Will you please like to share the model question paper of TANCET MBA Exam??

Here I am sharing the model question paper of TANCET MBA Exam

Directions: There are two passages in this section. Read also the directions for answering
questions under the passage before answering.
FIRST PASSAGE
The Parks company, located in New York City, had engaged exclusively in the manufacturer of
baking powder in the seventy -five years since its founding. Sales were approximately $800,000
annually. The sales volume, measured in commodity units instead of dollars, had showed a
decline of about 11 percent over the past decade. The company had a small office force and
employed approximately 50 people in the production process, which was divided into (1} the
mixing department (2) the assembly department, and (3) the final inspection and packing
department.
In 1935, distribution had been foreign as well as national. Forty years later, the sale of the
product was confined to New England and the Middle Atlantic states. Mr. Andrew H. Pendler,
the president, attributed this significant decrease in both market area and sales volume to high
train rates, sterner competition and trade dislocations caused by World War II.
Mr. Gordon Janis, the sales manager, after studying the market closely, arrived at a different set
of reasons why sales had been dropping. In the first place, according to Janis sales to commercial
consumers had diminished to practically nothing. Many modern bakeries bought the necessary
chemicals and manufactured their own baking powder. Secondly, the population had become
urbanized. Formerly, when a larger portion of the citizenry was suburban, many housewives had
done their own baking. People in cities were close to bakeries and other outlets where they could
buy the finished product, and improved transportation had enabled fresh bakery products to be
readily available at retail outlets. The third reason which Mr. Janis considered significant was the
growing popularity of ready mixes. The natural tendency of practically all human beings is to get
as much as they can for a minimum of effort. Since ready-mixes did save housewives a good
deal of labour, this type of product had been well received.
Mr. Janis believed that the company could not cope with first two factors, and therefore his
suggestion for increasing sales was to branch out and manufactured ready mix baking products
which would compare favourably with nationally -known brands. Management was particularly
receptive to Janis's idea because production of ready-mixes would require only minor changes in
personnel and the cost of additional machinery would be relatively small. Two additional
machines were necessary each costing approximately $10,000.
Mr. Pendler was determined to succeed in the marketing of the new product. He believed that a
thorough market analysis was a prerequisite to making a final decision as to whether Janis's idea
was commercially sound. Pendler wanted to know whether a small company like Parks could
battle for a share of the ready -mix market against much bigger competitors. His concern
centered on two key variables. First, he questioned the ability of his marketing people to develop
a product which would be sufficiently differentiated from competitors' product. Parks would
have to market a product which had some distinct advantage over competing products. This
advantage could be in the form of an improvement over existing brands, for example, a mix that
was easier to prepare. Second, a strong advertising campaign was necessary to enter market with

an unknown product. Potential consumers would have to be made aware of the new brand and its
advantages. Pendler wanted to know how much such an advertising campaign would cost and
whether the company had the financial resources to finance it.
Janis was given the task of preparing a marketing research report which would provide answer,
to Pendter's questions. Graduate students were hired to poll housewives as they entered
supermarkets. Each student questioned a number of housewives about their purchases of readymixes,
how frequently they used the products, what they liked and or disliked about the mixes.
After about fifty interviews, Janis believed that he had collected enough information to reach
certain conclusions.
Janis tabulated the research data and funds the following: Most housewives said that they
purchased ready-mixes and preferred to prepare their own cakes, rather than buy them from a
bakery or supermarket. Housewives felt that ready-mixes were preferable to commerciallyprepared
cakes because of their freshness and economy. In particular, respondents liked the
convenience of being able to bake a cake "in an emergency" if unexpected company came to
visit. Other reasons mentioned for preferring ready-mixes were: "Tastes fresh", modern thing to
do," my neighbours use it" and "I can choose some of the ingredients."
Few respondents using ready-mixes mentioned any dislikes. Some of the negative reactions
mentioned were: "Lack of recipe variety", "my husband doesn't like them", and "all the mixes are
the same."
Most of the housewives polled recalled seeing some advertising for ready-mixes during the last
week. Half of the respondent recalled specific advertising themes of the major producers. Overall
reaction to the advertising was favourable.
Examining the survey results, Janis concluded that Parks should market a ready mix of its own.
He reasoned that since consumer reaction was so favouable, there was room in the market for
another brand. Janis recommended, however, that since the research did not reveal how Parks
might differentiate its products from those already on the market, the best marketing strategy
would be to charge a lower price than that of competing products. With a lower price, he
asserted, Park's ready mix would sell well to the economy-minded housewife.
Advertising was a problem. It was clear that, given the relatively small marketing budget
available to Janis's Parks could not emulate the sort of advertising campaign used by existing
ready-mix manufacturers. Janis believed that if Parks would concentrate solely on the economy -
minded market segment, advertising themes could be developed and a campaign launched within
the company's budget constraints. Janis's report and conclusions were forwarded to Mr. Pendler.
After a short deliberation, Pendler approved the ready-mix project.
Without further investigation, the manufacture of Park's ready-mixes was started. After several
months, ready-mix sales still amounted to less than 10 percent of gross sales, and 85 percent of
ready-mix sales were in New York city. The entire position of the company was in jeopardy.
Both Mr. Pendler and Mr. Janis were worried about the business, but neither seemed to know
what to do.

Directions : The questions that follow relate to the preceding passage. Evaluate, in terms of
the passage, each of the items given. Then select your answer from one of the following
classifications.
1) A MAJOR OBJECTIVE in making the decision: one of the goals sought by the decision
maker.
2) A MAJOR FACTOR in making the decision: .an aspect of the problem, specifically
mentioned in the passage, that fundamentally affects and /or determines the decision.
3) A MINOR FACTOR in making the decision: a less important element bearing on or affecting
a Major Factor, rather than a Major Objective directly.
4) A MAJOR ASSUMPTION in making the decision: a projection or supposition arrived at by
the decision maker before considering the factors and alternatives.
5) AN UNIMPORTANT ISSUE in making the decision: an item lacking significant impact on,
or relationship to, the decision.
1) Declining sales volume.
2) New York City location of Parks Company.
3) Production of a successful ready-mix baking product.
4) Urbanization of the population
5) Increased world trade.
6) Start-up costs for development of ready-mix product.
7) Differentiation of Park's ready-mix from competing products.
8) Specific advertising themes recalled by shoppers being interviewed.
9) $10,000 cost for one additional machine
10) Size of the office staff employed at Parks.
11) Park's ability to compete with bigger companies.
12) Number of housewives interviewed for marketing survey.
13) Modern bakeries practice of producing their own baking powder.
14) Financial resources of Parks.
15) Cost of Park's advertising campaign.
SECOND PASSAGE:
Source Perrier was one of the largest distributor of natural water drinks in France. By the early
1970s it was having difficulty in sustaining growth of its sales in France and looked to develop a
market in the United States. Its American operation was headed by Bruce Nevins.
There were a number of conditions that made Nevins optimistic about the acceptance of Perrier
water by American consumers. The most important of these was the growing diet consciousness.
Miller brewing had hit the market with phenomenal success a few years earlier with the
introduction of Life beer. Since cyclamates had been banned in soft drinks, producer;; had turned
to saccharin which many people found distasteful. There was also no popular law-calorie drink
that was considered chic to order. The use of the adjective "diet" simply announced that the
drinker was encountering weight problems. If people could be persuaded that Perrier tasted good,
then it could be a preferred low-calorie alternative.
Another trend was towards natural foods for health reasons. Even tap water and the 75 percent of
bottled water that was processed from tap water become suspect. In the process of purification,
cancer-suspect chlorine derivatives were added to water. Furthermore, certain viruses, sodium,
and heavy metals were still found in most purified water and soda water. Perrier came from

natural springs, contained high calcium, no sodium, and no additives. It could be promoted as a
natural drink with healthy properties even though some of the bubbles were lost when the water
was removed from the springs and put back in during the bottling process.
A third factor was a growing U.S preference for imports. This was apparent not only by noting
the rising ratio of imports to gross national expenditures, but also by the acceptance of
"foreignness". "In terms of food, so-called gourmet restaurants, cookbooks, dinner clubs,
ingredients, and wines were becoming commonplace, and French items were practically
synonymous with the word gourmet. Perrier might successfully capitalize on these attitudes.
The marketing program for Great Waters of France really got underway in 1977. One of the first
questions was in which part of the market to position Perrier. The three trends discussed above
would clearly lead to different price, promotion, and distribution strategies because of facing
different competitors in each segment. In order to go after the diet market segment, for example,
Perrier would come face-to-face with Coca-Cola and Pepsi-Cola, who between them controlled
45 percent of the soft-drink market. These firms, along with the many others that competed for
the remaining 55 percent of sales, fought vigorously in the market by keeping prices fairly low,
advertising heavily, and clamouring for shelf space in the soft-drink section of supermarkets. The
difficulty of competing in this segment is evident by the experience of Schweppes, which in spite
of establishing U.S bottling facilities and engaging in heavy marketing outlays, had failed to get
even 1 percent of the market. To compete in this mass market segment might also cause Perrier
to lose the snob appeal it held among high-income buyers.
To compete in the natural or health foods segment would pit Perrier against other bottled water
producers and various tonics that contained healthful additives. This was a very small market as
compared with soft drinks. In 1976, sales of bottled water were $189 million of which 93 percent
was from purified domestic still water. This water largely sold in five-gallon containers at low
prices through home or commercial delivery. Less than 20 percent of bottled water was sold in
retail stores, and there was little brand identification. To expand retail sales would probably
mean concentrating on gaining shelf space in health food sections of stores. Since bottled water
sales were determined to be much more geographically concentrated than soft-drink sales, it
would be far easier for Perrier to target its promotion and distribution for this segment. About 50
percent of sales, for example, was in California.
The gourmet market was the one to which Source Perrier had been selling for some 70 years.
There were undoubtedly usages as well as distributional gaps in this market. The total sales of
mineral water in 1976 was only $15 million. Primary demand might be increased and Perrier
might be made more and new distribution to the growing gourmet sections of supermarkets.
Perrier decided to hit the mass market by competing in the soft-drink market segment. One of the
first problems that they had to overcome was the price of the product. Through massive
distribution, they reasoned that the retail price could be cut about 30 percent. Even at that, the
price was still about 50 percent higher than the average soft drink. This price was considered
"rock bottom". The cost of transporting water across the Atlantic was expensive, resulting in an
East Coast retail price in 1977 of 69 percent for a 23 ounce bottle. This included a retail gross
margin of 27.6 percent as compared to 22.6 percent on soft drinks. Management reasoned that
the higher margin would make supermarkets more willing to handle Perrier. A low margin was
maintained by Perrier not only to become more price competitive with domestic soft drinks, but

also to dissuade other European firms from exporting to the United States. To get people to pay
what was still a high price, it was necessary to segment the soft-drink market differently than
anyone had heretofore done by aiming at an adult population and using the higher price to gain
snob appeal.
Great waters of Frances felt that distribution was the real key to success. A sales force of forty
people, almost all of whom were formerly with soft-drink firms, were hired. Through a close
examination of demographics, there cities were picked for the first expansion efforts. The cities
(New York, San Francisco, and Los Angles) were those with the largest penchant for imported
food items. The company made a film designed to convey to distributors and supermarket chains
that Perrier water had a long-term viability. The film showed that the springs had been popular as
far back 218 B.C When Hannibal partook of the waters and that the present firm dates back to
1903, supplies 400 million bottles a year, and outsells the leading cola in Europe to 2 to 1.
Perrier sought the most aggressive distributors for these first and subsequent market areas. These
included soft-drink bottlers, alcoholic beverage distributors, and food brokers, in different areas.
It was essential that distributors be able to get supermarket space in the soft-drink sections,
replenish stocks frequently, and set up point of purchase displays. One of the first distributors,
Joyce Beverage Management, bought fifty-five trucks and hired 100 additional people to handle
the Perrier account. In the introductory period, arrangements were made for secondary display
stacks and in-store tasting. The company also gave cents-off coupons with purchases. Within a
year, Perrier had moved from three to twenty major market areas. This was doubled in the
second year.
For the big sales push, Perrier developed 11 -ounce and 6.5 ounce bottles, the latter sold in
multipacks. They also developed a modern logo in the bottles, later to be replaced by the original
label design, which was more congruent with the old-world image that the firm wishes to project.
With initial distribution assured, it was necessary to get sufficient appeal so that he bottles on the
shelves would be sold. In Europe, the company could make therapeutic claims; however the U.S
law was very strictly against this. In test marketing, Perrier tried such themes as "formerly heavy
drinkers such as Richard Burton and Ed Me Mahon are now 'hooked' on Perrier and 'contains no
sodium which causes heartburn'. These were abandoned in favour of message emphasizing its
qualities as a natural thirst-quencher with no calories and no additives. Initial promotion was
regional relying heavily on the print media. Groups of food and beverage writers were invited for
dinners and exhibitions so that they would write about Perrier. Marathons were sponsored so that
the product would be associated both with "healthiness" and "thirst-quenching". As distribution
became national, Perrier got Orson Welles to give T.V spots on network channels. The
advertising budget was set high $1 million, $2 million, and $7 million for respective fiscal years
1977, 1978, and 1979. Throughout this period, Perrier was able to maintain a snob appeal by
getting titbits in gossip about celebrations being seen sipping Perrier in the "right places".
Sales increased rapidly to 21 million bottles in 1977, 60 million in 1978 over 100 million in
1979, and over 200 million in 1980. The increase did not go unnoticed by either the media or by
competitors. By 1979, a bottling executive said, "Everyone with water seeping from a rock is
buying glass, slapping a label on it, and marketing a new bottled water". In the first quarter of
1979 alone, seven new bottled waters came on the market. Some of the old bottled spring water
firms suddenly sought a larger share of the growing market. They promoted blind tasting
comparisons to emphasize that American water was just as tasty as the imports. Nestle's Deer
Park brand made a challenge with a spring water priced 35-40 percent below Perrier in a bottle

with a label that unashamedly copied Perrier. Its theme was, 'let your guests think it's imported,
Norton Simon's Canada Dry began repositioning its club soda to be more competitive with
Perrier. SAMI, a market research group, reported 104 brands of bottled waters in its territory.
In view of the increased competition from American companies. Nevins was forced to review his
company's marketing strategy.
Directions: The questions that follow relate to the preceding passage. Evaluate, in terms of
the passage, each of the items given. Then select your answer from one of the following
classifications.
1) A MAJOR OBJECTIVE in making the decision: one of the goals sought by the decision
maker.
2) A MAJOR FACTOR in making the decision: an aspect of the problem, specifically
mentioned in the passage, that fundamentally affects and /or determines the decision.
3) A MINOR FACTOR in making the decision: a less important element bearing on or affecting
a Major Factor, rather than a Major Objective directly.
4) A MAJOR ASSUMPTION in making the decision: a projection or supposition arrived at by
the decision maker before considering the factors and alternatives.
5) AN UNIMPORTANT ISSUE in making the decision: an item lacking significant impact on,
or relationship to, the decision.
16. Perrier as a low - calorie alternative to soft drinks.
17. Growing U.S preference for imports.
18. No sodium in Perrier water.
19. Finding aggressive distributors.
20. Diet-consciousness of Americans.
21. The establishment of Perrier in 1903.
22. Cutting the retail price by 30 percent
23. Perrier's success in France.
24. Advantage of mineral water.
25. Cost of shipping to the United States.
26. Logging growth of Perrier in France.
27. Finding a market position for Perrier.
28. Proportion of bottled water sold in five-gallon containers.
29. Increased competition from American bottlers.
30. Banning of cyclamates in soft drinks.
SECTION II - READING COMPREHENSION
Directions: This section contains three passages. You have to read each carefully. Each
passage is followed by questions based on its contents. After reading each passage choose
the best answer to each question. The questions are based on what is stated or implied in
each passage.
PASSAGE 1
Entrepreneurs innovate. Innovations the specific instrument of entrepreneurship. It is the act that
endows resources with a new capacity to create wealth. Innovation, indeed, creates a resource.
There is no such thing as a resource until man finds a use for something in nature and thus
endows it with economic value. Until then, every plant is a weed and every mineral just another

rock. Not more than a century ago, neither mineral oil seeping out of the ground nor bauxite, the
ore of aluminium, were resources. They were nuisances; both render the soil infertile. The
penicillin mold was a pest, not a resource., Bacteriologists went to great lengths to protect their
bacterial cultures against contamination by it. Then in the 1920s, a London doctor Alexander
Fleming, realized that this pest was exactly the bacterial killer bacteriologists had been looking
for and the penicillin mold became a valuable resource.
The same holds just as true in the social and economic spheres. There is no greater resource in an
economy than purchasing power. But purchasing power is the creation of the innovating
entrepreneur. The American farmer had virtually no purchasing power in the early nineteenth
century, he therefore, could not buy farm machinery. There were dozens of harvesting machines
on the market, but however, much he might have wanted them, the farmer could not pay for
them. Then one of the many harvesting machine inventors, Cyrus McCormick, invented
installment buying. This enabled the farmer to pay for a harvesting machine out of his future
earnings rather than out of his future earnings rather than out of past savings and suddenly the
farmer had purchasing power to buy farm equipment.
Equally whatever changes the wealth-producing potential of already existing resources
constitutes innovation. There was not much new technology involved in the idea of moving a
truck body off its wheels and onto a cargo vessel. This innovation, the container, did not grow
out of technology at all but out of a new perception of the cargo vessel as a materials-handling
device rather than a ship which meant that what really mattered as to make the time in port as
short as possible. But this humdrum innovation roughly quadrupled the productivity of the
ocean-going freighter and probably saved shipping. Without it, the tremendous expansion of
world trade in the last forty years - the fastest growth in any major economic activity over
recorded could not possibly have taken place. What really made universal schooling possiblemore
so than the popular commitment to the value of education, the systematic training of
teachers in schools of education, or pedagogic theory - was that lowly innovation, the textbook.
Without the textbook, even a very good teacher cannot teach more than one or two children at a
time.
Innovation as these examples show, does not have to be technical, does not indeed have to be a
thing altogether. Few technical innovations can compete in terms of impact with such social
innovations as the newspaper or insurance. Installment buying literally transforms economies.
Wherever introduced, it changes the economy form supply-driven to demand-driven, regardless
almost of the productive level of the economy. The hospital, in its modern form a social
innovation of the enlightenment of the eighteenth century, has had greater impact on health care
than many advances in medicine- Management, that is the useful knowledge that enables man for
the first time to render productive people of different skills and knowledge working together in
an organization. It has converted modem society into something brand new, something, by the
way, for which we have neither political nor social theory; a society of organizations.
Books on economic history mention August Borsing as the first man to build steam locomotives
in Germany. But surely far more important was his innovation-against strenuous opposition from
craft guilds, teachers and government bureaucrats of what to this day is the German system of
factor organization and the foundation of Germany's industrial strength. It was Borsing who
devised the idea of the Master the highly skilled and highly respected senior worker who runs the
shop with considerable autonomy; and the apprenticeship system, which combines practical

training on the job with schooling in the classroom. And the twin inventions of modern
government by Machiavelli in the Prince and of the modern national sate of his early follower,
Jean Bodin, sixty years later, have surely had more lasting impacts than most technologies.
31. For the American fanner, the innovation was:
(a) harvesting machine; (b) installment plan;
(c) cooperative farming; (d) none of the above.
32. Natural resources are so called because:
(a) these are found in nature;
(b) somebody has been able lo locate these;
(c) somebody has been creative enough to put these to use;
(d) none of the above.
33. The innovation of a text buokhas:
(a) helped the teachers; (b) helped the students;
(c) helped the cause of universal education; (d) helped the publishers do a business.
34. Which of the following statements could be termed to be true as per the author
(a) ship is different from a cargo vessel.
(b) every innovation has to be technical.
(c) hospital is a technical innovation.
(d) management is purely a non-technical innovation.
PASSAGE 2
Emile Durkheim, the first person to be formally recognized as a sociologist and the most
scientific of the pioneers, conducted a study that stands as a research model for sociologists
today. His investigation of suicide was, in fact, the first sociological study to use statistics. In
'Suicide' (1964, originally published in 1897) Durkheim documented his contention that some
aspects of human behavior — even something as allegedly individualistic as suicide - can be
explained without reference to individuals.
Like all of Durkheim's work, suicide must be viewed within the context of his concern for social
integration. Durkheim wanted to see if suicide rates within a social entity (for example, a group,
organization, or society) are related to the degree to which individuals are socially involved
(integrated and regulated). Durkheim described three types of suicide, egoistic, anomic and
altruistic. Egoistic suicide is promoted when individuals do not have sufficient social ties. Since
single (never married) adults, for example, are not heavily involved with family life, they are
more likely to commit suicide than are married adults. Altruistic suicide, on the other hand, is
more likely to occur when social integration is too strong. The ritual suicide of Hindu widows on
their husbands' funeral pyres is one example Military personnel, trained to [ay down their lives
for their country, provide another illustration.
Durkheim's third type of suicide — anomic suicide — increases when the social regulation of
individuals is disrupted. For example, suicide rates increase during economic depressions. People
who suddenly find themselves without a job or without hope of finding one are more prone to
kill themselves. Suicides may also increase during periods of prosperity. People may loosen their
social ties by taking new jobs, moving to new communities, or finding new mates.
Using data for the government population reports of several countries (much of it from French
Government Statistical Office), Durkheim found strong support for his line of reasoning. Suicide

Attached Files

TANCET MBA Model Question Paper.pdf (186.9 KB, 70 views)