Business dynamics final

chapters 13, 14, 15, 16, 17, 18, 19, 22

what is marketing?

the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large

marketing helps a buyer through

- websites that help buyers find the best price, identify product features, and question sellers

- blogs and social networking sites that cultivate consumer relationship

4 eras of marketing

production, selling, marketing concept, customer relationship

customer relationship management (CRM)

learning as much as possible about customers and doing everything you can to satisfy or exceed expectations

key factors in customer relationship era

-build customer relationships

- loyalty

-retention

six steps for customer satisfaction

1) build trust

2) be open about mistakes

3) listen

4) promise only what you can deliver

5) show appreciation

6) remember employees are customers

the marketing mix (Four P's)

1) product

2) place

3) price

4) promotion

product definition

any physical good, service, or idea that satisfies a want or need plus anything that would enhance the product in the eyes of consumers

test marketing definition

testing products among potential consumers

brand name definition

a word, letter, or group of words or letters that differentiates one seller's goods and services from those of competitors

steps of the market research process

1) define the problem

2) collecting research data

3) analyze the data

4) choosing the best solution and implementing it

total product offer definition

everything that consumers evaluate when deciding whether to buy something

developing a total product offer

-Products are evaluated on many different dimensions, both tangible and intangible.

- Marketers must think like and talk to consumers to find out what's important.

potential components of a total product offer

-The outermost level: brand name, convenience, package, and price

-The middle level: service, internet access, buyer's past experience, and store surroundings

-The innermost level: speed of delivery, image created by advertising, reputation of producer, and guarantee

product line definition

a group of products that are physically similar or intended for a similar market (often include competing brands like coca-cola, Diet Coke, Coke Zero...)

aspects of product differentiation

marketing different classes of consumer goods/services:

specialty goods vs. unsought goods

specialty goods definition

consumer products with unique characteristics and brand identity. because these products are perceived to have no substitute, the consumer puts forth special effort into purchasing them

unsought goods and services definition

products that consumers are unaware of, haven't necessarily thought of buying, or find that they need to solve an unexpected problem

product mix definition

the combination of product lines offered by a manufacturer

product differentiation definition

creation of real or perceived product differences

how does packaging change a product

companies use packaging to change and improve their basic product

key functions of packaging

1.Attract buyers' attention

2.Protect the goods inside

3.Be easy to use and open

4.Describe and give information about the contents

5.Explain the product's benefits

6.Provide warranty information and warnings

7.Give an indication of price, value, and uses

brand equity

the value of the brand name and associated symbols

brand loyalty

the degree to which customers are satisfied, like the brand, and are committed to further purchases

brand definition

a name, symbol, or design that identifies the goods or services of one seller or group of sellers and distinguishes them from the goods and services of competitors (GIVES DISTINCTION THAT MAKES GOODS ATTRACTIVE)

trademark definition

a brand that has exclusive legal protection for both its brand name and its design

product life cycle definition

the theoretical model of what happens to sales and profits for a product class over time

product lifestyle stages

introduction, growth, maturity, decline

brand awareness definition

Related to familiarity consumers have with a brand

competitive pricing

Pricing strategies based on the prices charged by rivals

types of competitive pricing

cost based pricing, demand based pricing, competition-based pricing

cost based pricing definition

price based on cost of producing a product including materials, labor, and overhead

demand based pricing

target costing- designing a product so that it satisfies customers and meets the profit margin desired by the firm

competition-based pricing

pricing strategy based on what all the other competitors are doing

price leadership

the strategy by which one or more dominant firms set the pricing practices that all competitors in an industry follow

break-even analysis

the process used to determine profitability at various levels of sales

break-even analysis --> BREAK EVEN POINT

the point at which total sales revenue equals total costs

total fixed costs definition

all the expenses that remain the same no matter how many products are made or sold

variable costs definition

costs that change according to the level of production

marketing intermediaries

Organizations that assist in moving goods and services from producers to businesses (B2B) and from businesses to consumers (B2C). Intermediaries because they are in the middle of firms who distribute goods

channel of distribution definition

a whole set of marketing intermediaries that join together to transport and store goods in their path from producers to consumers

types of marketing intermediaries

agents and brokers, wholesalers, retailers

agents and brokers

marketing intermediaries who bring buyers and sellers together and assist in negotiating an exchange but don't take title to the goods

wholesaler

a marketing intermediary that sells to other organizations

retailer

an organization that sells to ultimate consumers

why does marketing need intermediaries

-intermediaries perform marketing tasks faster and cheaper than most manufacturers could provide them

-intermediaries make the exchange process easier and more efficient and profitable

utility (created by intermediaries)

utility is the want satisfying ability, or value, that organizations add to goods and services when the products are made more useful or accessible to consumers than they were before

six types of utilities

1. Form- changing raw materials into useful products (ex: flour)

2. Time- making products available when consumers need them (ex: 24hr)

3. Place- placing businesses' products where people want them (ex: Wawa)

4. Possession- doing what is necessary to transfer ownership from one party to another including services such as installations

5. Information- adding value to products by operating two-way flows of information

6. Service- adding value by providing fast, friendly service

supply chains

the sequence of linked activities that must be performed by various organizations to move goods from the sources of raw materials to ultimate consumers

supply-chain management

the process of managing the movement of raw materials, parts, work in progress, finished goods, and related information through all the organizations involved in the supply chain; managing the return of such goods, if necessary; and recycling materials when appropriate

logistics

the marketing activity that involves planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at a profit

seven R's of logistics

Getting the right product, to the right place, to the right customer in the right quantity, in the right condition, at the right time, and at the right price

promotion

all the techniques sellers use to motivate people to buy their products or services

promotion mix

the combination of promotional tools an organization uses

traditional promotional mix

advertising, personal selling, public relations, and sales promotions (all about product)

integrated marketing communication (IMC)

a technique that combines the promotional tools into one comprehensive and unified promotional strategy

uses of IMC

create positive brand image, meet the needs of consumers, meet the strategic marketing and promotional goals of the firm

advertising

paid, non personal communication through various media by organizations and individuals who are in some way identified in the advertising message

impact of advertising

-Digital media is the number one medium

- consumers benefit from ads because they inform and costs are paid for by producers

-choose ad media that will reach target market

social media advertising

-companies can measure how many times a post is viewed or shared

-social media allows marketers to test promotions before bringing them to traditional media

-a company can establish a base with customers by including top managers in the dialogue

global advertising

-requires marketers to develop a single product and promotional strategy to implement worldwide

-problems can arise in global markets with using one campaign in all countries (usually bad translation)

-many marketers are moving from globalism to regionalism

how to avoid losing customers over a and website

1) brand messaging is key

2) site must be easy to navigate

3) make sure calls to action are effective

4) engage your users and link your social media pages

5) average attention span is 8 seconds; users want fast, readable sites

6) users with disabilities should be able to navigate

accounting

the recording, classifying, summarizing, and interpreting of financial events and transactions to provide management and others interested the information they need to make good decisions

accounting system

the method used to record and summarize accounting data into reports

stakeholders

employees, owners, creditors, unions, investors, and government all make use of accounting information

GAAP

Generally Accepted Accounting Principles

inputs (accounting documents)

sales documents, purchasing documents, shipping documents, payroll records,

processing

-entries are made into journals: recording

- the effects of these journal entries are transferred or posted into ledgers (classifying)

-all accounts are summarized

outputs (financial statements)

balance sheet, income statement, statement of cash flows, annual reports, etc...

the accounting cycle

6 step procedure that results in the preparation and analysis of the major financial statements

bookkeeping

the recording of business transactions

(bookkeepers divide transactions into categories and post them into a record book/computer program)

double-entry bookkeeping

the practice of writing every business transaction in two places; done so they can check one list of transactions against another for accuracy

steps of accounting cycle

analyze source documents, record transactions in journals, transfer journal entries to ledger, take a trial balance, prepare financial statements (balance sheet, income statement, cash flow statement), and analyze financial statements

technology in accounting

-computerized accounting programs post information instantly and from remote locations

- quickbooks help address specific needs

financial statement

summary of all the transactions that have occurred over a particular period

3 key financial statements

balance sheet, income statement, statement of cash flows

fundamental accounting equation

The basis for the balance sheet.

Assets = Liabilities + Owners Equity (A=L + E)

balance sheet

Financial statement that reports a firm's financial condition at a specific time and is composed of three major accounts: (assets, liabilities, and owners' equity.)

assets

economic resources (things of value) owned bye a firm; items can be tangible or intangible

liquidity

the ease with which an asset can be converted into cash

three types of assets

current, fixed, intangible

current assets

items that can or will be converted into cash within one year

fixed assets

assets that are relatively permanent, such as land, buildings, and equipment

intangible assets

long-term assets (patents, trademarks, copyrights) that have no real physical form but do have value

liabilities

what the business owes to others (debts)

common liability accounts

accounts payable, notes payable, bonds payable

accounts payable

current liabilities involving money owed to others for merchandise or services purchased on credit but not yet paid for

notes payable

short term or long term liabilities that a business promises to pay by a certain date

bonds payable

long-term liabilities that represent money lent to the firm that must be paid back

owners' equity

the amount of the business that belongs to the owners minus any liabilities owed by the business

owners equity formula

Owner's Equity = Assets - Liabilities

retained earnings

the accumulated earnings from a firm's profitable operations that were reinvested in the business and not paid out to stockholders in dividends

income statement

the financial statement that shows a firm's profit after costs, expenses, and taxes; it summarizes all of the resources that have come into the firm (revenue), all the resources that have left the firm, expenses, and the resulting net income or net loss

net income or net loss

revenue left over after all costs and expenses, including taxes, are paid

formula for net income/net loss

net income= revenue-costs

=gross profit - operating expenses and costs

=operating income - non-operating expenses and costs - net income expense

=net income before taxes-income taxes

=net income or loss

revenue

the monetary value a firm received for goods sold, services rendered, or other payments

costs of goods sold (or manufactured)

a measure of the cost of merchandise sold or cost of raw materials and supplies used for producing items for resale

gross profit (or gross margin)

How much a firm earned by buying (or making) and selling merchandise.

operating expenses

Costs involved in operating a business, such as rent, utilities, and salaries.

depreciation

the systematic write-off of the cost of a tangible asset over its estimated useful life