Studied by 0 people
Looks like no one added any tags here yet for you.
New-to-the-company
The process of delivering a new product the company has never developed/sold before or improving an existing one for customers.
4 categories of Product Development
New-to-the-company, Improvement of existing product, Extension of product line, New-to-the-market.
Improvement of existing product
making changes to a product to make it more effective or efficient
Extension of product line
occurs when a company introduces additional items in the same product category under the same brand name such as new flavors, forms, colors, added ingredients, package sizes.
New-to-the-market
an enterprise that is entering a new market or market segment
Diffusion of Innovations Theory
Theory that seeks to explain how, why, and what rate new ideas and technology are adopted over time
-Each customer group has defining characteristics
-Critical mass is reached when growth becomes self-sustaining
Product Life Cycle
The four stages (Time utility, place utility, form utility, ownership utility) a product typically goes through from development to its decline in value and ultimately removal from the market.
Time utility
Having a product available at a convenient time.
Place utility
Having a product available in a convenient location
Form utility
Transforming customer needs into products that meet those needs.
Ownership utility
Comes from having multiple uses for a product or easing its transfer from seller to buyer.
Methods to Evaluate an Industry
Assess competition, SWOT Analysis, monitor disruptors that could impact the industry
Methods to Forecast Demand
Historical trend analysis.
Sales force projections.
Market research/customer surveys.
Competitor and market share analysis. 
Break Even Analysis
Reveals the minimum number of sales a product must generate at a specific price level to cover all costs
Consumer Purchase Decision-Making Process
Recognize a need.
Search for information.
Evaluate alternatives.
Make a purchase decision.
Post-purchase behavior (satisfaction or dissatisfaction).
Legal Ways to Protect Product Ideas
Patent: Protects inventions for 20 years, not renewable.
Trademark: Distinguishes a company’s products; renewable every 10 years.
Copyright: Protects original works like books, movies, and music.
Marketing
The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
Marketing Concept
Satisfying customer needs while meeting organizational goals.
Find out what customers need, develop products to meet those needs, and engage everyone in efforts to satisfy customers.
4 Ps of the marketing mix
Product, Price, Place, and Promotion.
Target Market
The group of customers particularly interested in your product, to whom you direct your marketing efforts.
Types of Markets
Consumer Market and Business Market
Consumer Market
(B2C): Buyers are consumers, a product's end users.
Business Market
(B2B): Buyers are businesses that use products to help produce their goods and services.
Market Research
The process of planning, collecting, and analyzing data about potential customers relevant to making a marketing decision.
Primary Data
Newly collected data tailored to specific questions.
Secondary Data
Pre-existing data from other sources.
Branding
The way a product or company is perceived by those who experience it.
Positioning
Establishing a brand's image in the consumer's mind to differentiate it from competitors.
Branding Strategies
Private Branding, Generic Branding, Manufacturer Branding, Multi-Product Branding, Multi-Branding
Private Branding
Products sold under a retailer's brand name.
Generic Branding
Products with no branding that compete on price.
Manufacturer Branding
Products sold under the company brand.
Multi-Product Branding
A single brand for multiple products.
Multi-Branding
Multiple brands for different products.
New Product Pricing Strategies
Skimming Pricing, Penetration Pricing
Skimming Pricing
Setting a high price initially, then lowering it later.
Penetration Pricing
Setting a low initial price to gain market share.
Other Pricing Strategies
Prestige Pricing, Odd-Even Pricing, Cost-Based Pricing, Demand-Based Pricing.
Prestige Pricing
Setting high prices to indicate superior quality.
Odd-Even Pricing
Prices that seem lower than they are.
Cost-Based Pricing
Adding profit to production costs.
Demand-Based Pricing
Setting prices buyers are willing to pay.
Promotional Mix
The blend of promotional elements used to meet marketing goals: Advertising, Sales Promotion, Public Relations, Direct Marketing, and Personal Selling.
Accounting
The process of collecting, recording, classifying, summarizing, reporting, and analyzing financial activities
Types of Accountants
Public and Private Accountants
Public Accountants
Provide accounting services for a fee.
Private Accountants
Serve one particular organization.
Sarbanes-Oxley Act
A 2002 law passed in response to major accounting scandals, requiring stricter financial reporting and accountability.
Financial Accounting Standards
GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards)
GAAP (Generally Accepted Accounting Principles)
U.S. standards for financial reporting.
IFRS (International Financial Reporting Standards)
Global standards for consistency and comparability.
Four Financial Statements
Balance Sheet, Income Statement, Statement of Owner’s Equity, Statement of Cash Flows
Balance Sheet
Details a firm’s financial position at a specific point in time (Assets = Liabilities + Owner’s Equity).
Income Statement
Summarizes revenues, expenses, and profits over a period of time.
Statement of Owner’s Equity
Shows changes in owner’s equity over a period of time.
Statement of Cash Flows
Tracks cash inflows and outflows from Operating, Investing, and Financing activities.
Ratio Analysis
The comparison of financial statement line items to evaluate a company’s performance.
Liquidity Ratios
Measure short-term debt-paying ability.
Leverage Ratios
Measure the extent of debt financing.
Activity Ratios
Measure operational efficiency.
Profitability Ratios
Measure overall financial performance.
Open Book Management
Sharing financial information with employees to enhance motivation and job satisfaction by showing how their work impacts company success.
Functions of Money
Medium of Exchange, Measure of Value, Store of Value
Medium of Exchange
Facilitates trade by eliminating the need for a barter system.
Store of Value
Maintains its worth over time.
Characteristics of Money
Divisible, Portable, Durable, Difficult to Counterfeit.
Measures of Money Supply
M1 and M2
M1
Currency + Checking/Savings Accounts + Traveler’s Checks.
M2
M1 + Short-term Investments (near-cash items).
Financial Intermediaries
Institutions that act as middlemen between savers and borrowers, directing the flow of funds.
Depository Institutions
Commercial Banks, Thrifts, and Credit Unions
Commercial Banks
Offer savings, loans, and credit card services.
Thrifts
Primarily focused on home loans; fewer exist today due to consolidations.
Credit Unions
Not-for-profit cooperatives owned by depositors.
Federal Deposit Insurance Corporation (FDIC)
Insures deposits up to $250,000 per account, established to restore public confidence after bank failures in the 1930s.
Non-Depository Institutions
Insurance Companies, Pension Funds, Finance Companies, Brokerage Firms
Insurance Companies
Protect against loss by accepting risk.
Pension Funds
Employer-sponsored retirement plans.
Finance Companies
Provide short-term loans, often requiring collateral.
Brokerage Firms
Offer stocks, ETFs, and mutual funds.
Financial Crisis of 2007-2008 Cause
Low interest rates, policies promoting homeownership, deregulation, risky financial products
Financial Crisis of 2007-2008 Effects
Burst housing bubble, financial firm failures.
The Federal Reserve System
Central bank of the United States.
Goals: Maximum employment, stable prices, moderate long-term interest rates (Dual Mandate).
Monetary Policy Tools
Reserve Requirements, Open Market Operations, Discount Rate, Federal Funds Rate.
Reserve Requirements
Banks must hold a percentage of deposits as reserves.
Open Market Operations
Buying/selling U.S. Treasury securities to control money supply.
Discount Rate
Rate at which the Fed lends to banks.
Federal Funds Rate
Rate banks charge each other for short-term loans.
