ISC Commerce 2016 Class-12 Previous Year Question Papers

Question 7.     (ISC Commerce 2016 Class-12 )
(a) Distinguish between method and procedure. [3] (b) What is marketing 9 State two features of the modem concept of marketing. [4] (c) Explain the need for consumer protection. [5] Answer 7:
(a) Difference between Procedures and Methods

Procedures Methods
(a) Procedures are sequences of steps to be followed for performing some important jobs. (a) Methods are formalized way of doing a routine and repetitive jobs.
(b) Procedures are more rigid. (b) Methods are less rigid or flexible.
(c) Procedures help in implementation of policy. (c) Methods help for standardization and co-ordination of activity.
(d) Example : Procedure for giving admission in school or giving contracts to an outside agency. (d) Example: Methods of valuation of stock or method of production.

(b) Traditionally marketing has been described in terms of its functions or activities. In this respect, marketing has been referred to as performance of business activities that direct the flow of goods and services from producers to consumers.

In modern times, emphasis is placed on describing marketing as a social process. It is a process whereby people exchange goods and sen ices for money or for something of value to them.


The main features of marketing are as follow:
Needs and Wants:
The main objective of marketing process is to satisfy the needs and wants of the customers. All the marketing activities are carried out to fulfill this objective. A need can be defined as sum total of all those items which are basic to human beings. For example, food, shelter, clothing, water etc. Culturally defined objects that are potential satisfies of needs are known as Wants. For example, basic need for water can take many forms such as cold drink or lemon water or tea or coffee etc. These forms are known as wants. An organisation must identify’ the various needs of their customers and should develop products and services that satisfy the same.

Creating a Market Offering:
Market offering means giving an offer for goods and services by describing its features like shape, size, qualify, uses etc. Suppose a computer is offered in a market: its various features like different sizes and prices at which it is available, technologies used, location of the shops at which it is available etc. are described. A good ’market offer’ is one which aims at complete consumers’ satisfaction.

(c) Following are points which highlight the need for consumer protection :
Consumer Ignorance : In many cases, consumers remain ignorant about their rights or do not have adequate measures to differentiate between genuine and spurious products Therefore, they need suitable protection in the form of consumer protection.

Widespread Consumer Exploitation : In the present business environment, there is scope for widespread consumer exploitation through a variety of malpractices, some even unconceivable by consumers. This necessitates protection of consumers.

Unorganized Consumers : Consumers are not organised like trade unions or trade associations which protect the interests of their members. They are unorganised and have no voice to convey their exploitation except through consumer protection measures.

Long-term Interest of Business : Consumer protection is quite relevant for long-term interest of business. The main focus of a business is on its consumers (the ultimate customers). Thus, serving the consumers by protecting their interests becomes the interest of business. Any unethical practice erases all positive effects of ethical practices.

Use of Social Resources : A business uses social resources of various types. Therefore, it is bound to serve the society by using its resources through adoption of fair trade practices which ensure consumer protection.

Social Responsibility : Social responsibility is a business objective along with other objectives. Since consumers are a part of society, consumer protection becomes an objective of a business. The business is required to balance various objectives.

Question 8.     (ISC Commerce 2016 Class-12 )
(a) State three objectives of sales promotion. [3] (b) Explain the meaning of e-banking. State any three features of e-banking. [4] (c) Explain five factors that affect the pricing decision of a product. [5] Answer 8:
(a) Objectives of Sales Promotion:

  • To create, demand through the issue of free samples, premiums and other methods.
  • To educate the customers about the new products and about their uses.
  • To maintain and extend the market for an established product.
  • To remove or overcome competition.

(b) e-Banking: e-Banking or electronic banking is the latest wave in information technology. It can be defined as the services provided by the banks on internet. It involves low transaction cost, adds value to the banking relationship and empowers customers. Electronic services offered by the bank are Electronic Funds Transfer (EFT), Automated Tekker Machines (ATM), Electronic Data Interchange (EDI), Credit cards, Debit cards etc. These services help the customers to conduct banking transactions such as managing savings, applying for loans, checking accounts, paying bills etc. over the internet a personal computer, mobile telephone etc.
Features of E-Banking are :


  • It facilitates 24 hours banking services to the consumers.
  • It involves electronic services offered by the bank i.e.. Electronic Funds Transfer (EFT), Automated Teller Machines (ATM). Electronic Data Interchange (EDI) etc.
  • It provides greater security to the customers as they can avoid travelling with cash.
  • It also offers unlimited access to the bank.
  • It keeps a record of each and even transaction.

(c) The following factors to be kept in mind before pricing :
Cost of Production : The most important factor affecting price of a product or service is its cost. While fixing the price of a product or service all total costs (Fixed costs, semi variable costs or variable costs) and desired profit is added. No business firm likes to sell its product below the marginal cost of product. Moreover, profits are also must for the survival of business.

The Utility and Demand : Utility means the satisfaction which a customer receives from a consumption of a product. The buyer is ready to pay up to the point where the utility from the product is at least equal to the sacrifice made in terms of price paid. Demand also plays an important role in determining the price of the product. If there is less demand for the product, it would not be sold at a very’ high price and vice-versa. Thus demand should be predicted correctly before setting the price.

Extent of Competition in the market: If there is higher degree of competition, the price will be fixed at the lowest level and if there is lesser degree of competition, the price will be fixed at the upper limits. In addition, while fixing prices, the quality , price and features of competing products must be considered.

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