DECA CLUSTER EXAM RESOURCES

TABLE OF CONTENTS
GENERAL BUSINESS... INTRO TO BUSINESS.3 BRANDING AND POSITIONING..4 BUSINESS MANAGEMENT AND ADMINISTRATION. VOCABULARY..5 QUESTIONS.10 HOSPITALITY AND TOURISM VOCABULARY..24 QUESTIONS..31 FINANCE... VOCABULARY..36 QUESTIONS....45 MISC. INFO (IMPORT/EXPORT)...51 FINANCE ROLE PLAY STRATEGIES....52 MARKETING... VOCABULARY..53 QUESTIONS AND MISC. VOCABULARY...77 MARKETING IDEAS91 TEXTBOOK NOTES.106

GENERAL BUSINESS
INTRO TO BUSINESS
Purpose of a business: create and keep a customer Functions of a business: marketing and innovation A business must o Produce and deliver goods and services that people want at a price and under conditions that are reasonably attractive to those offered by others o Produce revenue in excess costs in sufficient quantity with sufficient regularity to attract and hold investors o Have an appropriate system of rewards and controls

Marketing o o o Is a distinguishing, unique function of the business Must be used to create and exchange value with customers Creates value for customers and builds strong customer relationships

Marketing process: understand needs and wants of the customers o o o o Design a customer driven marketing strategy Construct a marketing program that delivers superior value Build profitable relationships and create customer delight Customer value from customers to create profits and customer quality

Creative destruction: the process of change in the industrial process incessantly revolutionizes the economic structure, destroying the old one and creating a new one

Marketing myopia: if a customer competes with your own offering, it is far more sensible for you to give it to them than to let competitors do it

GENERAL BUSINESS
BRANDING AND POSITIONING
Brand: how a business represents itself Position: how a brand is thought of *always be unique 7up vs. Coke didnt say it was better, said it was different, the uncola, lemon/lime

brand tools: logo, promotional mix, product mix, customer service, activity

5 principles of a logo: simple, memorable, timeless, versatile, appropriate McDonalds promo mix: advertising, personnel selling, sales promotion, public relations, direct marketing advertising: attracts, educates, reaffirms personal selling: oral persuasion sales promotion: stimulate demand public relations: create favorable perceptions (make people feel good about the buying) direct marketing: channel agnostic, directly addressed, drive a call action product mix: total amount of product lines a company offers width: number of product lines depth: variations of each product length: number of products in a company consistency; how all product lines are related customer service: image of the company activity: create a brand and position yourself different from the top brands of your industry

BUSINESS MANAGEMENT AND ADMINISTRATION

VOCABULARY
Financial Management and Accounting
Workers in this pathway perform a company's financial operations, tracking sales and expenses, planning budgets, handling invoicing, receiving payments, preparing tax statements, and more. Jobs include auditor, accountant, tax examiner, bookkeeping clerk, and auditing clerk.

Human Resources

This pathway focuses on the management of people. Jobs include labor relations manager, personnel manager, industrial-organizational psychologist, and human resources manager.

Administrative and Information Support

Workers in this pathway help a company operate efficiently. Jobs include receptionist, secretary, mail clerk, information systems manager, transcriptionist, database manager, office manager, and records clerk.

Business Analysis

This pathway covers any activity that helps people understand how a particular aspect of a business works. Workers in this pathway include management consultants, management analysts, operations analysts, systems analysts, and business analysts.

Management

Management is the direction or control of a business or enterprise. Management occupations include administrative manager, restaurant manager, hotel manager, marketing manager, advertising manager, small business entrepreneur, and retail manager.

Marketing and Communications

Workers in this pathway help their firms market and sell products and services more effectively. Jobs include marketing assistant, market researcher, marketing manager, marketing director, public relations specialist, product developer, and promotions manager.

Information Needs

revelent information - value of information lies solely on how it affects behavior, decision, or outcome

intangibles

cannot be measured because it has no physical substance

security policies

set of rules defining who is authorized to access what and under what conditions

cash

ready money

credit

purchasing power created by banks through lending based on fractional reserve system

debit note

form of letter issued by a seller to advise amount owed by the buyer

electronic funds transfer

moving money without paper

vision statement Management

description of what company wants to achieve in the mid-term/long-term The people who have the responsibility of running the company

Administration

All the tasks that enable the company to function e.g. customer service, office duties, bookkeeping, answering the phones

Operations Site

Business activities Location, place

Headquarters
Main office

Customer support
Helping customers with their questions and complaints

Switchboard Purchasing

Answering the phones Buying supplies for the company

Aggregate Function

A formula used to calculate counts, totals, averages, and other statistics for groups of records.

AutoFormat Criteria Form

A format available in Access to apply to your existing database object. Conditions that are set in a query. An onscreen display where data can be added or changed.

Group Header Layout View

A tool that refines reports by sorting information into groups. A view that allows you to see how your data will look what printed.

Multiple Item Form PivotTable Property

A form that shows multiple items in a datasheet. A table that can display information and present it in several different ways. A detail about an object, such as the size or default value.

Property Sheet Redundant

A window listing the properties for an object. Exceeding what is necessary.

Referential Integrity Relationship Sort

Prevents conflicting data between two tables by enforcing a relationship. A link between two tables based on a common field. To put a list of data in ascending or descending order.

Split Form Subform

A form that is split into a datasheet in one half and a form in the other. A form inserted into another form.

Table Analyzer Wizard

A wizard that evaluates the information in a chosen table and then makes changes to streamline the data.

Total Row

A function that can summarize columns of data in a table to give you totals, averages, maximums, minimums, and other calculations simply and quickly.

Unmatched Query

A query that finds records without matching related data.

Wildcard Demand

Using characters similar to your criteria to find information. The quantity, or how much of a good or service that an individual or group of individuals will purchase at various prices

Law of Demand Demand Curve

Price goes up then quantity goes down; Inversely related Graphical representation of the demand schedule; sloped shows inverse relationship between price and quantity demanded

Market Demand

Demand of all consumers in the market place for a particular good or service

What are the determinants (ceteris paribus conditions) of demand?

Consumers tastes and preferences, Income, Prices of related goods, Expectations of the future, and Number of Buyers

Change in the quantity demanded

Shift along demand curve

Supply

Schedule showing the relationship between price and quantity for specifies period of time; with everything else remaining constant

Law of Supply

Higher Prices = Larger Quantity Supplied Lower Prices = Smaller Quantity Supplied Directly Related

What are the determinants (ceteris paribus conditions) of supply?

Cost of inputs, Taxes and subsides, Price expectations, Number of firms in the industry, and Technology and productivity

Equilibrium

When quantity demanded equals quantity supplied

Equilibrium Price Proprietorship Partnership

The price at equlilibrium a business that has only one owner a form of business organization where two or more people go into business together

Corporation

a business owned by many people

Entrepreneur Franchise

a person who organizes and manages a business the right to market another company's product or service

General Manager

the highest ranking manager who is responsible for all departments that perform different functions

Certified Public Accountant

analyze financial information and prepare financial reports to determine or maintain record of assets, liabilities, profit and loss, tax liability, or other financial activities within an organization and has met all licensing requirements of a state to be certified by that state

Human Resource Manager

an individual responsible for recruitment, selection, and placement for all positions within a company. Maintains personnel files. Administers all employee benefit programs, including vacation, insurance, and retirement plans.

Financial Management

planning for a firm's money needs and managing the allocation and spending of funds

Financial Analysis

budgeting for marketing activities, obtaining the necessary funds needed for operations, and providing financial assistance to customers so they can purchase the business' products and services

Business Analysis

involves a review of the sales, costs, and profit projections to find out whether they satisfy the company's objectives

Marketing Manager

plan, direct, or coordinate marketing policies and programs, such as determining the demand for products and services offered by a firm and its competitors, and identify potential customers

Office Manager Office Clerk

person who organizes and oversees the daily operations of the office staff. perform duties in any specific office clerical occupation, requiring knowledge of office systems and procedures. Clerical duties may include a combination of answering telephones, bookkeeping, typing or word processing, stenography, office machine operation, and filing

Receptionist

a secretary whose main duty is to answer the telephone and receive visitors

Department Manager Sales Manager

the manager who oversees all department operations

plan, direct, or coordinate the actual distribution or movement of a product or service to the customer. Coordinate sales distribution by establishing sales territories, quotas, and goals and establish training programs for sales representatives

Bookkeeper

someone who keeps accounts and records all of the transactions of a business

Auditor

a qualified accountant who inspects the accounting records and practices of a business or another organization

Administrator

a person with a higher degree who manages or directs a group of people

Attachment Field Backup

A field that is useful for linking files and other objects to a database.
A copy of a file that is created to protect one's work and data.

Caption

A label that corresponds with a picture or diagram; in Access, a field's column heading in Datasheet View or text in a label control.

Control

An objection a form or report that displays data, such as a text box or a check box, or a button that lets users control a program.

Criteria

Conditions that are set in a query.

Crosstab Query

Calculates a sum, average, count, or other type of total for data that is grouped by two fields-one across the top of the datasheet, the other in each row of the datasheet.

Data Type Database

Tells what type of data a field can hold.

An organized way to store information so that it is easy for the computer to search for information.

Database Template Default

A sample database used by the Database Wizard to create a new database. A setting that a program automatically selects if you do not specify a substitute.

Design View

The view that allows you to change the structure of a database object.

Duplicate Query Field

A database query that finds records with the same data in a field. One piece of data that describes something.

Input Mask

Allows users to apply a specific type of format to data entered into a database.

Lookup Field

Displays input choices from another table so you can enter data by choosing from a list.

Primary Key Query

A column in a table whose values unequally identify the rows in table. An instruction that tells a database to show only certain information.

Record

The set of data that describes one item, shown in one row of a table.

Shared Access

The ability for more than one person to access and edit a database at the same time.

Table

A set of rows and columns used to organize information.

BUSINESS MANAGEMENT AND ADMINISTRATION

QUESTIONS
Why do businesses with excessive debts often file Chapter 7 bankruptcy?
To liquidate.

What type of business ownership is easy to start, the individual owner is the boss, and the owner receives all the profits?
Sole proprietorship.

Following directions is important because

Failing to do so has consequences.

Communicating by telephone is sometimes more difficult than communicating face-to-face because

Nonverbal cues are missing.

No matter what method you use to get the audience's attention, the opening of your oral presentation should always
Relate to the audience.

Letters of inquiry that businesses write to other businesses are routine business communication and usually contain only
Basic information.

A memorandum is typically used for communication that takes place

Within a business.

The primary purpose of a research report is to

Summarize gathered information.

What type of information is often transmitted through upward communication?

Suggestions.

Employees who always keep their commitments to customers are building positive relationships with those customers by being
Dependable.

To discover a product's level of utility, marketers measure the consumer's

Satisfaction.

On the box of the McDonald's Happy Meals, there is a warning label indicating that children under a certain age should not play with the enclosed toy because they may choke on it. This is an example of McDonald's being socially responsible to
Product users.

One of the differences between private enterprise and other types of economic systems is that, in other systems, workers
May be unable to improve their standard of living.

The federal agency created to protect competing businesses against unfair methods of competition is the
Federal Trade Commission.

Whenever the United States establishes trade relations with a developing nation, it means that the citizens of the developing country will be able to sell their goods and

purchase more goods. For the developing country, this will promote
A higher standard of living. Shaking hands.

The most acceptable business greeting in the United States is Native New Yorker, Carolyn Hendricks is in London to finalize a business contract with British entrepreneur, Nigel Westwood. After their meeting, Nigel said, "Say, Carolyn. I'm feeling a tad peckish. Would yeh fancy to go out for a starter, or perhaps a sarnie and crisps?" An astonished Carolyn had no idea how to respond. What does this example illustrate?
Although the Americans and British people speak English, the variations of the language can create barriers.

Carmen Sanchez is a Chilean businessperson who is attending a business meeting with Mr. Takahasi in Nagoya, Japan. She knows that a formal, conservative appearance is very important in Japanese business situations. To make a favorable impression on Mr. Takahasi, Carmen should wear
A dark skirt and jacket, low-heeled shoes, and no jewelry.

In many Middle-Eastern countries, showing the bottom of your shoe or foot is an offensive gesture, so it is important for foreign businesspeople to
Monitor their behavior.

Hindu is the primary religion in India. According to religious traditions and customs, Hindus consider cows sacred creatures. To respect this religious custom of Indian Hindu businesspeople, foreign businesspeople should not
Wear or carry leather accessories.

When doing business in India, it is important for foreigners to remember that it is disrespectful for men to shake hands with women. This is an example of a cultural issue related to
Gender differences.

The term which refers to your ability to guide or direct the actions of others is
Leadership.

Jack, a manager, said to his staff, "I know that many of you think that this is a risky course of action. But, I've decided that we should proceed. If this is successful, it could greatly benefit the company. If it fails, I'll accept the consequences and work to find a new solution." What is Jack doing?
Accepting responsibility for his decision.

Jana has a meeting with her boss for two hours at 10:00 Monday morning and is leading a videoconference at 4:30 that afternoon. Susan, a potential investor, calls Jana early Monday morning and says that she will be flying in from Portland Monday morning at 11:30. After she picks up her rental car, Susan wants to meet with Jana early Monday afternoon. Jana knows that meetings with her boss tend to last longer than expected, and that Susan will have a 45minute drive from the airport to her office. The investor could really help the company, so Jana feels that it is important to meet with Susan. What should Jana tell this important potential investor about meeting on Monday afternoon?
Suggest that they meet for lunch at 1:15 p.m.

Michael messed up some reports for work. After he realized it, he went straight to his boss and admitted his mistake. He apologized and promised to fix the reports right away. What characteristic of a positive attitude does this display?
Positive people are responsible.

Feedback can be extremely valuable because it

Shows you what areas to improve.

Taking a couple of deep breaths and counting to 10 slowly are techniques that will help you to
Keep your self-control.

Leadership is especially important at the beginning of a business because

Start-up failure rates are high. Secured.

What type of loan requires collateral? When the U.S. federal government owes money to a contracted employee or business, the government must pay the employee or business according to the
Prompt Payment Act.

Individuals charging only the amount they can afford to pay in full every month are an example of
The wise use of credit.

One way that rapidly developing technologies can increase economic risk for business is by
Shortening the demand cycle for products.

Accounting records for a business show that the week's total sales revenues were $125,000. Cash sales accounted for $50,000 and credit sales, $75,000. This is an example of
The accrual method of accounting.

Capturing and managing tacit knowledge is important to a business because all employees possess personal __________ and __________ that may be used to improve the business's processes.
Wisdom, expertise.

Camilla is being promoted and is training Cecily to take over her current position. To help Cecily acclimate to her new job, Camilla gives Cecily some tips that might help her process her work more efficiently. What does this example illustrate?
Camilla is exhibiting ethical behavior by passing along personal knowledge to help Cecily learn how to do her job.

To reduce the risk of employees sharing trade secrets with industry rivals, businesses might require their employees to
Sign a nondisclosure agreement.

A business captures its employees' knowledge of certain tasks, processes, and events by developing a chart that outlines the relationships among bits of information. This is an example of a business using a(n) __________ technique to capture and transfer knowledge.
Diagram.

Communicating information to consumers or clients about products, images, or ideas to achieve a desired outcome is the __________ function.
Promotion.

Appropriate information management helps a business build a good reputation by

Being consistent.

Technology that links employees who work in different location and allows them to access the same business information is called a computer
Network.

A benefit of using project-management software is that it

Creates a variety of evaluative reports.

Some business records need to be maintained in secure locations because they contain __________ information.
Confidential.

A growing trend that is influencing the way that many companies do business is the concern for
Protecting the environment.

When a company considers how a new trade agreement among several countries may impact its business activities, it is evaluating a(n) ________ factor.
Political.

Which operations activity is also referred to as procurement?

Purchasing.

Ken is a manager for a local company. He has collected bids from several area trucking companies and is currently comparing them with the invoices of the company's current trucking service to determine which one is the best transportation vendor for the company to use. Ken is analyzing business data in relation to
Distribution.

What should all companies have on the premises in order to handle accidents?
First-aid supplies.

What type of security problem does a business have if its employees routinely take pens and paper home for personal use?
Pilferage.

Luke is a purchasing-department employee who must complete his inventory report by 4:00 p.m. on Tuesday. He must also collect bids and place orders for staple items by Wednesday at noon. Because Luke knows that it will take a while to obtain the bids, he decides to start contacting vendors before he begins working on his inventory report. Luke is __________ his workload.
Prioritizing.

Tom needs Allison to provide a status report, so he can review inventory levels. After Tom has reviewed the inventory report, he must tell Kayla which items the business needs, so she can contact the appropriate vendors to order stock. To achieve the business's goal of maintaining adequate inventory levels, each employee must perform his/her tasks in a(n) __________ order.
Sequential.

Before Bob can pay the business's bills, he checks with Ingrid to verify that accounts receivables are coming in, and that there is enough cash in the business's checking account to cover the expenses. This is an example of coworkers who are
Coordinating their work efforts. Control the project.

Reviewing activity-status reports helps a project manager to To maintain favorable relationships with vendors, a business must
Have a cooperative orientation.

The Colbert Company ships 19 cases of model number 328 bolts to SOA Manufacturing Company every other week. This is an example of a(n) ___________ purchase order.
Standing.

Why does a business keep stock on hand for resale?

To sell it to end-users.

The Simpson Company is negotiating discount terms with Cornwell Manufacturing, a prospective vendor. During the negotiation, Cornwell states that it is willing to offer Simpson a six-percent discount on orders over $50,000. Although Simpson would rather have an eight- percent discount, it agrees to the terms, hoping to obtain something it wants later in the negotiation. This is an example of a
Concession.

Employees who handle company property correctly so it needs less repair often help the business to
Save money.

One of the reasons that businesses schedule regular maintenance activities is because maintenance
Affects the business's image.

The Maxwell Manufacturing Company regularly inspects its production equipment and conducts regular maintenance activities so the equipment works correctly. By conducting these activities, Maxwell is complying with laws that relate to
Workplace safety.

One of the benefits of setting goals that will help you in your relationships with others is that setting goals
Helps you to understand yourself.

Employees who understand who they are, accept their weaknesses, and realize that they each possess unique talents usually have high
Self-esteem.

One of the advantages of discussing career opportunities with employees in specific fields is that you often obtain information about
Job requirements.

What is a factor that many businesses consider when promoting employees? Seniority. It is important for employees to follow the rules of conduct established by management to
Maintain a consistent and fair work environment.

Sally is a production-line worker who is experiencing problems with the production equipment. Following the appropriate chain of command, Sally should report the problem to
Jim, the production-line supervisor.

Within the next three years, the PRM Company wants to set up an electronic data interchange with all of its suppliers. What type of organizational goal is PRM establishing?
Technology.

A business should establish its employees' work goals so they

Align with the organization's objectives.

One way to determine if an employee is helping a business to achieve its organizational goals is by
Evaluating the employee's performance.

When initiating a project, managers often develop SMART objectives, which are specific, ___________, achievable, ___________, and timely.
Measurable, relevant.

Isabelle is developing a document that divides a long-term project into meaningful subprojects and tasks, which she will use to guide the workflow. Isabelle is developing the
Work breakdown structure.

So project-team members understand the project objectives and what is expected of them, project managers need to
Communicate clearly.

Before closing a project, the project manager, team, and stakeholders must agree that the
Objectives have been achieved.

The Fisher Manufacturing Company has been receiving a lot of complaints about product breakage problems with the model 2YZ. Fisher has been working with its parts vendors and production-line personnel to try to determine why the problems are occurring. This is an example of a productquality issue related to
Durability.

An advantage to a business that uses Capability Maturity Model Integration (CMMI) software is that it
Guides continuous improvement efforts throughout many levels of the organization.

To control the business's level of risk, management needs to clearly communicate the business's code of ethics to employees because The employees' personal ethics may differ from the business's ethics. When businesses continuously monitor the laws and implement changes to remain in compliance, they are
Controlling their risks.

A business manager who helps an employee decide when and where products should be delivered performs which management function?
Directing.

Caitlin is the manager for a busy accounting department and has decided not to replace the payroll specialist who recently resigned. She wants Martin, who currently handles the firm's accounts-receivable, and David, the accounts-payable clerk, to jointly take over the payroll-processing responsibilities. She also wants her assistant Fiona to take over some Martin's and David's current tasks. What organizing activity is Caitlin performing?
Reallocating resources.

Findley Construction Company has been awarded a major contract to work on a new shopping mall and arena that is being built in the city's business district. Because the project requires special skills and knowledge, Nick, Findley's humanresources manager, will need to acquire new workers to carry out the many tasks associated with the project. Nick is responsible for _________ workers, which is an activity associated with the __________ management function.
Hiring, staffing.

What is a manager doing, when s/he provides an employee with positive feedback and encouragement?
Motivating.

What are the three primary characteristics of an effective control system in a business?
Suitable, understandable, and timely.

In order for a contract between two parties to be legally binding, one party must make an offer and the other party

must accept the offer. This offer and acceptance meet the __________ provision.
agreement

When an agent legally acts in the best interests of his/her client, the agent is establishing a(n) _______ relationship.
fiduciary

An effective technique for personalizing a telephone sales presentation is to

Greet the customer by name

One of the advantages of rehearsing an oral presentation is that it gives the businessperson the opportunity to
Time the presentation

When writing persuasive messages to convince customers to do something, it is often helpful to explain the
Benefits of taking action

Supplemental materials that help to explain the information contained in a simple report can be included in the form of
Attachments

When analytical reports contain information readers might disagree with, writers should back their conclusions with
Logical arguments

What channel of staff communication are managers usually unable to control?

Grapevine

Employees usually are able to provide good customer service by considering the customers'
Needs

A customer has politely expressed dissatisfaction with the business's policy, but s/he is actually upset about an employee's attitude. This is an example of a
Hidden complaint

Offering higher wages, employee-assistance programs, and benefits are responses to limited
Human resources.

What happens when the amount of a good that is supplied is greater than the amount demanded?
Prices go down

The amount of satisfaction a product will provide a customer is referred to as the product's
Value

Individuals put limits on their own economic freedom by

Making personal economic choices Uninsurable

Risks that may result in a loss, no change, or a gain are One of the benefits of economic growth is that government
Can carry out its activities more easily

David Lyle, an American businessperson, is in Munich, Germany to negotiate a deal with Braun's Bratwurst Company. When David opened his presentation with a joke, Braun's executives glared at him, and the room was silent. If David had done some research, he would have learned that
It is inappropriate to use humor with Germans in business situations

Katherine is going on a business trip to Argentina. Cecilia, Katherine's coworker, is from Argentina. Cecilia tells Katherine to make sure that she keeps her hands on the table

because it is considered rude to put your hands in your lap while in a restaurant. Cecilia's tip is related to
Dining etiquette

When doing business in Taiwan, foreigners should avoid winking because this is considered a(n)
Inappropriate gesture

Foreign businesspeople should understand that Saudi Arabians might leave a business meeting for several minutes to attend daily prayers. This is an example of a custom related to
Religion

Paige is a Canadian businessperson who is attending a meeting in India. What should Paige wear to the meeting to make a positive, professional impression?
Conservative pantsuit

Emotional intelligence is especially important today because

Collaboration is becoming a standard method of achieving business goals

Most people have consistent patterns of behavior that are based on their personal characteristics known as personal
Traits

In order for responsible employees to meet deadlines or timelines on the job, they must learn to avoid
Procrastination

Susan is a purchasing manager for a manufacturer. On Monday, Susan received a call from the plant manager, who frantically told Susan that the production line ran out of 3/8" washers, which has forced production to stop. Because Jason is the senior buyer in charge of ordering the washers, Susan set up a meeting with Jason to discuss the problem. During the meeting, Susan asked Jason to explain why the washers were out of stock. Jason replied, "Well, I told the office assistant to check the inventory. It's not my fault that we don't have the washers in stock." What is Jason doing?
Blaming another person for his mistake

To manage your work commitments in a timely manner, you should first

Determine the time it takes to complete various tasks Self-control

A person who has willpower would be described as having Employee recognition and approval is a form of __________ feedback.
Positive

Jim likes to tease Susie because she gets upset, but she doesn't say anything to him about it. What kind of behavior is Susie exhibiting?
Passive

Abby feels that the company's vacation policies are fair, while Joe thinks that they are too strict. Abby and Joe's disagreement is an example of a(n) ___________ conflict.
Emotional

Business risks caused by negative personal characteristics are examples of __________ risks.
Human

In order for an accounting system to be useful to the business, the accounting information it contains must be
Accurate and up-to-date

The cash conversion cycle should be

As short as possible

Businesses regularly evaluate and compare the figures in their original budgets to the actual figures in order to
Make adjustments

Information consists of facts and data for a specific situation or condition, and knowledge consists of __________ and ___________ that accumulate over time.
Data, expertise

Pamela has devised a process that helps her complete her work in a more efficient manner. This is an example of
Tacit knowledge

To have effective knowledge-management processes, businesses need their employees to have a(n) __________ attitude.
Transparent

What do companies often use to assign and track various business tasks?
Accountability matrix

The use of sorting techniques to capture knowledge involves

Comparing and ordering concepts

What process involves all of the planning, pricing, promoting, and distributing activities that must take place in order to get goods and services to the consumer?
Marketing

Paulette works for a retail chain. She has been asked to determine if the retail chain should build another store in a remote but growing area of town. After obtaining the necessary information, what format should Paulette use to present her findings?
Formal report

How does appropriate information management affect a business's relationship with its customers?
Businesses serve customers more effectively

Which component of project-management software helps project managers to determine the length of time that a series of interdependent tasks will take to complete under various circumstances:
Critical path

A primary reason for a business to interpret statistical findings is to

Aid decision making

To maintain a hazard-free work environment, local regulations might require businesses to undergo
Safety inspections

The purpose of depositing large bills in drop boxes upon receipt is to prevent
Robbery

When you look at whether or not your project is "do-able," what should you examine?
How long you have to complete the project

What should project managers do when an unexpected situation occurs during the execution of a complex project?
Be flexible

An important step in the process of purchasing equipment and supplies for the business is
Selecting vendors

When companies work with their vendors to develop mutually beneficial business arrangements, they are more likely to
Maintain long-term relationships

Cassandra is a buyer for a department-store chain. On Tuesday, she placed a seasonal order with an apparel vendor without providing specific models, sizes, colors, or ship dates. What type of order did Cassandra place?
Blanket

A business orders 10% more widgets than it needs because the supply of and the demand for widgets have been difficult to forecast in recent months. This is an example of a business ordering __________ inventory.
Buffer

Because the ILM Manufacturing Company orders large amounts of bolts and washers, the company's buyer asks its parts vendor for an additional five percent off the invoice total. This is an example of a business negotiating
A quantity discount

Why is production important to businesses?

It creates goods and services businesses can sell

Why should maintenance schedules for company equipment be established and followed?
To minimize equipment failure

When employees review and analyze financial reports and income data from different time frames, they are
Comparing data

How should a job seeker respond to a business's help-wanted advertisement that asks applicants to send a resume?
By sending a resume and a cover letter

The primary focus of most professional organizations/associations is generally to

Expand members' professional knowledge

Employees who are unsure about workplace protocol and procedures should
Ask their managers to clarify the policies Performance standards

What do organizational goals provide to a business? What is the primary action needed to ensure that employees understand their roles in meeting the business's overall goals?
Ongoing communication

In which component of the project's statement of work (SOW) would the following message most likely appear: "Due to the limited amount of time allocated to complete the study, the survey sample size may need to be reduced."
Constraints

Why do project managers develop a work breakdown structure (WBS) for complex projects?
To identify and better manage all project activities

A project manager who wants a central location that contains relevant information about each component of the work breakdown structure (WBS) should develop a
WBS dictionary

Corrine is the project manager for a research project. Yesterday, Corrine told Anthony, one of the project team members, that he is responsible for developing the sample plan for a survey. What was Corrine doing?

Delegating work

Releasing equipment, materials, and team members are tasks that are completed during the ___________ phase of a project.
Closing

When evaluating the quality of its product, one factor that a business considers is the feedback that it receives from the product's users, which indicates
Customer-satisfaction levels

Capability Maturity Model Integration (CMMI) software has the ability to conduct an audit that compares the business's existing production and acquisition processes with the CMMI model. The audit provides information that will allow the business to
Incorporate the best overall quality-improvement processes

A potential benefit to businesses that implement continuous quality improvement processes is

Increased sales

Michelle has acquired proof that her coworker Ted has been embezzling money from the company. If Michelle fails to inform her employer about Ted's activities, what will likely occur?
The company's financial risk will increase

To reduce the risk of unauthorized access to confidential data, businesses use security software to protect their
Intranet systems

To reduce the risks associated with noncompliance, a business should continuously monitor
Government regulations

Scheduling and assigning work, checking the quality of work, making sure projects meet deadlines, and handling employees' job problems are primary responsibilities of
Supervisory managers

The fundamental activity associated with the planning function of management involves
Looking ahead

What is a primary consideration when organizing employees' workloads?

Time management

What management function involves identifying qualified candidates to perform the business's work?
Staffing

What is an important question that a manager must consider when hiring a new employee?
How will the company compensate this worker?

One activity associated with the directing function of management is

Instructing employees

Financial transaction

An agreement, movement, communication carried out between a buyer and a seller to exchange an asset for payment. Involving the change in status of the finances of two or more businesses or individuals. It is still a transaction if goods are exchanged at one time, and money at another.

What is a financial record?

Formal record of the financial activity of a business, person or other entity. Includes comprehensive income, cash flows and statement of financial position.

What is administration?

The process, organization etc. of running a business.

What resource do all businesses use? Where is it found and where should it be kept?
Information - letters, reports, payslips, order forms, receipt and bank statements. Kept in places where people can easily find them.

What is the purpose of database software?

Putting addresses, telephone numbers, buying records and other data onto a computer.

What in specific do you need to put addresses, telephone numbers, buying records and other data on a computer?
Database software.

What does a computer database mean?

Having information such as a telephone book or a T.V. Programme in electronic form, rather than a book/magazine.

What is the advantage of sorting out information on the computer?

Computer can process it very quickly.

Give an example of the electronic advantages of sorting out your information, on the computer? What is this called?

E.g. if you have a long list of addresses on computer - you can write one letter using word -processing software, press a set of keys that can make the computer produce personalized letter for each address. Mail Merging .

What do businesses also used to file financial and other numerical information?
Spreadsheet software

What can the computer do with spread sheets?

Automatically show numbers as pie or bar graphs

How do spreadsheets aid managers?

Easily interpret budgets and sales figures.

How are spreadsheets useful to organization

Compare current sales with sales in previous years. Monitor progress and performance of the organization.

How could a school secretary use a database facility on school computer?

Compare fees of present and previous years. Use mail-merging when writing e-mails to various parents

Disadvantages of storing all information on the computer?

Hackers/viruses - may not be aware of security software. If electronic device unexpectedly breaks down, information will be lost. Accessible to nearly anyone.

How to overcome disadvantages of computer?

Install security software. Store important data in another location for safekeeping.

Computers have become smaller, faster and cheaper. What do these changes mean for a business?

Portable. Affordable. Storage unit for documents - processing information faster and more efficiently ; increasing work productivity .

What does an established business have a lot of? What are these the source of?
Paperwork needed to be sorted. Source of financial data.

How does recording the income and expenses aid a business?

Have an accurate record of how well it is doing. Business decisions often made based on these records.

Why has the accounting system been developed?

Intelligible to people regardless of who or where they are.

Why is Accounting regarded as a language?

Communicates financial data about business - used in the making of business decisions.

What is a bookkeeper?

Person in business who writes down all data.

What does a bookkeeper have to be? What can he/she work on or with to do their work.
Neat and methodical. Work on computer, using accounting software or in special accounting books.

What is the accountant's relation to the bookkeeper in terms of work?

Takes bookkeeper's data, ascertains it is correct for payment of income tax. Put data into a form, for easier interpretation in making of decisions.

What is the accountant's function, in this case?

To tell managers, shareholders, banks, employees and SARS how business is doing financially .

What does SARS stand for?

South African Revenue Service - government's tax office.

Why does accountant need bookkeeper?

To have information to record transactions in a systematic way. Can see if business is a loss/ success.

What is the counterfoil? What is capital?

The small section left after the cheque has been made. Money entrepreneurs and businesses to buy what they need in order to sell goods or provide services.

What is written on the counterfoil?

Date, business or person to whom check was made, goods/services paid for, amount paid.

What does the bookkeeper do at the end of the month?

Summarizes daily amounts into monthly accounts by adding receipts, cash slips etc. together. Before at the end of each day, keeps source documents for different transactions.

If you paid someone in cash, why would you want a receipt?

To ascertain that you've paid the amount of cash. To avoid misunderstanding or dishonesty. Professional.

What is a tax invoice?

Commercial document issued by seller to buyer, usually when made a local purchase.

Name five items that appear on a tax invoice?

Identify of seller and buyer, address of seller's company, date, description and quantities of items bought, total amount.

If you were a seller, why would you want to issue a tax invoice?

To confirm purchase amount. To create impression that your business is trustworthy - customers passing review to friends.

What is the purpose of a check?

To make payments/exchange without the inconvenience of carrying large sums of money around.

When is a deposit slip used?

When depositing funds into account at bank.

How many copies are made of the deposit slips?

Two - one for the account-holder and bank.

In what way is a deposit slip a receipt?

Both perform transaction and wish to deposit money. Includes identities, total sums - both notes and coins are included.

What can a cash register do for customer?

Cash registers speed checkouts - saving time. Customer safety - feeling money is kept safe.

What do cash registers do for businesses?

Keep accurate record of transactions and process sales. Stores money safely. Increases productivity. Small carbon footprint.

What is the formula for calculating profit?

Income - expense = profit.

What is income?

Money that has been received (or money still yet to be received) by a firm of services given, or for goods sold or manufactured. Examples ; rent and interest received.

What are expenses?

Costs incurred directly or indirectly so that the firm can operate to generate income.

What are purchases?

Goods that a company buys or sells again in some form.

HOSPITALITY AND TOURISM

VOCABULARY
Cultural Impacts of Tourism
In many cases, the growth of tourism in developing countries has led to improved standards of living and greater educational opportunities

Carrying Capacity

How tourism managers and planners determine how much tourism a natural site, attraction, or destination can absorb without deterioration. This can change for an area when any one or more of the area's capacity determining factors change

Demonstration Effect

Compared with their own lifestyles, the local residents see the visitors as uniformly wealthy and in possession of all of the "good things" in life. This display of material goods and affluence may lead to envy and resentment from the locals. --->When locals want to look and act like the tourist

Tourisms effect on Developing Countries

These countries can experience a subtle change in their class system from tourism. Tourism can be viewed as a modern form of colonialism, in which the host country is "exploited" for its natural beauty but does not participate in the most lucrative return from the industry

Sacred Time

communal participation, reminded of this type of time in the rituals we celebrate each year. - Non-linear , qualitative measurement, cyclical or recurring EX: Christmas

Profane Time

time which is measured, linear and quantitative EX: Regular clock - minutes, hours, days

Diffusion

Tourists and locals interact and borrow/learn from each other.

Rejection

Tourists are not welcome

Toleration

Live and let live without significant interaction

Segregation

Distance between groups

Acculturation

Sharing and acceptance of each other's values and culture

Commodification

When culture is reduced to a generic product, "staged authenticity" EX: Native American culture is often reduced to a mere product such as moccasins or fringe clothing, which may not necessarily be an accurate representation of the culture

Tourism Saturation Point Pseudo-event

The point at which the destination's carrying capacity has been met. Cultural events reproduced for tourists without regard to cultural intent. EX from video in class: Every time a cruise ship toured through a particular village, a fake wedding was put on ---> it was reproduced for the tourists without any regard to the cultural intent of the wedding

Euphoria

Stage 1 of Doxey's Irridex. Welcoming the potential economic and social benefits that tourism may bring

Apathy

Stage 2 of Doxey's Irridex. As residents begin to take tourism for granted, contact and communication with tourists become more businesslike and communications begins to focus on marketing

Irritation

Stage 3 of Doxey's Irridex. Locals become annoyed by the inconveniences of the increased numbers of visitors. This develops when residents become "saturated" with the number of tourists in their area and begin to see the downside of sharing their home area.

Antagonism

Stage 4 of Doxey's Irridex. If the crowding increases, residents begin to show resentment or hostility towards the visitors, which may ultimately be expressed through violence

Final Stage of Doxey's Irridex

Stage 5 of Doxey's Irridex. This stage offsets a vicious cycle requiring increased promotional efforts to attract visitors and offset the deteriorating reputation of the region.

Eco-Tourism

the effort to try to preserve the environment and still gain the economic benefits of tourism... has evolved

Eco-Tourism (Weaver Definition)

A form of nature-based tourism that strives to be ecologically, sociologically, and economically sustainable while providing opportunities for appreciating and learning about the natural environment or specific elements thereof.

Eco-tourists

Tend to be wealthier, college educated individuals who are willing to spend large amounts of money on extended trips

Growth of Eco-tourism

Eco-Tourism is experiencing double digit growth that should accelerate as concerns over the environment and global warming rise

Greatest Benefit of Ecotourism

The transfer of the Eco-tourism philosophy to the preservation of many practices that support mass tourism markets

Sustainable Tourism (National Geographic)

Tourism that sustains and enhances the character of the place -- its environment, culture, aesthetics, heritage, and the well-being of residents." National Geographic Center for Sustainable Destinations

Greenwashers

an individual or company that claims to be "green" and "eco-friendly", but really is not

Sustainable Tourism

Fastest growing segment of the tourism industry, especially when you realize that Eco-tourism is a part of this

Mass Tourism

opposed to ecotourism, it tends to strain the environment though the development of more and more infrastructure and superstructure and the increasing wear and tear from the presence and actions of more and more tourists.

Track One Diplomacy

the official channel of government relations, diplomats must make worst case scenario assumptions about adversaries intentions leads to bad effects (war, mutual distrust)

Track Two Diplomacy

the unofficial channel of people-to-people relations, supplement to the understandable shortcoming of official relations, non-structured interaction, and open minded

Tourism in terms of Diplomacy

Tourism operates at the most basic level of "track-two" diplomacy" by spreading information about the personalities, beliefs, aspirations, perspectives, culture and politics of the citizens of one country to the citizens of another.

Relationship of Track One and Two Diplomacy

They run parallel, are interdependent on one another

Cruise Industry: Consumers

Cruise lines are now targeting many of the same people and groups who previously stayed in traditional destination resorts

Cruise Industry: Consumer Demographics

The fastest growth in cruisers is the 25-40 year-old and family segments, so the median age of cruisers has dropped

Cruise Industry: Segmentation

Short Cruises are proving to be the most popular and fastest- growing segment of this industry

Cruise Lines: Profitability

Depend on the generation of additional high margin values to achieve profitability - spas, beauty salons, gaming, etc.

Carnival Cruise nationality

Panama

Royal Caribbean Cruise nationality

Liberian

NCL nationality
Malaysian

The Jones Act of 1920

Regulated the USA Cabotage (coastal shipping). Requires that all goods transported by water between U.S. ports be carried in U.S.-flag ships, constructed in the United States, owned by U.S. citizens, and crewed by U.S. citizens and U.S. permanent residents.

USS Independence

The last American built ocean liner (1951)

GRT or Gross Registered Tonnage

Calculation of the INTERIOR space available to passengers. Including cabins, dining rooms, and public areas. Does not include galley, crew quarters, or engine room

1 GRT

100 cubic feet (measure of volume), how we measure the size of cruise ships

Space Ratio

Calculation of passenger comfort. GRT/# Pax berths (passenger lower beds)

Passenger/ Crew Ratio

Calculation of passenger service. # of Pax Berths/ # of Crew

Mature Traveler Segment

Biggest change in the 21st century tourism market. Important tourism segment because of their affluence and ability to travel at any time of the year

Time Poverty

Even though some studies suggest that we do have more leisure time than earlier generations, our modern life styles make us feel like we can't accomplish anything in the time we have, thus for most households the time available to take a vacation will become a more important consideration that the actual cost when planning a vacation.

King's math

1/3 food and beverage + 1/3 labor + 1/3 taxes, utilities, profit, etc.

POS or Point- of - Sale Systems

systems that are being integrated into management information systems to improve food service efficiency and profitability. They are no longer just cash registers, constantly updating their computer software

Consolidated data for Food an Bev

accumulated by a chain or a POS provider, it is data available via an Internet site. Profitability as well as enhanced food quality is achieved by keeping inventories lower through rapid turnover.

Physical Capacity

The limit on the actual number of users that can be accommodated in a region (finite capacity). Things like the number of roads, size of parking lots, and the amount of water resources influence this capacity.

Environmental Capacity

The limit on the number of users that an area can accommodate before visitors can perceive a decline in the desirability of that area.

Ecological Capacity

The maximum level of users that an area can accommodate before ecological damage is incurred

Social Capacity

When visitor numbers become a burden on locals

Cultural Impacts of Tourism

In many cases, the growth of tourism in developing countries has led to improved standards of living and greater educational opportunities

Carrying Capacity

How tourism managers and planners determine how much tourism a natural site, attraction, or destination can absorb without deterioration. This can change for an area when any one or more of the area's capacity determining factors change

Demonstration Effect

Compared with their own lifestyles, the local residents see the visitors as uniformly wealthy and in possession of all of the "good things" in life. This display of material goods and affluence may lead to envy and resentment from the locals. --->When locals want to look and act like the tourist

Tourisms effect on Developing Countries

These countries can experience a subtle change in their class system from tourism. Tourism can be viewed as a modern form of colonialism, in which the host country is "exploited" for its natural beauty but does not participate in the most lucrative return from the industry

Sacred Time

communal participation, reminded of this type of time in the rituals we celebrate each year. - Non-linear , qualitative measurement, cyclical or recurring EX: Christmas

Profane Time

time which is measured, linear and quantitative EX: Regular clock - minutes, hours, days

Diffusion

Tourists and locals interact and borrow/learn from each other.

Rejection

Tourists are not welcome

Toleration

Live and let live without significant interaction

Segregation

Distance between groups

Acculturation

Sharing and acceptance of each other's values and culture

Commodification

When culture is reduced to a generic product, "staged authenticity" EX: Native American culture is often reduced to a mere product such as moccasins or fringe clothing, which may not necessarily be an accurate representation of the culture

Tourism Saturation Point Pseudo-event

The point at which the destination's carrying capacity has been met. Cultural events reproduced for tourists without regard to cultural intent. EX from video in class: Every time a cruise ship toured through a particular village, a fake wedding was put on ---> it was reproduced for the tourists without any regard to the cultural intent of the wedding

attractions

Items of specific interest to travelers, such as natural wonders, man-made facilities and structures, entertainment, and activities.

client

A person or business that pays for professional services or products of people or businesses.

consumer customer

The actual user of a product or service. The buyer of a product or service.

destination

The geographic location to which a traveler is going.

discretionary travel E-commerce events Euro

A trip taken by choice rather than out of necessity. The sale of products and services over a Web site Activities planned around specific events or activities in an area. A term used in relating the monetary system used in the European Union (EU).

intermediary

A person or company that acts as a link between the producer of a product or service and the consumer of that product or service.

international tourism

1. Inbound tourism - non-resident visitor arrivals to the United States. 2. Outbound tourism - U.S. resident travels outside the United States.

marketing concept

The business philosophy that focuses on understanding and meeting the needs of customers.

mass tourism

A twentieth century trend during which the working and middle classes began traveling in large numbers for leisure purposes.

moment of truth

The moment that an employee interacts with a customer related to a business activity.

needs

Things a person must have to exist, such as food, shelter, and clothing.

relationship marketing

The process of building and nurturing ongoing, solid relationships with customers.

retailer
A middleman, such as a travel agent, who sells directly to the customer.

target market

The market that a company has identified and toward which marketing efforts are directed.

theme park

An amusement park in which the rides, attractions, shows and buildings revolved around a central theme or group of themes.

tour

A prearranged, prepaid journey, usually including an itinerary of leisure activities, to one or more destinations and a return to the point of origin.

tourism

All the components of the travel industry used to serve the needs and wants of tourists and to attract travelers to a destination.

tourist

A person who travels at least 100 miles from home to visit an area for business and /or pleasure for 24 hours or more.

travel industry

The business segment that provides transportation, lodging, dining, attractions, entertainment, guide services, and other travel elements related to tourism.

trends

Identifiable changes in consumers' preferences for activities, goods, and services.

wants

Things a person may like to have but which are not critical for survival.

apprenticeship

An educational program in which students receive direct work experience and training for a specific trade/career.

discretionary income

The amount of money individuals have available to spend after paying for the necessities of life and other fixed expenses.

Marketing mix

The process of how a business blends the four marketing elements of product, distribution, price, and promotion...4Ps.

Product Goods

what a company offers customers to satisfy their needs. Tangible (touch) objects that are useful to consumers like a shoes, car, fruit.

Services

Intangible (can't touch) and include tasks or acts performed for a customer for a price or fee. Examples: a haircut, a video rental or a physical at the doctor's office.

Distribution

This involves the locations and methods used to make products available to customers. This is the "place" in the 4Ps.

Price

The amount that customers pay for products they need/want to buy.

Promotion

This word describes ways to make customers aware of products and encourage them to buy. To inform, persuade or reminds.

Niche Marketing

Marketing to a particular group of people (a market) seen as potential customers for a product or service.

attractions

Items of specific interest to travelers, such as natural wonders, man-made facilities and structures, entertainment, and activities.

participant spectator sponsor

a person or group that participates or partakes in the event observers of an event businesses or organizations that pay to associate their names or products with a sporting event

event marketing

designing or developing a live themed activity, occasion, display or exhibit, such as a sport, music festival or concert to promote a product, cause, or organization

entertainment marketing

involves the use of entertainment to develop, promote and distribute goods and or services to satisfy the wants and needs of customers

sports marketing

the process of planning and executing the conception, pricing, promotion, and distribution of sports ideas, goods and services to create exchanges that satisfy individual and organizational objectives

Marketing

The process of developing, promoting, pricing, and distributing products in order to satisfy customers' needs and wants.

HOSPITALITY AND TOURISM

QUESTIONS
As a primary source of law, federal statutes are enacted by
the U.S. Congress.

Requiring businesses to control pollution and to dispose of hazardous waste properly are some of the main functions of __________ regulations.
environmental

The use of dual distribution is legal only if it is intended to

promote competition.

What does a channel of distribution usually need to be able to manage or avoid conflict within the channel?
Strong leadership follow directions.

Listening carefully should enable employees to Sara is a new marketing employee who is learning that the best way to listen to customers is
actively.

What type of communication style is usually appropriate for evaluation or counseling interviews with employees?
Formal

When defending their ideas objectively, employees should be prepared to

provide supporting information.

In order to be understood on the telephone, a business's employees should always

enunciate clearly.

Bart is writing a letter intended to persuade customers to upgrade their service with his company. He begins with an outline. What is the best order for the four main parts of his letter?

Gain attention, introduce service, create desire for product, and encourage purchase

Communication between two employees with the same level of authority in the business is __________communication.
horizontal

order to facilitate the distribution process:

Fill orders within a specified amount of time when they are needed.

Time utility makes products available to the consumer One important function of the main business activity of marketing is the __________ of goods or services.
promotion

Because of competition, people in our society enjoy

a higher standard of living than that of people in many other countries

The two main sources of revenue used to pay the costs of government regulation are
taxes and borrowing.

The manager of a franchise business prepares a monthly calendar according to the franchisor's requirements. What level of depth and scope are involved in this task?
Low depth, high scope

Businesses' profits are at a 30 -year low, but consumer savings are at an all-time high. For more than a year, unemployment has also been at record levels. What is the state of the economy?
Depression

When you receive criticism on the job, the best course of action would be to
use it to improve your job performance. strategizing.

Negotiators decide how to get what they want by An example of assertive verbal behavior would be
initiating conversations with others.

What kind of team is a business likely to use to prevent defects in the company's products?
Quality circle

The arrangement by which businesses or individuals can purchase now and pay later is known as
credit.

Molly and Tim have just had their first baby, Tommy. On top of their other financial considerations, such as saving for their retirement, they will now have to start saving and investing for Tommy's
college education.

Matt is balancing his checkbook for the first time. He compares the checks he has written over the last month with those listed on his statement and finds that all of his checks have cleared. Next, he verifies that his latest paycheck, which he deposited the previous day, is on the list. It is not, so he adds it to his statement balance. After this, he should
subtract fees and charges.

A characteristic of the accrual method of accounting is that it

records credit purchases when the purchases are made.

What is one of the main purposes of a business's sales budget?

To estimate income

True or false: All employees make an impact on a business. Analyzing relevant marketing information can help a tour company make favorable business decisions, which may provide the tour company with
a competitive advantage.

True; all employees make either a positive or negative impact on a business.

The Cozy Night Motel chain wants to learn about hospitality trends. Which secondary source would provide the chain with the desired information:
Trade association

Last year's quarterly sales for Mountain High Ski Resort were nd as follows: 1st Quarter: $652,276; 2 Quarter: $947,550; 3rd Quarter: $423,835; 4th Quarter: $345,766.What does the data reveal about the resort's sales?
The resort's peak season occurred during the second quarter.

What is the range of times people went to the movies if 20 people go to the movies 8 times a month, 45 people go to the movies 7 times a month, 72 people go to the movies 6 times a month, 58 people go to the movies 5 times a month, and 32 people go to the movies 4 times a month?
4

A product being in great demand is a factor that might encourage businesses to

adjust prices.

What type of software program would a cruise line use in order to maintain a list of recent passengers and their cabin preferences?
Database

What must businesses determine during the phases of record keeping?

Who will be responsible for record keeping

The increased use of computers and telecommunications equipment is fueling the trend in business that allows many employees to
work in various locations.

One way to determine the importance of an issue or trend is to consider its impact on
demand for your business's products.

A hotel clerk can match available space to a guest's request for a certain type of accommodation by checking the information in the
room rack.

When Mr. Mason develops a production schedule, he is carrying out ______ activities.
operations

One of the ways workers can protect themselves from injury on the job is to
report or correct safety hazards.

In order to prevent credit-card fraud, businesses often instruct their employees to check the __________ on the back of the card.
customer's signature

Why is it important for business employees to follow established security procedures?

To reduce the possibility of loss

A project manager persuading group members to reach an agreement about how to carry out a project is an example of
negotiation.

A business that is clean and well maintained is likely to

attract and retain customers.

What do many gift shops keep on hand in the event there is a robbery situation?
Bait money

A cruise ship security specialist may advise a tourist who is going ashore at a port of call to
limit shore tours to ones approved by the cruise line.

The two major areas that determine your personal appearance are
your physical body and your dress. organized.

Orderly and systematic behavior means being What is the first thing you should do when breaking down your goal?
Pinpoint your main goal.

Lauren was filling out an employment application and encountered a question for which she was unsure of the answer. What should she do?

Write in "unknown"

One of the reasons why networking is so effective is because the contacts often
work at the company that is hiring.

One of the services provided by some professional organizations in the travel and tourism industry is training that leads to obtaining
certification.

Because of regular changes in the supply of and demand for hotel rooms, prices for rooms are often
negotiable.

Creating an economical image of a new product to match the business's low-cost image is an example of
product positioning.

A key factor for a business to consider in determining the right time to purchase is
whether products will be available when needed.

If buyers offer something to vendors in exchange for something else while negotiating a contract, the buyers are making a
concession.

When a visitor to the Royal Caribbean Cruise Lines' web site moves the mouse from one part of the web site to another, a video-like ad appears that shows entertainment on board. This is a form of online advertising known as
superstitial.

Deleting duplicate e-mail addresses and removing unauthorized subscriptions are the responsibility of
list management.

What is one of the most effective and flexible elements of a print advertisement?
Color

The type styles used in advertisements often are selected because they are
distinctive.

What type of advertising copy draws attention by using words with strong psychological impact?
Emotional

An advertising proof shows the advertiser exactly how an ad

will look when it is run.

Simplicity and consistency are essential qualities viewers seek and that must be incorporated into the planning of a web site's
navigation.

What should the writers of news releases avoid splitting between two pages?
Paragraphs

What do hotel gift shops usually do to prepare the shop for a special seasonal event?
Put up decorations

Using the same shape, color, or texture over and over in a display is a technique called
repetition.

The Ramada Inn is a sponsor of the annual "Festival of Trees," which raises money for a local women's shelter. This is an example of

promotion.

Why do hotels use sweepstakes?

To attract new customers

Why is it important for travel agents to implement creative display techniques when promoting trips or tours?
Customers respond well to visuals. "May I help you?"

An example of a service approach in selling is A front -desk employee telling a guest about the hotel's new casual restaurant and expanded room -service menu is an example of
recommending hospitality services.

A hotel coffee shop cashier processes a food and beverage check for a guest who presents a half-off coupon for one entree. What key on an electronic cash register calculates the discount?
Percent

FINANCE
VOCABULARY
Case Law
Primary source of law that is based on previous court decisions

Constitutional Law Uniform Laws

The supreme law of the land and is based upon the US constitution These laws address issues such as trade and commerce. These laws provide legal consistency among the states that adopt them

Statutory Laws

The US Congress enacts these laws

Product trade-name franchise

An independent sales relationship between a supplier and a dealer to stock and sell a specific or exclusive line of products

Temporal Reasoning

Reasoning which involves considering the timing of a financial transaction or process.

Collection Letter

A type of persuasive message that many businesses write to customers who are delinquent in making payments on their accounts (Purpose: persuade customers to send payment or to contact the business to make some type of arrangement)

Unity of Command

An organizational principle that states that no employee should answer to more than one manager at a time

Scalar Principle

A principle that states authority should flow in a clear, unbroken line from the top to the bottom

Hedge Fund

A pooled investment fund that uses many types of aggressive investment strategies to maximize returns

Transference

A risk-response strategy that involves moving the impact of a risk to someone or something else

Data Mining

The process of searching computer databases to look for patterns of information and correlations among information (use info obtained from data mining to make business decisions)

Structured Query Language

Used for building queries and performing database administration tasks. Made up of clauses with each clause beginning with a keyword that is typically written in all caps

Profitability Ratios Economizing

Ratios that measure the business's ability to generate profit The process of deciding how scarce resources will be used or which goods and services will be purchased or provided so that the most satisfaction can be obtained

Controlling Organizing Directing

The management function that monitors the work effort management function of setting up the way the business's work will be done The management functions of providing guidance to workers and work projects

Rationing

Occurs when there are limited resources, goods, and services --> those who are willing and have the ability to pay are able to purchase them

Comparative Reasoning

Used to identify financial system transactions that are very similar to each other but not exactly alike

Contextual Reasoning

Used to consider each financial transaction's circumstances and how it compares to historical patterns in the system

Query

The mechanism used to obtain the desired information from the financial databases

Bylaws

The provisions of corporate policies

Hedging

The strategy focused upon reducing exposure to risk of loss resulting from fluctuations in exchange rates, commodity prices, interest rates, etc.

Hedge Fund

A special type of investment fund with fewer restrictions on the types of investments it can make (more exclusive, fewer people can invest)

Hedge

In securities, is a transaction that reduces the risk of an investment

Cost-Plus Pricing

All costs and expenses are calculated, and then the desired profit is added to arrive at a price

Credit Union

A cooperative association formed by labor unions or groups of employees for the benefit of its members

Limited Liability

The personal assets of the owners cannot be taken if the company does not meet its financial obligations

Revolving Accounts

Charge accounts where the retailer determines the credit limit and payment terms

Opportunity Costs

Trade-offs that occur when you choose one alternative over another; they are impossible to avoid

Money Markets

These markets facilitate the buying and selling of low-risk, short-selling of land and buildings

Variance

A measure of how data points differ from the mean

Exploratory Interview

A meeting in which the purpose is to gather information about a specific topic

Break Even Formula

Break Even Point =Fixed Costs/Sales Price-Variable Costs

Corporation

Owned by the people who have purchased shares of stock in the business

Consolidation

The joining of two or more companies to form a new company

Fiduciary Responsibility

Making wise financial decisions and obtaining financial products that will help the client achieve his/her financial goals.

Fiduciary

A financial professional who has been given legal authority to make financial transactions on behalf of an individual or business

Capital Gain Gift Tax

The difference between the purchase price and the sales price of an asset Tax on something of value given to another person

Cross-Source Reasoning

Reasoning that is used to compare financial transactions and processes across multiple financial systems and determine inconsistencies and errors

Clustering

Involves selecting various characteristics of a market that the business wants to explore-->selects the data that meets the criteria and clusters the data into appropriate categories

Law of Demand

An economic principle that states that the quantity of a good or service that people will buy varies inversely with the price of the good or service

Trade Deficit

An unfavorable balance of trade in which a nation's imports are greater than its imports

Prosperity Phase Recession Phase

Expansion (Boom) phase From prosperity to recession

Depression Phase Recovery Phase Human Risks

Contraction of economy From depression to prosperity The chances of loss caused by human weakness and unpredictability

Bonding Employees

This tactic reduces human risks by providing reimbursement for employee theft

Depreciation

The reduction in value of goods or assets occurring over a period of time

Cost Analysis

Used to determine the costs associated with a variety of business functions and activities

Accrual Accounting System

Records a business's financial transactions at the time they occur, even if the money is not exchanged at the time

Manual Accounting System External Audience

System which processes financial information by hand Consists of businesses or individuals who are not involved in the day to day operations of the business

Bear Market

When stock prices decrease over time, it may indicate a downturn in the market

Bull Market

When stock prices increase over time

Compensation Teller

Pay for work completed (includes commission) A person employed to deal with customers' transactions in a bank (most basic banking job)

Transmittal Letter

A business letter whose purpose is to accompany other written material (sent along with other documents/reports)

Decision Tree

An approach in which the data received through data mining is categorized into meaningful groups based on a set of established criteria

Dividends

Income earned on stock investment

Asset Utilization Ratios

These ratios help businesses determine if they are using their assets in the most effective ways

Liquidity Ratios Extension

Ratios used to determine a business's ability to pay its short term debts This indicates the total cost of each quantity of products purchased by the price per unit

Gramm-Leach-Bailey Act

Repeals part of the Glass-Stegall Act by allowing financial institutions to form mergers or consolidate

Securities Exchange Act of 1934

Law which requires the disclosure of certain financial information, regulates the issuance of securities, and and outlaws insider-trading practices

Sarbanes-Oxley Act Enrichment

Law which regulates corporations and public accounting firm activities Involves adding interest and satisfaction to a task

Job Analysis

A detailed study of a job

Enlargement

Involves adding more tasks to a worker's present job

Line of Credit
A type of Loan

Checking account Commodities Macro

Used to manage current income and expenses Resources that are often used to create other goods A customized keystroke or shortcut that commands the database program to perform certain tasks automatically

Profit

Pay federal tax. AKA Proprietary organizations

Nonprofit

501c3 entities. allows them to be tax exempt. Here for a common good. Money made is expected to be put back into the organization to advance it.

Sole Proprietorship

Unincorporated owned by one person. TONS OF LIABILITY. Income taxes paid on individual's tax return "schedule C"

General Partnership

Business owned by 2 or more individuals as co-owners. Income tax filed by each partner individually (tax return is called a pass through)

Limited partnership

Business formed by 2+ individuals in which one partner is fully liable for all debts of the business. Limited partners are liable up to their investment. Purpose: Attract capital

Corporations

Legal entity whose shareholders have limited liability (limited to their investment) has legal qualities and rights as an individual. File w/. an EIN (Employer identification number) like we use our SSN. Profits double taxed. Once as corporation, and again as shareholders get dividends.

Closely held corporations

Shares in the hands of a few people (only a few are in the hands of the public)

Closed corporation

Owned entirely by one person or family. Consider closed the same as closely held for this class.

Publically owned corporations Voluntary nonprofit

Publically traded. Generally more than 15-25 investors required to distribute 5% of its funds every year due to federal tax law

Government nonprofit Shareholders

Not taxed because they are governmental entities OWN the company and ELECT board of directors

Board of directors Officers

Hire officers as employees Hire lower level employees

Management

Art of maximizing productivity and developing people's talents while providing them self-enrichment and opportunities for growth Focus on human capital primarily Maximize happiness, productivity, and money.

Hiring tips

Hire people that fill the mission. Hiring is expensive.

Factors influencing motivation

Expectancy, Valence, Instrumentality

Expectancy Valence

Do you believe you can do it? (confidence) Will completing the task be beneficial to me?

Instrumentality

What is the probability of me completing the task (ability)? Will it lead to the desired outcome?

SMART goals

Specific, Measurable, Agreed upon, Realistic, and Time based

4 elements of communication

Sender, Receiver, Message, Environment Who accepts responsibility? The sender does.

360 evaluations

Very expensive, so not always done. Have feedback from all angles (employees, peers, boss)

Formal leadership

Formal power and authority bestowed through organization

Informal leadership

Create and articulate compelling visions of the future to achieve success, but without formal authority. due to charisma and magnetism

3 origins of authority

Traditional (custom/tradition) Bureaucratic (based on rules/laws) Charismatic (based on persuasion/magnetism)

5 sources of power

Reward, legitimate, expert, referent (charm/appeal), coercive

Leadership vs management

Leadership is "doing the right things" whereas management is "doing things right"

Affiliative leaders
Forge relationships

Autocratic leaders
independent decisions facilitate input

Democratic Leaders Laissez-faire

Provide resources, but little directions

Transformational Servant

Use societal/spiritual values to bolster performance and motivation Meet needs of those they help and lead them to grow

Strategic planning

Used to purse and achieve organizational goals and desired results

Strategic planning Order Vision

Vision-> Mission -> goals -> objectives -> strategies/tactics -> results Organizations aspirations (where you want to go). INSPIRE stakeholders/employees

Mission Values

Defines why the organization exists. PURPOSE Organization's central PRIORITIES

Strategic plan template

Mission/Vision/Values SWOT Long term Goals Action plan (Objectives/strategies/tactics) Monitoring and evaluation plan

SWOT

Internal Strengths/weaknesses External Opportunities/threats Start with EXTERNAL first

Four P's of marketing Strengths

Product, Price, Promotion, Place Well-known name/brand, good product, scale of company, technical skills, customer loyalty

Weaknesses

Unreliable service, no expertise, Scale of company, financial position, poor management

Opportunities Threats

Demographics, economics, technological, legal, social, cultural, political Changes in customer base, new technology, tax law change (plus all those in opportunities)

Par value

Principal or face value of bond. represents the amount of money to be repaid. most corporate bonds are issued in $1,000 units. repayment is usually made in one lump sum payment or in serial payments over the life of the bond

maturity date coupon rate

the final date on which repayment of the bond principal is due actual interest rate paid, usually in semi-annual installments. stated as a percentage of the par value. may have a fixed, floating, or zero coupon rate

restrictive covenants

usually include 1) conditions under which issuer can pay off bonds prior to maturity, 2) the levels at which certain ratios must be maintained if the company is to issue additional debt, and 3) restrictions against the payment of dividends unless earnings meet certain specifications

security provision

specific assets are pledged to the bondholders in the event of default (e.g. mortgage bond). may be either senior or junior. (note- if a bond is unsecured, it is called a DEBENTURE)

sinking fund provision

contributions are made to a fund each year and the trustee of the fund finds investors willing to sell back their bonds, so they can be retired

guarantee provision call provision

pay guaranteed by another firm other than the issuer gives the issuer the right to call the bonds in prior to the maturity date and force retirement of the issue. however, investors typically receive a call premium in compensation for early retirement

put provision

gives the bondholder the right to sell the bond back to the issuer prior to the maturity data at a predetermined price (usually par value). however, investors typically earn a lower rate of return to have this advantage

convertible provision

bond may be converted into a predetermined number of shares of common stock (usually at the discretion of the bondholder)

warrant provision

gives the bondholder option to purchase a specified number of shares of common stock at a fixed price

risk free rate of interest (Rrf)

rate of return an investor would expect to earn if exposed to no risk

marketability risk premium (MRP)

reflects the relative ease with which an investor can sell the security quickly at a low transaction cost (low marketability= high MRP)

treasury bonds

us government bonds

municipal bonds

state and local bonds

corporate bonds
corporations bonds

foreign bonds
foreign entities

diversifiable risk

risk that the stock price will decline due to random events that affect a particular firm (e.g. strike, lawsuit, unsuccessful marketing campaign) (can be minimized through diversification)

market risk

risk that the stock price will decline due to factors that systematically affect most firms (e.g. inflation, recession) (cannot be minimized through diversification)

equity securities

represent ownership in a corporation and a claim on part of the company's assets and earnings

preferred stock common stock

no voting rights, fixed dividend, middle claim, may have maturity voting rights, variable dividend, residual claim, no maturity, preemptive right

preemptive right

the right to purchase additional shares sold by the firm to prevent dilution of ownership percentage

cumulative preferred stock

when there is not enough cash to cover preferred dividend payments, board of directors will push payment off to a later point in time

participating preferred stock

pays a fixed dividend plus an extra amount based on conditions set forth in prospectus

nonparticipating preferred stocks

majority of preferred stocks

weak form efficiency

all information contained in past price movements are fully reflected in current market prices (highly efficient in this form)

semi strong form efficiency

current market prices affect all publicly available information (reasonably efficient in this form)

strong form efficiency

current market prices affect all pertinent information, whether publicly available or privately held (evidence shows this form does not hold)

Net sales growth rate Gross profit margin

measures the change in net sales between comparable periods margin available to cover expenses other than cost of goods sold

Operating profit margin Net profit margin Return on assets

margin available to cover interest charges margin available to cover dividends measures how efficiently assets are used to generate earnings

Return on equity

measures how much profit a company generates with shareholders' money

Inventory turnover

measures how many times inventory is sold and replaced over a period (the higher the quicker)

Days' sales in inventory

number of days it takes to sell the inventory (the lower the quicker)

Accounts receivable turnover Days' sales outstanding Fixed assets turnover Total assets turnover Current ratio Quick ratio Debt ratio

measures the speed at which a firm converts its receivables into cash number of days it takes to receive cash from the customer measures the utilization of the company's fixed assets measures the utilization of the company's total assets measures the ability to meet short-term obligations with current assets measures ability to meet short-term obligations with most liquid assets total liabilities/ total assets, measures extent to which a company uses liabilities to finance assets

Debt/equity

total liabilities/total equity, measures extent to which a company uses liabilities to finance assets

Leverage (equity multiplier)

total assets/total equity, measures extent to which a company uses liabilities to finance assets

Times interest earned Cash coverage Price/earnings Price/book creditor

measures ability to cover interest charges using operating profit measures ability to cover interest charges using cash operating profit indication of future growth in earnings compared to current EPS measures value added to shareholders wealth since the company's inception the debtor is the individual or business that owes money to another individual or business

GRC technology trajectory

high cost and lack of evidence of return on investment stock broker using customer relationship management (CRM)

over the counter bulletin board (OTCBB)

small companies that don't meet organized exchange listing requirements with poor credit

long-term solvency

a creditor analyzes whether the client should be able to pay the principal and interest on a loan

training

using interactive computer simulations to help employees learn how to do their jobs

identify trends

statistics are information presented in numerical form

operations management tokenization

involves the operational aspects of safety and security protect online transactions (substitutes a random number in place of an account number to process the transaction online)

FINANCE
QUESTIONS
What group is often affected by administrative law?
Businesses

A form of business ownership in which the owners own shares of stock is known as a
partnership

Financial managers who are legally responsible for their clients' investments must demonstrate fiduciary responsibility, which involves
acting in the best interest of their clients

Colin bought 35 shares of stock at $23.50 per share and recently sold all of the stock for $53.00 per share. What type of tax will Colin pay?
Capital gains

The primary reason that financial-services businesses hire compliance officers is to

Ensure that the businesses are following industry regulations

What is an advantage to businesses of using virtual-auditor technology?

The continuous inspection of transactional data

A virtual auditor that determines inconsistencies and errors by examining data from multiple financial systems is suing the _____ reasoning process.
Cross-source

Sometimes, the ability to follow directions is a skill that is necessary for survival. This is a ____ skill.
Life

What is one way businesspeople can improve their active listening skills?
Asking questions during speakers' messages to reduce barriers

One reason business employees often use note cards when making oral presentations is because the cards help them to
Remember key points

A persuasive message that asks a person to do something should be written in a way that makes it easy for the person to
Respond positively Logical

Characteristic of an effective informal business report? A request made by an employee to a supervisor is an example of what type of communication?
Upward

What is likely to happen to employees who are discourteous to the customers?

They may be fired

Which of the difficult customer types may become your best and most loyal customer once they learn to trust you?
Suspicious

When providing services to clients financial professionals have the responsibility to supply
Accurate information

By using simple data-mining techniques to gather data from internal databases, businesses can often identify
Customer trends

A business selects specific characteristics about its customers and uses software to obtain data from its database, which will help the business identify, evaluate, and group its customers' buying behaviors. The business is using the ____ data-mining technique.
Clustering

The law of demand states that as the price of a product increases, the demand for that product will
Increase

What is a characteristic of the organic organizational business structure?

Delegation emphasis

What is true about private enterprises?

Individuals make economic choices

What factor that affects profit can be controlled by a business?

Expenses

According to the law of diminishing returns, what is the result of more and more workers being added to the production process if all other factors remain unchanged?
Output will increase proportionately with each worker Imports = $5 million, exports = $3 million

Give an example of a country's trade deficit How can you let people know that you really are thinking about what they are saying?
By asking questions

To be considered a person with initiative you must

Demonstrate initiative on a regular basis Feedback

Evaluative information about you/your behavior is known as An example of social change would be change in
Hair and clothing styles

What is one factor that determines a manager's credibility with employees?

Reputation

How does empathy help coworkers to be fair to each other?

Coworkers with empathy are better able to understand others 1. Equal Credit Opportunity Act 2. Uniform Commercial Credit Code 3. Truth-in-Lending Act

Name three federal laws regulating the granting of credit:

The single most important aspect of making a financial plan and setting goals is
Getting started now

Compounding can be described as

Earning interest upon interest

The primary purpose of financial institutions is to help clients manage their money, and the primary purpose of insurance companies is to provide insurance projects that help clients ____ their ____.
Minimize, risk

Thad is investing in a money market, which buys and sells products such as

Treasury bills

Recently, the Second-Fourth bank merged with the Wide World Insurance Company. This is an example of
Convergence

A primary factor that has led to the consolidation of financial firms is the desire
To lower costs

In relation to the business cycle, the stock prices of noncyclical industries tend to
Steadily decrease during the expansion phase

In the past 20 years, Country X has reformed its trade policies and currency exchange rate system. As a result, foreign investment is increasing, and the country's business activity and gross domestic product is rapidly growing. This is an example of a(n)
Emerging market economy

The section of the SEC website that houses companies' filings is called
EDMUND

What is true about hedge funds?

Investment options for hedge funds are limited in scope

On a stock table, net change shows you the difference between

The day's closing price and the previous day's price

If a stock price rises and falls sharply within a 52-week period, it is said to be
Volatile

Bonding employees is a way of reducing _____ risk in business.

Human

A business' cash flow statement for one month indicates cash sales of $4,275, credit sales of $2,960, shipping costs of $525, and fixed expenses of $2,380. Calculate the total cash receipts.
$4,275

To be useful to businesses, financial information should be

Timely and understandable

Recommending corrective measures after identifying differences between budget projections and actual monies spent is considered a(n) _____ function in financialinformation management.
Control

A primary reason why businesses implement financial audit trails is to

Reduce risks associated with intentional data tampering

To protect the integrity of archived financial information, businesses might consider using different types of
Storage strategies

An advantage to businesses that use master data management applications is the ____ of the data.
Consistency

An important consideration for financial-services businesses that use data-mining techniques is the way the results are
Presented

To facilitate the long-term budgeting process, it is helpful for businesses to use budgeting software applications that allow them to
Merge entries

What financial analysis application does a business use to evaluate changes in its cash position from month to month?
Cash flow

If a business wants to separate a large SQUL server database table into separate file groups, it would use the ____ function.
Partitioning

The purpose of using the locking function for a database is to

Ensure that only one person can edit data fields

Because the Keller Company is a public corporation, it provides shareholders w/ financial information in a(n)
Annual report

A business that fails to provide accurate financial information in the required timeframe to a government agency may be subject to
Monetary fines

The XTY Company is experiencing a cash-flow problem and is falling behind in paying its bills. It recently received payment on an invoice in the amount of $450 and wants to use it to pay its vendors. Review the following information and determine which vendor the company should pay first: Vendor A, $300, due in two weeks; Vendor B, $75, due five days ago, Vendor C, $325, due 30 days ago; Vendor D, $110, due in three days.
Vendor C

The AMB Company records its financial transactions at the time they occur, even if money is not exchanged. This is an example of a business using the ____ accounting system.
Supplemental

The financial accounting system is used to provide required financial reports to external audiences including
Stockholders and government agencies

As a financial analyst for the Webster Company, and important aspect of Jane's job is to monitor Webster's stock prices, as well as its competitors' stock prices. In the past several weeks, Jane has noted that the industry, in general, has experienced a steady decrease in stock prices. These falling prices indicate that economic conditions are headed toward a ____ market.
Bull

If a trend indicates that a business is making more money, the business is most likely to have identified the trend by comparing its ____ from previous time periods.
Profitability ratios

Before approving a loan application, a bank is likely to analyze the applicant's

Debt ratio

A primary reason why businesspeople analyze financial variances is to

Identify problems Benefit

A commission or bonus is an example of a form of How does the selling function of marketing benefit businesses?

Generates profit

Carson is a staff accountant and he needs to look at last year's tax return. However, he can't find it anywhere. Which information management guideline is not being followed in this situation?
Make sure that information is retrievable

Businesses that use computer software to track the customers' billing information and sales transactions create records about their customers'
Payment history

What type of business record would provide a company with information about the movement of its products?
Inventory

Statistical findings reveal that the Benson Company earned a 35% net profit on the funds it spent on a project. The statistics provided the Benson Company with information about the businesses'
Return on investment

Maintenance and repairs is an operations activity that includes

Custodial work

Who is responsible for reporting unsafe conditions or equipment that is not in good operating order?
Safety supervisors

When project managers prepare to-do lists and schedule activities, they are using ____ skills.
Time-management

A company that makes one specialty item at a time is using what type of production system?
Batch

Personal appearance should be important to a businesses' employees because

Their image affects company image

Individuals are more likely to reach their personal goals if they have
Put their goals in writing

A member of a sales team said, "Our sales always decline this time of year. We just need to wait a few months until they pick up again." What barrier to creativity is the sales-team member exhibiting?
Limiting code of behavior

What do people usually take into consideration when identifying occupations that they want to pursue in life?
Social attitude

The job interviewer told Elizabeth at the end of the interview that he couldn't offer her the job because she lacked a particular skill that the job required. Elizabeth's next step should be to
Write the interviewer a follow-up letter

Essential qualifications for working in the financial-services industry include:

1. Good communication skills 2. Mathematical and analytical skills 3. The ability to speak a foreign-language

Successful bank managers and supervisors usually move up the career ladder as a result of beginning their employment as

Tellers

To maintain their licensure, many finance professionals are required to participate in

Continuing education classes

Joining a professional organization is one way for financial planners to

Build business contacts

What is a potential negative consequence to a business that fails to manage risk by implementing and ethics training program for employees?
Damaged reputation

One way for a company to manage its risk in relation to its employees' workplace behavior is by
Encouraging employees to report workplace misconduct

Managers need to be familiar with the latest technology, government regulations, innovations and trends within the industry, and competitors' activities. Which category of resource is this?
Information

FINANCE
MISC. INFO (IMPORT/EXPORT)
US Accounting System Influence
Brazil, Chile, Japan India, South Africa

UK Accounting System Influence EU Accounting System Influence

Egypt, Nigeria, Germany, Norway China

China Accounting System Influence Soviet Accounting System Influence

Ukraine

Mostly Open Remittance Strategy Restricted Remittance Strategy

Norway, Germany, Japan, China, Chile, South Africa Ukraine, India, Brazil, Bolivia, Egypt, Nigeria

Light Import/Export Restrictions

Norway, Germany, Chile

Medium Import/Export Restrictions

Japan, China, Brazil, South Africa

Heavy Import/Export Restriction

Ukraine, India, Bolivia, Nigeria, Egypt

FINANCE
ROLE PLAY STRATEGIES
General Performance Indicators Address needs of individual personalities Use buying motives as the basis of a sales presentation Explain the selling process Use feature/benefit selling Open the sales presentation

You are always given a problem Preparing your role play Write down all of the performance indicators and leave some space in between them (use shorthand) Look over situation given and take notes on o o o Who you are Where the event takes place Who the judge is Be creative Some ideas include o Business Card Brochure Drawings

Use of props o o

Its not the content on the props.. its how you present it S strengths W weaknesses O opportunities T threats Mention all of the General Performance Indicators Be precise Make a projected sales graph Questions? Shake judges hand

Use SWOT summary/analysis o o o o

Talk about the selling process o o

Closing statements o o o

MARKETING
VOCABULARY
Accounting Ad Council
The discipline that keeps track of a company's financial situation A nonprofit organization that helps produces public service advertising campaigns for government agencies and other qualified sponsors

Ad layout

A sketch that shows the general arrangement and appearance of a finished ad

Adaptation

Changing an existing product and/or promotion to better suit the characteristics of a targeted country or region

Adjacent colors

Colors that are located next to each other on the color wheel and share the same undertones; also known as analogous colors

Advertising

A form of no personal promotion in which companies pay to promote ideas, goods, or services in a variety of media outlets

Advertising agencies

Independent businesses that specialize in developing ad campaigns and crafting the ads for clients

Advertising campaign

A group of advertisements, commercials , and related promotional materials and activities that are designed as a part of a coordinated advertising plan to meet the specific goals of a company

Advertising proof Agents

A representation of an ad that shows exactly how it will appear in print Intermediaries who bring buyers and sellers together and do not own the goods they sell

Agreement Allowance Aptitude

A specific commitment that each member makes to the group A partial return of the sale price for merchandise that the customer has kept An ability or natural talent; the potential to learn a certain skill

Articles of incorporation

A document filed with a state department of commerce that identifies the name and address of a new corporation, its purpose, the names of the initial directors, and the amount of stock that will be issued to each director

Aseptic packaging

A food storage process that keeps foods fresh without refrigeration for up to six months

Assertiveness Asset

Standing up for what you believe Anything of monetary value that a person owns, such as cash, checking and savings accounts, real estate, or stocks

Attitude research

Type of research designed to obtain information on how people feel about certain products, services, companies, or ideas; also known as opinion research

Audience

The number of homes or people exposed to an advertisement

Balance of trade Balance sheet Bar graph

The difference in value between a nation's exports and its imports A summary of a business's assets, liabilities, and owner's equity A drawing made up of parallel bars whose lengths are proportional to the qualities being measured

Barriers

Obstacles that interfere with the understanding of a message

Basic stock list

A list used for those staple items that should always be in stock

Better Business Bureau (BBB)

One of the oldest nonprofit organizations that establishes self-regulation among businesses

Blind check method

The receiver of a delivery writes the description of the merchandise, counts the quantities received, and lists them on a blank form of dummy invoice

Blisterpack

Packaging with preformed plastic molds surrounding individual items arranged on a cardboard backing

Bonded warehouses

Public or private warehouses that store products requiring the payment of a federal tax

Boomerang method Brand

A selling method that converts a customer's objection into a selling point A name, term, design, symbol, or combination of these elements that identifies a business, product, or services and distinguishes it from its competitors

Brand extension

A branding strategy that uses an existing brand name to promote a new or improved product in a company's product line

Brand label

label giving the brand name, trademark, or logo

Brand licensing

A legal authorization by a trademarked brand owner to allow another company (the licensee) to use its brand, brand mark, or trade character for a fee

Brand mark

A unique symbol, coloring, lettering, or other design elements

Brand name

A word, group of words, letters, or numbers that represent a product or service; also known as a product brand

Brick-and-mortar retailers

Traditional retailers that sell goods to customers from physical stores, rather than over the internet

Broadcast media
Radio and television

Budget accounts

Accounts that allow the payment of a purchased item over a certain time period without finance charge

Bundle pricing

A pricing technique in which a company offers several complementary products in a package that is sold at a single price

Business cycle

Recurring changes in economic activity, such as the expansion and contraction of an economy

Business philosophy

Beliefs about how a business should be run that demonstrate an understanding of the business's role in the marketplace

Business plan Business risk

A proposal that outlines a strategy to turn a business idea into a reality The possibility of financial loss

Business-to-business selling

Sales that take place in a manufacturer's or wholesaler's show room (inside sales) or in a customer's place of business (outside sales)

Buying behavior

The process individuals use to decide what they will buy, where they will buy it, and from whom they will buy it

Buying signals

The things customers do or say to indicate a readiness to buy

Career outlook Carload

Valuable information on the number and types of jobs available in any field The minimum number of pounds of freight needed to fill a boxcar

Cash flow statement

A monthly plan that tracks when a person anticipates that cash will come into their business and when they expect to pay out cash

Cash on delivery (COD) sale

A transaction that occurs when a customer pays for merchandise at the time of delivery

Category management

A process that involves managing product categories as individual business units

Cause packaging

Packaging that is used by companies to promote social and political causes

Centralized buying

Buying process for all branches in a chain store operation, usually done in a central location, such as company headquarters

Channel of distribution Channels

The path a product takes from its producer or manufacturer to the final user The avenues through which messages are delivered

Circle graph

A pie-shaped geometric representation of the relative sizes of the parts of a whole; also called a pie chart

Clip art

Images, stock drawings, and photographs used in print advertisements

Closing the sale Co-branding

The process of obtaining a positive agreement from the customer to buy A combination of one or more brands in the manufacture of a product or in the delivery of a service

Cold canvassing

The process of locating as many potential customers as possible without checking out leads beforehand

Collateral

Something of value that a person pledges as payment for a loan in case of default

Color wheel

A circular illustration of the relationships between colors

Command economy

An economic system in which the government decides what, when and how much will be produced and distributed

Common carriers

Trucking companies that provide transportation services to any business in their operating area for a fee

Communication

The process of exchanging messages between a sender and a receiver

Communications programs

Software applications that enable users to electronically communicate through computers with people around the world

Competition

The struggle between companies to attract new customers, keeps existing ones, and take away customers from other companies

Complementary colors

Colors that are opposite ends of the color wheel and are used to create high contrast

Consensus

A decision on which all members of a team agree

Consignment buying Consultative selling

Paying for goods only after the final customer purchases them Sales that provide solutions to customers' problems by finding products that meet their needs

Consumer market

Consumers who purchase goods and services for personal use

Consumer price index (CPI)

Measurement of the change in price over a period of time of approximately 400 retail goods and services used by the average urban household

Consumer product safety commission (CPSC)

Federal agency responsible for overseeing the safety of all products except food, drugs, cosmetics, medical devices, tobacco products, firearms and ammunition, motor vehicles, pesticides, aircraft, boats, and fixed site amusement rides

Consumer promotions

Sales strategies that encourage customers And prospects to buy a product or service

Contract carriers

For-hire trucking companies that provide equipment and drivers for specific routes

Contract manufacturing

The process of hiring a foreign manufacturer to make products according to certain specifications

Controlling Copy

The process of setting standards and evaluating performance The selling message of a written advertisement

Copyright

The exclusive right to reproduce or sell a work authored by an individual, such as writings, music, and artwork

Corporation

A legal entity created by either a state or a federal statute authorizing individuals to operate an enterprise

Cost per thousand (CPM)

The media cost of exposing 1,000 readers or viewers to an advertising impression

Cost-plus pricing

All costs and expenses are calculated, and then the desired profit is added to arrive at a price

Coupons

Certificates that entitle customers to discounts on goods and services

Cover letter

A letter written by an applicant to an employer describing why that applicant is the best person to fill a specific job opening

Credit

The opportunity for businesses or individuals to obtain products or money in exchange for a promise to pay later

Credit union

A cooperative association formed by labor unions or groups of employees for the benefit of its members

Cross-training

A process that prepares a team member to do many different activities

Customer benefits

The advantages or personal satisfaction a customer will get from a good or service

Customer profile

List of information about a target market, such as age, income level, ethnicity, occupation, attitudes, lifestyle, and geographic residence

Customer relationship management (CRM)

Identifying and understanding customers to form a strong, lo0ng-lasting relationship

Customization

The process of creating products or promotions for certain countries or regions

Cycle counts

A small portion of the inventory is physically counted each day by stock keeping units so that the entire inventory is accounted for on a regular basis

Data analysis

The process of compiling, analyzing, and interpreting the results of primary and secondary data collection

Database

a collection of related information about a specific topic

Database marketing

A process of designing, creating, and managing customer lists that contain information about an individual's characteristics and transactions with a business; also known as customer relationship management (CRM)

Database programs Debt capital

Software applications that store and organize information Borrowed funds that must be repaid

Decentralized buying

Local chain store managers or their designated buyers who are authorized to make special purchases for their individual stores

Decimal number Demand

A fraction or mixed number whose denominator is a multiple of ten Consumer willingness and ability to buy products

Demand elasticity Demographics

The degree to which demand for a product is affected by its price Statistics that describe a population in terms of personal characteristics such as age, gender, income, marital status, ethnicity, education, and occupation

Denominator

The bottom number in a fraction; it represents how many parts make up a whole

Depression

A period of prolonged recession

Derived demand

The demand for industrial goods based on the demand for consumer gods and services

Descriptive label

A label that gives information about the product's use, construction, care, performance, and other features

Desktop publishing programs

A software application that is part word processor and part graphics application, and enables users to edit and manipulate both text and graphics in one document

Digit

The ten basic symbols that compose the numbering system: 0, 1, 2, 3, 4, 5, 6, 7, 8, and 9

Direct check method

The merchandise is check directly against the actual invoice or purchase order

Direct close

A closing method in which a salesperson asks for the sale

Direct distribution Direct marketing

Sales of goods or services directly to the customer with no intermediaries A type of advertising directed to a targeted group of prospects and customers rather than to a mass audience

Disclaimer

A statement that contains exceptions to and exclusions from a warranty

Discretionary income

The money left over from a consumer's income after paying for basic living necessities such as food, shelter, and clothing

Display

The visual and artistic aspects of presenting a product to a target group of customers

Disposable income Distractions

The money left over after taxes are taken out of a consumer's income Things that compete with the message for the listener's attention

Distribution center

A warehouse designed to speed delivery of goods and to minimize storage costs

Doing Business As (DBA) registration

The registration by which a county government officially recognizes that a new proprietorship or partnership exists

Dollar control

The planning and monitoring of the total inventory investment that a business makes during a stated period of time

Domestic business Drop shippers

A business that sells its products only in its own country Businesses that own the goods they sell but do not physically handle the products

Economic risks

Risks that result from changes in overall business conditions

Economy

The organized way a nation provides for the needs and wants of its people

e-marketplace

The online shopping location where products re sold to customers and industrial buyers through the use of the Internet

Embargo

A total ban on specific goods coming into and leaving a country

Emotional barriers

Biases against the sender's opinions that prevent a listener from understanding

Emotional motive Empathy

A feeling experienced by a customer through association with a product An understanding of a person's situation or frame of mind

Employee discounts Empowerment

Discounts offered by employers to their workers Encouragement of team members to contribute and take responsibility for the management process

Endless chain method

The process of asking previous customers for names of potential customers

Enterprise resource planning (ERP)

Sophisticated software that integrates all parts of a company's business management

Entrepreneurs

People who create, launch, organize, and manage a new business and take the risk of business ownership

Entrepreneurship Enumeration

The process of starting and operating your own business Listing items in order

Environmental protection agency (EPA) Environmental scan

Federal agency that protects human health and our environment An analysis of outside influences that may have an impact on an organization

Equal employment opportunity commission (EEOC)

Federal agency responsible for the fair and equitable treatment of employees with regard to hiring, firing, and promotions

Equity

The concept of equal rights and opportunities for everyone

Equity capital

The process of raising money from within your company or by selling part of the interest in the business

e-tailing

Retailers selling products over the internet to the customer; also known as online retailing

Ethics

Basic values and moral principles that guide the behavior of individuals and groups

European Union (EU)

European trading bloc

Everyday low prices (EDLP)

Consistently low prices with no intention of raising them or offering discounts in the future

Exclusive distribution

Sales involving protected territories for distribution of a product in a given geographic area

Excuses

Reasons for not buying or not seeing the salesperson

Executive summary Exempt carriers

A brief overview of an entire marketing plan Trucking companies that are free from direct regulation of rates and operating procedures

Exit interview

An interview arranged by the human resources department when an employee leaves a company

Expansion

A time when the economy is flourishing; also called prosperity

Experimental method

Research technique in which a researcher observes the results of changing one or more marketing variables while keeping certain other variables constant under controlled conditions

Exports

Goods and services sold to other countries

Express warranty

A warranty that is explicitly stated, in writing or verbally, to encourage a customer to make a purchase

Extended coverage

An endorsement that provides protection against types of loss that may not be covered under a basic property insurance policy

Extensive decision making

The process used when there has been little or no previous experience with an item

Factors of production

Economic term for the four categories of resources: land, labor, capital, and entrepreneurship

Feature-benefit selling

Sales that match the characteristics of a product to a customer's needs and wants

Federal Trade Commission (FTC)

Federal agency responsible for enforcing the principles of a free enterprise system and protecting consumers from unfair or deceptive business practices

Feedback

A receiver's response to a message

Fidelity bonds Finance

A type of insurance that protects a business from employee dishonesty A business function that involves money management

Firewall

Hardware or software that protects a computer from attacks by hackers

Fixtures

The principal installations in a store; permanent or movable store furnishings that hold and display merchandise

Flexibility

Behavior that allows you to adapt to changing circumstances

Flexible-price policy Flextime

A price policy that lets customers bargain for merchandise A program that allows workers to choose their work hours

Focal point

An area in a display that attracts attention first, above all else

Food and Drug Administration (FDA)

Federal agency that regulates labeling and safety of food, drugs, and cosmetics sold in the United States

Forced-choice questions

Questions that ask respondents to choose answers from possibilities given on a questionnaire

Foreign corporations

A company that is incorporated under the laws of a state that differs from the one in which it does business

Foreign direct investment (FDI)

Investments in factories, offices, and other facilities in another country that are used for a business's operations

Formal balance

When a large item is placed on one side of a display a similarly large item should be placed on the other side

For-profit business Fractions

A business that seeks to make a profit from its operations Numbers used to describe or compare parts of a whole

Franchise

A legal agreement to sell a parent company's product or services in a designated geographic area

Free enterprise system

A system that encourages individuals to start and operate their own businesses in a competitive market, without government involvement

Free trade

Commercial exchange between nations that is conducted on free market principles, without tariffs, import quotas, or other restrictive regulations

Free-on-board (FOB)

The price for goods includes delivery at the seller's expense to a specified point and no further

Freight forwarders

Private companies that combine less than carload or truckload shipments from several businesses and deliver them to their destinations

Frequency

The number of times an audience sees or hears an advertisement

Full warranty

A warranty that guarantees that if a product is found to be defective within the warranty period, it will be repaired or replaced at no cost to the purchaser

General partnership

A way to organize a business in which each partner shares in the profits and losses

Generalization

A statement that is accepted as true by most people

Generic brands

Products that do not carry a company identity

Geographical pricing

A pricing technique that makes price adjustments because of the location of the customer for delivery of products

Geographics

Segmentation of the mark based on where people live

Global business

A business that sells its products to more than one country

Globalization

The process of selling the same product and using the same promotion methods in all countries

Goods

Tangible items of monetary value that satisfy needs and wants

Grade label

A label that states the quality of the product

Graphics and design programs Green marketing

Software applications for creating and modifying images Producing and promoting environmentally safe products

Greeting approach

A way to approach a customer that focuses on welcoming the customer to the store

Gross domestic product (GDP)

The output of goods and services produced by labor and property located within a nation

Gross national product (GNP) Gross profit Gross sales Headline

The total dollar value of goods and services produced by a nation The difference between sales revenue and the cost of goods sold The total of all sales for a given period of time The phrase or sentence that captures the readers' attention, arouses their interest, and entices them to read the rest of the ad

Home page

The main page of a web site that clearly and quickly lets people know what site they are visiting

Horizontal organization

A structure where top management shares decision making with selfmanaging teams of workers who set their own goals and make their own decisions

Human risks

Risks that are triggered by errors or omissions as well as the unpredictability of customers or of working environments

Hypertext markup language (HTML)

A detailed code used to write Web pages

Hypertext transfer protocol (HTTP)

The global computer protocol used to identify and locate web pages on the internet

Illustration

The photograph, drawing, or other graphic element used in an advertisement

Implied warranty

A warranty that takes effect automatically by state law whenever a purchase is made

Impression Imports

A single exposure to an advertising message Goods and services purchased from other countries

Incentives

Products earned or given away through contests, sweepstakes, and rebates

Income statement

A summary of income and expenses during a specific period of time; also known as profit and loss statement

Indirect distribution

Sales of goods or services to the customer through one or more intermediaries

Industrial market

Businesses that buy products to use in their operations; also called the business-to-business market (B2B, B to B)

Industry

A group of establishments primarily engaged in producing or handling the same product or group of products or in rendering the same services

Inflation

A period of rising prices

Informal balance Infrastructure

The placement of several small items with one large item within a display The physical development of a country, including its roads, ports, sanitation facilities and utilities

Initiative

The process of taking action and doing what needs to be done without being asked.

Installment accounts

Accounts that allow for payment over a period of time; also known as time payment accounts

Institutional advertising

He process used to try to create a favorable image for a company and foster goodwill in the marketplace

Institutional promotion

A promotion method used to create a favorable image for a business, help it advocate for change, or take a stand on trade or community issues

Insurance policy

A contract between a business and an insurance company to cover a specific business risk

Integrated distribution

A distribution system in which manufacturers act as wholesaler and retailer for their own products

Intensive distribution Interest

Sales involving the use of all suitable outlets to sell a product The money paid for the use of money borrowed or invested

Intermediaries

Businesses involved in sales transactions that move products from the manufacturer to the final user; also known as middlemen

International trade Internet

The exchange of goods and services among nations A worldwide network of computer networks, allowing a free flow of information

Internet service providers (ISPs)

Companies that provide internet access for businesses, organizations, and individuals

Internship

An opportunity that offers students direct work experience and exposure to various aspects of a career, either with or without pay

Inventory

All the goods stored by a business before they are sold

Inventory management

The process of buying and storing materials and products while controlling costs for ordering, shipping, handling, and storage

Inventory turnover

The number of times the average inventory has been sold and replaced in a given period of time

Invoice

An itemized list of goods that includes prices, terms of sales, total, taxes and fees, and amount due

Jargon

Specialized vocabulary used by members of a particular group

Job descriptions

Written statements listing the requirements of a particular job and the skills needed to fulfill those requirements

Job lead

Information about a job opening

Joint venture

A business enterprise that different companies set up together; often, the venture involves a domestic company and a foreign company

Just-in-time (JIT) inventory system

An inventory system that controls the flow of parts and material into assembly and manufacturing plants

Kiosks

Interactive point of purchase displays that are typically four feet high, have pedestal-mounted high-tech screens, and take up only a few feet of floor space

Label

An information tag, wrapper, seal, or imprinted message that is attached to a product or its package

Law of diminishing marginal utility

An economic law stating that consumers will buy only so much of a given product, even though the price is low

Layaway

A sales method that keeps merchandise in storage until the customer finishes paying for it i.e. prom dress

Layman's terms Liability

Words the average customer can understand A debt that a person owes to others, such as credit card debt, school loans, car payments, or taxes

Licensing

The process of letting another company (licensee) use a trademark, patent, special formula, company name, or some other intellectual property for a fee or royalty

Lifestyle

The kind of life a person lives

Limited decision making

The process used when a person buys goods and services that he or she has purchased before but not regularly

Limited liability

The personal assets of the owners cannot be taken if the company does not meet its financial obligations

Limited liability company (LLC)

A relatively new form of business organization that is a hybrid of a partnership and corporation

Limited partnership

A form of business organization in which each limited partner is liable for nay debts only up to the amount of his or her investment in the company. The business's general partner is liable for all debts

Limited warranty

A warranty that excludes certain parts of the product from coverage or requires the customer to bear some of the expense for repairs resulting from defects

Line graph

A line that joins points representing changes in a variable quantity, usually over a period of time

Loss leader

An item priced at or below cost to draw customers into a store

Maintained markup Management

The difference between an item's final sale price and its cost The business function of planning, organizing, and controlling all available resources to achieve company goals

Market

People who share similar needs and wants and are capable of buying products

Market economy

An economic system in which individuals and companies decide what will be produced, when, and how it will be distributed

Market intelligence

Information about the size and location of a market, the competition, and the segmentation within the market for a particular product or service

Market segmentation

The process of analyzing and classifying customers in a given market to create smaller, more precise target markets

Market share

A company's percentage of total sales volume generated by all competition in a given market

Marketing

The process of planning, pricing, promoting, selling, and distributing products to satisfy customers' needs and wants

Marketing concept

Businesses should satisfy customers' needs and wants while making a profit

Marketing information system

A set of procedures and methods that regularly generates, stores, analyzes, and distributes information for use in making marketing and other business decisions

Marketing mix

The four basic marketing strategies, called the four Ps: product, place, price, and promotion

Marketing plan

A formal written document communicating the goals, objectives, and strategies of a company

Marketing research

The process and methods used to gather information, analyze it, and report findings related to marketing goods and services

Marketing strategy

Identification of target markets and determination of marketing mix choices that focus on those markets

Markup pricing

The process where resellers add a dollar amount (markup) to their cost to arrive at a price

Marquee

An architectural canopy that extends over a store's entrance

Mass marketing

Use of a single marketing plan to reach all customers

Media

The avenues through which messages are delivered; also known as channels

Media planning

The process of selecting the advertising media and deciding the time or space in which the ads should appear to accomplish a marketing objective

Media research

A type of research focusing on the issues of media effectiveness, selection, frequency and ratings; also known as advertising research

Memorandum buying

A buying process in which the supplier agrees to take back any unsold goods by a certain pre-established date

Merchandise approach

A way to approach a customer that focuses on making a comment or asking questions about a product in which the customer shows interest

Middle management Mini-nationals

Managers who implement the decisions of top management Midsize or smaller companies that have operations in multiple countries

Mission statement Mixed brand

A brief paragraph or two that describes the ultimate goals of a company A combination of manufacturer, private distributer, and generic brands as a strategy to sell products

Mixed bundling Mixed number

The practice of packaging different products and services together A whole number and a fraction written together

Model stock list

An inventory monitoring plan used for merchandise that quickly goes out of fashion

Monopoly

Exclusive control over a product or the means of producing it

Multinationals

Large corporations that have operations in multiple countries

national brands

Brands that are owned and initiated by national manufacturers or service companies; also known as producer brands

Natural risks

Risks that result from natural occurrences, such as an earthquake or bad weather

Negotiation

The process of working with different parties to find a resolution to their conflict

Net income Net sales

The amount left after the total expenses are subtracted from gross profit The amount left after gross sales have been adjusted for returns and allowances

Net worth

The difference between the assets of a business and its liabilities

Networking

The art of building business contacts and alliances

Never-out list

An inventory monitoring plan used for best-selling products that make up a large percentage of sales volume

News release

An announcement that is sent by a business or organization to media outlets

Nonprice competition

Competition based on factors that are not related to price, such as product quality, service, and financing, business location, and reputation

Nonprofit organization

An organization that can function like a business but uses the money it makes to fund the cause identified in its charter

Nonverbal communication

Expressing oneself without the use of words

North American Free Trade Agreement (NAFTA) Numerator

An international trade agreement among the US, Canada, and Mexico The top number in a fraction; it represents the number of parts being considered

Objection analysis sheet Objections

A document that lists common objections and possible responses to them Concerns, hesitations, doubts, or other honest reasons a customer has for not making a purchase (it's this or an excuse)

Observation method

A research technique in which the actions of people are watched and recorded either by cameras or by observers

Occupational area

A category of jobs that involve similar interests and skills

Occupational Information Network (O*NET)

An online database that includes information on skills, abilities, knowledge, work activities, and interests associated with occupations

Occupational Outlook Handbook (OOH)

A publication that describes what workers do on the job, working conditions, the training and education needed, earnings, and expected job prospects in a wide range of occupations

Occupational Safety and health Administration (OSHA)

Federal agency that provides guidelines for workplace safety and enforces those regulations

On-approval sale

An agreement permitting a customer to take merchandise (usually clothing) home for further consideration

One-price policy

All customers are charged the same price for the goods and services offered for sale

Online advertising

A form of advertising that uses either e-mail or the world wide web

Open-ended questions Opening cash fund

Questions that require respondents to construct their own answers A limited amount of money for the cash register provided by a manager or other designated person at the beginning of each business day

Open-to-buy (OTB)

The amount of money left for buying goods after all purchases received and on order have been considered

Organization chart

A diagram of a company's departments and jobs with lines of authority clearly shown

Organizational buyers

Buyers who purchase goods for business purposes, usually in much greater quantities than the average consumer buys

Organizing

Establishment of a time frame in which to achieve a goal, assigning employees to the project, and determining a method for approaching the work

Package

The physical container or wrapping for a product

Paraphrase

To restate something in a different way

Partnership

A legal agreement between two or more people to be jointly responsible for the success or failure of a business

Patent

A government-issued exclusive right to make, use, or sell an invention for up to 20 years

Penetration pricing Percentage

A pricing policy that sets the initial price for a new product very low A number expressed in parts per 100

Performance bonds

A type of insurance that provides financial protection for losses that might occur when a construction project is not finished due to the contractor's impaired financial condition; also known as surety bonds

Performance standard

An expectation of performance that reflects a company's goals and marketing plan objectives

Perpetual inventory system

An inventory system that tracks the number of items in inventory on a constant basis

Personal financial statement Personal selling Persuade

A summary of a person's current personal financial condition Any form of direct contact between a salesperson and a customer The process used to convince someone to change a perception in order to get them to do what you want

Physical distribution

Activities to deliver the right amount of product to the right place at the right time

Physical inventory system

An inventory system where every so often, stock is visually inspected or actually counted to determine the quantity on hand

Pie chart

A pie-shaped geometric representation of the relative sizes of the parts of a whole; also called a circle graph

Planning

The process of setting goals and determining how to reach them

Planning goal

The small steps you take to get from where you are now to where you want to be

Planogram

A computer-developed diagram that shows retailers how and where products within a category should be displayed one shelf at individual stores

Point-of-purchase displays (POPs)

A sales promotion device; manufactured units with bold graphics and signage that hold, display, or dispense products

Point-of-sale research

A form of research that combines natural observation with personal interviews to get people to explain buying behavior

Point-of-sale system

The process of combining a cash register with a computer, making it possible to capture information about the transaction at the time of sale, and then applying it to different functions

Pre-approach Premiums

The preparation for the face-to-face encounter with potential customers Low-cost items given to consumers at a discount or for free

Preretailing

Marketing method when pricing information is market in advance on the purchase order

Presentation software Prestige pricing

Software application that produces slide shows or multimedia presentations A pricing technique that sets higher-than-average prices to suggest status and high quality to the consumer

Price

The value (in money or its equivalent) placed on a product

Price bundling

Two or more similar products are placed on sale for one package price

Price competition

The sale price of a product; the assumption that consumers will buy the product with the lowest price

Price discrimination Price fixing

Charging different prices to similar customers in similar situations when competitors agree on certain price ranges within which they can set their own prices

Price gouging

Pricing products unreasonably high when there is a high demand resulting from a monopoly or a natural disaster

Price lining

A special pricing technique that sets a limited number of prices for specific groups or lines of merchandise

Primary data

Data obtained for the first time and used specifically for the particular problem or issue under study

Principal

Money that is borrowed, sometimes tot start a business

Print media

Newspapers, magazines, direct mail, signs, and billboards used in advertising

Private carriers

Trucking companies that transport goods for an individual business

Private distributor brands

Brands that are developed and owned by wholesalers and retailers; also known as private brands, store brands, dealer brands, or private labels

Private employment agencies

Employment agencies that are not supported by taxes and just earn a profit to stay in business

Private sector

Businesses not associated with government agencies

Private warehouse

A facility designed to meet the specific needs of its owner

Problem definition

The process by which a business clearly identifies a problem and what is needed to solve it

Producer price index (PPI) product depth

Measurement of wholesale price levels in the economy The number of items offered within each product line

Product features Product item

Basic, physical, or extended attributes of a product or purchase A specific model, brand, or size of a product within a product line

Product life cycle Product line Product mix

The stages that a product goes through during its life A group of closely related products manufactured or sold by a business All the different products that a company makes or sells

Product mix pricing strategies

Adjusting prices to maximize the profitability for a group of products rather than just one item

Product modification Product planning

An alteration in a company's existing product Making decisions about the features and services of a product or idea that will help sell that product

Product positioning Product promotion

The image a product projects that sets it apart from the competition A promotion method businesses use to convince consumers to select its products or services

Product research

The evaluation of product design, package design, product usage, and consumer acceptance of new and existing products

Product width Production

The number of different product lines a business manufactures or sells The process of creating, expanding, manufacturing, or improving on goods and services

Productivity

The output per worker hour that is measured over a defined period of time, such as a week, month, or year

Profit

The money earned from conducting business after all costs and expenses have been paid

Promotion

Decisions about advertising, personal selling, sales promotion, and publicity used to attract potential customers

Promotional advertising Promotional mix

Advertising designed to increase sales A combination of strategies and cost effective allocation of resources

Promotional pricing

A pricing technique in which prices are reduced for a short period of time, generally used in conjunction with sales promotions

Promotional tie-ins

Sales promotional arrangements between one or more retailers or manufacturers; also known as cross-promotion and cross-selling campaigns

Proportion Prospect

The relationship between and among objects in a display A potential customer; also known as a lead

Protectionism

A government's establishment of economic policies that restrict imports to protect domestic industries

Psychographics

Studies of consumers based on social and psychological characteristics

Psychological pricing

Pricing techniques that help create an illusion for customers

Public employment agencies

Employment agencies that are supported by state or federal taxes and offer free services to both job applicants and employers

Public relations (PR) Public sector

Activities that help an organization influence a target audience Local, state, and federal government agencies and services, such as public libraries and state universities

Public warehouse

Storage and handling facilities offered to any individual or company that will pay for its use

Publicity

A tactic that public relations professionals use to bring information about an organization to the public's attention

Pull policy

A process that directs promotion towards consumers

Purchase order (PO)

A legal contract between a buyer and a supplier to purchase a specified number of products at a specified price

Push policy

A manufacturer uses a mix of personal selling, advertising, and buying discounts to promote a product to large retailers that sell its products

Qualitative research

A type of research that focuses on smaller numbers of people (usually fewer than 100) and tries to answer why or how questions

Quality check method

The merchandise is checked to determine whether the quality of goods received matches the quality of the products, which were ordered

Quantitative research

A type of research that answers questions that starts with how many or how much

Quota

A limit on wither the quantity or monetary value of a product that may be imported

Rack jobbers

Wholesalers that manage inventory and merchandising for retailers by counting stock, filling it in when needed, and maintaining store displays

Rational motive

A conscious, logical reason for a purchase

Real-time inventory system

An Internet technology that connects applications, data, and users in real time

Realistic goal

A goal that a person has a reasonable chance of achieving

Receiving record Recession Recovery

Information recorded by businesses about the goods they receive A period of economic slowdown that lasts for two quarters, or six months A period of renewed economic growth followed by a recession or depression

References

People who know a job applicant's work habits and personal traits well and will recommend that person for the job

Referrals

The names of other people who might buy a product, given to salespeople by satisfied customers

Reliability

When a research technique produces nearly identical results in repeated trials

Remedial action

Using preventive discipline or corrective discipline to encourage appropriate workplace behavior

Resources Resume

All the things used in producing goods and services A brief summary of personal information, education, skills, work experience, activities, and interests

Retailers

Channel of distribution that buys goods from wholesalers or directly from manufacturers and resells them to the consumer

Return on investment (ROI) Reverse auction

A calculation that is used to determine the relative profitability of a product Sale in which companies post what they want to buy and suppliers bid for the contract

Resolving accounts

Charge accounts where the retailer determines the credit limit and payment terms

Risk management

The systematic process of managing an organization's risks to achieve objectives in a manner consistent with public interest, human safety, environmental needs, and the law

Routine decision making

The process used when a person needs little information about a product to make a decision because he or she buys it regularly

Sales check

A written record of a sales transaction that includes such information as the date of the transaction, items purchased, purchase prices, sales tax, and the total amount due

Sales forecasts

The projection of probable future sales in units or dollars

Sales promotion

All marketing activities- other than personal selling, advertising, and public relations- that are used to stimulate purchasing and sales

Sales quotas

Dollar or unit sales goals set for the sales staff to achieve in a specified period of time

Sales tax

A percentage fee placed by the government on the sale of goods and services

Sample

A part of the target population that is assumed to represent the entire population

Scarcity

The difference between what consumers want and need and what the available resources are

Secondary data

Data that has already been collected for some purpose other than the current study

Securities and exchange commission (SEC)

Federal agency that regulates the sale of securities (stocks and bonds) licenses brokerage firms and financial advisers, and investigates dealings among corporations

Segmented pricing strategy

A pricing strategy that uses two or more different prices for a product, even though there is no difference in the item's cost

Selective distribution

A limited number of outlets in a given geographic area are used to sell the product

Self-esteem

Perception of your worth or value as a person

Service approach

A way to approach a customer that focuses on asking the customer if he or she needs assistance

Service close

A way to close a sale in which a salesperson explains services that overcome obstacles or problems

Services Setting

Intangible items of monetary value that satisfy needs and wants The circumstances under which communication takes place

Signature

The distinctive identification for a business; also known as logotype or logo

Situation analysis Site map

The study of the internal and external factors that affect marketing strategies An outline of what can be found on each page within the web site

Six-month merchandise plan Skimming pricing Slogan

The budget that estimates planned purchases for a six-month period A pricing policy that sets a very high price of r a new product A CATCHY PHRASE OR WORDS THAT IDENTIFY A PRODUCT OR COMPANY

Sole proprietorship Source marketing

A business owned and operated by one person The seller or manufacturer marks the price before delivering the merchandise to the retailer; the marking often uses a universal product code (UPC)

Specialty media

Relatively inexpensive, useful items featuring an advertiser's name or logo that are given away; also known as giveaways or advertising specialties

Specific goal

A goal stated in exact terms and includes some details

Spot check method

The receiver of a delivery conducts a check of one carton in a shipment to see if the right kind of quantity of goods were delivered

Spreadsheet programs

Software applications used to organize, calculate and analyze numerical data

Staffing/temporary agencies

Employment agencies that are not supported by taxes and must earn a profit to stay in business

Standard English

The formal style of writing and speaking that is taught in school

Standing-room-only close

A method of closing a sale that is used when a product is in short supply or when the price will be going up in the near future

Start-up costs

Projections of how much money a new business owner will need for the business's first year in operation

Stockholders

Projections of how much money a new business owner will need for the business's first year in operation

Stock keeping unit (SKU)

A unit or group of related items in a unit control inventory system; the smallest unit used in inventory control

Storage

A marketing function that refers to the holding of goods until they are sold

Store layout

The ways that stores use floor space to facilitate and promote sales and serve customers

Storefront

The exterior of a business that includes a store's sign or logo, marquee, outdoor lighting, banners, planters, awnings, windows, the exterior design, ambiance, landscaping, and lighting of the building

Substitution method

A selling method that involves recommending a different product that would still satisfy the customer's needs

Suggestion selling

A Method of selling in which the salesperson recommends additional goods or services to the customer

Superior-point method

A selling technique that permits the salesperson to acknowledge objections as valid yet still offset them with other features and benefits

Supervisory-level management

Managers who supervise the activities of employees who carry out the tasks determined by middle and top management

Supply

The amount of goods producers are willing to make and sell

Survey method

A research technique in which information is gathered from people through the use of surveys or questionnaires

SWOT analysis

An assessment of a company's strengths and weaknesses and the opportunities and threats that surround it; SWOT: strengths, weaknesses, opportunities, threats

Target market Tariff

A group of people identified as those most likely to become customers A tax on imports; also known as a duty

Teamwork

Work done by a group of people to achieve a common goal

Telecommuting

Program that involves working at home, usually on a computer, with completed jobs transmitted by e-mail or mail-in disk

Telemarketing

The process of selling over the phone

Terms for delivery

The final delivery arrangement between the buyer and seller

Third-party method

A selling method that involves using a previous customer or other neutral person who can give a testimonial about the product

30-day accounts

Accounts that enable customers to charge purchases during a month and pay the balance in full within 30 days after they are billed

Till

The cash drawer of a cash register

Time management Trade character Trade name

Managers who make decisions that affect the whole company A specific type of brand mark, one with human form or characteristics A phrase or symbol that identifies and promotes a company or a division of a particular corporation; also known as a corporate brand

Trade promotions

Sales promotion activities designed to get support for a product from manufacturers, wholesalers, and retailers

Trademark

A brand name, brand mark, trade name, trade character, or a combination of these elements that is given legal protection by the federal government

Trading area

The geographical area from which a business draws it customers

Traditional economy Transit advertising Transportation

Traditions and rituals that answer basic questions of what, how and for whom Advertising found on public transportation The marketing function of moving a product from the place where it is made to the place where it is sold

Triadic colors Trial close

Three colors that are equally spaced on the color wheel An initial effort to close a sale

Uniform resource locator (URL)

The address of a file that is available on the internet, usually on the World Wide Web

Unit control

A method of stock control that measures the quantities of merchandise that a business handles during a period of time

Unit pricing

Including price information for a standard unit or measure so that consumers can compare prices more easily

Universal product code (UPC)

A combination bar code and number used to identify a product and manufacturer

Unlimited liability

A business owner's financial liability is not limited to investments in the business, but extends to his or her total ability to make payments

Utility

An attribute of a product or service that makes it capable of satisfying consumers' wants and needs

Validity

When questions asked on a questionnaire measure what was intended to be measured

Values

Beliefs that guide the way people live

Vertical organization

A hierarchical, up-and-down organizational structure in which the tasks and responsibilities of each level are clearly defined

Visual merchandising

Coordinating the physical elements in a place of business to project the right image to customers

Want slips Warranty

Customer requests for the items that are not carried in the store A promise or guarantee given to a customer that a product will meet certain standards

Warranty of fitness for a particular purpose

A warranty used when the seller advises a customer that a product is suitable for a particular use, and the customer acts on that advice

Warranty of merchantability Which close

The seller's promise that the product sold is fit for its intended purpose A method of closing a sale that encourages a customer to make a decision between two items

Whistle-blowing

Reporting an illegal action by one's employer

Wholesale and retail buyers Wholesalers

Buyers who purchase goods for resale Channel of distribution that obtains goods from manufacturers and resells them to industrial users, other wholesalers, and retailers

Wi-Fi

Technology that establishes a wireless fidelity internet connection using radio frequencies

Word processing programs

Software applications designed to create documents that are primarily text but may contain a few graphics

World trade organization (WTO)

A global coalition of more than 140 governments that makes rules governing international trade

World wide web (WWW)

A subset of the internet that is a collection of interlinked electronic documents

MARKETING
QUESTIONS AND MISC. VOCABULARY
Target Marketing
The process of evaluating each market segment's attractiveness and selecting one or more segments to enter.

Market Positioning

Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of the target consumer

Market Segmentation

Dividing a market into smaller groups of buyers with distinct needs, characteristics, or behaviors who might require separate products.

Geographic Segmentation

Dividing the market into different units such as nations, states, regions, counties, cities, or neighborhoods.

Demographic Segmentation

Dividing the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation

Age and Life-Cycle Segmentation Gender Segmentation

Dividing a market into different age and life-cycles Dividing a market into different segments based on gender

Income Segmentation

Dividing a market into different income segments

Psychographic Segmentation

Dividing a market into different segments based on social class, lifestyle, or personality characteristics

Behavioral Segmentation

Dividing a market into segments based on consumer knowledge, attitudes, uses, or responses to a product

Occasion Segmentation

Dividing a market into segments according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item

Benefit Segmentation

Dividing the market into segments according to the different benefits that consumers seek from the product

Micromarketing

Tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments; it includes local marketing and individual marketing

Value Proposition

The full positioning of a brand- the full mix of benefits on which it is positioned

Product

Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need

Service

An activity, benefit, or satisfaction offered for sale that is essentially intangible and does not result in the ownership of anything

Social Marketing

The use of commercial marketing concepts and tools in programs designed to influence individuals' behavior to improve their well-being and that of society

Brand

A name, term, sign, symbol, or design, a combination of these, that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors

Packaging

The activities of designing and producing the container or wrapper for a product

Product Line

A group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges

Product Mix

The set of all product lines and items that a particular seller offers for sale

Private Brand Co-Branding

A brand created and owned by a reseller of a product or service The practice of using the established brand names of two different companies on the same product

Line Extension

Extending an existing brand name to new forms, colors, sizes ingredients, or flavors of an existing product category

Brand Extension

Extending an existing brand name to new product categories

New-Product Development

The development of original products, product improvements, product modifications, and new brands through the firm's own product development efforts

Intrapreneurship (Bootlegging)

The act of behaving like an entrepreneur while working within a large organization.

Idea Generation Idea Screening

The systematic search for new-product ideas Screening new-product ideas to spot good ideas and drop poor ones as soon as possible

Product Concept

A detailed version of the new-product idea stated in meaningful consumer terms

Concept Testing

Testing new-product concepts with a group of target consumers to find out if the concepts have strong consumer appeal

Business Analysis

A review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company's objectives

Test Marketing

The stage of new-product development in which the product and its proposed marketing program are tested in realistic market settings

Product Life Cycle Style

The course of a product's sales and profits over its lifetime A basic and distinctive mode of expression

Fashion Fad

A currently accepted or popular style in a given field A temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity

Introduction Stage

The PLC stage (product life-cycle) in which a new product is first distributed and made available for purchase

Growth Stage

The PLC stage in which a product's sales start climbing quickly

Maturity Stage Decline Stage Advertising

The PLC stage in which a product's sales growth slows or levels off The PLC stage in which a product's sales fade away Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor

Sales Promotion

Short-term incentives to encourage the purchase or sales of a product or service

Public Relations

Building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events

Personal Selling

Personal presentations by the firm's sales force for the purpose of making sales and building customer relationships

Direct Marketing

Connecting directly with carefully targeted segments or individual consumers, often on a one-to-one, interactive basis

Integrated Marketing Communications

Carefully integrating and coordinating the company's many communications channels to deliver a clear, consistent, and compelling message about the organization and its products

Push Strategy

A promotion strategy in which the sales force and trade promotion are used to do this to the product through channels. The producer promotes the product to channel members who in turn promote it to final consumers

Pull Strategy

A promotion strategy in which a company spends a lot of money on consumer advertising and promotion to induce final consumers to buy the product, creating a demand vacuum that does this to the product through the channel

Channel Management

the process of coordinating channel members to move goods and services to the end user

Protectionism

A government's policy to protect domestic industries and businesses against foreign competition

Channel Intermediaries Persons or businesses that perform channel functions in an

indirect channel of distribution; responsible for buying, selling, promoting, etc..

Promotion

A marketing function that communicates information about goods, services, images, and/or ideas to achieve a desired outcome

Consumption Competition

The economic process or activity of using goods and services The rivalry between two or more businesses to attract scarce customer dollars

Interdependent

Dependent upon one another; personal traits

Accounts receivables Trade credit

All monies owned to a firm by its customers An agreement whereby the supplier sells products to a buyer but does not require immediate payment

Sales

Income that results from sales of a company's goods and/or services

Liabilities

Debts, such as accounts payable, owned by other business to others

Net income

A business's final profit, bottom line; the amount of money a business is able to keep after paying all expenses

Total cost

All of a business's expenses

Gross revenue Net worth

All the money earned by a business before expenses are subtracted The total value of the business

Operating Budgets

Developed by businesses to organize the overall finances of the day-today operations

Sales Report

Contains a variety of marketing information that business often use to improve the effectiveness of salespeople

Focus Group

When a moderator asks question and guides the group discussion to obtain information about specific topic, such as products

Product/Service Management

Activities of a business the involve obtaining, developing, maintaining, and improving a product or service mix in response to market opportunities

Price Fixing

An illegal business agreement in which businesses agree on prices on their goods or services

limited warranty

A written that is understood by the consumer and the seller that the product will perform as expected

Express Warranty

A promise expressed in a specific statement concerning the quality of the product

Corporate Brand

The combined impressions, images, or experiences associated with a company or parent entity

Stealth Marketing

A deceptive practice in which a business tries to stimulate interest in a product without disclosing to the public that the business is paying other to create the "buzz"

Corrective advertising

Advertising that explains and amends information that was deceiving in a previous ad

Word-of-Mouth Communication

Promotion and publicity for a business provided by customers who tell others of their satisfaction with their business

Direct Selling Benefits

Involves calling on customers or potential customers

Advantages customer receive from buying a product

John loves sports and would like to own his own sporting goods business. He has set aside some money for investment but has very little time for the day -to-day operations of a business. What type of business ownership would you recommend?
Corporation.

Using coercive power in distribution channel relationships is illegal in the United States if it
...Restricts competition

When coordinating marketing activities, it is important for all distribution channel members to understand their roles in the supply chain and to
...Communicate clearly

What is an effective technique for employees to use to extract relevant information from written materials?
...Take notes while reading

In order for an employee to follow directions s/he is being given about how to do a new job properly, the employee must
...Focus on the message's content ...Pronounce words clearly.

To enunciate when speaking to customers means to Paul is responding to an inquiry he received in the mail. His response includes some good news and some bad news. How should he structure his response in light of the bad news?
...Place the good news at the beginning and the bad news in secondary position(s) ...Attacking someone else's idea.

When you ask questions in an open -minded way, you avoid When writing e-mail messages to businesspeople, it is best to avoid using
...Initialisms.

Employees often use simple written reports to provide managers with __________ information.
...Routine

What might a business lose if an advertisement attracted new customers, but they were greeted by a discourteous employee?
...Repeat business.

What kind of customer would make the following statement: "Why are you always moving everything around? You really make it hard for me to find what I want."
...Disagreeable

Carpeting had been installed in Karl's living room and den on Friday afternoon. The next day, he noticed that along one wall, the carpeting was not laid properly. Karl called the installer to have the problem corrected. The carpet installer should first
...Listen to Karl and see the problem through his eyes.

Dry cleaning is an example of a(n)

...Economic service.

When goods or services are made more useful to consumers, the goods and services have added
...Utility

Because the Engel Company takes raw materials and makes products that are useful for consumers, it is an example of a
...Manufacturer

The economic system in which producers are willing to use resources to create products that consumers are willing to buy is known as a __________ economic system.
...Market.

A high rate of unemployment usually has a negative impact on a country's

...Gross domestic product.

Jennifer's manager pointed out some areas for improvement in her last performance review. Now, she thinks she is a poor employee. This is an example of
...False generalization.

Katrina is a long-time employee who routinely finishes her assignments ahead of schedule. John, a new employee, often stays late to complete his work. As a responsible employee, Katrina should
...Offer to assist John if she can

One of the characteristics of a positive attitude that is easy to observe is

...A friendly smile.

An effective way to create a desire for others to agree with your ideas is by
...Explaining benefits.

Employees who are able to deal with new situations and changes in the workplace are demonstrating
...Adaptability

Shari finally finished the major project she'd been working on for months, so she takes the day of f and heads to the spa. Which step in developing an achievement orientation does this illustrate?
...Rewarding yourself for your accomplishments

Human relations can best be described as the study of the ways people
...Form and conduct relationships

When Matthew receives a check four times a year for income he has earned on his stock investments, he is receiving
...Dividends

The XYZ Company has a financial organization within the business that offers small loans, installment credit, and low interest rates to its members. This is an example of a
...Credit union

Preparing wills and setting up guardianships are types of financial services that often are provided by
...Attorneys

Mark has decided to hire a financial-services provider to help him plan his long-term financial goals. Business risks that are caused by changes in the market are called __________ risks.
...Economic.

A business's cash flow statement for one month indicates cash sales of $10,250, credit sales of $3,750, loans received of $525, and fixed expenses of $2,800. Calculate the total cash receipts.
...$10,775

A summarization of the total income and expense of a business for a period of time is called
...The profit-and-loss statement.

One reason why human resources management is important to the success of a business is because this process is responsible for
...Staffing the business

A marketing -information management system can help businesses to

...Discover new markets

The Internet gives marketing-information managers the ability to search for data in
...Remote locations

Kelli accesses a professional association's web site to review information about employment trends in a specific industry. What type of research is Kelli obtaining?
...Secondary

Marketing businesses use the information from sales representatives to make decisions. One type of report that details a sales representative's planned sales calls and routes for an upcoming week or month is a(n) __________ report.
...Activity

What is a common method of collecting research data that often involves the use of questionnaires?
...Mail survey ...Sample

What type of data do descriptive statistics summarize? What should researchers consider when evaluating the design of questionnaires?
...Types of questions

One way for a marketing researcher r to determine if online journals and articles are up -to-date is by
...Locating the publication date

The most immediate impact of the marketing function is its relation to

...Offering a variety of goods and services

When Ken Ditioner, owner of Shine Shampoo, considers how to package the items he produces, he is making a __________ decision.
...Product

A legal issue associated with the use of information might involve the violation of __________ laws.
...Copyright

What is a spreadsheet software program's calculation for next year's operating expenses based on the following information: an increase of 5% over current sales of $675,500 a year, and a 3% increase in operating expenses that are currently 40% of sales.
...$304,988.25

What approach to record keeping is Dahlia's business using when it hires a data processing center to handle the record keeping for its accounting information?
...Outsourcing the task.

What is the advantage to businesses of reviewing internal records to obtain information?

...Data are specific to the company

When operating machinery in the workplace, employees can reduce the risk of injury to themselves and damage to the machinery by
...Following the manufacturer's operating instructions

An auto-parts buyer evaluates a new vendor's performance and determines that the vendor didn't follow through on all of its promises and was late delivering the buyer's order. One of the first things that the buyer should do is
...Communicate his/her feedback to the vendor ...Create a favorable impression

One of the major functions of business maintenance is to What is an important guideline to remember when establishing personal goals?
...Set realistic goals.

One of the ways creativity is useful in marketing occupations is in accomplishing __________ activities.
...Public relations

Individuals often succeed in occupations that require the skills that match their
...Aptitudes

A job applicant should be able to completely answer the interviewer's questions if s/he has been
...Listening

What is an important quality that all rsums should possess?

...Neatness.

Businesses that display their goods and services at trade shows usually have representatives available whose major responsibility is to
...Meet with potential customers ...Quality

What do customers often associate with high prices? A law is established to ensure that businesses include pricing terms in their advertisements. The law is designed to discourage businesses from practicing ___ pricing strategies.
...Deceptive

Technology is important to the product/service management function because it helps a business

...Monitor inventory

With the arrival of digital television, many customers have purchased new digital televisions. A marketer recognized that these customers would want to do something with their old TVs. This is an example of
...Opportunity recognition

A common way for businesses to generate new product ideas is by reviewing

...Customer surveys

A women's clothing store that tells customers it will refund their money if they are not completely satisfied with any item they buy is providing a(n)
...Guarantee

Harrison Stroller Company manufactures baby strollers. The business launched a new stroller line in hopes of increasing its market share. The new model featured neon, plastic, musical toys on the front bar of the stroller. By the middle of the first year, there were 50 reports of infant injuries. What legal action will Harrison Stroller Company have to face?
...Product liability.

A company that makes ink pens claims that no other pen on the market uses a type of ink that changes color when exposed to light. The company is positioning its product according to what strategy?
...Unique characteristics

Corporate branding involves creating a specific image for a variety of products and product lines by focusing on
...A common vision

The way that business benefits directly from promotion is through

...Increased sales.

Effective product promotions can be used by businesses to

...Persuade consumers to buy goods or services

Critics claim that promotion poses an ethical dilemma because it encourages __________ attitudes in society.
...Materialistic

When a government requires a business to inform consumers about its product's limitations in its promotional materials, it is often referred to as
...Affirmative disclosure.

What type of promotional media might a chain of businesses use in order to reach a large number of potential customers in a particular state or province?
...Regional magazines

Why is it important to coordinate the elements in advertisements?

...To strengthen the theme.

Businesses often participate in trade shows as a way of communicating with their

...Target audiences

An important external factor that affects the type of promotional plan a business develops is the business's
...Competition

One of the ways that salespeople can use selling to create desire for products is by
...Using product demonstrations

An example of a lead that a salesperson might obtain from sources within his/her own company is a lead
...Obtained from an industry trade show

How do antitrust laws that prevent the formation of monopolies and promote competition affect businesses?
...Make certain selling activities illegal

A customer asks a specific product question that a new salesperson cannot answer. What should the new salesperson do?
...Ask an available, experienced employee

by incorporating what large retailers have integrated information sharing between channel members
bar codes and EDI

horizontal conflict

a channel conflict that occurs among channel members on the same level

three purposes of oral presentations

to entertain, to persuade, and to inform

what must employees avoid when dealing with customer complaints

arguing politely

sales force automation technology

The computerization of sales forces operations for more efficient order-entry transactions, improved customer service, and better decision-making support.

as prices increase, the quantity supplied will generally do what

increase

personal consumption expenditures ethics

Consumer purchases including durable and nondurable goods, and services A set of moral principles that may be held by a society, a group or an individual.

aggressive behavior installment

standing very close to others when talking A payment plan that allows customers to make payments at set intervals over a period of time until the total debt is paid

capital investment

the money paid to purchase buildings, tools, and machines to create goods and services

market share attitude

A company's product sales as a percentage of total sales for that industry A person's consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea

weakness to secondary info

it may be inaccurate

emergency situation that business employees should know how to handle and report
bomb threat

important step in the process of purchasing equipment and supplies for the business
selecting vendors

production

converting resources into goods and services

flexible prices

product prices that freely move upward or downward when product demand or supply changes

pure competition

A firm produces a homogeneous product and is a small part of the total supply such that it cannot influence market price and total output.

product managing

businesses follow in order to direct and control all phases in the life of a good or service

unconscious problem solving

rely on unconscious mind to continue processing info in our long and short term memory

touch points that a successful company often used to communicate its corporate brand to its target market
company website, sales calls, and trade shows

institutional public relations

promoted just say no campaign

trade shows

exhibitions where companies associated with an industry gather to showcase their products

one of the main functions of the legal procedure

resolve disputes

horizontal channel conflict

conflict that occurs between members of a marketing channel at the same level

yours truly is an example of a

complimentary close

specialization labor

To train or specialize people in certain areas of work so that people can accomplish tasks quicker

oligopoly peak

A degree of competition in which just a few sellers dominate the market business goes through the phase when theres demand for goods and services which exceed production

personal credibility Avoidance

you can persuade others to believe what you say conflict response mode

understanding spending habits

the first step in creating a finical plan

allocating funds

Percentage of sales budgeting

use accounting information

used for allocating funds

Return on capital

measure of how well a business generates cash flow

watching what customers do objectives

observation method of collecting marketing research data business can create in order to help answer the research problem

revising marketing strategy

a business uses information in a salespersons lost business reports that includes hat customers are dissatisfied

marketing concept

a business would re order a product it had stopped selling due to customer request

demographic

type of trend businesses are considering when analyzing where customers live and their background

improper lifting

cause of back injuries

who is doing what

project planning tools reveal this

arriving at work on time

way employees can control a businesss expenses

eliminating health hazards

why its important to manage storage areas in a way that allows them to throw away items that have expired

advantage of bar codes product management

its easier to change the prices a business using satellite communication systems to track a product from the time its ordered until its delivered

grades and standards

enables customers to buy without having to inspect each product

Magnuson-Moss Warranty act

Requires any supplier that offers a written warranty on a consumer product costing more than $15 to disclose the terms of the warranty in simple and readily understandable language before sale.

Industry Organization

subjects to regulation of free enterprise economic systems and professional practices

mix

an assortment of products that a firm offers for sale

set of objectives Selling

one of the first steps in developing a promotion plan communicating in order to influence customers purchasing decisions

Nature of the customer

primary difference between selling approaches in the retail and manufacturing industries

Explain types of business ownership.

There are four possible forms of business organization: sole proprietorship, partnership, corporation, and limited liability company (LLC). The choice depends on the financial and tax situation of the owner, the type of business, the number of employees, and the level of risk involved. Each has advantages and disadvantages to be explored. A sole proprietorship- a business owned and operated by one person. A partnership- a legal agreement between two or more people. The two types of partnerships are general and limited. A corporation- a legal entity created by a government statute authorizing individuals to operate an enterprise. A limited liability company- a hybrid of a partnership and a corporation. In an LLC the owners are shielded from personal liability while all profits/losses pass directly to the owners without taxation of the business itself.

How can you demonstrate active listening skills?

Demonstrating active listening skills includes making eye contact, identifying a purpose, asking clarification questions and providing feedback.

Explain the nature of effective verbal communications.

Effective verbal communications includes showing respect, knowing the purpose of why you are speaking, using your voice effectively, using enumeration where appropriate, and providing examples.

Discuss the nature of law and sources of law in the United States.

Laws are enforceable rules of society that reflect the culture and circumference that create them. Laws may be grouped unto an organized form called a code. They should be both predictable and flexible. A number of forms of law exist, including common law, positive law, English common law, and equity. In the US, sources of law include the Constitution, state constitutions, statues, ordinances, administrative regulations, and criminal or civil cases.

What can you do to demonstrate a customer-service mindset?

A customer-service mindset is an attitude that customers satisfaction always comes first. To demonstrate a customer-service mindset, employee should: make customers feel welcome, be willing to answer questions or find answers to questions.

What are some tips for handling difficult customers?

A recommended process for handling customers complaints includes: Listen, Take the customer aside to discuss the complaint, Repeat the facts to show that you understand what the customer has stated, Get assistance from a supervisor, if necessary, Establish a plan that determines the next action step.

Explain how organizations adapt to today's markets.

Organizations adapt to today's markets by using tools like SWOT Analysis and environmental scans to identify ways the business can improve. A SWOT

Analysis assesses a company's strength and weaknesses and the opp. and threats that surround it. An environmental scan is an analysis of outside info. that may have an impact on an organization. A business is constantly engaged in the process of renewal when they choose to use this data.

Identify sources that provide relevant, valid written material.

Sources for written material may be obtained internally or externally. Internal sources include such data as a company's monthly sales records or previously collected market research. External sources include the internet, govt., specialized research companies, and business/trade publications and associations. The internet provides a nearly limitless source of free or fee-based info. from companies' own website or business clearinghouses. Data collected by government economic news, and legislative trends. Government agencies also serve as good sources for written materials. Specialized research companies sell demographic data, sales forecast, and other business data they have collected.

Explain the role of ethics in customers relationships management.

Customers relationship management involves finding customers and keeping them satisfied through a variety of means. It is useful for developing and maintaining customer relationships. The sharing of customers info. among business has led to privacy issues. The government has regulations protecting the privacy of consumers, including offering customers the option of being added to mailing lists.

How can you demonstrate initiative?

Demonstrating initiative means taking action and completing tasks without being specifically asked to do so. An example of taking initiative is developing a new idea for a marketing campaign and conducting the research to show that your idea has viability.

Describe the marketing functions.

7 functions of marketing: Channel Management- process of deciding how to get goods into customer's hands Market Planning- understanding the analysis needed to target specific marketing strategies to a select audience. Marketing information management is gathering and analyzing information related to market, product and segmentation decisions. Pricing is how much to charge for goods and services to create a profit. Product/service management is obtaining, developing, maintaining, and improving a product or product mix in response to market opp. Promotion is to inform, persuade, or remind potential customers about a product or service. Selling is providing a customer with a good or service they want.

Explain communication techniques that support and encourage

a speaker. Comm. techniques include using your own body language and facial expressions to respond to the speaker. Ex. sitting up straight to show interest. show you care. ask questions. take notes. maintain eye contact.

Explain customer buying behavior.

Buying behavior is the process that customers use to decide what they will buy, where they will buy it, and from whom they will buy it.

What are some ways you can maintain a safe work environment?

Creating a safe work environ. is import. due to the significant financial impact these policies can have on a business. Many companies develop an accident management program that includes complying with the federal and state health and safety regulations, documenting workplace incidents, providing employees with protective clothing and equipment, offering safety training and info. and providing opp. for safety and health training.

Why is it important to follow established security procedures/policies?

Established security procedures allow employees to know what to do in certain situations w/out them making a personal judgment. Security policies protect the business from negative financial impacts form both employees and customers.

Describe legal issues affecting businesses

Among the legal issues affecting business are the following. Consumer protection issues include product safety , zoning laws to protect real estate value and quality of life, public health, and licensing for personal service providers. Issues include minimum wage standards, equal opp.

employment provisions, guidelines for workplace safety, and the family and medical leave act.

Explain how to handle telephone calls in a businesslike manner.

B/c in a phone like conv. your listener cannot see you, a pleasant voice is very important, whether answering or initiating a call.

MARKETING
MARKETING IDEAS
Give the product away o Can establish product in a new market When its revolutionary, few people may want to try it Therefore, must overcome that obstacle o Can make way for further purchases Cars sold relatively cheaply but spares to repair car are expensive o Example King C. Gillette invented the safety razor needed men to switch over from cut-throat to disposable razors => gave product away The catch: people had to keep buying his disposable razors because they weredisposable after a short time of usage o In practice: Identify products that carry a long-term commitment to buying peripherals, spares, or other consumables Decide your target market theres no point giving out freebies to all if theyre not going to follow up and buy your product later Make sure you have good intellectual property rights (patents, etc.) so that nobody can enter the market with knock-off consumables that work with your giveaway product Make it fun o Purpose: generate word-of-mouth among consumers, increased awareness Word-of-mouth is the most effective form of advertising o Example Raidsson Hotels served predominantly business clientele typical spend time in rooms working instead of sightseeing Duck in the bathtub, can be taken home for children or mailed to anyone in the world at no cost o In practice Do something thats fun Ensure that its as easy as possible for someone to tell others about the experience Try to have something tangible attached to the experience so that there is a permanent reminder of the event Be careful that the message does not detract from the rest of the brand image real money mailing o Mail is usually regarded as junk mail o Therefore, how to get people to open the mail? What NOT to do: teaser question or color printing flags that there is a sales pitch inside => counterproductive o Example 1920s: American insurance company Metropolitan Life sent mail around with a one-cent piece inside the letter, made the envelope feel heavy, people were curious and open it => letter went on to ask how much better it would be if the person could save two cents a day, or five centsor a dollar Advertising was sober no sales pitch

In practice Make the gift worth-while something more than yet another ballpoint pen Dont be stingy Explain the benefits clearly without rhetoric you already have their attention if they are reading the mail at all Accept that not everybody will respond Ensure that you link the message to the coin Withdraw the product o Sometimes we dont know what we have until we dont have it anymore o Example: coca-cola withdrew traditional coke recipe in favor of an improved recipe o Example: twinkies (?) o In practice Only works with well-known iconic products News media must become involved without publicity there will be no public outcry Must be prepared to follow up quickly with conventional advertising and other promotion when the publicity is at its peak Care needs to be taken that people dont feel conned by the promotion Need to consider other ways to revive the product, in conjunction with the threatened withdrawal Add some value o There is a strong likelihood that competitors will offer something similar therefore, how do you differentiate? o Example Pizza Express: there were no pizzerais outside of Italy and none at all in London, Peter Boizot = founder Tried to add: live jazz bands => present: live music Membbers Club: for a subscription members become entitled to four vouchers a year for free menu items plus a free glass of win, to free deserts when dining early, free entry to the Pizza Express Jazz Club and a 10 pound gift voucher for every 10 meals purchased o In practice Only offer added value that your target customers will appreciate Price accordingly - people do not mind paying more if they are getting more Ensure that wat it costs to add the value is less than the premium your customers will pay Promote the added value they already know about your product Be different! o Dont be put off by the fact that nobody else is doing it this is actually an advantage o Be sure you know who your target market will be are there people who are currently poorly served by the traditional approach o Be careful designing your new approach you may not have a precedent to guide you o Look for precedents in other industries you may be able to learn from them Respect your customer o Remember that your staff may not have the same commitment to the business that you have o People often forget that consumers are people too o

Not all your customers will think the same you must encapsulate all opinions and wants Play a game o Getting people to be involved with the brand means getting them to build it into their lives Puppy dog close: once youve cuddled with the puppy, its hard to give it back o Example Panasonic launched their lumix camera range needed to promote key features of the camera (10X optical zoom, 28 mm wide-angle lens) Therefore, Panasonic commissioned Inbox Digital to create an online game called Lumix World Golf players can zoom in and out to judge their shots just like they would with a camera tell a friend button o In practice The game must be professional executed and slick Needs to connect to the product in a straightforward but fun way Should connect with other promotions to reinforce the message It should ALWAYS have a tell-a-friend button Empowering staff o Hire good staff to start with o Train them well o Trust them and treat them fairly Speak the customers language o Dont try to guess what the target audiences language is let them tell you o Dont assume that information will be correctly transferred if you just sent a message o Learn about the customers culture so that you dont offend them when making the sale (a high five may be offensive to some cultures) Build your corporate culture o Aka build trust between you and your employees o Salespeople usually work away from the company => away from supervision Even though they are paid, theres no guarantee that they will actually do what they say theyre going to do, go where they say theyre going to go, and see people theyre going to see o Example Amway founded in 1950s, uses a direct sales force of over 3 million people worldwide to sell household cleaning products Salespeople = ABOs, Amway Business Owners (label suggesting independence) Motivational tapes and books are accompanied by regular meetings where salespeople are given pep talks => like a cult => result = feeling of being a part of something big and important => sense of wanting to help the process along by selling more an dmore Supports ethical and charitable activities => builds corporate culture based on helping others to improve their lives & salespeople feel proud to say they are working for Amway o In practice Have a clear idea of what your corporate vision is going to be Communicate the vision consistently and frequently o

Ensure that the staff can see that theres something in it for them in terms of self-esteem and the esteem of others Help staff to realize this vision Have a startling brand o Usually waste brand names based off of peoples names/surnames Exception: victorias secret but whatever o Get a controversial brand ^__^ o Example French Connection United Kingdom founded in 1972, fashion chain Acronym = fcuk Slogans: fcuk fashion, hot as fcuk, no fcuking worries Target market: rebellious teenagers When people banned the companys advertising, sales wnt up even further Was banned in boston. Established first store in san Francisco: San Franciscos First fcuk o In practice Try to be funny as well as controversial Dont go too far you might get banned altogether If possible, link the controversial brand to your companys name this will help you in defending against banning charges The main appeal of controversial brand names is to younger people it wont work with older people Make the product easy to demonstrate o The demonstration must be as simple as possible no matter how complex the product is o Example When Remington first introduced typewriter, must give people the incentive to switch from pen and paper to typewriter Needed to demonstrate the speed Therefore laid out the top line of the machine: QWERTYUIOP To type out TYPEWRITER very quickly QWERTY still survives today XD o In practice Works best for complex products Dont be afraid to redesign the product to make the demonstrations more striking The easier something looks to operate, the more likely it will be adopted Follow up on customers (customer loyalty) o You need to keep very good records and diarize things well o You need something of real value to offer the customers o Calculating the appropriate time gap is a matter of considering the value of the initial purchase and the type of add-on you are offering o Example Car company: follow up on your customer maybe a few months if not a year after they buy the car - by then, there might be something wrong with the car that needs to be fixed => sell spares Show people the competition o We dont have to run our competitors down makes us seem like bad people anyway o Example

Judy Kearney director of sales and marketing at Holiday Inn => started losing customers to a rival hotel chain Improved the hotel of course but how were you going to get people to take a look at your hotel and actually make the sale? Arranged tour of Holiday Inns hotel and also volunteered to drive decision makers around to the competitors hotels Risktaking but it worked o In practice Dont ever criticize your competitors it looks bad (lack of self confidence) & bad business ethic Let people make their own decisions but be prepared to guide them Go out of your way to be helpful => builds trust and a sense of obligation Make sure you are better than the competition Take your partners o Wouldnt it be nice if other people brought business to you? o Choosing the right partners can make a dramatic difference o Example Marriott and deca like literally all deca conferences are at mariotts Deca and mens warehouse Deca and fidm blahblahblah Park n fly and san Francisco airport hotels and restaurants make exhibitions work o there arent actually many buyers at exhibitions o most visitors: competitor research, new idea generating, people who have a day off (students, retired people, blahblahblah) o research shows: buyers represent less than 10 percent of exhihbition visitors o HOWEVER these visitors are important because they show an interest in the industry o Example Because there are barely any buyers => no point in a lot of salespeople on the stand People who visit may be engineers, administrators, blahblah so why not put your own engineers at the stand Visitors who are not buyers might be users of your products and services & will know who you should be talking to at their companies (useful in terms of networking and getting more business from more companies) The point is: these visitors open the door for you to establishing connections with potential buyers After establishing the connection, that is when you bring in the salespeople to follow up o In practice Dont staff your stand with salepeople. They have the important job of following up the leads you generate Remember that less than 10 percent of visitors to most exhibitions are not buyers Focus on your reason for exhibiting its to make contacts, not make sales Think about the needs of the visitors. That way you have a chance of exchanging something of value Food

Example: the stands at deca conferences. They usually offer food Adapt to a different country when exporting tap into country-of-origin effect o Country-of-origin effect: phenomenon by which products and brands are colored by consumers opinions about the country the product comes from and for many firms it can work greatly to their advantage Ex: French = food, Belgians = chocolate, murica = fast food, Chinese = dumplings, blahblahblah o Example Sprite Direct Chinese translation = evil spirit (so every time you buy the soda youre drinking an evil spirit woohoo) Changed => snow crystals Unfortunate direct translations The ford pinto o Brazilian: slang for tiny male genitals Ikea sold products o Jattebra Thai: slang for sex o Redalen Thai: getting to third base o Gutvik German: sounds close to good fuck Iranian paxam company produced soap called barf o Okkk well we know what it means in English o In farsi: barf = snow Pepsi slogan come alive with pepsi o China: bring your ancestors back from the grave got milk? o Mexico: are you lactating? o In practice Ensure that the perception you tap into is the one that the target audience has of your country this is likely to be different from your own perception Test the alternatives there may be more than one icon that you could use, but only one will be effective Never, ever simply translate your existing advertising into a foreign language culutural differences o well beyond language Make it easy for people to pay o If you make people go through a huge process before paying they just wont buy it cause humans are inherently lazy o Example: two shoe salespeople sent to the South Seas After a week Saleperson1 sends message home: nobody wears shoes here. Coming home Salesperson2 sends message home: nobody wears shoes here. Send two containerloads immediately. o Marketer would reply: nobody wears shoes here, but they do grow wonderful mangoes. I have arranged a deal with a cannery on the next island to buy the mangoes, and with the earnings from this the islanders will be able to buy shoes. I have measured a sample of their feet, and we will need mainly size

8s, wide fitting, but we should have around 10 percent of the shipment in 9s and 10 percent in 7s. Womens shoes should be mainly flat heeled due to the rocky terrain here. Marketer thinks about the customers needs o In practice Be creative Dont overstretch yourself Make it simple for people Consider what people are able and willing to pay, and build your package around that Give people something that helps you communicate your brand to them o The difficulty: trying to get right to the target audience by cutting through the advertising clutter but discovering a lot of inadequacies and do it the most economical and effective way o Example Pepsi wanted to target a youth market with the product but teenagers dont read newspapers (the marketing media of the time) to ell Mountain Dew At the time: it became fashionable for teenagers to carry pagers (electronic messaging devices) so PepsiCo hit on the idea of running a sales promotion in which teenagers could buy a pager for a heavily discounted price if they sent ten Mountain Dew bottle tops in to the company Cost of the pagers was not much more than the $20 customers paid for them self-liquidating sales promotion (promotion pays for itself) o In practice Self-liquidating promotions require you to find something that people want to buy and that carries a high profit margin Do not overuse the medium you dont want people to throw the device away that creates a bad image in itself (seeing something in the trash in masses doesnt give the company a favorable image) Reposition into a better market o When target audience is disappearing o Solution: resposition o Repositioning: establishing the brand in a different location in the customers consciousness Usually, it means changing the way everybody thinks of the brand Position of a brand in peoples mind is always relative to other brands and products o Example Lucozade (carbonated glucose drink) was originally developed as a drink for people convalescing after serious illness Glucose => quick energy and gave digestive system a boost 1980s: there were more healthy people than sick people => Lucozade had a shrinking market At the same time: interest in taking up sport was on the increase TV ads showed decathlete Daley Thompson drinking Lucozade helped reposition the product Drink was sold in different size (larger sports drink bottle) and sold in vending machines Now they use Lara Croft as the role model Result: successful repositioning o In practice

Before deciding to reposition, be very sure that you want to lose the market you are already in You cannot occupy two position at once Be very clear about the position you want to occupy consider the competitive issues particularly Anticipate retaliation from competitors in the new market Keep your promotion consistent with the new position Use the packaging o Basic: packaging is used to protect the contents from the environment and vice versa o HOWEVER: packaging can do more Inform customers, advise usage, promote other brands, etc. o Example French mineral water bottler Evian wanted to package in a plastic bottle that could be easily recycled Most plastic bottles take a lot of space. Therefore, evian designed a bottle that crushed down to a reduce size easily o In practice Watch what people do with the packaging. There may well be a good idea in there for you Think of ways the packaging can add value but remember it still ahs to sit on retailers shelves Influence the influencers o Buyers are all influenced by others (colleagues, friends, professional advisers (lawyers or consultants), family members) o Example Pharmaceutical companies have two basic markets: over the counter market of drugs and medicines sold based off of prescription Therefore, pharmaceutical companies employ salespeople for the purpose of visiting doctors to promote the drugs The doctors dont buy the drugs but they are the ultimate influencers to the target market Other examples Architects do not buy UPVC windows, but they do specify them TV chefs do not sell particular cuts of meat, but they can recommend them o In practice Identify the influencers in your market. In many cases, you may need to ask the actual customer if there is anyone he or she would normally consult Influence the influencers by personal approaches if possible, or by promotions directed at them if necessary Be subtle influencers are usually well aware of the concept of persuasion, since that is what they are themselves engaged in Research your customers o Knowing your customers is basic to planning to meet their needs o Running a survey is often regarded as far too difficult to undertake Analyzing survey responses involve a bunch of statistical expertise Designing the questions is hard as well as analyzing the answer (interpreted in different ways) o Example of what to use Survey monkey

Simple surveys = free Larger/complex surveys = paid for at reasonable rates Survey Monkey automatically analyzes and collates responses for you o In practice Be careful when writing questions. Itll be too late after you run the survey and find out whats wrong Always pilot any survey. Let a few people fill in the survey first and see what problems come up. Beware of ambiguous questions. Remember that the more respondents you survey, the more reliable the results BUT the higher the cost Involve your customers o In business-to-business markets, it is easy to concentrate simply on the relationship between the buyer and the salesperson (buyers are after all the ones responsible for the final purchase) o Buyers do not operate in isolation o They are usually working to a specific brief that has been handed to them by senior management o Therefore, companies must look beyond the buyer and seek to influence those who in turn influence the real decision makers o Example Cisco Systems: worlds largest manufacturer and supplier of networking equipment Main users = engineers who set up and maintain the systems in the client companies These engineers will encounter problems throughout the lifetime of the equipment Therefore, cisco has established a self-help online technical support system that allows engineers to troubleshoot the systems Also allows engineers to share information and discuss problems so that they can help each other => encourage engineers to become more involved with cisco and generates word-of-mouth (more properly word-of-mouse) recommendations AND increases sales because when engineers change jobs they could use cisco equipment at the new company o In practice Find out who the final users of your product are Find out how you can help them to make better use of your products If possible, establish links between all users of your products Remember that companies do not buy or use products people buy and use products on behalf of companies. Address the needs of the people, not the needs of the customer companies Tap into the social network o Keep in mind: current generation is very internet-oriented They have no difficulty in setting up software to block pop-ups and banners so advertising in those obtrusive ways is difficult o Example Youtube Companies have put commercials on Youtube Against terms of use: youtube specifically excludes videos that aim to solicit trade, but in general this has been interpreted to mean that the company does not allow advertising that directly seeks a response.

General promotional advertising is allowed provided it is interesting and amusing for YouTube suscribers In practice Create as slick a video as you can Keep it humorous, or surprising, or entertaining in other ways Dont patronize your audience. They are on the site to be entertained, not to be preached at Know your customers motivations o If we know what make customers tick, we can offer them solutions tat will appeal to their innermost motivations o Look beyond the obvious: few men buy aftershave and few women buy promiscuous things Women buy men the aftershave Men buy women the promiscuous stuff o Example Why do men buy deodorant? Consider Axe The brand owners (Unilever) decided that the only reason men buy deodorant is because of the women Developed the concept of the Lynx effect Ad: geeky-looking guy sprays himself with axe and suddenly he is mobbed by girls Message: smelling better will improve your chances with women o In practice Find the hidden motivator Make the characters in the advertising believable. Peole relate best to people who they perceive as being like them Tailor your products o Tailor the product to suit the exact needs of an individual o Drawback: cost o Example 1980s: PC revolution was taking off with many people buying computers for home use Computers arent that hard to tailor because all you need to do is plug in different modules to the basic system Michael Dell figured out how to sell tailored computers directly to customers using modular assembly in a subcontracted factory. Customers could specify exactly what they needed with advice from the company if necessary Today: dell computers are sold online as well as by telephone and mail order Customink o In practice Technical support and advice is crucial to this idea. People know what they need, but often do not know what they want Quick turnaround is important: customers might well be prepared to accept a less well-tailored product rather than wait weeks for perfection People will pay more for a tailored product but not a lot more Integrate communications o Marketers try to ensure that every message coming from the company is close to telling the same story o Problem: salespeople say whatever they need to say to make the sale, different media give different slants on the message, etc. o

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One solution of coordinating the messages: direct them to one stable form of media (example corporate website) Example Nine West Shoes Getting people to visit a website about shoes is not easy Molded the web address into the soles of the shoes (when someone stepped in a puddle of mud or something the print was left there) Print promoted the shoes In practice Integrate the message at all levels in the company All communications should have common visual standards Your marketing communications strategy needs to be clear to everybody Marketing communication have to be built around buyer behavior and customer contact points Build relationships with customers, and build brand values Ensure you have a good marketing information system so that you can monitor the process well Ensure that you always use the same artwork Be prepared to change if it isnt working GOOD EXAMPLE: DECA INC. the wealth People want to gain more market share Therefore: wining more customers and making bigger profits are all goals the directors eagerly aim for Problems Restraints on capital limit the rate at which the company is able to grow Working capital quickly runs out Most small firms rely on borrowed money that has to be paid back Solution: franchise the business format Example Holiday Inns Clear brand image: mid-range, comfortable hotel for business and family users Problem: new hotels are expensive. Building one is costly and time consuming Did not want to go the route of buying up existing buildings since they wanted to retain their branding intact Franchise the format Holiday Inns are almost all owned by the people who run them Parent company helps prospective franchises to find appropriate sites, build the right hotel, train the staff, create the appropriate dcor, market the hotel For the franchisee: dramatically reduces the business risk and allows the hotel to tap into Holiday Inns existing branding and reputation For the parent company: more rapid growth, franchisees pay fees and royalties for being allowed to use the format o With this format, Holiday Inns are able to open an average of one hotel per day somewhere in the world In practice Your business model must be proven to work

You will need to allow early franchisers in at a lower rate than you would like to charge later ones you dont know the quantity You must have a very clear manual, covering every possible circumstance: apart from the need for franchisees to know how to operate, this will ensure you keep your brand values intact Accept that you will have to provide a lot of support in the early stages, but regard this as an investment in the future

Ads on cars o Most people avoid ads Switch tv channels, flip pages of magazine, switch radio channels o Put ads where customers can see them o Example People find driving a necessity Some companies have their own customized cars while others pay individuals to drive around with their logos on them There are also companies who provide bumper stickers Bus stops, on buses, in malls (the directory things) Valley fair (those panels that hang down from the ceilings) Good one in valco and valley fair: if youre looking at this then your customers will too!) o In practice Adverts need to be easily processed with little viewing time often observers will only have seconds to see the ad before the car drives past Choosing the type of driver is often crucial because this will determine the audience for your advertising Vary the ambience o Having the right lighting, the right dcor, and the right smells o Some ambiences encourage people to linger => more opportunities to buy o Some ambiences encourage customers to eat and run (fast food restaurants) o Example Hollister and Abercrombie The smell perfume that they sell Dark lighting with light shining only on the clothes (spotlight) Macys Junior section, baby section, and womens section are completely different o The floor Junior: concrete Women: tiled ish but uniform color Baby: decorative floors and walls with bright colors Hard rock caf Music themed restaurant chain During busy periods: play fast rock n roll music, making diners eat quickly and staff moving quickly When the rush is over, music slows down o In practice What factors in your ambience can be changed easily? Heating? Smells? Lighting? How would you expect the change in ambience to affect your customers and staff Place your product

People skip through your ads on social media, tv, etc. On the other hand, people do watch the actual programs and movies. They notice products being used as props in those movies o Example Miley Cyrus We Cant Stop music video: there is a scene where she uses EOS It is possible to pay for a product to be integrated into a script for a movie BMW did that for the Bond movies Coca-Cola uses this idea in a big way Almost all American movies feature Coca-Cola somewhere o In practice Find out which company actually produces the shows youre interested in Try to establish a relationship with the producers This idea works best if your product is fairly eye catching Tv shows are easier to e into than movies, but some low-budget movie companies might be interested Be patient. Remember that TV shows are often made a couple of years before they are broadcast Develop a separate brand for each market o Brands are the personality of the product They appeal to a particular segment and what suits one segment will not suit another o Example Nokia = manufacturers of cell phones Range of cellphones at various prices to suit various pockets: within each country and even between most countries, the function of the cellphones has to be compatible with the cellular phone infrastructure There is a segment of wealthy people who are prepared to pay more simply to have a product that is exclusive Nokia brand does not carry the right image for this upper crust group Introduced a new brand Vertu for upmarket cellphones o Another example Abercrombie and Abercrombie & Fitch ?? more clothes on the male models in Abercrombie o In practice Consider whether your product or service could appeal to another segment if value could be added Always develop a separate brand for each segment this will take investment, but it is worth it Dont assume that people will buy more of something if its cheaper Use opinion leaders o Launching new products is always a problem o Marketing theory: opinions are formed either from direct experience or from seeing what the leaders do Who are the leaders? o Example Sprite drake Coca-cola taylor swift Gatorade tiger woods Blahblahblah with all the drinks Haagen- Dazs when first launched in Britain o o

o In practice Identify the opinion formers by observing how people behave toward them Consider how the opinion formers relate to the brand you are trying to launch Look for opinion formers who are in the public eye Ensure that the opinion formers have an ample supply of the product Link to a cause o Business and especially marketing often gets bad press o Marketing is associated with manipulation, persuasion, and separating people from their cash o The trick: get people to spend time with us rather than with someone else while simultaneously looking like decent, caring people <<throw in an example about getting a girl or whatever like Mr. Shcmidt>> o Example Tescos Computers for Schools Promotion DECA MDA o Promotion serves many functions Attract customers to the company Good for community relations Good reputation Make the customer feel good about the purchase or dealing with the company o In practice find a local cause to link with be specific offering to pay to some vague or unknown charity does not carry much weight allow your customers to get the warm glow of giving time-limit the promotion otherwise it loses impact, since it just becomes part of what people expect from you build a new distribution channel o sometimes distribution channels are so tied up by existing companies it is difficult to get a product to market o even when retailers can be identified, often part of the chain is contracted to some major supplier who blocks the distribution at the wholesale stage o example when Red Bull was first launched in Britain, it was an attempt to create the energy drinks market from scratch founded in 1984 in austia but only started selling in 1987 wanted to target a young audience (longer customer loyalty and youth are more inclined to drink it) therefore began recruiting students to act as part-time salespeople (visiting nightclubs and sports centers to promote the drink) not only kept costs down but also ensured that the entire workforce matched the brand values o in practice

Upmarket ice cream Promoted as a luxury, sensuous brand Gave away free samples at society events such as Henley Regatta, Wimbledon, polo tournaments, etc. Result: TV viewers saw the aristocracy eating the ice cream Impression of an upmarket luxurious brand was conveyed effectively

decide where you really want to sell your product and focus on those outlets decide who would be your best advocates for the product in those outlets follow up with a continued commitment to the distribution chain even when other channels open up

MARKETING
TEXTBOOK NOTES
Chapter 1: What do marketers do? o About marketing Marketing: activities which occur at the interface between the organization and its customers; the management process which identifies, anticipates, and supplies customer requirements efficiently and profitably; the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange and satisfy individual and organizational objectives Aim of marketing: to ensure that customers will conduct exchanges with the marketers organization Marketers must provide customers with what they want to buy at prices which represent value for money o The development of the marketing concept Production orientation Common belief: people would buy anything provided that it was cheap enough, ready for poorer quality as long as it cost less true in some cases Therefore, manufacturers thought that getting production right was all that mattered => production orientation o Prevails in market conditions under which demand greatly exceeds supply o Especially in Third World and Eastern European countries Product orientation With rising affluence, people are not prepared to accept standardized products, and as markets grow manufacturers are able to reap benefits of mass production despite providing more specialized products => the extra cost of having something that fits ones needs more exactly is not high enough to make a difference Led to the belief: ideal product could be made, one that all (or most) customers would want => product orientation o Tends to lead to ever more complex products at ever increasing prices o Customers are being asked to pay for features the might not need or what they regard as drawbacks o Does not allow for different tastes and needs Sales orientation As manufacturing capacity increases, supply will tend to outstrip demand Led to the belief: a born salesman could sell anything to anybody and therefore enough salesmen could get rid of the surplus products => sales orientation o Relies on the premise that the customer can be fooled, wouldnt mind being fooled, and would be fooled again later o Concerned with the needs of the seller and not the needs of the buyer

o Trying to produce a product then change consumers to fit it Sales orientation vs. practice of selling Practice of selling is more involved with establishing long term relationships with customers who will come back and buy more Consumer orientation The view that customers are intelligent enough to know what they need, can recognize value for money when they see it, and will not buy again from the firm if they do not get value for money o Basis of the marketing concept Seeks to change the organizations aims to fit one or more specific groups of customers who have similar needs often meet resistance from within the organizations THIS IS WHAT YOU WANT Customers vs. consumers Customers: people who buy the product can be professional buyers who are purchasing supplies for a company or a parent buying toys for a child, can also be the consumer Consumers: people who consume it, can also be the customer Societal marketing Societal marketing: marketers should take some responsibility for the needs of society at large, and for the sustainability of their production activities o Moves focus away from the immediate exchanges between an organization and its customers, and even away from the relationship between the organization and its consumers, and towards the long term effects on society at large Doesnt need to complicit with immediate needs of the organizations consumers (e.g. Body Shop operates a highly successful consumer oriented business while promising and delivering low environmental impact) Societal classification of new products Immediate satisfaction Low High Long-run High Salutary Desirable consumer products products Ex: smoke alarm Ex: fruit juice benefits Low Deficient Pleasing products products Ex: ineffective Ex: cigarettes slimming products Recognizes the needs of the individual consumers but it goes further in that it aims to improve the well-being of the wider society in which the firm operaes Problem: needs to balance customer needs, company profits (or other objectives), and the needs of society as a whole o May not be helpful in competing with other firms Relationship marketing Relationship marketing: focuses on the lifetime value of the customer

Example: motor manufacturer has models aimed at young drivers, families with children, middle-aged motorists each segment might be treated as a separate and unique entity marketers are responsible for establishing and maintaining these relationship key elements: creation of customer loyalty, establishment of mutually rewarding connection, willingness to adapt behavior in order to maintain the relationship marketing and other business disciplines marketing concept has evolved from product orientation through to customer orientation role marketing occupies relative to other business functions has also evolved

(a) marketing as an equal function

production finance marketing personnel

(b) marketing as a more important function

production finance marketing personnel

(c) marketing as the major function

production finance marketing personnel

(d) the customer as the controlling function

production finance marketing personnel customer

(e) the customer as the controlling function and marketing as the integrative function
production finance marketing personnel customer

Marketing on a day-to-day basis Marketing mix the four main Ps: Product: should fit target consumers needs, should function well, and should be what consumers expect

Place: should be available from wherever the target customers find it easiest to shop (doorstep delivery, online, store, etc.) Promotion: advertising, public relations, sales promotion, personal selling, and all other communications tools should put across the organizations message in a way that fits what the target consumers want to hear informative or appeal to emotions Price: should always be representative of its value Marketing mix can also include these three Ps People: virtually all services are reliant on people to perform them, very often dealing directly with the consumer (e.g. demeanor of waiters is important for a restaurants image) Process: process by which the service is delivered is part of what the consumer paid for (e.g. silver-service meal in upmarket restaurant vs. hamburger from fast food outlet) Physical evidence: almost all services contain some physical elements (e.g. restaurant meal is physical whereas most of the bill goes toward the intangible elements of the service dcor, atmosphere, waiters, etc.; completed hairdo after a hairdressing salon and some of the bill goes toward insurance company) Marketing jobs In market-oriented companies Customer has a major say in what happens Marketing team in the company ensures that everything is geared to customers needs Job title Brand managers Job description Responsible for all decisions concerning a particular brand Ex: brand managers of Mars compete with each other as well as with other firms for market share in the chocolate bar market (result in greater efforts and greater corporate share all round) Product Responsible for all decisions around a group of similar managers products within a firm Ex product manager in charge of chocolate-covered snack biscuits and another in charge of savory biscuits for cheese Sales Responsible for controlling, training, and motivating the manager sales-force and the sales back-up team Often also have a role in credit control (theyre in the best position to know the individual customers and can give an opinion on the customers creditworthiness on the least damaging way to get the customer to pay up) Salesperson Finds out what each customer needs and tries to arrange for its delivery Advertising Controls media purchases, deals with advertising agencies, manager generally handles the flow of information to the companys customers and consumers Public Monitors the companys public image and applies relations corrective measures if the company is acquiring a bad manager reputation, organizes events and activities that will put the company in a good light, tries to ensure that the company behaves responsibly towards its wider publics Market Collects evidence about what it is that consumers really research need and what they would like to buy, sometimes includes manager monitoring competitors activity so that the company can

take action early to counteract it Marketing orientation Customers are more likely to spend money on goods and services that meet their needs than on those that do not Definitions of some marketing terms Need: perceived lack of something Want: specific satisfier for a need Demands: what wants become when the potential customer also has the means to pay for the product Product: bundle of benefits (consumers will buy a product only if they feel it will be of benefit); physical goods and services Publics: any organizations or individuals that have actual or potential influence on the marketing organization Markets: all the actual and potential buyers of the firms products Segments: groups of customers with similar needs and characteristics Niches: very specific need and product categories Price: amount of money a product is sold for Value: what the product is worth to the customer or consumer Meeting marketing resistance within the firm what they should do Source Obligation Production people Keep customers ideas in mind when making the product Accountants and financial Must price reasonably (Too low no directors profit, too high no buyers) Cant sell directly to retailers (Cutting out wholesalers means we have to deliver to every single little shop in the country => transportation costs ^; Retailers also wont take us seriously because we would need wholesalers contacts) Legal department Must return peoples money when necessary and apologize (cant upset customers) Board of directors Cant cut the marketing budget (cutting marketing budget => cutting amount of business => competitors strengthen and we lose customer base and market share => not enough $$ to come back Front-line staff Must give good customer service (customers will come back) Sales force Cant get the sale through deceit (wont be able to get the customers back)

Chapter 1 summary o Marketing is about understanding what the consumer needs and wants, and seeing that the company provides it o A need is a perceived lack; a want is a specific satisfier o Customers buy things; consumers use them o Price is what something costs; value is what it is worth o A product is a bundle of benefits; it is only worth what it will do for the consumer

Consumer (or customer) orientation is used because it is the most profitable in the long run Chapter 1 questions o In a situation where supply exceeds demand, which orientation would you expect most firms to have? o Why might a consumer feel that paying $200 for a pair of designer jeans represent good value for money? o What needs are met by buying fashionable clothes? o What needs might a mother meet by buying a child sweets? o Why should marketers always refer back to the consumer when making decisions? o Multiple choice A strategy that aims to produce a perfect product that will suit everybody is called Production orientation Marketing orientation Product orientation A strategy that aims to produce the maximum amount of goods at the lowest possible selling price is called Selling orientation Societal marketing Product orientation Someone who has responsibility for marketing decisions concerning a group of products is A sales manager A product manager A brand manager Which of the following is true Price is always lower than value Cost is always lower than price Value is what consumers are prepared to pay The marketing concept should be central to business strategy because Companies have a moral responsibility to care for their customers Customers will only spend money with firms that look after their needs Marketing enables firms to persuade their customers to buy things they do not really need Which of the following statements is true, from a marketers perspective A need is something that is necessary for life A want is something that is just for fun A want is something that derives from a need Demand is created when A significant group of people want to buy something People who can afford something want to buy it Marketers persuade people to want something The four Ps of marketing are Product, price, place, promotion Product, price, persuasion, place Product, price, promotion, profit Physical evidence refers to Those features of a product that can be seen o

Those features of a service that are tangible Those features of a product that can be proved to exist Process refers to The way a product is made The way a service is delivered The way a product is disposed of Ch 2: The marketing environment o The Marketing Environment Represents a complex array of threats and opportunities for the organization External environment: concerned with everything that happens outside the organization Internal environment: concerned with everything that happens within the organization Two basic approaches to dealing with environmental forces Reactive: mindset where one regards environmental factors as being uncontrollable and will therefore adjust marketing plans to fit environmental changes Proactive: mindset where one looks for ways to change the organizations environment in the believe that many environmental factors can be controlled or influenced o The External Environment
Macro-environment Interest rates technology exchange rates

Micro-environment

culture

customers compet Firm: internal govern itors environment ment Some publics suppliers intermediaries Some publics

climate Foreign competition

Two divisions Micro-environment: factors close to the organization o E.g. customer base, location of companys warehouses, existence of a local pressure group that is unsympathetic to the business Macro-environment: factors common to society as a whole o E.g. government legislation, foreign competition, exchange rate fluctuations, climatic changes Overlapping areas: e.g. availability of skilled employees Often not susceptible to direct control Marketers can only influence some elements of it and react appropriately when threats come up Situational analysis SWOT analysis: Strengths, Weaknesses, Opportunities, Threats

A few ex. Positive factors

Internal factors

External factors Opportunities What changes in the external environment can we exploit? What weaknesses in our competitors can we attack? What new technology might become available to us? What new markets might be opening to us?

Strengths What are we best at? What intellectual property do we own? What specific skills does the workforce have? What financial resources do we have? What connections and alliances do we have? What is our bargaining power with both suppliers and intermediaries? Negative Weaknesses factors What are we worst at doing? Is our intellectual property outdated? What training does our workforce lack? What is our financial position? What connections and alliances should we have, but dont? Heading Socio-cultural

Threats What might our competitors be able to do to hurt us? What new legislation might damage our interests? What social changes might threaten us? How will the economic cycle affect us?

STEP analysis: Socio-cultural, Technological, Economic, Political Implications Women are becoming less dependent on men as financial providers => affects way women are portrayed in advertising and spending patters Automation of manufacturing increases => more people work in service industries Traditional class divisions are disappearing and new ones are appearing => changing lifestyle => different portrayal of target consumers Example: declining birth rate and increasing longevity in Europe => market oriented towards the elderly Internet => opportunities for advertising and direct marketing & greater knowledge about consumers buying patterns Satellites => communication New manufacturing techniques @ approx. 8-year intervals most national economies go into recession (production of goods and services shrinks, job loss, bankrupt businesses, less purchasing) Concerned with exchanges and competition Governments have policies concerning trade and industry => changes of government => shifts in emphasis on

Example Changing role of women? Post-industrial society

Demography Technological Information technology Space technology Economics Boom-and-bust cycle

Micro-economics Politics Influence of political parties

Legislation

policies => affects businesses Laws arise in 2 ways: government legislation and case law (law as interpreted by judges) Politicians can be influenced by petitions and by reasoned arguments (aka lobbying) Case laws can be appealed by the parties to it harder to influence International law can sometimes have powerful influence on businesses (e.g. EU)

The Micro-Environment Competitors o Segmentation: grouping consumers with similar needs and characteristics Therefore, since each segment has different needs, the threat from competition will come from different sources in each case o Ex: bus company Competition is all modes of transportation (subways, trains, bicycles, etc.) o Fiver Forces model that offers a useful approach to competitor analysis The bargaining power of suppliers: the greater this is, the stronger the competitive pressures The bargaining power of customers: the stronger this is, the more competitive the environment The threat of new entrants The threat of substitute products and services: this threat is often not seen until it is too late The rivalry among current competitors o Different types of competitor structures Examples Unregulated agricultural markets International money markets

Type Perfect competition

Explanation Large number of suppliers No one powerful enough to influence supply level overall Homogeneous products Easy entry to the market Everybody in the market (suppliers and consumers) know what everybody else is doing Monopolistic One major supplier has obtained a large competition share of the market by use of a differentiated marketing approach Other competitors can still enter and try to carve out their own market share Oligopoly Few companies control the market entirely Costs of entry to the market are high Often, size of market is not great enough to repay the capital cost of entry for a new firm Often investigated by government

Coca-Cola and PepsiCo have a major share of the soft drinks industry but other firms can still enter the market Commercial aircraft manufacture Detergent industry Oil extraction and refining

Monopoly

monopoly regulators to ensure that long firms do not abuse their power When a single firm has a product with no close substitutes

Electricity supply grids Some countries national rail networks

Customers o May change their needs or disappear altogether Suppliers o Can easily cause an adverse effect within a firm by supplying shoddy goods and failing to meet delivery dates o Relationship between suppliers and their customers should be a close one o Logistics approach to supply where the firm is seen as a link in a system for providing the right goods and services in the right place at the right time o Good communications is key Intermediaries o The retailers, wholesalers, agents, and others who distribute the firms goods o May include marketing services providers (e.g. research agencies, advertising agencies, distribution companies, etc.) o Good communications is key Publics o Generic term encompassing all the groups that have actual or potential impact on the company o Financial publics: might include the banks and shareholders who control the firms finances and who can pressure the firm to behave in particular ways o Local publics: consist mainly of the firms neighbors, may pressure company to take local actions (e.g. clean up pollution) The macro-environment Demographic factors o Demographics: study of population factors (race, gender, location, occupation, population density, size of population, etc.) o Changes in demographics change the market (decline in birth rate => smaller baby product target market) Economic factors o Encompass such areas as the boom/bust cycle and growth in employment and losing industries o Macro-economic factors deal with the management of demand in the economy o Micro-economic factors deal with the way people spend their incomes Political factors o Often impact business o Ex: worldwide movement towards privatization of former government-owned utilities and businesses Legal factors

o o Country France UK Belgium

Follow on from political factors Examples of legislation affecting marketing Legislation Alcohol advertising on TV is illegal Voluntary ban on spirits advertising on TV has been lifted Recent rulings allow British Office to prosecute Belgian companies which send misleading mail shots to British companies or consumers Advertising for war toys and games are forbidden Price of rice is state-controlled

Germany Japan

Socio-cultural factors o Areas that involve the shared beliefs and attitudes of the population o Ex: increased in number of couples living together but not marrying, increased in acceptance of single-parent families, etc. Ecological and geographical factors o E.g. scarcity of raw materials, problems of disposing waste materials, difficulty of finding appropriate locations for industrial complexes Technological factors o Advances in technology o Internet o New industries being created, old industries being destroyed Macro environment contains the remainder of the organizations publics o Government publics Local, national, and international agencies that restrict the companys activities by passing legislation, setting interest rates, and fixing exchange rates Can be influenced by lobbying and by trade associations o Media publics Press, television, etc. that can aid the firms marketing Public relations make sure that reputation is being portrayed correctly o Citizen action publics Pressure groups such as Greenpeace or consumers rights groups who lobby manufacturers and others in order to improve life for the public at large o The Internal environment Internal publics: employees of the company Employees develop a corporate culture with its own language, customs, traditions, hierarchy Corporate culture => major component of organizations public face If employees are not satisfied with the company, they will talk bad about their job at home to friends and family Ch. 2 Summary o Businesses and other organizations do not operate in a vacuum

Micro-environment is easier to influence than the macro-environment but both are impossible to control o The business should be defined from the customers viewpoint; this will help identify a broader range of competitors o Customers should be grouped into segments so that scarce resources can be targeted to the most profitable areas o Close relationships with suppliers and intermediaries will be helpful in influencing the environment o Public relations is about creating favorable impressions with all the companys publics o Case law can both affect businesses and are harder to predict since they are independent of national government o The socio-cultural environment changes slowly o Technology changes rapidly, creating and destroying industries o Internal publics need special attention, since they are the front line of the companys relationships with its environment Ch. 2 questions o Why is the external environment impossible to control? o What can SWOT analysis tell a firm about its environment? o Given that businesses are made up of people, how is it that the same people are included as part of the firms internal environment? o What are the most important factors making up the micro-environment o What are the main problems faced while dealing with the macro-environment Ch. 2 multiple choice questions o Factors that are common to society as a whole are called The micro-environment The external environment The macro-environment o STEP stands for Strengths, technical ability, energy, power Style, trying, effort, presentation Socio-cultural, technological, economic, political o Which of the following is not part of the micro-environment Government economic policy Competitors activity Customers preferences o Firms that distribute the firms goods are called Customers Suppliers Intermediaries o The study of population factors is called Economics Demographics Sociology o Employees of the firm are considered to be Part of the macro-environment The internal publics Part of the socio-economic environment o Grouping customers with similar needs is called Segmentation Targeting o

Marketing o A manager who regards environmental factors as uncontrollable is Proactive Reactive Realistic o Monopolistic competition arises when One company has the whole of a market Two or three companies control the market One company has a large market share o A situation where only a few companies have almost total control of the market is called Perfect competition Oligopoly monopoly Ch 3: Consumer and buyer behavior o Consumer Behavior Feedback loops

Problem recognition

information search

evaluation of alternatives

purchase

post purchase

divestment

Problem Recognition Arises when consumer realizes that there is a need for some item Reasons o Assortment depletion: consumers stock of goods has been worn out o Assortment extension: where the consumer feels the need to add some new item to the stock of goods Categories o Utilitarian: concerned with the functional attribute of the product o Hedonic: concerned with the pleasurable or aesthetic of the product Drive: internal stimulus

Comes about when there is a gap between actual and desired states o Leads to motivation Motivation: reason why people take action - subjective Depends on the desirability and ease of achieving the end goal Optimal stimulus level: point at which the drive is enjoyable and challenging without being uncomfortable subjective Information Search Two forms Internal search: remembering previous experiences of the product category, and thinking about what he/she heard about the product category External search: shopping around, reading manufacturers literature and advertisements, talking to friends about a proposed purpose Evaluation of alternatives After analyzing competing brands, consumers will evaluate the alternatives based on the information collected or remembered o First, select a consideration set (products that would most closely meet the need) what are used Cut-offs: minimum and maximum acceptable values for the product characteristics Signals = important when making choices (e.g. price-tag, brand name, retailer, etc.) o **marketers need to ensure that their products are part of the consideration set Heuristics: decision-making rules used for most purchases (simple ifthen rules that reduce risk by using previous experience as a guide e.g. tourist eat in restaurant full of locals because thats probably a good restaurant if everybody is eating there three categories) o Search heuristics: concerned with the rules for finding out information o Evaluation heuristics: about judging product offerings o Choice heuristics: evaluation of alternatives Interrupts: points at which the decision making process is suspended 4 categories o Environmental stimuli: in-store promotions (e.g. eye catching poster) o Affective states physiological needs (e.g. need to go to bathroom) o Unexpected information (e.g. change in layout of store) o Conflicts (e.g. when consumer realizes that original decision making plan cant be used) Approach-approach conflict when a second product is presented that would probably do the job as well => consumer must compare Approach-avoidance conflict when consumer finds out product is more expensive than expected Avoidance-avoidance conflict when two alternatives are distasteful o

Purchase Selecting appropriate payment method Post-purchase evaluation Post purchase evaluation: the way the customer decides whether the product purchase has been a success or not Before the purchase, consumer will have formed expectations of the products capabilities in terms of: o Equitable performance: what can be reasonably expected given the cost and effort of obtaining the product o Ideal performance: what the consumer hopes the product will do o Expected performance: what the product will probably do Possible results o Post-purchase dissonance: when product has not lived up to expectations o Post-purchase consonance: when product is as expected or better In the case of post-purchase dissonance o Four ways customers can act Ignore dissonant information and concentrate on positive aspects of product Distort the dissonant information (e.g. telling oneself that the product was cheap anyway so whatever) Play down the importance of the issue Change ones behavior (e.g. never buy from the store again) o Marketing point of view Generally better to ensure that the customer has accurate information about the product before the purchase o Three ways consumers can express dissatisfaction Voice responses: where the customer comes back and complains Private responses: where the consumer complains to friends Third-party responses: complaints to consumer organizations, trade associations, TV consumer programs, legal action o Best way to avoid Provide a product that meets expectations Fall-back method: make sure consumers have a place to complain to Maybe provide compensation Services where it is appropriate to offer a repeat service or voucher o E.g. dry cleaners, domestic appliance repairers, takeaway food outlets Services where giving the money back will usually be sufficient o E.g. retail shops, cinemas, theatres, video rental companies

Keep

Services where consequential losses may have to be compensated for o E.g. medical services, solicitors, hairdressers in mind Strength of the complaint Degree of blame attaching to the supplier from consumers viewpoint Legal and moral relationship between supplier and consumer

Divestment Divestment: the way the consumer disposes of the product after use Importance to marketers: green marketing or sales of new products (e.g. trade-in deals like Jansport, ZUCA, TI-84s) Perception Affected by Subjectivity: existing world-view of the individual Categorization: pigeonholing of information (where information is grouped into associated items e.g. a tune that might make someone recall a special evening out) Selectivity: degree to which the individuals brain has selected from the environment Expectation: process of interpreting later information in a specific way Past experience: leads to interpreting information in the light of existing knowledge aka law of primacy Importance to marketers: sometimes it is hard to know how to approach a specific person Influences on Buying Decision Main influences Personal factors: feature of the consumer that affect the decision process o Demographic factors age, gender, ethnicity, income, family life cycle, occupation o Situational factors aka changes in consumers circumstances pay raise o Level of involvement degree of importance consumer attaches to the product and purchasing decision e.g. right brand of wine is key to successful dinner party o ***research shows that buyer feels more attached to car dealer than to car price Psychological factors: elements of the consumers mental processes o Perception the way people build up a view of the world o Motives internal force that encourages the consumer towards a particular course of action o Ability and knowledge e.g. beginner at violin wont spend thousands of dollars on an expensive violin o Attitude three components Cognition conscious thought processes Affect consumers emotional attachment to the product Conation planned courses of behavior o Personality traits and behaviors that make each person unique

Consumer attitudes vary by Valence whether the attitude is positive, negative, or neutral Extremity the strength of the attitude Resistance the degree to which the attitude can be changed by outside influences Persistence the degree to which the attitude erodes over time Confidence the level at which the consumer believes the attitude is correct o Marketers viewpoint attitudes are important since they often precede behavior Social factors: those influences from friends and family that influence decision making Social Factors Normative compliance pressure exerted on the individual to conform and comply Value-expressive influence the need for psychological association with a particular group Informational influence the need to seek information from a group about the product category being considered The sources of all three reference groups (groups of friends, colleagues, relatives, and other whose opinions the individual values) o Primary groups small enough to allow face-to-face contact on regular basis o Secondary groups people we see occasionally and with whom we share interests (e.g. members of a golf club) o Aspirational groups groups to which we wish we belonged o Dissociative groups groups the individual does not want to be associated with o Formal groups groups with a known, recorded membership list and often have rules o Informal groups less structured and based on friendship o Automatic groups groups we belong to by virtue of age, race, culture, or education (e.g. a woman age 45 wouldnt exactly go to Abercrombie and fitch to buy clothes) Roles We play different roles in the course of our lives (student, girlfriend/boyfriend, spouse, internee, worker, parent, grandparent, etc.) that affect our buying decision Family roles influence decision-making beyond the normative compliance effects o Different members of the family are designated different things to buy (e.g. mom to groceries and dad to cars) o Differs from other groups in the following respects Face-to-face contact Shared consumption Subordination of individual needs Purchasing agents o

Culture can have a marked effect (e.g. really stereotypically, African cultures tend to be male-dominated while North American cultures tend to be more egalitarian) Decision-making stage also affects the roles of the family problem recognition may come from any family member while information search and product evaluation may be undertaken by a different member E.g. dad sees son needs new football boots, son asks around for types, mother decides which one to be bought Four kinds of marital role specialization Wife dominant Husband dominant Syncretic or democratic decision is arrived at jointly Autonomic decision made entirely independent of the partner Marketers need to know which type of specialization is most likely to occur in the target market to ensure the style and content of promotional messages Children have increasing influence pester power Often do the shopping since both parents are working Watch more TV Tend to be more attenuated to consumer issues and have time to shop around for e.g. environmentally friendly products

Impulse Buying Usually happen as the result of a sudden confrontation with a stimulus Pure impulse: based on the novelty of the product e.g. seeing something new may prompt the consumer to buy it just to try it Reminder impulse: when consumer suddenly realizes that something has been left off the shopping list Suggestion impulse: arises when confronted with a product that meets a previously unfelt need Planned impulse: when consumer has gone out to meet a specific need Industrial Buyer Behavior Theoretically more formalized in their buying behavior than regular consumers Areas where they differ from regular consumers Biggest order values in terms of finance and quantity Reciprocity, firms may buy each others products as part of negotiated deal Fewer buyers (fewer firms than individuals) More people in the decision process Fewer sales in terms of number of deals More complex techniques for buying and negotiating Organizational buyers are buying for the organizations needs but they also have personal needs (e.g. prestige, career security, friendship and social needs, etc.) Industrial buyers methods Description organization lays out exactly what is required and buyer is given the brief of finding the best supplier

Ch. 3 o o o o o o

Inspection Sampling Negotiation Straight re-buy tasks are routine buyer is simply placing an order for the same products in the same quantities as before => very little thought or negotiation Modified re-buy some changes in purchase order e.g. larger order value or different delivery schedule Demand for industrial products will be dictated by factors outside buying organizations control Derived demand: when buyers are using products either for resale or in making other products. Demand is dictated by the demand for the end product Joint demand: demand for one type of product dictates the demand for another Fluctuating demand: more common in industrial markets because a small reduction in consumer demand for a product will lead to destocking => big reduction in production && rise in consumer demand is likely to lead to re-stocking Decision-making units Gatekeepers secretaries and receptions who control the flow of information to decision-makers Influences individuals who influence decision-makers (e.g. people within the firm or golf partners, spouses, children) Users those who will actually use the product Deciders ones who make the real decision Buyers the ones who actually go through the process of buying Marketers have to get the deciders in some way rather than wait for buyers to make the first contact by issuing a tender tender will usually be very specific and buyers will then be deciding on the price (only way to get the order in those circumstances it to be the cheapest => reduced profits) HOWEVER if seller can persuade decision-maker beforehand, seller can persuade decision-maker to include certain essential aspects of the product in the tender => ensuring tender contains specifications that are difficult or impossible for the competition to meet Successful salespeople are able to identify potential customers and approach them with a solution for their specific problem can ensure that tender is drawn up to exclude the competition Summary Consumers buy because they recognize either assortment depletion or assortment extension needs Complains should be encouraged because they give the opportunity to cure postpurchase dissonance and create loyal customers Individuals belong to several reference groups and are also influenced by groups they do not belong to such as aspirational groups and dissociative groups Normative compliance is probably the most powerful factor in attitude formation and decision-making The family is probably the most powerful reference group Industrial buying is complex because of the number of people involved

Gatekeepers, users, influencers, deciders and buyers are all involved in organizational decision-making none of them should be ignored if the deal is to go through o The route to success in industrial marketing is to make sure the tender has something in it that the competition cant match Chapter 3 questions o How do family members influence each others buying behavior o What are the main differences between industrial buyers and consumers? o What is the difference between assortment depletion and assortment extension o How can the use of choice heuristics reduce post-purchase dissonance o How can a marketer use interrupts to influence consumer behavior Chapter 3 Multiple-Choice Questions o What is meant by assortment depletion The consumer owns very few possessions The consumer has worn out or used up some of his or her possessions The consumer has decided to concentrate on owning only a few possessions o Hedonic needs refer to The practical aspects of owning something Unnecessary purchases The cult of pleasure o Utilitarian needs refer to Only buying things that are strictly necessary The practical aspects of living Products that are plain or boring o remembering information about products is part of the internal search the external search interrupts o affective states are emotional feelings about products emotions that dictate heuristics circumstances that change behavior patterns o a consideration set is a group of products that would meet the consumers needs all the available products within a given group the criteria by which a consumer will judge products o the point at which anticipation becomes uncomfortable is called the optimum stimulation level the affective state the ideal performance o a decision making rule is called an interrupt a heuristic dissonance o deciding whether a product met expectations is called post-purchase dissonance post-purchase evaluation post-purchase verbal response o complains that are expressed to friends and acquaintances are called private responses verbal responses o

third-party responses Chapter 4: Segmentation, targeting, and positioning o Introduction Segmentation is concerned with grouping consumers in terms of their needs essentially about dividing up the market Assumptions underlying segmentation o Not all buyers are alike o Sub-groups of people with similar behavior, backgrounds, values, and needs can be identified o The sub-groups will be smaller and more homogeneous than the market as a whole o Its easier to satisfy a small group of similar customers than try to satisfy large groups of dissimilar customers Targeting is concerned with choosing which segments is to aim for essentially about the practicalities of doing business within the market Positioning is concerned with the brands relationship with other brands aimed at the same segment - about the place the brand occupies in the minds of the consumers relative to other brands o Reasons for segmenting markets Each consumer is an individual with individual needs and wants but it would be impossible to customize each product to meet exact requirements of each individual Mass marketing only works when a standard product is produced for all consumers will only be effective if the consumers concerned have little choice and do not already own a product that meets the main needs Therefore mass marketing is less effective when consumers already own the core-benefits of the product Main purpose of segmenting is to enable the company to concentrate its efforts on pleasing one group of people with similar needs, rather than trying to please everybody and probably ending up pleasing nobody Advantages of segmentation Customer analysis the firm can get to understand its best customers better Competitor analysis it is easier to recognize and combat competition when concentrating on one small part of the overall market Effective resource allocation companies scarce resources can be concentrated more effectively on a few consumers, rather than spread thinly across the masses Strategic marketing planning planning becomes easier once the firm has a clear picture of its best customers Expanding the market good segmentation can increase the overall size of the market by bringing in new customers who fit the profile of the typical customer, but were previously unaware of the product o Segmentation Variables Requirements for a segment to be successfully exploited Measurable and definable there must be some way of identifying the members and knowing how many of them are Accessible must be possible to communicate with the segment as a group and to get the product to them

Substantial big enough to be worth aiming for Congruent members must have close agreement on their needs Stable nature and membership of the segment must be reasonably constant Main bases for segmenting Geographic location o Commonly used in international marketing o E.g. cars in California always have air conditioning, o Reasons to be carried out Nature of the product such that it applies only to people living in a specific area - clothing manufacturers sell more heavy-weather clothing in cold coastal areas than in warm inland areas If companys resources are limited, firm may start out in small area and later roll out nationally The product might not travel well glass, wedding cakes, personal services like hairdressing Psychographic personality o E.g. home insurance market might segment those who are afraid of crime o Because its hard to determine and categorize peoples behaviors, this type of segmentation fails on the basis of accessibility Behavioral benefits, usage situation, extent of use, loyalty o E.g. car market might segment business into business users and private users o Useful and reliable o Can use a variety of different resources polls, Lifestyle Find out how people spend their free time Demographic- structure of the population in terms of ages, lifestyles, economic factors o E.g. housing market can be divided into first-time buyers, families with children, the elderly o Most commonly used because its easy to pick up relevant information through government statistics o Demographic change => emergence of new segments o E.g. Europe has increase elderly population and decreasing youth population Single variable segmentation based on only one variable Multivariable segmentation: several characteristics are taken into account Segmenting Industrial Markets Geographic location probably the most common because most organizational markets are serviced by salespeople and geographical segmentation enables the salesperson to make the best use of drive time Type of organization Client company size Product use Usage rate: customers who use large quantities of a given product will expect and get different treatment from customers who buy only in small quantities partly because their needs are different and partly because the supplier will tend to value the large buyer over the small buyer

Segmentation Effectiveness the tradoffs

premium consumers will pay Money cost of adapting product number of units sold per head of total population

Degree to which market is segmented

Targeting Managers must decide which segment will be the best to target Targeting: the process of selecting a segment to aim for Three basic strategies in targeting Niche marketing: concentrated marketing (single segment) concentrates on being the very best within a single tiny segment Differentiated marketing (multisegmented): concentrating on two or more segments, offering a differentiated marketing mix for each Undifferentiated marketing: scattergun approach, producers who do this are usually offering a basic product that would be used by almost all age groups and lifestyles The decision rests on the following factors Companys resources Products features and benefits Characteristics of each segment(s) Resourcing and degree of differentiation Type of product High resource company Mass market Specialist market Low resource company Mass market Specialist market Differentiated Differentiated Undifferentiated Concentrated High differentiation consumers Low-differentiation consumers

Concentrated Concentrated

Differentiated (perhaps geographically) concentrated

Targeting decisions the marketing strategy should be tailored to fit the intended audience => keep in the mind the seven Ps and every element of the promotion mix Adequate and accurate detailed market research Segment size Large Large Small Profit per unit sold Large Small Large # competitors Large Large Large Strategic decision rationale Will attract competitors, prices will fall rapid, so will profits Mature market new entrant would have something special to dominate the market Small segment with a high profit per unit and a laarge number of competitors can be captured entirely by a penetration pricing strategy Profitable competitors will certainly enter the market skimming policy = best: as competitors enter, reduce prices to compete Mature market but should be low risk lack of competition means easy to capture a share and low profit margin will discourage others from entering This is a dying market dont enter it Niche market should be possible to capture all of this market Clearly not a profitable segment unless the firm has something very new to bring to the segment, this is probably not worth targeting

Large

Large

Small

Large

Small

Small

Small Small Small

Small Large Small

Large Small Small

Market coverage strategies Strategy Explanation Product/market Niche marketing company concentration takes over one small part of the market Product Firm produces a full line of a specialization specific product type Market Firm produces everything specialization that a specific group of consumer needs Selective Firm enters selective niches specialization that do not relate closely to each other but are profitable

Example Tie Rack, Sock Shop Campbells Soup Titleist golf clubs, golf balls, tees, caddies British Telecom sells telephone services to consumers and industry but also owns satellite time which it sells to TV broadcasters and others Mitsubishi Industries

Full coverage

Firm enters every possible

segment of its potential market

produces everything from musical instruments to supertankers

Positioning Usually refers to the place the product occupies in the consumers perceptual map of the market Consumers build up a position for a product based on what they expect and believe to be the most High pertinent price features of the product class Example Brand B Brand A Low quality Brand E Brand C Brand D Marketers need to find Low out price first what the pertinent features of the products are in the target consumers perceptions => can then adjust the mix of features and benefits and the communications mix to give the product its most effective position relative to other brands Short list of factors in determining the position of a product Top-of-the range: refers to what consumers believe to be the most expensive or the best Service: the levels of service which surround the product can be an important factor Value for money: degree to which the products benefits represent a fair exchange for the price being asked Reliability Attractiveness Country of origin: some countries have a reputation for producing the best examples of some categories of product Brand name Selectivity: degree to which the consumer can distinguish between brands and select from the range is a factor in positioning Product positioning depends on the attitudes of the particular target market so the marketer must take these attitudes as they are and tailor the product to fit those attitudes Forecasting Two overall strategic approaches Break-down o Begins with the overall market for the product category and seeks to predict what the firms share of that market will be High quality

Sales

E.g. bank may have access to government economic forecasts which can be used to calculate the total loans market for the following year Build-up o Begins with the market segments (and even individual consumers) and builds up to a total market share o E.g. bank might begin with an estimate of how many home loans, car loans, business loans, etc. it might make based on market research and overall estimate the total sales for the following year Sales forecasting helps determine the viability of a segment and also help the firm plan its budgets Different approaches Many firms rely on executive judgment (using skill and experience of its senior people in deciding whether a product is the winner or not) this approach can fail because the executives may favor a product as private consumers rather than know what the target market segment would buy salesforce survey (asking the salesforce for reasonable estimates) has advantages because its the salespeople who make direct contact with the customer Distributor survey: variation of the salesforce survey, where the companys distributors are asked how much they expect to sell over a specific period Delphi approach: taking in the managers and salespeoples forecasts, combining them centrally, then sending the aggregate forecast back to the individuals concerned for revision problem: individuals will only make forecasts that theyre sure are achievable i.e. underestimating is very likely Time-series analysis: uses companys past sales records to predict what will happen in the future - works best for well-established products with fairly stable purchasing patterns not suitable for products with erratic demand cycles and not suitable for the unexpected (sudden emergence of competitor, change in legislation, etc.) o Trend analysis: focuses on aggregate sales data collected over a long period to determine whether sales are rising, falling, or staying level o Cycle analysis: examines the sales figures from a number of years to see whether there is a cyclical pattern o Seasonal analysis: analyzing sales figures on a monthly or weakly basis to see if theres seasonal cycle operating o Random factor analysis: when there are figures that do not fit the pattern, seeks to attribute explanations for these abnormal findings E.g. spell of unseasonal weather might have affected one months figures Test marketing might be carried out Test marketing: making the product available in one geographic area for a period of time and monitoring the actual sales of the product in the area o

Key success lies in ensuring that the area chosen is an accurate representation of the country as a whole Drawback: allows competitors to see the product and develop their own version before your own product becomes national => therefore, test marketing exercises are usually really short

Ch. 4: Summary o There are few, if any, mass markets left untouched o If most consumers already own the core benefits of a product, the market must be segmented if success is to follow, since thre is otherwise no reason for consumers to switch brands o Segments must be measurable, accessible, substantial, and congruent o The profitability of a segment is calculated as the number of people in the segment multiplied by the premium they are willing to pay o The narrower the segment the fewer the customers, but the greater the satisfaction and the greater the premium they are willing to pay (provided the segment has been correctly identified) o There are many ways to segment a market, in fact as many was as there are groups with congruent needs o Targeting is concerned with selecting an appropriate segment or segments and approaching it in a consistent and effective way o Some segments are defined by the media used to target them o Sales forecasting is difficult but can most easily be accomplished where the product is a fairly standard item o Forecasting is likely to be self-fulfilling if all interested parties are involved in the process Ch. 4 Questions: o What might be the segmentation bases for the home computer market? o What sales forecasting approaches would be most suitable for the launch of a new family car? o When should an industrial market be segmented geographically? o When should a consumer market be segmented geographically? o How might a TV company assess the viability of a new drama series? Ch. 4: Multiple Choice Questions o Dividing markets into groups of customers with similar needs is called Segmenting Targeting Perceptual mapping o Positioning is the process of Putting the product in the right shops Putting the product in the right place in the customers mind Putting the product in the right place within a retail store o The purpose of segmentation is To ensure that resources are used in the most effective way To make it easier to find customers To help customers understand what our products are o Segmenting a market according to where people shop is an example of Geographic segmentation Psychographic segmentation Behavioral segmentation o Which of the following is inappropriate for segmenting industrial markets Psychographic segmentation

Geographical segmentation Behavioral segmentation o Niche marketing is an example of Differentiated marketing Undifferentiated marketing Concentrated marketing o Delphi is used for Segmenting Targeting Sales forecasting o Australias influx of Asian immigrants will cause Demographic changes Increased markets Psychographic changes o A low-resource company in a mass market containing high differentiation consumers should Follow an undifferentiated strategy Follow a differentiated strategy Follow a concentrated strategy Ch. 5: Market Research o Introduction Usually considered to be research into customer needs, wants, and preferences Sometimes used to describe all research carried out for the purpose of supporting marketing decisions Concerned with the disciplined collection and evaluation of specific data in order to help suppliers understand their customers needs better o The Need For Market Research Market research: the process of collecting, analyzing, and presenting useful information about consumers,; includes the more general research into markets (including competitive activities and also environmental issues such as government activities and economic skills) First question to ask: will the information gained be worth more than the cost of collecting it Types of research Customer research o Intended to produce facts about markets and market segments o Provides information about where customers live, what they do with their time, what their motivations are, what they like to spend money on, what their spending power is, what the trends are in the market Promotion research o Measures the success of promotion in terms of objectives o Relies on careful planning of objectives but can provide information about the suitability of the approach used in reaching a target audience o Useful for determining which media should be used Product research o Used to identify new uses for existing products or to identify needs for new products

Often used to refine the design of an existing product to produce an improved version Distribution research o Concerned with finding the best channels of distribution for a product o Overlaps with customer research since the location of retail outlets will depend on where the target consumers live and on their habits Sales research o Intended to help the sales management process by ensuring that territories are of equal size or value the techniques and approaches being used are effective the training of the salesforce is appropriate and sufficient the salesforce motivation is appropriate and sufficient the salesforce motivation is appropriate Marketing environment research o Examines aspects of the micro- and macro- environment o Purpose is to ensure that the firm can anticipate environmental change and develop responses in advance o A lot of data (raw facts) o Analysis of the data will turn it into usable information o Marketing information systems are often set up to provide an automatic flow of data into the firm with systems for regular analysis of the data usually use computers to do this Decision support systems: computer-based systems Ex: EPOS (electronic point-of-sale) systems used by large retailers record every purchase made in the store so that the retailer can re-order stock in correct amounts, automatically analyze trends, and can track customers purchases over a period of time The Research Process Data can be collected from either primary or secondary sources Primary sources = original research e.g. questionnaires, interviews, experiments, or product tests with consumers Secondary research (aka desk research) = already published information in journals, newspapers, commercial published market research, government statistics, directories, yearbooks, etc. The market research process o

Problem recognition

Objective setting

Secondary research

Design Pprimary research

Executive primary research

Analyze results of research

Present the findings of the research in a suitable

Usually begin with secondary sources Reasons o Cheaper o Quicker o Sometimes all the necessary information for making decisions has already been published o Even when published information is incomplete, the researchers will only have to fill in the gaps with primary research rather than gather all the information first-hand Drawbacks of secondary research Often out of date May not be accurate because you dont know where the information came from May not tell researchers everything they need to know After completing secondary research, its possible to design primary research which involves deciding What gaps there are in terms of the objectives and what is known from the secondary sources Who we need to approach to get the information The methods to be used Approaching Respondents Respondents: subjects of research people whose behavior and opinion are of interest to the researchs The methodology will depend on what the researchers are hoping to discover Methodology = study of method and is concerned with the philosophy behind the choice of a specific method Qualitative Research Qualitative research: is to do with how people feel about the product, advertisement or company Approach is usually much more probing and time consuming than quantitative research which means the sample size must be smaller

People sometimes carry out qualitative research before designing a quantitative study to find out the dimensions of the problem Qualitative methods Method Explanation Group depth Group of 6-8 people recruited and invited to talk about the interview aka subject This method tends to produce a wide range of opinion because focus group each member of the group will trigger the other members to think of things to say BUT group pressure may mean that only the most vociferous respondents views are expressed Exploratory Used at the initial stages of market research to find the groups dimensions of the problem Clinical focus Sometimes respondents attitudes may be hidden below the groups conscious level so they are used in a clinical setting where the researcher can judge whether the persons true feelings are being expressed Experiencing Allow the research to gauge the feelings of a group of actual focus groups customers for the product category under consideration Teleconferencing Involves a group discussion conducted over the telephone, avoids the necessity of bringing people together physically and can also make people feel easier about expressing themselves; its particularly useful for focus groups involving managers in industry Video Like teleconferencing but with vision has the major advantage conferencing of allowing the researcher to see peoples facial reactions which often say more about a persons true feelings than do words Depth interviews Usually carried out by highly trained interviewers or psychologists, uses probing question to uncover the respondents deepest feelings Projective Subjects are presented with ambiguous, unstructured situations techniques and invited to respond the situation is unclear so that the respondents must use their imaginations to respond, in the course of which their true feelings will be revealed Used when a direct response might be too embarrassing Word Projective technique in which the respondent is asked to say association the first thing that comes to mind when the researcher says a particular word the theory is that the respondent does not have time to censor his/her response so that the respondents true feelings are revealed Cartoon tests Projective technique; the respondent is shown a cartoon and asked to supply the captions for it the respondent will put his/her true feelings down (no blame can attach to the respondent for what the characters are saying) Third-person The respondent is asked what he or she thinks another person techniques would say/do in a given situation would typically give their own opinion Analogy Where the respondents personality is linked to a prospective purchase e.g. respondent might be asked to imagine what it would be like to buy a new BMW. Respondent might say I feel powerful or I feel ready for my new executive owner Experimentation Respondents are invited to do something or are shown an item and their responses are monitored Observation Researcher watches the consumers and notes their behavior Quantitative research: deals with areas that can be expressed in numbers

Surveys Major problem: ensuring that the right questions are asked in the right way Survey techniques Start at the table