BA 101 Midterm 1 University of Oregon

4 degrees of competition

1. Perfect Competition

2. Monopolistic Competition

3. Oligopoly

4. Monopoly

management processes to deal with uncertainty and risk

planning, operating, organizing, controlling

Competition to be a part of exchanges results in?

pressure for lower prices, better products, and more efficient ways to do things

What is a stakeholder?

citizen

consumer

employee

business owner

risk

the damage associated with negative outcomes

areas of management

marketing

production

administration

finance

assets

item(s) that have value (probable future economic value)

--can be tangible or intangible--

economics

The study of how society employs resources to produce goods and services for consumption among various groups and individuals.

what are the two levels of economics?

microeconomics (behavior of people and organizations in markets for particular products or services) and macroeconomics (operations of the nation's economy as a whole)

resource development

The study of how to increase resources and create conditions that will make better use of them

Adam Smith beliefs

-Freedom was vital to any economy's survival

-Freedom to own land or property and the right to keep the profits of a business is essential

-People will work hard if they believe they will be rewarded.

The Invisible Hand

When self-directed gain leads to social and economic benefits for the whole community

Capitalism

All or most of the land, factories and stores are owned by individuals, not the government, and operated for profit

--U.S. England, Australia, Canada, etc.--

State Capitalism

When the state, rather than private owners, run some of the businesses.

--China, Russia--

Free Markets

Decisions about what and how much to produce are made by the market

Supply and Demand

Supply curves top right to bottom left on a graph and shows the quantities of products businesses are willing to sell at different prices

Demand curves go from top left to bottom right and show the quantities of products consumers are willing to buy at different prices

Market Price (Equilibrium Point)

The negotiated price determined by supply and demand (the meeting point)

What are the 2 major economic systems?

Free-Market economy:The -market- largely determines what goods and services are produced, who gets them, and how the economy grows.

Command economy: The -government- largely determines what goods and services are produced, who gets them, and how the economy will grow.

Gross Domestic Product (GDP)

Total value of final goods and services produced in a country in a given year. As long as a company is within a country's border, their numbers go into the country's GDP (even if they are foreign-owned)

Price Implications

inflation: The general rise in the prices of goods and services over time

deflation: Prices are declining because too few dollars are chasing too many goods

Cosumer Price Index (CPI)

Monthly statistics ran by the government that measure the pace of inflation or deflation

What are the four phases of business cycles?

--periodic rises and falls that occur in economies over time--

1. Economic Boom

2. Recession - Two or more consecutive quarters of decline in the GDP.

3. Depression - A severe recession.

4. Recovery - When the economy stabilizes and starts to grow. This leads to an Economic Boom.

What is fiscal policy?

The federal government's efforts to keep the economy stable by increasing or decreasing taxes or government spending.

--tools of fiscal policy: taxation and government spending--

What is monetary policy?

The management of the money supply and interest rates by the Federal Reserve Bank (the Fed).

--the Fed's most visible role is increasing and lowering interest rates (booming economy=interest rates are increased/vice versa)--

What is the National Deficit?

The amount of money the federal government spends beyond what it gathers in taxes

What is the national debt?

the sum of government deficits over time

What is marketing?

AMERICAN MARKETING ASSOCIATION DEF.: an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

The activities designed to provide goods and services that provide value and satisfy customers at a fair price.

Customer Relationship Management (CRM)

Learning as much as you can about customers and doing what you can to satisfy or exceed their expectations to build long-term relationships

What is customer perceived value?

A customer's evaluation of the benefits and costs of a marketing offer relative to those of competing offers

What is the "marketing mix'? (4 P's)

-product

-price

-place/distribution

-promotion

--centered around customer's needs--

Ways of collecting data for marketing purposes...

primary data, secondary data, observational research

What is consumer behavior?

Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased goods or services; also includes factors that influence purchase decisions and the product use

Demographic Segmentation includes...

age, gender, income, family life cycle, etc.

What is psychographic segmentation?

Market segmentation on the basis of personality, motives, lifestyles, and geodemographics

What is geodemographic segmentation?

Segmenting potential customers into neighborhood lifestyle categories

--Combines geographic, demographic, and lifestyle segmentation--

Environmental Scanning

The process of identifying factors that affect marketing success

--factors involved in the environmental scan include: Global factors

Technological factors

Sociocultural factors

Competitive factors

Economic factors--

What are the two different groups associated with the marketing environment?

consumer market (B2C): All the individuals or households that want goods and services for personal use and have the resources to buy them

Business-to-Business (B2B): Individuals and organizations that buy goods and services to use in production or to sell, rent, or supply to others

B2B Marketers

include...

-Manufacturers

-Wholesalers and retailers

-Hospitals, schools and charities

-Government

--Products may be sold and resold several times before reaching final consumers--

Smaller marketing segments include...

niche marketing: Identifies small but profitable market segments and designs or finds products for them

one-to-one marketing: Developing a unique mix of goods and services for each individual consumer.

What is profit maximization?

Setting prices so that total revenue is as large as possible relative to total costs

lower prices=higher volume (Walmart)

Higher prices=lower volume (Saks Fifth Avenue)

**service has a strong impact for commodity products (products which are especially similar to one another)**

What is total product offering?

Everything consumers evaluate when deciding whether to buy something

What is a product line?

A group of products that are physically similar or intended for a similar market

--often includes competing brand such as

-Coke

-Pepsi

-Dr. Pepper

--

What is a product mix?

The combination of all product lines offered by a manufacturer or service provider

What is positioning?

Brand meaning perceived by the target market in terms of:

-other, competing products

-perceived product

characteristics, features

Product Bundling

Grouping two or more products together and pricing them as a unit

--IE--

-Virgin Airlines bundles door-to-door limo service and inflight massage with some tickets

-Telecom companies bundle phone, internet and TV

Break-Even Analysis

The process used to determine profitability at various levels of sales. The break-even point is where revenues equals cost

Total Fixed Costs - All costs that remain the same no matter how much is produced or sold

Variable Costs - Costs that change according to the level of production

What is a brand?

A name, symbol, or design that identifies the goods or services and distinguishes them from competitors' offerings

brand equity

the value of the brand name and associated symbols

brand loyalty

the degree to which customers are satisfied and are committed to further purchases

brand awareness

how quickly or easily a given brand name comes to mind when a product category is mentioned

What is the product life cycle?

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

Stages:

-Introduction

-Growth

-Maturity

-Decline

The concept of B2C and B2B...

B2C: Companies sell you a product for your use such as a laptop, a smartphone, or clothing

B2B: Intel sells processors to a variety of computer manufacturers

What are marketing intermediaries?

Organizations that assist in moving goods and services from businesses to businesses (B2B) and from businesses to consumers (B2C)

--They are called intermediaries because they are in the "middle" of a series of firms that distribute goods--

Channel of Distribution

A group of marketing intermediaries that joining together to transport and store goods from producers to consumers

What are agents and brokers?

Intermediaries who bring buyers and sellers together and assist in negotiating an exchange but do not take title to the goods

What is a wholesaler?

An intermediary that sells products to other organizations such as retailers, manufacturers, and hospitals

What is a retailer?

An organization that sells products to ultimate customers

How do intermediaries offer value?

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

-Marketing intermediaries make markets more efficient by reducing transactions and contacts

Retail Distribution Strategies

Intensive Distribution - Puts products into as many retail outlets as possible

Selective Distribution - Uses only a preferred group of the available retailers in an area

Exclusive Distribution - The use of only one retail outlet in a given geographic area

Other distribution strategies....

electronic retailing, telemarketing, vending machines, direct selling (selling to consumers at their homes or workplaces), direct marketing, multilevel marketing

Integrated Marketing Communications (IMC)

Combines the promotional tools into one comprehensive strategy IMC is used to:

-Create a positive brand image

-Meet the needs of consumers

-Meet the strategic marketing and promotional goals of the firm

What is viral marketing?

The phenomena when people communicate on the Internet and through social media to share positive information about a product or service

Price cuts all come out of your what?

margin