Unit-II

FUNCTIONAL AREAS OF MANAGEMENT

Production: Production is an activity that transforms inputs into outputs.

Production Function

Definition: According to Michael R Baye defines production function as “that function

which defines the maximum amount of output that can be produced with a given set of inputs

Production is the result of the combinations of factors for the creation of values and utility to
the corresponding commodities. The factors of production are namely Land, Labour, Capital,
Organization and Technology.

Inputs Outputs

1. Men Money 1. Tangible goods

2. Machinery 2. Intangible goods
Processing
3. Material
4. Technology

In other words, it may be defined as it is a process of converting input into output is called as
production

Production Function: The function for the production is stated as:

Q = f {L1, L2, C, O, T}

Where Q = Quantity of Production, F = Relation between Inputs and Outputs, L1 = land, L2=
Labour, C = Capital, O = Organization, T = Technology.

Production management

Introduction

Production management aims to monitor and improve the efficiency of activities, materials,
staff resources, and budgets to produce goods. Production outcomes vary according to the
industry. A production manager ensures that manufacturing stays on schedule, within budget,
and achieves the desired output goals.
Production management is the process of managing production inputs (raw materials, capital,
and labour) to produce outputs (finished products). For companies that manufacture products,
production management is necessary to ensure the operations and logistics (supply chain) run
smoothly. Production management goes hand in hand with operations management.

Meaning

Production management is the process of controlling a company’s operations to provide the

services and products it wants to produce. It comprises organizing, carrying out, and
managing processes that transform raw resources into completed products and services.

Definition

The position and task inside an organisation that is in charge of a product’s overall success is
called product management. Functions of production management is to ensure that the
product best satisfies the company’s financial and strategic objectives, product managers
collaborate with groups both inside and outside the organisation to develop and implement a
plan.

Functions of production management

Production management attempts to utilize 6M’s: Men, Machines, Money, Methods,

Materials, and Market in order to better serve consumer needs. Its fundamental goal is to
produce products and services in the right quantity, quality, on a schedule, and for optimum
money. Production management makes it simple to adopt various technologies and
innovative changes in the workplace. Production management is in charge of supervising and
controlling all employees involved in the company’s production processes in order to ensure
that the target output is achieved.

Let’s discuss the functions of production management.

 Product and Design Selection: The proper product is first chosen for manufacture by
production management. The appropriate design for the product is then chosen.
Because the company’s survival and profitability depend on the product and design
chosen, care must be taken. The proper design must be chosen once the right product
has been chosen. The design must adhere to the specifications provided by the client.

 Production Process Selection: The proper production procedure must be chosen by

production management. Production management makes it simple to adopt various
technology, equipment, a material handling system, etc for better results in business.

 Production Capacity Selection: To match the demand for the product, production
management must choose the appropriate production capacity. This is so that
difficulties won’t be caused by excess or a lack of capacity.

 Planning The Production: Routing, which refers to determining the flow of work
and the order of operations, and scheduling, which refers to deciding when to begin
 and when to finish a certain production activity, are both included in production
planning.

 Production Control: Production management helps the organisation select the right
product and also monitoring and controlling production.

 Cost and quality control: this includes ensuring standards of quality and maintaining
costs.

 Inventory Control: This is another important phase of production management. This

means not overstocking or understocking but maintaining the right levels of
inventory.

Importance of production management

Production management not only improves certain areas of your business, but it is essential
for overall business growth and development.

1. Efficient Use of Capital and Resources

Production management maximises resource utilisation while lowering production costs. A

clear plan makes it possible to utilise resources and time effectively, reducing the gap
between the production process and the final product.

2. Competitive Edge

Organizations that must compete in the market might benefit greatly from production
management. Process efficiency is increased, and the business is able to deliver high-quality
goods and services.

3. Minimizes Risk of Product Failures

Lesser Risk of Failure: Understanding the demands and wants of the market will lessen the
likelihood that a product will fail. In the end, production management, like anything else,
does not ensure success but does help to mitigate it.

PLANT LAYOUT

Meaning

“Plant layout is a plan of optimum management of facilities which include; personnel,

operating equipment, storage space, material handling equipment, and all other support
services”.

It includes the arrangement and location of work centers and various service centers like
inspection, storage, and shipping within the manufacturing/factory building.
Plant Layout is the physical arrangement of equipment and facilities within a Plant.

This is valid for:

- Distances Material has to move
- Distances Equipment has to move
- Distances Operators have to move
- Types of Handling Equipment needed
- Energy required to move items against resistance (i.e. gravity)

Objectives of plant layout:

1. Bottlenecks and point of congestion are eliminated by line balancing so that material
handling and transportation is minimized.
2. work stations are designed suitably, so that movement made by the workers is
minimized.
3. The waiting time of the semi-finished products is minimized.
4. Increase the flexibility for changes in product design and future modification.
5. Utilization of cubic space, means besides using the floor space, its ceiling height also
utilized to accommodate more material in the same space.
6. Improved work methods and reduced production cycle time.
7. To increase productivity and better product quality by reducing the cost of
Production.

Types of Plant Layout

The following are the popular types of plant layout:

(1) Process layout

(2) Product layout

(3) Combined layout

(4) Fixed Layout

Each layout is explained in brief in the following paragraphs:

1) Product Layout (or Line Layout)

If all the machines are arranged in a line sequence according to the sequence of

operations of the products, then it is known as Product or Line Layout.

  In this arrangement each following machine or section is arranged to perform the next

operation that is performed by its preceding machine or section,

 i.e. raw material starts from one end of production lines and moves from one machine

to next with a storage and material handling and minimum work in process in a

sequential path.

 This type of layout is suitable for mass production and for the products having steady

demand.

 This arrangement is also good for the continuous production system where the

products have small parts that are highly standardised and interchangeable.

Product layout is depicted below:

Advantages
 Low material handling cost

 Less WIP (Work in progress)

 Better utilisation of Machine and Manpower

 Lesser time in Production

  Less space requirements

 Minimum possible cost of manufacturing

Disadvantages
 No flexibility

 Breakdown of any machine in the line may shut down the whole production line

 Difficulty in increase the production beyond the capacities of the production lines

 If the output rate of one machine is slower than the other machine, overall production

rate decreases.

2) Process Layout (or Functional Layout)

 In Process or Functional Layout all the similar machines are positioned

together so that all the similar operations are performed at the same place.
 Machines are arranged according to the nature or type of the operations or
their functions.
 For all the different types of functions separate machines are available i.e. For
carrying out tapping work, all the tapping machines are grouped together and
for carrying out drilling work all the drilling machines are arranged together.
 This type of layout is useful where low volume of production is needed.
 It is normally preferred for the industries involved in batch production,
manufacturing and maintenance activities of non- repetitive type.

A typical process layout is depicted below:

Advantages:

 In this type of layout there is no need for layout change for different types of products
  Breakdown of any machine can be easily handled by transferring work to another

machine

 Wide flexibility exists regarding allotment of work to workers and equipment

 There is a better utilisation of all the machines

 There is an improved product quality because of separate supervisors and workers for

all types of machines

 Breakdown of any machine does not affect the production of other machines

 Load distribution is easily controlled

Disadvantages

 High cost of material handling

 Large space required

 High investment required for inventory

 High cost of supervision

 Production time is longer

 Bottlenecks occur due to more work is in queue and waiting for further operation

 More floor area is required

 Scheduling is tedious because work does not flow through definite lines

3) Fixed Layout

In Fixed or Position type of layout the major part of a material remains at a fixed
position and all accessories, material, required tools, machinery and other supporting
equipment are brought to this location and this layout is also known as project layout.
This layout is good for extremely large items manufactured in very small quantities and
highly preferable when the cost of moving a major piece of material is high.
This layout is used in the manufacturing factory of boilers, hydraulic and steam turbines etc.

Examples of this type of project are a ship, a highway, a bridge, a house, and an operating
table in a hospital operating room. Fixed-position layout.

Advantages:

 Less material and workers movement

 Less Capital investment
  Highly flexible for varieties of products
 Ensures Continuity
 Less production cost

Disadvantages of Fixed position layout

 Complicated fixtures
 Required highly skilled manpower
 Movement of machines is time consuming
 Machines are not fully Utilised
 It is limited to large items only

4) Combination Plant layout

A combination of process and product layouts combines the advantages of both types of
layouts. A combination layout is possible where an item is being made in different types and
sizes. Here machinery is arranged in a process layout but the process grouping is then
arranged in a sequence to manufacture various types and sizes of products. It is to be noted
that the sequence of operations remains same with the variety of products and sizes. Figure
shows a combination type of layout for manufacturing different sized gears.

Advantages of combination layout

 Reduction in cost of material handling and machine set-up time

 Elimination of excess work-in-process inventory
 Simple production planning functions
 Smooth flow of work
 Systems of Production

Production System

The production system of an organization is that part, which produces products of an

organization. It is that activity whereby resources, flowing within a defined system, are
combined and transformed in a controlled manner to add value in accordance with the
policies communicated by management. A simplified production system is shown above.

The production system has the following characteristics:

1. Production is an organized activity, so every production system has an objective.

2. The system transforms the various inputs to useful outputs.

3. It does not operate in isolation from the other organization system.

4. There exists feedback about the activities, which is essential to control and improve system
performance.

Characteristics of Production System

 Objective: Because the process of production is an organized activity. So, it takes

place with an objective.
 Transformation: Conversion of various inputs into outputs takes place in this
process.
 Feedback: Feedback about activities is necessary. This helps in controlling and
improving the performance of the system.

Classification of Production System

One should note that the classification of any production system relies on many factors.
These factors include type and volume of production. Generally, there are three types of
production systems divided into two categories:

1. Intermittent production
 Job Production
 Batch Production
2. Continuous Production
 Mass and Flow Production

1. Intermittent production

The production process takes place at irregular intervals to produce a number of different
products with the help of one production line. Manufacturers use this system to produce low-
volume, high-variety products. The types of intermittent production systems are discussed
below:
JOB SHOP PRODUCTION

Job shop production is characterized by manufacturing of one or few quantities of

products designed and produced as per the specification of customers within prefixed
time and cost. The distinguishing feature of this is low volume and high variety of
products. A job shop comprises of general purpose machines arranged into different
departments. Each job demands unique technological requirements, demands
processing on machines in a certain sequence.

Characteristics

1. High variety of products and low volume.

2. Use of general-purpose machines and facilities.

3. Highly skilled operators who can take up each job as a challenge because of
uniqueness.

4. Large inventory of materials, tools, parts.

5. Detailed planning is essential for sequencing the requirements of each product,

capacities for each work

centre and order priorities.

Advantages

1. Because of general purpose machines and facilities variety of products can be

produced.

2. Operators will become more skilled and competent, as each job gives them learning
opportunities.

3. Full potential of operators can be utilized.

4. Opportunity exists for Creative methods and innovative ideas.

Limitations

1. Higher cost due to frequent set up changes.

2. Higher level of inventory at all levels and hence higher inventory cost.

3. Production planning is complicated.

4. Larger space requirements.

 BATCH PRODUCTION

Batch production is defined by American Production and Inventory Control Society

(APICS) "as a form of manufacturing in which the job passes through the functional
departments in lots or batches and each lot may have a different routing."It is
characterized by the manufacture of limited number of products produced at regular
intervals and stocked awaiting sales.
Its sub-classification relies on the production of batches:

1. Only once
2. At irregular intervals
3. At regular intervals
Examples: Production of tires and tubes, ready-made garments, pharmaceuticals, and
cosmetics.

Characteristics

Batch production system is used under the following circumstances:

1. When there are shorter production runs.

2. When plant and machinery are flexible.

3. When plant and machinery set up is used for the production of item in a batch and change
of set up is

required for processing the next batch.

4. When manufacturing lead time and cost are lower as compared to job order production.

Advantages

1. Better utilization of plant and machinery.

2. Promotes functional specialization.

3. Cost per unit is lower as compared to job order production.

4. Lower investment in plant and machinery.

5. Flexibility to accommodate and process number of products.

6. Job satisfaction exists for operators.

Limitations

1. Material handling is complex because of irregular and longer flows.

2. Production planning and control is complex.

3. Work in process inventory is higher compared to continuous production.

4. Higher set up costs due to frequent changes in set up.

Continuous Production

Here utilization of machines and resources for producing identical products takes place. It
involves the production of large quantities of products, whose demand is high. The types of
continuous production are explained below:

MASS PRODUCTION

Manufacture of discrete parts or assemblies using a continuous process are called mass
production. This production system is justified by very large volume of production. The
machines are arranged in a line or product layout. Product and process standardization exists
and all outputs follow the same path.

Characteristics

Mass production is used under the following circumstances:

1. Standardization of product and process sequence.

2. Dedicated special purpose machines having higher production capacities and output rates.

3. Large volume of products.

4. Shorter cycle time of production.

5. Lower in process inventory.
6. Perfectly balanced production lines.
7. Flow of materials, components and parts is continuous and without any back tracki
8. Production planning and control is easy.
9. Material handling can be completely automatic.

Advantages
1. Higher rate of production with reduced cycle time.
2. Higher capacity utilization due to line balancing.
3. Less skilled operators are required.
4. Low process inventory.
5. Manufacturing cost per unit is low.

Limitations
1. Breakdown of one machine will stop an entire production line.
2. Line layout needs major change with the changes in the product design.
3. High investment in production facilities.

Process (Flow) Production

Production facilities are arranged as per the sequence of production operations from the first
operations to the finished product. The items are made to flow through the sequence of
operations through material handling devices such as conveyors, transfer devices, etc.

characteristics

1. Dedicated plant and equipment with zero flexibility.

2. Material handling is fully automated.

3. Process follows a predetermined sequence of operations.

4. Component materials cannot be readily identified with final product.

5. Planning and scheduling is a routine action.

Advantages

1. Standardization of product and process sequence.

2. Higher rate of production with reduced cycle time.

3. Higher capacity utilization due to line balancing.

4. Manpower is not required for material handling as it is completely automatic.

5. Person with limited skills can be used on the production line.

6. Unit cost is lower due to high volume of production.

 Disadvantages

1. Flexibility to accommodate and process number of products does not exist. 2. Very
high investment for setting flow lines.

3. Product differentiation is limited.

Production Planning and Control (PPC)

The terms “production planning” and “control” relate to two approaches that coordinate key
operations effectively throughout the manufacturing process. What to produce, when to
produce it, how much to produce, and other factors are all included within this scope.

To properly optimize the production flow, production planning must be seen from a long-
term perspective. Production planning and control is the process of organizing all business
resources required to meet production requirements efficiently and without any delays. It
outlines the procedure based on which the complete work order preparation in a
manufacturing business will then proceed.

Production Planning

Production planning is the process of finding out the best ways to manufacture goods. It
requires analysing various factors of manufacturing. It includes demand forecasts, resources,
capacity, schedules etc.

Production Control

Production control is the process of monitoring the production plans. It involves continuously
looking at the production processes. This may include producing activities, tracking progress
etc. A manufacturing business can then adjust its production based on that. The main goal is
to reduce errors and make the production process as perfect as possible.

Key Functions with Production Planning and Control

Some of the key functions within production planning and control include the following:

Functions of Production planning and control

Production planning and control functions are the pillars of this process. PPC fulfills several
important roles in making sure efficient production:

1. Forecasting
  Purpose: PPC involves making future projections to create effective schedules.

 Impact: This helps in aligning production activities with future demands, making sure
that resources are optimally allocated.

2. Scheduling

 Purpose: PPC provides a detailed timetable for manufacturing activities.

 Impact: This makes sure that production is completed on time, meeting delivery
commitments and maintaining workflow efficiency.

3. Routing

 Purpose: PPC outlines the flow of work and the sequence of production activities.

 Impact: By defining the path of production, routing helps in optimizing processes and
reducing bottlenecks.

4. Make or Buy Decisions

 Purpose: PPC plays an important role in deciding whether to manufacture a

component in-house or purchase it from an external supplier.

 Impact: These decisions, typically made during the planning phase, can significantly
affect cost, quality, and production timelines.

5. Requirements Planning

 Purpose: PPC is responsible for determining the precise quantity of materials needed
for production.

 Impact: This makes sure that materials are available when needed, avoiding delays
and inefficiencies in the production process.

6. Material Control

 Purpose: PPC not only makes sure the availability of materials but also makes sure
their optimal use.

 Impact: Effective material control minimizes waste. It also promotes cost-

effectiveness, contributing to overall production efficiency.
 MARKETING MANAGEMENT

Introduction
Marketing is an essential function of a modern organization; it deals with products
or services. Gone are the days when a good product was sold on its own. Marketing
constitutes an essential function of modern business organization. However, customer is the
king to decide what is good quality or otherwise.

Definitions

“Marketing is a social process by which individuals and groups obtain what they need and
want through creating, offering and freely exchanging products and services of value with
others” -----Philip Kotler

“The aim marketing is to know and understand the customers’ requirements so well that the
product or services designed accordingly, are sold by themselves. Ideally marketing should
prepare a customer’s buy” --------Peter F. Drucker

Functions of Marketing

The marketing process performs certain activities as the goods or services move from
producer to consumer. Every firm does not perform all these activities or jobs. However, any
company that wants to operate its marketing system successfully must carry them out. The
following marketing tasks have been recognized for a long time.
1. Selling: It is core of marketing. It is concerned with the persuasion of prospective buyers to
actually complete the purchase of an article. Setting pays an important part in realizing the
ultimate aim of earning profit. Selling is enhanced by means of personal selling, advertising,
publicity and sales promotion.
2. Buying: It involves what to buy, what quality, how much, from whom, when and at, what
price. People in business buy to increase sales or to decrease costs. Purchasing agents are
much influenced by quality, service and price. The products that the retailers buy for resale
are determined by the need and preferences of their customers.
3. Transportation: Transport is the physical means whereby goods are moved from the places
where they are produced to those they are needed for consumption. Transportation is essential
from the procurement of raw materials to the delivery of finished products to the customers
places. Marketing relies mainly on railroads, tracks, waterways, pipelines and air transport.
The type of transportation is chosen on several consideration such as suitability, speed and
cost.
4. Storage: It involves the holding of goods in proper condition from the time they are
produced until they are needed by consumers (in case of finished products) or by the
production department (in case of raw materials and stores). Storing protects the goods from
deterioration and helps in carrying over surplus for feature consumption or use in production.
Goods may be stored in various warehouses situated at different places. Storing assumes
greater importance when production is seasonal or consumption may be seasonal. Retail
firms are called “stores”.
5. Standardization and Grading: The other activities that facilitate marketing are
standardization and grading. Standardization means establishment of certain standards or
specifications for products based on intrinsic physical qualities of any commodity. This may
involve quantity (weight or size) or it may involve quality (colour, shape, appearance,
material, taste, sweetness etc). Government may also set some standards e.g., in case of
agricultural products. A standard conveys a uniformity of the products.
Marketing Management

Marketing management is the strategic process of planning, executing, and overseeing

marketing efforts aimed at achieving an organization’s objectives. It involves analyzing
market conditions, understanding consumer behavior, and developing and promoting
products or services. Marketing management is pivotal for businesses to connect with their
target audience, create brand value, and drive revenue growth. It encompasses various
interconnected functions that work harmoniously to create a comprehensive marketing plan.

Functions of Marketing Management:

1. Market Research:
At the core of marketing management is market research. This function involves the
systematic gathering, analysis, and interpretation of data related to the market,
customers, competitors, and industry trends. Market research is the foundation upon
which well-informed decisions and effective marketing strategies are built. It enables
organizations to identify market opportunities and challenges, ensuring that their
marketing efforts are data-driven.
2. Consumer Behavior Analysis:
Understanding consumer behavior is essential for creating products and services that
resonate with the target audience. Marketing managers delve into consumer behavior,
studying patterns, preferences, and decision-making processes. This understanding
guides product development, pricing strategies, and promotional efforts, aligning
them with consumer expectations.
3. Product Development and Management:
Identifying opportunities for new products or services and managing existing product
lines fall under the purview of marketing managers. This function encompasses
defining product features, setting prices, and determining how products are positioned
in the market. It’s about ensuring that what an organization offers aligns with market
demands and creates value for customers.
4. Pricing Strategy:
Effective pricing is a critical factor in marketing. Marketing managers are tasked with
defining pricing strategies for products or services. This involves considering various
elements such as production costs, competition, and how the target audience perceives
the product’s value. Pricing strategies influence consumer behavior, profitability, and
market positioning.
5. Promotion and Advertising:
Promotion and advertising are the outward-facing functions of marketing
management. This function involves creating and implementing strategies to
communicate with the target audience. Marketing managers are responsible for
crafting advertising campaigns, engaging in public relations, utilizing social media
marketing, and more. Effective promotion and advertising strategies drive brand
awareness and attract customers.
6. Distribution and Channel Management:
 Efficient distribution and channel management ensure that products or services reach
customers when and where they are needed. Marketing managers oversee distribution
channels and logistics, making certain that the right products are available at the right
places and times. This function plays a crucial role in customer satisfaction and brand
loyalty.
7. Brand Management:
Building and maintaining a strong and recognizable brand is central to long-term
success. Marketing managers are entrusted with the responsibility of creating and
sustaining brand equity. This involves defining the brand’s identity, maintaining
brand consistency, and ensuring it aligns with the company’s values and the
expectations of consumers.
8. Sales Management:
Sales management involves setting sales targets, managing sales teams, and
developing strategies to achieve revenue goals. It’s the process of ensuring that an
organization’s sales efforts are optimized, efficient, and aligned with the broader
marketing strategy.
9. Marketing Analytics:
Marketing managers utilize data and analytics to evaluate the performance of
marketing campaigns and make data-driven decisions. Data-driven marketing allows
organizations to optimize their marketing strategies, understand consumer
preferences, and refine their approach for better results.
10. Marketing Strategy Development:
At the core of marketing management lies the development of a comprehensive
marketing strategy. This strategy aligns with business objectives, capitalizes on
market opportunities, and addresses challenges. It is the blueprint that guides all
marketing efforts, ensuring that they are coherent, goal-oriented, and effectively
responsive to market dynamics.

Marketing Mix

Marketing mix is a selection of marketing tools that include several areas of focus that can be
combined to create a comprehensive plan. The term refers to a classification that began as the
4 P’s: product, price, placement, and promotion, and has been expanded to Product, Price,
Promotion, Place, People, Packaging, and Process.
1.Product

Your customer only cares about one thing: what your product or service can do for them.
Because of this, prioritize making your product the best it can be and optimize your product
lines accordingly. This approach is called “product-led marketing.” In a marketing mix,
product considerations involve every aspect of what you're trying to sell. This includes:

 Design
 Quality
 Features
 Options
 Packaging
 Market positioning

There are five components to successful product-led marketing that are important for product
marketers to take into consideration:

2. Price

Many factors go into a pricing model. Brands may:

 Price a product higher than competitors to create the impression of a higher-quality

offering.
  Price a product similar to competitors, then draw attention to features or benefits other
brands lack.
 Price a product lower than competitors to break into a crowded market or attract
value-conscious consumers.
 Plan to raise the price after the brand is established or lower it to highlight the value
of an updated model.
 Set the base price higher to make bundling or promotions more appealing.

Consider what you're trying to achieve with your pricing strategy and how price will work
with the rest of your marketing strategy. Some questions to ask yourself when selling
products:

3. Promotion

Promotion is the part of the marketing mix that the public notices most. It includes television
and print advertising, content marketing, coupons or scheduled discounts, social media
strategies, email marketing, display ads, digital strategies, marketing communication, search
engine marketing, public relations and more.

All these promotional channels tie the whole marketing mix together into an omnichannel
strategy that creates a unified experience for the customer base. For example:

4. Place

Where will you sell your product? The same market research that informed your product and
price decisions will inform your placement as well, which goes beyond physical locations.
Here are some considerations when it comes to place:

5. People

The people are the employees, customers, and other stakeholders who interact with a
business. It is important to create a positive and memorable experience for these people. For
example, ensuring customer service representatives respond politely and efficiently impacts
customer satisfaction levels.

6. Process

Prioritize processes that overlap with the customer experience. The more specific and
seamless your processes are, the more smoothly your staff can carry them out. If your staff
isn't focused on navigating procedures, they have more attention available for customers—
translating directly to personal and exceptional customer experiences.

7. Physical Evidence
Lastly, the Physical Evidence element of the 7Ps refers to the tangible aspects of a product,
including packaging, branding, and more. Ensuring the tangible aspect of a product aligns
with the customer’s perception of the brand is essential in setting the business apart from
competitors.
Channels of Distribution
Introduction

A channel of distribution or trade channel is defined as the path or route along which
goods move from producers or manufacturers to ultimate consumers or industrial
users. In other words, it is a distribution network through which producer puts his products in
the market and passes it to the actual users. This channel consists of: - producers,
consumers or users and the various middlemen like wholesalers, selling agents and
retailers (dealers) who intervene between the producers and consumers. Therefore, the
channel serves to bridge the gap between the point of production and the point of
consumption thereby creating time, place and possession utilities.

Definitions
A channel of distribution or trade channel is defined as the path or route along which goods
move from producers or manufacturers to ultimate consumers or industrial users.
A distribution channel consists of the set of people and firms involved in the transfer of title
to a product as the product moves from producer to ultimate consumer or business user.

"A marketing or trade channel is a set of interdependent organizations involved in the process
of marketing a product or service available for use or consumption"

These channels of distribution are broadly divided into four types:-

Producer-Customer:

This is the simplest and shortest channel in which no middlemen is involved and producers
directly sell their products to the consumers. It is fast and economical channel of distribution.
Under it, the producer or entrepreneur performs all the marketing activities himself and has
full control over distribution. A producer may sell directly to consumers through door-to-door
salesmen, direct mail or through his own retail stores. Big firms adopt this channel to cut
distribution costs and to sell industrial products of high value. Small producers and producers
of perishable commodities also sell directly to local consumers.
Producer-Retailer-Customer:

This channel of distribution involves only one middleman called 'retailer'. Under it, the
producer sells his product to big retailers (or retailers who buy goods in large quantities) who
in turn sell to the ultimate consumers. This channel relieves the manufacturer from burden of
selling the goods himself and at the same time gives him control over the process of
distribution. This is often suited for distribution of consumer durables and products of high
value.
Producer-Wholesaler-Retailer-Customer:

This is the most common and traditional channel of distribution. Under it, two middlemen
i.e., wholesalers and retailers are involved. Here, the producer sells his product to
wholesalers, who in turn sell it to retailers. And retailers finally sell the product to the
ultimate consumers. This channel is suitable for the producers having limited finance, narrow
product line and who needed expert services and promotional support of wholesalers. This is
mostly used for the products with widely scattered market.
Producer-Agent-Wholesaler-Retailer-Customer:

This is the longest channel of distribution in which three middlemen are involved. This is
used when the producer wants to be fully relieved of the problem of distribution and thus
hands over his entire output to the selling agents. The agents distribute the product among a
few wholesalers. Each wholesaler distributes the product among a number of retailers who
finally sell it to the ultimate consumers. This channel is suitable for wider distribution of
various industrial products.

Recent Trends in Marketing

Marketing is a constantly changing field, and being aware of the most recent trends will help
your team succeed in building brand awareness and reaching your target audience. While it’s
not always easy to keep up, staying on top of emerging marketing trends is critical to stand
out from the crowd and boost your return on investment (ROI).

A marketing trend is anything that changes the area your organisation operates in. It's
important to pay attention to and utilise these trends to help your company succeed and stay
ahead of the competition. Marketing trends usually focus on technology, customer
interaction, social media and privacy.

 Personalization
  Social media
 Influencer marketing
 New video trends
 Social responsibility
 Artificial intelligence and machine learning
 The metaverse
 Search engine optimization
 Voice search
 Privacy is changing

1. Personalization

Your brand can personalize marketing by:

 Using platforms that collect and manage customer data

 Exploring the wealth of data that social media provides
 Harnessing AI technology to analyse data more closely

You can also personalize marketing based on location. As more searches shift to mobile,
geolocation data is now at your fingertips. Instead of advertising to everyone in the world,
this marketing trend allows brands to target nearby audiences to make more sales.

If your business does account-based marketing (ABM), you should personalize content for
those leads too. Personalization allows you to target decision makers within businesses and
customize your approach to each account. Send information that’s hyper-targeted to the
members of a specific C-suite team so your message really hits home.

2. social media

Social media isn’t a new marketing trend, but there have been important changes to the
platforms themselves and how users behave on those platforms

To succeed on social, you need to market your brand across a variety of platforms. If you’re
on Facebook, Instagram, and LinkedIn, consider expanding to younger-targeted platforms
like Snapchat and TikTok to boost your reach. But you can’t take a cookie-cutter approach —
brands have to tweak their voice, approach, content, and posting frequency to fit each
platform’s user base.

3. Influencer marketing

One of the top marketing trends will be influencer relationships. Not only are influencers here
to stay, but they should be part of every company’s marketing strategy. Since data privacy
laws are making it tougher to gather intel on your target audience, these influencer
relationships are a critical trend that you can’t ignore. However, the nature of influencer
partnerships will change in two big ways.

Micro-influencers are gaining popularity

Big-name influencers like the Kardashians might turn heads, but celebrity brand partnerships
are losing steam. Micro-influencers are a growing marketing trend for both enterprises and
small businesses. These are influencers who might have a smaller following but dominate a
specific niche. With 1,000–10,000 followers, micro-influencers have high engagement levels
that you won’t see with a celebrity. Micro-influencers also offer more affordable rates that
make them palatable for any marketing budget.

Influencer relationships are going long term

Don’t source new influencers for every campaign — foster relationships with successful
influencers to grow your brand even more. Instead of asking an influencer to plug your
product one time, you can cultivate long-term relationships with top-performing influencers.

4. New video trends

Video is an increasingly important space in marketing. In fact, 54% of consumers want to see
more video content from the brands they love — and 88% of marketers are happy with the
ROI they get from such content. If you want to go all-in on video this year, here are some of
the biggest trends in video marketing

Micro stories or short-form video

Short-form videos have the highest ROI of any social media marketing strategy. The video
we consume is getting shorter and shorter, thanks to platforms like TikTok. Brands need to
tell engaging stories in shorter video segments to engage their followers, so keep your videos
no longer than three minutes.

Go live

With the pandemic, live events shut down, and streamed events grew in popularity. In-person
events are back, but livestreaming is still an important marketing trend on Facebook,
Instagram, and YouTube. It’s a growing trend because live video allows for audience
interaction, which is more engaging than pre-recorded video.
Virtual events

The pandemic also had a big impact on events. Many of the events we once attended in
person, such as concerts and conferences, went online. Since virtual events allow brands to
have a wider reach than they would get with an in-person event, it’s a no-brainer for ROI.

5. Social responsibility

It isn’t enough for your brand to sit on the sidelines. Younger generations are more socially
conscious, and this affects their buying decisions.

6. Artificial intelligence and machine learning

Instead of targeting just one lead, artificial intelligence (AI) allows marketers to schedule
marketing campaigns across platforms at every stage of the customer journey. AI is now at
the point where it can make marketing more targeted. For example, predictive analytics uses
customer data to hyper-personalize marketing at scale. With the right customer data platform,
brands can gather vast amounts of data, analyze it, and turn actionable insights into big
marketing gains.

7. The metaverse

The metaverse is a digital version of reality. It’s considered the next frontier of the internet,
allowing users to work, play, and live their lives in an integrated digital world. The pandemic,
combined with developments in VR technology, created a boom in metaverse development.
Thanks to VR and augmented reality, consumers will be able to do much more from the
comfort of their homes, including:

 Courtside sporting events

 Concerts
 Virtual shopping
 Gaming

The metaverse opens up so many new avenues for marketing that brands are just beginning to
explore. This space will continue to grow, so start thinking about your metaverse strategy
now. That might include creating NFTs, trademarking your IP, or familiarizing yourself with
metaverse apps like RecRoom.

8. Search engine optimization

Search engine optimization (SEO) has been a marketing trend since the early days of Google,
and you’ve likely done SEO optimization before. Blogging, content, and keywords will still
have a place in SEO for recent, but a few things are changing.
9. Voice search

As the Internet of Things (IoT) grows, voice search is going to become even more important.
Each “smart” device in your home qualifies as IoT, which covers everything from your
thermostat to your smartwatch to your TV. Soon, consumers will interact with things in their
environment just with their voice, and marketing must adapt.

Siri, Alexa, Echo, and Google Assistant have changed what Google looks for in SEO content.

10. Privacy is changing

Consumers care about who has access to their personal information, and that desire for data
privacy is shaking up the future of marketing. So, what’s changing?

Apple is prioritizing user privacy, which means its devices will allow less app-based tracking.
Google will stop supporting browser cookies on Chrome, which will result in less audience
data. This means consumers will get the benefit of more privacy, but brands will have less
audience data to personalize their approach. Going forward, brands need to get creative with
how they gather customer data and create targeted marketing campaigns.

Human Resource Management

Human Resource Management is a management function concerned with hiring, motivating,

and maintaining workforce in an organization. Human resource management deals with
issues related to employees such as hiring, training, development, compensation, motivation,
communication, and administration. Human resource management ensures satisfaction of
employees and maximum contribution of employees to the achievement of organizational
objectives.

Definition

Edwin Flippo
Human Resource Management as “planning, organizing, directing, controlling of
procurement, development, compensation, integration, maintenance and separation of human
resources to the end that individual, organizational and social objectives are achieved.”

According to Decenzo and Robbins, “Human Resource Management is concerned with the
people dimension” in management. Since every organization is made up of people, acquiring
their services, developing their skills, motivating them to higher levels of performance and
ensuring that they continue to maintain their commitment to the organization is essential to
achieve organisational objectives. This is true, regardless of the type of organization –
government, business, education, health or social action”.

Nature of HRM

Human Resource Management is a process of bringing people and organizations together so

that the goals of each are met.

The various features of HRM include

 It is pervasive in nature as it is present in all enterprises.

 Its focus is on results rather than on rules.
 It tries to help employees develop their potential fully.
 It encourages employees to give their best to the organization.
 It is all about people at work, both as individuals and groups.
 It tries to put people on assigned jobs in order to produce good results.
 It helps an organization meet its goals in the future by providing for competent and
well-motivated employees.
 It tries to build and maintain cordial relations between people working at various
levels in the organization.
 It is a multidisciplinary activity, utilizing knowledge and inputs drawn from
psychology, economics, etc.

1. HRM is based on certain principles and policies contribute to the achievement of

organizational objectives.

2. HRM is a pervasive function – Human resource management is not specific to an

individual department, rather it is a broader function and spread throughout the organization,
it manages all type of people from lower level to top level departments of the organization.

3. HRM is people oriented – People or human resource is the core of all the activities of
human resource management. Human resource management works with and for people. It
brings people and organization together to achieve individual and organizational goals.

4. HRM is continuous activity – All factors of production are required to be continuously

updated and improved to cope up with the changes and increased competition. Similarly,
human resource also continuously trained, developed, or replaced to face the next level of
competition. Hence, it is a continuous activit

5. HRM is a part of management function.

6. HRM aims at securing maximum contribution.

7. HRM aims at optimum use of personnel power.

Scope of Human Resource Management

Personnel Aspect Human Resource Planning –

It is the process by which the organization identifies the number of jobs vacant.

 Job Analysis and Job Design – Job analysis is the systematic process for gathering,
documenting, and analyzing data about the work required for a job. Job analysis is the
procedure for identifying those duties or behaviour that define a job.
 Recruitment and Selection – Recruitment is the process of preparing advertisements
on the basis of information collected from job analysis and publishing it in newspaper.
 Selection is the process of choosing the best candidate among the candidates applied
for the job.
 Orientation and Induction – Making the selected candidate informed about the
organization’s background, culture, values, and work ethics.
 Training and Development – Training is provided to both new and existing employees
to improve their performance.
 Performance Appraisal – Performance check is done of every employee by Human
Resource Management. Promotions, transfers, incentives, and salary increments are
decided on the basis of employee performance appraisal.
 Compensation Planning and Remuneration – It is the job of Human Resource
Management to plan compensation and remunerate. Motivation – Human Resource
Management tries to keep employees motivated so that employees put their maximum
efforts in work.

2.Welfare Aspect –

Human Resource Management have to follow certain health and safety regulations for the
benefit of employees. It deals with working conditions, and amenities like - canteens,
creches, rest and lunch rooms, housing, transport, medical assistance, education, health and
safety, recreation facilities, etc.

3.Industrial Relation Aspect –

HRM works to maintain co-ordinal relation with the union members to avoid strikes or
lockouts to ensure smooth functioning of the organization. It also covers - joint consultation,
collective bargaining, grievance and disciplinary procedures, and dispute settlement

Objectives

 To help the organization reach its goals.

 To ensure effective utilization and maximum development of human resources.
 To ensure respect for human beings. To identify and satisfy the needs of individuals.
 To ensure reconciliation of individual goals with those of the organization.
 To achieve and maintain high morale among employees.
 To provide the organization with well-trained and well-motivated employees.
  To increase to the fullest the employee's job satisfaction and self-actualization.
 To develop and maintain a quality of work life.
 To be ethically and socially responsive to the needs of society.
 To develop overall personality of each employee in its multidimensional aspect.
 To enhance employee's capabilities to perform the present job.
 To equip the employees with precision and clarity in transaction of business.
 To inculcate the sense of team spirit, team work and inter-team collaboration.

Functions of HR Manager:

It has two types

 Managerial functions

a. Planning
b. Organizing
c. Staffing
d. Directing
e. Controlling

Operative functions

The operative functions of HRM are related to specific activities of personnel management,
viz.,
employment, development, compensation, organizational and industrial relations. These
functions are to be performed in conjunction with managerial functions

I) Procurement II) Development

III) Motivation & Compensation IV) Maintenance Integration

1) Procurement:

2) Job Analysis 2) Human resource Planning 3) Recruitment and selection

4) Placement 5) Induction & orientation 6) Internal Mobility.

2) Development:
1) Training & Development 2) career planning and development 3) Human resource
development
3) Motivation & compensation:
1) Job design 2) work scheduling 3) Job evaluation 4) performance appraisal
5) Compensation Administration 6) Incentives and benefits.

4) Maintenance and Integration:

1) Healthy and safety 2) Employee welfare 3) social security 4) Grievance redressal
 5) Collective bargaining 6) Employee participation 7) Industrial relations 8) Trade
union & Association.

1. Procurement function:

The first operative function of personnel management is procurement. It is concerned with

procuring and employing people who possess necessary skills, knowledge and aptitude.

 Job analysis:

It is the process of collecting information relating to the operation and responsibilities

pertaining to a specific job.
 Human resource planning:

It is a process of determining and assuring that the organization will have an adequate
number of qualified persons, available at proper times, performing jobs which would
meet their needs and provide satisfaction for the individuals involved.
 Recruitment:

It is the process of searching for prospective employees and stimulating them to

apply for jobs in the organization.
 Selection:

It is the process of ascertaining qualification, experience, skill and knowledge of an

applicant with a view to applicant with a view to appraising his/her suitability to the
job in question.
 Placement:

It is the process that ensures 360 degrees fit, matching the employee’s qualification,
 experience, skills and interest with the job on offer. It is the personnel managers’
responsibility to position the right candidate at the right level.
 Induction and Orientation:

Induction and orientation are the techniques by which a new employee is rehabilitated
in his surroundings and introduces to the practices, policies, and people.

 Internal Mobility: The movement of employees form one job to another through
transfers and
promotions is called internal mobility. Some employees leave an organization due to various
reasons leading to resignation, retirement and even termination. These movement are known
as external mobility.

2. Development:

It is the process of improving, moulding, changing and developing the skills,

knowledge, creative ability, attitude, values and commitment based on present and future
requirement both at the individuals and organization’s level. This function includes.

 Training:

Training is a continuous process by which employees learn skills, knowledge, abilities

and attitudes to further organizational and personnel goals.

 Executive development:

It is a systematic process of developing managerial skills and capabilities through

appropriate programmers.

 Career Planning and Development:

It is the planning of one’s career and implementation of career plans by means of

education, training, job search and acquisition of work experiences. It includes
succession planning which implies identifying developing and tracking key
individuals for executive positions.

 Human Resource Development:

HRD aims at developing the total organization. It creates a climate that enables every
employee to develop and use his capabilities in order to further both individual and
organization goals.

3. Motivation and Compensation:

It is a process which inspires to give their best to the organization through the use of intrinsic
(achievement, recognition, responsibility) and extrinsic (job design, work scheduling,
appraisal-based incentives) rewards.

 Job design:

Organizing tasks, and responsibilities towards having a productive unit of work is call job
design. The main purpose of job design is to integrate the needs of employees to suit the
requirement of an organization.

 Work scheduling:

Organizations must realize the importance of scheduling work to motivate employees

through job enrichment, shorter work, weeks flexi-time, work sharing work assignments.
Work scheduling is an attempt to structure work, incorporating the physical, physiological
and behavioural aspects of work.

 Job evaluation:

Organizations formally determine the value of jobs through the process of job
 evaluation. Job evaluation is a systematic process of determining the relative worth of
jobs in order to establish which jobs should be paid more than others within the
organization.

 Performance appraisal:

After an employee has been selected for job has been trained to do it and has worked on it for
a period of time, his performance should be evaluated. It is a process of deciding how many
employed to do their jobs. It is a method of evaluating the behaviour of employees at the
work place and normally includes both the quantitative and qualitative aspects of job
performance.

 Compensation administration:

Compensation administration is the process of dividing how much an employees should be

paid. The important goals are designing a low-cost pay plan that will attract, motivate and
retain competent employees-which is also perceives to be fair by these employees.

 Incentives and benefits:

In addition to basic wage structure, most organizations now a days offer incentive
compensation based on actual performance. Unlike incentives, benefits and services are
offered to all employees as required by law including social security, insurance, workmen’s
compensation, welfare amenities.

Maintenance:

It aims at protecting and preserving the physical and psychological health of employees
through various welfare measures.

 Health and safety:

Managers at all levels are expected to know and enforce safety and health
standards throughout the organization. They must ensure a work environment that protects
employees from physical hazards, unhealthy conditions and unsafe acts of other personnel.

 Employee welfare:

It includes the services, amenities and facilities offered to employees within or outside the
establishment for their physical, psychological and social well-being. Housing,
transportation, education and recreation facilities are all includes in the employee welfare
package.

 Social security:

Management provides social security to their employees in addition to fringe benefits. It

includes workman’s compensation to those workers who are involved in accidents, maternity
benefits to woman employees, sickness benefits and medical benefits, disablement
benefits/allowances, dependent benefits and medical benefits, disablement benefits,
retirement benefits like provident fund, pension gratuity.

Integration function:

This tries to integrate the goals of an organization with employee aspirations through various
employee-oriented programs like readdressing, like redressing grievances promptly,
instituting proper disciplinary measures, empowering people to decide things independently
encouraging a participative culture, offering constructive help to trade unions etc.

 Grievance redressal:

A grievance is any factor involving wages, hours or conditions of employment that is used as
a complaint against the employer. Constructive grievance handling depends first on the
managers ability to recognize, diagnose and correct the causes of potential employee
dissatisfaction before it covers into a formal grievance.

 Discipline:

It is the force that prompts an individual or a group to observe the rules, regulations and
procedures, which are deemed necessary for the attainment of an objective.

 Collective bargaining:

It is a process of agreeing on a satisfactory labour contract between

management and union. The contract contains agreements about the conditions of
employment such as wages, hours, promotion and discipline; lay-off, benefits vacations rest
pause and the grievance procedure.

 Employee participation and empowerment:

Participation means sharing the decision-making power with the lower ranks of an
organization in an appropriate manner. When workers participate in organizations decisions,
they are able to see big picture clearly and also how their actions would impact the overall
growth of the company. They can offer the feedback immediately based on their experiences
and improve the quality of decisions.

Financial Management

financial management is the business function that deals with investing the available financial
resources in a way that greater business success and return-on-investment (ROI) is achieved.
Financial management professionals plan, organize, and control all transactions in a business.
They focus on sourcing the capital whether it is from the initial investment by the
entrepreneur, debt financing, venture funding, public issue, or any other sources. Financial
management professionals are also responsible for fund allocation in an optimized way to
ensure greater financial stability and growth for the organization.
Meaning:
“Financial Management means planning, organizing, directing and controlling the financial
activities such as procurement and utilization of funds of the enterprise. It means applying
general management principles to financial resources of the enterprise”.

Scope/Elements of Financial Management

1. Investment decisions includes investment in fixed assets (called as capital
budgeting). Investment in current assets are also a part of investment decisions
called as working capital decisions.
2. Financial decisions- They relate to the raising of finance from various resources
which will depend upon decision on type of source, period of financing, cost of
financing and the returns thereby.
3. Dividend decision- The finance manager has to take decision with regards to the
net profit distribution. Net profits are generally divided into two:
a. Dividend for shareholders- Dividend and the rate of it has to be
decided.
b. Retained profits- Amount of retained profits has to be finalized
which will depend upon expansion and diversification plans of the
enterprise.

Objectives of Financial Management

The financial management is generally concerned with procurement, allocation and control of
financial resources of a concern. The objectives can be-

Certain specific and highly impactful objectives that financial managers aim to attain are:

 Assessing capital needs

Financial managers need to evaluate factors such as cost of current and fixed assets,
cost of marketing, need for buffer capital, long-term operation and human resources
cost etc. Successful businesses have clearly defined short-term and long-term
financial requirement projections in place.

 Determination of capital structure

A company’s capital structure is the framework that determines decisions such as

debt-equity ratio in the short as well as long term.

 Creation of effective financial policies

There is a need to frame efficient financial policies that govern cash control, the
lending and borrowing processes and so on.

 Resource optimization
 Great financial managers are able to navigate through different scenarios by making
optimum use of the available financial resources. This would reduce the cash burn and
increase the cash churn to generate maximum ROI.

1. To ensure regular and adequate supply of funds to the concern.

2. To ensure adequate returns to the shareholders which will depend upon the
earning capacity, market price of the share, expectations of the shareholders.
3. To ensure optimum funds utilization. Once the funds are procured, they should
be utilized in maximum possible way at least cost.
4. To ensure safety on investment, i.e, funds should be invested in safe ventures so
that adequate rate of return can be achieved.
5. To plan a sound capital structure-There should be sound and fair composition of
capital so that a balance is maintained between debt and equity capital.

Functions of Financial Management

1. Estimation of capital requirements: A finance manager has to make estimation

with regards to capital requirements of the company. This will depend upon
expected costs and profits and future programmes and policies of a concern.
2. Choice of sources of funds: For additional funds to be procured, a company has
many choices like-
a. Issue of shares and debentures
b. Loans to be taken from banks and financial institutions
c. Public deposits to be drawn like in form of bonds.
Choice of factor will depend on relative merits and demerits of each source and
period of financing.
3. Investment of funds: The finance manager has to decide to allocate funds into
profitable ventures so that there is safety on investment and regular returns is
possible.
4. Disposal of surplus: The net profits decision has to be made by the finance
manager. This can be done in two ways:
a. Dividend declaration - It includes identifying the rate of dividends
and other benefits like bonus.
b. Retained profits - The volume has to be decided which will depend
upon expansional, innovational, diversification plans of the
company.
5. Management of cash: Finance manager has to make decisions with regards to
cash management. Cash is required for many purposes like payment of wages
and salaries, payment of electricity and water bills, payment to creditors, meeting
current liabilities, maintenance of enough stock, purchase of raw materials, etc.
6. Financial controls: The finance manager has not only to plan, procure and
utilize the funds but he also has to exercise control over finances. This can be
done through many techniques like ratio analysis, financial forecasting, cost and
profit control, etc.
Importance of Financial Management
The financial management of an organization determines the objectives, formulates the
policies, lays out the procedures, implements the programmes, and allocates the budgets
related to all financial activities of a business. Through a streamlined financial management
practice, it is possible to ensure that there are sufficient funds available for the company at
any stage of its operations. The importance of financial management can be assessed by
taking a look at its core mandate:
 Availability of sufficient funds
 Maintaining a balance between income and expenses to ensure financial stability
 Ensuring efficient and high ROI
 Creating and executing business growth and expansion plans
 Safeguarding the organization against market uncertainties through ensuring buffer
funds
Let’s take a deeper look at the scope of financial management to gain a greater understanding
of its importance.

Goals of Financial Management

Goals / Objectives of Financial Management

A goal of the firm is the target against which a firm’s operating performance is measured.
The goals serve as the point of reference to a decision maker. The objectives or goals of financial
management are:1. Profit Maximization.2. Wealth Maximization.3. Return Maximization.
1. Profit Maximization:
The objective of financial management is to earn maximum profits. Various important decisions are taken to
maximize the profit of the firm. Profit maximization as an objective of financial management results in
efficient allocation of resources. Companies collect their finance by issuing shares to the public. Investors also
purchase shares in hope of getting good returns from the company in the form of dividend. If the company
does not earn good profits and fails to distribute higher dividends, the people would not invest in such a
company and people who have already invested will sell their stock.
2. Wealth Maximization:
The objective of wealth maximization of shareholders considers all future cash flows, dividends, earning per
share, risk of a decision, etc. This goal directly affects the policy decision of the firm about what to invest in
and how to finance these investments. Shareholders are always interested in maximization of wealth which
depends upon the market price of the shares. Increase in market price led to appreciation in shareholder’s
wealth and vice versa. So the major goal of financial management is to maximize the market price of the
equity shares of the company.
3. Return Maximization:
The third objective of financial management says to safeguard the economic interest of all the persons who
are directly or indirectly connected with the company – whether they are shareholders, creditors or employees.
All these parties must also get maximum return on the investment and this can be possible only when the
company earns higher profits to discharge its obligations to them