B.Com 1st Sem Marketing and Services Management Previous Papers

B.Com 1st Sem Marketing and Services Management Previous Papers

B.Com 1st Sem Marketing and Services Management Question Paper May 2013 with Answers

Time : 3 hours
Max. Marks : 100

SECTION – A

I. Answer any ten of the following sub-questions each question carries 2 marks. (10 x 2 = 20)

Question (a)
Define marketing.

Question (b)
What is promotion mix?

Question (c)
Mention any two objectives of pricing.

Question (d)
Mention any four advantages of advertising.

Question (e)
What is meant by Market Segmentation?

Question (f)
What is service environment?
Answer:
Service environment is the sum total of forces and factors that makes influence on the marketing of particular services. It includes organizational factors, customer needs and preferences, competition, etc.

Question (g)
What is Assembling?

Question (h)
Mention any four approaches to the study of Marketing?

Question (i)
What is M-Business?

Question (j)
Mention four characteristics of services.

Question (k)
What do you mean by Tourism Marketing?

Question (l)
What do you mean by healthcare services?

SECTION – B

II. Answer any four of the following questions. Each question carries 8 marks. (4 x 8 = 32)

Question 2.
State any 8 (eight) functions of wholesaler.

Question 3.
Explain eight interest internal factors which influence marketing.
Answer:
Internal factors influence marketing:
(a) Producers or organisation: Producers are the persons engaged in the production of materials including firms, mines, forestry, etc.

(b) Manufacturing resources: This comprises of men material, money, machinery and management. All these are internal and are under the control of management. It can be adjusted according to marketing planning and policy.

(c) Marketing mix: Price, product, promotion are internal factors can be adjustable according to external factors. Organization can take decision on price promotion and product according to the conditions prevail in the market.

(d) Suppliers: Suppliers are the important persons in the organization manufacturing programme can be adjusted according to the supply of material and labour resources organization can adopt such a purchase policy which gives bargaining power to the organization.

(e) Employees: Employees loyalty sincerity, productivity and their attitude towards their job and the organization behaviour can be controlled by following sound and employees oriented policies.

(f) Middle men : Middlemen are those who help the company in promoting and distributing the product. Organization can control the distribution of goods according to customers demand in the market.

Question 4.
Briefly explain the importance of pricing.

Question 5.
Briefly explain the characteristics services.

Question 6.
Briefly explain the concept and nature of educational service.

SECTION – C

III. Answer any three of the following questions. Each question carries 16 marks. (3 x 16 = 48)

Question 7.
Explain briefly the 7 Ps of marketing mix in service Industry.

Question 8.
Explain the functions of marketing briefly.

Question 9.
Explain the bases for market segmentation.

Question 10.
Explain various media of advertising.

B.Com 1st Sem Marketing and Services Management Question Paper November 2014 with Answers

SECTION – A

I. Answer any five of the following questions. Each question carries two marks. (5 x 2 = 10)

Question (a)
What is Relationship Marketing?
Answer:
Relationship marketing is a strategy that aims at developing and managing long term relationship with customers, suppliers and distributors, in order to earn and retain the business of the enterprises.

Question (b)
State any two components of political environment.
Answer:
Political environment includes government monetary and fiscal policy, import and export polices, custom duties, legislation controlling, physical environment etc.

Question (c)
Define Consumer Behaviour.

Question (d)
What is Branding?

Question (e)
Define Service.

Question (f)
Who is a Travel Agent?
Answer:
Travel agent is an agent who acts and do the work on behalf of a hotel, airline, transport or a shipping company. Travel agent provides the service to tourist on behalf of his owner.

Question (g)
Define Marketing?

SECTION – B

II. Answer any three of the following questions. Each question carries six marks. (3 x 6 = 18)

Question 2.
State any six objectives of Marketing.
Answer:
Following are the objectives of marketing:
(a) To apply effective marketing polices in the field of dynamic marketing. Rapid growth in the technology requires intelligent marketing polices to achieve the goals of the firm.

(b) To develop the market for the product in the market field. Some development and changes are required in continuous manner to retain the product in the market.

(c) To implement guiding policies for better results. Firm should develop and implement good guiding policies to earn more profit and to get better result in the market.

(d) To suggest solutions for marketing problems. Marketing is responsible for identifying problem and to find out better solutions for various aspects of marketing problems.

(e) To collect marketing information relating to marketing activities. Marketing decisions are based on marketing informations. Therefore marketing helps to take decisions on marketing activities by collecting marketing information.

(f) Marketing helps to collect new ideas for stabilization of firm in the market.

Question 3.
How does Technological Environment influence marketing?
Answer:
Technological environment is considered as uncontrollable environment in the marketing mix.
(a) Technological factors like development in computer science, information technology influence the growth of marketing. Growth of marketing helps to improvement in economic conditions.

(b) Technological environment changed the national market into global market. Globalization of the business activity has made tremendous growth in world market.

(c) Changes in information technology has also contributed for the growth of science sectors. Many instruments are developed which gives good services to customers.

(d) Technological changes also made changes in the specialized sectors like advertising education, personal cause, health care etc.

(e) Technological changes changed the life style income and behaviour of the people.

(f) New technologies offer a main source of economic growth.

(g) Technological environment changed the trading activity into e-trading, e-commerce, e-business and online business.

Question 4.
Briefly explain the various stages in product development.

Question 5.
State the merits of Personal Selling.

Question 6.
Differentiate between Products and Services.

SECTION – C

III. Answer any three of the following questions. Each question carries fourteen marks. (3 x 14 = 42)

Question 7.
Explain the functions of Marketing.

Question 8.
Explain the basis for Market Segmentation.

Question 9.
What is Product Life Cycle? Explain the various stages in product life cycle.

Question 10.
Explain the factors responsible for the growth of service sector in India.

Question 11.
What is Promotion? Explain its significance.

B.Com 1st Sem Marketing and Services Management Question Paper November 2015 with Answers

SECTION – A

I. Answer any five of the following sub-questions each question carries 2 marks. (5 x 2 = 10)

Question (a)
What is market.

Question (b)
What is meant by Relationship marketing?

Question (c)
Give the meaning of Marketing Environment.

Question (d)
What is Product-Mix?

Question (e)
What is Service Mix?
Answer:
Service mix is set of 7p’s. They are Product, Pricing, promotion, Place, People, Physical evidence, Process.

Question (f)
What is meant by Market Segmentation?

Question (g)
What is Social marketing Concept?

SECTION – B

II. Answer any three of the following questions. Each question carries six marks. (3 x 6 = 18)

Question 2.
What are the requisites of sound market segmentation?

Question 3.
Distinguish between advertising and personal selling.

Question 4.
Describe the Service Process.

Question 5.
Explain the impact of socio-cultural environment on marketing decisions.
Answer:
Social cultural environment is uncontrollable environment. Social and cultural forces influence the business concern in the long run. Marketing management should take new demands created due to changes in life style, social values etc., There are certain areas which require special attention.

They are –

  • Changes in life style
  • Changing role of women
  • Emphasis on quality goods
  • Greater performance for recreational activities
  • Greater care to health body and personality
  • Awareness of misleading advertisement
  • Growing consumerism

Social and cultural environment makes the business firm to perform social obligation. The social marketing concept demands every business firm to pay greater attention to consumer welfare and citizen welfare. Social habits and cultural status of consumers induce the business to take good decisions on production, marketing paid on consumer satisfaction. Business firm help the consumer by supplying satisfied goods according needs of consumers under social obligation.

Question 6.
Write short notes on ‘Selling Concept’ and ‘Marketing Concept’.
Answer:
There are five competing concepts under which business conduct its marketing activity.
They are –

  • The production concept
  • The product concept
  • The selling concept
  • The marketing concept
  • The societal marketing concept

(a) Selling concept:
The selling concept holds that consumers will not buy enough of the organisations products unless the organisation undertakes a substantial selling and promotion effort. Normally unsold goods like insurance, encyclopedias etc. Selling concept applies because they go for aggressive selling techniques selling techniques are applied by business man only when consumer are not interested with particular type of product firm uses price off offer combo offer to attract consumer.

(b)Marketing concept:
The marketing concept holds that the key to alliance organisational goals. The marketing concepts determines the needs and , wants of target markets and delivers the desired satisfactions more effectively and efficiently than competitors. This concept is based on find wants and fill them and have the consumer and not product for long time.

SECTION – C

III. Answer any three of the following questions. Each question carries fourteen marks. (3 x 14 = 42)

Question 7.
Define Product Planning. Describe the factors Influencing Product Planning.
Answer:
Product planning is the process of determining line of product which secure maximum profits from the protential markets. It is an act of marketing to find out market, supervising, searching, screening, development and commercialization of new product, the modification of existing lines, and the discontinuance of marginal or unprofitable items. Product planning is the management decision regarding introduction of new product following are the factors influence product planning and new product introduction in the market.

(a) Customers: Consumers needs and wants are monitored by the management through surveys. By inquiring and attending to complaints of consumers many new ideas are discovered by the management. Women consumers and working women provide lot of new ideas for manufacture of new product.

(b) Competitors: Management analyses competitors product, their advertisement techniques and takes invest in introduction of new product according to public invest,

(c) Distributors and suppliers: Distributors and suppliers are the middlemen between consumer and business firm. They pass information about new product and product planning with new changes, techniques according to consumer needs.

(d) Internal sources: Management always engage in the work of research. Marketing research and product research influence the firm to prepare plan for new product development. Marketing research and scientific research on product and production help to develop new product.

(e) Other sources: Trade magazines, seminars, government agencies, new product consultants, advertising agencies, marketing research firms, university, commercial laboratories, investors, advises and promotes management of firm to take decision on product planning.

Question 8.
Explain the different types of services.

Question 9.
Explain the bases of market-segmentation.

Question 10.
What is promotion? Explain its significance.

Question 11.
Explain the approaches to the study of marketing.

B.Com 1st Sem Marketing and Services Management Question Paper November 2016 with Answers

SECTION – A

I. Answer any five sub-questions. Each question carries 2 marks. (5 x 2 = 10)

Question (a)
What is market?

Question (b)
What is consumer behaviour?

Question (c)
Write any two elements of marketing-mix.

Question (d)
What is service-mix?

Question (e)
Who is a Travel Agent?

Question (f)
Write any two models of E-Business.
Answer:
Any two models of E-Business are –

  • B2B and
  • B2C.

Business to Business model is a model in which transaction is made between business. Business to customer model is used to trade the transaction between Business man and customers.

Question (g)
Expand the following:
(a) FCI
(b) PDS
Answer:
(a) FCI = Food Corporation of India.
(b) PDS = Public Distribution System.

SECTION – B

II. Answer any three of the following questions. Each question carries six marks. (3 x 6 = 18)

Question 2.
State any six objectives of Marketing.

Question 3.
Explain the stages in product development.

Question 4.
Describe the services process.

Question 5.
Explain the promotion-mix.

Question 6.
What are the essentials of a good qualities of a salesman?

SECTION – C

III. Answer any three of the following questions. Each question carries fourteen marks. (3 x 14 = 42)

Question 7.
Explain the approaches to the study of Marketing.

Question 8.
What are external macro environmental forces? Explain.

Question 9.
What is product planning? Describe the factors influencing product planning.

Question 10.
Explain briefly, the significance of Tourism.

Question 11.
Explain different types of services.

B.Com 1st Sem Marketing and Services Management Question Paper November 2018 with Answers

SECTION – A

I. Answer any five of the following sub-questions each question carries 2 marks. (5 x 2 = 10)

Question (a)
What is tele-marketing?

Question (b)
Give the meaning of retailing.

Question (c)
State the meaning of consumer behaviour.

Question (d)
What do you mean by psychological pricing?

Question (e)
What is meant by physical distribution?
Answer:
Physical distribution means transfer of goods form the place at production to the place of distribution. These distributions are done by businessman through channel of distribution.

Question (f)
State any four components of service marketing mix.

Question (g)
Define tourism.
Answer:
According to WTO, “Tourism is the movement of people away from their normal place of residence and work for a period of not less than 24 hrs. and not more than year and whose main purpose of travel is other than the exercise of an activity remunerated from with in the place visited.

SECTION – B

II. Answer any three of the following questions. Each question carries six marks. (3 x 6 = 18)

Question 2.
State any six goals of marketing.

Question 3.
Explain briefly the personal factors of consumer behaviour.

Question 4.
Explain briefly the stages in the product development.

Question 5.
Briefly explain the steps in building a service blue print.

Question 6.
State the significance of health care services.
Answer:
Significance of healthcare services:

  • Health care services in India has increased life expectancy at birth of male and female.
  • Improvement in health care services qualify has decreased the death rate.
  • Health care services are health related activities or benefits increases employment and generates revenue.
  • It deescases infant mortality rate.
  • Public health services, essential, public health services, preventive health services, mental health services, home health services and school health services are found in India.
  • Health workers provide services to different people in different age groups
  • Health services are offered at any time because different people may need them due to variaisor special reasons.

SECTION – C

III. Answer any three of the following questions. Each question carries fourteen marks. (3 x 14 = 42)

Question 7.
Briefly explain the recent trends in marketing?

Question 8.
Explain the bases of market segmentation.

Question 9.
Explain briefly the various channels of distribution.

Question 10.
Discuss the different types of services.

Question 11.
Discuss the marketing mix of educational services.

SECTION – A

I. Answer any five of the following sub questions. Each Sub-question carries two marks. (5 x 2 = 10)

Question (a)
What is green marketing?

Question (b)
What is consumer behaviour?

Question (c)
Write any two models of E-Business.
Answer:

  • B2 – BModel
  • B2 – C Model

Question (d)
Who is a Travel Agent?

Question (e)
Give the meaning of a product.

Question (f)
What is product mix?

Question (g)
What is branding?

SECTION – B

II. Answer any three of the following questions. Each questions carries six marks. (3 x 6 = 18)

Question 2.
Briefly explain any six objectives of marketing.

Question 3.
Explain in brief of the objectives of pricing.

Question 4.
Explain the stages in product development.

Question 5.
Describe the service process.

Question 6.
What are the requisites of sound market segmentation?

SECTION – C

III. Answer any three of the following questions. Each question carries fourteen marks. (3 x 14 = 42)

Question 7.
Explain the approaches to the study of marketing.

Question 8.
What is product planning? Describe the factors influencing product planning.

Question 9.
Explain the bases for market segmentation.

Question 10.
What is promotion? Explain its significance.

Question 11.
Explain the characteristics and economic significance of tourism.

B.Com 1st Sem Marketing and Services Management Question Paper Dec 2017

B.Com 1st Sem Marketing and Services Management Question Paper Dec 2017

Time: 3 Hours
Max. Marks: 70

SECTION – A

I. Answer any five sub-questions. Each sub-question carries two marks: (5 x 2 = 10)

Question (a)
What is market?
Answer:
Market means getting together of buyers and sellers in person or by mail, telephone, telegraph, cable or through any other means of communication. It does not refer to any particular place where buyers and sellers meet face to face and make their purchases and sale, but covers the whole of any where the buyers and sellers are in such free intercourse (i.e., communications or contact) with one another that a single price prevails for a certain commodity at a certain point of time throughout the region.

Question (b)
What is green marketing?
Answer:
Green marketing refers to holistic marketing concept where in the production, marketing, consumption and disposal of products and services happen in a manner that is less detrimental to the Environment with growing awareness about the implications of global warming, non-biodegradable solid waste, harmful impact of pollutants etc

Question (c)
What is market segmentation?

Question (d)
What is consumer behaviour?

Question (e)
Give the meaning product.

Question (f)
What is service market?

Question (g)
What is tourism marketing?

SECTION – B

II. Answer any three questions. Each question carries six marks. (3 x 6 = 18)

Question 2.
State any six characteristics of marketing.

Question 3.
Explain the models of e-business.
Answer:
→ Business -to- Business (B2B) model: It involves electronic transactions for ordering, purchasing, as well as other administrative tasks between houses. It includes trading goods, such as business subscriptions, professional services, manufacturing and wholesale dealings.

→ Business -to- Consumer (B2C) model: It involves transactions between business organizations and consumers. It applies to any business organization that sells its products or services to consumers over the Internet. Internet sites display product information in an online catalogue and stores it in a database. It also includes services online banking, travel services, and health information.

→ Consumer – to- Consumer (C2C) model: It involves transaction between consumers. Here, a consumer sells directly to another consumer. EBay and www.bazee.com are common examples of online auction Web sites that provide a consumer to-advertise and sell their products online to another consumer.

→ Consumer-to – Business (C2B) model: It involves a transaction that is conducted between a consumer and a business organization. It is similar to the B2C model, however, the difference is that in this case the consumer is the seller and the business organization is the buyer. In this kind of a transaction, the consumers decide the price of a particular product rather than the supplier. This category includes individuals who sell products and services to organizations. For example, www.monster.com is a Web site on which a consumer can post his bio-data for the services he can offer. Any business organization that is interested in deploying the services of the consumer can contact him and then employ him, if suitable

Question 4.
Explain the objectives of pricing.
Answer:
(a) Profit Oriented Objectives:
Profit oriented objectives focus on profit. This objective can be profit maximization and achieve target return.
→ To maximize profit: One of the objectives of pricing is to maximize the profit. It is very important to maximize the profit to run the organization. Some company set price to their products or services with a view of maximizing profit. It is very important to focus on profit maximization.

→ Achieving target return: Some company may determine the price of their goods or services to achieve a certain return on investment or on sales.

→ Achieving target return on sales: It is necessary to achieve target return on sales in pricing. Mostly resellers manage their pricing to achieve a target return on sales

→ Achieving target return on investment: Pricing should focus on achieving target return on investment too. Manufacturing company manages pricing in order to achieve specified return on investment in manifesting, research and development, establishment and commercialization.

(b) Sales Oriented Objectives:
Sales oriented pricing objectives focus on sales volume rather than on profit. The profit can be to gain sales volume and market share. It includes sales volume in-crease,

Sales volume increase:
One of the pricing objectives may be determined in terms of increasing sales volumes over the certain period of time. For example, 10% increase annually. This does not mean that profit should be avoided. Organization believes that higher sales volume will lead to lower unit costs and higher long run profit. It is necessary to focus in the increment in sales volume of the company.

Maintain market share:
Pricing should have the basic objectives in maintaining market share. Market share is really a meaningful measure of the success of a firm’s marketing strategy. A market share price objective can be either to maintain the market share, to increase it or sometimes to decrease it. The company uses the price as an input to enjoy a target market share. This market share is normally expressed as a percentage of the total industry sales.

(c) Status Oriented Objectives:
Status oriented pricing focus on maintaining the current position. Large companies in order to minimize the risk of loss and maintain their status adopt this objective. Organization does not take any initiative in the price change. These objectives are as follows:

Stabilization of price:
Pricing should have the objectives in stabilizing the price of a product. Some organization may set their pricing objective in order to maintain or stabilize price and prevent from market uncertainty. These objectives are adopted for minimizing the risk of loss.

Meet competition:
The objective of pricing is to meet the competition in the market. Under this objective organization set the prevailing market price.

Question 5.
State the essentials of good brand.
Answer:

  • It should be short as far as possible and should not exceed seven letters. Example: Surf, Lux, Colgate Super Max, Pear (soap)
  • Brand should be easy to write, read, spell, recognize and remember. Example: Sony (Cassette), Promise (tooth paste) Action (Shoe) etc
  • It should suggest product benefits or benefits or qualities. Examples are: LG Refrigerator, Vico Vajradanti tooth Powder, Snow cem paints etc
  • It should be suited to the markets, buyers and products. Women consumers are attracted’to feminine name and mark and men to masculine ones, Example – Evening in Paris (perfume), and Prince (Blades)
  • It should be able to translate in other foreign language easily
  • It should be distinctive so that the product is easily differentiated e.g. LG T. V., Samsung T.V., Kodak, Philips, etc
  • It should be capable of registration
  • It should be legally protectable. For example use of names like National Flag, Ashok Chakra, UNO, WHO are prohibited by the act

Question 6.
Describe the service process.
Answer:
The service process is the detailed specification of a service. Service processes intensely interact with the customer. First, there are intense interactions with the customer: Service processes show long encounters, during which customers interact directly. There may be duties of the customer that are critical for success or failure of the service process. For example, it may be necessary that the customer provides some information to allow the further proceeding of the process. It is important to emphasize that a service process must-describe the interaction between customer and service provider.

A second important property is, that service processes differentiate two areas, front stage and back stage. The front stage contains the activities of the customer and the service provider’s activities that are visible to the customer. The back stage contains the activities not visible to the customer. The third important property is that service processes need to represent the handover of resources and information from the customer to the service provider and the restitution vice versa. Furthermore, service processes are often cross-organizational. A top-level service process that is responsible for providing the service to the customer coordinates a number of sub processes.

SECTION – C

III. Answer any three questions. Each question carries fourteen marks. (3 x 14 = 42)

Question 7.
Explain the functions of marketing.

Question 8.
Explain the bases for market segmentation.
Answer:
(a) Geographic Segmentation:
Geographic location is one of the simplest methods of segmenting the market. People living in one region of the country have purchasing and consuming habit which differs from those living in other regions. For example, life style products sell very well in : metro cities, e.g., Mumbai, Delhi, Kolkata and Chennai but do not sell in small towns.

Banking needs of people in rural areas differ from those of urban areas. Even within a city, a bank branch located in the northern part of the city may attract more clients than a branch located in eastern part of the city.

(b) Demographic Segmentation:
In demographic segmentation, market is divided into small segments based on demographic variables like age, gender, income, occupation, education, social class, generation, family size, family life cycle, home ownership, religion, ethnic group, nationality etc. It is one of the most important factors for segmenting the customers groups. Consumer needs, wants, usage rate etc depends upon demographic variables.

Demographic factors play a very crucial role in formulating marketing strategy. For instance Maggi noodles were launched to target the market of children and young children but it has been found to be liked by adult. Consumer products like liquor, cigarette, apartments, cars, LCD TVs, hotels and restaurants are income related segmented markets.

(c) Psychographic Segmentation:
In Psychographic Segmentation, segments are defined on the basis of social class, lifestyle and personality characteristics. A psychographic variable includes interests, opinions, personality, self image, activities, values, attitudes. A segment having demographically grouped customers may have different psychographic characteristics.

(d) Behavioral Segmentation:
In this segmentation market is divided into segments based on consumer knowledge, attitude, use or response to product. Behavioral variables includes usage rate, product benefits, brand loyalty, price consciousness, occasions, user status etc. For example, one segment of the market may always purchase your product while another is made up of people who switch frequently between brands. An experienced drinker may stick with Guinness, while an inexperienced on may try out a range of beers and stouts.

(e) Benefit Segmentation:
Marketing and advertising executive attempt to identify the one important benefit of their product or service that will be most meaningful to consumers. Examples of . benefit that are commonly used includes financial security, data protection, good health, fresh breath, and peace of mind.

(f) Socio-cultural segmentation:
Socio-cultural variables that is group and anthropological variables provide further .bases for market segmentation. For example, consumer markets have been successfully subdivided in to segments on the basis of stage in the family life, social class, core cultural, sub-cultural memberships and cross cultural affiliations

(g) Use -Related segmentation:
An extremely popular and effective form of segmentation categorizes consumer in term of product, services, or brand usage characteristics, such as level of usage, level of awareness and degree of brand loyalty. Marketers of a host of other products have also found that a relatively small group of heavy users accounts for a disproportionately large percentage of product usage; targeting these heavy users has become the basis of their marketing strategies. Other marketers take note of the gaps in market coverage for light and medium users and profitably target those segments.

Question 9.
Explain the stages involved in new product development.

Question 10.
Define services. Explain the characteristics of services.

Question 11.
Explain the characteristics and economic significance of tourism.
Answer:
Characteristics of tourism:
(a) Tourism arises from a movement of people to, and their stay in, various destinations.

(b) There are two elements in all tourism: the journey to the destination and the stay including activities at the destination.

(c) The journey and the stay take place outside the usual place of residence and work, so that tourism gives rise to activities, which are distinct from those of the resident and the working population of the places, through which the tourist travels and in which they stay.

(d) The movement to destinations is of temporary, short-term character, with the intention of returning to the usual environment within a few days, weeks or months.

(e) Destinations are visited for purposes other than taking up permanent residence or employment remunerated from within the places visited.

(f) Tourism is a multi-dimensional phenomenon. It involves varied activities like hotels, travel, tour operators, retail shops, entertainment

(g) Tourism is basically a service industry and a large proportion of population actively engaged in it finds employment prospects in tertiary profession like hotels, catering, transport, travel agency etc

(h) The industry of tourism is dominated by changing ideas, attitudes and motivation of its customers.

Economic benefits of tourism:
Foreign exchange earnings:
Tourism expenditures, the export and import of related goods and services generate income to the host economy. Tourism is a main source of foreign exchange earnings ’ for at least 38% of all countries.

Contribution to government revenues:
Government revenues from the tourism sector can be categorized as direct and indirect contributions. Direct contributions are generated by taxes on incomes from tour¬ism employment, tourism businesses and by direct charges on tourists such as eco tax or departure taxes. Indirect contributions derive from taxes and duties on goods and services supplied to tourists, for example, taxes on souvenirs, alcohol, restaurants, etc.

Employment generation:
The rapid expansion of international tourism has led to significant employment creation. For example, the hotel accommodation sector alone provided around 11.3 million jobs worldwide in 1995. Tourism can generate jobs directly through hotels, restaurants, taxis, souvenir sales and indirectly through the supply of goods and services needed by tourism-related businesses. According to the World Tourism Organization tourism represents around 7 % of the world’s employees.

Stimulation of infrastructure investment:
Tourism can induce the local government to improve the infrastructure by creating better water and sewage systems, roads, electricity, telephone and public transport networks. All this can improve the quality of life for residents as well as facilitate tourism.

Contribution to local economies:
Tourism can be a significant or even an essential part of the local economy. Because environment is a basic component of the tourism industry’s assets, tourism revenues are often used to measure the economic value of protected areas. There are other local revenues that are not easily quantified, as not all tourist expenditures are formally registered in the macro-economic statistics.

Part of the tourism income comes from informal employment, such as street vendors and informal guides. The positive side of informal or unreported employment is that the money is returned to the local economy and has a great multiplier effect as it is spent over and over again. The World Travel and Tourism Council estimate that tourism generates an indirect contribution equal to 100% of direct tourism expenditures.