MBA Distance Learning Education / what is entrepreneurship

Ans. The entrepreneurship business plan serves several purposes:

1. Enables the small business entrepreneur

to think through the business in a logical and structured way and to set out the stages in the achievement of the business objectives.

2. Enables the small business entrepreneur to plot progress against the plant.

3. Ensures that the resources needed to carry out the strategy and the time when they are required are both identified.

4. Preparing a entrepreneurship business plan ensures that the entrepreneur has thought through the crucial aspects of the venture.

5. it is a means for making all employees aware of the business’s direction.

6. it is an important document for discussion with prospective investors and lenders of finance.

7. it links into the detailed, short-term, one-year budget.

8. if management intends to turn around a business or start a new phase of growth, the entrepreneurship business plan is an important tool to articulate their ideas while convincing investors and other people to support it.

Ans. Before preparing the plan, the small business entrepreneur should:

Review previous business plans (if any) and their outcome. This review will help highlight which areas of the business have proved difficult to forecast historically. For example, are sales difficult to estimate? If so, why?

Be very clear about objectives- a business plan must have a purpose.

Set out the key business assumptions on which their plan will be based ( e.g. inflation, exchange rates, market growth, competitive pressures etc.).

Take a critical look at their business. The classical way is by means of the strength, weakness, opportunity and threats (SWOT) analysis which identifies the business’s situation from four key angles. The strategies adopted by a business will be largely based on the outcome of this analysis.

Q3 what is the process of business planning?

Ans. The various steps involved in business planning process are:

1.  idea generation

2.  environmental scanning

3.  feasibility analysis

4.  drawing up a functional plan

5.  project report preparation

6.  Evaluation, control and review.

Ans. A marketing plan aims at planning the marketing strategies for a company, its products or services. Based on the Market survey, it identifies and segments the target Market and then plans the strategies of marketing mix of the proposedsmall business setup

Ans.  Steps in preparing the marketing plan

1.  situational analysis

2.  define the business situation

3.  define the target markets

4.  budgeting the marketing strategies

5.  implementing, monitoring and review of marketing plan

Ans. Market segmentationcan be defined as the process of dividing the Market into segments based on similar characteristics/ behavior in order to identify those segments for which the business venture can targets its product and .

Ans.

1.  demographic segmentation

a.   age segmentation

b.  gender segmentation

c.   income segmentation

d.  educational qualification segmentation

2.  psychographic segmentation:

a.   lifestyle segmentation

b.  personality characteristics

c.   social class segmentation

3.  geographic segmentation

4.  behavioural segmentation

5.  occasion segmentation

6.  usage rate segmentation

7.  buying situation segmentation

Ans. After the market has been segmented (grouped into various categories), the segments are evaluated and decisions are taken on how many and which segments to target. It involves two steps:

1.   Market evaluation

2.   target Market selection

Q9 what is the meaning of positioning?

Ans. After an organization has segmented the market, it evaluates the segments and identifies its target market. The next step is positioning of the product/service of the proposed business venture. Positioning is the image of the product/services that the company wants to portray to the chosen segment (target customer).

Ans. Setting the right price is an important part of effective marketing. Moreover, it is  part of the marketing mix that generates revenues (product, price, place and promotion).

Ans. Factors affecting demand are of two types:

1.  Factory within business control

2.  Factory outside the control of the business.

Ans.

1.  price (assuming an imperfect market i.e. not perfect competition)

2.  product research and development

3.  advertising and sales promotion

4.  training and organization of the sales force

5.  effectiveness of distribution (e.g. access to retail outlets, trained distributor agents)

6.  quality of after sales service (e.g., which effect demand for repeat business)

Ans.

1.  the price of substitute goods and services

2.  the price of complementary goods and services

3.  consumer disposable income

4.  consumer tastes and preferences

Ans. Full cost plus pricing seeks to set a price that takes into account all relevant costs of production this could be calculated as follows:

Total budgeted factory cost + selling / distribution costs + other overheads + mark up on cost as per budgeted sales volumes

Q15 what is penetration pricing?

Ans. Penetration pricing involves the setting of lower, rather than higher prices in order to achieve a large, if not dominant market share. This strategy is most often used by businesses that wish to enter a new market or build on relatively on small market share.