By Dr.M.Rama satyanarayana Faculty of HRM,ANU

1. MHRM
COURSE 101 : Principles and Practices of Management
Unit-IV
Contents
Financial Management: Functions, Sources of Finance, Financial
Reporting, Budgeting.
Production Management: Functions, Operations and Layout,
Facilities location, Project Management.
Marketing Management: Concept, Importance, Producer-Consumer
Relationships, Consumer Behaviour, Marketing Research and Information,
Market Mix.

2. Financial management
 Financial management is the process of
planning, organizing, directing, and controlling
financial activities such as procuring funds,
investing funds, and managing assets to
achieve organizational goals. It is an essential
part of any organization, regardless of its size
or industry.

3. Functions of Financial
Management
 Financial Planning: This involves setting
financial goals, forecasting future financial
needs, and developing strategies to achieve
those goals. It includes creating budgets,
developing investment plans, and raising
capital.
 Financial Analysis: This involves analyzing
financial data to assess the financial health of
an organization. It includes analyzing financial
statements, calculating ratios, and evaluating
risks.

4.  Financial Control: This involves implementing
and monitoring financial policies and
procedures to ensure that financial resources
are used effectively and efficiently. It includes
budgeting, cash flow management, and risk
management.

5. Sources of Finance
Organizations can raise funds from a variety of sources,
including:
 Equity: Equity financing involves selling shares of ownership
in the company to investors. This can be done through an
initial public offering (IPO) or by selling shares to private
investors.
 Debt: Debt financing involves borrowing money from lenders
such as banks and credit unions. The company must repay
the loan with interest over time.
 Retained earnings: Retained earnings are the profits that a
company keeps after paying dividends to shareholders.
These earnings can be used to reinvest in the business or to
pay off debt.

6. Financial Reporting
 Financial reporting is the process of preparing and
communicating financial information to stakeholders
such as investors, creditors, and regulators.
Financial reports include:
 Balance sheet: This shows the financial position
of a company at a specific point in time. It includes
assets, liabilities, and shareholder equity.
 Income statement: This shows the financial
performance of a company over a period of time.
It includes revenues, expenses, and net income.
 Cash flow statement: This shows the cash
inflows and outflows of a company over a period
of time.

7. BUDGETING
Budgeting is the process of creating a plan for
how an organization will spend its resources. A
budget typically includes revenue and expense
forecasts for a specific period of time. Budgeting
helps organizations to:
 Allocate resources effectively A budget helps
to ensure that resources are directed towards
the most important activities.
 Control spending A budget helps to identify
areas where spending can be reduced.

8.  Monitor progress: A budget can be used to track
actual results against planned results and identify any
areas where there are variances.
Effective financial management is essential for the
success of any organization. By understanding the
functions of financial management, the sources of
finance, financial reporting, and budgeting,
organizations can make sound financial decisions and
achieve their financial goals.

9. PRODUCTION
MANAGEMENT
 Production management is the process of
planning, coordinating, and controlling all the
activities involved in the production of goods
and services. It ensures that products are
produced efficiently, at a high quality, and
within budget. Here's a breakdown of the key
functions of production management.

10. Functions
 Planning
This involves determining what needs to be produced,
how much needs to be produced, and when it needs to
be produced. Production planning also includes
forecasting demand, scheduling production, and
determining resource requirements.
 Organizing
This involves structuring the production process and
assigning tasks to people and equipment. It also
involves establishing procedures and policies to ensure
that the production process is followed consistently.

11.  Coordinating
This involves ensuring that all the different parts of
the production process work together smoothly.
This includes coordinating activities between
different departments, such as engineering,
marketing, and purchasing.
 Controlling
This involves monitoring the production process to
ensure that it is meeting its objectives. It also
involves taking corrective action if there are any
deviations from the plan.

12. Operations and Layout
 Operations management: This is the broader
field that encompasses production
management, as well as other aspects of
business operations, such as logistics and
supply chain management.
 Facility layout: This refers to the physical
arrangement of the equipment and
workstations in a production facility. The layout
of a facility can have a significant impact on
the efficiency of production. There are different
types of facility layouts, such as:

13.  Process layout: This type of layout is used for products that are
produced in small batches or with a high degree of
customization. In a process layout, the equipment is grouped
together according to the function it performs, rather than by the
product being produced.
 Product layout: This type of layout is used for products that are
produced in large volumes and with a low degree of
customization. In a product layout, the equipment is arranged in
a sequence that follows the steps involved in the production
process.
 Fixed-position layout: This type of layout is used for products
that are too large or too bulky to be moved around. In a fixed-
position layout, the product remains stationary, and the workers
and equipment come to the product.

14. Facilities Location
 The decision of where to locate a production facility is
a complex one that can have a significant impact on
the cost and efficiency of production. Some of the
factors that need to be considered when making a
location decision include:
 Proximity to markets: It is important to locate the
production facility close to the markets that it will
serve. This will help to reduce transportation costs
and improve customer service.
 Availability of labor: The facility should be located in
an area where there is a readily available supply of
labor with the skills and experience needed to
produce the company's products.

15.  Cost of land and buildings: The cost of land
and buildings can vary significantly from
location to location. It is important to find a
location that is affordable for the company.
 Infrastructure: The availability of
infrastructure, such as transportation, utilities,
and communication services, is essential for
the efficient operation of a production facility.

16. Project Management
 Project management is the application of knowledge,
skills, tools, and techniques to project activities to
meet the project requirements. It is a crucial part of
production management, as it ensures that projects
are completed on time, within budget, and to the
required quality.
 Here are some of the key phases of project
management:
 Initiating: This phase involves defining the project
and obtaining approval to proceed.
 Planning: This phase involves developing a detailed
plan for the project, including the scope, schedule,
budget, and resources.

17.  Executing: This phase involves carrying out the
work of the project according to the plan.
 Monitoring and controlling: This phase involves
monitoring the progress of the project and taking
corrective action as needed.
 Closing: This phase involves formally closing the
project and evaluating its success.
 By effectively managing these functions,
production managers can help to ensure that their
companies are producing high-quality products
and services efficiently and at a competitive cost.

18. Marketing Management
 Concept
Marketing management is the process of
planning, executing, and controlling marketing
activities to meet the organizational goals in a
dynamic and competitive marketplace. It involves
understanding the needs and wants of target
consumers, developing and offering products and
services that fulfill those needs, and
communicating the value proposition effectively.

19. IMPORTANCE
 Understanding Customers: Marketing management
helps businesses understand their target audience by
researching their needs, wants, buying behavior, and
preferences. This enables them to develop products and
services that resonate with their customers and increase
the chances of success.
 Building Relationships: Marketing fosters positive and
long-lasting relationships with customers. This can be
achieved through effective communication, building
trust, and exceeding customer expectations. Strong
relationships lead to customer loyalty and increased
sales.

20.  Creating Value: Marketing management focuses on creating
value for both the organization and the customer. This means
offering products and services that meet customer needs at a
price they are willing to pay, while also generating profit for
the business.
 Gaining Competitive Advantage: In a competitive market,
effective marketing helps businesses stand out from the
crowd. By understanding the competitive landscape and
developing unique selling propositions, businesses can
attract and retain customers, giving them a competitive edge.
 Driving Growth: Marketing management drives sustainable
growth for businesses by attracting new customers, retaining
existing ones, and encouraging repeat purchases. It also
helps businesses tap into new markets and opportunities.

21. Producer-Consumer
Relationships
 Building positive relationships with consumers is crucial
in today's competitive landscape. Marketing
management plays a key role in fostering these
relationships through various strategies:
 Customer Centricity: Putting the customer at the
center of all marketing activities. This involves
understanding their needs, wants, and feedback and
incorporating them into product development,
communication, and overall marketing strategy.
 Effective Communication: Establishing clear and
consistent communication with consumers through
various channels like social media, email marketing,
advertising, and customer service.

22.  Building Trust: Building trust with consumers
requires transparency, honesty, and
responsiveness to their concerns. This helps
create a sense of loyalty and encourages them
to choose the brand over competitors.
 Engaging Content: Creating engaging
content that resonates with consumers and
provides value beyond just selling a product.
This can involve educational content,
entertaining stories, or interactive experiences.

23.  Community Building: Building a community
around the brand fosters a sense of belonging
and loyalty among consumers. This can be
achieved through online forums, loyalty programs,
or social media engagement.
 By implementing these strategies, marketing
management can help businesses build strong
producer-consumer relationships that lead to
increased customer satisfaction, loyalty, and
ultimately, business success.

24. Consumer Behaviour
 Consumer Behavior is the study of how individuals, groups, and
organizations select, purchase, use, and dispose of goods,
services, ideas, or experiences to satisfy their needs and desires. It
encompasses various factors that influence consumer decision-
making, including:
 Psychological factors: These include motivation, perception,
learning, and attitudes.
 Social factors: These include cultural influences, reference groups,
family, and social status.
 Personal factors: These include age, life stage, occupation,
economic situation, lifestyle, and personality.
 Understanding consumer behavior is crucial for businesses to
develop effective marketing strategies that resonate with their target
audience.

25. Marketing Research
 Marketing Research is the systematic process of
collecting, analyzing, and interpreting data about a
specific market, industry, or service to help
businesses make informed decisions. It involves
various methods such as:
 Surveys: Gathering information from a sample of
the population through questionnaires or
interviews.
 Focus groups: Conducting discussions with a
small group of individuals to gain qualitative
insights.
 Market analysis: Evaluating market trends,
competitor analysis, and customer segmentation.

26. Marketing research helps businesses
understand consumer needs, preferences, and
buying habits, which allows them to:
 Develop new products and services that meet
market demands.
 Price their products competitively.
 Design effective marketing campaigns.
 Distribute their products through the right
channels.

27. The Marketing Mix
 The marketing mix is a framework used by
marketers to identify the key factors that influence
a product or service's success in the marketplace.
It consists of four key elements, often referred to
as the "4 Ps":
 Product: This refers to the goods or services that
is being offered to the customer. It includes the
product's features, benefits, and quality.
 Price: This refers to the amount of money that
customers are willing to pay for the product or
service. It is important to consider the cost of
production, competition, and target market when
setting the price.

28.  Place: This refers to the channels through
which the product or service is distributed to
the customer. This can include online and
offline channels, such as retail stores,
wholesalers, and e-commerce websites.
 Promotion: This refers to the activities that
are used to communicate the product or
service to the target market. This can include
advertising, public relations, sales promotion,
and social media marketing.