Business Unit 2 Review

Unskilled Labour

Little training (dishwasher or restaurant worker)

Semi-skilled Labour

Requires some instruction (cashier)

Skilled Labour

Training from educational institution or previous employment (cake decorator, truck driver)

Professional Labour

Highly trained within the context of a specific occupation (accountant, teacher, plumber)

Hourly Wages

Amount of money paid to an employee every hour of work they have performed

Salary

A fixed amount of money that an employee receives on a regular basis, such as weekly or monthly. Often, it is expressed as a yearly amount.

Salary + Commission

This type of compensation is where employers pay the employee a percentage of the sales the employees made in addition to their hourly wage or salary

Straight commision

A form of compensation based solely on the employee’s sales

Incentive Bonus/Variable Pay

Many businesses offer a bonus, or reward, for good performance. Sometimes, this type of reward is called variable pay.

Companies set performance goals (also called sales quotas or targets) for each employee. If the employee meets the goal, they receive extra cash, a trip, a car, or something else of value.

Performance - based pay

An incentive-based form of compensation and is also known as piecework. Work is paid for according to the amount produced

Fee for Service

Construction, catering and cleaning business often receive a fee for service from of compensation. They estimate how much it will cost in time and materials to do a job, and then build in an additional fee to ensure they earn a profit.

Royalty or Licensing

A payment for the use of ideas and creativity

Stock Options

The business gives employees an opportunity to buy company shares at a lower than market price.

Enforcing health in the workplace:

• Sick pay - wages paid when absent from work because of illness

• Employers benefit from healthy employees

• Many businesses have established wellness programs

  • Promote the physical and emotional well being of their employees

Enforcing safety in the workplace:

Employees have the right to:

• Be informed about hazards in the workplace

• Identify and resolve job-related health and safety problems

• Refuse dangerous work

Planning

 Planning is the process of setting realistic goals for a business-both short-term and long-term-and deciding how best to achieve them.

• Occasionally social

• Always economic

Planning: Long term and Short term goals

• The long-term economic goal of any business is to maximize profits. 

• Short-term goals are often expressed as a sales or income target. 

For example, a business may plan to increase sales by 10 percent in the next quarter or to increase profit by 5 percent in the next year.

Leading

Managers are leading when they focus employees on achieving objectives and motivate their staff to accomplish these objectives.

Examples of Leading

Leadership involves activities such as leading teams, motivating employees, communicating effectively, and managing conflict and stress.

Organizing

Organizing is arranging people and tasks to carry out the business's plans.

Examples of Organizing

Each department within a company has its own manager, who is responsible for organizing the department.

• determines tasks and duties for the department

• establishes relationships with other departments to help achieve the company's goals. 

• hires the employees

• writes job descriptions for each member of the department so each employee is aware of his or her role.

Controlling

Controlling is the method managers use to increase, maintain, or decrease the resources they are allocated.

Examples of Controlling

Activities involved in controlling include employee discipline, performance appraisals, and budgeting.

Assets

something that has value and is owned by a person (money, clothes, jewelry, etc.)

Liabilities

a debt of an individual, business or other organization that is owed to others (student loans, accounts payable, mortgage, taxes, etc.)

The 5 Steps of the Product Life CYcle

1. Product Introduction

2. Growth

3. Maturity

4. Decline

5. The Decision Point

Product Introduction

The start of a product in the marketplace. Sellers focus on their selling efforts

Growth

After being introduced, the sales increase. Marketers start to manage their products carefully and popularity increase as competitors enter the market

Maturity

Product sales are slowly increasing or are steady marketers promote the name of the product development costs have been recouped

Decline

• Unable to find new customers

• Profits decrease

• Marketers need to determine what is causing the decline

• Might try and reverse the process by changing price, ads, design, etc.

The Decision Point

At a point during the decline stage, marketers have to determine the future of the product

The 3 Channels of Distribution

Direct, Indirect, and Specialty

Channels of Distribution: Direct

Selling directly to the consumer

• Simplest form of distribution

Channels of Distribution: Indirect

One or more intermediaries, such as importers, wholesalers or retailers.

Channels of Distribution: Specialty

Any indirect channel of distribution that does not involve a retail store. I.e.

• vending machines

• telemarketing

• catalogue sales

• e-commerce

• door-to-door sales.

Stages of Production

1. Purchasing

2. Processing

3. Quality Control

4. Grading

Purchasing

• Purchasing department, purchasing agent, buyer, or owner is responsible for buying raw materials or natural resources

• Quality and Price of the raw material being purchased must be considered, among other things (i.e ethics)

• In the M & M video they bought Chocolate, Sugar, Corn Syrup, Cocoa butter, Milk, 

  They purchase their cocoa from Ghana, Ivory Coast and Indonesia

  
  

Processing

Treating or preparing something using the typical method. Conversion Processing - convert one item into another

Refined raw materials examples:

• Wheat → flour

• Timber or logs → paper
  In the M&M video they:

  Mixing food dyes with the liquid coating

  • Turning cocoa into chocolate

  • Turning sugarcane into sugar

  • Putting in in a round mould

  • Mixing food dye with liquid sugar to make the bright coloured coating

Quality Control

Products meet set standards (prescribed levels of excellence)

Set by:

• Company

• Government

• Other organizations such as ISO
  M&M highly test for contaminants, impurities, and other defects that could impact the taste and texture of the candy. After the chocolate is processed and packaged they gp to the quality control department where they go through tests for level of crunchiness, sweetness, and overall appearance including a drop test, and a test for humidity. M&M regularly audits their suppliers to make sure they are in compliance with labour laws and food & safety laws.

Grading

• Checking products for size and quality against fixed standards

• Helps consumers make informed purchasing decisions

• Ex: Diamonds, eggs, gasoline, etc.

  M&Ms are available in small single serving packages as well as large packages to share with others. They also come in many flavours such as peanut butter, hazelnut spread, caramel, etc.

4 Ways to improve productivity

• Training

• Capital Investment (machines, building, etc.)

• Investment in Technology (specifically phones, computers, etc.)

• New Inventory Systems

The 3 non-traditional product life cycles

1. Fads

2. Niches

3. Seasonal

Fads

A product that is extremely popular for a very short period of time

Ex. Pokemon cards, Silly Bands, Tamagotchi, Fidget spinners

Niches

A product that is a specific section of the market that it dominates that very few competitors enter
Ex. High-Tech industry (micro chips)

Seasonal

A product only popular during a specific season

Ex. Christmas tree, ice cream parlour

The 4 P’s of Marketing

• Product

• Price

• Place

• Promotion

Product (or service)

• Quality

• Design

• Features

• Benefits

• Service & Support

Price

• Perception of the product’s value in relation to price

• Cover costs and make a profit

Place

• Where the product will be sold

• How will the product will get to the customer

Promotion

How will customers be made aware of the product or service

Various forms: advertising, personal selling, sales promotion, sponsorship