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1 (a) Managing Redundancy - Adopting a 7-Step Approach

Outplacement is a valuable and effective tool in redundancy management. Corporations who choose to provide outplacement services to employees are seen to value and respect the contribution made by individuals during the course of their employment. There are 7 key stages to good redundancy management.

Stage 1 - Strategy:
There are many factors that influence an organization and result in a review of process and people with the aim of reducing costs to improve effectiveness, productivity and competitiveness, often as a result of market downturn; falling profits; funding or cash flow crisis; outsourcing; company merger; or loss of a major contract.

Involving senior HR professionals in the earliest stages of the downsizing process is an important part of the planning phase. All the organizations leaders should be trained both to manage the process and to deal with their own emotional reactions to change.

When redundancy is under consideration, whether one employee or several, having a clear strategy for consultation, implementation and communication is crucial. Developing strategies to support those employees who are leaving, but equally those who remain is considered best practice, and has a number of benefits:

It gives you control over what, when and, most importantly, how information is released. Communicating the issues fosters an environment of honesty, trust and respect. It reduces damaging rumor and innuendo and lessens the shock and the reaction, if and when retrenchments have to be made. It allows for a period of adjustment and personal change with regard to work role, interactions and post change environment. It often unites staff and senior management in a common fight for survival.

Clearly the process needs to be carefully managed to avoid any additional damage to the

company or panic amongst the staff. Organizations need to put in place measures to reassure, motivate and reward their key people. Retaining talented employees is critical, yet they are the people most likely to find work easily elsewhere. Those employees in business critical positions should be reassured, as early as possible in the process that their positions are not, and will not be, in jeopardy.

Stage 2 - Minimizing Redundancies:

Having developed a plan, in consultation with all key stakeholders, the next phase is to carefully examine all avenues for minimizing job cuts and the damaging effects of redundancy. With this objective in mind, the following methods have all been used successfully by a variety of organizations: Building flexibility by re-evaluating working hours. Redeployment into other areas of the business. Flexible work practices such as job sharing schemes and part-time working arrangements. Early retirement, natural wastage and voluntary retrenchments. Voluntary pay cuts.

An approach which is honest, and as open as possible, not only reduces the devastating effect on the staff, but also benefits the management and the success of the plans for recovery, streamlining or downsizing. Organizations need a clear strategy to retain key staff long term and retain others until the organization is ready to let them go. Financial incentives often in the form of long-stay or retention bonuses, communication and good management are among the most successful methods used.

Stage 3 Selection:
Having worked through stages 1 & 2 above, care and attention needs to be given to selecting the positions and people. Key actions include: Aligning your consultation and notification obligations with current legislation. Establishing the criteria to determine which positions should be selected. Giving individual consideration to each position. Consider whether this position will be needed

again in the near future, how the work will be managed or dispersed, and the impact on staff in a similar position.

Stage 4 Notification:
One of a senior managers most unpleasant duties is to announce their restructure and redundancy decision, taken with the organizations best interests at heart that results in a valued colleague being forced to look for new employment. Consider the manner in which you would wish to be treated and how you would respond to a threat to your livelihood - care and empathy is essential. All the organizations leaders should be trained both to manage this highly sensitive event and to deal with their own emotional reactions the change represents. Redundancy can be one of the most stressful life experiences. Even when generous redundancy packages are involved this can still be a devastating blow. As a manager: look into each individual's personal situation beforehand so that you have some understanding of the problems they may face. Aim to provide appropriate support, either via an outplacement service or directly. Explain the process and procedure carefully and follow this up in writing. Remember, the affected individuals are likely to be ill equipped for positioning themselves in the job market and often feel confused, isolated, angry and afraid. Finding another position is a full time occupation.

Stage 5 - Selecting an Outplacement Provider:

A good organization will Endeavour to provide support and assistance to cushion the blow and help their people to make the transition. An appropriate outplacement service is a big advantage. Studies show that an external outplacement service is better received and far more effective than in-house measures.

If required, outplacement consultants will work with the organization through the entire process, at certain stages of the process or in the identification and provision of an appropriate outplacement program. The outplacement consultant can also be available on site at the time of the announcement.

In selecting an outplacement service provider consider the following: Location: Does the outplacement provider have offices and facilities available within a reasonable travelling distance? Budget: Does the outplacement provider have a range of viable solutions to fit your budget? Timing: Can the outplacement provider respond and be available at the right time for your organization? Expertise: The service needs to be 'fit for purpose'. When contacting a prospective outplacement company speak with one of the consultants. The company should be able to provide you with a proposal and program outline at the appropriate level and in line with your budget. People: Most outplacement consultants are empathetic and experienced, and good outplacement companies will be able to provide profiles of their people demonstrating their collective experience. Method of Delivery: Can programs be provided on an individual or group basis? Is there a faceto-face, electronic or manual based method of delivery? Content:

Does the outplacement service provide: A comprehensive career assessment Psychometric testing Strategic career planning Access to extensive databases Office facilities and computer resources, including internet access Draft rsums and marketing letters Expertise in working the hidden job market and networking Interview skills and mock interviews Fit to advertised positions Remuneration advice & salary negotiation Communicating with referees On-going mentoring

.Post Transition Support: Support for the individual normally continues for some time after your contact has ceased what are the terms of the program? Guarantee: Does your outplacement provider guarantee to work with, support, coach and mentor your former employees until they are placed in a suitable role?

Stage 6 - Stabilization: Evaluation:

Having provided support and assistance to those directly affected, you need to turn your attention to those indirectly affected; in varying degrees this includes all members of the workforce on whom the future of the organization depends. Their emotional reaction to the change needs to be considered and promptly addressed. A complex, emotional response is often displayed by those left behind, shock and relief, but also anger and anxiety. By implementing redundancies you will have sown the seeds of doubt about the security of their position. Those remaining need to feel confident that the crisis is over and the company is doing all it can to avoid any further redundancies.

Good communication during this period of uncertainty is crucial and goes hand in glove with management presence and visibility. In your initial planning, ensure that you have included measures to cover this period of transition. Ensure the organizations actions support the reasons for the upheaval. Do not suddenly burden remaining staff with a departing colleagues workload.

Open all lines of communication both formal and informal so that any grievances or concerns can be expressed and dealt with; check individual understanding of the reasons for redundancy and establish how staff feels about the manner in which the situation has been managed.

Stage 7 - Evaluation:
Managing redundancy is never easy. However the adverse effects can be substantially reduced through adopting this 7-step approach to managing retrenchment. Essential to the process is good communication; careful analysis and planning; effective consultation; sensitivity in approach; and the provision of appropriate support, assistance, and good on-going support.

Q.1 (b)
Intellectual property
Intellectual property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce.

IP is protected in law by, for example, patents, copyright and trademarks, which enable people to earn recognition or financial benefit from what they invent or create. By striking the right balance between the interests of innovators and the wider public interest, the IP system aims to foster an environment in which creativity and innovation can flourish.

Types of intellectual property:

1. Patents 2. Trade-marks 3. Copyright 4. Industrial Designs



A patent granted by the Patent Office of the Canadian Intellectual Property Office (CIPO) provides protection within Canada for up to 20 years from the date considered to be the filing date in Canada. For the purpose of the patent term, a patent application filed in Canada through the Patent Cooperation Treaty (PCT) has, as the Canadian filing date, the date when the application was first filed. You can receive a patent for products, processes, machines, manufactures or compositions of matter that are new and useful as well as new and useful improvements thereof.

A patent enables its owner to stop others from making, using, selling or importing such a product or process. This is a very powerful right since the patent owner could also use it to stop someone who subsequently, though independently, invents the claimed invention. In many cases, a patent

is the only way its owner may ensure exclusivity in the marketplace, and hence a competitive edge.



Trade-mark registration gives you exclusive rights to words and designs (or a combination of these) that distinguish your goods or services from those of others. Your trade-mark can be registered through CIPO's Trade-marks Office. By doing so, you obtain protection within Canada for renewable 15-year periods.

Except in the case of precious metals, you do not have to register a trade-mark. Just using it can give you certain rights. Registration, however, gives you exclusive rights throughout Canada and enables you to better stop a potential infringer from using your trade-mark. Trade-marks come to represent not only actual wares and services, but also the reputation of the producer. As such, they are considered valuable IP that gives the owner an important competitive advantage.



The right to copy - means that an owner is the only person who may copy the work or permit someone else to do so. Generally, copyright in Canada lasts for the life of the author and 50 years following the author's death. The kinds of works covered include: books, maps, lyrics, musical scores, sculptures, paintings, photographs, films, tapes, computer programs and databases.

The owner of a copyright has a number of rights, among which is the sole right to control first publication, production, reproduction and performance of a work or its translation. A SME may assign its copyright, license it or use it for funding. A copyright license may be restricted by territory, time, media, purpose, or by almost any other factor agreed to by both parties. Copyright owners may also collect royalties through performing rights' societies, collectives, publishing houses, or directly through contracts.

You obtain copyright automatically in Canada when you create an original work. Canadian copyright is recognized in many other countries under various treaties. You don't have to register your copyright, but it can be useful evidence of ownership.


Industrial Design

An industrial design comprises the visual features of shape, configuration, pattern or ornament (or any combination of these) applied to a manufactured article. The shape of a table or the decoration on the handle of a spoon is examples of industrial designs.

In Canada, obtaining a registration for an industrial design will give you exclusive rights for ten years. A maintenance fee is required before the expiry of five years plus six months from the date of registration to maintain the registration for a further five years. It is best to apply for registration before marketing the product to which the design is applied.

If the design is an artistic work, it is automatically protected by a copyright, and may be registered as such. However, if the design is used as a model or pattern to produce 50 or more manufactured articles, it is protected only by an industrial design registration, with certain exceptions.

Q.3 (a)

A single value which can represent the whole set of data is called an average. If the average tends to lie or indicating the center of the distribution is called measure of central tendency or sometimes they locate the general position of the data, so they are also called measure of location.

Types of Averages: Mathematical averages are: 1. Mean 2. Median 3. Mode

Mean is what most people commonly refer to as an average. The mean refers to the number you obtain when you sum up a given set of numbers and then divide this sum by the total number in the set. Mean is also referred to more correctly as arithmetic mean.

Mean Example Problems

Example Find the mean of the set of numbers below

Solution The first step is to count how many numbers there are in the set, which we shall call n The next step is to add up all the numbers in the set

The last step is to find the actual mean by dividing the sum by n

The median is defined as the number in the middle of a given set of numbers arranged in order of increasing magnitude. When given a set of numbers, the median is the number positioned in the exact middle of the list when you arrange the numbers from the lowest to the highest. The median is also a measure of average. In higher level statistics, median is used as a measure of dispersion. The median is important because it describes the behavior of the entire set of numbers. Example Find the median in the set of numbers given below

Solution From the definition of median, we should be able to tell that the first step is to rearrange the given set of numbers in order of increasing magnitude, i.e. from the lowest to the highest

Then we inspect the set to find that number which lies in the exact middle.

The mode is defined as the element that appears most frequently in a given set of elements. Using the definition of frequency given above, mode can also be defined as the element with the largest frequency in a given data set.

For a given data set, there can be more than one mode. As long as those elements all have the same frequency and that frequency is the highest, they are all the modal elements of the data set. Example Find the Mode of the following data set.


Mode = 3 and 15

Q.3 (b)
Presenting numbers in tables
Tables are used to present numerical data in a wide variety of publications from newspapers, journals and textbooks to the sides of grocery packets. They are the format in which most numerical data are initially stored and analyzed and are likely to be the means you use to organize data collected during experiments and dissertation research. However, when writing up your work you will have to make a decision about whether a table is the best way of presenting the data, or if it would be easier to understand if you were to use a graph or chart.

Graphs are a good means of describing, exploring or summarizing numerical data because the use of a visual image can simplify complex information and help to highlight patterns and trends in the data. They are a particularly effective way of presenting a large amount of data but can also be used instead of a table to present smaller datasets. There are many different graph types to choose from and a critical issue is to ensure that the graph type selected is the most

appropriate for the data. Having done this, it is then essential to ensure that the design and presentation of the graph help the reader or audience interpret the data.

Types of Graph

Bar charts
Bar charts are one of the most commonly used types of graph and are used to display and compare the number, frequency or other measure (e.g. mean) for different discrete categories or groups. The graph is constructed such that the heights or lengths of the different bars are proportional to the size of the category they represent. Since the x-axis (the horizontal axis) represents the different categories it has no scale. The y-axis (the vertical axis) does have a scale and this indicates the units of measurement. The bars can be drawn either vertically or horizontally depending upon the number of categories and length or complexity of the category labels. There are various ways in which bar charts can be constructed and this makes them a very flexible chart type.

Histograms are a special form of bar chart where the data represent continuous rather than discrete categories. For example a histogram could be used to present details of the average number of hours exercise carried out by people of different ages because age is a continuous rather than a discrete category. However, because a continuous category may have a large number of possible values the data are often grouped to reduce the number of data points. For example, instead of drawing a bar for each individual age between 0 and 65, the data could be grouped into a series of continuous age ranges such as 16-24, 25-34, 35-44 etc. Unlike a bar chart, in a histogram both the x- and y-axes have a scale. This means that it is the area of the bar that is proportional to the size of the category represented and not just its height

Pie charts
Pie charts are a visual way of displaying how the total data are distributed between different categories. The example here shows the proportional distribution of visitors between different types of tourist attractions. Similar uses of a pie chart would be to show the percentage of the total votes received by each party in an election. Pie charts should only be used for displaying nominal data (i.e. data that are classed into different categories). They are generally best for showing information grouped into a small number of categories and are a graphical way of displaying data that might otherwise be presented as a simple table. The study guide Pie Charts gives more details about designing pie charts and using them to compare data.

Line graphs
Line graphs are usually used to show time series data that is how one or more variables vary over a continuous period of time. Typical examples of the types of data that can be presented using line graphs are monthly rainfall and annual unemployment rates. Line graphs are particularly useful for identifying patterns and trends in the data such as seasonal effects, large changes and turning points. As well as time series data, line graphs can also be appropriate for displaying data that are measured over other continuous variables such as distance. For example,

a line graph could be used to show how pollution levels vary with increasing distance from a source, or how the level of a chemical varies with depth of soil. However, it is important to consider whether the data have been collected at sufficiently regular intervals so that estimates made for a point lying half-way along the line between two successive measurements would be reasonable.

Scatter plots
Scatter plots are used to show the relationship between pairs of quantitative measurements made for the same object or individual. For example, a scatter plot could be used to present information about the examination and coursework marks for each of the students in a class. In the example here, the paired measurements are the age and height of children in 1837. In a scatter plot a dot represents each individual or object (child in this case) and is located with reference to the x-axis and y-axis, each of which represent one of the two measurements. By analyzing the pattern of dots that make up a scatter plot it is possible to identify whether there is any systematic or causal relationship between the two measurements.

Straight-line Depreciation
The simplest and most commonly used method, straight-line depreciation is calculated by taking the purchase or acquisition price of an asset, subtracting the salvage value (value at which it can be sold once the company no longer needs it) and dividing by the total productive years for which the asset can reasonably be expected to benefit the company (or its useful life).

Example: For $2 million, Company ABC purchased a machine that will have an estimated useful life of five years. The company also estimates that in five years, the company will be able to sell it for $200,000 for scrap parts.
Depreciation Expense = Total Acquisition Cost Salvage Value / Useful Life

Straight-line depreciation produces a constant depreciation expense. At the end of the asset's useful life, the asset is accounted for in the balance sheet at its salvage value.

Unit-of-Production Depreciation
This method provides for depreciation by means of a fixed rate per unit of production. Under this method, one must first determine the cost per one production unit and then multiply that cost per unit with the total number of units the company produced within an accounting period to determine its depreciation expense.

Depreciation Expense= Total Acquisition Cost - Salvage Value / Estimated Total Units

= Total Acquisition Cost - Salvage Value / Estimated Total Units Estimated total units = the total units this machine can produce over its lifetime Depreciation expense = depreciation per unit * number of units produced during an accounting period Example: Company ABC purchased a machine for $2 million that can produce 300,000 products over its useful life. The company estimates that this machine has a salvage value of $200,000.

Unit-of-production depreciation produces a variable depreciation expense and is more reflective of production-to-cost (see matching principle).

Accelerated Depreciation
Accelerated depreciation allows companies to write off their assets faster in earlier years than the straight-line depreciation method and to write off a smaller amount in the later years. The major benefit of using this method is the tax shield it provides. Companies with a large tax burden might like to use the accelerated-depreciation method, even if it reduces the income shown on the financial statement. This depreciation method is popular for writing off equipment that might be replaced before the end of its useful life if it becomes obsolete ( computers, for example). Companies that have used accelerated depreciation will declare fewer earnings in the beginning years and will seem more profitable in the later years. Companies that will be raising financing (via an IPO or venture capital) are more likely to use accelerated depreciation in the first years of operation and raise financing in the later years to create the illusion of increased profitability (and therefore higher valuation). The two most common accelerated-depreciation methods are the sum-of-year (SYD) method and double-declining-balance method (DDB):

Sum-of-Year Method:

Depreciation In Year i = ((n-i+1) / n!) * (total acquisition cost - salvage value) Example: For $2 million, Company ABC purchased a machine that will have an estimated useful life of five years. The company also estimates that in five years, the company will be able to sell it for $200,000 for scrap parts.

n! = 1+2+3+4+5 = 15 n=5

The sum-of-year depreciation method produces a variable depreciation expense. At the end of the useful life of the asset, its accumulated depreciation is equal to the accumulated depreciation under the straight-line depreciation.

Double-Declining-Balance Method
The DDB method simply doubles the straight-line depreciation amount that is taken in the first year, and then that same percentage is applied to the un-depreciated amount in subsequent years. DDB In year i = (2 / n) * (total acquisition cost - accumulated depreciation) n = number of years Example

For $2 million, Company ABC purchased a machine that will have an estimated useful life of five years. The company also estimates that in five years the company will be able to sell it for $200,000 for scrap parts.

Q # 5 (a) Defining the 3 Types of Investments

The word "investment" has become muddled with overuse. Referring to a stock or a bond as an investment is still in regular use, but now people make "investments" in their education, their cars and even their flat screen TVs. In this article, we will look at the three basic types of investment as well as some of the things that are definitely not investments - no matter what the commercial says.

The Three Types of Investment

Investment, as the dictionary defines it, is something that is purchased with money that is expected to produce income or profit. Investments can be broken into three basic groups:

1. Ownership 2. Lending

3. Cash Equivalents 1. Ownership Investments

Ownership investments are what come to mind for most people when the word "investment" is batted around. Ownership investments are the most volatile and profitable class of investment. The following are examples of ownership investments:

Stocks Stocks are literally certificates that say you own a portion of a company. More broadly speaking, all traded securities, from futures to currency swaps, are ownership investments, even though all you may own is a contract. When you buy one of these investments, you have a right to a portion of a company's value or a right to carry out a certain action (as in a futures contract).

Your expectation of profit is realized (or not) by how the market values the asset you own the rights to. If you own shares in Sony and Sony posts a record profit, other investors are going to want Sony shares too. Their demand for shares drives up the price, increasing your profit if you choose to sell the shares.

Business The money put into starting and running a business is an investment. Entrepreneurship is one of the hardest investments to make because it requires more than just money. Consequently, it is also an ownership investment with extremely large potential returns. By creating a product or service and selling it to people who want it, entrepreneurs can make huge personal fortunes. Bill Gates, founder of Microsoft and one of the world's richest men, is a prime example.



Houses, apartments or other dwellings that you buy to rent out or repair and resell are investments. The house you live in, however, is a different matter because it is filling a basic need. The house you live in fills your need for shelter and, although it may appreciate over time, it shouldn't be purchased with an expectation of profit. The mortgage meltdown of 2008 and the underwater mortgages it produced are a good illustration of the dangers in considering your primary residence an investment.



Gold, Da Vinci paintings and a signed LeBron James jersey can all be considered an ownership investment - provided that these are objects that are bought with the intention of reselling them for a profit. Precious metals and collectibles are not necessarily a good investment for a number of reasons, but they can be classified as an investment nonetheless. Like a house, they have a risk of physical depreciation (damage) and require upkeep and storage costs that cut into eventual profits.

2. Lending Investments
Lending investments allow you to be the bank. They tend to be lower risk than ownership investments and return less as a result. A bond issued by a company will pay a set amount over a certain period, while during the same period the stock of a company can double or triple in value, paying far more than a bond - or it can lose heavily and go bankrupt, in which case bond holders usually still get their money and the stockholder often gets nothing. Youre Savings Account Even if you have nothing but a regular savings account, you can call yourself an investor. You are essentially lending money to the bank, which it will dole out in the form of loans. The return is pitiful, but the risk is also next to nil because of the Federal Deposit Insurance Corporation (FDIC). Bonds Bond is a catchall category for a wide variety of investments from CDs and Treasuries to corporate junk bonds and international debt issues. The risks and returns vary widely between the different types of bonds, but overall, lending investments pose a lower risk and provide a lower return than ownership investments.

3. Cash Equivalents
These are investments that are "as good as cash," which means they're easy to convert back into cash.

MoneyMarket Funds
With money market funds, the return is very small, 1 to 2%, and the risks are also small. Although money market funds have "broken the buck" in recent memory, it is rare enough to be considered a black swan event. Money market funds are also more liquid than other investments,

meaning you can write checks out of money market accounts just as you would with a checking account.

Close, but Not Quite Your education is called an investment and many times, it does help you earn a higher income. A case could be made for you "selling" your education like a small business service in return for income like an ownership investment.

The reason it's not technically an investment is a practical one. For the sake of clarity, we need to avoid the ad absurdity of having everything be classified as an investment. We'd be "investing" every time we bought an item that could potentially make us more productive, such as investing in a stress ball to squeeze or a cup of coffee to wake you up. It is the attempt to stretch the meaning of investment to purchases, rather than education, which has obscured the meaning.

Q # 5 (b)
Manufacturing and Operations Plan
The manufacturing and operations plan needs to include such factors as plant location, the type of facilities needed, space requirements, capital equipment requirements, and labor force (both full and part time) requirements. For a manufacturing business, the manufacturing and operations plan needs to include policies on inventory control, purchasing, production control, and which parts of the product will be purchased and which operations will be performed by your workforce (called make or buy decisions). A service business may requireparticular attention to location (proximity to customers is generally a must), minimizing overhead, and obtainingcompetitive productivity from a labor force.

1) Operating cycle
Describe the lead/lag times that characterize the fundamental operating cycle in your business. Explain how any seasonal production loads will be handled without severe dislocation (e.g., by building to inventory or using part time help in peak periods).

2) Geographical location
Describe the planned geographical location of the business. Include any location analysis, and so on, that you have done. Discuss any advantages or disadvantages of the site location in terms of labor (including labor availability,whether workers are unionized, wage rates, and outsourcing), closeness to customers and/or suppliers, access to transportation, state and local taxes and laws (including zoning and environmental impact regulations), access to utilities (energy use and sustainability), and so forth.

3) Facilities and improvements

For a startup, describe how and when the necessary facilities to start production will be acquired. Discuss whether equipment and space will be leased or acquired (new or used) and indicate the costs and timing of such actions and how much of the proposed financing will be devoted to plant and equipment. Explain future equipment needs in the next three years. For startups expecting to outsource manufacturing, indicate the location and size of the firm, and discuss the advantages, risks, and monitoring regime. Discuss how and when, in the next three years, plant space and equipment will be expanded and capacities required by future sales projections and any plans to improve or add existing plant space. Discuss anyenvironmental impacts related to those expansion requirements. If there are any plans to move the facility,outsource labor, or move production overseas, discuss the impact on the local community. Indicate the timing and cost of such acquisitions.

4) Manufacturing strategy and plans

Describe the manufacturing processes involved in production of your product(s) and any decisions with respect to subcontracting of component parts, rather than complete in house manufacture. Justify your proposed makeorbuy policy in terms of inventory financing, av ailable labor skills, and other nontechnical questions, as well as production, cost, and capability issues.

Discuss who potential subcontractors and/or suppliers are likely to be and any informatio n about, or any surveys that have been made of, these subcontractors and suppliers. Present a production plan that shows cost/volume/ inventory level information at various sales levels of operation with breakdowns of applicable material, labor, purchased components, and factory overhead. Describe your approach to quality control, production control, and inventor y control; explain what quality control and inspection procedures the company will use to minimize service problems and associated customerdissatisfaction. Describe the environmental sustainability of your operations, including the activities of your subcontractors and suppliers.

5) Regulatory and legal issues

Discuss any relevant state, federal, or foreign regulatory requirements unique to your product, process, or service such as licenses, zoning permits, health permits, and environmental approvals necessary to begin operation. Note any pending regulatory changes that can affect the nature of your opportunity and its timing. Discuss any legal or contractual obligations that are pertinent as well.


Consumer goods are products which are purchased for personal consumption. Consumer goods are classified into three areas: Convenience goods, shopping goods and specialty goods.

Convenience Goods
Convenience products are inexpensive frequent purchases, there is little effort needed to purchase them. Examples include fast food, toiletries and confectionery products. Convenience products are split into staples, such as milk, eggs and emergency products which are purchased when the need arises e.g. Umbrellas.

Shopping Goods
Shopping goods are products that consumers do not buy as frequently as convenience goods. They usually cost more than convenience goods and consumers expect to have them for longer, so they will do some research prior to purchase. The research will include comparing product features and price. Examples of shopping goods include white goods (such as fridge/freezers and washing machines), clothing and furniture.

Specialty Goods
Specialty goods are products with unique features or branding. Consumers do not compare them with other products as the goods have features unique to them. Instead they will spend time searching for the place selling the product they want. Consumers are often prepared to travel to purchase their product and pay a premium. Specialty goods include designer clothes, luxury cars, and antiques. Professional services provided by a person known for the effectiveness and quality of their work can also come under this category. For example a lawyer or public relations "guru" such as Max Clifford.

It is important for marketers to know what classification their products come under, as the classification determines how consumers behave when they are purchasing their product. Marketing can then be designed around the specific buying behavior.

What is Industry? Meaning

The production side of business activity is referred as industry. It is a business activity, which is related to the raising, producing, processing or manufacturing of products. The products are consumer's goods as well as producer's goods. Consumer goods are goods, which are used finally by consumers. E.g. Food grains, textiles, cosmetics, VCR, etc. Producer's goods are the goods used by manufacturers for producing some other goods. E.g. machinery, tools, equipments, etc.

Classification / Types of Industries

There are various types of industries. These are mentioned as follows

1. Primary Industry
Primary industry is concerned with production of goods with the help of nature. It is a natureoriented industry, which requires very little human effort. E.g. Agriculture, farming, forestry, fishing, horticulture, etc.

2. Genetic Industry
Genetic industries are engaged in re-production and multiplication of certain spices of plants and animals with the object of sale. The main aim is to earn profit from such sale. E.g. plant nurseries, cattle rearing, poultry, cattle breeding, etc.

3. Extractive Industry
Extractive industry is concerned with extraction or drawing out goods from the soil, air or water. Generally products of extractive industries come in raw form and they are used by manufacturing and construction industries for producing finished products. E.g.Mining industry, coal mineral, oil industry, iron ore, extraction of timber and rubber from forests, etc.

4. Manufacturing Industry
Manufacturing industries are engaged in transforming raw material into finished product with the help of machines and manpower. The finished goods can be either consumer goods or producer goods. E.g. textiles, chemicals, sugar industry, paper industry, etc.

5. Construction Industry
Construction industries take up the work of construction of buildings, bridges, roads, dams, canals, etc. This industry is different from all other types of industry because in case of other industries goods can be produced at one place and sold at another place. But goods produced and sold by constructive industry are erected at one place.

6. Service Industry
In modern times service sector plays an important role in the development of the nation and therefore it is named as service industry. The main industries, which fall under this category, include hotel industry, tourism industry, entertainment industry, etc.

B Definition of 'Distribution Channel' The chain of businesses or intermediaries through which a good or service passes until it reaches the end consumer. A distribution channel can include wholesalers, retailers, distributors and even the internet. Channels are broken into direct and indirect forms, with a "direct" channel allowing the consumer to buy the good from the manufacturer and an "indirect" channel allowing the consumer to buy the good from a wholesaler. Direct channels are considered "shorter" than "indirect" ones.

Distribution Channels
A distribution channel can have several stages depending on how many organizations are involved in it:

Channel 1 contains two stages between producer and consumer - a wholesaler and a retailer. A wholesaler typically buys and stores large quantities of several producers goods and then breaks into bulk deliveries to supply retailers with smaller quantities. For small retailers with limited order quantities, the use of wholesalers makes economic sense.

Channel 2 contains one intermediary. In consumer markets, this is typically a retailer. The consumer electrical goods market in the UK is typical of this arrangement whereby producers such as Sony, Panasonic, Canon etc. sell their goods directly to large retailers such as Comet, Tesco and Amazon which then sell onto the final consumers.

Channel 3 is called a "direct-marketing" channel, since it has no intermediary levels. In this case the manufacturer sells directly to customers. An example of a direct marketing channel would be a factory outlet store. Many holiday companies also market direct to consumers, bypassing a traditional retail intermediary - the travel agent.