Business Studies 2006 CBSE [ Delhi ] Set I

Objectives of Marketing Management are:
1.   Goodwill Creation: Marketing management is very helpful in creating goodwill in the market. As marketing creates awareness and demand, this leads to increase in goodwill. By selling quality products at reasonable prices, the firm tries to earn goodwill.

2.   Market Share: Another objective of marketing is to capture a reasonable share in the market. Various marketing activities are carried out to make the goods popular. Various promotional activities are carried to make the product or service popular. All such activities help in capturing the market share.

3.  Creation of demand: Main objective of marketing is to create demand through various means. There is a conscious attempt to find out what the customer wants. The producers first ascertains what the customers want and then produces goods according to their needs.

4.   Profitable sales volume through customer's satisfaction: Marketing aims to realise long-term goals of profitability, growth and stability through satisfying customer’s wants. All the basic activities of a company (like production, finance, marketing etc.) are coordinated to meet the wants of customers and at the same time making a reasonable profit. Modern marketing thus begins with the customers and ends with the customers.

Product refers to something which is offered in the market for sale. It may be physical object, service or an idea. Product mix deals with decisions concerning varieties, quality features, packaging, size, brand, guarantee and services to be offered with respect to firm's product.

Management means getting work done & achieving goals through people. It involves interaction of managers with their superiors and subordinates. Managers must maintain good relations with them. They must maintain social relations and solve problems in a helpful manner.

Principle of equity is violated in this case.

The principle of equity implies that similar treatment should be given to people of similar positions. Workers performing similar jobs should be paid the same wage rate. The manager should be fair & impartial while dealing with their subordinates.

In a complex organisational structure there is a long chain of command. It results in delay in communication and the information is filtered, modified, or may lost at different levels. It may sometime result in concealment of criticism or negative reports. Too many levels of hierarchy may act as a barrier in effective communication.

Capital Structure refers to the composition of long term sources of funds such as equity shares, preference shares, debentures and long term loans.

For obtaining optimum capital structure all the types of finances have to be in right proportion. Basically there are two types of long term funds.

Three causes of over capitalisation are:
1. Idle funds:It is just possible that the promoters of a company may issue more than the required number of shares and debentures. The funds raised may remain idle.
2. Under utilisation of funds:The returns of the company will be comparatively lower, if the funds are not properly utilised. Under utilisation of funds will yield low earning and result in the decline of return per share.
3. Acquisition of goodwill at excessive price:In case of purchasing an enterprise, the company may pay for goodwill more than its net worth. Goodwill is a fictitious asset, which has got no real worth. If excessive funds have been wasted in acquiring goodwill, lesser funds will be available for utilisation. It will consequently result in the fall of rate of return.

It is a Diagonal Communication
Flow of Communication between the persons of two departments, one holding a higher position than the other is known as diagonal communication .It may cause a feeling in superior of being ignored if the subordinates talks directly to the managers of other departments. For e.g.: If a sales manager is asking product manager to modify the product according to the demand so it is a kind of Diagonal Communication.

OUT OF SYLLABUS

Qualities of a good leader are:

• A leader should have logical bent of mind and a mature and an objective outlook for decision making
• A leader should have communication skills
• A leader should have ability to inspire people