Business Exam

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Marketings 2 Fundamental Roles

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Marketings 2 Fundamental Roles

  1. To sell what a business makes

  2. To manage a brand

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Product Life Cycle

  1. 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)

  2. Growth (Sales increase rapidly, The market grows, Competitors appear, Products are managed to create brand awareness, At peak growth cycle, only a few survive)

  3. 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)

  4. 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)

  5. 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)

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Channels of Distribution (Physical)

  1. Brick and Mortar

  2. E-Commerce

  3. Catalogues

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Channels of Distribution (International)

  1. Indirect (Intermediaries – wholesalers, importers, retailers)

  2. Direct (Producers, Consumers, ie: Farmers market)

  3. Specialty (Vending machines, telemarketing, catalogue, e-commerce)

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Assets

Things of value that a business or person owns like cash, stocks, bonds, vehicles etc..

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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…

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Liquidity

The ability to turn an asset into cash (fastest to slowest)

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Capital

Wealth in the form of money or other assets owned by a person or business

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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

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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

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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

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Entrepreneurial Characteristics

Risk-takers and problem-solvers. They are acutely aware of opportunities in the marketplace and take advantage of these in their businesses.

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Gender Discrimination

treating an employee differently based on their sex (male or female)

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Blue Chip Company

company that is a safe investment (solvent, respect workers etc)

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Disposable Income

The amount of money left over after pay deductions have been deducted from gross income

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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.

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Bull Market

When the demand for and prices of most stocks are high

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Bear market

If the offers to sell stocks exceed the orders to buy stock, then prices will fall

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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

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Fixed Expenses

Occur regularly and cannot be adjusted (e.g. rent, insurance payment, car payment…)

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Variable expenses

Differ from month to month (food, clothing, entertainment, gifts, savings @ 10%…)

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Impulse buying

Consumer buying behaviour where you buy something without thoughtful consideration or planning

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Short-term/long term savings goal

  • Short Term - Saving for a new iphone, computer

  • Long Term - Saving for College/University

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Mutual fund

A mutual fund is an investment fund that pools money from many investors to purchase securities

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Provincial securities commission

The largest securities regulator in Canada, enforcing securities laws in the province of Ontario

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Sustainable development

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

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Balance of Trade

Countries try to import the same total value of products that they export

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Ethics

Rules that help us tell the difference between right and wrong

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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?

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Harassment

Behaviour that demeans, humiliates, and intimidates a person,

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Brand Equity

The value of a brand in the marketplace

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Niche Market

A section of the market in which a product dominates and into which few competitors enter

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Landed cost

What it actually costs to import the item (vendor cost, transportation charges, duties, taxes, broker fees, etc)

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Secondary Data

Information collected by others:

• Websites • Databases, • Periodicals, • Indexes • Professionally prepared marketing research reports

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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

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Trading bloc

A group of countries that share trade interests

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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.

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Brand Identification

  1. Slogan

  2. Name

  3. Logo

Must be consistent

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Revenue

The money earned for selling goods and services (sales)

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Domestic transactions

Selling items produced in the same country

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Global Products

A standardized item that is offered in the same format in all countries - ie. pencils

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Trademark

A word, symbol, design, or a combination of all three that a business uses to distinguish its goods or services from others

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Global dependency

When customers in one country demand items that are created in another

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Trade Agreements

Any contractual arrangement between states concerning their trade relationships

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Transnational

operate in several countries to produce their goods and services

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CSR – Socially Responsible

A desire to protect customers and to treat employees and shareholders fairly

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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

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Duty to accommodate

An employer’s obligation to ensure accessibility for all employees

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Discrimination

Denying a qualified individual an interview, job, or promotion based on his or her religion, gender, sexual orientation, or physical disabilities

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Purchasing power

The amount of goods and services that can be purchased with a unit of currency

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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

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Crown Corporation

Operated by the provincial or federal government

EX: CBC, Via Rail, Canada Post

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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

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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

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Depreciation

When a business asset loses value over time

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Income tax deductions

CPP ▫ EI ▫ Taxes

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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

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Why consumers buy?

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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

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Solvent

To have all bills due, payed

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Consumer Price Index

Measures the change in prices paid by consumers for goods and services.

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Hidden or Social Costs

  1. Offshore outsourcing

  2. Human rights or labour abuses

  3. Environmental degradation

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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.

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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)

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Benefits for businesses in operating internationally

  • Access to Markets

  • Cheaper Labour

  • Increased Quality of Goods

  • Increased Quantity of Goods

  • Access to Resources

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66

RESP

A registered education savings plan (RESP) is a contract between an individual (the subscriber) and a person or organization (the promoter)

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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)

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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.

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