deca marketing EC

economics

possession utility

usefulness created when ownership of product is transferred form seller to user

place utility

usefulness created by making sure that goods and services are available at a place where they are needed by customers

time utility

usefulness created when products are made available at the time they are needed or wanted by customers

form utility

usefulness created by changing shape or good to make it more useful to customers

research and development

researchers can speed up production by simplifying existing products, developing new ones, and determining better processes

marginal cost

used to calculated extra cost of producing one more item

keynesian theory of unemployment

increasing demand and encouraging spending will increase a business’s production and allow them to retain and hire more workers

business cycle

period of economic fluctuations (GDP) that an economy experiences over time (measured from start of one recession to the next)

global market competition

rivalry between nations to attract share of the world market

• inflation and unemployment make products of some nations more or less competitive w/ each other

currency exchange rate

determines value of a nation’s currency compared to another

• increases when currency demand > its supply

  • increases when consumer confidence is high

political factors

includes tax laws and regulations impacting business operations

competitive factors

external factor that businesses cannot control, but should strive to be competitive

economic factors

includes inflation, interest rates, changing incomes

• affects the customer’s ability to spend

social factors

changing values, changing family roles, lifestyle and fashion trends, shifts in demographics

• affects customer needs

private enterprise system

system in which markets, not the government, are in charge of the economy

• people are allowed to choose what to produce, how to sell, and what prices to charge

• includes private property and limited gov control

inflation

steady rise in price levels of goods and services over time

• occurs when demand > supply and when productivity declines while costs of labor increase

deflation

steady decline in general price levels of goods/services over time

balance of trade

difference between value of a nation’s exports and its imports

exports

goods/services sold to other countries

imports

goods/services purchased from other countries

base currency

currency on the left of the slash, equals one unit

• ex: USD/EUR=.88

quote currency

currency on the right of the slash, equals what one unit of the base currency will buy

• ex: USD/EUR = .88

• one US dollar will by .88 euros

materials

items that will become part of a finished product after being processed

parts

items that become part of finished product without any additional processing

installations

high-cost, long-lasting items that are used to produce other goods and services

supplies

items that are constantly being purchased and used in operation of a business (used regularly)

gross private domestic investment

total money that businesses and landlords spend on capital goods within country over set period of time

• includes office furniture, computer equipment, business expenditures

gross domestic product

value of all capital goods created in economy during the year

net exports of goods and services

exports - imports

limited-line business

carries only a few produce lines, but has a large assortment of goods in each

specialty business

only carries a limited variety of products

structural unemployment

when an individual’s skillset doesn’t match up with jobs available

frictional unemployment

when the right jobs and workers haven’t been matched up (job exists, but hasn’t been found by the individual)

cyclical unemployment

when there is an overall decline in the economy (ex: recession)

contraction

phase of business cycle characterized by decreased demand, rising unemployment, increased customer savings, and reduced sales and profits for businesses

depression

when a contraction continues for a long period of time and is severe (depression is worst of all)

recession

when a contraction lasts for 6 consecutive months

high-depth jobs

include several opportunities for decision-making and allow employees to set their own pace

low-depth jobs

contains strict guidelines that you must follow, and there are very limited decisions to make

high-scope jobs

perform several different operations on the job (less repetitive, more variation)

low-scope jobs

require you to perform one specialized skill repeatedly (high repetition, low variation)

divisional organizational structure

groups a large company's activities by product, process, territory, or customer type → creating semi-autonomous units (divisions) that function like mini-companies with their own resources, marketing, and R&D, allowing for focused strategies but risking duplication of functions (ex: disney)

traditional functional structure

broken down by function (sales, marketing, etc.)

matrix organizational structure

uses horizontal authority to integrate departmental functions w/ product orientation

• efficient w/ resources bc representative from each major department is knowledgable about various aspects of the product

line-and-staff organizational structure

involve advisory authority, w/o the ability to enforce or take action (integrates traditional line positions w/ specialized staff roles)

span of control

refers to # of employees supervised under one manager

bureaucratic organizational structure

rigid, pyramid-shaped hierarchy, a strict chain of command, and standardized, rule-bound operating procedures

• known for being slow (red tape) and insistence on unnecessary procedures