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Marketings 2 Fundamental Roles
To sell what a business makes
To manage a brand
Product Life Cycle
Introduction (Product launch, Low sales, Consumers are unaware, Low cash flow, Selling for early adopters in the hope that they will influence others to buy the product)
Growth (Sales increase rapidly, The market grows, Competitors appear, Products are managed to create brand awareness, At peak growth cycle, only a few survive)
Maturity (Growth is flat, Intense competition, Brand equity is at its highest, High profits for those with high market share, Weaker competitors will leave the marketplace, Competitor based pricing)
Decline (Falling Sales = weaker profits, May be temporary seasonal/new competition, More competitors leave the market, Little spent on marketing the product, If brand equity drops, the business is in trouble)
Decision Point (Whatever brand equity is left is used to reposition the product and make it popular again, Reformulate, repackage, and reintroduce, Introduce the product to a new market,If the decline continues product is removed from the marketplace)
Channels of Distribution (Physical)
Brick and Mortar
E-Commerce
Catalogues
Channels of Distribution (International)
Indirect (Intermediaries – wholesalers, importers, retailers)
Direct (Producers, Consumers, ie: Farmers market)
Specialty (Vending machines, telemarketing, catalogue, e-commerce)
Assets
Things of value that a business or person owns like cash, stocks, bonds, vehicles etc..
Liabilities
Debts or amounts of money that are owed to others by an individual or a business like a mortgage, loans, credit card balances and etc…
Liquidity
The ability to turn an asset into cash (fastest to slowest)
Capital
Wealth in the form of money or other assets owned by a person or business
Unlimited Liability
Partners are personally liable for the debts and obligations of the partnership, which means their personal assets can be used to pay off business debts
Law of Demand
When prices decrease consumers buy more and the quantity demanded goes up
When prices increase consumers buy less and the quantity demanded goes down
Law of Supply
When prices decrease businesses sell less and the quantity supplied goes down
When prices increase businesses sell more and the quantity supplied goes up
Entrepreneurial Characteristics
Risk-takers and problem-solvers. They are acutely aware of opportunities in the marketplace and take advantage of these in their businesses.
Gender Discrimination
treating an employee differently based on their sex (male or female)
Blue Chip Company
company that is a safe investment (solvent, respect workers etc)
Disposable Income
The amount of money left over after pay deductions have been deducted from gross income
Discretionary income
The income left over after necessities (needs -housing –mortgage or rent, food, insurance, car payments, electricity, and other necessities) have been paid. Used to purchase luxury items or wants such as vacations or eating out.
Bull Market
When the demand for and prices of most stocks are high
Bear market
If the offers to sell stocks exceed the orders to buy stock, then prices will fall
Whistleblower
When an employee informs officials or the public about an illegal or ethical violation. Like…
◦False information on an accounting document
◦Ignoring hiring procedures for minorities
◦Knowingly ignoring workplace safety codes
Fixed Expenses
Occur regularly and cannot be adjusted (e.g. rent, insurance payment, car payment…)
Variable expenses
Differ from month to month (food, clothing, entertainment, gifts, savings @ 10%…)
Impulse buying
Consumer buying behaviour where you buy something without thoughtful consideration or planning
Short-term/long term savings goal
Short Term - Saving for a new iphone, computer
Long Term - Saving for College/University
Mutual fund
A mutual fund is an investment fund that pools money from many investors to purchase securities
Provincial securities commission
The largest securities regulator in Canada, enforcing securities laws in the province of Ontario
Sustainable development
Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
Balance of Trade
Countries try to import the same total value of products that they export
Ethics
Rules that help us tell the difference between right and wrong
Ethical Dilemma
A moral problem with a choice between potential right and wrong. Some questions to consider are
◦Who will be helped by what you do?
◦Who will be hurt by what you do?
◦What are the benefits and problems of such a decision?
◦Will the decision survive the test of time?
Harassment
Behaviour that demeans, humiliates, and intimidates a person,
Brand Equity
The value of a brand in the marketplace
Niche Market
A section of the market in which a product dominates and into which few competitors enter
Landed cost
What it actually costs to import the item (vendor cost, transportation charges, duties, taxes, broker fees, etc)
Secondary Data
Information collected by others:
• Websites • Databases, • Periodicals, • Indexes • Professionally prepared marketing research reports
Non-tariff barrier
controls or standards for the quality of imported goods set so high that foreign competitors cannot enter the market. (German cars)
Trade Embargoes/Sanctions are the partial or complete prohibition of commerce and trade with a particular country/state or a group of countries
Trading bloc
A group of countries that share trade interests
PLC (seasonal)
Some products are popular during a specific time or season. Balancing product quantity with seasonal sales is called inventory management. To be left with little seasonal inventory, businesses calculate the amount of product to keep on hand.
Brand Identification
Slogan
Name
Logo
Must be consistent
Revenue
The money earned for selling goods and services (sales)
Domestic transactions
Selling items produced in the same country
Global Products
A standardized item that is offered in the same format in all countries - ie. pencils
Trademark
A word, symbol, design, or a combination of all three that a business uses to distinguish its goods or services from others
Global dependency
When customers in one country demand items that are created in another
Trade Agreements
Any contractual arrangement between states concerning their trade relationships
Transnational
operate in several countries to produce their goods and services
CSR – Socially Responsible
A desire to protect customers and to treat employees and shareholders fairly
What Qualifies as CSR
◦ Provide a safe and healthy work environment
◦adopting fair labour polices
◦protecting the environment
◦being truthful in advertising
◦avoiding price discrimination
◦donating to charity
Duty to accommodate
An employer’s obligation to ensure accessibility for all employees
Discrimination
Denying a qualified individual an interview, job, or promotion based on his or her religion, gender, sexual orientation, or physical disabilities
Purchasing power
The amount of goods and services that can be purchased with a unit of currency
Sole proprietor
A business owned by one person who is considered the proprietor. They have many responsibilities and need to fill various roles in order for success
Crown Corporation
Operated by the provincial or federal government
EX: CBC, Via Rail, Canada Post
Public corporation
Raises money by making shares available to thousands of people through selling shares on the stock market.
These individuals become the owners of the business.
People with only a few shares of stock have little influence on a company’s policies
EX: McDonalds, Netflix, Amazon
Franchise
One business, the franchiser, licenses the rights to its name, operating procedure, designs, and business expertise to another business, the franchisee
EX: Booster Juice, Dunkin Donuts, Subway, Thai Express, Pizza Pizza
Depreciation
When a business asset loses value over time
Income tax deductions
CPP ▫ EI ▫ Taxes
Prime Lending Rate
The interest rate that banks and lenders use to determine the interest rates for many types of loans and lines of credit. These can include credit cards, HELOCs, variable-rate mortgages, car and auto loans, and much more
Why consumers buy?
Insider Trading
Buying or selling shares of a company based on confidential information.This type of trading is illegal. Prosecution for insider trading falls under the provincial securities commission. Punishment includes
◦fining the individual(s) for up to $1 million
◦turning over all profits from trading
◦incarcerating the person(s) for up to two years
◦being banned from future trading in securities
Solvent
To have all bills due, payed
Consumer Price Index
Measures the change in prices paid by consumers for goods and services.
Hidden or Social Costs
Offshore outsourcing
Human rights or labour abuses
Environmental degradation
Students and Credit Ratings
Credit ratings occur when credit card companies track loans taken out. Meaning the more reliable you are for paying it off the more likely you are to get a bigger loan.
Characteristics of a wise shopper
• Compares what’ s available (different stores and online)
• Looks for higher quality products that will last
• Makes sure product has the right features before buying it.
• Asks the vendor about delivery and warranty
• Does research before buying
• Watches for sales
• Avoids impulse buying
• Considers buying things second hand (Kijiji)
Benefits for businesses in operating internationally
Access to Markets
Cheaper Labour
Increased Quality of Goods
Increased Quantity of Goods
Access to Resources
RESP
A registered education savings plan (RESP) is a contract between an individual (the subscriber) and a person or organization (the promoter)
Business Interdependence
When businesses rely on the goods and services from a variety of businesses to satisfy consumer needs and wants. (ex: Yamaha: motorcycle and drums)
Code of Ethics
A document that explains specifically how employees should respond in certain situations. Canadian laws address acceptable business behaviours. However, businesses can still behave unethically without breaking these laws.