1.

(a) Distinguish between ‘Product’ and ‘Services’. (b) Explain the strategies to be adopted during the Introduction Stage and the Growth Stage of Product Life Cycle. (c) Explain ‘Accounting Period Concept with reference to concept of accounting

Answer»

(a) 

BasisProductServices
(i) Market RelationshipProduct and brand are the focus of transaction.A very important link.
(ii) QualityCan be measured and controlled.Difficult to control and measured
(iii) Inseparability  of buyer and sellerFully separable, remote transactions are possibleNot separable, remote transactions not possible
(iv) Sensitivity to timeLow sensitivity, e.g., a soap can be bought in advance of needHighly sensitive, e.g., doctor's services are needed when there is a patient
(v) BrandMain strategy in product marketing.people are equally important.

(b) The strategies adopted during introduction stage are :

1. Selective distribution and attractive discount should be given.

2. Proper advertisement of product.

3. Removing technical and other deficiencies in the product.

4. Attract gifts to customer as on introductory offer.

The strategies adopted during Growth stage are :

1. Keeping the price at competitive levels. 

2. Expanding distribution channels to make the product available wherever demanded. 

3. Greater emphasis on customer service. 

4. More advertising to create brand image.

(c) Accounting statements are prepared at regular intervals, generally One year. This is called Accounting period concept. The expenditure whose benefit will across over a long period, should be apportioned suitable over each year. The users of financial statements need periodical reports on the performance of business. As such, the results of business can be ascertained only after the liquidation of business. But the measurement of net profit and financial position of the business after a very long period will be of little use of owners, managers, investors and other.


Discussion

No Comment Found

Related InterviewSolutions