Saturday, 30 September 2023

IGNOU ASSIGNMENT SOLUTIONS - MCO-01 - Organisation Theory and Behavior - MCOM - SEMESTER 1

              IGNOU ASSIGNMENT SOLUTIONS

        MASTER OF COMMERCE (MCOM - SEMESTER 1)

               MCO-01 - Organisation Theory and Behavior  

                             MCO - 01 /TMA/2023 


Please Note: 
These assignments are valid for two admission cycles (January 2023 and July 2023). The validity is given below:  
1 Those who are enrolled in January 2023, it is valid upto June 2023.  
2 Those who are enrolled in July 2023, it is valid upto December 2023.  
In case you are planning to appear in June Term-End Examination, you must submit the assignments to the Coordinator of your Study Centre latest by 15th March, and if you are planning to appear in December Term-End Examination, you must submit them latest by 15th September. 

Question 1
What do you mean by bureaucracy? Discuss its characteristics. Do you think that bureaucracy enhances efficiency in the organisation. Give your arguments. 

Solution: 


Bureaucracy is defined in the dictionary as, “a system for controlling or managing a country, company, or organization, that is operated by a large number of officials employed to follow rules carefully”.
These days the word bureaucracy is often associated with negative connotations, but at the time bureaucratic theory was developed by Weber it was designed to solve some big problems with the way organizations were being run.

What is Bureaucratic Theory?
Because of the problems Weber saw with traditional authority he favored a more rational approach to running an organization and helping it to achieve its goals. 

There are two parts to Weber’s Bureaucratic Theory:

1. A clear organizational hierarchy
An organizational hierarchy defines how people are structured and fit within an organization. For example, a typical company will have the CEO at the top of the hierarchy, followed by the executive board. Each board member will then be responsible for managers, who in turn will manage employees.

Weber wanted each hierarchy to have what he called legal-rational authority. This means that defined authority sits with a position, not with a person. For example, your subordinate would never be able to tell you what to do even if they happened to be the son of the CEO because their formal position doesn’t hold that power. Basically, your authority comes from the position you hold in the hierarchy.

2. Clear rules for decision making
Weber referred to this as rational-legal decision-making rules. This means that there should be a set of explicit rules and procedures defining how the organization functions, and that these rules should be consistent with the rules and laws of wider society.


Six characteristics of bureaucracy in turn.

1. Hierarchical Management Structure
One of the hallmarks of a bureaucracy is a hierarchical management structure. In a hierarchy, each level within the organizational structure controls the level below but is controlled by the level above.

Power and authority are clearly and explicitly defined for each position within the hierarchy. Job responsibilities and duties are also clearly defined for each position.

2. Division of Labor
Division of labor means that tasks are divided between the employees of the organization. Each employee will be responsible for specific tasks and each department will be responsible for specific functional areas.

As an example of this think about how your salary is set and paid within a large organization. Your salary will be set by your line manager, but you will be paid by the Payroll department, rather than the money being paid to your boss who would then give it to you. There are advantages to breaking things up in this way. First, your manager is the person in the best position to set your salary as they observe your performance much more closely than the payroll department. Second, the payroll department are specialists in payroll and ensure you get paid on the same day each month.

3. Formal Selection Process
All employees are treated equally and are hired and promoted on the basis of qualifications, expertise, performance, and experience. There are formal rules and regulations to ensure this selection process isn’t abused. For example, your manager can’t hire someone simply because they’re friends from the golf club.

4. Career Orientation
The organization is career orientated, meaning that if you follow the rules and regulations and perform well you will not be arbitrarily fired. In fact, if you perform well you may even have the chance to be promoted or receive a pay rise. In this way, the organization offers each employee the opportunity for a long term career, provided they follow the rules and perform well.

5. Formal Rules and Regulations
There are rules in place that govern how all employees should behave. Managers cannot simply appraise their employees according to their whims. Instead, they must assess employees according to the rules. For example, if you’ve been set a target to make 10 widgets and you make 10 widgets then you’ve achieved your target. Your manager can’t simply decide retrospectively that you should have really made 15 widgets and then fire you for not making 15 widgets. The rules protect employees against this type of behavior.

Similarly, there are rules surrounding how we behave, treat, and interact with other employees.

6. Impersonality
The rules are well defined and clear and are applied in the same way to everyone. The rules are there to prevent favoritism or nepotism.

If two employees were to enter into a relationship together whilst working within the same department, then often one of them will be moved to a different department or different part of the organization to avoid favoritism and help keep in-work relationships impersonal.

How does bureaucracy contribute to the effectiveness and efficiency of organisations?

It can be. Compared to a large organization with no bureaucracy, I would expect an organization with bureaucracy to be more efficient.

A bureaucracy only makes sense in a large organization. Small organizations with few employees, like a really small business, don’t need bureaucracy. A large organization needs it. A bureaucracy has a hierarchical structure, which provides for accountability of employees and supervisors. It also has formal rules that make clear what employees are expected to do, and what rights and responsibilities they have. Employees also develop specialized, professional expertise in their functions. Absent bureaucracy you have employees doing whatever they want, with no accountability and no standards to judge employee performance.

That is not to say that bureaucracies are always efficient. Once a company grows large enough to need a bureaucracy, it may not set up its bureaucracy properly. Growth in that situation may result in failure by the company. Bureaucracies aren’t static, and over the life of a corporation may go from efficient to inefficient. There is an incentive for bureaucracies in corporations operating in competitive markets to be efficient. An inefficient corporate bureaucracy may put the company at a competitive disadvantage compared to more efficient companies. That does happen, and old companies can die from bureaucratic calcification. A monopoly has minimal incentive for efficiency, and its bureaucracy may get sloppy in the absence of competition.

Government bureaucracies are notorious for inefficiency, which may arise from government having a monopoly in its various functions. A representative government may mitigate this, as unsatisfied citizens may vote against an incumbent government that doesn’t effectively provide services. Even an authoritarian government has an incentive to make its bureaucracy efficient in some respects; a dictator needs efficient tax collection, for example.

In summary, bureaucracy is necessary in a large organization, but bureaucracy will not necessarily be efficient. It can be efficient, but requires effort by management, corporate or government.


Question 2
(a) Explain process of perception. What are the factors those influence perception?      
(b) Discuss individual management strategies of stress. Do you think that they can reduce stress in the organisation? Discuss. 


Solution: 
(a) 

Perceptual sets are the tendency of humans to notice and ignore certain aspects of a stimulus, determined by a state of readiness. Perception is a cognitive process that is used to understand and interpret information that we get from our senses, and certain factors affect perception, such as emotion, motivation, culture, and expectations.

Process of Perception
1. Reception: In this process, a person receives the information through stimuli.

2. Selection: This is governed by two types of factors:

External factors: These are size, intensity, proximity, motion and novelty.

Internal factors: These are attitude, motives, experiences, interests and expectations.

3. Organization: It is the process by which we sort stimuli into a meaningful pattern. It involves the following:
Grouping: Assembling of stimuli on the grounds of similarity.
Proximity: This is the closeness of stimuli to one another that affects perception.
Closure: It is the ability to organize stimuli so that together they form a whole pattern.

4. Interpretation: It is the formation of an idea about the information that is sensed, selected and organized. It involves the following phenomena: primacy effect, selective perception, stereotyping, halo effect, projection and expectancy effect. They are the types of perceptual errors.

Primacy/ Recency Effect:  The first impression is given the most important which is known as the primacy effect. Recency effect, on the other hand, is that human beings remember latest events more than the less recent ones.

Stereotyping:  It is the effect caused by forming a certain belief about a category of stimuli and generalizing that notion to encounters with each member of that category. In reality, there is a difference between the perceived notion of each category and the actual traits of the members. It may affect the interview process in an organization.

Halo effect: It is the process of generalizing from a comprehensive analysis to a single attribute or trait. A negative halo effect is known as the reverse halo effect. It affects the performance appraisal of employees in a company.

Projection: It is a psychological defence mechanism which makes a person compare his negative traits with other people and conclude that they are better off than others.  Perceptual checking minimizes the negative effects of projection.

Selective Perception: This means a person sees, feels or hears what he wants to and skips other information which are inconsistent to his view.

Expectancy effect: It is the tendency of an individual to interpret any person or object based on how he expects the person or object to be in the first place. It is also called as Pygmalion effect.
Stimulus factors affecting perception

Various stimulus factors can affect perception. These include:

1. Intensity
The more intense something is, the more likely it is that it will be perceived. For example, people are more likely to perceive a loud noise rather than a quiet background noise.

2. Changes
When driving in a car, there are constant changes in visual stimuli. So, what we see/perceive constantly changes.

3. Magnitude
The larger the size of an object, the more likely it is to be seen/perceived.

4. Repetition
Repetition increases our sensitivity to the stimuli. This means that we become more aware of stimuli because it has been perceived frequently.

Psychological factors affecting perception

Psychological factors that have been found to affect perception are:

1. Motivation

We are more likely to perceive and see objects or aspects of objects that are of interest to us.

2. Emotion

it is still debated how emotion affects perception. Generally, it is theorised that heightened states and emotions such as stress and anxiety can influence how much and what we perceive
Sad or happy feelings can affect how stimuli are interpreted; when sad, we may notice events or situations that are more upsetting.

3. Expectation

We have a tendency/bias to see things of how we expect to see them

4. Culture

Social norms, rules, beliefs and standards set by the society/culture we live in can affect how stimuli are perceived. This can affect how we process and interpret information that is perceived.
Culture affects the type of stimuli children are exposed to. For example, in western societies, children may be accustomed to colouring in 2D images and seeing pictures and cartoons of people and objects, so tend to draw them in a 2D format.


(b) 

Individuals can cope with stress using a variety of strategies, including:

  • Setting priorities, creating schedules, and allocating time for tasks are all part of time management. Individuals who use effective time management can avoid feeling overwhelmed by tasks and deadlines.

  • Relaxation techniques, such as deep breathing, meditation, and yoga, can help people manage stress by encouraging relaxation and reducing muscle tension.

  • Exercise: Regular exercise can help people manage stress by improving their physical health and decreasing tension and anxiety.

  • Strong social support networks can help people manage stress by providing emotional support, practical assistance, and a sense of belonging.

  • Cognitive restructuring entails identifying and changing negative thought patterns that contribute to stress. Techniques such as positive self-talk and reframing negative situations in a more positive light can help with this.

  • Individual stress management strategies can be effective in lowering stress levels for those who use them. However, the impact of these strategies on overall stress reduction in the organisation may be limited. Organizational stress is frequently caused by factors beyond an individual’s control, such as workload, organisational structure, and job insecurity. Furthermore, people may not always have the time, resources, or support they need to implement and maintain effective stress management strategies.

  • Organizations can help employees manage stress by implementing policies and practises that encourage work-life balance, social support, and opportunities for employees to practise relaxation techniques. Flexible work schedules, employee assistance programmes, and wellness programmes that promote exercise and mindfulness practises are examples of such strategies.

  • Individual stress management strategies, in conclusion, can be effective for managing stress levels in individuals. To reduce stress in the organisation as a whole, however, a more comprehensive approach that addresses the organisational factors that contribute to stress is required.


Question No. 3
Comment briefly on the following statements: 
a) Persuasion is a fact of modern life  
b) Stress is moderated by anxiety and burnout.  
c) Job design is a continuous process.  
d) Culture is the social glue that helps hold the organisation together. 

Solution 
a) 


We are constantly bombarded with messages from a variety of sources, including advertisers, politicians, friends, and family members, in today’s world. Persuasion is the process of influencing another person’s beliefs, attitudes, or behaviours through communication.

The ability to persuade others is useful in many areas of life. Persuasion is used by salespeople in business to persuade customers to buy their products or services. Politicians use persuasion to gain votes and support for their policies. Individuals use persuasion in personal relationships to resolve conflicts and influence their partners.

Persuasion, on the other hand, can be used to manipulate and deceive others. Advertisers, for example, may use misleading or false information to entice customers to purchase their products. Politicians may make promises that they do not intend to keep in order to gain voter support.

Individuals must be aware of and critically evaluate the persuasive messages they receive before making decisions. Consider the message’s source, examine the evidence presented, and consider alternative points of view. This allows us to make more informed decisions and avoid being manipulated or misled by persuasive messages.

Persuasion has become an important part of modern life. It is used to achieve goals and desires and can be intentional. However, people tend to use different methods and approaches to get similar results. Persuasive tools, practices, and skills are used, learned, and trained by some people to perform specific tasks or achieve goals. Each of the approaches is determined by a set of skills and activities, but not every person is suitable for the same options, and due to this, knowledge and understanding of one’s strengths are necessary.

To summarise, persuasion is a fact of modern life, and the ability to persuade others is a valuable skill in many areas. However, before making decisions, it is critical to be aware of the potential for manipulation and deception in persuasive messages and to critically evaluate them.


b) 

Stress is a psychological condition and body discomfort.  Stress is a common phenomenon.  Every individual experiences stress at some or other time.  Employees experience stress in the process of meeting the targets and working for long hours. When the person experiences a constraint inhibiting the accomplishment of desire and demand for accomplishment, it leads to potential stress. Anxiety is converted into stress and ultimately it leads to job burnout.  In fact for most of the time individuals are responsible for stress. However, organisations also create stress in the individuals. Why one should be concerned about stress?  The reason is that the stress has more negative consequences than positive.  In this unit, you will learn the definition, causes and consequences of stress.  You will be exposed to the techniques of managing stress. You will further learn the process of creating stress free environment.

Stress is a state of discomfort experienced by an individual.  Loss of emotional stability is the general expression of stress. It is generally apparent when the individual experiences a biological disorder. Stress has a positive association with the age, life styles, time constraints and the nature of occupation.  Certain occupations are more prone to the stress than the others.  For instance, drivers of vehicles, doctors, lawyers and managers are more likely to get stress than teacher, bankers and operating personnel. Individuals feel stress when the needs or desires are not accomplished in the normal expected ways.  This is because of the natural constraints operated on the individuals.  The more the intensity of the desire and greater is the uncertainty associated with the achievement of the goal, the greater is the degree of stress. Employees are working for longer hours, taking on the work once done by laid-off colleagues, meeting tighter deadlines and cutting back on expenses are some of the causes of stress.  Combined to this with the double-income family demands of monthly mortgages, childcare issues and aging parents, and the result for many is anxiety, sleeplessness, irritability, and physical and mental deterioration.  Perhaps these are the potential reasons for stress in the employees.  Let us first learn what is stress? In the words of Fred Luthans, stress is defined as an adaptive response to an external situation that results in physical, psychological, and/or behavioural deviations for organisational participants.  Ivancevich and Matteson define stress as the interaction of the individual with the environment.  It is an adaptive response, mediated by individual characteristics and/or psychological processes that are consequence of any external action, situation or event that places special physical and / or psychological demands upon a person.  Schuler defines stress as a dynamic condition in which an individual is confronted with an opportunity, constraint, or demand related to what he or she desires and for which the outcome is perceived to be both uncertain and important.

The stress is caused when a person has needs, desires, wishes and expectations and certain forces prevent the person from doing the desired activities. Stress and anxiety are not similar concepts. Anxiety occurs as a result of emotions caused by the interactions of environmental stimuli. Thus, it is confined to the psychological disturbance.  On the other hand, stress is originated by the psychological tensions and slowly leads to physical or biological breakdown.  While stress is accompanied by anxiety, the latter need not always lead to stress.

Similarly, stress and burnout are different concepts. Prolonged stress leads to burnout. It is a state of mind. It results from a continuous feeling of emotional stress.  An individual feels physical, mental and emotional exhaustion. Job burnout is characterised by emotional exhaustion, depersonalisation, and diminished personal accomplishment. Burnout is also closely associated with the so-called helping professions such as nursing, education, and social work.


c) 

Modern organisations are highly complex and competitive.  In order to attain the objectives, organisation structures are created and maintained.  Organisation structure consists of jobs and tasks. The design of jobs and tasks is essential to direct the human energy in a proper manner. Job design is structuring of the jobs suitable to the realisation of organisational objectives. It includes instructions, detailing of tasks and clarifying the roles.  A properly designed job motivates the employees.  Interestingly designing the jobs is not an easy task.  A number of internal and external factors influence the process of job design. 

Organisations are created for attainment of goals. For this purpose, an organisation structure is created and jobs are designed to meet the goals. F. W. Taylor suggested that jobs should be designed based on scientific principles to attain higher productivity.  However Human Relations approach has taken a different view and suggested that job design should provide human satisfaction.  Research also revealed that employees performing properly designed jobs showed high motivation and satisfaction levels.  Conversely poor job design kindles boredom, monotony, ambiguity, conflicts and the result is dissatisfaction.  Thus, job design helps in directing human energy for organisational effectiveness.  In addition, job design has an influence on employee’s behaviour and organisational behaviour.  Moreover, job design changes with the  change in internal and external factors. Organisational objectives, environmental factors, social aspects, employee skills, training, status, job expectations, and individual goals and objectives are some of the factors considered in the process of job design.

According to Taylor ‘job design is complete written instructions describing in detail the task to be accomplished.  The task specifies what is to be done,  how is it done and exact time allowed for doing it.’ Job design is making components and sub components of job clear, so that employee understands the goals of the job. The paradigm of job design has changed remarkably over years.  Traditionally job design is viewed as designing standard procedures, clarifying specific job descriptions for increasing productivity and efficiency. The job design is viewed from the perspective of total quality management. The jobs are designed to involve innovation, empowerment, autonomy and teamwork.   Thus, job design as a quality of work life is concerned with the product, process, tools and techniques, design, plant layout, work measurement, standard operating procedures, human process, machine interaction and other activities related to job performance.


d)

Culture acts as the social glue that holds people together within an organisation. It fosters a shared sense of purpose and identity, assists in the establishment of norms and expectations for behaviour, and encourages individual cooperation and collaboration.

Organisational culture refers to a system of shared meaning held by its members.  It is expressed in terms of norms, values, attitudes and beliefs shared by organisational members.  The organisational culture must be created and sustained in such a way that it develops the congenial environment in the organisation.  On the other hand, organisational climate consists of a set of characteristics and factors that are perceived by the employees about their organisation.  Organisation must create favourable organisational climate for improving the organisational effectiveness. 

When an organisation takes on a life of its own, apart from any of its members, and acquires immortality, the organisation is said to be institutionalised. When an organisation takes on institutional permanence, acceptable modes of behaviour become largely self-evident to its members. So an understanding of what makes up an organisation’s culture, and how is it created, sustained, and learnt will enhance our ability to explain and predict the behaviour of people at work. Organisational culture is described as the set of important understandings, such as norms, values, attitudes, and beliefs, shared by organisational members. According to the recent understanding about organisational culture, ‘system of shared meaning among members’, is the essential core of organisational culture.

Employee perceptions of their work environment, as well as their level of commitment to the organisation, can be influenced by organisational culture. A positive and supportive culture can lead to higher levels of job satisfaction, motivation, and engagement, whereas a negative or toxic culture can lead to lower levels of job satisfaction, high turnover rates, and lower productivity.

Effective leaders understand the value of organisational culture and work to create and maintain a positive and supportive culture within their organisations. They understand that creating culture is a long-term process that requires ongoing attention and investment.

Finally, culture is a strong force that helps organisations stay together by providing a shared sense of purpose, identity, and values. A supportive and positive culture can increase job satisfaction, motivation, and engagement, whereas a negative or toxic culture can have the opposite effect. Effective leaders understand the value of culture and work to create and maintain a positive and supportive culture within their organisations.


Question No. 4
Difference between the following: 
a)  Classical and neo-classical theory of management 
b)  Classical conditioning and operant conditioning 
c)  Positive reinforcement and negative reinforcement. 
d)  Evolutionary and Revolutionary strategies of change 

Solution
a) 

The key difference between classical and neo classical theory is that the classical theory assumes that a worker’s satisfaction is based only on physical and economic needs, whereas the neoclassical theory considers not only physical and economic needs, but also the job satisfaction, and other social needs.

What is Classical Theory?
Classical management theory is based on the assumption that employees work to satisfy their physical and economic needs. It does not discuss job satisfaction and other social needs. However, it emphasises specialization of labour, centralized leadership and decision-making, as well as profit maximization.

The theory came into practice in the 19th century and early 20th century. Although this theory is no longer in common use in modern society, some of its principles still remain valid, especially in small businesses.

Based on the classical management theory, three concepts contribute to an ideal workplace:

Hierarchical Structure
There are three layers in an organization structure. The top layer is the owners, while the middle layer is the middle management who oversees the entire operation. The third layer is supervisors who take part in the day to day operations and engage in employee’s activities and training.

Specialization
The entire operation is broken down to small, task specified areas. The employees are specialized in a single operation. Thus, this concept helps to improve productivity and efficiency while avoiding multiskilled employees.

Incentives
The concept describes the extrinsic motivation of employees for rewards. It will make the employees work harder; as a result, it will improve the productivity, efficiency and profit of the organization.

Furthermore, the classical management theory follows an autocratic leadership model to a certain extent where it is considered as the central part of the management system. A single leader takes decisions and communicates them down the line for suitable actions. Thus, this process is quick in comparison to decision making and execution by a team.

Moreover, classical management theory outlines a clear structure of the management, clear identification of roles and responsibilities of employees and division of labour to increase productivity. However, expecting workers to work like machines and disregarding job satisfaction of employees are the major flaws of this theory.

What is Neo Classical Theory?
The neoclassical theory is an alteration and improvement of classical management theory. The theory lies in three main concepts described below.

Flat Structure
In this concept, there is a wide span of control. Moreover, the chain of communication is shorter, and it is free from hierarchical control.

Decentralization
Decentralization is more close to the flat structure because of the wider span of control. Furthermore, it allows autonomy and initiative at the lower level. It also supports employees’ carrier growth in future.

Informal Organization
It emphasizes both formal and informal organizations. The formal organisation describes the intentions of top management for the purpose of interactions among people. However, an informal organisation is necessary to find flaws of formal organisation and to satisfy the social and psychological needs of employees. Management uses the informal organisation for overcoming resistance to change on the part of workers and for a fast communication process. Thus, both formal and informal organisations are interdependent upon each other.

What is the Difference Between Classical and Neo Classical Theory?
The classical theory came into public in the 19th century and early 20th. At that time, the management was more focused on large scale manufacturing and wanted to enhance the productivity and efficiency of operations. Their strategy to increase them based on a rewarding system for workers, luring them into working more to get a good income. Generally, classical theory only considered the physical and economic needs of employees. Neoclassical theory, on the other hand, is a modification of the classical theory. This theory pays more attention to employees needs and expectations; this not only considers physical and economic needs, but also other social needs such as job satisfaction, and carrier growth. So, this is the key difference between classical and neo classical theory.

Moreover, there is a distinct difference between classical and neo classical theory in terms of their characteristics like organizational structure, strategies, considerations, rewarding systems etc. Classical theory has a hierarchical organization structure with layers of management. A single person, most of the times, the owner, makes all the decisions. Moreover, the employees are motivated to work by an incentive system.  In contrast, neo classical theory has a flat organization structure with no layers of management. Most of the time, decision-making and execution involve a team.


b) 

Classical and operant conditioning are two important concepts central to behavioral psychology. While both result in learning, the processes are quite different. To understand how each of these behavior modification techniques can be used, it is also essential to understand how classical and operant conditioning differ from one another.

Classical Conditioning
Even if you are not a psychology student, you have probably at least heard about Pavlov's dogs. In his famous experiment, Ivan Pavlov noticed dogs began to salivate in response to a tone after the sound had repeatedly been paired with presenting food. Pavlov quickly realized that this was a learned response and set out to further investigate the conditioning process.

Classical conditioning is a process that involves creating an association between a naturally existing stimulus and a previously neutral one. Sounds confusing, but let's break it down:

The classical conditioning process involves pairing a previously neutral stimulus (such as the sound of a bell) with an unconditioned stimulus (the taste of food).

This unconditioned stimulus naturally and automatically triggers salivating as a response to the food, which is known as the unconditioned response. After associating the neutral stimulus and the unconditioned stimulus, the sound of the bell alone will start to evoke salivating as a response. The sound of the bell is now known as the conditioned stimulus and salivating in response to the bell is known as the conditioned response.
Classical conditioning is much more than just a basic term used to describe a method of learning; it can also explain how many behaviors form that can impact your health. Consider how a bad habit might form. Even though you have been working out and eating healthy, nighttime overeating keeps tripping up your dieting efforts.

Thanks to classical conditioning, you might have developed the habit of heading to the kitchen for a snack every time a commercial comes on while you are watching your favorite television program.

While commercial breaks were once a neutral stimulus, repeated pairing with an unconditioned stimulus (having a delicious snack) has turned the commercials into a conditioned stimulus. Now every time you see a commercial, you crave a sweet treat.

Operant Conditioning

Operant conditioning (or instrumental conditioning) focuses on using either reinforcement or punishment to increase or decrease a behavior. Through this process, an association is formed between the behavior and the consequences of that behavior.
Imagine that a trainer is trying to teach a dog to fetch a ball. When the dog successfully chases and picks up the ball, the dog receives praise as a reward. When the animal fails to retrieve the ball, the trainer withholds the praise. Eventually, the dog forms an association between the behavior of fetching the ball and receiving the desired reward.

For example, imagine that a schoolteacher punishes a student for talking out of turn by not letting the student go outside for recess. As a result, the student forms an association between the behavior (talking out of turn) and the consequence (not being able to go outside for recess). As a result, the problematic behavior decreases.

A number of factors can influence how quickly a response is learned and the strength of the response. How often the response is reinforced, known as a schedule of reinforcement, can play an important role in how quickly the behavior is learned and how strong the response becomes. The type of reinforcer used can also have an impact on the response.

For example, while a variable-ratio schedule will result in a high and steady rate of response, a variable-interval schedule will lead to a slow and steady response rate.

In addition to being used to train people and animals to engage in new behaviors, operant conditioning can also be used to help people eliminate unwanted ones. Using a system of rewards and punishments, people can learn to overcome bad habits that might have a negative impact on their health such as smoking or overeating.

Classical vs. Operant Conditioning

One of the simplest ways to remember the differences between classical and operant conditioning is to focus on whether the behavior is involuntary or voluntary.
Classical conditioning involves associating an involuntary response and a stimulus, while operant conditioning is about associating a voluntary behavior and a consequence.
In operant conditioning, the learner is also rewarded with incentives, while classical conditioning involves no such enticements. Also, remember that classical conditioning is passive on the part of the learner, while operant conditioning requires the learner to actively participate and perform some type of action in order to be rewarded or punished.
For operant conditioning to work, the subject must first display a behavior that can then be either rewarded or punished. Classical conditioning, on the other hand, involves forming an association with some sort of already naturally occurring event.
Today, both classical and operant conditioning are utilized for a variety of purposes by teachers, parents, psychologists, animal trainers, and many others. In animal conditioning, a trainer might utilize classical conditioning by repeatedly pairing the sound of a clicker with the taste of food. Eventually, the sound of the clicker alone will begin to produce the same response that the taste of food would.
In a classroom setting, a teacher might utilize operant conditioning by offering tokens as rewards for good behavior. Students can then turn in these tokens to receive some type of reward, such as a treat or extra playtime. In each of these instances, the goal of conditioning is to produce some sort of change in behavior.


c)

Positive reinforcement is the process that enhances the likelihood of the response, by adding something. On the contrary, negative reinforcement is one that intensifies the probability of response, by removing or reducing something.

n psychology, the concept of reinforcement is studied in operant conditioning. Reinforcement means an act in which the experimenter attempts to manage the reinforcer. Reinforcer implies the stimuli that increase the response rate. Reinforcement can be positive or negative. Both of them strengthens the repetitiveness of response, but by using different methods.

The two terms are diametrically opposite to one another. So, here we are going to discuss the difference between positive and negative reinforcement.

Definition of Positive Reinforcement
Positive Reinforcement can be understood as the operation of encouraging an approved behaviour by offering a reward as a stimulus, on showing that behaviour. In short, after performing an action, it results in a positive response or reward, then the response tends to be reinforced.

The aim is to increase the probability of the pattern or behaviour. Positive reinforcers can be the desirable outcome, which satisfies the needs such as food, water, money, status, medals, etc. or eliminates the obstacle, in need satisfaction.

For Example:

Commercial Ad for a health drink presenting an increase in height, as result of consuming it, is an example of Positive Reinforcement, whereby increased height is the reinforcer to buy the health drink.
Income Tax Authorities offering gifts to the genuine assessee.
Promotion as a reinforcement offered to the employees if they achieve the desired sales target.
One thing is to be noted that, a positive reinforcer, can be different to different people, as an appreciation from the manager, can act as an effective reinforcer for some employees, but not for everyone, as promotion or increment can be a reinforcer for others.

Definition of Negative Reinforcement
By the term ‘negative reinforcement’, we mean that a reinforcer, i.e. stimulus is removed, on performing a certain behaviour. The frequency of occurrence of the behaviour will be increased in future, as a result of removing negative outcome. In short, negative reinforcement encompasses the application of the aversive stimulus. It is also known as escape or avoidance learning, as the reinforcer is negative and the person attempts to avoid or escape from it.

It is not same as punishment because in punishment the likelihood of the behaviour is reduced, whereas, in negative reinforcement, the repetitiveness increases.

For Example:

A person learns to wear a raincoat, during the rainy season, to avoid getting wet.
People wear helmets, to avoid getting injured, in case of a road accident, or getting fined by cops.

Key Differences Between Positive and Negative Reinforcement
To understand the difference between positive and negative reinforcement in detail, check out the points given below:

  • Positive Reinforcement implies a process of adding a stimulus when a certain behaviour is shown, to increase the likelihood of recurrence of that behaviour. On the other hand, negative reinforcement refers to a process in which the experimenter, in spite of adding something undesirable, he/she removes the unwanted stimuli, to motivate the organism to perform a certain activity again.
  • In positive reinforcement, a favourable stimulus is added, whereas, in negative reinforcement, an unfavourable stimulus is removed.
  • Stimuli involved in positive reinforcement, have pleasant outcomes. Conversely, in negative reinforcement, the stimuli can have unpleasant or even painful outcomes.
  • In positive reinforcement, the stimuli act as a reward, for doing something, whereas in negative reinforcement, the stimuli act like a penalty, for not doing something.
  • Positive Reinforcement strengthens or maintains the probability of recurrence of response. On the contrary, in negative reinforcement, the organism learns to get rid of nasty responses.

d) 

Evolutionary Change: Evolutionary change is a method of change that seeks to improve existing systems and processes gradually over time. This type of change typically entails making minor adjustments to existing structures and systems, and it is frequently motivated by a desire to increase efficiency, cut costs, or respond to changing market conditions.

Adopting new technologies, streamlining production processes, or restructuring departments to better align with organisational goals are all examples of evolutionary change. Evolutionary change is frequently regarded as a more manageable and less disruptive approach to change because it allows organisations to make minor improvements without disrupting existing systems.

Revolutionary Change: A more radical and disruptive approach to change that seeks to fundamentally transform an organisation is revolutionary change. This type of change is frequently prompted by a crisis or a significant external or internal shift, and it may entail rapidly overhauling existing systems and structures.

A merger or acquisition, a major restructuring of the organisation, or a shift in the organization’s core mission or values are all examples of revolutionary change. Because it involves significant disruption to existing systems and processes, revolutionary change is frequently perceived as more difficult to manage and implement.

Finally, evolutionary and revolutionary change strategies are two approaches that organisations can use to implement change. Revolutionary change involves more radical and disruptive transformations, whereas evolutionary change involves gradual and incremental improvements to existing systems and processes. The decision between these strategies will be influenced by a number of factors, including the nature of the change, the goals of the organisation, and the resources available for implementation.


Question No. 5 
Write short notes on the following: 
a)  Resistance to Change 
b)  Work Related Attitudes 
c)  Group Cohesiveness 
d)  Barriers to Communication 

Solution
a)

'Change is constant and unavoidable. However, human behaviour has repeatedly shown a resistance to change in the existing methods and ways of doing work. Organizations, for the advancement of business processes, require constant adaptation to changes. However, organizational resistance to change acts as a major hindrance in the path of development and success of an organization. Such resistance to organizational change brings in the need for defined change management.


Before we move on to discuss the resistance to change theory, the reasons for resistance to change and the ways of managing the resistance to change, let’s take a quick look at the main causes of change in an organization:

Business strategy and structure change

Mergers and acquisitions

Product reaching the end of the life cycle

Changes in government priorities

So, the influencing factors for organizational change can be both internal as well as external.


Resistance to Change Meaning in Organizational Context
The resistance to change meaning can be defined as a major obstacle in the way of development with new technology and methodologies. Change in the techniques and organizational structure comes at regular intervals. However, with pre-existing methods, individuals become reluctant to learn and implement the new techniques bringing in a resistance to change. Resistance can be in the form of protests and strikes by employees, or even in the form of implicit behaviour. The organization with its managers must take up initiatives in managing resistance to change and in the process develop a gradual adaptation to change ensuring productivity as well as efficiency at work. 


Reasons for Resistance to Change
The common causes of resistance to change in all organizations are stated below:

People are not willing to go out of their comfort zones defined by some existing methods for learning something new.

Changes in methods and techniques come with a change in power, responsibilities as well as influence. Organizational resistance to change comes in from people negatively affected by the changes implemented.

Insecurity, laziness and lack of creative approach make people cling to the pre-existing customs there by resisting changes.


Types of Resistance to Change
The types of resistance to change are stated below:

1. Logical Resistance: Such resistances come in with the time genuinely required in adaptation and adjustment to changes. For example, with the advent of talkies, the movie production houses had to shift techniques in the change from silent movies to talkies. This, in a very logical sense, took time for the sound engineers and even the filmmakers to adapt.


2. Psychological Resistance: Often resistance to change in change management comes with the psychological factor of fear of embracing the unknown, or even from hatred for the management and other mental factors like intolerance to changes.


3. Sociological Resistance: Sometimes resistances come not for particular individuals but from a group of individuals. In such cases, individuals do not allow their acceptance with the fear of breaking ties with the group.  


Managing Resistance to Change
An organization’s effort in managing resistance to change should come with proper education and training of the employees of the changes implemented. For a smooth change to facilitate, the organization has to take care of the considerations stated below:

Changes should come in stages. A one-time major change would straightaway put operations into a stop.

Changes should not affect the security of workers.

Leadership qualities in managers with initial adaptations would gradually encourage employees to do so.

An opinion must be taken from the employees who will ultimately be subject to the changes.

Educating the employees and training them with the new methodology will boost up their confidence and build their efficiency. 

The basic resistance to change theory defines the resistance to change meaning as the reluctance of people to adapt to the changes and to cling to the pre-existing customs and methods, mostly due to the fear of facing the unknown and its possible negative effects. The management of an organization must be well aware of the various aspects of resistance to organizational change and be trained if the need arises, in methods of managing resistance to change. This is crucial for a smooth transition and restoration of organizational harmony.

b)

Our behavior at work often depends on how we feel about being there. Therefore, making sense of how people behave depends on understanding their work attitudes. An attitude refers to our opinions, beliefs, and feelings about aspects of our environment. We have attitudes toward the food we eat, people we interact with, courses we take, and various other things. At work, two particular job attitudes have the greatest potential to influence how we behave. These are job satisfaction and organizational commitment. Job satisfaction refers to the feelings people have toward their job. If the number of studies conducted on job satisfaction is an indicator, job satisfaction is probably the most important job attitude. Institutions such as Gallup Inc. or the Society of Human Resource Management (SHRM) periodically conduct studies of job satisfaction to track how satisfied employees are at work. According to a recent Gallup survey, 90% of the employees surveyed said that they were at least somewhat satisfied with their jobs. The recent SHRM study revealed 40% who were very satisfied (What keeps employees satisfied, 2007). Organizational commitment is the emotional attachment people have toward the company they work for. There is a high degree of overlap between job satisfaction and organizational commitment, because things that make us happy with our job often make us more committed to the company as well. Companies believe that these attitudes are worth tracking because they are often associated with important outcomes such as performance, helping others, absenteeism, and turnover.

How strong is the attitude-behavior link? First of all, it depends on the attitude in question. Your attitudes toward your colleagues may influence whether you actually help them on a project, but they may not be a good predictor of whether you will quit your job. Second, it is worth noting that attitudes are more strongly related to intentions to behave in a certain way, rather than actual behaviors. When you are dissatisfied with your job, you may have the intention to leave. Whether you will actually leave is a different story! Your leaving will depend on many factors, such as availability of alternative jobs in the market, your employability in a different company, and sacrifices you have to make while changing jobs. In other words, while attitudes give us hints about how a person might behave, it is important to remember that behavior is also strongly influenced by situational constraints.

What makes you satisfied with your job and develop commitment to your company? Research shows that people pay attention to several aspects of their work environment, including how they are treated, the relationships they form with colleagues and managers, and the actual work they perform. We will now summarize the factors that show consistent relations with job satisfaction and organizational commitment.

c) 

In business parlance group cohesiveness means the extent to which members of the group stick together and their commitment to each other. It is the affinity which the members share among each other which binds the group as a single unit. It signifies the extent of sincerity and interest of the members to remain in the group.

Group cohesiveness is visible if the aims of the group and its members coincide. If there is a good attachment between members and similarity of goals then it forms an intact organization.

If the liking between members is not that good the cohesiveness of the group gets weakened. Individual goals are different from group goals lessens the bond between members. If an individual puts his career and desires in the forefront and joins the group for his own selfish interest, it will negatively impact the group.

Salient Features Affecting Group Cohesiveness

In business management studies, strategists and industrial personnel claim that cohesiveness increases productivity and dynamism and also is helpful in the retention of employees in the group. Vice versa the group supports the members to achieve much more than he would do on his own.

Groups as a comprehensive element with skillful working provide a conducive atmosphere to enhance ones interactive skills and abilities.

1) Like-Mindedness
A group should consist of like-minded individuals with similar tastes to a certain extent. Then only the group can achieve common goals.

The group selects individual members on the basis of some familiarizes with the group likings. People with different thought processes than the group’s motives are generally rejected.

A common goal for the group is identified and it is understood that members will work for the group’s interest inclusive of their own interest.

2) Dialogue
Logical communication between the group and the members is most essential. Thoughts should be verbally explained to reach a final conclusion.

Any kind of misinterpretation of words between members and the groups will lead to all sorts of trouble.

The member’s mindset should be properly put across the table to avoid any miscommunication. This will also help in forging and strengthening the bond among the members and the group.

3) Background
Previous experiences of other groups and exposure to a different set of ideas are also very important. Different experiences bring different perspectives which help in enhancing the performance of the group.

New thoughts and views from varied sources give birth to newer ideas and create more awareness and productivity within the group. People from different backgrounds have fresh ideas from their previous experiences which helps in the growth of the group and in turn help in the group cohesiveness.

4) Confidence
Reliability and trust is an important element in group cohesiveness. The individuals in a group need to trust the team and its decisions to bring about a positive change.

Trust connects the group and the members so that decisions can be taken in unanimity.

5) Goals and Ambitions
Having an objective and a common goal sets the foundation for a positive outcome.

Most groups have a common aim in which they strive to deliver by their activities and social services. These positive aims help them in attaining goodwill in the market which furthers their future enhancements.

d)

Communication is defined as the process by which information is exchanged between individuals through a system of signs, symbols. The concept of communication involves a sender, a message and a recipient.

The sender sends the message and the recipient is the receiver of the message. The process of communication is never smooth as it is affected by the barriers of communication.

Barriers to effective communication can result in confusion which can lead to incorrect information being conveyed or miscommunication which can lead to loss of business.

Following are some of the barriers to effective communication:

1. Semantic barriers

2. Psychological barriers

3. Organisational barriers

4. Cultural barriers

5. Physical barriers

6. Physiological barriers

Let us study in detail about the various types of barriers to effective communication.

Semantic barriers: Semantic barriers are also known as language barriers. These barriers are caused due to improper communication between the sender and the receiver. The following instances of semantic barriers can be witnessed in communication.

Poor quality of message: Message when communicated should be precise and easy to understand, that makes it easy for the receiver to grasp the information conveyed.

Sometimes, due to the lack of clarity or complexity of the way of providing information from the sender, there can be a case of semantic barriers.

For e.g. A manager is conversing in English to a group of workers who understand and speak Bengali. It will create confusion among workers as they will not be able to understand what is being conveyed by the manager.

Technical language: Language barriers also arise when the sender of the message is speaking in technical terms while the receiver is unaware of the terms. It creates confusion and misunderstanding between the sender and receiver by acting as a barrier to effective communication.

Psychological Barriers: Psychological barriers play an important role in interpersonal communication as the state of the mind of the sender or the receiver can make it difficult to understand the information that is conveyed, which often leads to misunderstanding.

Here are some instances where psychological barriers to communication can be seen.

1. Premature evaluation of information by the receiver even before it is transmitted can lead to barriers in communication, as it will create premature conclusion to the message, which withholds the original message.

2. Inadequate attention from the receiver’s end at the time of communication can lead to barriers of communication as the information conveyed by the sender is not properly received by the receiver.

3. When information is passed within multiple sources, the final information is distorted as the receivers of the message are not able to retain everything that was conveyed. This can cause communication barriers.

Organisational barriers: Organisational barriers are those barriers that are caused due to the structure, rules and regulations present in the organisation. The various types of barriers that can be encountered due to superior subordinate relationships where the free flow of communication is not possible.

Sometimes the complexity of organisational structure and multiple managers make it difficult to convey information properly, and the information gets distorted leading to miscommunication.

Cultural barriers: Cultural barriers are those that arise due to lack of similarities among the different cultures across the world. A term that can be harmless in one culture can be regarded as a slang in another culture. Moreover, various beliefs can differ from one culture to another.

Physical barriers: Physical barriers to communication are those that arise due to certain factors like faulty equipment, noise, closed doors and cabins that cause the information sent from sender to receiver to become distorted, which results in improper communication.

Physiological barriers: Physiological barriers arise when a sender or the receiver of the communication is not in a position to express or receive the message with clarity due to some physiological issues like dyslexia, or nerve disorders that interfere with speech or hearing.

Tuesday, 4 July 2023

IGNOU ASSIGNMENT SOLUTIONS - MCO-06 - MARKETING MANAGEMENT - MCOM - SEMESTER 2


                        IGNOU ASSIGNMENT SOLUTIONS

        MASTER OF COMMERCE (MCOM - SEMESTER 2)

               MCO-06 - MARKETING MANAGEMENT 

                         MCO-06/TMA/2022-2023


Please Note: 
These assignments are valid for two admission cycles (July 2022 and January 2023). The validity is given below: 
1. Those who are enrolled in July 2022, it is valid upto January 2023. (Term End Examinations in December 2022)
2. Those who are enrolled in January 2023, it is valid upto December 2023. (Term End Examinations in June 2023)

Question No. 1
What do you mean by Buyer Behavior? Discuss various social and Cultural factors which influence the buyer behavior?                                                         (20 Marks)

Solution: 

Buyer Behaviour simply means the decision and acts pursued by any buyer while purchasing any product or service. Another term for buyer behavior that is majorly used in the market of digital monetization is “consumer buying behavior,”.

It is the highlighted driving force behind any marketing campaign. But how it can benefit you or your business or why should you even care what is buyer behavior? The following reasons will make the significance of buyer behavior supremely certain:

  • Buyer Behaviour helps you understand the dynamics behind any purchase done by the consumer regarding a wide range of products.
  • It reveals substantial reasons behind the loyalty of consumers, for a specific brand or product.
  • Also, it helps you in analyzing & predicting the demand of any service or product prior to its launch.
  • Moreover, is the wizard’s wand when it comes to generating influential marketing campaigns.
  • In addition to that, it makes your product or services more engaging & relatable to the target audience.

Social Factors affecting the Buyers Behaviour: 

The social factors affecting consumer behaviour includes the following components: -

a) Reference Groups
  • We are social beings, and we always want to be around a group of people. There a few groups of people who are always around us, and they have a direct or indirect influence on our behaviour and attitudes. These are called the Reference Groups.
  • Don't most of us used to want the bicycle that our friends used to have in our childhood? A few groups like family, friends, colleagues; with whom we interact regularly are called the Primary Groups. 
  • On the other hand, we have few groups with whom we interact less and conversations are required to be formal; these groups are called the Secondary Groups. But how do these groups influence our behaviour as a consumer?
  • The below mentioned three points will answer this better:
  • Let's say, most of the times you get to know about the latest cool gadgets from your friends and colleagues only; this means that they expose us to new behaviours and lifestyle. 
  • Now, you also need to have the same product. Hence, they influence our behaviour and self-image. 
  • You want to buy that cool gadget from a few specific brands only; they create a pressure of conformity. 
  • Apart from this, there are also certain groups to which you want to belong to but you are not currently a part of it. Suppose you cannot afford expensive designer clothes today but someday you want then that group which buys premium designer clothes is an Aspirational Group for you. Whereas, the groups whose values and attitudes we reject are called the dissociative groups. 
  • Now, marketers reach and influence these groups through an Opinion leader; he is a person who informs and gives information about various products and brands to his group members. They have a good influence on their group members.

b) Cliques
  • According to some communication researchers, our society comprises small groups, known as cliques, and their members interact with each other frequents. This scenario can be compared to the different clubs and committees in B-schools, where all the students from different clubs and committees (cliques) interact with each other.
  • Now, as a promoter of any event of your B-school, you would want cliques to talk more about your event with each other. For that, you will find people who have networks in most of the cliques. These people are known as bridges.
  • Many companies do pay money to influencers to promote their product in different cliques anonymously. This tactic is known as shill marketing or stealth marketing.
  • You must have also heard that many of the reviews on digital platforms are being given by the people who are in some financial contract with the company. Another interesting example could be of some comedy shows where there are anonymous people who laugh while sitting in the audience.

c) Family
  • This is the most important determinant in influencing the buying and deciding characteristics of consumers. We acquire a lot of values, attitudes, beliefs and perspectives from our family.
  • In most of the Indian families, the women are considered to be the main purchasing member; hence they influence the buying decision the most. The marketers of specific products very cleverly target these women to promote their product.

d) Roles and Status
  • All of us play multiple roles in lives, the roles that we play influences our behaviour and choices. The role that we play decides our "status". This also influences the kind of products and services that we use. Most of the times, we like those brands and products which relates to our identity that emerges from the kind of roles we play.
  • You must have observed that people who are fit and muscular generally prefer to buy Royal Enfield among other bikes. This is nothing but a buying behaviour arising out of social factors.

Cultural Factors affecting the buyers behaviour: 

Culture includes race and religion, tradition, caste, moral values, etc. Culture also
include sub-cultures such sub-caste, religious Sects, language, etc.

a) Culture: 
  • It influences consumer behaviour to a great extent. 
  • Cultural values and elements are passed from one generation to another through family, educational institutions, religious bodies, social environment, etc. Cultural diversity influences food habits, clothing, customs and traditions, etc. 
  • For instance, consuming alcohol and meat in certain religious communities is not restricted, but in certain communities, consumption of alcohol and meat is prohibited.
b) Sub-Culture: 
  • Each culture consists of smaller sub-cultures that provide specific identity to its members. 
  • Subcultures include sub-caste, religious sects geographic regions as South Indians, North Indians, and based on languages etc. 
  • The behaviour of people belong to various sub-cultures is different. Therefore, marketers may adopt multicultural marketing approach, i.e., designing and marketing goods and services that cater to the tastes and preferences of consumers belonging to different sub-cultures.
 Conclusion 
Each and every person has his or her own behavior towards the purchasing process , however all of them are influenced by certain factors. Those influences may be environmental, social, personal, or psychological influences. But the cultural values are shared among the people in the society and affect them gradually over time. Besides the society has different impacts on one’s behavior depending on different groups to which it belongs. Each individual has their own effects varying from age or sex or the process of perceiving, motivating and memorizing. Those factors affect the consumer buying behavior so they should be considered. The consumers themselves are the decision makers and so are the most important factors in the consumer market. When a firm wants to enter in to a foreign market then the local customer behavior is probably different from customer behavior that they are dealing with the home country. Therefore it is important for the marketing manager to take all these factors into consideration, and helping them to develop marketing campaign in the international market and to improve the product to fully satisfy the customer which ultimately increase sales and develops in global level.

Question No. 2
What are the objectives of Pricing? Discuss the basic methods of Price Determination.                                                                                         (20 Marks) 

Solution: 

Pricing is a process of fixing the value that a manufacturer will receive in the exchange of services and goods. Pricing method is exercised to adjust the cost of the producer’s offerings suitable to both the manufacturer and the customer. The pricing depends on the company’s average prices, and the buyer’s perceived value of an item, as compared to the perceived value of competitors product.

Pricing objectives

Firms rely on price to cover the cost of production, to pay expenses, and to provide the profit incentive necessary to continue to operate the business. We might think of these factors as helping organizations to: (a) survive, (b) earn a profit, (c) generate sales, (d) secure an adequate share of the market, and (e) gain an appropriate image

a) Survival: It is apparent that most managers wish to pursue strategies that enable their organizations to continue in operation for the long term. So survival is one major objective pursued by most executives. For a commercial firm, the price paid by the buyer generates the firm’s revenue. If revenue falls below cost for a long period of time, the firm cannot survive.

b) Profit: Survival is closely linked to profitability. Making a USD 500,000 profit during the next year might be a pricing objective for a firm. Anything less will ensure failure. All business enterprises must earn a longterm profit. For many businesses, long-term profitability also allows the business to satisfy their most important constituents–stockholders. Lower-than-expected or no profits will drive down stock prices and may prove disastrous for the company.

c) Sales: Just as survival requires a long-term profit for a business enterprise, profit requires sales. As you will recall from earlier in the text, the task of marketing management relates to managing demand. Demand must be managed in order to regulate exchanges or sales. Thus marketing management’s aim is to alter sales patterns in some desirable way.

d) Market share: If the sales of Safeway Supermarkets in the Dallas-Fort Worth metropolitan area of Texas, USA, account for 30 per cent of all food sales in that area, we say that Safeway has a 30 per cent market share. Management of all firms, large and small, are concerned with maintaining an adequate share of the market so that their sales volume will enable the firm to survive and prosper. Again, pricing strategy is one of the tools that is significant in creating and sustaining market share. Prices must be set to attract the appropriate market segment in significant numbers.

e) Image: Price policies play an important role in affecting a firm’s position of respect and esteem in its community. Price is a highly visible communicator. It must convey the message to the community that the firm offers good value, that it is fair in its dealings with the public, that it is a reliable place to patronize, and that it stands behind its products and services.

Pricing Methods:

Pricing method is a technique that a company apply to evaluate the cost of their products. This process is the most challenging challenge encountered by a company, as the price should match the current market structure and also compliment the expenses of a company and gain profits. Also, it has to take the competitor’s product pricing into consideration so, choosing the correct pricing method is essential.

The pricing method is divided into two parts:

  • Cost Oriented Pricing Method– It is the base for evaluating the price of the finished goods, and most of the company apply this method to calculate the cost of the product. This method is divided further into the following ways.
    • Cost-Plus Pricing- In this pricing, the manufacturer calculates the cost of production sustained and includes a fixed percentage (also known as mark up) to obtain the selling price. The mark up of profit is evaluated on the total cost (fixed and variable cost).
    • Markup Pricing- Here, the fixed number or a percentage of the total cost of a product is added to the product’s end price to get the selling price of a product.
    • Target-Returning Pricing- The company or a firm fix the cost of the product to achieve the Rate of Return on Investment.
  • Market-Oriented Pricing Method- Under this category, the is determined on the base of market research
    • Perceived-Value Pricing- In this method, the producer establish the cost taking into consideration the customer’s approach towards the goods and services, including other elements such as product quality, advertisement, promotion, distribution, etc. that impacts the customer’s point of view.
    • Value pricing- Here, the company produces a product that is high in quality but low in price.
    • Going-Rate Pricing- In this method, the company reviews the competitor’s rate as a foundation in deciding the rate of their product. Usually, the cost of the product will be more or less the same as the competitors.
    • Auction Type Pricing- With more usage of internet, this contemporary pricing method is blooming day by day. Many online platforms like OLX, Quickr, eBay, etc. use online sites to buy and sell the product to the customer.
    • Differential Pricing- This method is applied when the pricing has to be different for different groups or customers. Here, the pricing might differ according to the region, area, product, time etc.

Question No. 3
Write short notes on the following: 
(a) Positioning 
(b) Warehousing 
(c) Personal Selling 
(d) Relationship Marketing.                                                                   (4×5 Marks)

Solution: 

(a) Positioning


Positioning refers to the place you want your brand or product to have within a particular target market. More specifically, the process of market positioning and brand positioning involves how you market your brand or product to consumers to achieve that position.
The aim of positioning in marketing is to establish or sway how consumers perceive you to gain a competitive advantage. A great positioning strategy elevates marketing efforts to help consumers move from knowing about a brand to deciding to purchase a product. And as positioning can sometimes be subtle, it’s usually easier to detect when viewing from the same angle as a consumer.
For example, look at Burger King’s brilliant advertisement “Why eat with the clown when you can dine with a king?”. Not only does it suggest that Burger King has a higher class of dining experience than McDonald’s, but it’s also an excellent example of how positioning in marketing operates.
Positioning requires ongoing marketing initiatives for the brand, which must also be maintained over the life of each product. Doing this when running a business also reinforces the target market’s perceptions of both the brand and the product.
Remember that every brand and product has a place somewhere within the market, whether you cultivate your position or not. Once you understand what is positioning in marketing, you can start taking control of your brand’s reputation and product image.
While there are a wide variety of options to consider, positioning strategies are typically broken down into three specific categories. These three types of positioning strategies are known as comparative, differentiation, and segmentation.

1. Comparative
This positioning strategy works by comparing multiple products or brands to create a competitive edge and highlight their individual value.

2. Differentiation
By focusing on any unique features which ideally can’t be duplicated, a differentiation positioning strategy ensures a brand’s products will stand out from the competition.

3. Segmentation
In situations where there are multiple target audiences, a segmentation positioning strategy focuses on the different specific needs of each group.

(b) Warehousing

Warehouse operations are the daily activities that prepare inventory for shipping, inventory tracking, and order fulfillment. Here are four crucial operational components of warehousing:
  • Pick and Pack: A process of selecting one or more products that was ordered by a customer, checking it, and packaging it for shipping.
  • Inventory Management: The inventory definition is tracking, measuring, updating, and retrieving products in a storage facility, including minimum and maximum quantities, stock-outs, and service level agreements.
  • Order Fulfillment: The process of getting an order ready for shipment to a customer, and making sure it is shipped out as soon as possible.
  • Warehouse Management System (WMS): A software program designed to oversee warehouse operations, inventory storage, demand forecasting, and daily efficiency.
Warehouse management is the process of managing inventory in a warehouse, including tracking quantities, monitoring expiration dates, and organizing products based on customer demand. It also includes managing the process of receiving and storing inventory, and finalizing orders for shipments.
Many retailers and eCommerce businesses choose to outsource their warehouse logistics, which is a smart choice since warehousing is less about transportation and distribution and more about inventory storage. Warehouse management software is an essential component of warehouse operations and warehouse services. It allows you to track stock and create alerts for low inventory levels.
Inventory management can also be done using radio frequency identification (RFID) tags and scanners, which lets you track items in real-time and quickly scan items once they get to the warehouse space.

(c) Personal Selling 

Personal selling should be part of a wider sales mix, alongside telesales, email marketing, sales promotion, advertising, and public relations. But personal selling must not be overlooked: it remains an extremely important part of a salesperson’s arsenal and is a skill every good salesperson must master.
Personal selling is a personalised sales method that employs person-to-person interaction between a sales representative and prospective customers to influence the customer’s purchase decision.

Precisely, it’s a promotional technique where a salesperson:

Uses person to person communication: Personal selling involves direct contact of the salesperson and the customer.
To sell an offering: The purpose of personal selling is to motivate and persuade the customer to purchase the intended offering a detailed explanation or demonstration of the product. 
Using a personalised sales strategy: This strategy involves the salesperson to understand the needs and wants of the customers, develop personalised connections, communicate the value of the offering in a way that persuades the customer to buy the offering.
Today, personal selling is considered a business-to-business selling technique but is also used in trade and retail sales.

With the advent of the internet and other communications methods, personal sales isn’t limited to just face-to-face meetings. Salespersons now use video calls, phone calls, IM, and even emails, along with in-person interactions to develop a relationship with prospective customers.

Personal selling differentiates itself from other sales and promotional techniques by possessing the following characteristics:

  • Human contact: It involves person-to-person interaction where a seller interacts directly with the prospective customer and executes a personalised sales strategy according to the customer’s needs, wants, and expectations.
  • Development of relationship: Personal selling involves developing a relationship between the seller and the buyer where trust is established, and the prospective buyer can rely on the salesperson. Moreover, this technique even results in the salesperson becoming a part of the buying process.
  • Two-way flow of information: Unlike mass marketing, personal selling is characterised by a two-way flow of information. The prospective buyers get their chance to ask questions and clear their doubts directly from the seller before purchasing.
  • Quick communication: Since personal selling involves person-to-person interaction, the communication flow is really quick.
  • Flexibility: It involves the salesperson to tailor the sales pitch according to the prospective audience’s persona and requirements, making this sales tool flexible.
  • Satisfaction: The process of personal selling requires the salesperson to understand the customer’s needs and satisfy the same by offering the customer the opportunity to buy something he has to offer.
  • Persuasion: Personal selling isn’t just about informing prospective customers about the company’s offerings. It also involves using the power of persuasion to make customers accept the seller’s point of view or convince the customer to take a particular action.

(d) Relationship Marketing

Relationship marketing is a facet of customer relationship management (CRM) that focuses on customer loyalty and long-term customer engagement rather than shorter-term goals like customer acquisition and individual sales. The goal of relationship marketing (or customer relationship marketing) is to create strong, even emotional, customer connections to a brand that can lead to ongoing business, free word-of-mouth promotion and information from customers that can generate leads.

Relationship marketing stands in contrast to the more traditional transactional marketing approach, which focuses on increasing the number of individual sales. In the transactional model, the return on customer acquisition cost may be insufficient. A customer may be convinced to select that brand one time, but without a strong relationship marketing strategy, the customer may not come back to that brand in the future.

While organizations combine elements of both relationship and transactional marketing, customer relationship marketing is starting to play a more important role for many companies.

Acquiring new customers can be challenging and costly. Relationship marketing helps retain customers over the long term, which results in customer loyalty rather than customers purchasing once or infrequently.

Relationship marketing is important for its ability to stay in close contact with customers. By understanding how customers use a brand's products and services and observing additional unmet needs, brands can create new features and offerings to meet those needs, further strengthening the relationship.

Relationship marketing is based on the tenets of customer experience management (CEM), which focuses on improving customer interactions to foster better brand loyalty. While these interactions can still occur in person or over the phone, much of relationship marketing and CEM has taken to the web.

With the abundance of information on the web and flourishing use of social media, most consumers expect to have easy, tailored access to details about a brand and even expect the opportunity to influence products and services via social media posts and online reviews. Modern relationship marketing involves creating easy two-way communication between customers and the business, tracking customer activities and providing tailored information to customers based on those activities.

For example, an e-commerce site might track a customer's activity by allowing them to create a user profile so that their information is conveniently saved for future visits and so that the site can push more tailored information to them next time. Site visitors might also be able to sign in through Facebook or another social media channel, allowing them a simpler user experience and automatically connecting them to the brand's social media presence.

This is where CRM and marketing automation software can support a relationship marketing strategy by making it easier to record, track and act on customer information. Social CRM tools go further by helping to extend relationship marketing into the social media sphere, allowing companies to more easily monitor and respond to customer issues on social media channels, which in turn helps maintain a better brand image.



Question No. 4
Differentiate between the following 
(a) Consumer goods and Industrial goods 
(b) Selective and Intensive Distribution 
(c) Advertising and Publicity 
(d) Selling and Marketing                                                                       (4×5 Marks) 

Solution: 

(a)

Industrial goods are materials used in the production of other goods, while consumer goods are finished products that are sold to and used by consumers. Industrial goods are bought and used for industrial and business use. They are made up of machinery, manufacturing plants, raw materials, and any other good or component used by industries or firms. Consumer goods are ready for the consumption and satisfaction of human wants, such as clothing or food.

Industrial Goods
Industrial goods are based on the demand for the consumer goods they help to produce. Industrial goods are classified as either production goods or support goods. Production goods are used in the production of a final consumer good or product, while support goods help in the production process of consumer goods such as machinery and equipment.

Unlike consumer goods, which are purchased by the general public, there are very specific buyers of industrial goods. They include component part buyers such as car manufacturers, those who purchase and install machinery, and distributors or anyone else who buys for resale.

Characteristics of industrial goods include:

Rational buying power: The decision and drive to buy industrial goods is rational compared to consumer goods, which are primarily purchased because of an emotional need.
Complex product lines: Industrial goods are usually complex in nature because they can be highly technical. Those who use them must be highly skilled.
Higher purchase value: Industrial goods typically come with a higher price tag because of their complex nature and limited target market.
High level of investment: Those who need to will often invest a lot of money to purchase industrial goods.
Companies involved in the industrial goods sector represent a variety of industries including (but not limited to) machinery, construction, defense, aerospace, and housing.

Consumer Goods
Consumer goods are tangible commodities produced and purchased to satisfy the wants of a buyer. That's why these goods are also referred to as final goods or end products. They are goods that consumers can typically find stocked on store shelves. As such, they can be purchased for use at home, school, or work or for recreational or personal use. Consumer goods are divided into three different types: Durable goods, non-durable goods, or consumer services.

Durable goods have a significant lifespan of three or more years. The consumption of a durable good is spread out over the entire life of the good, which causes demand for maintenance and upkeep. Bicycles, furniture, and cars are examples of durable goods.

Non-durable goods are purchased for immediate consumption or use. These goods generally have a lifespan of fewer than three years. Food, beverages, and clothing are examples of non-durable goods.

Consumer services are also intangible products or services produced and consumed at the same time. Haircuts and car washes are typical examples of consumer services.

Because of consumer buying patterns, consumer goods are typically classified into four different categories including convenience, shopping, specialty, and unsought goods.

Convenience goods: These products are ready to be purchased. Milk is one example of a convenience good.
Shopping goods: These goods require more planning and thought during the purchasing process by consumers. This category includes products like electronics and furniture.
Specialty goods: This category, which includes jewelry, is composed of goods that are deemed to be luxuries.
Unsought goods: Unsought goods require a niche market and are typically purchased by only a few members in the market, such as life insurance.


(b)
Intensive Distribution:
Intensive distribution aims to provide saturation coverage of the market by using all available outlets. For many products, total sales are directly linked to the number of outlets used (e.g., cigarettes, beer). Intensive distribution is usually required where customers have a range of acceptable brands to choose from. In other words, if one brand is not available, a customer will simply choose another.

This alternative involves all the possible outlets that can be used to distribute the product. This is particularly useful in products like soft drinks where distribution is a key success factor. Here, soft drink firms distribute their brands through multiple outlets to ensure their easy availability to the customer.

Hence, on the one hand these brands are available in restaurants and five star hotels and on the other hand they are also available through countless soft drink stalls, kiosks, sweetmarts, tea shops, and so on. Any possible outlet where the customer is expected to visit is also an outlet for the soft drink.

Selective Distribution:
Selective distribution involves a producer using a limited number of outlets in a geographical area to sell products. An advantage of this approach is that the producer can choose the most appropriate or best-performing outlets and focus effort (e.g., training) on them. Selective distribution works best when consumers are prepared to “shop around” – in other words – they have a preference for a particular brand or price and will search out the outlets that supply.

This alternative is the middle path approach to distribution. Here, the firm selects some outlets to distribute its products. This alternative helps focus the selling effort of manufacturing firms on a few outlets rather than dissipating it over countless marginal ones.

It also enables the firm to establish a good working relationship with channel members. Selective distribution can help the manufacturer gain optimum market coverage and more control but at a lesser cost than intensive distribution. Both existing and new firms are known to use this alternative.


(c)

Advertising is a one-way public communication that conveys a message regarding a product, service or company to the viewers, readers, and listeners. It is the biggest marketing tool used for non-personal promotion of goods and services to the potential customers, however, the most expensive one.

Advertising is a sort of monolog activity done with an aim to induce customers i.e. to grab the attention of the target audience in such a manner that they are ready to buy the advertised product. The basic objective of advertising is to increase the consumption of the product of the sender company.

Most of the company’s use this sales promotional tool because of its reach, a single message can reach millions of people in nanoseconds. It is a paid announcement by sponsors, which can be done with various mediums like radio, television, websites, newspapers, hoardings, magazines, social media like Facebook, etc.

Although, we should not trust the advertisement blindly because some of them are false or misleading one that does not give complete information about the product. It is just a technique of branding whereby a product is highlighted by its few qualities, to leave an impact on the consumer’s mind.

Definition of Publicity
The term publicity is a combination of two words public and visibility. It refers to the flow of information or fact, regarding general awareness about a subject or hot topic or any burning issue. Here the subject may include a person, product, service, business entity and so on. It is used to draw the attention of the people, for any subject with the help of broadcast media, print media or social media. It is not a promotional technique and thus free of cost.

Publicity can be printed or just aired. It is either be positive or negative, but it is true and real as well.  It is an entirely unbiased opinion as it comes from an independent source like it can be given by an expert or a common man or mass media. As the third party has nothing to do with the company, their responses and reviews are given high weight.

However, it can be seen many times that rivals use this tool deliberately like they spread false rumors to injure the image of the company and ruin its market position too. Positive publicity boosts the consumption while the negative hampers the same.

Key Differences Between Advertising and Publicity
The following are the differences between advertising and publicity:

Advertising is to advertise a product or service of a company, for commercial purposes. Publicity is to publicize a product, service or company to provide information.
Advertising is what a company says about its own product, but Publicity is what others says about a product.
There is a huge investment to be made for advertising a single product however publicity does not require such kind of investment.
The key persons behind advertising are the company and its representatives. Conversely, Publicity is done by a third party which is not related to any company.
Advertising is under the control of the company which is just opposite in the case of publicity.
Advertising repeatedly occurs to grab the attention of the customers while Publicity is done only one-time act.
Advertising is always customer focused, i.e. the more creative the advertise, the more are the customers attracted to it while publicity is not done keeping such things in mind.
As advertising is done to promote a brand or a product so the credibility and reliability are relatively less in comparison to publicity, where the opinion comes from an independent source.
Advertising always speaks the goodness about a product, to persuade the target audience to buy it. In contrast to publicity, it is unbiased, and so it will speak the reality, no matter whether it is goodness or illness.


(d) 


1. Selling :
Selling refers to creating products and selling them to customers. It revolves around the needs and interest of the seller. It is a only an integrated part of the marketing process as its only focus is to manufacture product first and then selling them to customer and it is sales volume oriented not much concern about customer’s satisfaction. It views customer as the last link in business. Selling seeks to convert product into cash. In selling sell is the primary motive and it is more internal company oriented. It is based on inside-out perspective.

2. Marketing :
Marketing refers to finding wants of people/customer and fill them. It revolves around the needs and interest of the consumer. It is a wider term consisting of number of activities like identifying the market first, customer’s needs, product development to meet customer’s need, fixing price and then selling the product to the customer. It views the customer as the very purpose in business. Marketing seeks to convert customer needs into products. In marketing customer satisfaction is the primary motive and it is more external market oriented. It is based on outside-in perspective.



Difference between Selling and Marketing :

S.No.SELLINGMARKETING
01.Selling refers to creating products and selling them to customers.Marketing refers to finding wants of people/customer and fill them.
02.Selling revolves around the needs and interest of the seller.Whereas Marketing revolves around the needs and interest of the consumer.
03.It emphasis more on product or service.It emphasis more on consumer needs and wants.
04.Selling is a only an integrated part of the marketing process.While marketing is a wider term consisting of number of activities.
05.Selling is based on short term business planning.Marketing is based on long term business planning.
06.It manufactures the product first.It identifies the market first.
07.It is sales volume oriented.It is customer satisfaction with profit oriented.
08.It views business as a goods producing and selling process.It views business as a consumer satisfying process.
09.Here seller is considered as king pin of market.Here consumer is considered as king pin of market.


Question No. 5
Comment briefly on the following statement: 
(a) “Rural marketing in India offer huge opportunities and throw challenges to marketers”. 
(b) “The basic purpose of marketing research is to facilitate decision making process”. 
(c) “The rate of failure of new products is very high”. 
(d) “Market Communication plays an important role in a company’s overall marketing program”.                                                                                 (4×5 Marks)

Solution: 




All Questions - MCO-021 - MANAGERIAL ECONOMICS - Masters of Commerce (Mcom) - First Semester 2024

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