BA100 Exam 2

Comparative benefits vs. costs

The process of evaluating the advantages of a product or service against its costs to determine its overall value.

Digital marketing funnel

Discovery, interest, appraisal, confirmation, conversion

Value

The perceived benefit or worth of a product or service in the consumer’s mind, often compared to its price.

Willingness to pay

The maximum amount a consumer is willing to spend on a product or service.

5 P’s of marketing

Product, Price, Place, Promotion, and People; essential elements to consider in a marketing strategy.

Product

Goods or services offered to meet customer needs including features, quality, branding, and packaging

Price

Amount of money customers must pay for the product; must consider profit, costs, demand, segmentation, market competition, market share objectives

Place

Channels through which the product is distributed and made available to customers including distribution channels, location, logistics, market coverage

Market Coverage

Strategies that determine how widely a product is available, such as intensive (available everywhere), selective (available in specific locations), or exclusive (limited to certain retailers) distribution

Promotion

Activities that communicate the product’s benefits and persuade customers to purchase including advertising, public relations, social media, and sales promotion

People

Refers to everyone involved in the product’s creation, sale, and customer experience including employees and cutomers

Brand equity

A brand’s “reputation”; high brand equity means that customers recognize, prefer, and trust the brand leading to increased awareness, perceived quality, sales, loyalty, and ability to charge premium prices

Segmentation, targeting, positioning (STP)

A marketing strategy that involves dividing a market into segments, targeting the most appropriate ones, and positioning products accordingly.

Market segments

Geographic (where people/companies call home), demographic (age, income, gender, ethnic background, marital status, race, religion, social class), psychographic (lifestyles, interests, personalities, attitudes), behavioral (how customers behave ex in bulk or organic)

SWOT analysis

A strategic planning tool that assesses Strengths, Weaknesses, Opportunities, and Threats related to a business or project.

Customer relationship management (CRM)

Strategies and technologies that organizations use to manage and analyze customer interactions and data throughout the customer lifecycle.

Price discrimination

The practice of charging different prices to different consumers for the same product or service, based on willingness to pay.

Global marketing and ethics

The considerations and moral principles that guide marketing strategies across different countries, respecting cultural, environmental, and social factors.

Consumer Decision Making Process

Recognition of need, information search, evaluation of alternatives, purchase decision, post-purchase evaluation

Marketing Research

Process of gathering, analyzing, and interpreting information about a market including information about the target audience, competitiors and industry needs. Helps businesses understand customer needs, preferences, and behaviors, allowing them to make informed decisions about product development, marketing strategies, and sales

Develop the Marketing Plan

Define your objectives (establish clear goals), conduct market research, develop your strategy (determine marketing mix—5 p’s), create an action plan (outline specific tactics, timelines, and resources to implement strategy), monitor and adjust (track KPIs and make adjustments based on what’s working)

Influencing Factors

Cultural, social, personal, psychological

Forms of Marketing Research

Surveys, interviews, focus groups, and analyzing existing data, providing valuable insights to guide marketing efforts

Branding

Creating a unique identity for a product or company through elements like name, logo, design, and messaging. Helps differentiate the product from competitiors and builds recognition, trust, and emotional connections with consumers to drive loyalty and preference

Marketing Strategies

Marketing programs and activities used to achieve marketing goals

Brand Positioning

How a brand wants to be seen by its audience known as the unique space a brand occupies in minds of consumers compared to competitors

Key elements of brand positioning

Target audience (demographics, preference), competitive frame of reference (market or category or competitors), unique selling proposition (USP, makes distinct from competitors), and brand promise (commitment the brand makes to customers linked to the value it delivers)

Brand awareness

Extent to which a brand name comes to mind

Product life cycle

Series of stages in commercial life; introduction, growth, maturity, decline

Product Development

Idea generation, idea screening, concept development and testing, marketing strategy and business analysis, product development, test marketing, product launch; keep feedback channels open at all times and at every step

Pricing Strategies

Cost-plus (based on cost of production plus markup), value-based (based on perceived value), competitive/market approach (based on competitor prices), penetration (introducing a new product at a low price to attract customers then gradually increasing the price), skimming (setting a high price initially to maximize profits from early adopters then lowering it over time)

Digital/Social Media Marketing

Allows businesses to connect directly with their target audience in a dynamic and engaging way, can be more cost-effective, and provides data on consumer behavior

Marketing Metrics

ROI, KPIs, conversion rate, click throughs

Marketing Trends

Generative AI, social media marketing, AR, VR, increased data and privacy concerns

Market Share

Company’s percentage of total industry sales for specific product type

Selling Price

Selling Costs + Profits

Markup Percentage

Markup/Sales price x 100% (Markup has to cover all selling costs and generate enough profit to cover other costs)

Break-even Point

Number of unit sales at which total revenue = total costs, resulting in neither profit nor loss

Break-even point formula (units)

Fixed costs/(Selling Price per unit - Variable Cost per unit)

Contribution margin per unit

Selling Price - Variable cost

Price discrimination

Legal practice of charging different prices to different customers for the same product or service where the price differences are not justified by corresponding differences in cost ex: airline tickets and movie theatres

Mortgage Inequalities

When a quantity mandate is set, there is a decrease in quality especially for those of minority races. Example of price discrimination that crosses into illegal territory

Service and Goods Operations/Production

Activities producing intangible and tangible goods

Form Utility

Makes products availble— converts raw materials and human skills into finished goods

Time Utility

Makes products available when they’re wanted

Place utility

Makes products available where they’re wanted

Operations planning

Process of putting strategic plans into action by creating a detailed roadmap of tasks, milestones, and responsibilities

Capacity Planning

Amount of a product that a company can produce under normal conditions

Layout Planning

Process of arranging resources within a facility to optimize efficiency and productivity

Quality Planning

Ensuring that products meet the firm’s and customers’ quality standards

Methods Planning

Reduce waste and inefficiency by examining procedures on a step-by-step basis

Gantt and PERT Chart

Visual tools that project managers use to organize projects, assign tasks, and track progress (Gantt breaks down large projects into specific steps and PERT specifies sequences of activities, time requirements, and critical paths)

Big Data

Term used to describe large, complex data sets that are difficult to manage and analyze using traditional tools

5 V’s of Big Data

Volume, velocity, variety, veracity, value

Marketing

Refers to the activities, strategies, and processes involved in promoting, selling, and distributing a product or service. It encompasses market research, advertising, sales, and customer engagement aimed at meeting customer needs and creating valuable exchanges that benefit both the consumer and the business.

Supply Chain Management

Looks at chain as a whole to improve the overall flow through a system composed of companies working together including acquisition of raw materials, manufacturing, sales of the material, and all packing

Distribution Mix

Combination of distribution channels by which a firm gets its products to end users (direct, retail, wholesale, agents/brokers)

Handleman Lecture

Watson’s journey around the world is a testament to resilience. Amid adversity, she recognized the value of appreciating small victories and acknowledging progress at every step. Her perseverance and grit demonstrate that we all have the power to live our dreams — no matter how small or big they are

CSR and Operations

Reducing waste and having optimized sustainable operations can help organizations lower costs and improve overall financial performance

Accounting

A comprehensive system for collecting, analyzing, and communicating financial information to a firm’s internal and external stakeholders

Financial Accounting

External information

Managerial Accounting

Internal information

Income Statement

Summarizes a company's revenues, expenses, and profits or losses over a specific period of time, typically a fiscal quarter or year. It provides insight into a company's financial performance and its ability to generate profit

Balance Sheet

Provides a snapshot of an organization's financial condition at a specific point in time. It summarizes a company's assets, liabilities, and equity, adhering to the fundamental accounting equation

Cash Flow Statement

Provides a detailed breakdown of a company's cash inflows and outflows over a specific period of time. It highlights the company's ability to generate cash from operations, manage its investing and financing activities, and maintain liquidity

Accounting Equation

Assets = Liabilities + Equity

Gross Profit Margin

Gross Profit/Revenue × 100

Net Profit Margin

Net Income/Revenue × 100

Return on Assets (ROA)

Net Income/Average Total Assets × 100

Current Ratio (short-term/liquidity)

Current Assets/Current Liabilities

Debt to Equity Ratio (long-term/solvency)

Total Liabilities/Shareholders’ Equity

Inventory Turnover

Cost of Goods Sold/Average Inventory

Accounts Receivable Turnover

Net Credit Sales/Average Accounts Receivable