Business 9 Final Exam Review

Marketing

The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings with value for society.

The Production Era

From the time of the first European settlers until the early 1900s, the philosophy was "Produce as much as you can because there is a limitless market for it." Businesses focused largely on manufacturing and production capabilities.

The Selling Era

By the 1920s, mass-production techniques led to capacity exceeding immediate market demand. The focus shifted to selling and advertising to persuade consumers to buy existing products.

The Marketing Concept Era

Following World War II, a boom in consumer spending led to fierce competition. Businesses realized they needed to be responsive to consumers, focusing on a customer orientation, a service orientation, and a profit orientation.

The Customer Relationship Era

In the 1990s and early 2000s, the focus shifted to Customer Relationship Management (CRM)—learning as much as possible about customers and satisfying them to stimulate long-term customer loyalty.

Marketing Mix

Four controllable factors that businesses blend together in a well-designed marketing program: Product, Price, Place, and Promotion.

Value

Good quality at a fair price - consumers calculate the value of a product by looking at the benefits and subtracting the cost to see whether the benefits exceed those costs.

Total Product Offer

Also called a value package, a total product offer consists of everything consumers evaluate when deciding whether to buy something. This includes tangible items like the physical product and package, as well as intangible factors like the producer's reputation, guarantees, and the image created by advertising.

Convenience goods and services

Products the consumer wants to purchase frequently and with a minimum of effort (e.g., snacks, milk, gas).

Shopping goods and services

Products the consumer buys only after comparing value, quality, price, and style from a variety of sellers (e.g., items sold at Target).

Specialty goods and services

Consumer products with unique characteristics and brand identity. Consumers perceive these goods as having no reasonable substitute and put forth a special effort to purchase them (e.g., luxury watches, imported chocolates).

Unsought goods and services

Products consumers are unaware of, haven’t necessarily thought of buying, or suddenly find they need to solve an unexpected problem (e.g., emergency car-towing, burial services).

Brand

A name, symbol, or design (or combination thereof) that identifies the goods or services of one seller or group of sellers and distinguishes them from the goods and services of competitors.

Brand Equity

Brand equity is the overall value of the brand name and its associated symbols.

Brand Loyalty

The core of brand equity, brand loyalty is the degree to which customers are satisfied, like the brand, and are committed to further purchases.

Brand Awareness

How quickly or easily a given brand name comes to mind when someone mentions a specific product category.

Product Life Cycle

A theoretical model of what happens to sales and profits for a product class over time. The cycle consists of four stages: introduction, growth, maturity, and decline.

Promotion

Promotion consists of all the techniques sellers use to inform people about and motivate them to buy their products or services. It is an effort by marketers to persuade consumers to participate in an exchange.

Promotion Mix

The combination of promotional tools an organization uses. The traditional mix includes advertising, personal selling, public relations, and sales promotion.

Integrated Marketing Communication (IMC)

IMC is an approach that combines all promotional tools into one comprehensive, unified promotional strategy to create a positive brand image and meet the strategic goals of the firm.

Advertising

Advertising is paid, nonpersonal communication through various media by organizations and individuals who are in some way identified in the message.

Public Relations (PR)

PR is the function that evaluates public attitudes, changes policies and procedures in response to the public’s requests, and executes a program of action and information to earn public understanding and acceptance.

Publicity

Considered the "talking arm" of public relations, publicity is any information about an individual, product, or organization that is distributed to the public through the media and is not paid for or controlled by the seller.

Sales Promotion

Sales promotion is a promotional tool that stimulates consumer purchasing and dealer interest by means of short-term activities, such as displays, trade shows, samples, and coupons.

Accounting

Often referred to as the "language of business," accounting measures business activity and uses the recorded data to manage business fundamentals and assist a firm with long- and short-term planning.

5 Key Working Areas in the Accounting Profession

(1) Financial accounting, (2) managerial accounting, (3) auditing, (4) tax accounting, and (5) governmental and not-for-profit accounting

Certified Public Accountant (CPA)

A CPA is an accounting professional who has met specific educational and testing requirements to become certified, typically governed by the American Institute of Certified Public Accountants (AICPA).

Balance Sheet

A financial statement that reports the firm’s financial condition on a specific date, detailing what the company owns (assets) and owes (liabilities).

Income Statement

A financial statement that summarizes revenues, cost of goods sold, and expenses (including taxes) for a specific period of time. It highlights the total profit or loss (the "bottom line") the firm experienced during that period.

Statement of Cash Flows

A financial statement that provides a summary of money coming into and going out of the firm, tracking a company’s cash receipts and cash payments.

Liquidity Ratios

Measures a company's ability to turn assets into cash to pay its short-term debts.

Leverage (Debt) Ratios

Measures the degree to which a firm relies on borrowed funds in its operations.

Profitability Ratios

Measure how effectively a firm's managers are using its various resources to achieve profits.

Initial Public Offering (IPO)

When a company first offers its shares of stock to the public to raise capital.

Investment Bankers

Investment bankers are financial professionals who assist companies in raising capital by underwriting and issuing securities to the public.

Bonds

Long-term liabilities that represent money lent to a firm by investors that the business promises to repay.

Stocks

Ownership shares in a company.

New York Stock Exchange (NYSE)

Founded in 1792, the NYSE is an organization whose members can buy and sell securities. It was originally a floor-based exchange, but today its stocks are bought and sold primarily on electronic networks.

NASDAQ

The world’s first electronic stock market. It is an electronic-based network that links dealers so they can buy and sell securities electronically rather than in person.

Mutual Fund

An investment vehicle that pools money from many different investors to purchase a diversified portfolio of stocks, bonds, or other securities.