bu121 study guide

8/12/2019 BU121 Study Guide

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BUSINESS 121 WINTER 2012

BBA MIDTERM REVIEW GUIDE

Multiple Choicequestions from readings = 25 marks base concepts

Short Answerquestions from lectures = 40 marks more in-depth

Explanation and application, !hat did " learn#$ and !h% did " learn

it#$

Problems= &5 marks

Total: 80 marks

TOPICS TO BE COVERED:

Bs!"#ss Pla""!"$ 'hapter &()* +riting an Effectie usiness .lan

o !h% !rite a business plan

o model of business planning

o seen deadl% sins

/ecture Art of the Start

o 5 things an entrepreneur must accomplish

o reasons for !riting a business plan

Comm"!%at!o"

'hapter 2(4* .lanning usiness essages

o 4 principles of business !riting

o 1x1 !riting process

/ecture Made to Stick

o definition of stick%

o 3''E model principles

!h% the% affect stickiness

!a%s to achiee principles

Cr!t!%al T&!"k!"$

/ab anual pg &0-&5

o claims, eidence, underl%ing assumptions, and causal

claims

!hat the% are and ho! to find them

ho! to testchallenge and ho! to appl% to

!riting

o techniques of persuasion, ho! to build a persuasie

argument

Note:this material !as also coered in labs and thus !ill be tested in the short

ans!er section as !ell as in multiple choices6

Mark#t!"$

'hapter 7(&2* 3nderstanding the 'ustomer

o arketing concept, relationship marketing, and

customer relationship management

o 'ompetitie adantage

o 'onsumer decision-making

process, influences

o 2 market

o 8rends

/ecture 9& :e%

o .roduction sales marketing orientation

o teps to defining a target market

arket segmentation bases, process

.erceptual mapping and preference anal%sis

process, choosing target

o .ositioning consumer, competitie

o .roduct 'lassification (tested in multiple choice*

'hapter &0(&1* 'reating arketing trategies

o .roduct

'lassification consumer s6 2, related tointensit% of distribution

.roduct life c%cle stages and strategies,

changing speed of c%cle (from lectures*

o .ricing

;bactors affecting mix

o 8rends

/ecture 92 :e%

o 8otal .roduct 'oncept

randing, brand name, brand insistence model

o .rice approaches, strategies

o .romotion - "'

@dertising communication model factors

to consider, !hat the% achiee and ho! to

improe

.ersonal elling combined !ith adertising,

factors to consider in budget ales .romotion and .ublicit%

o .laceistribution

"mplications demand-back!ard pricing, push

s6 pull promotion

A%%o"t!"$ a"' (!"a"%#

'hapter &&(&4* 3sing >inancial "nformation and @ccounting

o @ccounting s%stem

o >inancial s6 managerial accounting

o >inancial statements in annual report

ections of alance heet, "ncome tatement,

tatement of 'ash >lo!s

o 8rends

/ecture 3nderstanding @ccounting, 'ash anagement

o ?@@., @.E and ">A

:e% differences format, aluation

o @udit statement !hat it does and does not sa%

o alance heet s6 "ncome tatement

+hat the% sho!, ho! the%Bre built

;rder of current assets, amortiCation of capitalassets, good!ill

atching concept

o 'ash s6 .rofit

Do! compan% that is profitable can go

bankrupt

o anaging cash (Problems and short answers)

+orking capital management !orking capita

c%cle risk and return, speed and predictabilit%

/iquidit% ratios current s6 acid test,

receiables ratios and inentor% turnoer

'ash budget process and construction


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Bs!"#ss Pla""!"$+h% !rite a business plan#

ifficult to arrie some!here unless %ou kno! !here %ou are going

etailed road map for conerting %our ideas and ision into a real functioning business

Explain !hat the ne! enture is tr%ing to accomplish and ho! it !ill go about attaining these goals

'lear understanding on the best !a% of proceeding

uccessful entrepreneurs tr% to coer this

'omponents of business plan +hat is the basic idea, !h% is this ne! product useful, ho! !ill the idea for the ne! enture be realiCed, !ho are the entrepreneurs, ho!much funding

.lan needs to be arranged and prepared in proper order, should be short and succinct as possible, should be persuasie

@fter exec summar%, talk about the follo!ing things

o ackground F purpose describe %our idea

o arketing market for productserice

o 'ompetition information on existing competition and ho! it !ill be oercome, pricing and related issues

o eelopment, production and location !here %ou product or serice is right no! in terms of deelopment

o anagement- describe experience, skills and kno!ledge of ne! enture

o >inancial compan%Bs current financial state and offers proinancial proinancial pro


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Comm"!%at!o"s+riting should be Pros#)l P#rsas!/# E%o"om!%al a"' A'!#"%# Or!#"t#'

+4+ Wr!t!"$ Pro%#ss

+hat ticks#

tick% = understandable, memorable, and effectie in changing thought or behaior$ - eelop argument !ell 3rban legends - because itBs stick%, eas% to understand6 Ar# !'#as -or" !"t#r#st!"$ or ma'# !"t#r#st!"$5

oie popcorn - "nteresting but not sensational, truthful but not mind-blo!ing, and important but not Jlife or deathB6 Or %a" 6o mak# tm !"t#r#st!"$

a"' #l#/at# %omm"!%at!o"5

ix .rinciples of tickiness- er% hard for %ou to communicate %our kno!ledge to someone !ho doesnKt kno!666$the%Bll get itL

S!ml!%!t6 imple = core M compact

>ind the core$ of the message and sa% it in compact !a%

'ommanderBs intent$ - !hat the% call in the arm%, !hat is our number one goal, much

like %our business plan, important to kno! the core message, if %ou canKt execute plan,

execute the commanders intent

atter of forced prioritiCation

onBt Jbur% the leadB

'ommunicate the core - er% compactl%

3se proerbs imple but profound666 Lgolden ruleL

3se existing schema - use existing kno!ledge

3se analogies

3se generatie metaphors - generates perception - Lcast

memberL666sub!@N and sand!ich artist (not effectie*U"#4#%t#'"#ss

?et audience to pa% attention

Geed both surprise and interest

Hiolate expectations

e counterintuitie uncommon sense in the serice of the core

message

GordstromKs

?enerate interest andcuriosit%

;pen gaps in kno!ledge

?ie context

>ill those gaps - make them curious, what questions can ou ask,

what questions will the ha!e, "et them thinkin"

Co"%r#t#"#ss

ake ideas clear

>ill !ith concrete images - be concrete not abstract

our grapes$ - messa"e stuck from fables because the ima"es are concrete

ro!n e%es, blue e%es - #rd "rade teacher who wanted to make pre$udice !er concrete %e&periment%Damburger Delperproduct of "eneral mills, concrete ima"e of how important con!enience is for customer and how critical that is, think it's important to e&pand

product line and "i!e options to people, but, that wasnt want it, all she cared was that her kids will eat it, predictabilit became concrete, *ead to ten percent increase

of salesCr#'!-!l!t6

ake them beliee

@uthorities -tend to trust credible

Experts

'elebrities tend to trust people that we want to be like

Janti-authoritiesB belie!able, honest, real situation e"

campai"n+ series of ad!ertisement alon" the same scene

"nternal credibilit% - credibilit within messa"e itself

Hiid details - makes it more real for us

tatistics

8estable credential -put it in words people will understand Puttin"

audience in position of "i!in" credibilit &tremel effecti!e campai"n

of -end's

G@ - brand new plaers, quite oun", all of a sudden

dramaticall life chan"es, dan"er of female attention, ma"ic

.ohnson /aids

Emot!o"s ?et people to care

Mak# tmfeelsom#t&!"$ for people s6 abstractions or statistics -feel for people not stats Mother 0heresa %if 1 look at mass, 1 will ne!er act, if 1 look at the one, 1will% A person !s mass stats e" donatin" mone Analtical !s emotional

Po7#r o) asso%!at!o"- create an associate with somethin" @ppeal to self-interest - EmphasiCe benefits s6 features +put in sense of benefits to that person instead of

$ust %features% imagine$ - @ppeal to identit% -"et them to care but appealin" to who he was, that kind of person, does not litter " don't mess with 0e&as

Stor!#s

G#t #ol# to a%t- Geed simulation and inspiration -simulate2 how to act and inspiration2 inspire them to do soental flight simulators - used to train people in situation, creates the same firin" in brain as actual acti!ities, ou "et 34# of benefit of simulation than actuall doin"

it So a stor is like a mental fli"ht simulation

"nspiration - 5 subs under 6 "rams of sub, man decided to onl eat subs, after # months lost 788 lbs, %subwa sa!ed m li fe% M9 cant do health for fast food *e"al

said no b4c medical claim,

ub!a%Sott!"$ a stor6

'hallenge plot - willpower !s ad!ersit

'onnection plot - human connection which brid"e "ap a!e a coke / a smile

'reatiit% plot - inspirin" to see massi!e breakthrou"hs

Oared s6 I under $ Simple + eat subs and lose wei"ht %Sunwa sa!ed m life ;ne&pected + lose !eight eating fast food Concrete+ o!ersi


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authorit motional + indi!idual !s mass, reachin" potential Stor+ inspirin"

D!))#r#"t Wr!t!"$ Rl#sAdapting to tas1 3 audience4 You must return the form by 5pm would you please return form by 5 pm

Audience benefit4 Our warranty becomes effective only when we receive owners registration your warranty begins working for you as soon as you return ownersregistration

!ultivating the 5you6 vie/4I need your account numberwould you mind giving me your account number so that I can locate your records to solve your problem?

!onversational but professional4 look dude, this report is bogus and the figures dont look kosher. how me some real stats. !ot sources?"ecause figures in thisreport seem inaccurate, please submit the source statistics.

Express yourself positively4 the plan definitely cannot succeed if we dont obtain management approvalthe plan definitely can succeed if we obtain managementapproval

Being !ourteous steward you must complete all performance review today steward, will you please complete all performance view today

B"A$ %REE +A&(AE 0 dont use hiss#herss, racial, disability or age biases ($E P+A"& .OR*$ 7 %A8"+AR A&* PRE!"$E 7 #"ORO($ .OR*$Basic sentences has sub9ect than verb the manager of I$sentan email to all employees

%&OI' (O))O* +*$+*(+ %-$ / 0%!)+*$, 0-* O* +*$+*(+, (O))% 1I(+ +*$+*(+ 2345 words in sentence 67834778 comprehension9Active voice for directness, vigor and clarity the manager completed performed reviews for all employeesPassive voice to be tactful or to emphasi:e the action rather than does (redit cannot be granted

Avoid dangling and misplace modifiers after working nine hours the report was finally finished after working nine hours, we finally finished the report(se direct paragraph plan to define classify illustrate or describe(se pivoting paragraph plan to compare and contrast

Eliminate flabby expression as a general rulegenerally

+imit +ead "&$ 0 get to the point we are sending this announcement to let everyone know that new parking permits will be available :an 4 stnew parking permitswill be available :an 4

Re9ect redundancies 0 absolute essentialessentialRevise for clarity short and simple / warn your employees about dangerous chemicals. 'ump trite phrases / as per your re;uest / as you re;uest, drop clich


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Mark#t!"$ 9 understanding the customer base!ar"eting0 process of discovering the needs and /ants of potential buyers and customers then providing goods and services that meet or exceed their expectationProdcts' in mar1eting, any good or service /ith its perceived attributes and benefits that creates value for the customer#$change' ta1es place /hen t/o parties give something of value to each other to satisfy their respective needs2 To encourage exchanges mar1eters follo/ the rightprinciple2 0 determines mar1eting success!ar"eting concept identifying consumer needs and then producing the goods or services that /ill satisfy them /hile ma1ing money, concept involves

ocusing on customers wants, integrating all of organi=ations activities %chieving long term goals Prodction orientation4 an approach in /hich a firm /or1s to lo/er production cost /ithout a strong desire to satisfy the needs of customers'Organi:ations concentrate on mass production 0 focus on maximi:ing efficiency of operations, increasing output, and ensuring uniform ;ualities Cstomer vale% ration of benefits to the sacrifice necessary to obtain those benefits, as determined by the customer, reflects /illingness of customers to buy aproduct 0 core business strategy, price is not the only thing that matters 0 pay premium for superior customer services Cstomer satis&action the customer-s feeling that a product has met or exceeded expectation < four measure describe overall satisfaction< ;uality=reliability,vehicle appeal, o/nership cost and service satisfaction Bilding relationships0relationship marketingis a strategy that focuses on gorging long term partnership /ith customers by offering value and providing

customer satisfaction2 Benefit from repeat sales and referrals increase in sales, mar1et share and profit222 cost fall less expensive to serve existing customer than toattract ne/ ones2 (ustomer relationship management the process used by organi:ation to trac1 and organi:e info about current and prospective customers222 includesinformation about customers=potential customers, past history /ith organi:ation, and future prospects loyalty programs- aka fre;uent3 buyer club build long term relationship employees attitudes and action must be customer orientedCreating !ar"eting strategy inclde &or main steps 'nderstanding the e$ternal environment environment scanning 0 process by /hich a firm continually collects and evaluates information about its externalenvironment six categories 0 social forces, demographic forces, economic forces, technological forces, political and legal forces, competitive forces (e&ining the target mar"et target mar1et 0 the specific group of consumers to/ard /hich a firm directs its mar1eting efforts, identifying this helps businessfocus its mar1eting efforts on those /ho are most li1ely to buy its product or services

Creating a competitive advantage "s the factor or factors that cause customers to patroni:e a firm and not the competitions !ost competitive advantage 0 firm-s ability to produce a product or service at a lo/er cost than all other competitors in industry /hile maintaining

satisfactory profit margins2 %irms become cost leader by obtaining inexpensive ra/ materials, ma1ing plant operations more efficient and designing productfor ease of manufacture, controlling overhead cost and avoiding marginal customers> might not be long term advantage

*ifferential competitive advantage 0 firm-s ability to provide a uni;ue product or service /ith set of features that the target mar1et perceives as important as

and better than the competitors2 *urability of this ma1es strategy more attractive to managers, advantages include brand name, strong dealer net/or1,product reliability, image and service

&iche competitive advantage 0 a firm-s ability to target and effectively serve a single segment of the mar1et /ithin a limited geographic area 0 might be only

viable option2 8ar1et segment has good gro/th potential but not crucial to success of ma9or competitors is good for niche2 %irms must defend againstchallenges through its superior ability to serve buyers

(eveloping mar"eting mi$ blend of product offering, pricing, promotional methods and distribution system that brings a specific group of consumers superiorvalue based on the ? P-s product, price, promotion and place

Prodct strategy* heart of mar1eting mix is goods and service, involves choosing a brand name, pac1aging, colors, /arranty, accessories and service

program

Price +trategy demand for the product and cost of producing it222 special introductory price try ne/ products2 Enter /ith lo/ price, stic1 to lo/ price

(istri,tion +trategy creating the means by /hich products flo/ from the producer to consumer 0 deciding ho/ many stores and /hich /holesalers andretailers /ill handle the product in geographic area

Promotion +trategy uni;ue combination of personal selling, advertising, publicity and sales promotion to stimulate the target to buy a product or service2

Advertising helps buyer get to 1no/ company, paves /ay for sales call2 Public Relations special role in promotion, used to create good image of the

company and products good publicity time, effort and money spent by PR2 $ales promotionstimulates sales includes trade sho/s, catalogues,contests, games, premiums, coupon and special offers

-ot &or pro&it mar"eting application of mar1eting principles and techni;ues are vital, identify target mar1ets and develop effective mar1eting mixes2 Profit

motive is both an ob9ective for guiding decisions and criterion for evaluating result

+ocial mar"eting the application of mar1eting techni;ue to social issues and causes

Byer Behavior the action people ta1e in buying and using goods and services 0 based on cultural, social, individual and psych factors

!ultural, social, individual and psychological factors affect all steps @2 &eed recognition 2 "nformation search ?2 Evaluation of alternative ?2 Purchase 2 Postpurchase behaviour.n&lences on consmer decision ma"ing

!ulture 0 set of values, ideas, attitudes and symbols created to shape human behaviour, social in nature2 Human interaction creates values prescribes acceptable

behaviour, give order to society by creating common expectation2 !ulture adapts to changing societal needs and evolving environmental factors

$ocial 0 see1 out opinions of others to reduce search and evaluation effort or uncertainty 0 see1 out for guidance on ne/ products or service, products /ith image

related attributes, products /here attribute information is lac1ing or uninformative through reference groups, opinion leaders and family members for productinformation and approval

"ndividual influences 0 personal characteristics result in different needs2 Personality combines psychological ma1eup and environmental forces2 "ncludes people-s

underlying disposition> less useful concept self3concept /ho/ people perceive themselves, ideal self3image /ay individual /ill li1e to be, real self3image / ho/an individual actually perceive him=herself

Psychological 0 perception beliefs and attitudes, /hat consumer use to interact /ith their /orld recogni:e feelings and gather 3analy:e information

/ypes o& consmer ,ying decisions0 five factors < level of consumer involvement, length of ma1ing a decision, cost of goods or service, degree of info search andnumber of alternatives to consider Croutine response behaviour, limited decision ma1ing, extensive decision ma1ingDB2B business mar1ets include hospital, schools, manufacturers, /holesalers and retailers and branches of gov-t2 (haracteristics purchase volume, number of customerslocation of buyers and direct distribution!ar"et segmentation *emographic most commonF, eographic, psychographic, benefit/rends in !ar"eting "nternet)arketing 0esearch, canner "ased 0esearch / from single group of respondents by continuously monitoring advertising, promotionsand pricing, oyalty (ards, One to One marketing / creating uni;ue marketing mi> for every customer using marketing database


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(ognitive dissonance / the condition of having beliefs or knowledge that are internally inconsistent or that disagree with ones behaviour

Marketing continue... understanding customer baseWhat is marketing? >an 5integrated system of activitiesdesigned to plan, price, promote and distribute, want-satisfyinggoods and servicesto present and potentialcustomers6 @eysto successful mar1eting> figure out /hat customers /ant, and to ma1e sure you mar1et it using integrated system of activities

Keys to Success 01 ey Related to providing a want3satisfying good or service (sed to be 5sell /hat you produce6> needed to s/itch the /ay things /ere happening&o/ it-s 5produce /hat you cansell 5Production 0 $ales 0 !ustomer Orientation ' mar1eting concept, focusing on customer, /hat does the customer /ant, the core ofthe company, come up /ith something that THE) /antThe Marketing Concept3 Aust not about the customer value but we also want customers to be loyal so we built a relationship...spent a lot of time nurturing relationship

!reate customer value*eliver customer satisfactionBuild relationships/arget !ar"etthe group of customers to /hom you /ish to direct your product to/ard ' a group of customers /hose /ants and needs have not been met by the competition+teps to de&ining a /arget !ar"et%@2 8ar1et $egmentation ' ta1e /hole mar1et, and brea1 it into groups, once you have the group, figure out /ho to target at2 Perceptual 8apping ' finding a group of people /hose needs are not met, then map out these people-s perceptionG2 Preference Analysis ' /hat do these customers actually /ant, compare preference to /hat they /ant and /hat they thin1 they are getting, do they feel they havesomething that meets the needBases &or +egmentation%State-of-being ' /ho are these people geographic 0 region, popn si:e, popn density, climate demographic 0 age, gender, lifecycle, income, occupant-s, educating,religion, social class, etc2 customer type ' is it an end consumer or business

state-of-mind' ho/ do they thin1 psychographic personality and lifestyle ' A"OF Attitudes interest and opinions product usage 0 behavior volume 0 usage rate, userstatus, readiness to buy sensitivity to mar1et factors, occasions ' snac1 vs2 gift, different product different approach loyaltybenefits sought' trying to find a group of people /ho /ant something, see1ing a benefit, so you can provide a benefit for them, you can subdivide later, but mustunderstand /ho this is, in the mar1et of this /hat are people loo1ing for e2g2 not enough to find benefits that consumer or see1ing, if they are already satisfy, it /ill no longer motivate them,ship has sale, find a gap, find /here they have a need but not fully satisfy it must provide a uni$ue benefit that thecompetition does not 3 providing a benefit that is uni;ue or find something you can do better

$teps4

@2 $egment on basis of benefits ' /ant the same thing2 *escribe using other bases ' behavioral characteristics, ho/ they thin1

G2 &ame them last*emographics vs2 psychographics> can-t loo1 at state of being characteristics,needs to ma1e it clic1 e2g2 8olson L ' adult male, psychographics4 not reallygro/n up, uncomfortable of role of society, and unsuccessful future


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Buying pac1ages of benefits that deliver value, ho/ consumer vie/ the types of product companies sell in order to design mar1eting mix appealing for targetconsumer product /bought by end users consumer nondurables0 used up, consumer durables0last a long time

Classi&ying ,siness prodctscapital products / large, e>pensive items with a long life span i.e. buildinge>pense items / typically smaller, less e>pensive with smaller life span i.e. printer cartridgeG industrial products have following categoriesH installations, accessories,component parts and materials, raw materials, supplies and services

Prodct li&e cycle as management tool % better forecast future sales and e>plains new marketing strategies. 1roduct must move from 4stage to ne>t. 0ightpriceJ K e>pected satisfaction

14 .ntrodction many obstacles, light competition, fre;uent modifications, limited distribution, and heavy promotions. ailure rate is high, costs are high, and salesare low. 1rofits are usually 3ve24 6rowth +tage sales increasing rate, healthy profit, competitors enter, aggressive advertising, distribution K maAor key, Lend price fall34 !atrity% sales mount Ldecreasing rate, long time e>posure, and line e>tensionJ:4 (ecline% sales C profit fall, decline stage, rate of decline by factorsM rate of change in consumer taste and rate of new product enter.Pricing o,;ective/ impt in determining how much firm earns. 1rices charged > number of units sold K !ross revenue, after paying activities KprofitPro&it ma$imizing% means producing a product for as as reenue S cost goalT get largest profit8arget return on inestment pricing obind out !hat the% are

!illing to pa% 26 "f intro price is high, can be lo!ered 16create image of qualit% and prestige 46 .rice lo!ered customer think the% are getting a deal

P#"#trat!o" Pr!%!"$ selling ne! products at lo! price in hope to achiee lg6 sales olume - more extensie planning big mass production M marketing

oerestimate demand666 2 @H lo! initial price induces consumers to s!itch brandcompan% and discourage competitors to enter market

=#a'#r r!%!"$:pricing product belo! normal mark up or belo! cost to attract customer to store the% !ould not come !ell kno!n appeal to customers

B"'l!"$: grouping 2 or more related products together and pricing them as single reach segment !here sold indi not effectie

O'' #/#" r!%!"$ : setting price at an odd number to connote a bargain and at een number to suggest qualit% Pr#st!$# Pr!%!"$: increasing price of a product so consumers !ill perceie it as being DP, status alue

Nature and function of distribution (logistics3 efficientl% managing acquisition of ra! materials to factor% and moement of products from producer to industrial user

uppliers of ra! material factor% (finish product* !holesalerdistribution center retailers, !holesalerdistribution centers customers

Mark#t!"$ !"t#rm#'!ar!#s organiCation that assist in moing goods and serices from producers to end users agents(sales rep) brokers("ob4w), industrial

distributors (independent wholesalers bu product line and sell to industrial users), !holesalers (finish "oods to retailers, manufacturer), retailers (sell "oods)Alt#r"at!/# %&a""#l arra"$#m#"t Dal '!str!-t!o" 9 2more channels that distribute same product to target market

No"tra'!t!o"al %&a""#l 9 differentiate a firmBs product from competition

Strat#$!% %&a""#l all!a"%#s 9 one manufacturer using another manufacturer preiousl% established channel to distribute goods

("%t!o"s o) C&a""#l

Channels reduce =of transaction- make distribution simpler -producers !ant to do this bc &6!ish to focus on production 26 'annot produce F distribute

channels ease the flow of "oods sorting (break items to separate stocks* , accumulating (bring similar stocks together in lg6 quantities* and allocating( breaking similarproducts into smaller and smaller lots* U!holesale leel=breaking bulk locate bu%ers for merchandise

Perform needed functions increase efficienc%, perform important function U reasonable cost to exist6 .erform 1 functions &6 8ransactional 26 /ogistical 16 facilitating

I"t#"s!t6 o) mark#t %o/#ra$# exclusie distribution (&2 dealers*, selectie distribution (more than V but limited*, intensie distribution (man%*

?oal of suppl% chain create satisfied customer b% coordinating all actiities of suppl% chain members into seamless process completel% customer drien

@llo!s compan% to respond !ith unique product configuration and mix of serices demanded b% customerT dual role &6 'ommunicator 26 .h%sical flo!

anaging logistical components of suppl% chain, sourcing and procument (reduce cost*, production scheduling (forecast calls*

Promotion attempt b% marketers to inform, persuade or remind consumer and industrial users to engage in the exchange process.romotional goals includeT creating a!areness, getting consumer to tr% product, proiding information, keeping lo%al customers, increase amount and frequenc% of use

T romot!o"al m!4 a"' !"t#$rat#' mark#t!"$ %omm"!%at!o"s

@dertising an% paid form of non-personal promotion b% identified sponsor .ersonal selling face to face presentation to prospectie bu%er (important in marketing industrial product and least important in nondurable*

ales promotion 0 marketing actiities that stimulate consumer bu%ing including coupon, samples, displa%s, sho!s, demonstration

.ublic relations linking of organiCational goals !ith ke% aspect of public interest and deelopment of programs designed to earn public understanding

IMC 9careful coordination of all promotional actiities to produce a consistent unified message that is customer focused managers !ork out roles it !ill pla%

and result of campaigns

(a%tors t&at a))#%t romot!o"al m!4

Natr# o) ro'%teach t%pe of promotional mix !orks better than another in different cases

Mark#t %&ara%t#r!st!%s 9potential customers are !idel% scattered, bu%ers highl% informed and are brand lo%al more adertising M sales promotion

personal selling666 detailingT ph%sical stocking of merchandise at retailer b% salesperson !ho deliers merchandise

A/a!la-l# )"'s 9mone%lack of it huge influence on promotional mix

Ps& a"' ll strat#$!#s aggressie personal selling and trade adertising to conince !holesaleretailer to carr% F sell merchandise .3D (promoting*

manufacturer focuses on stimulating consumer demand for its product rather than persuading .3// (demanding*

Trends in Marketing

I"%ororat!"$ mor# t#%&"olo$6 at all l#/#ls internet, corporate network and wireless setup linkin" people, machines and companies > connect seller and

Consmer prodct (efinition &egree of efforte'pended

-nsought products / lifeinsurance, burial plots,

new products

Products that either are un1no/nto potential buyer or are 1no/n

but not actively sought

&o effort

(onvenience products /soft drinks, bread, milk,coffee

Relatively inexpensive productthat re;uire little shopping effortand purchased routinely

#erylittle=minimum

hopping product3automobile, homes,vacation

Bought after considerableplanning, including brand'brandand store'store comparisons

!onsiderable

pecialty product /Aewelry, gourmet dinner

"tems for /hich consumer searchlong and hard and refuse toaccept subs

maximum


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buers nables to collect detailed data about customer buin" habits, preference and spendin" limits prices online enables shiftin" prices up and down,online retail increasing, search tech and comparison shopping sites cheaply and effectively mar1et products, promotions applied online

MS l %oma"!#s ma4 r#/#"#s %ield management s%stems help ad


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most effective medium - the channel chosen, it must reach consumer with messageintended, 7the medium is the message700 1he medium pro;ects it


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Mark#t!"$Pt !ontinue0 (reating )arketing trategiesPersonal Selling

more effective but more expensive ' individual /ill as1 for sale, ans/er ;uestion combine /ith advertising to4

generate leads ' through advertising

decrease cost of sales call ' seen and understand product, time reduced therefore less cost

reach Qinaccessible- ' reach people /ho cant be reached, some people dont li1e personal selling

8aintain image in buyer-s mind ' 1eep image22 8a1e them remember you2 But if you 1eep bugging them they-ll as1 u to bac1 off

factors to consider in budget decision '

perceived ris1 of sale 0 financial, social, performance ' buying stereo system, or computer22 $ales person can help ma1e you feel comfortable,social ris1 ' clothings, performance ' are you buying product to do something specific Kthere to help you feel betterF

amount of information to convey ' cant do that in ad, sales person

degree of customi:ing necessary ' not off the shelf product, then adaption can be made

Sales Promotion

short term incentives to induce purchase - don


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BRA-( .-+.+/#-C.#+

A%%o"t!"$ (!"a"%# Using Financial

Information and Accounting@ccounting process of collecting, recording classif%ing, summariCing, reporting and

anal%Cing financial actiities6 Aesults in reports that descrie financial condition of an

organiCation proides frame !ork for looking at past performance, current financial

health and future performance66 helps in comparisons 8here are 2 t%pes

Ma"a$#r!al a%%o"t!"$proides financial information that managers inside

the organiCation can use to ealuate and make decisions about current and

future operations6 ight prepare er% detailed financial reports for their o!n

use and proide summar% reports to top management (!"a"%!al A%%o"t!"$ focus on preparing external financial reports that are

used b% outsiders, people !ho hae interest in business6 .roides useful

information for managers, shareholders, lenders, suppliers, inestors and

goernment agencies to assess the financial strength of business

8he @daption of ">A to proide consistenc% in finicall% reporting internationall% andreplace ?@@. oer &00 countries (O@G 20&&*6 @nnual reports %earl% document

describe firmBs financial status and discusses the firmBs actiities during past %ear6 1 primar% financial statements areT statement of financial position, income statement,

and statement of cash flo!s

T a%%o"t!"$ '#s!$"at!o"s '"'@ '@, '@ 'anada-'@, '?@-'anada '?@ proides specialiCed serices and educational M!ork experience requirementCA 9proide tax, audit, and management serice focus on external reporting and proide opinion if financial statement accuratel% reflected

CMAprimaril% in industr% and focus on internal management accounting, combine accounting expertise and business kno!-ho! !ith professional management skills

to proide strategic financial management, planning, sales and marketing, info tech, DA, finance and operation

CGA focuses primaril% on external financial reporting, proide tax and adice to indiiduals and businesses

A%%o"t!"$ ro%#'r#sbookkeeping s%stem used to record firms financial transaction is routine and clerical6 @ccountant takes this and classif% summariCe the infoA%%o"t!"$ Eat!o" @ssets- /iabilities M ;!nerBs equit% (al!a%s balance* 6 eer% transaction must be recorded t!ice (ouble entr% book keeping*

A%%o"t!"$ %6%l#process of generating financial statement ! business transaction and ending ! preparation ofthe report6 &6 @nal%Ce business transaction documents 26 Aecord business transaction in


12/14

=!!'!t6 rat!os measure firmBs abilit% to pa% its short term debts as the% come6 pecial interest to firmTs creditors6 1 measures

Crr#"t rat!o total current assets to total current liabilities6 2 is good

A%!' t#st !%k rat!o" total current assets excluding inentor% to total current liabilities6 @tleast & preferred

N#t 7ork!"$ %a!tal amount obtained b% subtracting total current liabilities from total current assets, used to measure firmBs oerall liquidit%

Tr#"'s

A%%o"ta"ts #4a"' t!r rol# more actie role in adising clients on s%stem and procedures, soft!are and regulations6 Expand consulting serices

Val!"$ k"o7l#'$# ass#ts intellectual capital is more important to organiCations, alue to the intangible

Ca"a'a mo/#s to !"t#r"at!o"al )!"a"%!al r#ort!"$ sta"'ar's most significant trend, international trade and inestment important, companies operating

globall% creates man% adantage T lo!er costs associated !ith prep of financial info, consistenc% in reporting, ease of financial comparison6

Aeenue=income, balance sheet statement of financial position, cash flo! statement = statement of cash flo!s

U"'#rsta"'!"$ A%%o"t!"$ Cas& Ma"a$#m#"tA4+4P4#4 7 64A4A4P4 and .494R4+4Accounting $tandards for Private Enterprise ' A$PE , same thing as gaap even if youre a private enterprise you can use AAPenerally Accepted Accounting Principles"nternational %inancial Reporting $tandards ' if you are a public , then use this, for more consistency anuary @@ Private vs Public companies in !anadaey di&&erences

Relevancy vs Reliability ' need to trust /hat you are saying22 Qfair value- vs Qhistoric cost ' Ca buildingD value at /hat you paid- asset valuation 22 But /ith

"R%$ its o1ay to choose fair value because its more relevant,

Title of statements ' $tatement of %inancial Position = $tatement of !omprehensive "ncome Cfor income statementD

Order of assets ' Reverse order 0 non'current before current ' sho/ /hat you o/n and value it, no/ reversed, the things /e o/n /ith short life expectancy

used to be first, but no/ fixed asset Cnon'currentD is first22

Adit' !hartered accountants audit, financial accounts All public companies by la/

!hec1 that standards applied on consistent basis ' doing strategically chec1

Auditor-s $tatement222some fate that papers have been audited and /hat it says

o $cope and Opinion sections, Sualifications ' ma1e sure opinon is you can trust it,

Sualification< run as fast as you can,2rare to see it22red flag

do &OT say statements are accurate ' cant because of lots of estimations , allo/ed, /ont be perfect

o %air ' go ahead and trust them

o no material errors ' big enough that you can be misled

$ection ?? of the $arbanes'Oxley Act = !$A or !anadian $ecurities Administrators in !anada ' &OT

TE$TE*o !EOs and !%Os must certify the design and effectiveness of internal accounting controls

!ccounting E"uation - based upon it


13/14

the end .tart with 3rofit sense of why cash account change Add bac1 Amorti:ation ' ta1es amorti:ation and puts it bac1 in profit, add that bac1 in b=c it isnt cash

7 *ecrease = ' "ncrease in Accounts Receivable ' if A=r goes do/n, then cash goes up ' means you got the cash

7 *ecrease = ' "ncrease in "nventory ' if inventory goes do/n, then cash goes up

7 "ncrease = ' *ecrease in Accounts=&otes Payable' A=p goes up then cash go up ' ta1en a loan, dont pay still have cash

7 *ecrease = ' "ncrease in !apital Assets ' spending cash to buy capital assets

dont understand statement, understand essence it is saying!naly+ing the StatementsWhat is ratio analysis ust a tool What is a ratio ust a fraction /ypes o& ratios? i;uidity # %ctivity # +fficiency' ho/ li;uid you are, /e /ant to stay viable=alive,tability # 'ebt' ho/ stable are you, are you going to stay in business =@ years, 1rofitability' ho/ profitable is the companyro/th' are things gro/ing,)arketability ' ho/ mar1etability are your shares ' dont have to pay OE bac1, but debt you do, .hat do they tell us &othing by

themselves, What do they tell se< (omparisons ' can calculate all rations /hich are /aste of time if you dont compare, Other firms=benchmar1 ' some perspective,"ndustry average' most common thing, then is published Rule of thumb-' more broad and general Past years' are they getting /orse= betterAnother ratio' as long as there is a relationship +oo1 at components of numerator and denominator, if used profit, /hat part is causing the problem

,./&T0

measure a company-s ability to meet its current=short'term obligations 0 short3term viability Ehow capable are we with themF

assess the ade;uacy of a firm-s working capital management 3 money with short time frame, money we are working with

o 0elationship between current assets and current liabilities

assess /hether net /or1ing capital provides a sufficient cushion to meet current debts as they come due ' some turn into cash, some dont but ma1e sure you

have enough to pay bills

A++ RAT"O$ B(T &O +ABE+$&et .or1ing !apitalM current assets ' current liabilitiesOb9ective 0 balance ris1 and return ' to maximi:e the return/hat is sufficient ' depends on4$peed of working capital cycle 3 starts with cash, and you buy or manufacture inventory, might get cash back after sales, then will turn into %#0 and turns back to(%P but at the same time pay the liabilities, we want enough moving through so theres always someone coming back to pay billsJno/ledge of = ability to predict Q(( 3 you donBt know forsure if inventory will sell and what will get collected , ability to predict detemines how much cushion youBllhave. 'onBt have money paying liabilities you will go bank rupt look at cycle from slides If company is managing this well, then they can get it to 7, need to manage it!urrent Ratio ' ho/ /ell /e are managing itM current assets = current liabilities Qrule of thumb- =2%1 >not so ris"y) ? @:%1>do not diminsh retrns)suggests that &.! should be at least as large as current liabilities!AF ' !+ @F M &.! @F M !+ ' current ration rule says /e should have enough &.! that /ill e;ual liabilities, must have enough net&ot great ratio, because it has all current assetsAcid Test = Suic1 Ratio ' better measure of /hats truly li;uid, 9ust a lil bit more is fineM current assets ' inventories7supplies7prepaidsF current liabilities Qrule of thumb- 1%1Receivables ratios

@2 Average !ollection PeriodM avg2 closingF accounts receivable x GU days=GUannual creditF sales

compare to credit terms e>M #47, net R7 vs2 V days if you pay in ten days, you get W or you pay in G

chec1 industry terms, discount, penalty, credit granting procedures22 8atters because there is trade off in ris1 and return> if ris1 lo/er, return is lo/er> if

all the people are ta1ing discount, /ere ta1ing it last22

/hy so important to ta1e advantage of discount22 percent cost you for days22 @X times a year you are losing W,

2 Accounts Receivable Turnover ' ho/ many times do your receivable do they get collected each year

M annual creditF sales = avg2 closingF A=Rtradeoff " /ant it fast enough, that the money is coming bac1 to cash, but if its too fast then lo/er returns"nventory Turnover M cost of goods sold = average inventory OR sales = average inventory tradeoff ' need to achieve a balance ' not too slo/, not too fast-ote4 li;uidity ratios aJA Qactivity- or Qefficiency- ratios because they help assess ho/ efficiently a company employs its resources to balance ris1 and returnCash (udgeting

management of cash flo/smanagement of /or1ing capital cycle.hat you already do, loo1 in our poc1et Ybeginning cash balanceF 7 receipts M total cash availible do it monthly basis

Then ta1e a/ay monthly bills disbursementF M !ash Excess=*eficiency$ee1'ample on slide * lab manual 2 13!M 45 marksJeys4 G possibilities besides excess M balance re;-dF@2 *eficiency borro/ for deficiency 7 minimum, ending balance M minimum re;-d

2 Excess 8inimum surplus available to repay borro/ing, if do> ending balance M minimum re;-d if don-t> ending balance M total excessG2 Excess Z 8inimum borro/ to M minimum re;-d, end balance M minimum re;-dST!(,T0

measure a company-s ability to meet its long'term obligations by measuring the relationship bet/een components of a firm-s capital structure long3term

viability 3 is it going to go bank rupt 5 years from now?

sho/s results of financing decision !apital structure M long term liabilities 7 o/ners e;uity %inance through e;uity or debt

*ebt to E;uity OR *ebt to &et .orthM total debt = shareholders- e;uity net /orthF M current liabilities 7 long'term liabilities common stoc1 7 pref2 stoc1 7 retained earningsQrule of thumb- for industrial firm@1%1 dont /ant a lot of debt, /ant more e;uity then debt"nvestors=shareholders But investor=shareholder are o1ay /ith debt, not putting anymore money on it, 1eep ma1ing money on someone elses money for me22 "f balancebetter they can maximi:e this process


14/14

+everage 'better measure of thisM long'term debt = sh2 e;uity net /orthF measures the degree to /hich a company has loc1ed itself into fixed financial costs, e;uity doesnt have anything fixed, do itbecause theres magnified impact to the logic implies that a given change in sales /ill result in a greater change in profitQrule of thumb- Z24@ lo/24@ ' @4@ average @4@ highadvantage4long'term debt is the cheapest sorce o& capitalbecauseinterest is ta$ dedcti,le, dividends are not, therefore higher R#/'R- * de,t cost yo interest?,t when yo sell eity mst give dividends.n income statement * they are not there? they are distri,tion o& ,ottom line pro&it? not dedcted as e$pense44 Bt interest is an e$pense44 /he ,igger e$pensethe lower income yo are conting yor ta$disadvantage4higher long'term debt meanshigher interestpayments /hich are alegal o,ligation/hereas dividends are not, therefore a greater R.+ o& insolvency++ +S%)1+

$ummary4lo/ degree of leverage4 lo/er riskbut higher cost of capital M lo/er return high degree of leverage4 because youre loc1ing in22 But do it biggest lo/ercost higher risk but lo/er cost of capital M higher return"nterest !overage Ratio ' figure out the ris1, can /e pay the interest, can /e accept itM EB"T = annual interest helps assess the ris1 inherent in being highly levered Qrule of thumb- for industrial firm Gx, but should loo1 at long'run trend in earnings, andvariability in earningsloo1ing at lo/ points, in the future, can /e still cover it, t/o critical decision for finance)67T!(,T0 ross Profit 8argin P8F M gross profit = sales after ta1ing cost off &et Profit 8argin &P8F M net profit = sales after ta1ing out OP expchec1 components of "ncome $tatement RO" ' /hat shareholder ultimately care about M net income = shareholder-s e;uity net /orthF most important profitability ratiofor investor8)6WT9 measures the rate of gro/th of any Balance $heet or "ncome $tatement account M present yr-s 5''''''6 ' past yr-s 5''''''6= past yr-s 5''''''6

M!)K1T!(,T0 :directing to common stock holders;Earnings per $hare EP$F M earnings available for common stoc1holders= N shares of common stoc1 M net income ' preferred stoc1 dividends= N shares of commonstoc1calculate fully diluted if P=$ convertible ' if all preferred goes into common!ant ta1e it from face value, Price=Earnings Ratio M mar1et price=share= EP$ helps gauge stoc1 value and gro/th prospects if high P=E ratio ' /hy /ould people bid upprice relative to earnings available "f lo/, 1eeps ratio tighter )ield M dividends=share= price=share "mportant to see ho/ mar1etible the stoc1 is Payout Mdividends=share= EP$ relationship to P=E ratio *o /e necessary see high pay out22because it chooses dividend 22 As an investor you have t/o things< capital gains anddividends, if theres not a lot of prospect for capital gain do you expec dividends , other/ise stal1 isnt mar1etable, and current investors are not happy, ma1es it difficult

to sell stal1s and raise capital through stal1s, and then maybe you max out your debts, 1eep shareholders happy, 1eep mar1etable up> you need to strategically paythem out !ompany doesnt have to pay dividends but /hat percentage is really paying out

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