Course: Cap Ii: Supplementary Study Paper - 2015

COURSE: CAP II
SUPPLEMENTARY STUDY PAPER - 2015
[Covers amendments made by the New syllabus]
(Relevant for students appearing for Examination held on Dec, 2015 and onward)
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

NEPAL
This supplementary study paper has been prepared by the Institute of Chartered Accountants
of Nepal. Permission of the Council of the Institute is essential for reproduction of any
portion of this paper.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval
system, or transmitted, in any form, or by any means, electronic, mechanical, photocopying,
recording, or otherwise, without prior permission, in writing, from the publisher.
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The Institute of Chartered Accountants of Nepal Supplementary Study Material
Forward
It is always the endeavor of institute to provide contemporary education and training to the students.
As the distinctive characteristic of the course i.e., distance education, has emphasized the need for
bridging the gap between the current market requirement to provide quality professional education in
consonance with international norm and practice, the institute has been providing a variety of
educational inputs for the students for their updates..
In this respect, the institute of Chartered Accountants of Nepal has modified the syllabus of various
subject of the CAP II course wherein various topic has been added in the syllabus. In this regards, The
Institute of Chartered Accountants of Nepal has come up with this Supplementary Study Material
which has been prepared for the students of Chartered Accountancy Professional [CAP] II Level by
incorporating the additional chapters which has been introduced in new syllabus of 2015. This topic
will be applicable to the student appearing in the CAP II examination from December , 2015 onwards
This Supplementary Study Material contains a discussion of the amendments made in the syllabus of the
CAP II course. They are very important to the students for updating their knowledge regarding the latest
developments in the respective areas mentioned above. We believe this Supplementary Study material
will be of immense help to students appearing exams and to gain working level knowledge. However,
students are advised not to rely solely on the material. They should update themselves with latest
developments and pronouncements in auditing and assurance profession along with other reference
books recommended by Institute of Chartered Accountants of Nepal (ICAN).
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TABLE OF CONTENT
S.No Content Page No
1 Corporate Law 4
2 Business Communication 14
3 Marketing 21
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PAPER 3: CORPORATE LAW
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF NEPAL
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INSURANCE ACT 2049
State the procedures, how the Insurance Board formed under the Insurance Act 2049 and
also discuss the nature of the Board.
Answer:
Formation and of the Insurance Board has been prescribed by the Section 3 of the Insurance Act
2049. According to it
(1) An Insurance Board shall be formed to systematize, regularize, develop and regulate the
Insurance Business.
(2) The Board as said above shall consists of the following Members:
(a) A person nominated or designated by the Nepal Government – Chairperson
(b) Representative, Ministry of Law, Justice and Parliamentary Affairs –Member
(c) Representative, Ministry of Finance – Member
(d) A person nominated by the Nepal Government from among the persons having the
special knowledge in the Insurance Business – Member
(e) A person nominated by the Nepal Government from among the Insured – Member
(3) An employee designated by the Board shall perform the duty as a Secretary of the
Board.
(4) The Nepal Government may make alteration of the Members of the Board by
publishing a notification in the Nepal Gazette, if it deems necessary.
(5) If it is deemed necessary, the Board may invite any national or
foreign experts in the meeting of the Board as an observer.
(6) The tenure of the nominated Members of the Board shall be four
years. They may be re-nominated up to twice after the expiry of their tenure.
(7) The Head office of the Board shall be located in kathmandu .
According to Section 4 of the Act (1) The Board shall be an autonomous and corporate body
having perpetual succession.
(2) The Board shall have a separate seal for its business.
(3) The Board may deal as a person to acquire, possess, dispose or otherwise manage the
movable and immovable property.
(4) The Board may sue as a person by its own name and the Board also may be sued in its name.
Chapter – 3 Section 8 of the Insurance Act 2049 prescribes the provision regarding the
Functions, Duties and Powers of the Board as follows:
(a) to provide necessary suggestions to the Nepal Government to frame the Policy
regarding to systematize, regularize, develop and regulate the Insurance Business.
(b) To frame a policy for the investment of the amount received from the insurance and to
prescribe the priority sectors.
(c) To register and renew the *Insurer, Insurance Agent, Surveyor or Broker and to cancel
or cause to cancel such registration.
(d) To arbitrate in the dispute which arises between the Insurer and the Insured.
(d1) To make decision on the complaints filed by the Insured against the Insurer regarding
to the settlement of liability of the Insurance.
(d2) To issue necessary directives to the Insurer from time to time regarding to the
Insurance Business.
(e) To formulate necessary basis for the protection of interests of the Insured, and
(f) To do or cause to do other necessary functions regarding to the Insurance business.
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Under Section 9 of the Act, Sub-Committee may be Constituted by the Board may constitute
subcommittee as per necessary to conduct its functions smoothly. The functions, duties and
powers of the Sub-Committee and the procedures regarding to the meeting shall be as prescribed
by the Board.
State how the Insurer is registered under the Insurance Act 2049. Can the Board refuse to
register the insurer? State in what conditions the it may not be registered? Whether the
insurer business can be cancelled when it is registered?
Answer:
Chapter-4 Section 10 of the Insurance Act, 2049 has prescribes the provision regarding
Registration and Cancellation of the Insurer. According to the section 10 the registration
procedures has been prescribed as follows:
(1) No Person shall operate or cause to operate the Insurance Business without obtaining a
certificate pursuant to this Act.
(2) Any national or foreign corporate body desirous to operate an Insurance Business shall
submit an application to the office of the Board in the prescribed form along with the following
documents and prescribed fees for the registration of its name as an Insurer :
(a) Memorandum and articles of association of the corporate body,
(b) Insurance Business to be operated and its policies and terms and conditions,
(c) If life Insurance Business to be operated, documents displaying calculations of the
premiums to be received in operating such business and liability,
(d) The documents regarding the methods of utilizing the amounts to be received from
the Insurance, and
(e) Other necessary documents as prescribed by the Board.
(3) The Board shall make necessary investigation upon the application received pursuant to Sub-
section (2) and shall make an inquiry with the applicant, if necessary, and shall register the name
of such applicant in the prescribed register-book by mentioning the types of the Insurance
Business to be operated by the applicant and shall provide the registration certificate of Insurer to
the applicant in the form as prescribed. In case there is any reasonable ground for not registering
the name, the Board shall inform the concerned applicant
accordingly.
(4) Notwithstanding anything contained elsewhere in this Section, in the case of the Life
Insurance, the Board shall, with the approval of the Nepal Government, issue a certificate to
operate the Business, based on the fulfillment of the criteria which it has fixed, from time to
time, in respect of the operation of the Insurance Business.
Section 12 of the Act prescribes the provision regarding the refusal to be registered the insurance
company in the following conditions:
Notwithstanding anything contained in Section 10, no national or foreign corporate body shall be
registered as an Insurer in the following circumstances :
(a) If the name of an Insurer to be registered is identical to the name of another Insurer which has
been already registered in the office of the Board, and
(a1) If any Insurer wants to be registered for operating Life Insurance and Non-Life Insurance
Business,
Provided that, the registered Insurer who is operating the Life Insurance and Non-Life Insurance
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Business before the commencement of this Act, shall operate the business through a separate
organization for Life and Non-Life Insurance Business as prescribed from the date specified by
the Board.
(b) If the paid-up capital does not amount to at least two hundred fifty million rupees for the Life
Insurance Business and to at least one hundred million rupees for the Non-life Insurance
Business.
(c) In the event that the Board has made a decision to ban to register to additional corporate
body as an Insurer to operate Insurance Business on the basis of the report, regarding to the
study, research and evaluation of the Insurance Business market.
According to Section 13 of the Insurance Act 2049 Registration of an Insurer may be Canceled
as follows:
(1) The Board may cancel the registration of an Insurer by providing a written notice with effect
from the date prescribed in the same notice in the following circumstances:
(a) If the Insurance Business is not started within six months from the date of obtaining the
certificate,
(b) If it is felt that the liability of the Insurer exceeds its assets within Nepal,
(c) If the Insurer could not fulfill the liability pursuant to the decision within three months from
the date of final decision of the court in the case filed under the Insurance Policy issued
within Nepal,
(d) If the head office of the Insurance Business of any foreign Insurer is situated out side Nepal
and in case it is felt that Nepalese Insurer has not obtained equal facilities there which are
enjoyed by the foreign Insurer pursuant to the prevailing law of such country,
(e) If the Insurer does not open its office inside Nepal,
(f) If the Insurer does not perform the functions to be performed or has performed any functions
which is not to be performed pursuant to this Act or the Rules made under this Act.
(2) Before canceling the registration of an Insurer pursuant to Subsection
(1), the Board shall provide a reasonable time-limit to submit clarification to the concerned
Insurer, stating the reasons for canceling its registration.
(3) If the concerned Insurer does not submit its clarification within the
time period mentioned in Sub-section (2) or in case the clarification submitted by it is found not
to be satisfactory, the Board shall cancel the registration of such Insurer pursuant to Sub-section
(1), and shall publish a notice in two major newspapers to be published Nepal for the information
public in general.
(4) Mere cancellation of the registration of an Insurer pursuant to this Section shall not make any
effect to the rights and liabilities of the concerned Insurer regarding to any action taken or
functions performed before the cancellation.
When the registration of insurer is cancelled the arrangement of payment of insurance claims
after the cancellation of the Insurer is to be made under Section 16 of the Act as follows:
The Insurer, dissolved by the cause of the cancellation of its registration pursuant to Section 13,
shall refund the amount received by it for Insurance to the person, organization or the Board,
within the period and method specified by the Board. It shall refund the principal amount along
with bonus as specified by the Board in the case of Life Insurance and it shall refund the
principal amount as specified by the Board on a proportional basis in the case of Non-Life
Insurance.
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Discuss the legal provision regarding the renewal of registration of the insurer according
to the Insurance Act 2049. In what conditions the registration of the insurer can be
refused to be renewed?
Answer:
Section 11 prescribes the provision regarding the renewal of registration of the insurer.
According to it the insurer has to follow the procedure as follows:
(1) The Insurer shall have to submit an application to the office of the Board in the prescribed
form along with the prescribed fees up to the last day of Chaitra of each year for the renewal of
the certificate of registration.
(2) Upon the receipt of the application pursuant to Sub-section (1), the Board shall have to
renew the *certificate of registration.
(3) In case any Insurer submits an application to the Board within thirty days from the date of
expiry of the time-limit pursuant to Sub-section (1), mentioning the reason for its failure to
submit an application for the renewal of the certificate of registration within the aforesaid time-
limit, the Board may, if it considers the reasons to be appropriate, renew the certificate of
registration of such Insurer.
According to Section 11A. Certificate of Registration of the Insurer Cannot be Renewed in the
following Circumstance :
(1) Notwithstanding anything contained in Section 11, the Board shall not renew the certificate
of registration of the Insurer in any of the following circumstances :
(a) If the balance-sheet has not submitted pursuant,
(b) If the statement of income has not submitted,
(c) If the audit report has not submitted,
(d) If the report of Actuary has not submitted,
(e) If the service-charge has not paid pursuant to Section 40,
(f) If it has been prohibited to operate the Insurance Business as prescribed.
(2) If a circumstance has been created for not renewing the certificate of registration of an
Insurer due to any of the circumstance mentioned in subsection (1), the Board shall notify the
Insurer within fifteen days from the emergence of such circumstances.
(3) If the Insurer has submitted an application to the Board within fifteen days from the date of
receiving the notice pursuant to Sub-section (2), stating reasonable grounds for not performing
the liabilities to be performed pursuant to Section 23, 24, 25, 26 and 40, the Board may, if it
considers the reasons to be appropriate, provide an additional time-limit of up to one month to
perform such liabilities.
Discuss the punishment which has been prescribed by the Insurance Act 2049, where there
is violation of the Act or the Rules made under the Insurance or directives issued or
perform the functions as to be performed under the Act?
Section 36 of the Insurance Act prescribes the provision regarding the Punishment of
concerned responsible persons as follows :
(1) If any Insurer or the Director of the Insurer, employee or Surveyor, Broker or Insurance
Agent knowingly violates this Act or the Rules made under this Act or order or directives or does
not perform any function to be performed or does any act not to be done, the Board may punish
to such Insurer or the Director, employee or Surveyor, Broker or Insurance Agent with a fine
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ranging from three thousand rupees to ten thousand rupees. If such offense has
been made frequently, he will be fined at the rate of extra five hundred rupees for
each subsequent offense.
(2) If any Insurer or Insurance Agent or Broker has made any Insurance Business without
following the procedures to be followed pursuant to this Act, the Board may fine him up to ten
thousand rupees.
(3) If the accounts, records, register, details, information or any other documents to be
maintained, prepared, formed or submitted pursuant to this Act or the Rules made under this Act
has not maintained, prepared, formed or submitted in time by knowingly or with malafied
intention or has maintained or submitted the false details or documents by any-body, he may be
punished with a fine up to thirty thousand rupees or imprisonment up to two years or with both.
Any person or corporate body dissatisfied with the decision made by the Board pursuant to this
Act, may make an appeal in the concerned Appellate Court within thirty five days from the date
of such decision under Section 37 of the Act.
SOCIAL WELFARE ACT, 2049
What do you understand by Social Welfare Programme as per Social Welfare Act 2049?
What programmes are considered as special programme relating to social welfare? What
functions, duties and power is exercised by the Council in respect of implementing the
social welfare programme?
Answer:
According to Section 3 of the Social Welfare Act , 2049 Social Welfare Programme refers the
acts that, Government of Nepal, by means of different activities relating to the social welfare
work, to support the overall development of the country may operate the social welfare
programme through the concerned Ministry and Social organizations and institutions.
Section 4 of the Act prescribes the Special Programme relating to social welfare as follows:
Government of Nepal may operate special Programmes, relating to the social welfare activity
and social service, in the following matters:
(a) To serve interest and render welfare to the children, oldage, helpless or
disabled people.
(b) To foster participation in development and to promote and protect the welfare, rights and
interest of the women.
(c) To rehabilitate and help to lead a life of dignity to the victims of social mischief's and also to
juvenile delinquency, drug addicts and similar people involved in other kind of addictions.
(d) To help to lead a life with dignity to the jobless, poor and illiterate people.
(e) To manage religious places and the activities of the trust Guthi institutions.
(f) To take effective management and actions for the welfare of the backward
communities and classes.
Section 9 of the Act prescribes the functions, duties and powers of the Council as follows:
(a) To run or cause to run the social welfare activities smoothly and effectively, to extend help to
the social organizations and institutions and to develop co-ordinations among them and to
supervise, follow up and carry out evaluations of their activities.
(b) To extend or cause to extend help and support to establish social organizations and
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institutions, their development, strengthening and extensions.

(c) To work or cause to work as co-coordinator between Government of Nepal and social
organizations and institutions.
(d) To provide consultancies to Government of Nepal in order to formulate policies and
programmes directly related to social welfare activit ies and other social services
(e) To establish and conduct or cause to establish and conduct a fund, for the social welfare
activities.
(f) To work or cause to work as a center for dissemination of information and documentation to
the affiliated service oriented organizations and institutions with Council.
(g) To conduct or cause to conduct trainings, studies and research programmes in the areas with
social welfare.
(h) To carry out or cause to carry out the physical supervisions of the properties of those social
institutions and organizations affiliated with the Council.
(i) To carry out or cause to carry out the necessary functions to implement the objectives of this
Act.
(j) To make or cause to make contract or agreement with the local, foreign or international
organizations and foreign countries.
(k) To collect grant from the national and international agency and to manage the received grant.
Discuss the objective behind the enactment of Social Welfare Act, 2049. How terms of
Social Werlfare Activity, Social Service and Social Organization and Institution has been
defined by the Act? Discuss the provision relating to the affiliation of social institutions
with the Council and provision to provide economic assistance.
As to the title of the Act, it is an Act enacted to provide for the Social Welfare in the nation.
Preamble of the Act clearly prescribes the objective of the Act. It states that it is made with an
expedient to the all around development of Nepalese people and Nepalese society, in order to
relate social welfare activities and various social welfare oriented activities to tie up with
reconstruction activities, in order to provide humanistic livelihood to the weak and helpless
individual, class and community and make them enable; in order to provide status and respect to
the welfare oriented institutions and individuals and in order to develop a co-ordination between
social welfare oriented institutions and organizations.
The Act also prescribes the term “Social welfare activity” as the welfare activity oriented
towards the economic and social upliftment and self-reliance to the weak, helpless and
disable individuals. Accordingly it also prescribes the term “Social service” as the social welfare
activity done, personally or collectively without the purpose of profit.
(c) "Social Organization and Institution" means an organization and institution
established under the prevailing Laws in order to carry out various social welfare activities and
social welfare oriented non-governmental organization or institution.
Section 13 of the Act prescribes the provision regarding affiliation of social institution with the
council. According to it social organizations and institution can be affiliated with the Council by
adopting the following process:
(1) Social organizations and institutions interested to keep affiliation with the Council shoul have
to submit an application as prescribed in the form.
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(2) The organizations and institutions applying pursuant to Sub-section (1) should submit and
mention its Constitution, name of executive committee members, their occupations and
addresses and the office where the organization or institution has been registered and the date of
the registration along with the application.
(3) After receiving the application pursuant to Sub-section (1) if it deems to be affiliated such
institutions or organization with the Council, the Council shall issue the certificate as prescribed
form taking the fees as prescribed.
(4) The organization or institutions affiliated with the Council may keep out its affiliation as
prescribed.
Section 14 prescribes the Provisions related to Constitution: The constitution of the
organizations and institutions intended to affiliate with the Council, shall mention the related
matters as prescribed in addition to the matters mentioned in prevailing laws.
Section 16. of the Act prescribes provision relating to economic assistance as follows:
(1) Social organizations and institutions willing to get material, technical, economic or any other
kind of assistance either from Government of Nepal or foreign countries, international social
organizations and institutions or missions or individuals shall submit a project proposal and
application along with other details to the Council as prescribed.
Provided that, yearly assistance up to Two Hundred Thousand Rupees for

the project that to be finished immediately may be taken only giving prior notice
to the Council and after the completion of said work, a report should be submitted
to the Council, within the period of three months.
(2) After receiving an application pursuant to Sub-section (1) the Council will provide
permission coordinating with the concerned ministry or agency within the period of forty-five
days.
Provided that, no permission may be given to the work or project which is against the national
interest.
(3) To cooperate and coordinate with local agency while implementing the
approved project.
(4) Notwithstanding anything stated in Sub-section (1) no pre-permission will be required to
those international institutions established under international Agreements in which .
Provided that, notice shall be given to the Council after receiving such assistance.
(5) While providing economic assistance to the approved projects by the foreign organizations,
assistance shall be channelized through the commercial banks operating within Nepal
WTO AND NEPALESE LAWS:
Discuss the concept of World Trade Organization (WTO) along with the position of
membership in the WTO. What are the main principles of the WTO?
Answer:
The World Trade Organization (WTO) is an international body dealing with the rules of trade
between nations. It has started functioning from January 1, 1995. On April 23, 2004, Nepal also
got its membership. Many countries are currently negotiating for their accession. These inclue a
number o developing countries. The membership of WTO currently stands at 161 Countries,
representing more than 97 percent of the world’s population, and 23 (including 8 Least
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developed countries) countries as an observers, most seeking membership.
Main principles of the WTO, as an international institution is to regulate trade and investment
with following fundamental principles:
1. Fair competition and Non-discrimination
2. Transparency
3. Treatment for Least Developed Countries
4. Most Favoured Treatment
5. Free Trade Principle
6. Rule-based Trading System
7. Competitive principle
8. Environment Protection.
membership in the WTO. List out the functions of WTO as fixed by it.
Answers:
developed countries) countries as an observers, most seeking membership.
Functions of WTO
The major functions of the WTO as envisaged in its Charter are as follows:
 Administer and implement the trade agreements
 Act as a forum for multilateral trade negotiations
 Seek to resolve trade disputes
 Oversee national trade policies
 Cooperate with other international institutions involved in global economice policy
making
 Maintain trade related database. Members are required to notify in detail various trade
measures and statistics
 Act as watchdog of international trade, constantly examining the trade regimes of
individual members
 Act as a management consultant for world trade
Provide technical assistance and training for developing countries
Trade liberalization has thus been the main focus of the WTO. It has given due attention to
investments and issues of broader economic cooperation making it a global platform for
integration. It is envisaged that elimination of barriers in trade and investment would integrate
the world economy. This mechanism will ultimately generate growth and encourage competitive
activities benefiting the mankind across the world.
The WTO provisions have reduced the scope for bilateral preferential arrangements. However,
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such arrangements can be maintained at regional level. Hence, within the scope of WTO, the
importance and relevance of regional groupings have been accepted and recognized.
membership of Nepal in the WTO. Examine the legislative standards maintained by Nepal
as per the commitment made towards WTO.
Answers:
developed countries) countries as an observers, most seeking membership. Nepal became
member of the WTO on April 23rd 2004. Nepal had applied for the membership of GATT in
1989.This application of membership was made in view of trade and transit problems with India
at that time. While seeking the membership of WTO the countries have to go through a series of
negotiations and have to commit and determine conditions.
Legislative Process of Nepal

The laws of Nepal need to comply as to the standards of WTO agreements, as per the
commitment made by Nepal. The compliance requires upgrading of standards of laws,
regulations, policies, agreements and improving institutions. So far the report published by the
Government of Nepal, fifty five percent policies, laws and regulation etc. have been completed,
forty five percent are on the way to compliance i.e they are in the final stage.
Table of law making compliance

S.No. Particulars Total Completed Need to be
completed
1. Law 27(9 new 18 14 13
amended)
2. Regulation 6(3new 3 2 4
amended)
3. Convention/Agreements 4 3 1
4. Policies 2 2 0
5. Inquiry Points 42 24 18
On the committed policy, law, regulation, adoption of international instruments and
establishment of inquiry point about one fourth are new and remaining are just updated by
amendment.
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PAPER 6A: BUSINESS COMMUNICATION
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CHAPTER -1 : COMMUNICATING AT WORK
BUSINESS COMMUNICATION
Business communication is the process of communication that is oriented to fulfilling the
business goals, missions and tasks of an organization. It can be both internal and external in
nature. It involves oral, written and non-verbal tools with interaction, disseminations,
presentations being sensitive to given context and culture. Memos, letters, notice, press release,
advertisements, interviews, etc. are different instances of business communications. Thus, the
explicit purpose of business communication can be interpreted (i) communication to inform, (ii)
communication to promote business, and (iii) communication is also concerned with
socialization, motivation, instructions, feedback, conflict resolution, etc. different principles of
business communication are identified. Some importance ones are:
 Clarity
 Completeness
 Conciseness
 Concreteness
 Correctness
 Courtesy and so on.
OVERCOMING INTERPERSONAL COMMUNICATION BARRIERS

Communication that takes place between different people in or outside the organization is an
inter-personal communication. Different obstacles can be seen during the course of interaction or
communication between people. These are termed as communication barriers. The barriers in the
communication process affect its outcome. Inadequate language forms. Fluency paralinguistic
features, noise, schema, etc. are the major communication barriers. In the channel of
communication the receiver needs to achieve the actual intention of the sender; otherwise
misunderstanding may take place. Communication barriers are most responsible for creating
misunderstanding.
COMMUNICATING IN ORGANISATIONS
Organization communication skills are important for day to day professional activities and
transaction. Professional and executives have to accomplish their jobs in both internal and
external channels through some very specific skills and knowledge. Clients and agencies should
be dealt with properly. For this, the following types of organization skills are supposed to be
significant:
 Initiating discussions and interactions
 Organization meetings and workshops
 Creating information networks
 Training about business skills, and so on.
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D. ENVIRONMENT AND ECOLOGICAL RESPONSIBILITIES

Business organization should be responsible for the conservation of natural heritage of the world
where we live. Business ethics is always concerned with environmental and ecological
responsibilities. For example, while making packages of goods, the materials used in them
should be properly thought of. The materials which do not harm the environment should be used.
Environment friendly raw materials helps us protect our home, i.e. earth. In our context, recently
plastic bags are forbidden in the markets of Nepal. This helps to keep our surrounding relatively
clean. The business persons must co-operate for this kind of national campaign, not as a rule but
as a part of business ethics. It is one of the factors of corporate society responsibility. The society
feels being served through this kind of consecration campaigns when the business sectors
becomes irresponsible to the nature and environment, the existence of human society may also
be in question. Business is one of the most important sectors of our societies. So, the business
personas must be responsible to the societies where they have to survive and carry out business.
SELF- ASSESSMENT DEVICES

1. How is business communication an autonomous discipline? Discuss in brief its function and
principles by linking them with succeeding in the workplace.
2. Who are the major actors of business communication? Specify their roles in the organization
communication process.
3. What do you mean by communication barriers? How can they be overcome? Discuss in brief
with examples.
4. How are internal communication skills different from the external ones? Discuss with
examples.
5. What is ethics in business communication? Discuss in brief economic, legal and
philosophical perspectives of business ethics.
6. What are the potential consequences of unethical business dealings? How can you repair
them?
7. “Meaning is the outcome of mind, language and context”. Do you agree this statement?
Explain.
8. Write short notes on:
a) Encoding and Decoding
b) Courtesy in business communication
c) Business ethics
d) Frame of reference
e) Organizational communication skills
f) Feedback in business communication
CHAPTER 2 – WORKING IN GROUPS
1. LISTING SKILLS
Listening and speaking skills are regarded as the primary skills of language, while reading and
writing are the secondary ones. Similarly, listing and reading are the receptive skills, while
speaking and writing are productive ones. A listener receives the message and interprets it
according to the context. In business communication listening has a special position. To get the
intended meaning of the speaker, the listener should decode the meaning appropriately. Listening
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involves different sub-skills such as predicting, extracting general meaning, making specific
meaning, interpreting and analyzing meaning.
SELF-ASSESSMENT
1. As the member – secretary of a company write a notice to deliver to the board members
about the Broad Meeting to be held on a given date next week.
2. What are the major consideration to be taken into account while writing minutes? Discuss
with examples.
3. What roles can an individual member play in a group to accomplish the business goals?
Explain
4. Think of a situation where workers are in conflict, and present convincing ways of
overcoming such conflict.
5. Elaborate the importance of listing in business communication. Also discuss Do’s and Don’ts
of good listening.
6. Define feedback and explain how feedback should be given and received in groups.
7. Can you point out some drawbacks of team work in a business and present organization?
Think of and present a case where team work has failed due to misunderstanding.
8. Write short notes on:
a) Group dynamics
b) Position of agenda and minutes
c) Follow-up letters
d) Qualities of good minute
e) Conflict resolution strategies
CHAPTER 3- COMMUNICATING ACROSS CULTURES
5. WRITING TO AN INTERNATIONAL AUDIENCE

Primary concerns of writing to an international audience include: intercultural sensitivity, polite
language with no imposition at all, you-attitude in presentation, international conventional and
trends, choice of proper code, etc. International language should be used as the medium of
business transaction. Business letters, reports, proposal etc. in the formal style can be useful
device for international communication. Proper use of non-verbal communication has also been
significant for international exchanges. Non-verbal tools of communication are mostly universal.
Particular in multinational companies, exchanges are of international levels. Executives should
be given trainings about business communication. Writing strategies, presentation skills, and
non-verbal cues should be properly exposed to the workers of such multinational companies. The
most important thing in the international communication is the way the receiver’s culture
interprets the message and style of expression. The words discourse patterns, format of writing,
etc. Should be chosen in a way the receiver would be persuaded. Persuasiveness is an important
quality of international communication.
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SELF- ASSESSMENT TOOLS

1. Illustrate a case where there is workplace diversity. Explain how diversity can be properly
managed in an organization?
2. What are the major problems of workplace diversity? How can they be settled within an
organization?
3. How do people develop multicultural sensitivity and intercultural competence in business
multicultural sensitivity and intercultural competence in business communication? Explain
4. What are the major consideration that people need to take into account while carrying out
international communication?
5. Discuss the role of graphics in oral presentation of business papers.
6. What do you mean by globalization of culture? Discuss in brief in relation to business
communication
7. Why is international business communication important? Discuss in brief.
CHAPTER 4- EMPLOYMENT COMMUNICATION
SELF-ASSESSMENT TOOLS
1. Ramesh Chand, a graduate in Business Management is looking for suitable job. What do you
think Mr. Chand has to be prepared in when he visits business houses for job?
2. What do you mean by a persuasive resume? Discuss the major considerations to be made
while writing a persuasive resume.
3. Write a professional resume to submit to an employer.
4. Write a follow-up letter about the application you had submitted to an organization for the
post of sales manager as required by organization.
5. Write a set of questions that are possibly asked to an interviewer for the post of branch
manager of a commercial bank.
CHAPTER 5 – ANALYZING INFORMATION AND WRITING REPORTS AND

PROPOSALS
3. COLLECTING AND CHOOSING INFORMATION FOR REPORTS

Different tools such as interview, observation, questionnaire, etc. are used to elicit information
required for a report. Reports are based as facts and events. The information on facts and events
are presented systematically as data. The data are analyzed using tables, graphics, mean, median,
standard deviation, pie charts, etc.
Reports are written primarily when some actions are carried out. Proposal are written before
carrying out the actions. These are similar to work plan. Specific strategies are mentioned in the
proposal so that the proposed actions can be successful. The strategies and result of action are
narrated in the reports. According to the type of report, the language style and format are
different. Reports are described and narrative in nature, while proposal are more persuasive and
motivating ones. Basically, the parts such as introduction objectives, Methodology, Analysis,
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Results discussion, conclusion, and recommendation are common in reports. Reports are written
in the past tense, but proposal use the future tense. Time table should be presented for both
reports and proposal, and proper information should be chosen for the reports as required.
USE OF STATISTICAL TOOLS IN ANALYSIS AND INTERPRETATIONS

Commonly mean, median, percentage, range, etc. are used in business reports.
Stages of reports writing
1. Pre-writing stage:
 Gathering of information and data
 Classification of data
 Tabulation of data
2. Drafting stage
 Note making
 Screening and scanning
 Analysis and observation
3. Editing and presentations stage

 Style of report presentation
 Concept editing
 Language and grammar
Conceptual Framework of Reports Types

1. Components of information report:
 Background/ Information
 Objectives
 Details/ Feasibility/Discussion
 Executive summary
2. Components of Investigation Reports

 Introduction/ Background
 Statement of problem
 Objectives
 Methodology
 Result and Discussion
 Interpretation/ finding
 Bibliography
SELF-ASSESSMENT TOOLS
1. Write an operation reports representing XYZ electronics by analyzing about annual
operation events for the fiscal year 20-4-15. Kindly incorporate major activities, budget
allocation along with program highlights and its benefits.
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2. ACE development bank has nominated you to participate in the annual SAARC
conference about the challenges of financial market. Prepare a situation reports to submit
the managing director by describing about your participation and the importance of
events.
3. How are data analyzed in a business report? Illustrate.
4. After conducting a detail survey of an education institution write an investigation reports
including finding and recommendations.
5. How is a report different from a proposal? Distinguish between them in terms of
purposes, presentation styles and their types.
6. Discuss in brief the usefulness of proposals and reports in the success of business
organization.
7. How is information presented effectively in a report? Discuss.
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PAPER 6B: MARKETING
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CHAPTER 1: MEANING OF MARKETING AND MARKETING MIX
1.4 EMERGING MARKETING CHALLENGES
The following are the emerging marketing challenges:

1. Technology :
The digital revolution is creating a new information society. Electronic network will be
important for marketing. Technology challenges will be rapid
 The twenty first century promises many opportunities. Technological advances in solar
energy, online computer networks, cable and satellite television genetic engineering and
telecommunications promise to challenge the world as we know it. Organization that is
able to innovate new solution and values are the most like to succeed.
2. Globalization:
It is making the world one single market. Competition will be everywhere. Nepalese product
will face tough competition from foreign products. Companies will think globally and act
locally.
3. Customer Empowerment:
Customer will become more empowered. They will expect higher quality and better service.
Their brand loyalty will be low. They will be able to shop intelligently online. Customization
of product will increase.
4. Marketing think:
Everyone in the organization will think marketing .emphasis will be placed on creating
customer value and satisfaction. Every employee will do the marketing job.
5. Outsourcing:
More companies will choose to own brands rather than physical assets. They will restore to
greater outsourcing in their activities. Strategic alliances will increase. Global brands will
become popular.
6. Target Market :
Companies will serve well – defined target market. New market positioning will become
important. Cross cultural changes will create global life styles.
7. Relationship:
Relations will be developed with customer for lifetime. Loyalty emphasis will be given on
retaining existing customer. Stakeholders will be given importance together with shareholder.
Lifetime customers will be created.
8. Customer Share:
Companies will force on gaining customer share by offering large variety of product to
existing customer. Market share will lose importance.
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9. Organization:
Marketing organization will be based on customer segments rather than product units.
Product divisions are likely to disappear.
10. Holistic Approach:

Marketing will embrace holistic approach. It will emphasize integrated marketing,
relationship marketing internal marketing and social responsibility to achieve goals
effectively. The concern for ethical marketing will increase.
CHAPTER 2: EVOLUTION OF MARKETING CONCEPTS
2.1 INTRODUCTION
Various concepts of marketing that have evolved over the year are:
1. Production Concept
2. Product Concept
3. Selling Concept
4. Marketing Concept
5. Customer Concept
6. Societal Concept
7. Holistic Concept
2.8 HOLISTIC CONCEPT OF MARKETING

The focus of this concept is all matters related to marketing. It integrates the new marketing
concept with the societal marketing concept. Integrated marketing is used to meet customer need.
Relationship marketing is used to make all members of the organization customer oriented.
Social responsibility is practiced to promote consumer and societal welfare.
Starting point Focus Means Ends
Target All market matters  Integrated marketing Goals is

Market  Relationship marketing achievement
 Internal marketing through
 Social responsibility marketing think
Figure: Holistic Concept of Marketing
The holistic concept has the following features:

a) The starting point is the target market.
b) Focus is given to all matters related to market. Any one aspect of marketing is not given too
much attention.
c) The means for marketing are:
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 Integrated marketing to efficiently and effectively utilize marketing resources. All

marketing matters are put under the marketing department.
 Relationship marketing is practiced to develop long term relationship with customer -
oriented. Customer think is promoted organization wide.
 Internal marketing is practiced to make all managers and employees customer -oriented.
They are given training to become customer-oriented. Customer thing is promoted
organization wide.
 Socially responsible marketing is practiced to enhance customer and social welfare.
d) The goals of the organization ate effectively achieved through marketing think
 Holistic concept is the latest thinking about marketing. Its four pillars are:
Figure: Four Pillars of Holistic Concept of Marketing
CHAPTER 3: ENVIRONMENT CONTEXT OF MARKETING
3.4 IMPACT OF ENVIRONMENT ON NEPALESE MARKETING

Environment impact on marketing occurs mainly from changing forces in the environment. Such
changes result from increasing uncertainty, competition political instability and technological
developments. They prevent opportunities and threats.
Environment has both positive and negative impact on Nepalese market.
1. Positive impact:
Environment impacts Nepalese market positively in the following ways:
a) Opportunities :
Environment provides opportunities to Nepalese marketing. Changes and developments in
the environment can be monitored to locate future opportunities. This helps marketing to
expand and grow.
b) Adaption :
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Marketing detects trends and create scenarios through environmental analysis. This facilitates
environmental adaptation. Marketing can maintain its dynamism through environmental
adaptation.
c) Goals achievement:
Environment helps marketing to achieve its goals efficiently and effectively knowledge of
environmental changes can be used to improve performance. Competition can be effectively
managed. This positively helps in goals achievement.
d) Demand Management:
The tracking of environmental changes helps to identify changing customer preferences.
Customer demand can be stimulated and managed. Customer needs can be effectively.
Satisfied through appropriate marketing mixes.
e) Stability:
Marketing can foresee the impact of environmental changes on its stability. It can develop
action plans to cope with such changes to maintain stability. This helps reduce uncertainty.
2. Negative impact:
Environment poses threats and negative impacts Nepalese marketing in the following ways:
a) Political-legal forces:
Uncertainties in political forces in Nepal are having adverse impact on marketing. Similarly,
too many changes in legal framework are having adverse impact on marketing. They have
restrained marketing.
b) Economics forces:
Nepal’s taxation policies keep on changing. Tax laws are too complicated. Value Added Tax
has created problems for marketing. Globalization has brought competition everywhere.
Inflation has increased costs has adversely impacted marketing.
c) Socio-cultural forces:
Mass migration from hill to terai region has created shifts in market cultural forces are
changing food habits. Consumers have developed taste for fast food in urban areas.
d) Technological Forces :
Inability to adopt to changes in technology have adverse affected Nepalese industries. Most
industries are sick. Job designs are changing. Marketing has been slow in adopting
information communication technology.
CHAPTER 4: MARKET SEGMENT AND TARGETING
4.5 MARKET TARGETING:
Organization should carefully select the segment to be served. The selected segments constitute
the target market. Segment select strategies can be.
1. Single segment coverage:

An organization selects one segment and offers one marketing mix
The organization gains reputation through specialization in the selected segment. It can match
marketing mix to customer needs with limited resources.
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2. Multi- Segment Coverage of Marketing:

An organization selects two or more market segments and offers separate marketing mixes for
each segment.
This strategies diversifies the risk. It results in greater sales volume.
3. Product Specialization Strategies:

An organization concentrates on one segment but serves many product to that segment. This
strategy helps organization to build reputation but they remain over- dependent on one segment.
4. Market Specialization Strategy:
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An organization concentrates on one segment but serves many product to that segment. This
strategy helps organization to build reputation but they remain over-dependent on one segment.
5. Full Market Coverage:

An organization serves all market segment with all the products they need. Various product
items in one product line are offered. Coca Cola is using this strategy by offering a variety of soft
drinks to all segment of the market.
4.6 MARKETING SEGMENTATION IN NEPAL
The supplier driven Nepalese market generally practiced mass marketing approach with product
variations in the past. The socio-economic changes and development in transport and
communication system have made Nepalese marketers conscious of marketing segmentation.
The marketing strategies of global organization like coca cola, Pepsi. Nepal Lever and Standard
Chartered Bank have reinforced this consciousness.
The following points describe the practices of marketing segmentation in Nepal:

1. Non-Systematic: Segmentation is generally not based on systematic market research. Past
experiences, hunches of management, and competitor’s strategy have influenced
segmentation.
2. Variables for Segmentation: The variable mostly used for consumer market segment are:
i. Geographic: Nepalese organization generally segment market on area basis –
Development regions, zones, district, etc. Population density is also used for some
products. Geographic variable are most popular for market segmentation.
ii. Demographics: Gender, age, and income are widely used as variables for segmentation.
Family life cycle is not much used. Religion and ethnicity also influence market
segmentation in Nepal. The importance of demographic variable is gradually increasing
for market segmentation.
iii. Psychographic: life style and personality variable are not much used for market
segmentation. Some high priced products like cigarettes and liquors use personality
variables.
iv. Behavioral: Benefits, usage rate, and loyalty, have been neglected for segmentation in
Nepal.
3. Lack of Information: Nepalese marketers lack comprehensive information about consumer

characteristics. They regard marketing research as a “wasteful cost”. This has constrained the
effective evaluation of market segment in terms of their attractiveness and appropriateness.
Risk are not properly assessed.
4. Government Policies: Government policies in Nepal are not very supportive of marketing.
They do not regard businessmen as partners for development. Restrictions and control have
discouraged market segmentation.
5. Lack of Ethical Considerations: Environmental and welfare considerations are generally
disregarded for market segmentation in Nepal.
The concept of marketing segment is at an initial stage in Nepal. However, the importance of
marketing segmentation is likely to increase in the years to come.
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CHAPTER 5: MARKETING INFORMATION SYSTEM
5.5 PROBLEMS OF MARKETING INFORMATION SYSTEM IN NEPAL
1. The Nepalese market has traditionally been a seller’s market characterized by control.
Shortages and scarcities. Most of the organization lack effective marketing information
system. Marketing decision are largely based on hunches and intuition where personal
knowledge and experience play an important role.
2. Since 1980, Nepal has adopted the policy of liberalization and privatization. Globalization of
the economy has been increasing. The growing competition has led to the emergence of a
buyer’s market. Computerization is increasing in business enterprises. This has led to
growing awareness about the importance of marketing information system for decision
making.
3. The following points characterize the problems of marketing information in Nepal:
a) The marketing information needs are not carefully assessed. Ad-hoc managerial decisions
generally determine such needs.
b) The internal records constitute the most important components of marketing information
system. They are used to make sales analysis, customer demand and marketing analysis.
There is a growing trend toward computerization of internal records but its pace is slow.
c) Marketing intelligence is also used by Nepalese companies in a limited way. They subscribe
to newspapers and magazines. They also use “press cutting services” which provided cutting
of newspaper that are of interest to the company. Sales forces and middlemen also provide
intelligence but they are not properly trained and motivated.
d) Decisions support system has not made much headway in Nepal. Some global companies use
quantitative tools to interpret data. Private sector banks use MKIS for their operation.
e) Marketing research is at an early stage of development. But it is not getting attention from
marketing managers. Some organization have set up their own market research department.
Consulting firms in the private sector have mushroomed to provide market research services.
Professional marketing research firms have started operations in Nepal. Marketing research
in Nepal is dominated by advertising and product – related problems. Customer
characteristics have been little researched.
f) Nepal has been fast introducing new information technology. It is expected that the growth of
market information technology will be rapid in 21st century. The demand for market research
is growing marketing is getting on-line.
CHAPTER 6: BUYER BEHAVIOR ANALYSIS
6.6 CONSUMER BUYING BEHAVIOR IN NEPAL:
Consumer buying behavior has generally remained a dark area of marketing in Nepal. Marketers
have given very little attention to who, what, why, when, where, and how of consumer behavior,
very little marketing research has been on this aspect. The following factors characterize
consumer buying behaviors in Nepal marketing:
1. Consumer buying behavior has not been properly taken into account while creating and
offering market mixes.
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2. Nepalese marketers lack knowledge of consumer buying behavior.

3. Marketers know very little about the consumer behavior at every stage of the consumer
buying process. The post-purchase stage is hardly considered to build lifelong customers.
The disposal aspect is neglected which has created serious environment problems.
4. Marketers have not given proper attention to the psychological and social factors that
influence consumer buying behavior Economic, demographic and cultural factors have been
dominant in the design of the marketing mixes and market positioning.
5. The marketing resources have not been efficiently utilized.
6. In recent years, the advent of global enterprises and e-commerce has brought some
consciousness about the need for better understanding of customer buying behavior the
emergences of marketing research organization is likely to promote marketing research about
consumer buying behavior in Nepal.
CHAPTER 7: PRODUCT DECISIONS
7.3.1. REASONS FOR NEW PRODUCT FAILURE
New product have high failure rate. The reasons for the product failure are:
1. Development Costs: New product require high costs in terms of research and development.
The level of sales may not be sufficient to recover high development costs.
2. Product Design: New products may not be well-designed. They may not satisfy the needs of
the customers.
3. Market Size: The size of market may be small to generate sales. Fragmented markets can
result in product failure. Wrong segment may be selected as target market. This leads to
product failure.
4. Competition: Competitors can launch a better new product. They can be first in launching
the new product. The product can be imitated by competitors.
5. Positioning: The new product may be incorrectly positioned in the market. Consumers may
not perceive the product as different from competing products.
6. Price: The price may be overpriced or underpriced. Customers may perceive poor value in
the product.
7. Distribution: The channels and logistics for the product may not be well designed. It may
not be available or accessible to consumers.
8. Promotion: the product may lack effective promotion. The promotion mix may not be
appropriate.
9. Government Regulation: The product may not meet environmental standard, quality
regulations or consumer welfare provisions. Its marketing may not be allowed.
10. Favored Idea: the product may be a favored idea of an executive. It may have no relevance
to customer needs.
11. Organization arrangements: They can be ineffective for management of new products.
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CHAPTER 8: PRICE DECISION
8.2.5 FACTORS AFFECTING PRICE DETERMINATION

Several factors affecting price determination. They can ne internal factors and external factors.
1. Internal factors are:

a) Price objectives
b) Cost
c) Other elements of marketing mix: Product, Place, Promotion.
d) Organizational structure.
2. External factors are:
a) Market demand
b) Competition
c) Market intermediaries
d) Government
e) Pressure groups
Figure: Factors Affecting Price Determination
Internal Factors
Internal factors affect price determination. They are controllable by the organization. They are:
a) Pricing Objectives: Pricing objectives guide price determination. They can be profit, sales,
status quo, and quality. Profits volume can be target return or satisfactory return. Sales can be
in terms of volume or market share. Status quo can be in terms of price stability, competition,
or survival. Quality can be in terms of leadership or imitation.
b) Costs: Cost must be covered by price. Cost can be production cost for raw materials, labor
and production expenses. They can be indirect costs for transport, promotion, and office
expenses. Costs vary for different levels of output. Costs set the lower limit for price. Total
30
costs of a product can be classified into various and fixed. Variable costs directly vary with
the level of production. Fixed costs do not vary with production levels. Price should cover
variable costs and fixed costs.
c) Other elements of marketing mix: product, place and promotion affect price determination.
i. Product: New innovative product provides pricing freedom. Imitation product is sold at
competitive prices. Differentiated products can be sold at different prices. Price changes are
necessary over the product life cycle, for example high price at introduction stage and low
price at maturity stage.
ii. Place: Long channels increase commission’s costs. Price differs according to type of
channel. Transportation mode also affects price. Air transport is expensive than road
transport.
iii. Promotion: Product promotion affects price. Aggressive advertising and sales promotion
add to costs. Locally promoted products are less expensive than nationally promoted
products.
d) Organization structure: pricing responsibility in the organization structure affects price.

Finance department is concerned about realizing costs and making profits. Marketing
department uses price to promote brand image and consumer satisfaction.
External Factors
External factors affect price determination. They are not controlled by the organization. They
are:
a) Market Demand: The demand for the product affects price. Elasticity of demand is also
important. It is the amount of quality demanded when price changes. Demand can be elastic
and inelastic. The market demand sets the upper limit for the price. Elastic demand changes
with price. Inelastic demand is not affected by price.
b) Competition: Competitors affect price. If the product is similar, the price also has to be
similar. Higher price can be charged for superior products. Competitor’s reaction to the price
change is also important. Competition at the brand level can encourage brand switching.
o The type of competition – pure, oligopoly, monopolistic-also affect price.
When RARA chau chau was launched Magee noodles was already established in
. the Nepalese market. RARA set the same price as that of Magee.
c) Market Intermediaries: They are suppliers, middlemen, transport, and financial institute. If
intermediaries change prices, the product price is affected. Price hike by suppliers, transport
and banks increase costs. Higher commission to middlemen leads to higher prices.
d) Government: Government policies and regulation affect price. Price can be controlled by
the government. New taxes or change in taxes affect price. Government subsidies reduce
price. Government can increase or decrease supply to influence price. Legal compliance is a
must for pricing.
e) Pressure Group: Pressure group is motivated by special concerns and interests.
Environment concerns lead to added costs for controlling pollution. Consumer interest group
31
pressurize to reduce Nepal, such group are emerging. But they are poorly organized,
politically motivated and weak in action.
CHAPTER 9: PLACE DECISIONS ( DISTRIBUTION)
9-2 MARKETING MIDDLEMEN

Marketing middlemen make the flow of goods smooth between manufacturer and customer.
They can be:
1. Wholesalers: They deal with retailers.
2. Retailers: They deal with customers
3. Agents: They represent buyer or seller but do not take title to goods.
4. Facilitators: They assist in distribution.
1. Wholesaler
Wholesalers are merchant middlemen. They take title to the goods. They deal with retailers.
They do not deal with the ultimate consumers. They buy for reselling. Their transaction are large
in volume. They cover large trade areas. They serve as an important link between the
manufacturers and the retailers. They are of many types.
 According to Philip Kotler:

Wholesaling includes all the activities involved in selling goods or services to those who
buy for resale or business use.
Role of Wholesaler in Distribution system

Wholesalers are important not only to manufacturers but also to retailers.
Figure: Role of wholesaler in distribution system
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Role of Wholesaler for Manufactures:

a) Distribution Efficiency: Wholesalers perform wholesaling function more efficiently than
manufacturers. Transaction costs decrease due to decrease in the number of transaction
between manufacturers and customers. Distribution efficiency increases.
b) Bulk Buying: Wholesalers buy product in large volume (bulk buying). They sell them in
smaller lots (bulk buying). Their activities match product with customer needs. They
maintain storage facilities. This reduces selling costs.
c) Financing: Wholesalers carry large inventories in warehouses. They finance manufacturers
by timely payment of bills. They also make advance payment to manufacturers.
d) Risk Bearing: Wholesalers take title to the product. They bear all the risk of price changes,
damage, spoilage, and obsolescence related to goods. They hold inventory.
e) Market Coverage: Wholesalers operate through a network of retailers. This facilitates
intensive distribution of products. Manufacturers can realize economies of scale through high
volume. They can cover multi-segments of market.
f) Promotion: Wholesalers push products to retailers. They undertake cooperative advertising
with manufacturers and retailers. They help to implements sales promotion schemes.
g) Market Information: Wholesalers are near to marketplace. They provide information to
manufacturers about customer’s needs, competitor’s activities, price changes, new product,
and environmental changes.
Role of Wholesalers for Retailers:

a) Efficiency: Wholesalers make speedy delivery of goods to retailers. This results in cost
savings. Efficiency of retailer’s increases.
b) Assortment of Goods: Wholesalers buy various products from various manufacturers. They
provide an assortment of goods to meet the needs of retailers. This help retailer’s to carry
small inventories. Their inventory cost decrease.
c) Financing: Wholesalers provide credit facilities to retailers. This helps retailers to manage
their cash flow pressures.
d) Technical support: Wholesalers provide technical support to retailers for window display,
point-of-purchase display, training of salespersons and installations of information
technology. They also provide after sales services.
e) Promotion: Wholesalers provide promotional materials to retailers. They also participate in
promotional campaigns launched by retailers at local level by cost sharing. They also help to
implement sales promotion schemes.
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Wholesalers are of many types

1. Merchant Wholesalers: They are independently owned. They take title to goods. Also known
as Distributor. They can be:
a) Full-service Wholesaler: Provide a full line of services. They can be
 Wholesale merchants: sell to retailers.
 Industry Distributer: sell to manufacturers.
b) Limited Service Wholesalers: Provide fewer services. They can be:
 Truck wholesaler: Pick goods from producer and deliver to retailers.
 Cash and carry: Sell to retailers on cash basis; no delivery.
 Drop shippers: Arrange for the product to deliver goods to retailers.
 Producer cooperatives.
2. Brokers: Bring buyer and sellers together and assist in negotiation. They earn commission. They
do not take title to goods.
3. Agents: Represent buyer or seller. They do not take title to goods. They can be:
a) Manufacturer Agent: Represent manufacturers.
b) Selling Agent: Have authority to enter into contract.
c) Purchasing Agent: Purchase for buyers.
2 Retailers
Retailers are merchant middlemen. They deal with customers. They link manufacturers with
ultimate consumers. Their transactions are small in volume. They take title to the goods. They
buy from reselling. This location, display, atmosphere, and interpersonal skills are important
factors in retailing. Retailers are of many types.
According to Philip Kotler:

Retailing includes all the activities involved in selling goods or services directly to final
consumers for their personal, non-business use.
Retailer is any business enterprise whose sales volume comes primarily from retailing. The
product can be sold in person, by internet, telephone, mail, or vending machine. It can be sold in
a store, street, or at home. Cyber stores are appearing fast.
Role of the Retailer in Distribution System

Retailers serve as sales specialist for wholesalers. They serve as purchasing agent for the
consumer. They play important roles for wholesalers and customers.
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Figure: Role of retailer in distribution system
Role of Retailer for Wholesalers:

a) Distribution Efficiency: Retailers perform retailing functions more efficiently than the
wholesalers. Transaction costs decrease due to decrease in the number of transaction between
wholesalers and ultimate consumers. The delivery cost are low. These activities save
distribution costs.
b) Financing: Retailers carry and store inventories in small lots. They convert products into
cash through the selling function. They financing wholesaler by timely payment, of bills.
They bear the risk by taking title to the goods.
c) Market Coverage: Retail outlets exist in every nook and corner of the country. They make
shopping convenient to customers. Economist of sale can be realized through intensive
distribution.
d) Promotion: Retailers promote product to ultimate consumers. They undertake store display
and point-of-purchase display. They carry out local advertising. They participate in
cooperative advertising with wholesalers. They implement sales promotion schemes.
e) Information: Retailers are nearest to the marketplace. They build long term relationship
with the consumers. They provide information about consumer needs, behavior, and
preference. They also provide information about competitor’s activities relating to product,
price, and promotion. They also assist in market surveys.
Role of Retailer for Consumers

a) Product Assortment: Retailers provide product assortments to consumers. This facilitates
exchange. Consumers can match products with need and purchasing power. They get choice
in terms if features, advantage, and benefits of products.
b) Credit: Retailers provide credit facilities to consumers. They sell feeds on hire-purchase and
arrange financing from financial institution.
In Nepal, consumer’s purchase of cars and motorcycles financed by banks and financial
companies is popular.
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c) Information: Retailers provide information to consumers about new product, changing

fashion price fluctuations, and sales promotion schemes. Such information is useful for
making buying decisions. Consumers get free advice from retailers.
d) Service: Retailers offer a variety of service consisting of delivery, installation, repair,
maintenance, and supply of spare parts. They serve as authorized “Service Centers”. Large
retail establishment include restaurants, health clubs, beauty parlors, and children’s play
corner in their product assortment, they provide advice to consumers.
CHAPTER 11. EMERGING CONCEPTS IN MARKETING
11.4 GREEN MARKETING
Green marketing is a form of marketing in which marketing managers consider the impact of
marketing in the natural environment. It is environmental-friendly marketing. It considers
environmental consequences of marketing activities. It promotes environmental protection
through marketing efforts. It develops a sense of “green responsibility” in marketing. It does not
contribute to global warming. It contributes to environmental sustainability.
The beginning of the concept of green marketing can be traced to the Earth Summit Conference
held in 1992 at Rio de Janeiro. It emphasized the importance of protecting the environment by
raising environmental awareness among consumers and business people. Many countries if the
world have strong green movements. They build public options for green marketing. They
advocate legislation favoring environmental-friendly marketing. They have imposed restrictions
on marketing of products that are not environment-friendly.
Main points in the concept of Green Marketing

1. It is environmental-friendly marketing. It does not increase pollution.
2. It considers environmental consequences if marketing.
3. It develops sense of green responsibility in marketing.
4. It promotes consciousness among consumers and business people to protect environment.
5. It advocates legislation for environment-friendly marketing
.
11.4.1 Requirement for Green Marketing

Green marketing requires:
1. Commitment: Green marketing requires commitment from top management and marketing
managers for environmental protection. It is regarded as everybody’s responsibility in the
organization. Environmental officer is appointed to promote green marketing.
2. Pollution Control: Green marketing requires avoidance of marketing decisions that cause:
 Pollution of air, water, noise.
 Erosion of bio-diversity and land degradation.
 Deforestation, desertification, drought.
 Industrial waste.
 Depletion of non-renewable natural resources through wasteful uses.
 Release of toxins into the atmosphere.
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3. New Technology: Green marketing requires new technology that prevents pollution.
Environmental-friendly clean technology is used. Digitalization, robotics, and
nanotechnology is used for clean manufacturing. Production processes are also
environmental-friendly.
4. Use of Recyclable Materials: Green marketing requires the use of materials that can be
recycled. Consumer acceptance is promoted for recycled products. Generally, packaging
materials are recyclable. Recycling of waste provides viable business opportunity. Excess
packaging is avoided. Biodegradable materials are used.
5. Legal Framework: Green marketing requires legal framework that promotes environment
protection. It provides incentives for environment protection and punishment for
environment pollution.
6. Use of Eco labels: Environment friendly products carry Eco-labels. Germany has eco-
labeling programme to identify eco-friendly products through “Blue Angel” logo. European
commission has issued guideline for eco-labeling.
7. Consumer Consciousness: Green marketing requires arousal of environmental
consciousness among consumer, Education, training, and publicity campaigns and launched
and information dissemination is done to arouse consumer consciousness. Consumer demand
environment-friendly products. They prefer durable rather than disposable products. They
willingly accept recycled products. They reject products with excessive packaging.
Consumers “Think Green”.
Green Marketing in Nepal

 Waste paper is recycled to produce handicraft and egg-trays.
 Bio-waste is converted into fertilizer.
 Plastic bags are recycled into pipes.
 Waste materials are converted into bio-briquettes.

11.4.2 Tools for Green Marketing

The tools of green marketing are:
37
1. Legal Framework:
Environmental-friendly legal framework is put in place. Facilities and incentives are
provided for environmental protection. Penalties and fines are imposed for environmental
degradation. Environmental impact assessment is made compulsory for industries,
development projects and other activates detrimental to environment.
2. Environmental Friendly Technology:
Environmental friendly machineries and equipment are made compulsory for industries that
pollute environment. Pollution control technology is also used. Pollution tax is imposed on
all pollution activities.
3. Biodegradable Materials:
Polluting materials, especially, plastic, are banned for packaging purpose. Tax incentives are
given for use biodegradable materials and recycling of such materials. Plastic bags are
banned.
4. Think Green:
Everybody in the organization from chief executive officers to peons think green. Marketing
activities are guided by this philosophy. Campaigns are launched to arouse consciousness
for green marketing.
ETHICS:
Ethics involves moral issue, standards and choices that guide behavior. It is an individual’s
Personal beliefs regarding right and wrong or good or bad. They are code of conduct for people.
Ethics behavior conforms to generally accept social norms. It is doing the right thing. It is a
measure of integrity. It is concern for doing the right thing.
Ethics are acceptable standards of behavior that guide professional service marketing. They
involve moral issues. They involve respecting the interest of stakeholders. They define values,
moral duties and obligation at workplace.
11.1 Factors that influence ethics is professional service marketing
38
a) Ethical Standard of managers: They are the source of individual ethics. A manager’s
values and moral contribute to ethical standards. They shape his personal code of ethics.
They influences employer-employee relation. Greed and fear encourage unethical acts.
b) Action of Peers and Top, Managers: They are the source of professional ethics. Actions of
peers and top management influence professional service marketing. High ethical standard by
top management contribution to ethical standard of individual managers. Pressures to
perform can lead to unethical acts.
c) Organization Culture: Organization culture can contribute to ethical standard of managers.
Code of ethics lay down moral rules for decision making. They prohibit bribes and
corruption. Which promotes ethical standard in professional service marketing practices. It
prohibits unethical practices. It integrated ethical behavior in performance criteria.
d) Organizational environment: Organization wide consciousness regarding ethical standards
contributes to ethical behavior of managers. Policies and practices also influence ethics.
Ethical behavior should be appreciated and promoted.
e) Societal Forces: They are the source if society ethics. They consist of values, standards and
embodied in society’s affect management ethics. Violation of human rights is unethical. So is
sexual harassment at work.
11.2 Significance Of Service Marketing Ethics In Professional

Ethics affect marketing action and practice in following ways:
a) Promotion of Social Responsibility: ethical behavior promotes sense of social
responsibilities in marketing managers give careful consideration to the social goods in their
decisions and actions. Image of organization improves.
b) Treatment of Employees by Organization: Ethical standards affect hiring, firing, wages
and working conditions. Promises made to employees are kept. Transparency is maintained.
Team work is facilitated. Harassment at work place is avoided.
c) Treatment of Organization by Employees: Ethical standards affect employee treatment of
organization in terms of:
 Conflict of interest: No individual gains at the detriment of organization. Accepting
bribe is regarded unethical.
 Secrecy: No leaking of organization secrets. Keeping confidentiality norms.
 Honesty: integrity is promoted
d) Treatment of other Economic Agent by organization:
Ethical standards encourage managers to:
 Maintain business ethics in customer relations.
 Maintain fair business practices towards competitors.
 Maintain honesty with stakeholders.
 Maintain fairness in dealing with labor unions.
 Protect interest of society.
Ethic serves as a guide for good behavior. It applies ethical norms to professional service
marketing.
39
11.3 Ethics is Professional Service Marketing:

Service is identifiable, intangible and perishable activity designed to provide want satisfaction to
clients. It does not result in the ownership of anything.
Professional service is people-based. They are provided through personal skills. They satisfy
client needs clients are generally organization who legally or voluntarily requires such services.
Chartered accountants are engaged in providing professional services.
Professional services are provided by professionally trained people. Training and motivation of
service providers is important for professional service marketing. The institute of chartered
accountant of Nepal is legally authorized to produce theoretical and practical training to charter
accountants in Nepal.
11.4 Code of Ethics for Professional Accountants prescribed by ICAN, Nepal

1. Integrity:
Professional Accountants should be straight forward and honest in all professional and
business relationships with fair dealings and truthfulness.
2. Objectivity:
Professional should not compromise their professional or business judgment because of
bias, conflict of interest or the undue influence of others.
3. Professional Competence and Due Care:
Professional Accountants should maintain professional knowledge and skill to ensure that
clients or employers receipt competent professional services by acting diligently in
accordance with applicable technical and professional standards.
4. Confidentiality:
All professional accountants should maintain confidentiality of information acquired as a
result of professional or business relationship.
5. Professional Behavior:
All professional accountants have an obligation to comply with relevant laws and
regulations.
40

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COURSE: CAP II

SUPPLEMENTARY STUDY PAPER - 2015

[Covers amendments made by the New syllabus]

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF

S.No Content Page No

PAPER 3: CORPORATE LAW

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF NEPAL

INSURANCE ACT 2049

SOCIAL WELFARE ACT, 2049

institutions, their development, strengthening and extensions.

Provided that, yearly assistance up to Two Hundred Thousand Rupees for

WTO AND NEPALESE LAWS:

developed countries) countries as an observers, most seeking membership.

Legislative Process of Nepal

Table of law making compliance

PAPER 6A: BUSINESS COMMUNICATION

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF NEPAL

CHAPTER -1 : COMMUNICATING AT WORK

OVERCOMING INTERPERSONAL COMMUNICATION BARRIERS

D. ENVIRONMENT AND ECOLOGICAL RESPONSIBILITIES

SELF- ASSESSMENT DEVICES

CHAPTER 2 – WORKING IN GROUPS

CHAPTER 3- COMMUNICATING ACROSS CULTURES

5. WRITING TO AN INTERNATIONAL AUDIENCE

SELF- ASSESSMENT TOOLS

CHAPTER 4- EMPLOYMENT COMMUNICATION

CHAPTER 5 – ANALYZING INFORMATION AND WRITING REPORTS AND

3. COLLECTING AND CHOOSING INFORMATION FOR REPORTS

USE OF STATISTICAL TOOLS IN ANALYSIS AND INTERPRETATIONS

Stages of reports writing

3. Editing and presentations stage

Conceptual Framework of Reports Types

2. Components of Investigation Reports

PAPER 6B: MARKETING

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF NEPAL

CHAPTER 1: MEANING OF MARKETING AND MARKETING MIX

1.4 EMERGING MARKETING CHALLENGES

The following are the emerging marketing challenges:

10. Holistic Approach:

CHAPTER 2: EVOLUTION OF MARKETING CONCEPTS

2.8 HOLISTIC CONCEPT OF MARKETING

Starting point Focus Means Ends

Target All market matters  Integrated marketing Goals is

Figure: Holistic Concept of Marketing

The holistic concept has the following features:

 Integrated marketing to efficiently and effectively utilize marketing resources. All

Figure: Four Pillars of Holistic Concept of Marketing

CHAPTER 3: ENVIRONMENT CONTEXT OF MARKETING

3.4 IMPACT OF ENVIRONMENT ON NEPALESE MARKETING

CHAPTER 4: MARKET SEGMENT AND TARGETING

4.5 MARKET TARGETING:

1. Single segment coverage:

2. Multi- Segment Coverage of Marketing:

3. Product Specialization Strategies:

4. Market Specialization Strategy:

5. Full Market Coverage:

4.6 MARKETING SEGMENTATION IN NEPAL

The following points describe the practices of marketing segmentation in Nepal:

3. Lack of Information: Nepalese marketers lack comprehensive information about consumer