Companies also give gifts to consumers, dealers and key people. These gifts include pens, diaries, table, decoration. Gifts normally carry the companys name and logo. The gifts are intended to create goodwill towards the company. 9) Exchange schemes/Money back offers- This is the latest sales promotion tool in consumer disables market. E.g. Akai exchange scheme- Bring in your old color TV with remote. Videocon money back offer. Philips- 5 in 1 offer.- Philips TV, 2 in 1, Mixer, grinder, rice cooker at an attractive price. Sponsoring the games and teams- Many companies like reliance, Pepsi, Pentaloons, Maruti sponsor different games and sports in the country and abroad. Q. What are the tools of sales promotion used for business and industrial goals? Ans. Sales promotion is targeted for business and industrial goods also Industrial Product/ Services differ with that of consumer goods. The tools which are used are1) Trade shows: - The industrial Product/ Services are displayed and demonstrated to the members of trade and industry. The representatives explain about the Product/ Services. The trade shows can be useful for smaller firms which cant much in advertising and also salesman can make for more contacts. Trade shows are important rules for reaching potential wholesalers & distributors for a companys brand. 2) Business gifts:- These gifts are given as a part of building and maintaining a close working relationship with suppliers business gifts may include small items of jewellary, watch, electronic items, expensive trips.

3) Trial offers:- Trial offers are particularly well suited to the business and industrial market. Trial offers provide a way for buyers to lower the risks of making a commitment to one brand over another. Trial offer is a good way to attract new customers who need a reason to try something new. 4) Frequency program: - high degree of travel associated with many business professionals make frequency programs and an ideal form of sales promotion for the business and industrial markets. This can be used in airline, hotel and other industries. 5) Coupons:- Coupons are used in business to business sector. Coupons must reach the hands of a purchasing against or someone who has the authority to make decision. 6) Contest and sweepstakes:- As like in consumer promotional methods. Customer methods. Business buyers are also interested in winning prizes as are customers in other situations. 7) Sampling:- Sampling is an excellent method to encourage a business to buy a Product/ Service. E.g. producing a sample in the area of process materials has the advantage of giving the engineers an opportunity to analyze the materials to see if it meets their standards. Through analysis they may find that the material is actually superior to the Product/ Service they currently use. 8) Bonus picks:- offering a prospective a bonus pack may attract new users as price is a negotiated item in our B2B sector price of discount can be offered by vendors seeking to obtain a new business contract. 9) Other tools:- They may include demonstrations, free training, warranties, credit faculties maintenance services, films, publicities and audio visual aids. Q. Discuss the promotional tools aimed at internal organization? Ans. Promotional of internal organization concern with the steps to be taken for a sound promotional programs. The elements of internal promotion are as follows1) Approval of promotional philosophy:- The success of a promotional program depends on the attitude of the top management. There for a promotional program requires the approval of the top management. The manager has to make a cost profit analyses so that top management appraise him about the profitability of program.

2) Product/ Service department for marketing:- Quality of a Product/ Service is responsible for the success of sales promotion program. As the customers are quality conscious and he always makes a comparison with that of competitors Product/ Service before taking the final decision of purchase. Therefore the Product/ Service manager should continuously work on improving the features of the Product/ Service. 3) Coordination with advertising department:-It is the advertising department that make the ground for the sales by giving Product/ Service knowledge among the distributors as well as potential customer BDT When the frequency of the advertisement is reduced then the sales promotions frequency start increasing. Therefore a coordination has to be made with the advertising department. 4) Coordination with sales department:- Sales promotion program can be successful if a proper exhibition is established with the sales department. Its includes arranging and organizing sales meetings and conferences, organizing contest, sales exhibition, traveling to sales personal etc. Q. What are the needs for evaluation of sales promotion program? Discuss the methods of evaluations of sales promotion program. OR Discuss the needs for evaluations of sales promotion program. OR Why the need arises for evaluations of sales promotion program? Explain. Ans.- Though almost all companies resort to sales promotion techniques , only some of them follow it in a planned way. The conditions for the success of sales promotion program are as follows:1. Identify the requirement The firm needs to find out. It is to bring in substantiate extra sales immediately. It is to offered accumulated stocks ? It is to regain loosing consumer interest in the Product/ Service etc. 2. Identifying the right promotion program-The firm has to select the program suitable for current need & situation the choice of the firm should be deducted according to the resources available with the firm. 3. Enlisting the involvement of salesmen- Often sales promotion program are conceded & planned at the head office . But for the campaigns to succeed, it is essential that the salesmen be briefed on the contest & contest of the program. They have to be informed of their roles in the conduct of the program.

4. Enlisting the support of the dealers:- It is also essential to enlist then support of the dealers in any large scale sales promotion venture. Since the major part of the activity is around the dealer shop, the pop material and the Product/ Service under campaign will get the required prominence. Only if the leader so dealeBDT 5. Enlisting the advertisement agencys support:- The adevertising agencies support is also essential for the successful working of a sales promotion campaign. carrying out a sales promotion campaign is as challenging as conditioning an advertising campaign. So companies while commetting heavy finds for sales promotion make it a point ensure that that they benefit from the experience and experlise of their agency. 6. Timing of the campaign:- The sales need of the company is the prime factor that desides the timing. But the firm has to eansider factors like seasonality of purchase of Product/ Service. Need for evolution:- The need for evaluating the sales promotion programs are1. Identifying growth and development opportunity. 2.Taking correction steps in case of any draw back. 3.To measure the effectiveness and achievements of objectives. 4.Facilities for future planning. 5.To encourage for research & innovations. 6.To motivate the employees into have contributor. 7. to know the maturity limit of sales promotion program. 8.To study new & modern tools of promotion. 9.To get allocated maximum budget for sales promotion.

Methods of evalution:1. Sales data method- This method is a widely a accepted practice. In this method , sales volume or market share prior to any sales promotion techniques are measured . Eg. If market share of a Product/ Service before the introduction of sales promotion is 4% , during the period 10% & immediately after the program 6% ,Thus giving an increase of 8%. Showes that new customers are created by the sales promotion program. 2. Consumer panel data- This technique help to identify that how the customers have been motivated by the sales promotion technique for longer purchase . How much quality have the customers purchased & What were the charges of their buying behavior after the sales promotion program. This technique help to identify the

various classes of customers on new or old customers / women / men / industrial / general customers etc. 3. Consumer surveys- This method collects various kinds of information about the customers so as to analysis the effectiveness of sales promotion. The analysis of suchinformation help to know following things1) The numbers of customers who have remembered the techniques used. 2) The views opinion about these techniques. 3)How these technique have been helpful in influencing the buyers behavior & brand chore of customer? 4)Do the customer require any innovation to be differed in the Product/ Service? 5)Do these techniques improve the image of the firm? 6)Do they feel like using these techniques through the year? 4. Experiment methods- The effectiveness of sales promotion technique may be measured by experimenting them in selected markets. However there can be certain difficulties. They are as follows1) The consumer always looks for deals customers are interested only in the purchase in the items Which offer certain additional incentive with that of the Product/ Service. 2) The promotional tools at times can be very costly as, if the organization does not get expected results. Then the price of Product/ Service may be increased. 3) The cooperation from middlemen might not be smooth. Q. Define sales forecasting? Discuss the produce & the methods of sales forecasting. Ans. Sales forecast is the basis of corporate planning forecasting is a systematic attempt to Product/ Service the future on the basis of known facts. It is the result of numerous assumption made about the external and internal environment of firms. Sales forecasting is the estimate level of the company sales based on chosen marketing plan and assumed marketing environment. OR Sales forecasting is the climate of sales during some specific future period time & under a pre determined marketing plan of the firm. Important

1. it is the foundation of planning. 2. Companies uses the sales forecast to allocate resource across different functional areas. 3. It is the key factor in all operational planning throughout the company. 4. It serves as a base for sales force planning. 5. It plays a major role in the success of the organization. 6. It is the key to sales management. 7. It helps in profitability of the firm 8. It helps in facilitating Product/ Service ion planning 9. It helps in better financial planning. 10. It is developing sales strategies and promotional plans 11. It helps in suggesting R & D. 12. Also helps in better inventory control & sales quota determination. Process of sales forecasting :Determination of goals The sales manager should decide the goals for sales forecasting. The objectives may include determination of sales publicity programme, marketing methods, sales quota determination, estimation of working capital etc. Determining the factors affecting sales The controllable factors are like marketing & advertising policy, organization structure etc. & the non controllable factors like political & social systems, seasonal fluctuations etc. must be determined. Selection of techniques Suitable methods for sales forecasting must be selected keeping in view the objective time intervals resources and nature of the firm. Correction of data This is the step of collecting various kinds of informations & data related with future demands of Product/ Services. Analysis of market potential The next step is to analyze the data of market potential. Analysis requires two steps>> a) Select the market associated with Product/ Service demand. b) Eliminate those market segments that do not contain prospective business. Forecasting of future sales:Sales projection should be made for an entire Product/ Service line or for an individual Product/ Service or for companies total market or individual market segment. Making operational programme & the budget:The firm determines the requirements for various operational activities such as Product/ Serviceion purchasing marketing capital assets. On the basis of forecast the

related plans such as sales budget sales quotes sales publicity and material acquirement are formulated Derivation of a sales volume objectives:A sales volume objectives for the coming operative period is hoped for the outcome of a companys short range sales forecasting procedure, The sales volume should be consistent with managements profit aspirations and the companies market capabilities. Evaluation & revision of forecasts:The sales executives should evaluate the forecasts carefully. The company should examine all the assumption on which it is based. The company should the forecasting process periodically. The first step in the review is to determine the accuracy of past forecasts to learn if changes are needed in the way forecasts are made if the company finds that sales forecasts are significantly different from actual sales in the period it should undertake a review of the sales forecasting process. Techniques of sales forecasting:I. Survey methods:a) Executive opinion b) Prudent manager forecasting c) Delphi method d) Sales force composite e) Detecting differences in figures f) Survey of buyer intention g) Product/ Service testing and test marketing. a) Executive opinion It consists of obtaining the views of top executives regarding future sales. The forecasts made by executives are arranged to yield one forecast for all executives or the differences are reconciled through discussion. b) Product/ Service manager forecasting In this method the company personnel are asked to assume the position of purchasers in customer companies. They must then look at company sales from a customers view point & prudently evaluate sales. c) Delphi method This method begins with a group of knowledgeable individuals estimating future sales. Each person makes a prediction without knowing others in the group have responded. these estimates are summarized. Now knowing how the group responded. They are asked to make another Product/ Serviceion on the same issue. This process of estimates & feedback is continued for several rounds. In final round involves face to face discussions among the participants.

d) Sales force composite This method is based on collecting an estimates from each salesperson of the Product/ Services they expect to sell in the sale forecast period. The estimate may be made in consultation with sales executives and customeBDT e) Detecting differences in figures method In this method the sales person produces figures broken down by Product/ Service & customers and the area manager produces figures for the sales persons territory. They then meet & must reconcile any differences in figures. the process proceeds with the area manager producing territory by figures. f) Surveys of buyers intentions This method consist of contacting potential customers & questioning them about whether or not they would purchase the Product/ Service at the price asked. g) Product/ Service testing & test marketing This technique is of value for new or modified Product/ Services for which no previous sales figures exists & where it is difficult to estimate. Likely demand. It involves placing the pre Product/ Serviceion model with a sample of potential users beforehand & noting their reactions to the Product/ Service. Test marketing involves the limited launch of a Product/ Service in a closely defined geographical test area. II. Mathematical methods :a) Moving average technique Simplest way to forecast sales is to predict that sales in the coming period will be equal to sales in the best period. This forecasts assumes that conditions in the last period will be same as the conditions in the coming period. SALES t+1 salest + salest-1 + sales + s salest-n SALESt+1 = Forecasted sales SALESt = Sales in the present period.SALESt+1 = Sales in the period immediately past. b) Exponential smoothing models It is a type of moving average that represents a weighted some of all past numbers in a time series. with the heaviest weight placed on the most recent data.

c) Regression analysis This technique is used to project sales trends in the future. The sales plotted are for each past time period. It determines and measures the associations between the sales & other variables. d) Projection of past sales It takes a variety of forms. To set the sales forecasts for the coming year at the same figure.May be moving average of the sales figures for several past yea BDT e) Time series analysis It is a statistical procedure for studying historical sales data this process involves measuring 4 types of sales variations long term trends, cyclical changes, seasonal variations & regular fluctuations. Then a mathematical model about the past behavior of the series is selected assumed values for each types of sale variation are insisted and sale forecast is made. f) Market factor analysis Market factor analysis determines market factors & measures their relationships to sales activity. g) Correlation analysis This method takes in to account the association between potential sales of the Product/ Service and market factor affecting its sales. h) E-charts this technique is furtherance of moving average technique. It also shows the monthly sales & cumulative sales.

March 24, 2012Marketing of Financial Services: Industry Concept of Competition BANKING DIPLOMA EXAMINATION Banking Diploma Courses in Bangladesh under The Institute of Bankers, Bangladesh (IBB) Marketing of Financial Services-JAIBB Industry Concept of Competition A. Definition of Industry. An industry is a group of firms that offer a product or class of products that are close substitute of each other. (To Get Download Option Click Read More)

B. Classification of Industry. Industries can be classified according to competition among themselves are given bellow.

1. Number of sellers and degree of differentiation : An industry can be specify by the number of sellers and whether the product is homogeneous or highly differentiated in nature. These characteristics give rise to four industry structure types. (a) Pure monopoly : Only one firm provides a certain product and service in a certain country or area. An unregulated monopolist might charge high price, do little or no advertising and offer nominal service. If partial substitutes are available and there is some danger of competition, the monopolist might invest more service and technology. (b) Oligopoly : A small number of large firms produce products that range from highly differentiated to standardized. Pure oligopoly consists of a few companies producing essentially that the same commodity ( oil, steel and mobile phone in Bangladesh ). Such companies would find it hard to charge anything more than the going price. If competitors match on services, the only way to gain competitive advantages is through lower cost. Differentiated oligopoly consists of a few companies products ( autos, cameras ) partially differentiated along lines of quality, features, styling, or services. (c) Monopolistic competition : Many companies are able to differentiate their offers in whole or part (restaurant, beauty shops). Competitors focus on market segmentations, where they can meet consumers needs in a superior way and charge a price premium. (d) Pure competition : Many competitors offer same product and service ( stock market, daily essential food commodity ) to the consumer. Because there is on basis or way for differentiation, competitors prices will be the same. No competitor are not interested to advertise there products or services unless advertising can able to create psychological differentiation ( cigarettes, beer ). 2. Entry, Mobility, Exit Barriers : Industries differ greatly in case of entry. It is easy to open a new restaurant but difficult to enter in the aircraft industry. Major entry barrier includes high capital requirements, economy of scale, patents and licensing requirement, scare locations, raw materials, distributors and reputation requirements. Even after a firm enters in an industry, it might face mobility barriers when it tries to enter more attractive market segments. Firms often face exit barriers, such as legal or moral obligations to customers, creators, and employees, government restrictions, low assets salvage value due to over specialization or obsolescence, lack of alternative opportunities, high vertical integration and emotional barriers. Many firm stay in the industry as long as they can able to cover their variable costs and some or all of their fixed costs.

3. Cost structure : Each industry has a certain cost burden that shapes much of its strategic conduct. For example, steel industry has heavy manufacturing and raw material costs, but toy industry has heavy distribution and marketing costs. So, marketers can easily classify the industries on the basis on the cost structure. 4. Degree of vertical integration : Companies can get advantages through backward and forward integration. Major oil producers carry on oil exploration, oil drilling, oil refining, chemical manufacture, and service station operations. Vertical integration often lowers costs and the company gains a larger share of value added stream. It has some disadvantages, such as high costs in certain parts of the value chain and a certain lack of flexibility. 5. Degree of globalization : Some industries are highly local ( restaurant, beauty shop, small size manufacturing organization ), others are global ( oil, aircraft, camera, computer ). Companies in global industries need to compete on a global basis if they are to achieve economies of scale and keep up with the largest advances in technology.

December 14, 2011Promotional Mix of Bank Services BANKING DIPLOMA EXAMINATION Banking Diploma Courses in Bangladesh under The Institute of Bankers, Bangladesh (IBB) Marketing of Financial Services -JAIBB Promotional mix of Bank service: A study on Dutch Bangla Bank Ltd. - (DBBL) Introduction: Promotional mix is the combination of all the promotional tools used for communicating the offered services. Dutch Bangla Bank Ltd. (DBBL) is such a reputed service provider that has become differentiated from other Banking organizations in Bangladesh which was formed as a joint venture having 70% share of Bangladesh and 30% of Europe. DBBL got its commence paper or the permission of starting business functions in 1995on 4th July. It commercially started its business function with a branch at Dhaka first on 3rd June 1996. With in a short time it grew faster in the market. At present it is a fully online banking

organization in our country having 39 branches all over the country. Not only that it has the highest number of ATM booths in our country. It has made the banking services easier to the country people through 130 ATM booths that are the highest number in comparison to all the present government and private banks in our country. With all its promotional mixes DBL is operating functions effectively maintaining corporate social responsibility refunding the money back from a certain profit portion. For the well combination of the promotional mix and its contribution DBL has occupied a distinctive position in the market. In the CAMEL (Cash, Assets, Management, Equity and Liability) study under the supervision of central bank of Bangladesh DBL occupied the first position in2004. In the year of 2005 it occupied the second position. In Bangladesh DBL has introduced on line banking through Internet, POS and ATM. The success of offering the proposed service has been possible by the contribution of the sound blend or the promotional mix including both the printed and the electronic media. Reasons for choosing DBBL: There are a lot of service organizations available in our country. But in our case study we have selected DBL as it has fame in the market. Our study will cover only the promotional mix side, about this regard the promotional mixes are known a little bit to us. It is known that if the offerings are not matched with the communication then customer will not be satisfied. Ultimately word of mouth will not be generated. Here DBL seemed very much careful. We know that communication gap is very much crucial for any service organization to make it successful which is the deviation between service provided and communication disclosed. DBL is sincere about this regard and that has influenced us to select DBL as an object for our case study. THEORETICAL FRAMEWORK: The theoretical framework refers to arguments quoted by the renowned experts about the mentioned topic. Here the theories developed by the writers are bellows: According to McCarthy promotion is communicating information between seller and buyer to change their attitudes and behavior. According to Philip kotler promotion stands for the various activities the company undertakes to communicate its products merits and to persuade target customers to buy them According to William J Stanton the term promotion is used to refer to the use of persuasive information which is conjunction with other elements of marketing mix. According to Philip kotler promotion or communication mix means combination of all promotional tools and the firms promotion or communication mix communicates the firms positioning strategies to its relevant markets, including consumers, employees, stockholders, and suppliers Communication mix: according to Douglas Hoffman the firms promotion, or communication mix, communicates the firms positioning strategy to its relevant

markets including consumers, employees, stockholders and suppliers. The term communications mix describes the array of communications tools available to marketers. Marketers need to combine the elements of the marketing mix (including communication) to produce a marketing program. The elements of marketing mix fall in to four broad categories: personal selling, media advertising, publicity and public relations and sales promotions. Personal selling: According to Philip kotler personal selling is an oral presentation and conversation with one or more prospective customers. According to William J Stanton personal selling is the direct presentation of product or service to a prospective customer by a representative of the organization selling it. Advertising: According to Philip kotler Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor According to William J Stanton advertising is impersonal mass communication that the sponsor has paid for and which the sponsor is clearly identified. Publicity: According to Philip kotler publicity is a non personal stimulation of demand for product, service or business that is transmitted through a man, media at no charge. According to William J Stanton publicity is a special form of public relation that involves news, stories about an organization or its services. Public relation: According to Philip kotler It includes a variety of programs designed to promote or protect a companys image or its individual products According to William J Stanton public relation encompasses a wide variety of communication effort to contribute to generally favorable attitude and opinion toward an organization and its service. Sales promotion: According to Philip kotler sales promotion a key ingredient in marketing campaigns, consists of a diverse collection of intensive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers or trade According to William J Stanton sales promotion is demand stimulating activity designed to supplement advertising and facilitate personal selling. It is paid for by the sponsor and frequently involves a temporary incentive to encourage a purchase. Empirical study: Empirical study refers to the reality of perception. The reality about its communication mix or promotional mix is up to mark. What it is promising to the customers through the different promotional mixes are being matched with the reality. The services include:

Usual Banking services. Online Banking facilities. Services to the distressed community DBL uses all types of promotional mixes to cover the target market. It is currently using both the printed and electronic media. The elements of promotional mix consist of: Advertising. Sales promotion. Public relation. Publicity. Word of mouth: DBL is communicating the proposed services through the mentioned elements of promotional mixes. Now a short explanation of the service offered can be viewed. Usual Banking services: DBL offers the usual Banking services include the fastest and speedy transactional account services consist of current account, savings account, fix deposit scheme and special target account. The well-trained front desk executives with well-decorated inanimate environment are performing the activities very well. Online Banking facilities: DBL is providing the shoposticated target customers with online Banking facilities through ATM card, Internet, POS and SWIFT (POS and SWIFTs meaning was not available in annul report 2005 of DBL) Earlier it has been noted that country wide it has the highest number of ATM booths including 130 by which the customers are withdrawing money with in 24 hours. It is offering the customers four types of cards and these are Classic card, Silver card, Gold card and Visa electron. For the Classic card there is no charge and for the first time clients, Silver card is offered to the current account holders who can transect anytime and any amount according to the deposit, Gold card is allowed to the account holders who have at least 500000 tk deposit and through the Gold card the customers can shop in credit basis up to 2000000tk, Visa electron is under process that may offer unique service to the client in future. The foreign client can send money from any corner of the world through the Western Money Union, as DBL is one of the representatives that serves the nation the service through the Internet facility. Services to the distressed community: Besides the important services performed or the clients DBL is performing some distinct activities for the people who are distressed in some of cases they are deprived of a lot. DBL is doing a lot for those people through performing the corporate social responsibility (CSR) countrywide. DBL previously would allocate 2.5% of its annual profit to perform the CSR activity and now it is allocating 5% of its annual profit for the CSR activities. DBL has formed a foundation for smooth performances named DBL foundation. To build the corporate image it is donating a lot of money to different charitable organization, donating to the flood affected and winter affected people in our country.

Promotional mix used by DBL: We know that the combination of all the promotional tools is referred to as promotional mix. Here DBL is blending a sound mixer by which it is trying to caver the whole target market. Now we will view separately all the elements of promotional mix. Advertisement: DBL is using all the printed media and electronic media for communicating the services to the clients. The elements of the mixes are as follows: Printed media: DBL is using all the printed media including the newspaper, magazines, festoons, billboard, and etc. to communicate their services. Electronic media: It includes different TVs both the government run and privately own to position the idea your trusted partner. Sales promotions: Sometimes DBL undertakes sales promotion to attract the existing and new clients short time basis but not appointing any personnel specifically as sales personnel. Word of mouth of the existing clients act as sales promotion for that period. Public relation: DBL sponsors different seminars, symposiums, math Olympiad to build corporate relation with the mass people. Publicity: As DBL is performing a lot of social responsibilities. It was awarded the number one CSR performer in the southern Asia in a conference held in Philippines. Not only that different media both views the countrywide nonprofit able performances printed and electronic which are publishing and telecasting the news countrywide. it also did the beatification of part of Dhaka city, Hotel Sheraton to Ishkha road and that attracted the media as a result DBL is getting publicity than any other service organization in our country that represent obviously the reality. Word of mouth:We know that satisfied customer is the best source of promotion and DBL has a great impact of word of mouth, which is generated from the existing satisfied customers as they promote the bank services that they avail. Further more those potential customers who dont have account but wish to open an account in future for availing the smart service of DBL. In the study we find that the promotional mixes of DBL are contributing a lot to retain the goodwill and day by day the authority is being serious about making a sound mixer of their communication mixes. Analysis: The service organizations offer their offerings through the promotional mixes. If the reality is matched with the promotional messages then no problem but the situation will be very crucial if promises are not matched with the real services. The deviation

between the theories with the practice is analysis. In the study we find that the inanimate environment of the DBL of - branch is very much modern and the behavior of front line executives are standard. The standard of each advertisement in different media are very fine. Especially the social responsibilities performed by the DBBL attracted to the eye of many. Actually DBL has properly used its promotional mixes. It is trying to provide the standard and promised services to its clients. DBBL thinks that the service provided will make the customers loyal as a result those customers will further recommend the others. For doing that it is emphasizing on the publicity and public relation and publicity that is the result of CSR. The target customer of DBBL is the higher customer group and slightly he upper middle class group as well. DBBL has been successful to communicate with the target customers by the proposed services through the promotional mixes. The proposed on line banking has matched with the reality also. In short it can be asserted that the differences between the services of DBBL communicated through various tools and the real mixers of promotion, the performances of individual promotional tool and the reality of the service offered are positive to DBBL and to the customers. Conclusion and Recommendations: The promotional mixes and the effectiveness of them are fully judgmental but the reality of the services can be understood better if we would possess accounts at the bank. In spite of this we can say that this joint venture is performing very well in serving the nation very well. But still there are some recommendations, which are as follows: Target customers: Although DBBL has targeted the higher-class income group but most of the people in our country are middle class and lower class income group. DBBL can target that segment to increase its market share although it has become successful to satisfy the higher income people. Customer training: We know that DBBL has 130 ATM booths allover the country but the people are less trained about this technology. So it can provide more training to the targeted customers about different card including classic card, silver card, and gold card. Although visa electronic is not available but the band has to teach the people about the upcoming technology. Although it is providing the prospectus and other written learning aid but the language is in English. Those can be translated in to Bengali for the betterment of the customers. New social task: In order to draw the attention of the people DBBL can create new ides that means the scope for performing the Corporate Social Responsibility (CSR) such as promoting the bad image of early marriage and creating mass awareness about it. Informing the people about the Sanitation and first aid in critical situations. In brief we can claim that, to the customers DBBL is a popular bank. For this it has obtained 2nd rank. It blended a good promotional mix. Consumers perceive a little risk. It is offering professional banking. Promotional mixes are effectively communicating. Day by day it will target new customer. Its slogan will be correct your trusted partner. It will be very careful for social responsibility. It will show the

customers more honesty. For adding value to customers no conclusion. DBBL will be more careful thats our recommendation.