HSC OCM Question Paper July 2022 with Solution | Maharashtra Board (Download Free PDF)

HSC OCM Question Paper July 2022 with Solution

HSC OCM Question Paper July 2022 with Solution
HSC OCM Question Paper July 2022
  • 12th Commerce July 2022 Question Papers – View
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12th Commerce OCM Textbook Solutions

Chapter Name Solution Link
1) Principles of ManagementClick Here
2) Functions of ManagementClick Here
3) Entrepreneurship DevelopmentClick Here
4) Business ServicesClick Here
5) Emerging Modes of BusinessClick Here
6) Social Responsibilities of BusinessClick Here
7) Consumer ProtectionClick Here
8) MarketingClick Here

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Old Question Papers of 12th Commerce with solution (All Subjects)Click Here

Students Appearing for Maharashtra 12th Class Exam need to Get Familiar with the Exam Pattern and Question Paper design. They Should also know the Marking Scheme of the Upcoming Maharashtra 12th class Exam 2022, Students who are Searching for Maharashtra 12th Class Question Paper 2022 can Find the Complete list of Subject Wise Annual, Supplementary & Model Question Paper of the New Syllabus

HSC OCM Question Paper July 2022 with Solution

Q. 1. (A) Select the correct option and rewrite the sentences: (5) {20}

(1) Principle of __________ is based on “a place for everything and everything in its place”.
(a) discipline
(b) order
(c) equity

(2) Principle of ________ is not applicable to life insurance.
(a) insurable interest
(b) utmost good faith
(c) indemnity

(3) The process of contracting a business function to someone else is called as __________ .
(a) outsourcing
(b) trading
(c) e-business

(4) Making timely payment of proper taxes is the responsibility of organisation towards ________ .
(a) shareholders
(b) consumers
(c) government

(5) The term market is derived from the _________ word ‘mercatus’.
(a) French
(b) Latin
(c) Italian

(B) Match the pairs : (5)

Group ‘A’Group ‘B’
a) Controlling1) Intangible in nature
b) Business Services2) Consumer to consumer
c) B2C3) 1930
d) Consumer Protection Act4) It is the process of comparing the actual
performance with the predetermined
standard performance
e) Branding5) 2019
6) Concept of Market
7) It is an integration and synchronisation of the
efforts of group
8) Tangible in nature
9) Business to consumer
10) Distinct Name

A-4, B-2, C-9, D-5, E-10

(C) Give one word / phrase / term: : (5)

(1) First function of management.

(2) A type of bank account where a fixed sum of money is deposited for a fixed period.
Fixed Deposit

(3) Employment generation is the responsibility of the organisation towards this group.

(4) One who consumes any commodity or service.

(5) A place where goods and services are bought and sold.

(D) State true or false : (5)

(1) Standards are not set for every performance in controlling function. (False)
(2) Business services are important for the growth of business. (True)
(3) It is easy to set up e-business as compared to traditional business. (True)
(4) Media does not play an important role in public life. (False)
(5) Consumer, being the king of the market, does not have any rights. (False)

Q. 2. Explain the following terms/concepts: (Any Four)(12)

1) Esprit de corps (Team work)
Answer: Henry Fayol has given the emphasis on teamwork. Esprit de corps means union is strength. Running any organization is a group activity and human resources are a valuable asset of the organization. If all employees are working as a union and with mutual trust, the difficulties can be solved quickly. Therefore, as a leader, manager should create a spirit of teamwork and understanding among employees to achieve organizational goals easily.

2) Organising
Answer: Organizing is the process of identifying, and bringing the required resources together such as men, money, material, machine, and method, grouping and arranging them properly for achieving the objectives. This function is important for the execution of the plans which have been prepared by top-level management people.
The synchronization and combination of workforce, physical, financial, and information resources are established in the process of organizing.

3) Banking
Answer: As per The Indian Banking Regulation Act, 1949 banking company means “any company which transacts the business of banking in India” and the word banking has been defined as “accepting for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, and order or otherwise.

4) Directing
Answer: Directing is the soul of the management function. It is the process of instructing, guiding, communicating, inspiring, motivating and supervising the employees to achieve the predetermined goals of an organization. Direction is a continuous function initiated at top level and flows to the lower level through organizational hierarchy. It is a continuous managerial process that goes on throughout the tenure of the organization.

5) Lok Adalat
Answer: Lok Adalat is an effective and economical system for quick redressal of public grievances. It can also be referred to as ‘People’s Court’.
It is established by the government to settle disputes by compromise. The aggrieved party can directly approach the Adalat with a grievance, issues are discussed on the spot, and decisions are taken immediately. Resolution of disputes by Lok Adalat gets statutory recognition. e.g. MSEDCL, MSRTC, Railway Authority, Insurance Companies, Banks, etc. organize regular Lok Adalat.

6) Central Bank
Answer: The central bank is the apex financial institution in banking industry in the country. Every country has their own central bank. In India, The Reserve Bank of India (RBI) is the central bank. The RBI was established in 1935 under the Reserve Bank of India Act, 1934.
Some functions of RBI are as follows:
i) Frames monetary policy
ii) Issues currency notes
iii) Acts as a banker to the Government
iv) Acts as a banker’s bank to commercial and other banks in India.

Q. 3. Study the following case/situation and express your opinion : (Any Two) (6)

1) Ms.Harshali started new business two years ago. Her customers are located in different parts of the country and hence they are directly depositing bill amount in her business account. At the same time she used to pay various payments from this account only.

a) Identify Type of account maintained by Ms. Harshali.
b) Suggest any one modern way of money transfer to Ms.Harshali.
c) Mention the facility she gets on her business account to meet her working capital requirement.

a) Ms. Harshali maintains current account.
b) NEFT stands for National Electronic Fund Transfer is one of the modern ways of transferring money. Ms. Harshali can use this facility.
c) Ms. Harshali gets overdraft facility on her business account to meet her working capital requirement.

2) An organization manufacturing paints has been enjoying a prominent market position since many years. It has been dumping its untreated poisonous waste on the river bank, which has created many health problems for the nearby villages.

a) Which responsibility is neglected by manufacturing organizations?
b) What kind of pollution they are doing?
c) Mention any one precautionary measure they need to take.

a) Responsibility toward the protection of the environment is neglected by manufacturing organization.
b) They are creating water pollution by dumping its untreated poisonous waste on the riverbank.
c) Proper waste management techniques should be used by which waste should be reduced or reused.

3) Mr. Jagdish purchases watch from Titan shop and his friend Shambhavi purchases watch from online shopping site.
a) Who shops through traditional business?
b) Which shopping is done through e-business?
c) Which business involved high risk?

a) Jagdish shops through traditional business.
b) Purchase of watch by Shambhavi from online shop is an example of shopping from e-business.
c) From customer point of view online business involved high risk because there is no direct contact, and from business point of view traditional business involve high risk because it requires more capital.

Balbharti Textbook Solutions for other subjects
Solution of all Chapters of OCM

Q. 4. Distinguish between the following: (Any Three) (12)

1) District Commission and National Commission.

PointsDistrict CommissionNational Commission
1) MeaningA consumer dispute redressal forum at the district level
established by the State Government is known as District
A consumer dispute redressal forum at the National level
established by the Central Government by notification is
known as National Commission.
2) PresidentA person who is sitting or retired
or qualified to be District Judge.
A person who is or has been a judge of the Supreme Court,
shall be appointed as the president National Commission.
3) MemberNot less than two and not more than such number of members as may be prescribed, in consultation with the Central GovernmentNot less than four and not more than such number of members as may be prescribed.
4) Membership TenureThe members can have the membership for a term of five
years or upto the age of sixty-five years, whichever is earlier.
The members can have the membership for a term of five
years or up to the age of sixty-seven years and president upto seventy years, whichever is earlier.
5) Area coveredIt covers particular districtIt covers the entire country.
6) Monetary JurisdictionTo entertain complaints where the
value of the goods or services paid as consideration does
not exceed Rs. one crore.
To entertain complaints where the
value of the goods or services paid as consideration exceeds
Rs. ten crores.
7) AppealAn appeal against the District Commission can be made to the
State Commission.
An appeal against the National Commission can be made to the Supreme Court.

2) Saving Account and Current Account.

PointsSavings AccountCurrent Account
1) MeaningIt is that account that is opened by individuals in order to save a part of their income.It is that account that is maintained by businessmen and others who have regular bank transactions.
2) WithdrawalsCustomers can withdraw either by cheques or by withdrawal slips.Customers can withdraw money by cheques.
3) DocumentsThe bank gives a passbook, cheque book, and pay-in-slip book to the customers.The bank gives a passbook, checkbook, statement of account, and pay-in-slip book to the customers.
4) Who opens itIt is suitable for fixed income groups, wages, or salary earners.It is suitable for traders, businessmen, firms, or institutions.
5) RestrictionsThe customer has certain restrictions on withdrawals.There are no restrictions on the 
operation of a current account as long as there is a balance in the acount.
6) Interest RateThe interest rate is low.Normally interest is not given.
7) Nature of accountIt is of continuous Nature.It is of continuous Nature.
8) FacilitiesNo overdraft facility is given. A temporary overdraft facility is given.

3) Staffing and Controlling

1) MeaningThe staffing function pertains to the recruitment, selection, development, training, and compensation of subordinate
Controlling is the process of taking steps to bring actual results and desired results closer together.
2) ObjectiveTo appoint right type of people at the right positions and the right time. To ensure that the objectives are achieved according to the plan.
3) Area of functionIt includes recruitment, selection, training, development, and compensation of human resources.It includes setting up of standards, 
measurement, and comparison with actual performance and taking corrective steps whenever 
4) FactorsStaffing is mostly concerned with internal factors.Internal and external factors are taken into account for taking corrective action.
5) ResourcesIt is the process relating to organization of human resources.It is related to all organizational resources which help to achieve goal of organization.
6) Level of managementMiddle-level management is related with recruitment, training and selection Top level is concerned with promotion and 
Top and middle-level management are responsible for controlling the activities.

4) E-Business and Traditional business

PointsE-BusinessTraditional business
1) FormationE-Business is easy to form.Traditional business takes lengthy and complicated procedure to form.
2) Setting up costIt takes a very nominal cost.It takes huge capital in order to setup.
3) Risk InvolvedHigh risk involved as there is no direct contact between the parties.Less Risk involved as parties have personal interaction.
4) Area coveredE-Business covers entire world and so scope is vast.Traditional business is limited to particular area so scope is limited.
5) Customer interactionIn E-business, there is absence of face-to-face interaction.Face-to-face interaction is possible.
6) Physical inspectionGoods cannot be inspected physically before purchase.Goods can be inspected physically before purchase.
7) Resource focusE-business resources focus on demand side.Traditional business resources focus on supply side.
8) Delivery of goodsIn E-business delivery of goods takes time.In traditional business delivery of goods is instant.

Q. 5. Answer in brief : (Any Two) (8)

1) Explain 4p’s of marketing mix.

Answer: Marketing mix is putting the right product, at the right time, at the right price in the right place.

Following are the 4p’s of the product marketing mix.

1) Product

Product refers to the goods or services that are offered to the customers for sale and are capable of satisfying the need of the customer. The product can be intangible or tangible, as it can be in the form of services or goods. The business needs to decide on the right type of product through extensive market research. The success of the business depends on the impact of the product in the minds of the customer.

2) Price

The price of the product is basically the amount that a customer pays for the product. Price plays an important role in creating demand for the product. The business needs to take utmost care to decide the price of the product. A too high price may affect the demand for the product and pricing too low may affect the profitability of the business.

3) Place

The place is also known as a distribution channel. Placement or distribution is a very important part of marketing. A businessman needs to make the product available to a potential customers at the right place. Business needs to distribute the product in a place that is accessible to potential buyers. It covers location, distribution, and ways of delivering the product to the customer. Better the chain of distribution higher the coverage of the product in the market.

4) Promotion

Promotion is an important element of marketing as it creates brand recognition and sales. Promotion is a tool of marketing communication that helps to publicize the product to the customer. It helps to convey product features to the potential buyer and induce them to buy it. The promotion mix includes tools such as advertising, direct marketing, sales promotion, personal selling, etc.

2) Explain any four rights of consumers.

Answer: Every consumer should be aware of his rights and use them in his daily life for protection. Consumers have to fight for their rights and put pressure on businesses, manufacturers, and traders for safeguarding their rights.

Following are the rights of consumers:

1) Right to Safety

This right protects consumers against products, production processes, and services that are hazardous to health or life. According to this right, the consumer must get full safety and protection to his life and health. This safety should be in relation to medicines, electrical appliances, food, etc. The GOI has given safety standards in the form of AGMARK, lSI, BIS, Hallmark, etc.

2) Right to Information

According to this right, consumers should be provided with adequate information about all aspects of goods and services like price, name of the manufacturer, contents used, batch number if any, date of manufacture and expiry date, user manual, safety instruction, etc. This right also enables consumers to select the right product or service. It is applicable to food products, medicines, spare parts or any other consumer products or services.

3) Right to Choose

According to this right, consumers should be given full freedom to select an article as per their requirement, liking, and purchasing capacity. The right to choose is related to the concept of a free-market economy. As per this right, the seller cannot compel consumers to buy a particular product and hence monopoly is prevented.

4) Right to be heard

Every business organization should listen to and solve the complaints of consumers. According to this right, consumers have the opportunity to voice their complaints to the consumer forum. Consumers also give suggestions to manufacturers or traders on certain matters such as quality, quantity, price, packaging, etc. Nowadays, consumers can file online complaints through portals or mobile applications.

3) Give any four types of warehouses.


1Private Warehouses

The private warehouses are owned and operated by big manufacturers and merchants to fulfill their own storage needs. Big business firms which need large storage capacity on a regular basis and who can afford money, to construct and maintain their private warehouses. A big manufacturer or wholesaler may have a network of his own warehouses in different parts of the country.

2Public Warehouses

A public warehouse is a specialized business establishment that provides storage facilities to the general public for a certain charge. It may be owned and operated by an individual or a cooperative society. It works under a license from the government in accordance with the prescribed rules and regulations. Public warehouses provide storage facilities to small manufacturers and traders at a low cost.

3Bonded Warehouses

Bonded warehouses are licensed by the government to accept imported goods for storage until the payment of custom duty. These warehouses work under the control of custom authorities. The warehouse keeper is required to give an undertaking or ‘Bond’ that it will not allow the goods to be removed without the consent of the custom authorities. The goods are held in bond and cannot be withdrawn without paying the custom duty.

4Duty-paid Warehouses

If an importer faces any problem in the transportation of goods, after making payment of duty, then goods can be stored at a duty-paid warehouse. All duty-paid warehouses are public warehouses that are available to all importers. Duty-paid warehouses help the importer as proper care of goods is taken, processing of goods can be done like sorting, re-packing, etc.

5Government Warehouses

These warehouses are owned, managed, and controlled by central and state governments or public authorities. It is difficult for small farmers, businessmen, traders to own a warehouse, so these government warehouses assist them in storing their goods at a nominal charge.

Q. 6. Justify the following statement : (Any Two) (8)

1) Principles of management are flexible in nature.

a) Principle is defined as a fundamental truth or proposition that serves as the foundation for a system of belief or behaviour or for a chain of reasoning.
b) Management principles are flexible in nature. It means they can be changed or modified according to the situation.
c) Managers can be flexible while implementing principles to suit the requirement.
d) The business situations keep on changing. Management principles can be adjusted or modified and can be used in the organization according to its need.
e) Thus it is rightly justified that, Principles of management are flexible in nature.

2) The Consumer Protection Act was passed in the interest of consumers.

a) The Central Government initially passed the consumer protection Act on 24th December 1986. In 2019, the Ministry of Law and Justice proposed a new act ‘Consumer Protection Act, 2019’
b) The act has recognized six rights of consumers,

  • The right to be informed about the quantity, quality, purity, price, etc.
  • The right to be protected from hazardous goods and services.
  • The right to make a choice out of a variety of goods.
  • The right to make a complaint about unsatisfactory goods
  • The right to seek redressal from unfair or restrictive trade practices.
  • The right to consumer education.

c) Under the Consumer Protection Act, 2019, a system has been set up to deal with consumer grievances and disputes at the district, state, and national levels.
d) The basic aim of the Consumer Protection Act is to save the rights of the consumers by establishing authorities for timely and effective administration and settlement of consumers’ disputes.
e) The strict enforcement of these rights creates competition among the sellers. Consequently, consumers will get the quality of goods at fair prices.
Hence, The Consumer Protection Act was passed in the interest of consumer

3) Organizing facilitates the administration as well as operation of the organization.

a) Organizing process leads to identifying and too group the activities.
b) Grouping and assigning the activities is the task of administration whereas processing according to it is operational activity.
c) Due to a proper grouping of the tasks and the employees, there is an increase in production and a reduction in wastage.
d) Duplication of work is restricted and effective delegation becomes possible.
e) Thus, organizing facilitates administration as well as operation of the organization.

4) Business organisations have many social responsibilities.

a) Although business organisations are run by profit motive, commitment to society is equally important.
b) Social responsibility of business refers to its obligation to take business decisions and perform actions which are desirable or ethical, in terms of the objectives and values of society.
c) It involves an element of voluntary action on the part of business people for the benefit of society.
d) Business organisations need to fulfil various responsibilities towards their owners, investors, employees, consumers, government and society at large.
e) Hence, business organisations have responsibilities towards different interest groups.

Q. 7. Attempt the following : (Any Two) (10)

1) Explain various concepts of market.


There are many concepts associated with the word ‘market’ and according to the concept, different definitions of the term market are given below:

1) Place concept of Market

The term market is commonly understood as the place where the transaction of buying and selling of goods and services takes place in exchange of money or money’s worth. It is the place where buyers, sellers, and other intermediaries come together and exchange goods or services.

In the olden days, place played an important role in defining the market. But in the age of information technology, the term ‘market’ has a wider meaning than just a place.

2) Commodity Concept of Market

In the commodity concept of market, emphasis is given on ‘buying and selling of goods or services’. In this concept the process of buying and selling of goods or services is important and not the place of exchange. In this process, buyer and seller as well as the commodity exchanged among them play an important role.

3) Exchange concept of Market

The exchange concept of market has given emphasis on exchange of goods or services between buyer and seller with free consent as well as mutual trust. There should not be any Fraud or Misrepresentation or Coercion or undue influence during the exchange. The exchange should be voluntary between buyer and seller.

4) Area concept of Market

The area concept of the market is related to exchange concept. This concept gives emphasis on free association between buyers and sellers to fix the price of goods for buying and selling. The price fixed between buyer and seller implies in the certain area only. In this concept it is not necessary for buyer and seller to meet in person.

5) Demand or Customer concept of Market

The customer is the king of the market. One of the important perspectives of the market is to assess the need or demand of the customer. The market can be studied from the perspective of demand or customer. According to this concept, the aggregate demand by potential buyers for any product is market.

6) Space or Digital concept of Market

The emergence of Information Technology gave birth to the new concept of the market called as Space or Digital Concept. New and sophisticated E-Commerce Portals and Mobile Applications make buying and selling easy and convenient for buyers as well as sellers. The communication media like telephone, mobile, computer, Internet, etc. have made direct contact between customer and seller. It is easy for the customers to know about the quality, features, price, terms, and conditions, etc. of any products of any company.

2) Explain the characteristics of Entrepreneurship Development.

Characteristics of Entrepreneurship Development:

1) Innovation

Entrepreneurship is an innovation. The introduction of new combination of various factors of productions is innovation. In view of changing taste of consumers from time to time, entrepreneurship focuses on the research and development to produce goods to satisfy the customers.

2) Economic activity

An entrepreneur produces a new product for the customers as per their needs. He feels the need of this to satisfy human wants and as well in exchange earn a better livelihood. Hence entrepreneurship is an economic activity.

3) Organization Building

It is an activity where various factors of production have to be organized. Place utility, time utility, form utility etc. has to be considered to collect them under one roof for new production.

4) Creative activity

Innovation should have strong support of creativity. Introducing creativity in producing something new is a big challenge for the entrepreneur. Thus creativity is an essential part of entrepreneurship.

5) Skillful management

The success of any entrepreneurship depends on the management of the organization. With professional management and skilled managers, entrepreneurship becomes successful activity.

6) Gap filling function

The most significant feature of entrepreneurship is gap filling. It is the entrepreneur’s job to fill the gap or make up the deficiencies that always exist in the knowledge about the production function.

3) Explain any five principles of management given by Henry Fayol.

Answer: Following are the five principles of management given by Henry Fayol.

1) Principle of Division of Work

According to this principle, the work is divided into different kinds such as technical, financial, commercial, security operations, accounting, and managerial. It is assigned to employees as per their qualities and capabilities. It helps in improving the efficiency and expertise of employees which ultimately turns into the expected productivity level.

2) Principle of Authority and Responsibility

Authority is the right to take decisions. It is necessary to get things done appropriately by subordinates. Authority always comes with responsibility. If the manager is given the authority to complete a task within a given time, he should be held responsible if he does not complete the work within the given time. The manager should have the proper authority to take managerial decisions on his own with respect to the goal.

3) Principle of Discipline

According to Fayol, discipline is the most essential thing in the organization. Employees must obey and respect the rules that govern the organization. Discipline helps to achieve the goals of the organization. Good discipline is the result of effective leadership. There must be a clear understanding between the management and workers regarding the organization’s rules. Basic discipline should be observed at all levels of management.

4) Principle of Unity of Direction

This principle states that ‘there should be one head and one plan’ in every organization. Each group in the organization should have the same objective and the group should be directed by one manager using a single plan.

5) Principle of Order

This principle is based on ‘A place for everything and everything in its place. Human resources and materials should be in the right place at the right time for maximum efficiency. Human resources should be placed in right place and on right job. The principle focuses on the proper utilization of physical and human resources.

Q. 8. Answer the following questions : (Any One) (8)

(1) What is insurance? Explain the principles of insurance.

Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss. Insurance is a contract between the insurer and the insured, whereby the insurer agrees to compensate the insured against loss. The insured has to pay a certain fixed sum of money on timely basis to the insurer.

Principles of Insurance:

1) Principle of Utmost good faith

In all types of insurance contracts both the parties must have utmost good faith towards each other. The insurer and insured must disclose all material facts clearly, completely and correctly. The insured must provide complete, clear and correct information of the subject matter of insurance to the insurer. Similarly, the insurer must provide relevant information regarding terms and conditions of the contract. Failure to provide complete, correct and clear information may lead to non-settlement of claim. 

For example, Mr. Shantanu has not provided information regarding his heart surgery at the time of taking policy. After his death, insurance company comes to know about this fact. As Mr. Shatanu has not provided correct and complete information at the time of taking policy, insurance company can refuse to give compensation to his family members.

2) Principle of Insurable interest

Insurable interest means some financial interest in the subject matter. The insured must have an insurable interest in the subject matter of insurance. Insurable interest is applicable to all insurance contracts. It is said to have an insurable interest in subject matter, when the existence of that subject matter puts the insured in financial benefit. Whereas nonexistence of subject matter put him into financial loss.

For example,
i) a person has an insurable interest in his own life and property.
ii) a businessman has an insurable interest in the goods he deals and in the property of business.

3) Principle of Indemnity

Indemnity means a guarantee or assurance to put the insured in the same financial position in which he was immediately prior to the happening of the uncertain event. This principle is applicable to fire, marine, and general insurance. It is not applicable to life insurance as loss of life can never be measured in monetary terms. In case of death of the insured, the actual sum assured is paid to the nominee of the insured. Under this principle, the insurer agrees to compensate the insured for the actual loss suffered.

For example, If a property is insured for Rs. two lacs and if the loss by fire is Rs.one lac, then the insured can claim compensation of Rs.one lac only.

4) Principle of Subrogation

This principle is applicable to all contracts of indemnity. As per this principle, after the insured is compensated for the loss due to damage of the property insured, then the right of ownership of such property passes on to the insurer. This principle is applicable only when the damaged property has any value after the event causing the damage.

For example, Mr. A owns a two-wheeler. The vehicle was stolen and subsequently, Mr.A filed a complaint in local police station. Upon receiving report from police,. the insurance company compensated fully Mr.A for the loss of the vehicle. Later on the stolen vehicle was recovered by police. In this situation, the owner of the vehicle does not have any claim over the vehicle as he has already subrogated i.e. transferred the ownership rights of the vehicle to the insurer. The insurer gets every right to sell or to scrap the said vehicle.

5) Principle of Contribution

This principle is applicable to all contracts of indemnity where the insured has taken out more than one policy for the same risk or subject matter. Under this principle, the insured can claim the compensation only to the extent of actual loss either from one insurer or all the insurers. If the one insurer pays full compensation then that insurer can claim a proportionate amount from other insurers from whom insured has taken policy.

For example, Ms. Sayali insures her property of Rs. Two Lac Fifty Thousand with two insurers, with T Insurance Co. for Rs.One Lac(2/5th of the property value) and R Insurance Co. for Rs.One Lac Fifty Thousand (3/5th of the property value). If Ms. Sayali ‘s property is destroyed and the loss is worth Rs. One Lac Twenty Thousand, then both insurance companies will contribute towards actual loss i.e.Rs.One Lac Twenty Thousand. Thus company T will pay RS.48000/- (2/5th of the loss) and company R will pay Rs. 72000/-(3/5th of the loss).

6) Principle of Mitigation of loss

Insured must always try to minimize the loss of the property, in case of uncertain events. The insured must take all possible measures and necessary steps to control and reduce losses. Hence, it is the responsibility of the insured to protect the property and avoid loss.

For example, A house of Mr. Jayant is on fire due to an electric short circuit. In this case, Mr. Jayant cannot remain passive and must try his best to save his house from fire. Mr. Jayant must be active and cannot watch his house burn, just because house is insured.

7) Principle of Causa-Proxima

The principle of causa Proxima means, when a loss is caused by more than one causes, then the proximate cause of loss should be taken into consideration to decide the liability of the insurer. The property is insured against some causes and not against all causes, in such a case, the proximate cause of loss is to be found. If the proximate cause is the one which is insured against, the insurance company is bound to pay compensation and vice versa.

For example, a house was insured against the risk of theft. There was a theft in the house and before leaving, the house was set on fire by thieves. Now, there are two causes of loss, theft and fire, and the nearest cause of loss was fire. As the house was insured against theft and not by fire, the insured will not get any compensation from insurance company for loss by fire. But, he will get compensation for the property lost by theft.

(2) Define marketing. Explain the functions of marketing in detail

Answer: The success of a business is difficult without effective marketing. Marketing deals with the exchange of goods and services to satisfy the needs of consumers. Marketing functions help to study the needs of the consumers and facilitate to satisfy them.
Following are some of the important functions of marketing :

1) Marketing Research:

Effective marketing is possible when a business takes initiative to identify the needs and wants of the consumers in the market. To identify the needs of the consumers, there is a need to collect information from the consumers and analyze the same is known as Market Research. It helps to find out what do consumers want to buy, when do consumers buy, in what quantity they want to buy, and at what price.

2) Buying and Assembling:

It involves collecting raw materials from different sources at one place for production. This function is important as the quality and price of raw materials determine the cost and quality of the final product.

3) Market Planning:

After assessing the need of marketing, the business needs to chalk out the marketing plan and strategies to achieve the desired objective. Market planning is the process of organizing and defining the marketing objectives of the business and creating strategies to achieve them. It is the comprehensive blueprint that will help to draw an outline business’s overall marketing efforts.

4) Product Development:

Product development and design play an important role in the selling of the product. There is a need to develop a product that suits the needs of the consumer. Product design includes decisions related to quality, standards, shape, design, packing, colour, etc. of the product. The consumer always prefers better and attractively designed products. Good design of the product gives a competitive advantage to the business.

5) Standardisation and Grading:

Standardization means determining standards related to the process, size, quality, design, weight, colour, etc. of the product. It helps in ensuring uniformity in the quality of the product. It helps in achieving customers’ loyalty towards the product. Grading is the process of classification of products according to similar characteristics and/or quality. Grading is done on the basis of their features like size, shape quality, etc. Generally grading is done in the case of agricultural products like wheat, rice, potatoes, etc.

6) Packaging and Labelling:

Package and Label create the first impression on the consumer about the product. Attractive packages and labels can help to make the product successful. Packaging means designing the package for the product. It helps to avoid breakage, damage, and destruction of the product. Packing material includes bottles, containers, plastic bags, tin, wooden boxes, jute bags, bubble bags, packing foam, etc.
A label is a slip that is found on the product and provides all the information regarding the product and its producer. The slip-on in which all this information is provided is called a label and its process is called labeling.

7) Branding:

Every businessman wants to have a special identity in the market for his product. Branding is the process of giving a special identity to a product through a unique brand name to differentiate it from competitors’ products. In simple words giving a distinct name to one’s product is called branding. Registered brands are known as Trademarks. Trademarks can not be copied. Branding helps to get recognition among the consumers. It can help to get new business and increase brand awareness in the market.

8) Customer Support Service:

The customer is the king of the market hence business needs to take the necessary steps for the satisfaction of the customer. Business needs to take every possible effort to provide support services to the customer. Timely support services help to gain customers’ loyalty. The business can provide the support services like Pre-sales service, consumer helpline, after-sales service, technical assistance, product demo, etc. to the customers. These services help in getting, retaining, and growing the customers.

9) Pricing of Product:

Pricing is one of the most important as well as challenging functions of marketing. Many times price of the product decides the success or failure of the product. Pricing plays an important role in the market where there is cutthroat competition. While determining the price of the product businessman needs to consider factors like cost, desired profit, price of the competitor’s product, demand for the product, market condition, etc.

10) Promotional Channels:

Promotion is the process of informing the consumers about the products, their features, uses, prices, etc, and encouraging them to buy these products. Advertising, Personal selling, Publicity, and Sales Promotion are some of the important tools of promotion. Business uses a combination of all or some of these four methods for promotion as per the need of the business. Promotional activities help to increase brand awareness in the market.

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