ENTREPRENEURSHIP

STANDARD: XI
UNIT 5: CONCEPT OF MARKET

1. What is meant by E-commerce?

E-commerce (electronic commerce or EC) is the buying and selling of goods and services, or. the transmitting of funds or
data, over an electronic network, primarily the internet.

2. Define Market.
The word “market” is derived from the Latin word ‘marcatus’ meaning merchandise, ware, traffic, trade or a place where
business is conducted.
A market is a place where parties can gather to facilitate the exchange of goods and services. The parties involved are
usually buyers and sellers.

3. Define ‘Traditional Markets’.

ii) According to the American Market Association: “At every point where a specific commodity is concentrated for sale a
market is found.”
Traditional market gives emphasis on:
a. Place: The goods available for sale are bought to a specific place and the buyers of those goods reach those places for
buying them.
b. Commodity: Different markets for different commodities such as vegetable market, food grains market, etc.

4. In what terms, with passage of time, did the industrial activity intensified?
With the passage of time, the industrial activity has intensified in terms of:
a. Quantity
b. Quality
c. Variety of the products
d. Awareness on the part of consumers
e. Emergence of laws and enactments to protect consumer’s interest.
f. Competition

5. What range of activities business comprise of?

Business includes the following range of activities:
(a) Industry, i.e. production and related activities
(b) Commerce, i.e. trade and aides to trade.

6. (i) Give three points of difference between the Traditional Market and Modern Markets.

7. Discuss the role of E-business in promoting the business community.

 Quick Solution: E-business allows quick response to the queries/doubts of various categories of customers and
other business houses, thus facilitating sales and customer satisfaction.
 Updated Information: A company’s web-site, which can be accessed anywhere in the world, provides not only
the first hand but the latest information about the product related to price, discount, quality, features, range, etc.
available to the consumers merely at the click of the mouse.
  Extending Markets: Making sales to customers is spread over the different parts of the world. It has made it
possible to make things available in those areas too where there are no markets around like rural areas.
 Shortening of distribution channel: Producers are having direct contact with the consumers, resulting in the
reduction of middlemen and related cost. Prices have thus decreased.
 Saving time and cost: Customers now do not have to physically visit the market to purchase goods. They can get
information and the goods online because of e-commerce, thus saving time, cost and energy.
 Less risk in payments: Payments can be made on the Internet through debit cards, credit cards, E-banking, etc.
thus reducing risks involved in the transfer of money.

8. Differentiate between E-Commerce and E-Business.

9. What is Micro Environment?

The term "Micro Environment" refers to the environment that exists within a company organization and can influence
daily operations. It is connected to a small area where the company operates. The Micro Environment is made up of all the
forces that surround the company.
10. Differentiate between primary forces and secondary forces.
OR
Differentiate between Micro Environment and Macro Environment.
11. Who is a producer?
A producer is someone who creates and supplies goods or services.
12. What is the concept of market after the inclusion of E-Business? Answer:
 'Market' is emerging as any form where the transaction between the buyer and seller is because of interacting
electronically using telecommunication network the world over.
 So the whole world is a potential market, with no requirement of physical presence of a buyer or seller.
 Internet-commerce has broadened the definition, scope and range of markets.
13. Describe the role of E-business or E-commerce in the developing countries. Answer: Following points describe
the role of E-business in the developing countries:
 Opportunities: It is offering great opportunities to developing countries.
 Entry: It is helping them to enter the global markets merely at the click of the mouse.
 Cost effective opportunities: It is helping business in discovering new cost-effective opportunities not only locally
but also internationally.
 Promotion: It is playing leading role for the promotion of the business community.
14. Differentiate between Selling and Marketing.

15. Who are Customers?

Customers refer to a person or firms who buy/s goods or services from a shop, enterprise or business. They are the
ultimate consumers of the product.
16. Performing sellers sustain and succeed in the market. How?
(i) Performing sellers sustain and succeed in the market because-:
(ii) They keep themselves aware of market needs and trends.
(iii) They give market a solution for their 'unmet' needs.
(iv) They identify opportunities and threats in the environment.
17. Discuss primary forces that comprise the internal environment of the market.
Following are the Primary forces that comprise the internal environment of the market:
1. Producer/Seller: The goals, objectives, policies, strategies, etc. of the organization are the foremost forces which
govern the market. Successful companies are those that can recognize and respond profitably to unmet needs and trends in
the society. Unmet needs always exist."PERFORMING SELLERS" sustain and succeed in the market. Catering to social
responsibility, if more is the number of producers, harder and healthier would be the competition. Ethics, values,
principles, creativity, innovativeness of the seller helps in setting trends for market.
2. Customers: Consumer is the King instead of trying to market what is essential for us to make, we must find out much
more about what the consumer is willing to buy. We must apply our creativity more intelligently to people, and their
wants and needs, rather than products. The most influential force which rules the market is the 'Consumer'. Consumer
satisfaction is the foundation stone of a successful business. Business has to produce goods according to the needs of the
customers. But knowing customers is never simple.
3. Competitors: Competitors are such factors in the micro environment that provide similar offerings for goods and
services. To remain competitive, an enterprise must consider who their biggest competitors are. With LPG, the level of
competition is no more local or national, but international. The company should develop a strategic advantage over their
competitors else if it's otherwise the fate of the enterprise is doomed. Edmund Burke believes "An opponent is our
helper".
4. Suppliers: Suppliers are another key component in the core system of market. The company is essentially a resource
conversion machine that converts material, machines, labour and funds into useful products. The necessary resources are
obtained from suppliers. How well the company buys depends on how well it grasps the working of the various supply
markets and how well it applies business principles in conducting its relations with suppliers. Lack or non-availability of
suppliers can ruin the market for a product.
5. Marketing Intermediaries: Marketing intermediaries are institutions that facilitate the flow of goods and services
between the company and its final markets. They include resellers(i.e. wholesalers, retailers, agents and brokers),
transporters, warehouses, banks and promoting agencies. These all institutions come into being to facilitate the work of
consummating exchanges in the market. They perform a great deal of work in bringing about transactions between the
buyers and sellers, market cannot survive without these intermediaries.
18. Differentiate between competitors and suppliers as primary forces of market.
(a) Competitors provide similar offerings for goods and services whereas suppliers normally offer only one brand of
goods or service.
(b) Competitors try for developing strategic advantage over their competitors whereas suppliers take advantage of the
strategies made by the parent firm.
19. "Consumer is the King". Why?
Consumer is the King because of the following reasons:
a. Consumer's willingness is involved in the purchase of products.
b. Consumer is smart and want full return for its money.
c. Useful creativity is always appreciated and accepted by the consumer.
d. Consumer satisfaction is the foundation stone of a successful business.
20. Explain the term Secondary forces. Explain the external factors.
Secondary forces or Macro environment refers to all forces that are part of the larger society and are the "uncontrollable"
to which companies mould itself through setting the "controllable" factors.
Following are the factors that comprises of Macro environment:
(a)Demographic Forces: Demographic forces refer to features of populations with reference to size, density, location, age,
gender, race, and occupation. These features help to divide the population into market segments and target markets. Each
classification has its unique and different characteristics and causes.
(b)Economic Factors: These refer to the purchasing power of potential customers and also the patterns in which people
spend their money. Expenditure pattern of customers is different in different economic situations of the economy.
(c) Economic Factors: These refer to the purchasing power of potential customers and also the patterns in which people
spend their money. Expenditure pattern of customers is different in different economic situations of the economy.
(d)Technological Forces: The technological environment is perhaps one of the fastest changing factors in the macro
environment. This includes all developments from antibiotics and surgery to nuclear missiles and chemical weapons to
automobiles and credit cards. Advances in technology have provided opportunities to new products, new ways of selling,
new markets and new trends.
(d)Political Forces: The political environment covers all laws, government agencies, and groups that influence or limit
other organizations and individuals within a territory. Market is run and regulated by these laws or restrictions. These are
different for various places and vary from time to time. The fate of enterprises and markets depend upon the political
conditions of the areas in which they are situated.
(e)Natural Factors: These include the natural resources that a company uses as inputs and affects their marketing
activities. The ability to create a company's product is becoming a tough task for the enterpriser. Also, pollution,
government intervention, etc. have effect on a company's reputation if they are known for damaging the environment.
(f)Cultural Forces: The cultural environment, which consists of institutions and basic values and beliefs of a group of
people. The values can also be further categorized into core beliefs, which passed on from generation to generation and
very difficult to change, and secondary beliefs, which tend to be easier to influence.
21. 'Google' and 'Yahoo' just appeared and captured, whereas solids like American Airlines and Avon are almost
on the brink of winding up. Why?
Because something in market was either in their favour or against them.
22. What is 'Market research'?
Market research is a systematic gathering, recording and analyzing of data about 'problems' which is a continuous process.
23. What is 'Market Survey?
Market survey is an organized and indepth approach, which includes all the research activities involved with extracting
out carefully the information for not only the first time, but directly from the sources.
24. To be characterized as good market information, enlist any four essential characteristics to be possessed by it.
(i) Following are the characteristics ofa good market information: Clarity, Completeness, Relevance, Accuracy,
Confidentiality, Authenticity, Economy and Precision.
25. Define 'Research Instruments'.
Research instruments are the instruments, tools methods or techniques employed in research for gathering the information
or response.
26. Give one major difference between 'Market Research and Market Survey'
Market survey is a smaller concept as it is a method of conducting market research.
27. State the main steps involved in Marketing Research.
Following are the main steps involved in Marketing Research:
Step 1: Defining the marketing problem to be tackled and identifying the marketing research problem involved in the task.
Step 2: Specifying the information requirement, i.e. preparing a list of the needed information.
Step 3: Developing the research design and research produce, i.e. determining whether such information is already
available, either in records of the company or in outside sources.
Step 4: Information, i.e. select the research instrument to be used, select sample type and size.
Step 5: Analyzing the information and interpreting it in terms of the problem being tackled.
Step 6: Summarize the findings.
Step 7: Preparing the research report.
28. Explain Marketing survey along with the procedure of conducting the same.
Market survey is an organized and in depth approach, which includes all the research activities involved with extracting
out carefully the information for not only the first time, but directly from the sources. A normal way of conducting a
survey comprises of the following procedure:
Step 1: Planning the Survey.
Step 2: Fieldwork.
Step 3: Analysis and Interpretation of Data.
Step 4: Report Making.