IIBM MBA SECOND SEMESTER PHARMACEUTICAL MANAGEMENT EXAM QUESTION AND ANSWER PROVIDED WHATSAPP 91 9924764558
Examination Paper of Pharmaceuticals Management
IIBM Institute of Business Management
Examination Paper
MM.100
Pharmaceuticals Management
Section A: Objective Type & Short Questions (30 Marks)
This section consists of Multiple Choices & Short Notes type questions.
Answer all the questions.
Part one carries 1 mark each & Part Two carries 5 marks each.
Part One:
Multiple Choices:
1. Which of the following not the principle of co-„ordination?
a. Principle of early beginning
b. Principle of continuity
c. Principle of time
d. Principle of reciprocity
2. Oral communication includes__________
a. Lecture
b. Poster
c. Union publication
d. Complaint procedure
3. Enthusiasm, co-operation, tact and skillful handling come under:
a. Intellectual quality
b. Character quality
c. Psychological quality
d. Physical quality
4. Which of the following is the demerit of formal communication?
a) Decay in accuracy
b) Time consuming
c) It is temporary
d) Fairly unsuitable
5. Arrange the following into decision making process__________
i. Conception
ii. Investigation
iii. Perception
iv. Selection
a) iv,i,iii, ii
b) ii,iv iii,i
c) iv,i,iii,ii
d) iii,i,ii, iv
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Examination Paper of Pharmaceuticals Management
6. FIFO stands for _______________.
7. Record of all item of material and good in the store is recorded in which document?
a) Store ledger
b) Bin card
c) Both a & b
d) None of these
8. VED stands for ______________.
9. In the EOQ formula „C‟ is stand for-
a) Annual consumption
b) Cost of per unit of material
c) Cost per order
d) Storage
10. WTO stands for ________________.
Part Two:
1. What is questionnaire? Explain rules or guidelines for designing a good questionnaire?
2. Define drug store management? „Discuss the arrangements of drugs in drug store?
3. Name the various steps in the selection of a pharmacist?
4. What are the purposes of training given to a pharmacist?
END OF SECTION A
Section B: Caselets (40 Marks)
This section consists of Caselets.
Answer all the questions.
Each case let carries 20 marks.
Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
For the Indian Pharmaceutical Industry which has been presenting a robust performance during the last few years, the internet is a powerful tool. Web-enabling leverages the pharmaceutical firm‟s existing investment in IT. Customer Relationship Management (CRM) and Sales Force Automation (SFA) systems can be web-enabled to cost of operations, and on being effectively used, they establish immense customer goodwill.
The speed, efficiency and accuracy of a pharmaceutical company‟s response to customer queries determine the extent of customer satisfaction. About 200,000 doctors will be contacted by a typical mid-sized pharmaceutical company, on a regular basis. It is crucial that these doctors are kept
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Examination Paper of Pharmaceuticals Management
abreast of product profiles, new introductions etc. also, during the sales calls made by the field force queries are raised by the doctors, which need to be addressed quickly. By possessing a comprehensive medical information system, pharmaceutical companies are able to fulfill their obligations, and, at the same time, lend support to their sales and business partnerships. A good CRM system incorporates features that enable information sharing and identification of trends in the market; at the same time, to accommodate growth, it runs on a scalable platform.
A good CRM system is characterized by two key functions:
Tracking, organizing, prioritizing and responding to callers; and
Automating quick responses through letter, fax or e-mail, using a comprehensive data base.
The CRM system can help make urgent responses. It will also have a system of archiving call sheets.
The benefits of a good CRM system include a facility to handle a large number of medical queries efficiently; tracking customer correspondence/exchanges; retrieval and dissemination of the latest medical information; providing statistical reports for the re-assessment of product profiles. A good CRM system arms the company with tools to implement measures for continuous improvement of its business practices; it can be an invaluable aid to the sales force in understanding the interests and concerns of medical practitioners.
Sales Force Automation (SFA) is a system related to the CRM system. This tool enables a company to manage a vast field force. The system provides up-tp-date information to the field force while they are on the field; it provides the managers with a facility to keep a tab on field force‟s activities and ensure they are going according to plan.
A good SFA system incorporates features as under:
Customer Profiles: by maintain up-to-date, detailed profiles of customers, the system facilitates tailoring of the profile base for different needs; a comprehensive view on important business opportunities and important customer is generated.
Hospital Profiles: detailed hospital profiles maintained helps in implementing focused strategies.
Activity Planning: planning of activities by each member of the team is made possible by the SFA system.
Promotion/Call Reporting: detailed information about a particular promotion, and each sales call are made available; this enables planning of future activities that focus on specific needs.
Online Submission: daily call reports can be submitted online; call coverage reports and record of monthly target achievement can be maintained.
Analysis and Reports: to facilitate better planning and strategy formulation, the SFA system provides detailed statistics.
If the traditional applications and expertise of pharmaceuticals companies can be leveraged by web-enabling them, then major benefits are in store for them. The companies can cut down costs, manage their markets with more effectiveness and also enter into new markets.
The following are some of the CRM/SFA systems available in the market for the pharmaceutical industry.
FFReporting of Sarjen Systems Pvt. Limited.
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Examination Paper of Pharmaceuticals Management
CrissSmart SFA/CRM of Oasis Infotech.
Online MR Reporting Software of Marg Compusoft Pvt. Limited.
Siebel-based Pharma CRM Implementation Kit of Infosys Technologies Limited.
Pharma Pulse of TVS-electronics.
Talisma of Talisma Corporation.
Questions:
1. Briefly explain the concept of CRM & SFA systems.
2. State the features of a Good SFA system.
3. Write down some CRM/SFA systems which are available in the market for Pharmaceutical Industry.
4. What are the benefits of CRM system?
Caselet 2
Glenmark Pharmaceuticals uses a web-based tool for sales force automation. The tool helps the sales force in adding new contacts/accounts, deciding upon the appointments, planning their tour, planning joint working, submitting their daily call reports, submitting request for samples, promotional articles etc. based on the actual travel, the tool also calculates te necessary expenses to be paid to the field sales officer. The sample management and promo management modules in the software keep a complete track of samples and promo items. Te entire leave management system for the field sales staff runs on this software. A part from this , the software has multiple reports such as missed call report; call average report etc, which helps the entire sales force hierarchy to be aware of the developments and act accordingly.
Majority of the above features and functionalities are available on the mobile interface of the application as well. The software also allows the field force to capture certain important remarks made by the customers. The CRM team/medical support team can make the best utilization of this data gathered. These systems are upgraded on need basis. A part from the pure technical upgrades, the enrichment of features and functionalities happen through the new version release of the software. The sales force automation tool is in the form of portal. The portal has two components in terms of content- static Content and Dynamic content. The transactions happen on the dynamic content side, where as any circulars, information to the field force, product related FAQs, Manuals etc. are posted on the static content side. This section really helps to keep in touch with the field force. Any product information which would help the field force to upgrade the product knowledge can be posted here. Going forward, Glenmark also plans to have CBT (computer based training) programs to be made online on this portal. These types of interactive programs will really boost the process of learning for the field sales force.
Questions:
1. Explain the working of a Glenmark Pharmaceuticals.
2. State the features of a Glenmark Pharmaceuticals.
END OF SECTION B
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Examination Paper of Pharmaceuticals Management
Section C: Applied Theory (30 Marks)
This section consists of Applied Theory Questions.
Answer all the questions.
Each question carries 15 marks.
Detailed information should from the part of your answer (Word limit 200 to 250 words).
1. Define „Pharmaceutical marketing? Explain objectives and importance of pharmaceutical marketing.
2. Define „Advertising‟? What are the advantages and disadvantages of advertising in pharmaceutical marketing?
END OF SECTION C
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Examination Paper of Pharmaceuticals Management
IIBM Institute of Business Management
Examination Paper
MM.100
Pharmaceutical Marketing
Section A: Objective Type & Short Questions (30 Marks)
This section consists of Multiple Choice & Short Notes type questions.
Answer all the questions.
Part one carries 1 mark each & Part Two carries 5 marks each.
Part One:
Multiple Choices:
1. What is the full form of „IPR‟?
a. Intellectual property rights
b. Intellectual patent rights
c. Intellectual process rights
d. International patent rights
2. The environment that poses tremendous opportunities for new products and services to alert marketer is an _________ environment.
a. Ecological
b. Social
c. Technological
d. Competitive
3. Arrange these market opportunities analysis step by step:
i. Evaluate new opportunities in new segments
ii. Build on your strengths
iii. Explore new market opportunities
iv. Analyze your existing markets
a. i, ii,iii,iv
b. ii,iv,i,iii
c. iv,ii,iii,i
d. i,iii,iv,ii
4. Marketing virtually the same product with two or more brand names is a strategy of_______
a. Family brand strategy
b. Multiple brand strategy
c. Individual brand
d. Private brand
5. The pricing that deals with the judgmental or subjective elements of pricing is a_______
a. Cost-based pricing
b. Petition based pricing
c. Market based pricing
d. Demand based pricing
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Examination Paper of Pharmaceuticals Management
6. Which of the following is not a member of distribution channel?
a. The Physician
b. Manufacturer
c. The consumer
d. The transporter
7. Arrange the communication process in order:
i. Medium
ii. Feedback
iii. Sender
iv. Receiver
v. Message
a) ii,iv,v,i,iii
b) iii,v,i,iv,ii
c) iv,i,iii,v,ii
d) iii,ii,iv,i,v
8. The strategy used to create a demand for a product within a channel of distribution by appealing directly to the consumer is a________
a. Pull strategy
b. Push strategy
c. Combination strategy
d. Competitive strategy
9. Toward off a competitive threat or to create an entry barrier, some companies from different power blocks may temporarily form a cartel it is termed as_______
a. Franchise power
b. Integration power
c. Niche power
d. Coalition power
10. Which of the following „R‟ is not a part of good management principle?
a. Resources
b. Recognition
c. Responsibility
d. Reward
Part Two:
1. Define the term “Marketing Communication”.
2. Differentiate between „Product Item‟ and „Product Mix‟.
3. Differentiate between „Cost Based Pricing‟ and „Demand Based Pricing‟.
4. Describe “Boston Matrix”.
END OF SECTION A
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Examination Paper of Pharmaceuticals Management
Section B: Caselets (40 Marks)
This section consists of Caselets.
Answer all the questions.
Each Caselet carries 20 marks.
Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
Apex Pharma was one of the Leading pharmaceutical companies with manufacturing plants spread all over India. Initially, the company produced bulk drugs as the activities expanded, the company started manufacturing formulation. The first formulation plant was commissioned at Mandideep, Bhopal in 1983. This plant was exclusively catering to the overseas demand in various countries including the US, South Africa, Australia and the UK.
The demand in pharmaceutical industry is not evenly spread throughout the year. There were months when the company operated at 50%-60% of its capacity, and there were months, when the company operated at more than the installed capacity, by working in three shifts. As a general policy, the company used to operate in two shifts. Third shift operations were only resorted to during the peak season. Apex, during the period of increased demand, outsourced medicines from other companies. However, the medicines which were outsourced were sold only in the domestic market. The company applied high quality standards so as to fulfill the requirements of the export market.
Apex‟s Bhopal plant was run as a cost center and hence, it was not supposed to report any profits or losses. The plant had three different blocks manufacturing different sets of medicines (capsules, tablets, dry syrups and injectibles).
Semi Synthetic Penicillin Block (SSP): This block produced antibiotics and drugs based on amoxicillin and ampicillin.
General Block: This block produced non-antibiotic drugs.
C Block: this block produced third generation drugs based on cephalosporins.
Apex had a policy to invest in a new plant and machinery only when the company foresaw a sustainable long-term demand for a particular product. For its cephalosporin‟s range of drugs, the company was experiencing an increased demand from the US markets for the past 2-3 years.
The total investment in C-block was Rs. 130 million with the existing capacity of 396 million capsules per year. The demand had increased to 590 million capsules per year. To meet the increased demand, the management decided to purchase a new machine. The finance manager, Ramesh Swami, had two options (Refer Table 1)
Table 1
Particulars
Machinery I
Machinery II
Brand
Zenhasi (USA)
Zentacs (Second hand machinery
from Russia)
Capacity
300 million capsules
per
200 million capsules per annum
annum
Cost of Machine
Rs. 11.70 million
Rs. 9.50 million
Life of Machine
5 years
3 years
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Examination Paper of Pharmaceuticals Management
Residual Value
Nil
Nil
Sales revenue (for 18 tones
material
equivalent to
194
Rs. 575.4 million
Rs. 575.4 million
million capsules per annum)
Material Cost
90.68% of sales price
90.68% of sales price
Cost
of
repair
and
overhauling
before
Nil
1.30 million
commissioning
Total indirect costs (65%
Rs. 26.91 million
Rs. 30.00 million
fixed, 35% variable)
Depreciation as per income
Rs. 0.87 million
Rs. 0.80 million
tax provisions
Total Interest (Non cash)
Rs. 7.86 million
Rs. 7.79 million
Income Tax rate (company
is paying
only
MAT
@
Rs. 2.08 million
Rs. 1.74 million
11.5% of EBT)
Investment
requirement
in
working
capital
for
operations
of the
machine
Rs. 63.39 million
Rs. 63.39 million
(assumed to be released at
the end of life of the
machine)
The interest was calculated on the aggregate of receivables, investment and the working capital. The details for the proportion of different components of total interest are given in Table.
Table 2
Particulars
Machinery I
Machinery II
Receivables
Rs. 0.06 million
Rs. 0.06 million
Investment (10.4% of the cost
Rs. 1.21 million
Rs. 1.12 million
of Machine)
Working Capital (10.4% of the
Rs. 6.59 million
Rs. 6.59 million
investment
required
in
working capital)
Total interest
Rs. 7.86 million
Rs. 7.79 million
After calculating the cash flows for the alternatives available, Swami decided to buy the first machinery. The policy of the company was to discount the cash flows at the rate of 16.59%. the order for the machine was placed in March 2000, with a delivery period of four months, and the machine was to be made operational in July, 2000. The payment was released in April, 2000. The machine was received in July, 2000 but it could not be made operational due to damage in the transit. The machine was finally made operational in October, 2000. The company was not able to generate revenues from that machine for the same period. Apex finalized its balance sheet on June, 30 every year.
Questions:
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Examination Paper of Pharmaceuticals Management
1. If you were in the position of Swami, what would have been your decision? Justify keeping qualitative aspects in mind.
2. Discuss the various other factors, which should be considered while making capital investment decision.
Caselet 2
Geetha Laboratories Pvt. Ltd. Was established by Mohan Ramnath in 1985 at Chennai. He was a PhD in Chemistry, a soft spoken gentleman who did not believe in working under pressure. The company was a small scale unit manufacturing non-patented anti-malarial medicines. The company worked 6 days per week and was running smoothly. In 1978, CITU supported union came into existence. Industrial relations started deteriorating making it difficult for the company to service. In 1983, Ramnath decide to enter into partnership with three other partners, Chandan Keshav, Bharat Pathak and Veenu Ramachandan to overcome the difficulties faced by him. The company came to be known as Geetha Laboratories Ltd. Even after this, industrial relations did not improve till 1990 and it was during this period that 14 workers were sacked. In 1990, Ramnath decided to sell his shares to Emission Pharmaceuticals, a multinational, though other partners continued. Now, the company was called German Drug House (GDH) Pharmaceuticals. During this period CITU withdrew support to the union and BMS (Bhartiya Mazdoor Sangh) came into the picture. An average increment of Rs. 225/-was given to all workers and industrial relations improved to some extent.
IMPLA Pharmaceuticals Limited was another non-patented anti-malarial bulk drug manufacturing giant having units at Poona, Mysore, Hyderabad, and Coimbatore and having corporate office at Baroda. It wanted to have monopoly in anti-malarial drug manufacturing by taking over GDH, but before taking such step, they wanted to assess the internal condition of the company. Therefore, in January 1994 Vishal Shrivastav, a qualified Chartered Accountant, was inducted as Director by purchasing a requisite number of shares of the company. In September 1994, after IMPLA was convinced about the favorable conditions of GDH it formally took over the company. At that time the manpower strength of the plant was 210 in which 130 were workers and 80 were executives and staff members. After taking over, IMPLA made many changes and the major ones were:
1. They increased the salaries of executives and staff of the unit to reduce the gap in the pay structure of the executives and staff of this unit and their other units.
2. They invested 3-4 crores for up gradation of the plant.
3. They shifted from 6 days working per week to 7 days working per week to improve the productivity and enhance cost-effectiveness of the unit.
The shift from 6 days to 7 days working without any financial gains, made workers resists the change. At this junction Sumeet Joshi, Corporate Manager, (IR) intervened and promised the workers that they would be paid for 30 days instead of 26 days, but Ravi Shriman, Director (Personnel) and Vishal Shrivastav; GM (operations) refused to agree to this since they were not involved when Sumeet Joshi made the commitment. The promise was not fulfilled, further complicated problems. The issues kept on lingering for 6 months. No decision could be taken because of the difference of opinion among senior executives. In June 1995, the workers gheraoed Vishal Shrivastav to pressurize the management to take the decision. They were successful to some extent as it led to the agreement of management with workers that financial benefits would be given with retrospective effects of 4 years making it one additional year over and above 3 years of normal agreement. They were asked to give a notice of change which the Workers couldn‟t give till December 1995 because of disagreement among themselves. It was felt at this point of time by Shrivastav that the plant should have an Assistant Manager (Personnel) instead of having a Personnel Officer. Ajit Dubey, Assistant Manager
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Examination Paper of Pharmaceuticals Management
(Personnel) was appointed in October 1995 but even this appointment took 3-4 months because of difference of opinion between shrivastav and Shriman.
In December 1995, the workers gave a notice of change demanding an increase of Rs. 2200/- per month. In January 1996, a notice of change was given by management. In February 1996, the negotiations started and continued till July 1996. Shrivastav, Rajkumar, the new Corporate Manager (IR), Ajit Dubey and Kishore were to represent the management and nine members of the union were to represent the workers, besides V.D. Agarwal, the General Secretary of BMS. The first two rounds of meeting did not lead to any outcome as none of the parties were ready to budge. This made V.D. Agarwal withdraw as he was fed up with the rigid stand of the union leaders.
The third meeting was held without Agarwal, wherein the union leaders came down to Rs. 1,200/-from Rs. 2,200/- p.m. The minutes of the meeting were jotted down but the union leaders refused to sign. Taking advantage of the occasion, Dubey and Shrivastav had a secret meeting with Agarwal in a hotel. Agarwal advised the representatives of the management to maintain a low profile for a few months to crack down the workers‟ aspirations who had very high expectations. It was observed by
Dubey that there were perceptual differences between senior and junior union leaders. Taking clue from this, Dubey adopted a policy of divide and rule and took into confidence Devilal, the senior union leader and had secret meeting with him to explore the last settlement amount and apprised him that the management could go only upto Rs 450/- . He also took Janak Singh, the junior union leader into confidence and convinced him that the management was not going to bend before their demands and as such the workers were going to be the ultimate sufferers. Besides this, Dubey spread the message that no wages would be given retrospectively.
The next day the meeting resumed in which union representatives demanded Rs. 750/- (because of the pressure from the workers) beyond which they were not ready to come down. It was decided that instead of having a meeting with all the members, only two members, one senior union leader, Devilal and one junior union leader, Janak Singh would sit in the negotiations. Immediately a meeting between Shrivastav, Rajkumar, Devilal and Janak Singh was held and it was resolved that Rs. 575/- average per month would be given for 4 years retrospectively. A MOU was drafted by the legal consultant at the corporate office and was duly signed by Shrivastav, Rajkumar, Dubey and all the union representatives. In the evening a dinner was hosted in which all the negotiators were invited. When the papers were sent to R. Shriman, he objected to the MOU on the following points. First, the other plants were having 30 days pay system leading to less average per day and in Chennai plant it was to be given for 26 days leading to higher average per day. Second, the milk allowance given for overtime at Chennai unit was higher than other units. it took Shrivastav and Rajkumar two months to convince Shriman about the agreement, thereafter implementing the same. Rs. 14 to 15 lakhs were given to all the 160 workers within a week as arrears and the issue was settled.
Questions:
1. Was it right for V.D. Agarwal to withdraw half way during negotiations?
2. In view of the information given in the case, suggest the strategies for making IMPLA Pharmaceuticals a more progressive organization.
END OF SECTION B
Section C: Applied Theory (30 Marks)
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Examination Paper of Pharmaceuticals Management
This section consists of Applied Theory Questions.
Answer all the questions.
Each question carries 15 marks.
Detailed information should from the part of your answer (Word limit 200 to 250 words).
1. Explain the terms in the context of the “Pharmaceutical Marketing” :
a. Brand
b. Trademarks
c. Product line
2. Explain the important point that should be considered, while packaging pharmaceutical product? Also list the various dimensions of pharmaceutical market.
END OF SECTION C
S-2-300813
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Examination Paper of Managerial Economics
IIBM Institute of Business Management
IIBM Institute of Business Management
Subject Code-B106
Examination Paper
Managerial Economics
MM.100
Section A: Objective Type & Short Questions (30 marks)
Part one:
Multiple choice:
I.Demand is determined by
(1)
a) Price of the product
b) Relative prices of other goods
c) Tastes and habits
d) All of the above
II. When a firm’s average revenue is equal to its average cost, it gets (1)
a) Super profit
b) Normal profit
c) Sub normal profit
d) None of the above
III. Managerial economics generally refers to the integration of economic theory with business
(1)
a) Ethics
b) Management
c) Practice
d) All of the above
IV. Which of the following was not immediate cause of 1991 economic crisis (1)
a) Rapid growth of population
b) Severe inflation
c) Expanding Fiscal deficit
d) Rising current account deficit
V.Money functions refers to : (1)
a) Store of value
b) Medium of Exchange
c) Standard of deferred payments
d) All of the above VI. Given the price, if the cost of production increases because of higher price of raw materials, the supply (1) a) Decreases b) Increases c) Remains same d) Any of the above
This section consists of multiple choices and Short Notes type questions.
Answer all the questions.
Part one questions carry 1 mark each & Part two questions carry 5 marks each.
Examination Paper of Managerial Economics
IIBM Institute of Business Management
VII. Total Utility is maximum when (1)
a. Marginal Utility is maximum
b. Marginal Utility is Zero
c. Both of the above
d. None Of The Above
VIII. Cardinal approach is related to (1)
a. Equimarginal Curve
b. Law of diminishing returns
c. Indifference Curve
d. All of the above
IX. Marginal Utility curve of a consumer is also his (1)
a) Supply Curve
b) Demand Curve
c) Both of above
d) None of above
X. Government of India has replaced FERA by (1)
a) The competition Act
b) FRBMA
c) MRTP Act
d) FEMA
Part Two:
1. What is Managerial Economics? What is its relevance to Engineers/Managers? (5)
2. “Managerial Economics is economics that is applied in decision making” Explain? (5)
3. Differentiate b/w, Micro economics vs. macroeconomics? (5)
4. Factors Affecting Price Elasticity of Demand? (5)
Section B: Caselets (40 marks)
END OF SECTION A
This section consists of Caselets.
Answer all the questions.
Each Caselet carries 20marks.
Detailed information should form the part of your answer (Word limit 150 to 200 words).
IIBM Institute of Business Management
Examination Paper of Managerial Economics
Caselet1
Dabur is among the top five FMCG companies in India and is positioned successfully on the specialist herbal platform. Dabur has proven its expertise in the fields of health care, personal care, home care and foods. The company was founded by Dr. S. K. Burman in 1884 as small pharmacy in Calcutta (now Kolkata), India. And is now led by his great grandson Vivek C. Burman, who is the Chairman of Dabur India Limited and the senior most representative of the Burman family in the company. The company headquarter is in Ghaziabad, India, near the Indian capital New Delhi, where it is registered. The company has over 12 manufacturing units in India and abroad. The international facilities are located in Nepal, Dubai, Bangladesh, Egypt and Nigeria. S.K. Burman, the founder of Dabur, was trained as a physician. His mission was to provide effective and affordable cure for ordinary people in far-flung villages. Soon, he started preparing natural remedies based on Ayurveda for diseases such as Cholera, Plague and Malaria. Due to his cheap and effective remedies, he became to be known as ‘Daktar’ (Indian izedversion of ‘doctor’). And that is how his venture Dabur got its name—derived from Daktar Burman. The company faces stiff competition from many multinational and domestic companies. In the Branded and Packaged Food and Beverages segment major companies that are active include Hindustan Lever, Nestle, Cadbury and Dabur. In case of Ayurvedic medicines and products, the major competitors are Baidyanath, Vicco, Jhandu, Himani and other pharmaceutical companies.
Vision statement of Dabur says that the company is “dedicated to the health and wellbeing of every household”. The objective is to “significantly accelerate profitable growth by providing comfort to others”. For achieving this objective Dabur aims to:
Focus on growing core brands across categories, reaching out to new geographies, within and outside India, and improve operational efficiencies by leveraging technology.
Be the preferred company to meet the health and personal grooming needs of target consumers with safe, efficacious, natural solutions by synthesizing deep knowledge of Ayurveda and herbs with modern science.
Be a professionally managed employer of choice, attracting, developing and retaining quality personnel.
Be responsible citizen with a commitment to environmental protection.
Provide superior returns, relative to our peer group, to our shareholders.
Chairman of the company
Vivek C. Burman joined Dabur in 1954 after completing his graduation in Business Administration from the USA. In 1986 he was appointed as the Managing Director of Dabur and in 1998 he took over as Chairman of the Company.
IIBM Institute of Business Management
Examination Paper of Managerial Economics
Under Vivek Burman’s leadership, Dabur has grown and evolved as a multi-crore business house with a diverse product portfolio and a marketing network that traverses the whole of India and more than 50 countries across the world. As a strong and positive leader, Vivek C. Burman had motivated employees of Dabur to “do better than their best”—a credo that gives Dabur its status as India’s most trusted nature-based products company.
Leading brands
More than 300 diverse products in the FMCG, Healthcare and Ayurveda segments are in the product line of Dabur. List of products of the company include very successful brands like Vatika, Anmol, Hajmola, Dabur Amla Chyawanprash, Dabur Honey and Lal Dant Manjan with turnover of Rs.100 crores each.
Strategic positioning of Dabur Honey as food product, lead to market leadership with over 40% market share in branded honey market; Dabur Chyawanprash is the largest selling Ayurvedic medicine with over 65% market share. Dabur is a leader in herbal digestives with 90% market share. Hajmola tablets are in command with 75% market share of digestive tablets category. Dabur Lal Tail tops baby massage oil market with 35% of total share.
CHD (Consumer Health Division), dealing with classical Ayurvedic medicines, has more than 250 products sold through prescription as well as over the counter. Proprietary Ayurvedic medicines developed by Dabur include Nature Care Isabgol, Madhuvaani and Trifgol.
However, some of the subsidiary units of Dabur have proved to be low margin business; like Dabur Finance Limited. The international units are also operating on low profit margin. The company also produces several “me – too” products. At the same time the company is very popular in the rural segment.
Questions
1. What is the objective of Dabur? Is it profit maximisation of growth maximisation? (10)
2. Do you think the growth of Dabur from a small pharmacy to a large multinational company is an indicator of the advantages of joint stock company against the proprietorship form? Elaborate. (10)
Caselet2
The Regina Company„ one of the largest inakets of vacuum cleaners recent') had scv cfc ptollkins with the quality of its products. The market responsc to this 1ak of quality caused financial problems for Ow company. in late 1995. Regina began having return rates as high as 30 to 50 percent on some of its Housekeeper and Housekeeper Plus models. These models were sold primarily through discount stores. Further, Regina's Spectrum vacuum cleaner, an upgraded version sold in specialty stores, was introduced in 1995 with many quality problems. ef The specific problems identified for the Housekeeper and Housekeeper Plus models were associated with faulty belts and weak suction. In the Spectrum model, the agitator was melting; and making a loud noise, the foot pedals were breaking, and the steel-encased motor (which had been advertised as the
IIBM Institute of Business Management
Examination Paper of Managerial Economics
power source for the vacuum cleaner) had been replaced with a less desirable. less reliable motor.
As a result of these problems, Target stores discontinued Regina's Housekeeper Plus model after reporting that "at least half of those sold were returned." At Starmart, which accounts for about a quarter of the Housekeeper sales, I. out of every 5 machines sold was returned. To help service customer complaints, Regina set up an 800 telephone number for customers to contact the firm. directly. The sales returns caused Regina's shareholders to question the 1995 fiscal earnings report. Furthermore, both inventories and accounts receivable doubled during the 1995 fiscal year. At the end of that period, Regina's chairman and 40 percent stockholders
Resigned. The chairman’s resignation was closely followed by a company announcement stating that the financial results reported for the 1995 fiscal year were materially incorrect and had been withdrawn. This announcement brought a suit from shareholders who had bought Reoina stock on the basis of the 1995 camings report. It also prompted an audit of the 1995 results and a request to another accounting organization to work on Regina's business and accounting controls. A few months later, Regina 'agreed to be acquired by a unit of Magnum, a vacuum cleaner and Water-purification Company. Under Magnum, Regina shut down production while engineers worked to solve the problems inherent in the Housekeeper and Housekeeper Plus vacuums, particularly the suction difficulties. In September 1998, Magnum and Regina decided to separate the two companies again. Since then, Regina has been regaining market share with its Housekeeper models. The 'vacuums are popular because they carry on-board tools.
Questions:
1. What type of controls would you have established to preclude the major returns experienced by Regina? (10)
2. How would you have controlled the finished-goods -inventory to avoid its growing to twice the size that it was in the previous year. (10)
Section C: Applied Theory (30 marks)
1. What is the importance of demand analysis in business decision? (15)
2. Explain individual demand function and market demand function. (15)
S-2-010619
This section consists of Applied Theory Questions.
Answer all the questions.
Each question carries 15marks.
Detailed information should form the part of your answer (Word limit 200 to 250 words).
END OF SECTION C
END OF SECTION B
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