+

Bus 101 Final Study Cards


Final Exam Study Cards
  
Changes are done, please view the flashcard.

Preview Flashcards

FrontBack
Benchmarking
 
Comparing your business to a competitors
4 P's of Marketing
 
Price - cost
Place - where its sold
Promotion - how to get word out about it
Product - what is being sold
Push Markting V. Pull Marketing
 
Push - assuming customer is unable to make decision on their own, pushing information onto them, like car sales
Pull - make information available for customer to make their own decision
Marketing
 
*To help buyers buy
*Set standards of quality relative to price
*Creating and communicating a product that has a set value for customers and society at large
Evolution of marketing
 
1. 1860 -mass produce for profit
2. 1920s - over production, focus on persuasion
3. Post WW2 - baby boom, competition for the consumer's dollar
4. Consumer research to satisfy them
Product
 
a physical good or idea to satisfy a need or want
Test Marketing
 
testing products among potential customers
Brand Name
 
word, letter or phrase that differentiates one seller's goods from another
Focus Group
 
small group of people under direction of a discussion leader to communicate opinions on products and issues
Marketing Mix
 
The mix of different marking methods used to promote products. ie radio, tv, web ads, newspaper, magazine
Influences of Marketing:
Sociocultural
Psychological
Situational
 
1. family, culture, social class
2. perception, motivation
3. previous experiences, social and physical surroundings
Ways to segment market:
Demographics
Geographics
Psychographics
 
1. By city, region, state, physical location
2. By age, income, education
3. By values, attitudes, interests
Mass Marketing
 
developing products and promotions to please a large market or group
Characteristics of Business to Business Marketing (6)
 
1. Few customers
2. usually larger organizations as customers
3. geographically concentrated
4. Rational as opposed to emotional
5. Usually direct sales
6. Concentrated on Selling rather than Advertising
Top - Bottom Pricing
 
based on costs to produce, then set price
Bottom - Up Pricing
 
set prices before considering costs
Product Line v. Product Mix
 
Line: group of products physically similar, intended for a similar market (ex. Frito Lay pretzels, chips, fritos)
Mix: combination of lines offered by a manufacturer
Product Life Cycle (4 steps)
 
1. Introduction (market tested, high price, selective distribution)
2. Growth/Competition (improve product, adjust price to competition, heavy advertising, increased distribution
3. Maturity (differentiate product from competition and other market areas, further reduce price, emphasize brand name
4. Decline ( cut product mix, consider price increase, reduce advertising to loyal customers, reduce distribution
Pricing Strategies - Skimming
 
Skimming - high prices, when product is highly demanded
Pricing Strategies - Low Prices/Everyday Low Prices
 
Low Prices - enter new market to beat competition

Everyday Low Prices (Walmart) -low prices constantly, predatory pricing
Pricing Strategies - Competition Base
 
Competition Based - set pricing at, above, or below competition's pricing levels
Pricing Strategies - Cost Based
 
Set pricing based on costs of production comparing profit margins
Pricing Strategies - Price Leadership
 
One or more dominant firms set the pricing practices for all competitors in an industry to follow
Pricing Strategies - Psychological Pricing
 
pricing goods and services at price points that make the product appear less expensive than it is
Fixed Costs
 
expenses that remain the same no matter how many products are made/sold (ex. building, equipment, insurance)
Variable Costs
 
costs that change according to the level of production (ex. raw materirals, electricity, labor)
Channels of Distribution
 
intermediaries in the market that together transport and store goods in their path from producer to consumers

ex. agents, brokers, wholesalers, retailers
Supply Chain
 
adds value at each step as the materials move to become a good, and information sent to the ultimate consumer
Marketing Intermediaries
 
Organizations that assist in moving goods/services from producers to consumers
Tend to add cost at each step but can make things more efficient.
Can't be eliminated, otherwise consumers would have to perform their functions
Logistics
 
marketing activity involving steps from planning to manufacturing to end user the most effectively and most efficiently
Inbound Logistics
 
managing the inbound raw materials from suppliers to producers
Outbound Logistics
 
managing the flow of finished products to business buyers and ultimate consumers
Containerization
 
bar coded shipments as it travels, easy to locate
Freight Forwarder
 
an organization that puts many small shipments together to send them in a larger shipment to transport more cost effectively
Transportation Pros/Cons
 
Trains - great for large shipments
Trucks - good for small shipments to remote locations
By Water - inexpensive but slow
Pipeline - fast and efficient (water, petroleum)
Air - Fast, expensive
Loss Leader
 
to sell something that is at a low price in order to gain a customer to buy a more expensive item
Promotion Mix
 
Using a variety of promotions tools (personal selling, public relations, sales promotions, advertising)
Advertising
 
paid, non-personal communication, through various media with an identified sponsor
Ex. newspaper, TV, radio, magazines, direct mail, internet, mobile, product placement
The Selling Process (7 steps)
 
1. Prospect and Qualify - research prospective buyers, see if there is a need for it
2. Pre-approach - gather information about customer, their wants/needs
3. Approach - first impression, emphasize benefits, sell whole package
4. Make a presentation, use testimonials
5. Answer Objections - anticipate questions, satisfy doubts
6. Close the Sale - use test questions to see if ready to buy
7. Follow Up - see if customer is happy, handle complaints, establish relationships
Publicity
 
any information distributed about a product or an organization through the media to the public, not paid for or controlled by the seller
Sales Promotion
 
to stimulate the consumer into purchasing and dealer interest by means of short term activities
Ex. Display boards, trade shows, events, contests, coupons, catalogs, demonstrations
Managerial v. Financial Accounting
 
Managerial: make decisions based on the #s, how to utilize the resources of the company

Financial: figure out and analyze the numbers, pay people and bills
Accounting System Inputs and Outputs
 
Inputs: Sales Documents, reciepts, payroll, travel records
Outputs: Financial statements such as balance sheets, income statements, statements of cash flows
Sarbanes Oxely Act
 
*when the accounting industry was under scrutiny
*created government standards for publicly traded companies
*created Public Company Accounting Oversight Board
Balance Sheet
 
financial statement that reports the financial condition at a specific time made up of assets, liabilities, and owner's equity
Selling Accounts Receivable
 
way to get rid of a liability - sell to a collections agency for pennies on the dollar, but better than nothing, get cash immediately
Current Assets
 
can be converted into cash with in a year

ex. cash, accounts receivable, inventory
Fixed Assets
 
land, building, equipment
Intangible Assets
 
items like patents, copyrights, goodwill
Current Liabilities
 
payments due in one year or less

ex. accounts payable, taxes, salaries
Long Term Liabilities
 
payments due in over one year

ex. notes and bonds payable
Owners Equity
 
value of what stockholder's own in a firm (aka stockholder's equity)
LIquidity
 
ability for something to be converted into cash
Income Statement
 
shows a firm's profit after costs, expenses and taxes. It summarizes the revenue, resources in the firm, and net income
Net Income
 
revenue left after costs, expenses, and taxes are paid
Revenue
 
Value of everything received from goods sold, services, and other financial sources
NIBT
 
Net Income Before Taxes
Proforma
 
income statement projected over a period of time -usually 12 months. A way to budget based on current trends and possible future problems or periods of growth
Operating Expenses
 
costs involved with operating a business, such as rent, utilities, insurance, supplies, and salaries
G & A Expenses
 
General and Administrative part of a budget
ex. office supplies, utilities
Statement of Cash Flow
 
reports cash receipts and disbursements related to a firms 3 major activities: operations, investments, and financing. showing the difference between cash coming in and going out
Financial Management
 
job of managing a firm's resources to meet its goals/objectives
3 major reasons why a firm fails financially
 
1. Under-capitalization (insufficient funds to start)
2. Poor control over cash flow
3. Inadequate expense control
Capticla Budget
 
a budget that highlights a firm's spending plans for a major purchase that requires a large amount of money
Cash Budget
 
estimates cash flowing in and out during amonth or period, helps to document trends and estimate future spending
Financial Control
 
when a firm compares its actual revenue, costs, and expenses to it's actual budget
Capital Expenditures
 
major investments in long-term tangible assets (land, buildings, equipment, copyrights, trademarks, patents)
Trade Credit
 
Practice of buying goods now and paying for them later
Secured Loan
 
loan backed by collateral
Unsecured Loan
 
Loan that doesn't require collateral
Time Value (of money)
 
Money has more power and value now, than sitting and doing nothing
Factoring
 
the process of selling accounts receivable for cash
Credit Cards
 
many business use them for readily available crdit as opposed to loans
HOWEVER - very risky and costly with interest rates very high, and an expensive way to borrow money
Venture Capital
 
money invested in new or emerging companies that are perceived as having great profit potential
Cost of Capital
 
the rate of return a company must earn in order to meet the demands of its lenders and equity holders
Money Supply
 
the amount of money the Federal Reserve Bank makes abailable for people to buy goods and services
M1 money
 
money that can easily be accessed (coins, paper money, checks)
M2 Money
 
money in M1 plus money that takes a little more time to obtain (savings accounts, mutual funds, CDs)
M3 Money
 
M2 PLUS deposits like money market funds
Weak dollar v Strong Dollar
 
Weak -falling value can't buy as much with it, weak economy
Strong - rising value, can buy more with it, increased value and strong economy
Federal Reserve
 
Sets reserve requirements and interest rates for banks, buys and sells government securities (bonds/stocks), buys and sells foreign currency
Using Checks/Check Clearing
 
Lengthy process, expensive.
Saving and Loans Banks
 
Financial institution that accepts savings/checking deposits,and provides home mortgage loans
Commercial Banks
 
profit-seeking, receives deposits through checking and savings accounts, which uses those funds to make loans
Nonbanks
 
do not accept deposits, but offer services like banks - these types of non-banks include pension funds, insurance companies, commercial finance companies, brokerage houses
Pension Funds
 
money put aside by corporations, non-profits or unions to cover the needs of members financially when they retire.
Risk
 
the chance, probability, and amount of possible loss
Speculative Risk
 
chance of loss OR profit
Self-Insurance
 
setting aside money to cover routine claims and buying only Catastrophe polocies to cover big losses
Liability Insurance
 
covers people found liable for professional negligance, protected them rom being sued "malpractice insurance"
Key Executive Insurance
 
if the owner dies, money goes back into the business as pposed to a beneficiary
Insurance
 
way to give risk to a third party, who pays for the risk insteadI
IRA
 
Individual Retirement Account, save money now, so money available when ready to retire
Rainy Day Money
 
SAVE MONEY NOW - for unexpected expenses that may happen
Credit Union
 
a cooperative financial institution the is owned and controlled by its members, aimed at providing credit at reasonable rates, and. community developement.
Debt Financing v Equity Financing
 
Debt: to get a loan

Equity: using equity as collateral in order to get money
Revolving Credit
 
a line of credtit readily available but usually involves a Fee

Upgrade and get a lot more done!
Upgrade